BRENTON BANKS INC, DEF 14A, 1998-03-30

BRENTON BANKS INC
DEF 14A, 1998-03-30
NATIONAL COMMERCIAL BANKS

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Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

BRENTON BANKS, INC.
(Name of Registrant as Specified In Its Charter)

__________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)
(4) and 0-11.

1) Title of each class of security to which transaction applies:
________________________________________________________________

2) Aggregate number of securities to which transaction applies:
_________________________________________________________________

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
_________________________________________________________________

4) Proposed maximum aggregate value of transaction:
_________________________________________________________________

5) Total fee paid:
_________________________________________________________________

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offset
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously paid:
_________________________________________________________________

2) Form, Schedule or Registration Statement No.:
_________________________________________________________________

3) Filing Party:
_________________________________________________________________

4) Date Filed:
_________________________________________________________________

<PAGE>
BRENTON BANKS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

MAY 20, 1998

DES MOINES, IOWA

TO THE STOCKHOLDERS OF BRENTON BANKS, INC.:

You are cordially invited to attend the Annual Meeting of Stockholders of
Brenton Banks, Inc., which will be held at the West Des Moines Marriott
Hotel, 1250 74th Street, West Des Moines, Iowa, on Wednesday, May 20, 1998,
at 5:00 p.m., for the following purposes:

1. To elect a Board of Directors to serve until the next Annual Meeting
and until their successors are elected and have qualified;

2. To vote upon a proposal to approve KPMG Peat Marwick LLP as
independent auditors for Brenton Banks, Inc. for the year 1998; and

3. To transact any other business which may properly come before the
meeting.

In addition, we will report to you on the business and affairs of the
Company for 1997. The 1997 annual report and appendix to the proxy
statement, including financial statements, are enclosed for your
information.

The close of business on March 13, 1998, has been fixed as the record date
for determination of stockholders entitled to notice of and to vote at the
Annual Meeting. A list of such stockholders will be maintained at the
offices of Brenton Banks, Inc. at Capital Square, 400 Locust, Des Moines,
Iowa 50309, during the ten-day period preceding the Annual Meeting.

PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED. Prompt return of your proxy will be appreciated. Your vote is
important no matter how many shares you own. We hope you will be able to
attend the meeting in person.

Des Moines, Iowa

March 30, 1998

C. Robert Brenton
Chairman of the Board

<PAGE>
BRENTON BANKS, INC.

CAPITAL SQUARE, 400 LOCUST, DES MOINES, IOWA 50309

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD

MAY 20, 1998

This proxy statement is being mailed to the shareholders of Brenton
Banks, Inc. on March 30, 1998. The proxy statement is furnished in
connection with the solicitation by the Board of Directors of Brenton
Banks, Inc. of proxies for use at the Annual Meeting of Stockholders of
Brenton Banks, Inc. to be held on May 20, 1998, and any adjournments
thereof (the "Proxy Statement"). The Bylaws of Brenton Banks, Inc. provide
that the Annual Meeting of Stockholders is to be held on May 6, 1998.
However, the Annual Meeting of Stockholders of Brenton Banks, Inc. is
adjourned until May 20, 1998.

The close of business on March 13, 1998, has been fixed as the record
date for determination of the stockholders of Brenton Banks, Inc. who are
entitled to notice of and to vote at the Annual Meeting. As of the record
date, there were 17,340,626 outstanding shares of Common Stock of Brenton
Banks, Inc. Each of these shares is entitled to one vote at the Annual
Meeting. Only stockholders of record on the books of Brenton Banks, Inc.
as of the record date will be entitled to vote at the Annual Meeting or any
adjournments thereof.

Any stockholder giving a proxy is empowered to revoke it at any time
before it is exercised. A proxy may be revoked by filing a written
revocation or a duly-executed proxy bearing a later date with the Secretary
of Brenton Banks, Inc. (the "Parent Company"). Any stockholder may still
attend the meeting and vote in person, regardless of whether the
stockholder has previously given a proxy, but presence at the meeting will
not revoke the stockholder's proxy unless the stockholder votes in person.

PRINCIPAL HOLDERS OF VOTING SECURITIES

The following table sets forth, as of March 13, 1998, information as
to (a) the only persons who were known by the Parent Company to own
beneficially more than 5 percent of the outstanding Common Stock (the only
voting securities) of the Parent Company, and (b) the number of shares of
such Common Stock beneficially owned by all executive officers and
directors as a group:

1
<PAGE>

<TABLE>
<CAPTION>
Of such beneficial ownership,
amounts to which the
Beneficial Ownership beneficial owner has:
__________________________________ ________________________________
Sole Voting Shared Voting
Name and Address of Shares Beneficially Percent and Investment and Investment
Beneficial Owner Owned (1)(2)(3) of Class Power Power
___________________ _______________ ________ _____ _____

<S> <C> <C> <C> <C>
William H. Brenton 3,377,276 19.44% 1,084,970 2,292,306
Capital Square
400 Locust
Des Moines, IA 50309

C. Robert Brenton 3,282,992 18.89% 879,988 2,403,004
Capital Square
400 Locust
Des Moines, IA 50309

Junius C. Brenton 3,498,896 20.14% 966,232 2,532,664
Capital Square
400 Locust
Des Moines, IA 50309

Jane Eddy 1,113,456 6.41% 384,924 728,532
2908 Forest Drive
Des Moines, IA 50312

Carolyn O'Brien 1,248,338 7.18% 397,720 850,618
301 Tonawanda Drive
Des Moines, IA 50312

All executive officers and directors 5,955,912 (4)(5) 34.27% 3,143,220 (4)(5) 2,812,692 (5)
as a group (16 persons including
William H. Brenton, C. Robert
Brenton and Junius C. Brenton)
<FN>

(1) For purposes of this proxy statement, beneficial ownership is deemed to include stock owned (a) personally by the
individual or as custodian for minor children; (b) by the spouse or children of the individual having the same home
as the individual or being supported by the individual; (c) by any trust in which the individual has or shares
voting power or investment power over the securities; and (d) by any foundation or corporation in which the
individual has or shares voting power or investment power over the securities.
(2) The number of shares which are beneficially owned by each of the individuals listed above and which are also
listed as beneficially owned by another person(s) listed in the above table are as follows: William H. Brenton -
2,244,378 shares; C. Robert Brenton - 2,244,378 shares; Junius C. Brenton - 2,244,378 shares; Jane Eddy - 692,358
shares; and Carolyn O'Brien - 692,358 shares.
(3) The registrant knows of no shares with respect to which any listed individual or group has the right to acquire
beneficial ownership, except as noted in Footnote (4) below.
(4) Amount includes vested options for the purchase of the Parent Company's Common Stock pursuant to the 1987 Non-
Qualified Stock Option Plan in the following amount: one member of the executive officers and directors group -
36,300 shares.
(5) Adjusted to eliminate multiple counting of shares beneficially owned by two or more persons. With respect to
shares beneficially owned by individual directors who are nominees, see "Election of Directors".
</TABLE>

2
<PAGE>

I. ELECTION OF DIRECTORS

The Parent Company's Bylaws provide that the number of persons serving
on the Board of Directors shall not be less than five and not more than
eleven. The normal terms for persons elected as directors is until the
next Annual Meeting of Stockholders and until their successors are duly
elected and qualified.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED
BELOW.

Proxies in the accompanying form will be voted FOR the election of
these individuals, unless authority to vote is withheld on the proxy. If
any nominee or nominees shall become unavailable for election, it is
intended that the proxies will be voted for the election of the substitute
nominees as the Board of Directors may propose. Any stockholder has the
option to withhold authority to vote for all nominees for directors, or to
withhold authority to vote for individual nominees for directors. The
effect on the election of directors of casting votes against nominees or of
withholding authority to vote for nominees is that the stockholder is
considered present at the meeting and considered for meeting quorum
requirements, but the vote is not a vote in favor of the nominee for
purposes of determining whether the nominee has received the favorable vote
of a majority of shares present at the meeting needed for election.
Information about the nominees as of March 13, 1998, is set forth below:

<TABLE>
NOMINEES
<CAPTION>
Has Served Shares Beneficially
Position with the Parent Company as a Director Owned as of Percent
Name Age and/or Principal Occupation Since March 13, 1998 of Class
____ ___ ___________________________ _____ ______________ ________

<S> <C> <C> <C> <C> <C>
C. Robert Brenton 67 Chairman of the Board
Brenton Banks, Inc. 1960 3,282,992 (1) 18.89%

William H. Brenton 73 Director
Brenton Banks, Inc. 1957 3,377,276 (1) 19.44%

Junius C. Brenton 63 Director
Brenton Banks, Inc. 1969 3,498,896 (1) 20.14%

Robert L. DeMeulenaere 58 President and Chief Executive Officer
Brenton Banks, Inc. 1994 52,300 (2) less than
1%

Gary M. Christensen 54 President and Chief Executive
Officer, Pella Corporation 1995 -- --

Robert J. Currey 52 President 1998 -- --
21st Century Telecom Group, Inc.

<FN>

(1) See "Principal Holders of Voting Securities". William H. Brenton, C. Robert Brenton and Junius C. Brenton
are control persons of Brenton Banks, Inc. by virtue of their stock ownership.
(2) Mr. DeMeulenaere has sole voting and investment power over 47,694 shares, and shared power over 4,606 shares.

</TABLE>
3
<PAGE>

In addition to the positions listed above, the nominees were employed
in the following capacities during the past five years. C. Robert Brenton
served as Chairman of Brenton Bank from October 1995 to November 1997.
William H. Brenton served as Chairman of Executive Committee and Vice
Chairman of the Board of the Parent Company through December 1994. Junius
C. Brenton served as President of the Parent Company from May 1990 to
January 1994. Robert L. DeMeulenaere served as Senior Vice President of
the Parent Company and CEO of Brenton Bank and Trust Company of Cedar
Rapids from August 1990 through January 1994. Gary M. Christensen served
as Senior Vice President of Marketing and Sales for Pella Corporation from
November 1990 through December 1993 and President and Chief Operating
Officer for Pella Corporation through January 1996. Robert J. Currey
served as President for Consolidated Communications Inc. (CCI) from March
1990 through September 1997 and subsequent to the acquisition of CCI served
as Group President, Telecommunications Services for McLeodUSA Incorporated
from October 1997 through February 1998.

None of the nominees, current directors or executive officers of the
Parent Company are related except William H. Brenton, C. Robert Brenton and
Junius C. Brenton, who are brothers.

All loans made by the Parent Company's affiliated banks to directors,
nominees, executive officers and associates of such persons were made in
the ordinary course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated persons, and did not involve more
than the normal risk of collectibility or present other unfavorable
features.

None of the above nominees hold a directorship in any other company
with a class of securities registered pursuant to Section 12 or subject to
Section 15(d) of the Securities Exchange Act or registered as an investment
company under the Investment Company Act of 1940 except C. Robert Brenton,
who is a director of Pioneer Hi-Bred International, Inc. and Robert J.
Currey, who is a director of McLeodUSA Incorporated.

The Audit Committee was comprised of R. Dean Duben, Arlen D. Schrum
and Hubert G. Ferguson, with John C. Eddy and William H. Brenton as
consulting members. R. Dean Duben, Hubert G. Ferguson and William H.
Brenton are also members of the Board of Directors of Brenton Banks, Inc.
Arlen D. Schrum is a member of the regular Board of Directors of Brenton
Bank and John C. Eddy is a member of the advisory Board of Directors of the
Des Moines market. The Audit Committee oversees the functions of the
internal audit department; examines the services performed for Brenton
Banks, Inc. and its subsidiaries (the "Company") by the Company's
independent auditors; approves or disapproves their services and considers
the effect of their services on the independence of the auditors; and
performs such other functions as the Board of Directors shall from time to
time assign to it. During 1997, the Audit Committee met twice.

The Compensation Committee, which sets and/or confirms the salaries of
executive officers consisted of Gary M. Christensen, William H. Brenton,
and Junius C. Brenton for 1997. During 1997, the Compensation Committee
met once. See the Compensation Committee Report on page 8.

Although the Board of Directors has no standing Nominating Committee,
the Board met once during January 1998 for the purpose of naming nominees
for the Board of Directors and has selected R. Dean Duben to report to the
stockholders at the Annual Meeting on the nominees recommended by the Board
of Directors. The Board will consider nominations for the Board of
Directors submitted by stockholders to the Secretary of the Parent Company
at least one hundred and twenty days prior to the Annual Meeting of
Stockholders. In accordance with the Parent Company's Bylaws, no
nominations for the Board of Directors will be considered or voted on at
the Annual Meeting of Stockholders unless submitted in writing to the
Secretary of the Parent Company at least five days prior to the Annual
Meeting.

During 1997, the Board of Directors held twelve meetings, including
six regular meetings, four dividend declaration meetings and two special
meetings. During 1997, each of the incumbent directors who are nominees
for the Board of Directors attended at least 75 percent of the aggregate of
the total number of meetings of the Board of Directors and the total number
of meetings held by all committees of the Board on which the nominee
served.

R. Dean Duben and Hubert G. Ferguson are resigning from the Board of
Directors as they desire less business

4
<PAGE>
involvement in retirement. The Company wishes them the best in retirement
and thanks them for their contribution and value they provided for their
years of service.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 of the Securities and Exchange Act of 1934 requires the
executive officers, directors and shareholders holding more than ten
percent of the Company's common stock to file reports reflecting their
ownership of stock and any changes in ownership with the Securities and
Exchange Commission. Copies of the reports filed with the Securities and
Exchange Commission are delivered to the Company. Based upon the Company's
review of the forms and upon representations from the individuals that no
year-end filings are necessary, except as noted below, the Company believes
that all filing requirements under Section 16 were made by all of the
Company's officers, directors and shareholders holding more than ten
percent of the Company's common stock. During 1997, the Company failed to
timely file a Form 4 provided to it by Larry A. Mindrup and improperly
reported a gift from Woodward G. Brenton to his children. These omissions
have been corrected by the filing of Form 5's reporting the omissions.
Brenton Banks, Inc. undertakes to make the filings on behalf of its
executive officers and directors and has procedures to assure that filing
requirements are met.

EXECUTIVE COMPENSATION

The following sets forth information on the annual and long-term
compensation paid or accrued by the Company for services rendered in 1997,
1996 and 1995 of those persons who are the Chairman of the Board, President
and the three most highly compensated officers of the Company.

5
<PAGE>

<TABLE>
Summary Compensation Table
<CAPTION>

Annual Compensation Long Term Compensation
__________________________________ _________________________________

Awards Payouts
_______________________ _______

Securities
Other Annual Restricted Underlying LTIP All Other
Name and Current Principal Compensation Stock Options/ Payouts Compensation
Position Year Salary ($) Bonus ($) ($) Award($)(4) SARS (#) ($)(5) ($)
________ ____ __________ _________ ____________ __________ ________ _______ ____________

<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Robert Brenton 1997 189,800 71,175 -- -- -- -- 129,030(6)
Chairman of the Board 1996 189,800 45,903 -- -- 48,400 -- 129,218(7)
1995 172,388 -- 19,181(1) -- -- -- 137,147(8)

Robert L. DeMeulenaere 1997 189,800 71,175 -- -- -- 470,248 11,550(9)
President and Chief 1996 189,800 45,903 -- -- 169,400 -- 10,062(9)
Executive Officer 1995 150,000 -- -- 65,196 -- -- 9,948(9)

Larry A. Mindrup 1997 169,800 63,675 -- -- -- 339,643 11,550(9)
President/Chief Banking 1996 165,800 41,066 -- -- 108,900 -- 37,343(10)
Officer 1995 156,250 40,000 20,963(2) 47,071 -- -- 10,799(9)
Brenton Bank*

Phillip L. Risley 1997 156,100 58,538 -- -- -- 382,239 11,550(9)
Executive Vice President/ 1996 156,100 37,753 -- -- 108,900 -- 10,859(9)
Chief Administrative 1995 146,300 -- 16,305(3) 52,979 -- -- 11,150(9)
Officer
Brenton Bank*

Norman D. Schuneman 1997 139,800 52,425 -- -- -- 337,812 11,550(9)
Chief Credit Officer 1996 137,600 33,811 -- -- 60,500 -- 9,553(9)
Brenton Bank* 1995 129,308 -- -- 47,852 -- -- 9,002(9)

* A Subsidiary of the Parent Company

<FN>
(1) Includes payments of $10,181 and $4,800 for excess insurance coverage and automobile allowance.
(2) Includes a payment of $11,935 made to Mr. Mindrup in connection with his relocation from Ames, Iowa, to Des Moines,
Iowa.
(3) Includes payments of $7,178 and $7,555 to or on behalf of Mr. Risley for automobile allowance and club memberships.
(4) The restricted stock awards are a part of the Company's Long-Term Incentive Stock Compensation Plan. Under the
terms of the restricted stock grant, an individual receiving a grant must be continuously employed by the Company
for three fiscal years beginning in the year of the grant for the restricted stock to vest, unless vested prior to
this date due to death, disability, retirement or change in control of the Company. No dividends are paid on the
restricted stock. The market value per share of the restricted stock on the date of grant was $7.49 for the 1995
grant, after restatement for stock dividends and the 2-for-1 stock split effective February 10, 1998. Robert L.
DeMeulenaere was granted 8,705 restricted shares for the year 1995. The market value of Mr. DeMeulenaere's
restricted stock holdings was $170,874 based on the closing price at December 31, 1997. Larry A. Mindrup was
granted 6,285 restricted shares for the year 1995. The market value of Mr. Mindrup's restricted holdings was
$123,369 based on the closing price at December 31, 1997. Phillip L. Risley was granted 7,074 restricted shares
for the year 1995. The market value of Mr. Risley's restricted holdings was $138,856 based on the closing price at
December 31, 1997. Norman D. Schuneman was granted 6,253 restricted shares for the year 1995. The market value of
Mr. Schuneman's restricted stock holdings was $122,752 based on the closing price of December 31, 1997. The
restricted stock awards vested on December 31, 1997.
(5) The LTIP payouts consist of performance stock awards which are a part of the Company's Long-Term Incentive Stock
Compensation Plan. Under the terms of the 1995 performance stock grant, the performance shares vested in
accordance with a performance vesting schedule tied to the financial performance of the Company for the three-year
period ended December 31, 1997. The maximum potential benefit available to an individual was 150 percent of the
performance stock granted, with amounts in excess of 100 percent to be paid in cash to the individual. Based on
financial results for the three-year performance period ended December 31, 1997, 150 percent of the performance
shares granted were vested and the amounts above represent the value of vested shares and cash to be paid.
(6) Includes life insurance premium payments made on behalf of Mr. Brenton in the amount of $114,000, which will be
repaid to the Company upon the termination of such insurance policies. The Company expensed $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $11,550 toward qualified retirement
plans and $3,480 of director fees paid by affiliated banks.
(7) Includes life insurance premium payments made on behalf of Mr. Brenton in the amount of $114,000, which will be
repaid to the Company upon the termination of such insurance policies. The Company expensed $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $9,988 toward qualified retirement
plans and $5,230 of director fees paid by affiliated banks.
(8) Includes life insurance premium payments made on behalf of Mr. Brenton in the amount of $114,000, which will be
repaid to the Company upon the termination of such insurance policies. The Company expensed $29,211 in connection
with the payment of the premiums. This amount also includes contributions of $9,957 toward qualified retirement
plans and $13,190 of director fees paid by affiliated banks.
(9) Constitutes the entire amount contributed to qualified retirement plans, on behalf of the named individual.
(10) Includes $10,844 contributed toward qualified retirement plans and $26,499 discretionary payment to adjust the
total compensation among the Company's senior executive officers.
</TABLE>

6
<PAGE>

Option Exercises and Fiscal Year-End Values - The following table sets
forth information regarding the number of options exercised by the named
executive officers and the year-end values of options held by such
individuals pursuant to the Company's non-qualified stock option plans.

<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and December 31, 1997, Option/SAR Values
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In the Money
Shares Options/SARs at Options/SARs at
Acquired on Value December 31, 1997 December 31, 1997
Name Exercise #(b) Realized $ (Exercisable)/(Unexercisable)(b)(c) (Exercisable)/(Unexercisable)(c)
____ _____________ __________ ___________________________________ _______________________________

<S> <C> <C> <C> <C>
C. Robert Brenton
Chairman of the Board 50,820 $634,615 -0-/48,400 -0-/$462,600

Robert L. DeMeulenaere
President and Chief 45,980 $559,807 -0-/169,400 -0-/$1,619,000
Executive Officer

Larry A. Mindrup
President/Chief Banking 6,600 $70,724 -0-/108,900 -0-/$1,040,800
Officer
Brenton Bank(a)

Phillip L. Risley
Executive Vice President/ -- -- -0-/108,900 -0-/$1,040,800
Chief Administrative
Officer
Brenton Bank(a)

Norman D. Schuneman
Chief Credit Officer -- -- 36,300/60,500 $616,300/$578,200
Brenton Bank(a)

<FN>
(a) A Subsidiary of the Parent Company
(b) Restated for 2-for-1 stock split effective February 10, 1998 and May 1997 10% stock dividend.
(c) The unexercisable stock options become vested only upon achievement of an aggressive net income performance vesting
schedule or with continued employment through March, 2006.
</TABLE>

Shareholder Return Performance Presentation - Set forth on the
following page is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's common stock
against the cumulative total return of the NASDAQ stock market index for
U.S. companies and SNL Securities' Midwestern Bank Index for the five-year
period ended December 31, 1997. Total return values for the Company,
NASDAQ and SNL Securities' Midwestern Bank Index were calculated based on
cumulative total return values assuming reinvestment of dividends. The
graph represents a $100 investment on December 31, 1992, and presents the
current value, considering dividend reinvestment and current market prices.
The shareholder return shown on the graph is not necessarily indicative of
future performance of the Company.

<PAGE>
<TABLE>
Brenton Banks Inc., Total Return Performance
<CAPTION>
1992 1993 1994 1995 1996 1997

<S> <C> <C> <C> <C> <C> <C>
Brenton Bank Inc. 100 103 110 131 192 311
SNL Securities' Index for the NASDAQ
Stock Market (U.S. Companies)* 100 115 112 159 195 240
SNL Securities' Midwestern Bank Index* 100 104 101 149 203 329
</TABLE>

Compensation Committee Report - The Compensation Committee report has
been prepared by the following individuals who comprise the Compensation
Committee: Gary M. Christensen, Chairperson; Junius C. Brenton and William
H. Brenton.

The role of the Compensation Committee is to provide leadership by
effectively and appropriately using compensation to tie the financial
interests of the Company's executive officers to those of the shareholder.
The goal is to achieve the Company's vision and goals and thereby maximize
the return to shareholders.

The general responsibilities of the Compensation Committee are the
oversight of executive compensation for the Chief Executive Officer and
other senior officers of the Company who report to the Chief Executive
Officer; communicate with the full Board of Directors; and communicate with
shareholders of the Company.

8
<PAGE>
The specific duties of the Compensation Committee include the following:

1. Establish a total compensation philosophy and policy which fairly
rewards the executives for performance benefiting shareholders and
which effectively attracts and retains the executive resources
necessary to successfully lead and manage the Company.
2. Determine the details of the Chief Executive Officer's total
compensation.
3. Review and approve the Chief Executive Officer's salary and bonus
recommendations for the other Senior Officers who report to the Chief
Executive Officer.
4. Approve and administer cash incentive compensation plans and deferred
compensation plans for the executives, including any modifications to
such plans, and annually establish the performance objectives for the
incentive plans.
5. Approve and administer all the stock incentive plans.
6. Prepare the committee's annual report to shareholders in the proxy
statement.
7. Oversee the Company's retirement and benefit programs involving
significant cost; periodically review executive supplementary benefits
and perquisites.
8. Such other duties as delegated by the Board of Directors.

The total compensation of the company's executive officers, including
C. Robert Brenton and Robert L. DeMeulenaere, is comprised of three
distinct components; base salary, annual incentive bonus and long-term
stock compensation. In addition to each of the foregoing, the executive
officers of the Company are allowed to participate in the Company's
Executive Savings Plan, Profit Sharing/401(k) Plan, Employee Stock Purchase
Plan and other employee benefit programs generally available to all Company
employees.

During 1996, the Compensation Committee engaged a recognized
consulting firm to review compensation programs of the Company. This
engagement included a review of base pay, incentive bonus and stock
compensation plans for the executive officers and senior officers of the
Company. The engagement also included a general review of the compensation
philosophy and compensation programs employed by the Company. The general
philosophy that resulted from the consulting work was to focus on the
following three items: competitive total compensation; a philosophy of pay
for performance; and on tying the financial interests of the executives to
those of the shareholders. As a result, compensation emphasis is shifting
toward the variable components of incentive bonus and stock compensation.

Base Salaries - The Committee's policy is to set the base salary of
each of the Company's executive officers at levels that are comparable to
those paid by similar sized banks and bank holding companies located in the
midwestern region and throughout the United States, as documented by
independent survey companies. The Compensation Committee believes that the
base salaries of C. Robert Brenton and Robert L. DeMeulenaere are set at
levels below average base salaries of Chief Executive Officers of other
comparable bank holding companies. The base salaries of the Company's
executive officers, including C. Robert Brenton and Robert L. DeMeulenaere,
are not directly related to the Company's stock performance. There were no
increases in base pay for executive officers in 1997, except for small
adjustments made due to the elimination of company automobiles.

Bonuses - The bonus plans utilized by the Company are designed to
promote the interest of the Company by tying the Company's financial goals
to each executive officer's bonus plan. For 1997, to create a unified
team, all executive officers of the Company had between 50 percent and 100
percent of their bonus plan tied to the consolidated net income goals of
the Company. The remaining portion of the bonus plan and the bonus plans
for other officers of the Company were tied to other financial goals or
personal objectives for which the officer had influence or control. A
bonus performance matrix was established for each bonus area. All
executive officers were eligible to earn a bonus of up to 37.5 percent of
base pay. All executive officer bonus plans were subject to achieving a
threshold net income level of $17,000,000 and the portion of the bonus tied
to consolidated net income was 100% earned at $18,000,000.

For 1997, C. Robert Brenton and Robert L. DeMeulenaere were eligible
to receive a bonus of up to 37.5 percent of their base pay. The bonus plan
was tied 100 percent to the achievement of consolidated net income. This
plan was subject to a tiered earnings matrix whereby no bonus would be paid
if consolidated net income was below $17,000,000

9
<PAGE>
and 100 percent of bonus was earned if consolidated net income was above
$18,000,000. Based on the bonus performance matrix both C. Robert Brenton
and Robert L. DeMeulenaere earned 100 percent of their bonus potential.

Long-term Stock Compensation Plan - Long-term Incentive Stock
Compensation Plan - The purpose of the Company's Long-term Incentive Stock
Compensation Plan was to increase the stock held by the Company's executive
officers and key employees and to provide long-term incentives to
participants in the Plan. The long-term incentives were designed to
closely ally the interest of executive officers to the interests of the
shareholders of the Company. Stock was granted under the Plan to achieve
value equal to a specific multiple of the individual's base salary, with 35
percent designated as restricted stock and 65 percent as performance stock.
Executive officers granted restricted and performance stock by the Board of
Directors were required to remain employed by the Company through the third
calendar year following the grant, in order to receive the stock without
the restrictions. Performance shares vest based upon a tiered performance
vesting schedule tied to the Company's average annual increase in earnings
per common share for the three-year performance period. The threshold,
target and maximum average annual earnings per share growth under the terms
of the Plan are 7.50 percent, 10.00 to 11.99 percent, and greater than
16.00 percent, respectively; for example, none of the performance shares
will be earned if the average annual earnings per share growth over the
performance period is less than 7.50 percent, 100 percent will be earned if
the annual average per share growth is 10.00 percent to 11.99 percent, and
150 percent will be earned if the average annual earnings per share growth
is more than 16.00 percent. The maximum amount available to a participant
granted performance stock is 150 percent of the performance shares granted.
Amounts in excess of 100 percent of the stock awarded are to be paid in
cash.

During 1997, there were no additional grants of shares under this plan
and no further grants are allowed. As of December 31, 1997, all
outstanding grants vested and no further restricted or performance shares
are still outstanding.

Based on financial results for the three-year performance period ended
December 31, 1997, the executive officers as a group had 53,591 shares of
restricted stock and 99,525 shares of performance stock vest under the
plan, including no shares for C. Robert Brenton and 24,867 shares for
Robert L. DeMeulenaere.

When granting both the restricted and performance stock awards under
the Plan, the Board of Directors considered the position of the executive
officer, the executive officer's past and anticipated future contribution
to the Company's profitability and the executive officer's alliance with
the interests of shareholders. The Board of Directors did not award any
restricted or performance stock to C. Robert Brenton because Mr. Brenton's
interests already closely allied the interests of shareholders due to his
substantial stock holdings in the Company.

Long-Term Stock Compensation Plan - 1996 Stock Option Plan - In 1996,
the Company adopted the 1996 Stock Option Plan. The purpose of the Plan is
to support the creation of shareholder value. The Plan aligns the
interests of key employees with those of the shareholders of the Company
and encourages key employees of the Company to acquire equity interests in
the Company. The Plan is intended to attract, motivate and retain key
employees and to tie a significant portion of their compensation to the
long-term success of the Company. The Plan authorizes the granting of
options on up to 1,210,000 shares of the Parent Company's $2.50 par value
common stock. The options are intended to be non-qualified options under
the Internal Revenue Code.

The Board of Directors granted 1,030,920 options on September 12, 1996
and 4,840 options on November 14, 1996. The options are exercisable at the
market price on the date of grant: $10.07 in September 1996 and $10.74 in
November 1996. During 1997, an additional 87,180 options were granted by
the Board of Directors to officers and key employees at a weighted average
exercise price of $13.90. The Compensation Committee and the Board of
Directors considered both the total number of shares to include in the Plan
as well as how shares should be allocated among employee groups. To meet
the overall goals of the Company's compensation philosophy and the stock
option plan, approximately 80 percent of the shares will be allocated to
the executive officer group and approximately 20 percent will be allocated
to other officers and key personnel. When making specific grants the
Compensation Committee considers the position of the executive officer, the
executive officer's past and anticipated future contribution to the
Company's profitability and the executive officer's alliance with the
interest of shareholders. As of December 31, 1997, 36,300 options have
been forfeited. The weighted average per share exercise price of the
1,086,640 options currently outstanding is $10.38. At December 31, 1997,
there were 123,360 shares still available for grant.

10
<PAGE>
To date a total of 762,300 option shares have been granted to the
executive officers as a group, with 48,400 granted to C. Robert Brenton and
169,400 granted to Robert L. DeMeulenaere. The smaller amount granted to
C. Robert Brenton is in recognition of the fact that his interests are
already closely allied with the interests of shareholders due to his
substantial stock holdings. The amounts granted to C. Robert Brenton and
Robert L. DeMeulenaere are in recognition of their past and future expected
contribution and impact on the financial results of the Company.

Under the provisions of the Stock Option Agreements granted to date,
the options will vest and may be exercised upon the earlier of nine years
and six months from the date of grant or upon the Company's achievement of
aggressive cumulative net income goals specified in the agreement. The
cumulative net income goals specified in the option agreement include
performance periods beginning January 1, 1996, and continuing through
December 31, 1998, 1999 and 2000. To the extent the Company's cumulative
net income meets or exceeds the thresholds set forth in the Performance
Vesting Schedule below, the options will become vested proportionately to
the extent that the amount of cumulative net income exceeds the minimum up
to the maximum level applicable to the performance period.

<TABLE>
<CAPTION>
Performance Vesting Schedule

% Total Vested Cumulative Net Income (in thousands) Starting 1/1/96 Through
12/31/98 12/31/99 12/31/00
<S> <C> <C> <C>
100% -- -- $93,900
75% -- -- $89,486
67% -- $70,900 $88,073
50% -- $67,737 $85,071
33% $50,000 $64,574 --
25% $45,940 -- --
0% -- -- --
</TABLE>

The Plan also provides for prorated vesting upon normal retirement
after age 65, upon death or disability of the optionee, or in the event the
Company is sold, merged, or consolidated with another company. If the
optionee retires prior to age 65 without approval or leaves the Company,
the options that were exercisable by the optionee will expire if not
exercised within 90 days.

Long-Term Stock Compensation Plan - 1987 Non-Qualified Stock Option
Plan - The Company also maintains a 1987 Non-Qualified Stock Option Plan
which permitted the Board of Directors to grant options to officers of the
Company (Brenton Banks, Inc. and its subsidiaries) through May 6, 1997.
There were no grants of options under this plan in 1997 and no further
grants are allowed under the plan. The options were intended to be non-
qualified under the Internal Revenue Code.

The Board of Directors adopted Administrative Rules ("Rules") for the
1987 Non-Qualified Stock Option Plan. The Rules set the term of the options
at 10 years and 30 days after the date of grant and provide for a ratable
five (5) year vesting schedule for the options. The Rules also provide for
full vesting upon normal retirement after age 60, upon the death or
disability of the optionee, or in the event the Company is sold, merged, or
consolidated with another company. If the optionee retires prior to age 60
without the Board of Directors' approval or is terminated by the Company,
the options that were then exercisable by the optionee will expire if not
exercised within 90 days.

The Board of Directors granted 20,328 options on July 21, 1994; 36,300
options on June 28, 1990; 50,820 options on April 19, 1990; 36,300 options
on September 14, 1988; and 606,210 options on July 13, 1987. The options
are exercisable at the market price on the date of grant: $8.12 in July
1994, $3.91 in June 1990, $3.63 in April 1990; $2.65 in September 1988; and
$1.83 in July 1987. As of December 31, 1997, 659,208 options have been
exercised and 54,450 have been forfeited. The exercise price of the 36,300
options currently outstanding is $2.65 per share. All of the outstanding
options were vested and exercisable at the end of 1997.

Split Dollar Insurance - The Company has instituted a life insurance
program for the benefit of C. Robert Brenton to encourage his continued
participation in the Company following his retirement and to aid him with
his estate planning

11
<PAGE>
goals. The life insurance program provides up to $3,500,000 of life
insurance coverage to C. Robert Brenton and his spouse. Pursuant to the
terms of the program, the insurance policies are held in a trust created
for the benefit of the named executive officer and the officer's spouse.
The Company is obligated to pay $114,000 of the premiums for a period of
seven (7) years. Upon the termination of the policies, the Company is
repaid the premiums together with interest in excess of $300,000 on the
premiums at the rate of 5.2 percent per annum. The amount of the premiums
paid for 1997 was $114,000. The Company expensed $29,211 in connection
with the payments made pursuant to the life insurance program. The
benefits payable pursuant to the life insurance program are not related to
the performance of the Company.

RESPECTFULLY SUBMITTED,

GARY M. CHRISTENSEN, WILLIAM H. BRENTON, AND JUNIUS C. BRENTON

Director Compensation - During 1997, directors William H. Brenton, R.
Dean Duben, Hubert G. Ferguson and Gary M. Christensen received directors'
fees for their service on the Board of Directors and directors C. Robert
Brenton, Junius C. Brenton and Robert L. DeMeulenaere did not receive
directors' fees for their service on the Board of Directors. For 1997, the
directors fees were $2,500 for regular Board of Directors' meetings and
$500 for audit and compensation committee meetings. One-half of the fees
earned by a director for regular meetings are credited toward the
Director's Incentive Plan described below. During 1997, R. Dean Duben,
Hubert G. Ferguson and Gary M. Christensen earned $7,250, $8,500 and
$8,000, respectively, for their service as directors of the Company.
Additionally, Hubert G. Ferguson received $3,750 of consulting fees from
Brenton Investments, Inc. R. Dean Duben also earned $1,800 for services as
a director of certain of the Company's affiliated banks. Junius C. Brenton
earned $1,500 for services as a director of certain of the Company's
affiliated banks and $500 for committee meetings. William H. Brenton
earned $10,200 for services as director of the Company and $8,050 for
services as a director of certain of the Company's affiliated banks.

William H. Brenton and Junius C. Brenton participate in the Company's
split dollar life insurance program. The plan is designed to encourage
their continued participation in the Company following their retirement and
to aid them with their estate planning goals. The life insurance program
provides up to $3,500,000 and $2,000,000 of life insurance coverage to
William H. Brenton and Junius C. Brenton and their spouses, respectively.
Pursuant to the terms of the program, the insurance policies are held in a
trust created for the benefit of the named Director and their spouse. The
Company is obligated to pay $114,000 of the premiums for a period of seven
(7) years for William H. Brenton and $48,314 of the premiums for a period
of seven (7) years for Junius C. Brenton. Upon the termination of the
policies, the Company is repaid the premiums together with interest in
excess of $300,000 and $150,000 for William H. Brenton and Junius C.
Brenton, respectively, on the premiums at the rate of 5.2 percent per
annum. The amount of the premiums paid for 1997 was $114,000 for William
H. Brenton and $48,314 for Junius C. Brenton. The Company expensed $35,401
in connection with the payments.

In the third quarter of 1995, the Company adopted the Directors'
Incentive Plan to attract, retain and compensate directors of the Company.
The Plan is a non-qualified phantom stock deferred compensation plan and
is administered by the Board of Directors. Pursuant to the plan's
provisions, one-half of the directors' fees payable to directors for
regular Board of Directors meetings are credited toward the Plan.
Participants are awarded common stock share credits to a special ledger
account maintained by the Company. Within six months following the
participant no longer being a director of the Company, the Company will pay
to the participant the value of the share credits, which are equated to the
fair market value of the Company's common stock (assuming the reinvestment
of dividends). During 1997, the values of the credits awarded to William
H. Brenton, Mr. Duben, Mr. Ferguson and Mr. Christensen were $13,378,
$13,191, $19,479 and $16,633, respectively.

Agreements with Executive Officers - The Company entered into an
agreement with Robert L. DeMeulenaere which provides him certain benefits
upon a change in control of the Company. A change in control occurs when
there is a transfer of substantially all of the Company's assets, when the
stockholders of the Company immediately preceding an event or transaction
control less than a majority of the voting power of the Company immediately
following the event or transaction, or when the Brenton family and their
affiliates together, are no longer the largest shareholder of the Company.
Pursuant to the terms of this contract, Mr. DeMeulenaere may receive up to
$500,000 if there is a change

12
<PAGE>
in control of the Company and he is terminated or there is a substantial
change in his duties within three years following a change in control. In
the event of a change in control where his employment is not terminated,
his base salary for the three years following the change in control shall
not be less than the amount immediately prior to the change in control.
The maximum benefit payable to Mr. DeMeulenaere is limited to the lessor of
the amount deductible under the Internal Revenue Code Section 280G or the
amounts set forth above. The benefits payable to Mr. DeMeulenaere are
subject to certain phase-out adjustments beginning one year following the
change in control.

II. APPROVAL OF SELECTION OF INDEPENDENT AUDITORS

The Board of Directors has selected KPMG Peat Marwick LLP as
independent auditors for the Company for the year 1998. Such selection is
being submitted to the stockholders for approval. KPMG Peat Marwick LLP
has served for many years as the independent auditors for the Company,
including 1997, and was approved by the stockholders at the last Annual
Meeting of the Stockholders. Representatives of KPMG Peat Marwick LLP are
expected to be present at the meeting, will be given an opportunity to make
a statement, if they so desire, and are expected to be available to respond
to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF KPMG PEAT
MARWICK LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.

III. OTHER MATTERS

The Board of Directors does not know of any matters to be presented at
the Annual Meeting other than the approval of minutes and those mentioned
above. However, if any other matters properly come before the meeting or
any adjournments thereof, it is the intention of the persons named in the
enclosed proxy to vote the shares represented by them in accordance with
their best judgment pursuant to the discretionary authority granted in the
proxy.

SUBMISSION OF SHAREHOLDER PROPOSALS

In accordance with the Parent Company's Bylaws, any stockholder
proposal for action at the Annual Meeting, including nominations for the
Board of Directors, must be submitted in writing to the Secretary of the
Parent Company at least five days prior to the date of the Annual Meeting
to be considered and voted upon at the meeting.

INCLUSION OF SHAREHOLDER PROPOSALS IN PROXY STATEMENT

Any stockholder may present a proposal for inclusion in the Parent
Company's proxy statement for the next Annual Meeting of the Stockholders
to be held on May 5, 1999, provided that at the time the proposal is
submitted the proponent is a record or beneficial owner of at least 1
percent or $1,000 in market value of shares entitled to be voted at the
meeting on a proposal and has held the shares for at least one year, and
provided that the proponent shall continue to own the shares through the
date of the meeting, May 5, 1999. The proponent shall notify Brenton
Banks, Inc. in writing of his or her intention to appear personally at the
meeting to present his or her proposal for action. Any proposal must be
received by Brenton Banks, Inc. no later than January 5, 1999, in order to
be included in the proxy statement of Brenton Banks, Inc. for the May 5,
1999, meeting.

13
<PAGE>

S.E.C. FORM 10-K AVAILABLE.

COPIES OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES, WILL BE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE
BY WRITTEN REQUEST ADDRESSED TO STEVEN T. SCHULER, SECRETARY, BRENTON
BANKS, INC., P.O. BOX 961, DES MOINES, IOWA 50304-0961. IT IS ALSO
AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S INTERNET WEB SITE AT
HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR.

The cost of soliciting proxies will be borne by Brenton Banks, Inc.
In addition to the solicitation of proxies by use of the mails, some of the
officers, directors and regular employees of Brenton Banks, Inc. or its
subsidiaries, none of whom will receive additional compensation therefor,
may solicit proxies by telephone, personal interview or other means.
Brenton Banks, Inc. will, upon request, reimburse nominees, custodians and
fiduciaries for expenses in forwarding proxy material to their principals.

Only stockholders of record at the close of business on March 13,
1998, will be entitled to notice of and to vote at the meeting.
Stockholders are urged to sign and date the enclosed proxy, which is
solicited on behalf of the Board of Directors, and return it as promptly as
possible. Proxies will be voted for or against the proposals presented at
the meeting, in accordance with the stockholder's specifications marked
thereon. If no specification is made, proxies will be voted on matters
presented at the meeting in accordance with the recommendations of the
Board of Directors set forth above in this Proxy Statement. The proxy does
not affect the right to vote in person at the meeting, and may be revoked
by appropriate notice to the Secretary of the Parent Company at any time
prior to the voting.

By order of the Board of Directors,

Steven T. Schuler
Secretary

14
<PAGE>
PROXY BRENTON BANKS, INC. PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING TO BE HELD ON MAY 20, 1998, WEST DES MOINES, IOWA.

The undersigned hereby appoints William H. Brenton, C. Robert Brenton and
Junius C. Brenton, and each of them, with full powers of substitution,
attorney and proxy to represent the undersigned at the Annual Meeting of
Stockholders of Brenton Banks, Inc., to be held at the West Des Moines
Marriott Hotel, West Des Moines, Iowa, at 5:00 p.m., on May 20, 1998, and
at any adjournments thereof, and to vote the shares of Brenton Banks, Inc.
standing in the name of the undersigned with all powers which the
undersigned would possess if he, she or they were personally present.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEE LISTED ON THE
REVERSE SIDE IN PROPOSAL 1, AND FOR THE APPROVAL OF KPMG PEAT MARWICK LLP
AS INDEPENDENT AUDITORS IN PROPOSAL 2.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE OR IF
AUTHORITY TO VOTE FOR NOMINEES IS NOT WITHHELD, THIS PROXY WILL BE VOTED
FOR THE NOMINEES LISTED ON THE REVERSE SIDE IN PROPOSAL 1, AND FOR PROPOSAL
2.

PLEASE MARK, AND SIGN ON REVERSE SIDE, DATE AND RETURN IN THE ENCLOSED
ENVELOPE.

Will you attend this meeting in person? [ ] Yes [ ] No If yes, there will
be _____ person(s) attending.

(Continued and to be signed on the reverse side.)

<PAGE>
BRENTON BANKS, INC.
Please mark vote in oval in the following manner using dark ink only. [ ]

1. Election of Directors -
Nominees: William H. Brenton, C. Robert Brenton, Junius C. Brenton, Robert
L. DeMeulenaere, and Gary M. Christensen, and Robert J. Currey.

[ ] For [ ] Withhold [ ] For All
All All Except nominee(s) written in below
____________________________________________

2. Proposal to approve KPMG Peat Marwick LLP, Des Moines, Iowa, as
independent auditors for the Company for 1998.

[ ] For [ ] Against [ ] Abstain

3. Upon the approval of minutes and such other matters as may properly
come before the meeting, in such a manner as he or they determine to be in
the best interest of the Company. The Board of Directors is not presently
aware of any other matters to be presented for action at the meeting.

Dated _______________________, 1998

(Signatures)___________________________________

_______________________________________________
Joint owners must both sign exactly as shown hereon. Please sign and
return each proxy card you receive. If you are an administrator or other
fiduciary, please give your full title. Corporations should sign the full
corporation name by an authorized officer. A partnership should sign in
the partnership name by one of the partners.

FOLD AND DETACH HERE

YOUR VOTE IS IMPORTANT!

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.

BRENTON BANKS, INC.
APPENDIX TO THE PROXY STATEMENT
FISCAL YEAR 1997

<PAGE>
TABLE OF CONTENTS

PAGE

General Information 1

Financial Highlights 2

Management's Discussion and Analysis 3

Consolidated Average Balances and Rates 11

Selected Financial Data 12

Consolidated Statements of Condition 13

Consolidated Statements of Operations 14

Consolidated Statements of Cash Flows 15

Consolidated Statements of Changes in
Common Stockholders' Equity 16

Notes to Consolidated Financial Statements 17

Management's Report 31

Independent Auditors' Report 31

Stock Information 32

Corporate Structure 33

<PAGE>
BRENTON BANKS, INC.

GENERAL INFORMATION

Brenton Banks, Inc. (the "Company") is a bank holding company registered
under the Bank Holding Company Act of 1956 and a savings and loan holding
company under the Savings and Loan Holding Company Act. Brenton Banks, Inc.
was organized as an Iowa corporation under the name of Brenton Companies in
1948. Subsequently, the Company's name was changed to its current name,
Brenton Banks, Inc.

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
1997 1996 1995
<S> <C> <C> <C>
Operating Results
Net interest income $ 60,133,764 56,052,142 53,332,143
Provision for loan losses 3,900,000 2,900,000 1,864,801
Total noninterest income 27,505,789 23,327,441 17,846,740
Total noninterest expense 57,698,564 56,090,571 55,051,267
Income before income
taxes and minority
interest 26,040,989 20,389,012 14,262,815
Net income 18,010,107 14,015,430 10,407,354

Per Common Share*
Net income-basic $ 1.03 .78 .56
Net income-diluted 1.01 .76 .55
Cash dividends .273 .207 .186
Book value, including
unrealized gains
(losses)** 7.46 6.86 6.46
Book value, excluding
unrealized gains
(losses)*** 7.28 6.80 6.38
Closing bid price 19.63 12.56 8.78

At December 31
Assets $1,718,483,797 1,632,095,082 1,582,779,320
Loans 993,189,110 941,943,513 910,193,212
Nonperforming loans 6,712,000 6,167,000 5,619,000
Deposits 1,364,270,491 1,353,057,111 1,361,942,715
Common stockholders'
equity** 129,379,299 121,954,229 119,533,631

Ratios
Return on average common
stockholders' equity
(ROE)** 14.47% 11.76 9.04
Return on average assets
(including minority
interest) (ROA) 1.14 .92 .71
Net interest margin 4.16 4.03 3.89
Net noninterest margin (1.86) (2.09) (2.38)
Efficiency ratio 63.66 68.27 73.70
Loan to deposit ratio 72.80 69.62 66.83
Allowance for loan losses
to total loans 1.28 1.20 1.22
Primary capital to
assets*** 8.32 8.33 8.40
Equity to assets*** 7.36 7.41 7.47
Tier 1 leverage capital
ratio*** 7.63 7.62 7.45
Nonperforming loans as a
percent of loans .68 .65 .62
Net charge-offs as a
percent of average loans .26 .29 .18
Allowance for loan losses
as a percent of
nonperforming loans 189.69 183.69 197.01
<FN>
* Restated for the 2-for-1 stock split effective
February 1998 and the 10% common stock dividends
effective in 1997 and 1996.
** Including unrealized gains (losses) on securities
available for sale.
*** Excluding unrealized gains (losses) on securities
available for sale.
</TABLE>

<PAGE>
Management's Discussion and Analysis

For 1997, Brenton Banks, Inc. and Subsidiaries (the "Company") reported
net income of $18,010,107 compared to 1996 earnings of $14,015,430.

Capital Resources

Common stockholders' equity totaled $129,379,299 as of December 31, 1997,
a 6.1 percent increase from the prior year.

In January 1998, the Board of Directors (the "Board") declared a 2-for-1
stock split for holders of record as of February 10, 1998, payable February 20,
1998. As a result of this action, each shareholder received one additional
share of common stock for each share outstanding. The par value of the stock
was reduced from $5.00 to $2.50 and authorized shares were increased to 50
million.
In May 1997, the Board declared a 10 percent common stock dividend. As a
result of this action, each shareholder received one additional share of common
stock for every 10 shares they owned. Fractional shares were paid in cash.
All per-share data has been restated to reflect the 2-for-1 stock split and the
10 percent common stock dividend. Cash dividends for 1997 totaled $4,781,675,
or $.273 per common share, which represents an increase of 31.9 percent over
1996 dividends of $.207 per share. The dividend payout ratio for 1997 was 27.0
percent of earnings per share.

As part of the Company's ongoing stock repurchase plan, 695,480 shares of
common stock (restated for the 2-for-1 stock split) were repurchased during
1997 at a cost of $10,014,087. Since the inception of the plan in 1994, the
Company has repurchased 1,996,746 shares at a total cost of $23,943,479. The
Board has extended this plan for 1998 by authorizing up to an additional $10
million for stock repurchase.

The Company continues to monitor its capital position to balance the goals
of maximizing return on average equity, while maintaining adequate capital
levels for regulatory purposes. The Company's risk-based core capital ratio at
December 31, 1997, was 10.88 percent and the total risk-based capital ratio was
11.95 percent. These ratios exceeded the minimum regulatory requirements of
4.00 and 8.00 percent, respectively. The Company's tier 1 leverage capital
ratio, which measures capital excluding intangible assets, was 7.63 percent at
December 31, 1997, exceeding the regulatory minimum requirement for well-
capitalized institutions of 5.0 percent.

The debt-to-equity ratio of Brenton Banks, Inc. (the "Parent Company") was
7.8 percent at December 31, 1997, compared to 9.2 percent at the end of 1996.
The Parent Company's $2 million line of credit with a regional bank was unused
throughout 1997. Long-term borrowings of the Parent Company at December 31,
1997, consisted entirely of $10,112,000 of capital notes.

Brenton Banks, Inc. common stock closed on December 31, 1997, at a bid
price of $19.63, an increase of 56.3 percent over the prior year-end. The
closing price at December 31, 1997, was 263.1 percent of the book value per
share of $7.46. The year-end stock price represented a price-to-1997-diluted-
earnings multiple of 19.4 times.

Brenton Banks, Inc. continues to pursue acquisition and expansion
opportunities which will fit the strategic direction of the company and enhance
the financial performance of the Company as well as strengthen the Company's
presence in current and new markets. There are currently no pending
acquisitions that would require Brenton Banks, Inc. to secure capital from
public or private markets.

Forward-Looking Information

Forward-looking information relating to the financial results or
strategies of the Company are referenced throughout Management's Discussion
and Analysis.
The following paragraphs identify forward-looking statements and the risks that
need to be considered when reading those statements.

Forward-looking statements include such words as believe, expect,
anticipate, target, goal, objective or other words with similar meaning. The
Company is under no obligation to update such forward-looking information
statements.

The risks involved in the operations and strategies of the Company include
competition from other financial institutions, changes in interest rates,
changes in economic or market conditions and changes in regulations from
federal and state regulators. These risks, which are not all inclusive, cannot
be estimated.

<PAGE>
Market Risk Management

Market risk is the risk of earnings volatility that results from adverse
changes in interest rates and market prices. The Company's market risk is
comprised primarily of interest rate risk arising from its core banking
activities of lending and deposit taking. Interest rate risk is the risk that
changes in market interest rates may adversely affect the Company's net
interest income. Management continually develops and applies strategies to
mitigate this risk. Management does not believe that the Company's primary
market risk exposures and how those exposures were managed in 1997 changed when
compared to 1996.

The Company uses a third-party computer software simulation modeling
program to measure its exposure to potential interest rate changes. For
various assumed hypothetical changes in market interest rates, numerous other
assumptions are made such as prepayment speeds on loans and securities backed
by mortgages, the slope of the Treasury yield curve, the rates and volumes on
the Company's deposit products and the rates and volumes on the Company's loan
production.

The following table sets forth the estimated changes in net interest
income (expressed as a percent of 1997 net interest income) for projected
hypothetical changes in market interest rates. As shown in the table, the
Company's net interest income is more sensitive in a falling rate scenario than
in a rising rate scenario. As market rates decline, the assumed speed of fixed
rate loan repayments increases, causing the funds received to be reinvested at
lower rates.

Current interest rates on certain liabilities are at a level that does not
allow for significant downward repricing should market interest rates decline
significantly. As market rates increase, fixed rate loans are less likely to
prepay, therefore slowing the opportunity to reinvest at the assumed higher
rates. In either a rising or falling interest rate environment, the Company
believes it has taken actions to minimize the actual impact on net interest
income. Those actions include the origination of variable-rate consumer and
commercial loans, the use of fixed rate Federal Home Loan Bank advances as
alternatives to certificates of deposit and active management of the investment
securities portfolio to provide for cash flows that will facilitate interest
rate risk management. In selected cases, the Company may enter into interest
rate swaps, however, the amount of swaps at December 31, 1997 and assumed in
the projection of net interest income are not material. The Company entered
into an interest rate floor contract at the end of 1997 to mitigate the effect
falling interest rates would have on certain deposit accounts with contracted
minimum interest rates. Actual changes in net interest income may differ from
estimated changes set forth in this table due to various risks and
uncertainties concerning how actual repricing opportunities will differ from
assumed repricing opportunities.
<TABLE>
<CAPTION>
Change in net interest income due to projected
hypothetical changes in market interest rates:
_________________________________________________________

Assumed changes
in market rates 1998 1999 2000
_______________ ____ ____ ____

<S> <C> <C> <C>
-300 bps -4.8% -10.8% -14.1%
-200 bps -3.5% -8.3% -10.9%
-100 bps -2.1% -4.6% -6.2%
Flat -0.5% -1.4% -2.0%
+100 bps 0.6% 1.6% 2.3%
+200 bps -1.7% 0.3% 2.3%
+300 bps -3.6% -0.4% 3.0%

<FN>
(Changes in hypothetical interest rates are assumed to be instantaneous and
sustained parallel shifts in the yield curve.)
</TABLE>

Asset/Liability Management

The goal of asset/liability management is to structure the balance sheet
so net interest margin fluctuates in a narrow range during periods of changing
interest rates. The Company currently believes that net interest income would
fall by less than 5 percent if interest rates increased or decreased by 300
basis points over a one-year time horizon. This is within the Company's policy
limits.

The slope of the yield curve is also a major determinant in the net
interest income of the Company. Generally, the

<PAGE>
steeper the intermediate treasury to LIBOR curve, the better the prospects for
net interest income improvement. This curve is very flat at this time.

To improve net interest income and lessen interest rate risk, management
continued its strategy of de-emphasizing fixed-rate portfolio residential real
estate loans with long repricing periods. When appropriate for interest rate
management purposes, the Company will consider securitization of real estate
loans. The Company continues to focus on reducing interest rate risk by
emphasizing growth in variable rate loans.

In addition to normal balance sheet instruments, the Company has utilized
Federal Home Loan Bank advances and interest rate swaps to reduce interest rate
risk.

Liquidity

The Company actively monitors and manages its liquidity position with the
objective of maintaining sufficient cash flows to fund operations and meet
customer commitments. Federal funds sold, loans held for sale and investment
securities available for sale are readily marketable assets. Maturities of all
investment securities are managed to meet the Company's normal liquidity
needs. Investment securities available for sale may be sold prior to maturity
to meet liquidity needs, to respond to market changes or to adjust the
Company's interest rate risk position. Federal funds sold and assets available
for sale comprised 30.0 percent of the Company's total assets at December 31,
1997.

Net cash provided from operations of the Company is another major source
of liquidity and totaled $8,523,584 in 1997, $25,015,045 in 1996 and
$8,388,374 in 1995. These strong cash flows from operations are expected to
continue in the foreseeable future.

The Company has historically maintained a stable deposit base and a
relatively low level of large deposits which result in a low dependence on
volatile liabilities. At December 31, 1997, the Company had advances of
$100,250,000 from the Federal Home Loan Bank ("FHLB") of Des Moines, of which
$90,250,000 were used as a means of providing long-term, fixed-rate funding for
certain fixed-rate assets and managing interest rate risk. The remaining
$10,000,000 represents an advance on a variable rate, short-term $10,000,000
line of credit used to fund mortgage loans originated for sale. The Company
had additional borrowing capacity available from the FHLB of approximately $22
million at December 31, 1997.

The combination of high levels of potentially liquid assets, strong cash
flows from operations, low dependence on volatile liabilities and additional
borrowing capacity provided strong liquidity for the Company at December 31,
1997.

The Parent Company had sufficient cash flow and liquidity at December 31,
1997. The primary funding source for the Parent Company is dividends from its
subsidiaries. Dividends of approximately $15 million were available to be paid
to the Parent Company by subsidiary banks without reducing capital ratios below
regulatory minimums. At the end of 1997, the Parent Company had $3.6 million
of interest-bearing deposits with banks, a $2 million unused line of credit,
aswell as additional borrowing capacity.

Results of Operations - 1997 Compared to 1996

Net Income

For the year ended December 31, 1997, Brenton Banks, Inc. recorded net
income of $18,010,107, an increase of 28.5 percent over 1996, which totaled
$14,015,430. Diluted earnings per common share were $1.01 compared to $.76 for
1996. Return on average assets (ROA) was 1.14 percent in 1997, compared to .92
percent in 1996. The return on average equity (ROE) was 14.47 percent,
compared to 11.76 percent one year earlier.

Net Interest Income

Net interest income rose 7.3 percent to $60,133,764 for 1997. The
increase in net interest income is directly attributable to both favorable rate
and volume variances. Average earning assets increased 4.3 percent over 1996
while average interest-bearing liabilities increased 4.0 percent. The average
rate earned on earning assets increased 15 basis points, while the average rate
paid on interest-bearing liabilities increased only 4 basis points.

The net interest spread, which is the difference between the rate earned
on assets and the rate paid on liabilities, rose to 3.69 percent from 3.58
percent last year. Net interest margin, which is tax equivalent net interest
income as a percentage of

<PAGE>
average earning assets, averaged 4.16 percent in 1997 compared to 4.03 percent
in 1996. To improve net interest margin and lessen interest rate risk, the
Company continued its strategy of de-emphasizing portfolio real estate loans
and developing more commercial, agricultural, business and consumer loans.

Loan Quality

Loan quality remains strong with nonperforming loans at December 31, 1997
totaling $6,712,000 or .68 percent of loans. This compares to .65 percent at
December 31, 1996, or $6,167,000. Nonperforming loans include loans on
nonaccrual status, loans that have been renegotiated to below market interest
rates or terms, and loans past due 90 days or more.

The allowance for loan losses, which totaled $12.7 million, represented
189.69 percent of nonperforming loans at the end of 1997, compared to 183.69
percent one year ago. The provision for loan losses totaled $3,900,000 for the
year ended December 31, 1997, compared to $2,900,000 for 1996. The increase in
the provision of $1,000,000 is primarily related to the $50.5 million increase
in average loans outstanding during 1997 and projected future loan growth. The
Company's net charge-offs as a percent of average loans were .26 percent for
1997 compared to .29 percent for 1996, both of which were better than
historical industry peer group averages. Loan losses for 1997 were primarily
concentrated in the consumer loan portfolio.

Loan quality control and risk management are carefully balanced with goals
for loan growth. The Company has a formal structure for reviewing and
approving all loans. Documentation and loan quality reviews are performed
routinely by internal loan review personnel, as well as by regulatory
examiners.

The allowance for loan losses represents a reserve available to absorb
estimated possible future loan losses within the loan portfolio. The allowance
is based on management's judgment after considering various factors such as the
current and anticipated economic environment, historical loan loss experience,
and most importantly, the evaluation of individual loans by lending officers
and internal loan review personnel.

Using the Company's standard evaluation process, individual loan officers
evaluate loan characteristics, the borrower's financial condition and
collateral values and rate all loans on a 1 to 8 rating scale. From these
assessments, the Reserve Adequacy Committee performs quarterly reviews of the
loan portfolio quality, quantifies the results and reviews the calculations of
the required allowance for loan losses. In addition, the Reserve Adequacy
Committee approves charge-offs and reviews subsequent collection action plans
for problem credits.

Management believes the allowance for loan losses at December 31, 1997,
was sufficient to absorb potential loan losses within the portfolio.

Net Noninterest Margin

To measure operating efficiency, the Company uses the net noninterest
margin, which is the difference between noninterest income (excluding security
gains or losses) and noninterest expense as a percent of average assets. For
1997, the net noninterest margin improved to (1.86) percent compared to (2.09)
percent in 1996. Another ratio that the Company utilizes to measure
productivity is the efficiency ratio. This ratio divides noninterest expense
by the sum of tax-equivalent net interest income plus noninterest income
(excluding gains and losses on the sale of securities and loans). For the year
ended December 31, 1997, the Company's efficiency ratio was 63.66 percent,
compared to 68.27 percent one year ago. To enhance operating efficiency
throughout the organization, the Company continues to focus on cost management
and the development of strategic improvements in noninterest income and expense.

Noninterest Income

The Company achieved record levels of noninterest income in 1997. For
1997, total noninterest income (excluding securities transactions) increased
17.4 percent to $27,011,967 from $23,006,185 one year ago. Noninterest income
(excluding securities gains and losses) for 1997 represented 1.6 percent of
average assets and 31.0 percent of total operating income, which were the
highest levels in the history of the Company. All categories of noninterest
income, except insurance commissions and fees, reflect strong growth from the
prior year.

Service charges on deposit accounts increased 8.6 percent in 1997 to
$7,290,765. This growth related to a continued focus on collecting a higher
percentage of fees assessed and increased sales of fee-generating accounts,
particularly commercial accounts.

<PAGE>
Investment brokerage commissions totaled $4,808,048 for 1997, an increase
of 27.7 percent over the 1996 total of $3,766,436. Strong financial markets
and successful new sales initiatives drove the increase in this category.

Mortgage banking income totaled $3,274,215 for 1997 compared to $2,168,593
in 1996, an increase of 51.0 percent. This increase is attributable to a
higher volume of real estate mortgage loan originations, which totaled $179.1
million compared to $110.8 million in 1996.

Fiduciary revenues climbed 14.3 percent to $3,136,078 in 1997 compared to
$2,744,530 in 1996. This increase in revenue is due to increased volumes of
personal trusts, investment management fees and employee benefit plan fees.

Insurance commissions and fees declined 3.8 percent to $2,803,983 in 1997
due to the sale of the Company's insurance agency in Marshalltown, Iowa. The
Company is committed to the insurance business but desires to grow its
insurance operations through other distribution channels. The decrease in
property and casualty commission income due to the agency sale was largely
off-set by a 68.8 percent increase in credit-related insurance commissions.
The significant increase was due to the strong increase in direct consumer
lending and increased sales efforts during 1997.

Other service charges and fees increased 23.8 percent to $3,441,454 in
1997 compared to 1996 due to increases from letters of credit fees, fees
received from purchased receivables and real estate commissions.

Other operating income increased by $338,840 from one year ago. The
increase was due to income from bank-owned life insurance policies which did
not exist until December 1996 and a gain on the sale of the Company's insurance
agency as discussed above. Several one-time revenue items also affected this
category in 1996.

Securities transactions produced an additional increase in noninterest
income. Securities gains of $493,822 were recorded in 1997 versus gains of
$321,256 in 1996.

The growth in various noninterest income categories has enabled the
Company to reach targeted levels of total income. The Company will continue to
focus on generating fee income by providing a broad array of financial products
and services to our clients. The continued growth rate of fee income could be
vulnerable to future economic conditions and competition by other financial
institutions that cannot be estimated by the Company.

Noninterest Expense

Total noninterest expense increased only 2.9 percent in 1997 to
$57,698,564 from $56,090,571 one year ago. Exclusive of a one-time special
assessment by the FDIC totaling $1,288,000 in 1996, noninterest expense
increased 5.3 percent.

Compensation, the largest component of noninterest expense, increased
$1,363,843, or 5.4 percent, over 1996. This increase is primarily related to
commissions and incentives paid on higher sales of the fee-related products
discussed above, and expense tied to bonuses and a stock performance plan which
were both directly related to higher 1997 earnings and the Company's advancing
stock price. Fixed salaries, those that are not based on commissions, which
comprised 67.5 percent of total compensation expense, actually decreased by 3.8
percent compared to 1996. The number of full-time equivalent employees
decreased by .2 and 3.8 percent at December 31, 1997, and 1996, respectively.
The total increase in compensation expense led to a proportionate increase in
employee benefits. The Company has adopted a pay for performance philosophy
and is focusing more on variable compensation tied to performance.

Occupancy expense totaled $5,609,600 for 1997, compared to $5,502,904 for
1996, an increase of 1.9 percent. The increase was primarily related to
building repairs and maintenance. Depreciation expense declined slightly and
lease expense increased due to the sale and relocation of one facility in late
1996.

Furniture and equipment expense declined to $3,634,336, a 2.4 percent
reduction from the prior year. Decreases in furniture and equipment
depreciation, repairs and maintenance, and furniture and equipment rentals more
than offset an increase in depreciation expense for technology-related
equipment. The Company continues to focus on using technology to improve
efficiency and provide better service to our clients.

Data processing expense increased $258,910, or 10.0 percent, due to
increased costs during 1997 associated with contracted core processing.

<PAGE>
Expense related to the FDIC deposit assessments declined $1,520,230 from
1996 to $281,416. Last year's expense included the previously-discussed, one-
time $1,288,000 special assessment to fully fund SAIF. The Company continues
to pay the lowest premiums available under the FDIC's risk-based premium system.

Marketing and supplies expenses declined 22.5 and 15.2 percent,
respectively, for 1997. These cost reductions were the result of concerted
efforts to minimize the growth of overall noninterest expense and renegotiating
pricing with various vendors. Also, 1996 supplies expense included one-time
charges related to the 1995 merger of the commercial banks.

Other operating expenses increased by $2,040,604, or 21.3 percent, when
comparing 1997 results to 1996. The increase was primarily due to increases in
check processing expense, consulting and legal fees and miscellaneous losses.

The "Year 2000 Issue", which has received much recent media coverage, is a
top priority for Brenton. The Company's core loan and deposit applications are
ALLTEL Information Services, Inc. ("ALLTEL") products and Brenton outsources
the data processing function to ALLTEL. Brenton and ALLTEL are working in
partnership to address the Year 2000 issues of the core application programs as
well as all other computer software programs used in the Company. The
incremental expense associated with becoming Year 2000 compliant is not
anticipated to be material. However, there is an opportunity cost associated
with this project in that the people involved are regular Brenton and ALLTEL
employees who would normally be spending their time on other projects. There
will be benefits as a result of this project because systems are being improved
in addition to becoming Year 2000 compliant.

The Company has a Year 2000 Committee and Plan in place and has been
executing on that plan. The Company expects to have all core application
systems Year 2000 compliant by the end of 1998 and all other software products
compliant by early 1999, with further testing to take place throughout the
remainder of 1999.

The Company continues to focus on cost management and evaluates all major
expense items in an effort to control the growth rate of noninterest expenses.

Income Taxes

The Company's income tax strategies include reducing income taxes by
purchasing securities and originating loans that produce tax-exempt income.
The goal is to maintain the maximum level of tax-exempt assets in order to
benefit the Company on both a tax-equivalent yield basis and in income tax
savings. The effective rate of income tax expense as a percent of income
before income tax and minority interest was 28.0 percent for 1997 compared to
28.3 percent for 1996.

Results of Operations - 1996 Compared to 1995

Net Income

For the year ended December 31, 1996, Brenton Banks, Inc. recorded net
income of $14,015,430, an increase of 34.7 percent over 1995, which totaled
$10,407,354. Diluted earnings per common share were $.76 compared to $.55 for
1995. Return on average assets (ROA) was .92 percent in 1996, compared to .71
percent in 1995. The return on average equity (ROE) was 11.76 percent,
compared to 9.04 percent one year earlier.

Net Interest Income

Net interest income rose 5.1 percent to $56,052,142 for 1996. Both
average earning assets and average interest-bearing liabilities increased 1.0
percent from 1995. The Company experienced a favorable change in the mix of
earning assets and interest-bearing liabilities which contributed to an
increase in net interest margin of 14 basis points over 1995. The average
rate earned on earning assets declined 6 basis points, while the average rate
paid on interest-bearing liabilities declined 23 basis points.

The net interest spread rose to 3.58 percent from 3.41 percent last year.
Net interest margin averaged 4.03 percent in 1996 compared to 3.89 percent in
1995.

Loan Quality

Loan quality was strong in 1996 with nonperforming loans at December 31,
1996, totaling $6,167,000 or .65 percent of loans. This compares to .62
percent at December 31, 1995, or $5,619,000. The majority of the increase in
nonperforming

<PAGE>
loans was related to two loans that were restructured within the commercial
loan portfolio.

The allowance for loan losses, which totaled $11.3 million, represented
183.69 percent of nonperforming loans at the end of 1996, compared to 197.01
percent one year earlier. The provision for loan losses totaled $2,900,000 for
the year ended December 31, 1996, compared to $1,864,801 for 1995. The
increase of $1,035,199 in provision is primarily related to a $933,535, or 54.7
percent, increase in net loan charge-offs during 1996. The Company's net
charge-offs as a percent of average loans were .29 percent for 1996 compared to
.18 percent for 1995. Loan losses for 1996 were concentrated in the consumer
loan portfolio.

Net Noninterest Margin

For 1996, the net noninterest margin improved to (2.09) percent compared
to (2.38) percent in 1995. At December 31, 1996, the Company's efficiency
ratio
was 68.27 percent, compared to 73.70 percent in 1995.

Noninterest Income

For 1996, total noninterest income (excluding securities transactions)
increased 28.9 percent to $23,006,185 from $17,849,743 one year earlier.
Noninterest income (excluding securities gains and losses) for 1996 represented
1.45 percent of average assets and 29.10 percent of total operating income.
All categories of noninterest income reflect strong gains from the prior year.

Service charges on deposit accounts rose 21.0 percent in 1996 compared to
1995. This growth related to full implementation of standardized service
charges as well as a new focus on collecting a higher percentage of fees
assessed.

Investment brokerage commissions totaled $3,766,436 for 1996, an increase
of 23.7 percent over the 1995 total of $3,044,107. Strong financial markets
and successful new sales initiatives drove the increase in this category.

Insurance commissions and fees increased 24.6 percent to $2,915,666 in
1996 due primarily to higher sales of both credit-related insurance and
insurance agency operations.

Mortgage banking income totaled $2,168,593 for 1996 compared to $1,427,342
in 1995, an increase of 51.9 percent. This increase was attributable to a
higher volume of real estate mortgage loan originations, which totaled $110.8
million, and a greater percentage of loans being sold into the secondary market
with the servicing rights being retained.

Fiduciary income rose 13.2 percent to $2,744,530 in 1996 compared to
$2,425,105 in 1995. This increase in revenue was related to increased volumes
of personal trusts, investment management fees and employee benefit plans.

Other operating income increased by $1,288,140 when comparing 1996 to
1995. Gains on the sale of loans of $83,440 were recorded in 1996 versus
losses in 1995 of $232,454. Several one-time revenue items affected this
category in both periods.

Securities transactions produced an additional increase in noninterest
income. Securities gains of $321,256 were recorded in 1996 versus losses of
$3,003 in 1995.

Noninterest Expense

Total noninterest expense increased 1.9 percent in 1996 to $56,090,571
from $55,051,267 in 1995. Noninterest expense for 1996 included a nonrecurring
charge for a special assessment by the FDIC. This assessment was based upon
all deposits insured by the Savings Association Insurance Fund (SAIF) as of
March 31, 1995, and equaled approximately 65.7 basis points per $100 of
SAIF-insured deposits. Brenton's assessment was $1,288,000. Excluding this
one-time assessment, noninterest expense would have actually decreased by .5
percent.

Compensation, the largest component of noninterest expense, increased
$2,645,244 or 11.6 percent over 1995. This increase was primarily related to
commissions paid on higher sales of fee-related products, expense tied to a
stock performance plan and severance costs. Fixed salaries actually decreased
by 6.6 percent. The number of full-time equivalent employees decreased by 3.8
percent and 13.6 percent at December 31, 1996 and 1995, respectively. The
total increase in compensation expense led to a proportionate increase in
employee benefits.

<PAGE>
Several new facilities and remodeling projects were completed in 1996 and
1995, which explains the combined increase in the categories of occupancy and
furniture and equipment expense. Occupancy expense totaled $5,502,904 for
1996, compared to $4,912,417 for 1995. Increases within the occupancy category
were associated with rents, leases and depreciation expense related to these
new facilities. Results for 1996 included the first full year of expense for
these new facilities.

Furniture and equipment expense decreased $21,871 from the prior year.
Depreciation expense increased by $197,130 due to technology updates throughout
the Company. Decreases in repairs and maintenance, and furniture and equipment
rentals offset the increase in depreciation expense. During 1996, 62.8 percent
of the Company's capital expenditures were in the technology area.

Data processing expense totaled $2,591,485, an increase of 8.9 percent
compared to 1995. This increase was related to new data servicing contracts in
1996 for mortgage loan processing and personal computer network maintenance and
support. The expense associated with core main frame processing actually
decreased which offset the cost of the new contracts.

Expense related to the FDIC deposit assessments increased 1.0 percent in
1996 to $1,801,646, which includes the previously-discussed, one-time
$1,288,000 special assessment to fully fund SAIF. This assessment related to
the deposits insured by SAIF, which represented approximately 16.4 percent of
the Company's total deposits at the end of 1996.

Other operating expenses decreased $2.6 million, or 21.2 percent, when
comparing 1996 results to 1995. This decline was the result of benefits
derived in 1996 from the 1995 merger of the Company's 13 commercial banks into
one bank charter, cost control measures and one time costs incurred in 1995.

Income Taxes

The Company's income tax strategies include reducing income taxes by
purchasing securities and originating loans that produce tax-exempt income.
The effective rate of income tax expense as a percent of income before income
tax and minority interest was 28.3 percent for 1996 compared to 22.5 percent
for 1995.

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND RATES

Average Balances (In thousands) 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Assets:
Cash and due from banks $ 58,681 65,439 57,138 46,301 46,025
Interest-bearing deposits
with banks 2,460 1,393 1,076 124 762
Federal funds sold and
securities purchased under
agreements to resell 31,472 26,188 39,763 37,666 23,725
Trading account securities 12 --- --- 116 ---
Investment securities:
Available for sale-taxable 348,232 330,002 244,786 245,913 53,174
Available for sale-tax-exempt 99,868 85,471 100,859 132,040 ---
Held to maturity-taxable 12,700 46,271 65,959 35,794 299,993
Held to maturity-tax-exempt 56,204 51,639 50,235 44,584 164,520
Loans held for sale 10,284 7,983 5,908 2,575 6,165
Loans 970,115 919,578 945,724 936,370 802,088
Allowance for loan losses (12,171) (11,440) (11,166) (10,502) (9,615)
Premises and equipment 29,841 31,728 31,436 24,545 23,045
Other 41,771 28,642 29,508 25,663 26,543
__________ _________ _________ _________ _________
$ 1,649,469 1,582,894 1,561,226 1,521,189 1,436,425

Liabilities and Stockholders'
Equity:
Deposits
Noninterest-bearing $ 139,480 131,051 128,770 127,464 119,322
Interest-bearing:
Demand* 81,430 376,259 355,819 250,520 217,754
Savings* 551,509 241,250 231,633 294,715 299,640
Time 567,258 583,508 626,497 625,981 622,789
__________ _________ _________ _________ _________
Total deposits 1,339,677 1,332,068 1,342,719 1,298,680 1,228,525
Federal funds purchased and
securities sold under agreements
to repurchase 78,234 59,276 40,237 62,656 42,715
Other short-term borrowings 53,223 17,295 6,536 4,860 33
Accrued expenses and other
liabilities 17,097 17,520 14,896 13,254 12,805
Long-term borrowings 32,056 33,094 37,264 26,500 14,077
__________ _________ _________ _________ _________
Total liabilities 1,520,287 1,459,253 1,441,652 1,404,950 1,329,135
Minority interest in consolidated
subsidiaries 4,691 4,471 4,391 4,290 4,150
Common stockholders' equity 124,491 119,170 115,183 111,949 103,140
__________ _________ _________ _________ _________
$ 1,649,469 1,582,894 1,561,189 1,521,189 1,436,425

Summary of Average Interest Rates
Average rates earned:
Interest-bearing deposits with
banks 4.80% 4.87 6.20 6.65 2.88
Trading account securities 4.26 --- --- 6.36 ---
Federal funds sold and securities
purchased under agreements to
resell 5.54 5.41 5.69 4.53 2.05
Investment securities:
Available for sale-taxable 6.31 6.08 5.96 5.30 5.28
Available for sale-tax exempt
(tax equivalent basis) 7.04 7.13 6.71 6.37 ---
Held to maturity-taxable 6.39 6.22 6.17 5.20 5.54
Held to maturity-tax-exempt
(tax equivalent basis) 6.72 6.68 8.05 7.70 6.97
Loans held for sale 7.89 8.47 6.71 7.50 8.43
Loans 8.82 8.69 8.69 8.14 8.77

Average rates paid:
Deposits 4.11% 4.12 4.37 3.55 3.70
Federal funds purchased and
securities sold under agreements
to repurchase 4.36 4.17 4.08 3.38 2.41
Other short-term borrowings 5.98 5.87 5.67 5.42 3.63
Long-term borrowings 6.86 7.07 7.03 6.86 8.60
Average yield on interest-earning
assets 7.95% 7.80 7.86 7.31 7.57
Average rate paid on interest-
bearing liabilities 4.26 4.22 4.45 3.62 3.71
Net interest spread 3.69 3.58 3.41 3.69 3.86
Net interest margin 4.16 4.03 3.89 4.12 4.28
<FN>
* The variance in average balances between 1997 and 1996 is due to an internal
reclassification in late 1996 of certain accounts. The reclassification was
implemented to reduce Federal Reserve Bank reserve requirements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA

Year-end Balances
(In thousands) 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total assets $1,718,484 $1,632,095 1,582,779 1,581,327 1,480,596 1,431,140 1,360,942 1,274,301 961,370 921,207
Interest-earning assets 1,578,923 1,497,600 1,461,218 475,473 1,400,709 1,323,252 1,267,402 1,181,172 883,721 845,571
Interest-bearing liabilities 1,406,258 1,335,609 1,300,508 1,315,378 1,224,951 1,181,013 1,141,008 1,052,597 769,717 733,133
Noninterest-bearing
deposits 161,007 153,284 143,220 136,548 127,132 137,212 115,479 125,626 113,349 118,392
Long-term borrowings 36,662 34,860 38,178 28,939 20,055 13,284 13,634 12,675 14,701 16,215
Preferred stock --- --- --- --- --- --- --- --- --- ---
Common stockholders'
equity** 129,379 121,954 119,534 110,430 112,418 97,430 86,712 77,258 63,522 56,401

Results of operations
(In thousands)
Interest income $ 118,239 111,383 111,040 101,223 98,656 106,560 115,561 106,826 85,722 76,745
Interest expense 58,105 55,331 57,708 45,772 44,427 54,773 68,687 64,431 49,102 43,180
Net interest income 60,134 56,052 53,332 55,451 54,229 51,787 46,874 42,395 36,620 33,565
Provision for loan losses 3,900 2,900 1,865 1,988 1,252 1,411 799 869 760 1,214
Net interest income after
provision for loan losses 56,234 53,152 51,467 53,463 52,977 50,376 46,075 41,526 35,860 32,351
Noninterest income 27,506 23,327 17,847 16,593 17,863 14,684 12,715 11,554 10,113 10,367
Noninterest expense 57,699 56,090 55,051 56,657 50,415 46,591 42,284 37,820 32,781 32,066
Income before income
taxes and minority
interest 26,041 20,389 14,263 13,399 20,425 18,469 16,506 15,260 13,192 10,652
Income taxes 7,288 5,771 3,205 2,701 5,508 4,884 4,308 4,388 4,016 2,527
Minority interest 743 603 651 591 667 632 539 533 472 422
Net income 18,010 14,015 10,407 10,107 14,250 12,953 11,659 10,339 8,704 7,703
Preferred stock dividend
requirement --- --- --- --- --- --- --- --- --- 81
Net income available
to common stockholders $ 18,010 14,015 10,407 10,107 14,250 12,953 11,659 10,339 8,704 7,622
Average common shares
outstanding
(In thousands)* 17,505 18,092 18,569 19,095 18,994 18,829 18,773 18,741 17,414 17,414
Per common share*
Net income-basic $ 1.03 .78 .56 .53 .75 .69 .62 .55 .50 .44
Net income-diluted 1.01 .76 .55 .52 .74 .68 .61 .55 .49 .44
Cash dividends .273 .207 .186 .182 .165 .145 .134 .113 .091 .048
Common stockholders'
equity*** 7.28 6.80 6.38 6.07 5.74 5.15 4.61 4.12 3.65 3.24
Selected operating ratios
Return on average assets
(including minority
interest) 1.14% .92 .71 .70 1.04 .98 .93 .95 1.00 .90
Return on average common
stockholders' equity** 14.47 11.76 9.04 9.03 13.82 14.13 14.27 14.39 14.50 14.34
Equity to assets*** 7.36 7.41 7.47 7.28 7.40 6.81 6.37 6.06 6.61 6.12
Common dividend payout 27.03 27.24 33.82 35.00 22.30 21.32 21.97 20.55 18.57 10.91
Allowance for loan losses
as a percent of loans 1.28 1.20 1.22 1.12 1.12 1.20 1.14 1.25 1.55 1.60
Net charge-offs to average
loans outstanding .26 .29 .18 .10 .05 .13 .15 .12 .08 .18
<FN>
* Restated for 2-for-1 stock split, effective February 1998, 10% common stock dividends effective in 1997 and 1996,
3-for-2 stock split effective in 1994 and 2-for-1 stock split effective in 1990.
** Including unrealized gains (losses) on securities available for sale.
*** Excluding unrealized gains (losses) on securities available for sale.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION

December 31 1997 1996
<S> <C> <C>
Assets:
Cash and due from banks (note 2) $ 77,468,210 76,900,524
Interest-bearing deposits with banks 1,319,700 731,554
Federal funds sold and securities purchased
under agreements to resell 9,300,000 15,200,000
Trading account securities 77,220 ---

Investment securities:
Available for sale (note 3) 486,653,872 461,099,272
Held to maturity (market value of
$69,852,000 and $73,316,000
at December 31, 1997, and 1996,
respectively) (note 3) 69,079,622 72,754,985

Investment securities 555,733,494 533,854,257
Loans held for sale 19,303,411 5,870,298
Loans (notes 4, 9 and 10) 993,189,110 941,943,513
Allowance for loan losses (note 5) (12,732,131) (11,328,359)
Loans, net 980,456,979 930,615,154
Premises and equipment (notes 6 and 10) 28,898,589 30,379,446
Accrued interest receivable 15,233,682 14,417,786
Other assets (notes 4 and 8) 30,692,512 24,126,063
$ 1,718,483,797 1,632,095,082

Liabilities and Stockholders' Equity:
Deposits (note 7):
Noninterest-bearing $ 161,007,156 153,284,094
Interest-bearing:
Demand 117,664,352 99,277,477
Savings 527,364,856 527,791,360
Time 558,234,127 572,704,180
Total deposits 1,364,270,491 1,353,057,111
Federal funds purchased and securities sold
under agreements to repurchase 92,632,576 66,826,120
Other short-term borrowings (note 9) 73,700,000 34,150,000
Accrued expenses and other liabilities 16,980,763 16,633,068
Long-term borrowings (note 10) 36,662,000 34,860,024
Total liabilities 1,584,245,830 1,505,526,323
Minority interest in consolidated subsidiaries 4,858,668 4,614,530
Redeemable preferred stock, $1 par; 500,000
shares authorized; issuable in series, none
issued --- ---
Common stockholders' equity (notes 12, 13, 14
and 16):
Common stock, $2.50 par; 50,000,000 shares
authorized; 17,334,048 and 16,171,368 shares
issued and outstanding at December 31, 1997,
and 1996, respectively 43,335,120 40,428,420
Capital surplus --- ---
Retained earnings 82,824,333 80,448,768
Unrealized gains on securities available for
sale, net 3,219,846 1,077,041
Total common stockholders' equity 129,379,299 121,954,229
$ 1,718,483,797 1,632,095,082
<FN>
Commitments and contingencies (notes 17 and 18).
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31 1997 1996 1995
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans (note 4) $ 86,020,464 80,301,707 82,525,850
Interest and dividends on investments:
Available for sale-taxable 21,969,148 20,063,114 14,577,652
Available for sale-tax-exempt 4,929,898 4,250,463 4,446,824
Held to maturity-taxable 811,729 2,878,982 4,069,617
Held to maturity-tax-exempt 2,647,149 2,404,155 3,090,185
Interest on federal funds sold and
securities purchased under agreements
to resell 1,742,284 1,416,539 2,263,734
Other interest income 118,695 68,157 66,705
___________ ___________ ___________
Total interest income 118,239,367 111,383,117 111,040,567

Interest Expense:
Interest on deposits (note 7) 49,310,346 49,507,425 53,075,352
Interest on federal funds purchased and
securities sold under agreements to
repurchase 3,413,432 2,469,939 1,641,516
Interest on other short-term borrowings
(note 9) 3,183,053 1,015,110 370,642
Interest on long-term borrowings (note 10) 2,198,772 2,338,501 2,620,914
___________ ___________ ___________
Total interest expense 58,105,603 55,330,975 57,708,424
Net interest income 60,133,764 56,052,142 53,332,143
Provision for loan losses (note 5) 3,900,000 2,900,000 1,864,801
___________ ___________ ___________
Net interest income after provision for
loan losses 56,233,764 53,152,142 51,467,342

Noninterest Income:
Service charges on deposit accounts 7,290,765 6,712,874 5,547,796
Investment brokerage commissions 4,808,048 3,766,436 3,044,107
Mortgage banking income 3,274,215 2,168,593 1,427,342
Fiduciary income 3,136,078 2,744,530 2,425,105
Insurance commissions and fees 2,803,983 2,915,666 2,339,817
Other service charges, collection and
exchange charges, commissions and fees 3,441,454 2,779,502 2,435,132
Net realized gains (losses) from
securities available for sale (note 3) 493,822 321,256 (3,003)
Other operating income 2,257,424 1,918,584 630,444
___________ ___________ ___________
Total noninterest income 27,505,789 23,327,441 17,846,740

Noninterest Expense:
Compensation 26,824,307 25,460,464 22,815,220
Employee benefits (note 15) 4,303,104 4,245,682 4,158,580
Occupancy expense of premises, net
(notes 6 and 17) 5,609,600 5,502,904 4,912,417
Furniture and equipment expense
(notes 6 and 17) 3,634,336 3,725,150 3,747,021
Data processing expense (note 18) 2,850,395 2,591,485 2,379,920
Marketing 1,361,963 1,756,473 1,741,390
Supplies 1,195,762 1,409,690 1,326,928
FDIC deposit insurance assessment 281,416 1,801,646 1,783,213
Other operating expense 11,637,681 9,597,077 12,186,578
___________ ___________ ___________
Total noninterest expense 57,698,564 56,090,571 55,051,267

Income before income taxes and
minority interest 26,040,989 20,389,012 14,262,815
Income taxes (note 8) 7,287,628 5,770,600 3,204,687
___________ ___________ ___________
Income before minority interest 18,753,361 14,618,412 11,058,128
Minority interest 743,254 602,982 650,774
___________ ___________ ___________
Net income $ 18,010,107 14,015,430 10,407,354
Per common share (notes 1 and 13):
Net income-basic $ 1.03 .78 .56
Net income-diluted 1.01 .76 .55
Cash dividends .273 .207 .186
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31 1997 1996 1995
<S> <C> <C> <C>
Operating Activities:
Net income $ 18,010,107 14,015,430 10,407,354
Adjustments to reconcile net income to
net cash provided by operating
activities:
Provision for loan losses 3,900,000 2,900,000 1,864,801
Depreciation and amortization 4,216,828 4,301,776 4,097,022
Deferred income taxes (685,223) 949,396 (25,181)
Net realized (gains) losses from
securities available for sale (493,822) (321,256) 3,003
Net (increase) decrease in loans held
for sale (13,433,113) 2,837,011 (6,602,817)
Net increase in accrued interest
receivable and other assets (3,501,066) (1,402,881) (1,678,132)
Net increase in accrued expenses, other
liabilities and minority interest 509,873 1,735,569 322,324
_____________ ____________ ____________
Net cash provided by operating activities 8,523,584 25,015,045 8,388,374

Investing Activities:
Investment securities available for sale:
Purchases (304,725,316) (289,895,560) (242,871,379)
Maturities 163,857,601 150,480,123 278,575,538
Sales 119,401,553 67,547,581 5,577,835
Investment securities held to maturity:
Purchases (26,528,449) (45,046,248) (121,543,300)
Maturities 30,203,812 79,614,914 59,896,255
Net (increase) decrease in loans (53,741,825) (26,364,596) 28,502,974
Purchase of other assets for
investment (5,000,000) (10,017,329) ---
Purchases of premises and equipment (2,526,958) (2,734,491) (9,733,181)
Proceeds from sales of premises and
equipment 225,080 1,356,634 360,470
_____________ ____________ ____________
Net cash used by investing activities (78,834,502) (75,058,972) (1,234,788)

Financing Activities:
Net increase in noninterest-bearing,
interest-bearing demand and savings
deposits 25,683,433 22,335,320 51,054,199
Net increase (decrease) in time deposits (14,470,053) (31,220,924) (29,394,594)
Net increase (decrease) in federal funds
purchased and securities sold under
agreements to repurchase 25,806,456 25,718,709 (29,596,325)
Net increase (decrease) in other
short-term borrowings 25,550,000 15,500,000 (9,500,000)
Proceeds of long-term borrowings 17,806,000 14,604,000 12,429,000
Repayment of long-term borrowings (2,004,024) (1,771,779) (3,190,610)
Dividends on common stock (4,781,675) (3,748,653) (3,498,220)
Proceeds from issuance of common stock
under the employee stock purchase plan 551,247 71,675 ---
Proceeds from issuance of common stock
under the stock option plan 1,286,157 290,748 187,213
Proceeds from issuance of common stock
under the long-term stock compensation
plan 246,915 334,834 361,602
Payment for shares reacquired under common
stock repurchase plan (10,014,087) (8,248,331) (4,830,111)
Payment for fractional shares resulting
from common stock dividend (16,399) (13,744) ---
_____________ ____________ ____________
Net cash provided (used) by financing
activities 65,643,970 33,851,855 (15,977,846)
_____________ ____________ ____________
Net decrease in cash and
cash equivalents (4,666,948) (16,192,072) (8,824,260)
Cash and cash equivalents at the
beginning of the year 92,832,078 109,024,150 117,848,410
_____________ ____________ ____________
Cash and cash equivalents at the end
of the year $ 88,165,130 92,832,078 109,024,150
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
BRENTON BANKS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS' EQUITY

Common Capital Retained Unrealized
Stock Surplus Earnings Gains (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance, December 31,
1994 $39,357,730 5,210,344 70,979,317 (5,117,046) 110,430,345
Net income --- --- 10,407,354 --- 10,407,354
Net change in
unrealized gains
(losses) --- --- --- 6,475,448 6,475,448
Dividends on common
stock
$.186 per share* --- --- (3,498,220) --- (3,498,220)
Issuance of shares of
common stock under
the stock option
plan (note 16) 98,750 88,463 --- --- 187,213
Issuance of shares of
common stock under
the long-term stock
compensation plan
(note 16) 100,445 261,157 --- --- 361,602
Shares reacquired under
the common stock
repurchase plan
(note 13) (1,290,665) (3,539,446) --- --- (4,830,111)

Balance, December 31,
1995 38,266,260 2,020,518 77,888,451 1,358,402 119,533,631
Net income --- --- 14,015,430 --- 14,015,430
Net change in
unrealized gains
(losses) --- --- --- (281,361) (281,361)
Dividends on common
stock
$.207 per share* --- --- (3,748,653) --- (3,748,653)
10% common stock
dividend (note 13) 3,684,215 --- (3,684,215) --- ---
Fractional shares
resulting from common
stock dividend --- --- (13,744) --- (13,744)
Issuance of shares of
common stock under
the stock option
plan (note 16) 128,000 162,748 --- --- 290,748
Issuance of shares of
common stock under
the long-term stock
compensation plan
(note 16) 73,590 261,244 --- --- 334,834
Issuance of shares
of common stock
under the employee
stock purchase plan
(note 16) 14,855 56,820 --- --- 71,675
Shares reacquired under
the common stock
repurchase plan
(note 13) (1,738,500) (2,501,330) (4,008,501) --- (8,248,331)

Balance, December 31,
1996 $40,428,420 --- 80,448,768 1,077,041 121,954,229
Net income --- --- 18,010,107 --- 18,010,107
Net change in
unrealized gains
(losses) --- --- --- 2,142,805 2,142,805
Dividends on common
stock
$.273 per share** --- --- (4,781,675) --- (4,781,675)
10% common stock
dividend (note 13) 3,966,905 --- (3,966,905) --- ---
Fractional shares
resulting from common
stock dividend --- --- (16,399) --- (16,399)
Issuance of shares of
common stock under
the stock option
plan (note 16) 501,760 784,397 --- --- 1,286,157
Issuance of shares of
common stock under
the long-term stock
compensation plan
(note 16) 82,945 163,970 --- --- 246,915
Issuance of shares
of common stock
under the employee
stock purchase plan
(note 16) 93,790 457,457 --- --- 551,247
Shares reacquired under
the common stock
repurchase plan
(note 13) (1,738,700) (1,405,824) (6,869,563) --- (10,014,087)

Balance, December 31,
1997 $43,335,120 --- 82,824,333 3,219,846 129,379,299
<FN>
* Reflects the 2-for-1 stock split effective February 1998 and the 10% common stock
dividends effective in 1997 and 1996.
** Reflects the 2-for-1 stock split effective February 1998 and the 10% common stock
dividend effective in 1997.

See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

BRENTON BANKS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997, 1996 AND 1995

(1) Summary of Significant Accounting Policies and
Related Matters

Nature of Operations Brenton Banks, Inc. and subsidiaries (the Company)
engage in retail, commercial, business, and agricultural banking and related
financial services from 46 locations throughout the state of Iowa. The
Company provides the usual products and services of banking such as deposits,
commercial loans, business loans, agribusiness loans, personal loans and trust
and investment management services. The Company also engages in activities
that are closely related to banking, including mortgage banking, investment,
insurance and real estate brokerage.
The accounting and reporting policies of the Company conform with
generally accepted accounting principles and general practices within the
banking industry. The following describe the more significant accounting
policies:

The Principles of Consolidation The consolidated financial statements include
the accounts of Brenton Banks, Inc. (the Parent Company) and its subsidiaries.
All material intercompany accounts and transactions have been eliminated in
the consolidated financial statements. Certain reclassifications were made in
the financial statements to agree with the current year presentation.
The excess cost over underlying net assets of consolidated subsidiaries
and other intangible assets are being amortized over 10 to 40 years and are
included in other assets in the consolidated statements of condition.
Intangible assets totaled $3,795,000 and $4,696,000 at December 31, 1997, and
1996, respectively.

Investment Securities Investment securities are classified based on the
Company's intended holding period. Securities, which may be sold prior to
maturity to meet liquidity needs, to respond to market changes or to adjust
the Company's asset-liability position, are classified as available for sale.
Securities which the Company intends to hold to maturity are classified as
held to maturity.
Investment securities available for sale are recorded at fair value. The
aggregate unrealized gains or losses, net of the income tax and minority
interest effect, are recorded as a component of common stockholders' equity.
Securities held to maturity are recorded at cost, adjusted for amortization of
premiums and accretion of discounts. The timing of the amortization and
accretion of mortgage-backed securities are adjusted for actual and projected
prepayments.
Net realized gains or losses on the sale of securities are shown in the
statements of operations. Gains or losses are computed using the specific
security identification method.

Trading Account Securities Trading account securities are carried at market
value and include securities purchased with the intent to resell in a
relatively short period of time. Gains and losses on trading account
activities, including market value adjustments, are reported in noninterest
income in the consolidated statements of operations.

Loans Loans are carried primarily at the unpaid principal balance. Interest
income on loans is accrued and recorded as income based on contractual
interest rates and daily outstanding principal balances, except on discounted
loans where unearned income is recorded as income over the life of the loans
based on the interest method.
The accrual of interest income is stopped when the ultimate collection of
a loan becomes doubtful. A loan is placed on nonaccrual status when it
becomes 90 days past due, if it is neither well secured or in the process of
collection. Once determined uncollectible, interest credited to income in the
current year is reversed and interest accrued in prior years is charged to the
allowance for loan losses.
Under the Company's credit policies, all nonaccrual and restructured
commercial, business, agricultural, commercial real estate and construction
loans are considered to be impaired loans. In determining when a loan is
impaired, management considers the delinquency status of the borrower, the
borrower's ability to generate cash and the fair market value of the
collateral. Specific allowances are established for any impaired commercial,
business, agricultural, commercial real estate or construction loan where the
recorded investment exceeds the measured value of the loan. On a practical
basis, the measured value of a loan is obtained by using the observable market
price of a loan or the fair value of the collateral, if the loan is collateral
dependent. Otherwise, the measured value of a loan is based upon the present
value of expected future cash flows discounted at the loan's effective
interest rate. Impaired loans are charged-off on the basis of management's
ongoing evaluation, but generally when it is deemed probable that the borrower
cannot generate sufficient funds to comply with contractual terms in the
normal course of business. Cash received on impaired loans is applied to
principal until principal is satisfied or until the borrower demonstrates the
ability to perform according to agreed-upon terms.
Loans held for sale include real estate mortgage loans originated with
the intent to sell. These loans are carried at the lower of aggregate cost or
fair value.

Allowance for Loan Losses The allowance for loan losses is maintained at a
level considered appropriate to support management's evaluation of potential
losses in the loan portfolio. Management's evaluation is based upon several
factors including economic conditions, historical loss and collection
experience, risk characteristics of the portfolio, underlying collateral
values, industry risk and credit concentrations. Loan losses or recoveries
are charged or credited directly to the allowance account.

Premises and Equipment Premises and equipment are stated at cost less
accumulated depreciation. Depreciation is provided predominantly by the
straight-line method over estimated useful lives of 8 to 40 years for
buildings and leasehold improvements, and 3 to 25 years for furniture and
equipment.

Other Real Estate Owned Included in other assets is property acquired through
foreclosure, acceptance of deed in lieu of

<PAGE>
foreclosure or other transfers in settlement of outstanding loans and related
contract sales of such property until the contract is transferred to earning
assets based upon sufficient equity in the asset. Amounts totaled $341,000
and $488,000 at December 31, 1997, and 1996, respectively. Such property is
carried at the lower of cost or estimated fair value, less selling costs.
Periodic appraisals are obtained to support carrying values. Net expense of
ownership and declines in carrying values are charged to operating expenses.

Employee Retirement Plan All employees of the Company are eligible, after
meeting certain requirements, for inclusion in the defined contribution
retirement plan. The plan is a combination profit sharing and 401(k) plan.
Retirement plan costs are expensed as the Company contributes to the plan.
The Company does not provide any material post-retirement benefits.

Income Taxes The Company files a consolidated federal income tax return.
Federal income taxes are allocated to the Parent Company and each subsidiary
on the basis of its taxable income or loss included in the consolidated
return.
The effects of current or deferred taxes are recognized as a current and
deferred tax liability or asset based on current tax laws. Accordingly, income
tax expense in the consolidated statements of operations includes charges or
credits to properly reflect the current and deferred tax asset or liability.

Statements of Cash Flows In the statements of cash flows, cash and cash
equivalents include cash and due from banks, interest-bearing deposits with
banks, federal funds sold and securities purchased under agreements to resell
and trading accounting securities.

Income Per Common Share Basic net income per common share amounts are
computed by dividing net income by the weighted average number of common
shares outstanding during the year. Diluted net income per common share
amounts are computed by dividing net income by the weighted average number of
common shares and all dilutive potential common shares outstanding during the
year. In January 1998, the Company declared a 2-for-1 stock split effective
February 10, 1998 and in May 1997 and October 1996, the Company declared 10
percent common stock dividends. The average number of common shares and
dilutive potential common shares have been restated for the stock split and
stock dividends.

The following information was used in the computation of net income per
common share on both a basic and diluted basis for the years ended December
31, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
(In thousands, except for EPS data) 1997 1996 1995

<S> <C> <C> <C>
Basic EPS Computation
Numerator:
Net income $18,010 14,015 10,407
_______ ______ ______
Denominator:
Average common shares
outstanding 17,505 18,092 18,569
_______ ______ ______

Basic EPS $ 1.03 .78 .56
_________ ______ ______
_________ ______ ______

Diluted EPS Computation
Numerator:
Net income $18,010 14,015 10,407
_________ ______ ______
Denominator:
Average common shares
outstanding 17,505 18,092 18,569
Average stock options 284 161 141
Average long-term stock
compensation plan 140 195 193
_________ ______ ______

17,929 18,448 18,903
_________ ______ ______
_________ ______ ______

Diluted EPS $ 1.01 .76 .55
_________ ______ ______
_________ ______ ______
</TABLE>

Fair Value of Financial Instruments Fair value estimates are made at a
specific point in time, based on relevant market information and information
about the financial instrument. These estimates do not reflect any premium or
discount that could result from offering the Company's entire holdings of a
particular financial instrument for sale at one time. Unless included in
assets available for sale, it is the Company's general practice and intent to
hold its financial instruments to maturity and not to engage in trading or
sales activities.
Fair value estimates are based on judgments regarding future expected
loss experience, current economic conditions, risk characteristics of various
financial instruments and other factors. These estimates are subjective in
nature and involve uncertainties and matters of significant judgment and
therefore cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.
Estimated fair values have been determined by the Company using the best
available data and an estimation method suitable for each category of
financial instruments.

Interest Rate Swaps Amounts paid or received, related to outstanding swap
contracts that are used in the asset/liability management process, are
recognized into earnings as an adjustment to interest income over the
estimated life of the related assets. Gains or losses associated with the
termination of interest rate swap agreements for identified positions are
deferred and amortized over the remaining lives of the related assets as an
adjustment to yield.

Interest Rate Floor An interest rate floor requires the seller to pay the
purchaser, at specified dates, the amount, if any, by which the market
interest rate falls below the agreed-upon floor, applied to a notional
principal amount. Initial cash amounts paid on positions accounted for as
hedges are deferred and amortized over the instrument's contractual life.

<PAGE>
Use of Estimates in the Preparation of Financial Statements The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. A significant estimate that is
particularly sensitive to change relates to the allowance for loan losses.

Changes in Accounting Policies:
Accounting for Mortgage Servicing Rights Effective October 1, 1995, the
Company adopted SFAS No. 122, "Accounting for Mortgage Servicing Rights."
This statement requires capitalization of purchased mortgage servicing rights
as well as internally originated mortgage servicing rights. These mortgage
servicing rights are amortized over the estimated servicing period of the
related loans.
Accounting for Stock-Based Compensation Prior to January 1, 1996, the Company
accounted for its stock option plan in accordance with the provisions of
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. As such, compensation
expense would be recorded on the date of the grant only if the current market
price of the underlying stock exceeded the exercise price. Effective January
1, 1996, the Company adopted SFAS No. 123, "Accounting for Stock-Based
Compensation," which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro
forma earnings per share disclosures for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in SFAS No.
123 had been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure
provisions of SFAS No. 123.
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities Effective January 1, 1997, the Company adopted SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." This statement requires that after a transfer
of financial assets, the Company must recognize the financial and servicing
assets controlled and liabilities incurred and derecognize financial assets
and liabilities in which control is surrendered or debt is extinguished. In
such a case, servicing assets are determined based upon estimated future
revenues from contractually specified servicing fees and other ancillary
revenues that are expected to compensate the Company for performing the
servicing. The adoption of SFAS No. 125 did not have a material effect on the
Company.

Earnings per Share Effective December 31, 1997, the Company adopted SFAS No.
128, "Earnings Per Share." This statement replaces the primary earnings per
share (EPS) disclosure with basic and diluted EPS disclosures to simplify the
calculation and improve international comparability. The adoption of SFAS No.
128 did not have a material effect on the Company.

(2) Cash and Due From Banks

The subsidiary banks are required by federal banking regulations to maintain
certain cash and due from banks reserves. This reserve requirement amounted
to $16,504,000 at December 31, 1997.

(3) Investment Securities

The amortized cost and estimated fair value of investment securities follow.
The estimated fair value of investment securities has been determined using
available quoted market prices for similar securities.

<PAGE>

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
December 31, 1997 (In thousands) Cost Gains Losses Value
<S> <C> <C> <C> <C>
Investment securities available for sale:
Taxable investments:
U.S. Treasury securities $ 38,502 288 --- 38,790
Securities of U.S. government agencies 86,185 490 (15) 86,660
Mortgage-backed and related securities 229,334 1,778 (179) 230,933
Other investments 20,925 36 (4) 20,957
Tax-exempt investments:
Obligations of states and political
subdivisions 106,804 2,522 (12) 109,314
_______ _____ _____ _______
$481,750 5,114 (210) 486,654

Investment securities held to maturity:
Taxable investments:
Securities of U.S. government agencies $ 5,025 --- (6) 5,019
Mortgage-backed and related securities 2,363 74 --- 2,437
Other investments 1,518 9 (1) 1,526
Tax-exempt investments:
Obligations of states and political
subdivisions 60,173 773 (76) 60,870
_______ _____ _____ ______
$ 69,079 856 (83) 69,852
</TABLE>
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
December 31, 1996 Cost Gains Losses Value
<S> <C> <C> <C> <C>
Investment securities available for sale:
Taxable investments:
U.S. Treasury securities $ 41,330 76 (55) 41,351
Securities of U.S. government agencies 98,357 143 (347) 98,153
Mortgage-backed and related securities 218,865 1,398 (816) 219,447
Other investments 8,213 --- (20) 8,193
Tax-exempt investments:
Obligations of states and political
subdivisions 92,519 1,606 (170) 93,955
_______ _____ _____
$459,284 3,223 (1,408) 461,099

Investment securities held to maturity:
Taxable investments:
Securities of U.S. government agencies $ 15,065 63 (112) 15,016
Mortgage-backed and related securities 3,041 72 --- 3,113
Other investments 2,466 15 (6) 2,475
Tax-exempt investments:
Obligations of states and political
subdivisions 52,183 681 (152) 52,712
_______ _____ _____ ______
$ 72,755 831 (270) 73,316
</TABLE>

<PAGE>
Proceeds from the sale of available for sale securities were $119,402,000,
$67,548,000 and $5,578,000 in 1997, 1996, and 1995, respectively. Gross gains
of $874,000 in 1997, $558,000 in 1996 and $19,000 in 1995 and gross losses of
$380,000 in 1997, $237,000 in 1996 and $22,000 in 1995 were realized on those
sales.
Other investments at December 31, 1997, and 1996, consisted primarily of
corporate bonds and Federal Home Loan Bank stock. U.S. government agencies
originate or guarantee primarily all of the mortgage-backed and related
securities.
The scheduled maturities of investment securities at December 31, 1997
follow. Actual maturities may differ from scheduled maturities because
issuers may have the right to call obligations without penalties. The
maturities of mortgage-backed securities have been included in the period of
anticipated payment considering estimated prepayment rates.

<TABLE>
<CAPTION>
Estimated
Amortized Fair
(In thousands) Cost Value

<S> <C> <C>
Investment securities available
for sale:
Due in one year or less $143,877 144,385
Due after one year through
five years 221,832 224,024
Due after five years through
ten years 93,418 94,727
Due after ten years 22,623 23,518

$481,750 486,654

Investment securities held to
maturity:
Due in one year or less $ 26,100 26,176
Due after one year through
five years 28,690 28,909
Due after five years through
ten years 9,356 9,553
Due after ten years 4,933 5,214

$ 69,079 69,852

</TABLE>

Investment securities carried at $314,865,000 and $246,552,000 at December 31,
1997, and 1996, respectively, were pledged to secure public and other funds on
deposit and for other purposes.

(4) Loans

A summary of loans at December 31 follows:

<TABLE>
<CAPTION>
(In thousands) 1997 1996

<S> <C> <C>
Real estate loans:
Commercial construction
and land development $ 30,007 42,693
Secured by 1-4 family
residential property
including home equity loans 342,134 338,010
Other 161,989 150,395
Loans to farmer 79,036 69,660
Commercial and industrial loans 160,428 132,395
Loans to individuals for personal
expenditures 217,405 207,197
All other loans 2,190 1,594

$993,189 941,944

</TABLE>

The Company originates commercial, business, real estate, agribusiness and
personal loans with clients throughout Iowa. The portfolio has unavoidable
geographic risk as a result.

Total nonperforming loans and assets at December 31 were:

<TABLE>
<CAPTION>
(In thousands) 1997 1996

<S> <C> <C>
Impaired loans:
Nonaccrual $3,227 2,663
Restructured 513 568

Total impaired loans 3,740 3,231
Loans past due 90 days
or more 2,972 2,936

Total nonperforming loans 6,712 6,167
Other real estate owned 341 488

Total nonperforming assets $7,053 6,655

</TABLE>

The average balances of impaired loans for the years ended December 31, 1997,
and 1996, were $3,076,000 and $3,378,000, respectively. The allowance for
loan losses related to impaired loans at December 31, 1997, and 1996, was
$1,187,000 and $481,000, respectively. Impaired loans of $704,000 and
$456,000 were not subject to a related allowance for loan losses at
December 31, 1997, and 1996, respectively, because of the net realizable value
of loan collateral, guarantees and other factors.

The effect of nonaccrual and restructured loans on interest income for each of
the three years ended December 31 was:

<TABLE>
<CAPTION>
(In thousands) 1997 1996 1995

<S> <C> <C> <C>
Interest income:
As originally contracted $402 363 418
As recognized 157 174 136

Reduction of interest income $245 189 282

</TABLE>

Loan customers of the Company include certain executive officers, directors
and principal shareholders, and their related interests and associates. All
loans to this group were made in the ordinary course of business at prevailing
terms and conditions. The aggregate indebtedness of all executive officers,
directors and principal shareholders of Brenton Banks, Inc. and its
significant subsidiaries, and indebtedness of related interests and associates
of this group (except where the indebtedness of such persons was less than
$60,000) included in loans follows:

<TABLE>
<CAPTION>
(In thousands) Amount

<S> <C>

Balance at December 31, 1996 $ 5,680
Additional loans 3,364
Loan payments (3,114)

Balance at December 31, 1997 $ 5,930

</TABLE>

Mortgage Servicing Rights The fair market value of capitalized servicing
rights at December 31, 1997 was approximately $2,548,000. To determine the
fair value of the servicing rights, the Company used comparable market prices.
There was a $5,000 charge to the impairment account for the year ended
December 31, 1997. In determining the fair market value and potential
impairment at the end of 1997, the Company disaggregated the portfolio by its
predominate risk factor, interest rate. The fair value

<PAGE>
of the portfolio was determined by calculating the present value of future
cash flows. The Company incorporated assumptions that market participants
would use in estimating future net servicing income which include estimates of
the cost of servicing per loan, the discount rate, float value, an inflation
rate, ancillary income per loan, prepayment speeds and default rates.

Capitalized servicing rights on originated loan servicing, included in other
assets, as of December 31 follows:

(In thousands) 1997 1996

<S> <C> <C>
Beginning of year balance $1,026 252
Additions from originations 1,491 962
Amortization (238) (188)
Impairment (5) ---

Balance at end of year $2,274 1,026

</TABLE>

(5) Allowance for Loan Losses

A summary of activity in the allowance for loan losses follows:

<TABLE>
<CAPTION>
(In thousands) 1997 1996 1995

<S> <C> <C> <C>
Balance at beginning of year $11,328 11,070 10,913
Provision 3,900 2,900 1,865
Recoveries 1,733 1,419 1,669
Loans charged off (4,229) (4,061) (3,377)

Balance at end of year $12,732 11,328 11,070

</TABLE>

(6) Premises and Equipment

A summary of premises and equipment as of December 31 follows:

<TABLE>
<CAPTION>
(In thousands) 1997 1996

<S> <C> <C>
Land $ 2,919 2,952
Buildings and leasehold
improvements 31,511 30,876
Furniture and equipment 25,047 23,463
Construction in progress 145 275

59,622 57,566
Less accumulated depreciation 30,723 27,187

$28,899 30,379

</TABLE>

Depreciation expense included in operating expenses amounted to $3,783,000,
$3,848,000 and $3,626,000 in 1997, 1996 and 1995, respectively.

(7) Deposits

Time deposits include deposits in denominations of $100,000 or more of
$80,896,000 and $82,011,000 at December 31, 1997, and 1996, respectively.

A summary of interest expense by deposit classification follows:

<TABLE>
<CAPTION>
(In thousands) 1997 1996 1995

<S> <C> <C> <C>
Demand $ 2,332 11,194 11,842
Savings 15,903 6,134 6,638
Time deposits
of $100,000 or more 4,833 3,935 4,193
Other time deposits 26,242 28,244 30,402

$49,310 49,507 53,075

</TABLE>

The Company made cash interest payments of $57,932,000, $55,455,000 and
$55,229,000 on deposits and borrowings in 1997, 1996 and 1995, respectively.

At December 31, 1997, the scheduled maturities of time deposits are as
follows:

(In thousands)

1998 $371,301
1999 134,459
2000 39,809
2001 9,981
2002 and thereafter 2,684

$558,234

(8) Income Taxes

The current and deferred income tax provisions included in the consolidated
statements of operations follow:

1997 (In thousands) Current Deferred Total

<S> <C> <C> <C>
Federal $6,562 (577) 5,985
State 1,411 (108) 1,303

$7,973 (685) 7,288

1996

Federal $3,754 894 4,648
State 1,067 56 1,123

$4,821 950 5,771

1995

Federal $2,728 (76) 2,652
State 502 51 553

$3,230 (25) 3,205

</TABLE>

Since the income tax returns are filed after the issuance of the financial
statements, amounts reported are subject to revision based on actual amounts
used in the income tax returns. The Company made cash income tax payments of
$6,100,000, $4,250,000 and $2,500,000 to the IRS, and $1,568,000, $435,000 and
$737,000 to the state of Iowa in 1997, 1996 and 1995, respectively. Cash
income tax payments for a year include estimated payments for current year
income taxes and final payments for prior year income taxes. State income tax
expense relates to state franchise taxes payable individually by the
subsidiary banks.

<PAGE>
The reasons for the difference between the amount computed by applying
the statutory federal income tax rate of 35 percent in 1997 and 1996 and 34
percent in 1995, and income tax expense follow:

<TABLE>
<CAPTION>
(In thousands) 1997 1996 1995

<S> <C> <C> <C>
At statutory rate $ 9,114 7,136 4,849
Increase (reduction) due to:
Tax-exempt interest (2,916) (2,556) (2,566)
State taxes, net of
federal benefit 847 730 365
Nondeductible interest expense
to own tax-exempts 536 426 431
Other, net (293) 35 126

$ 7,288 5,771 3,205

</TABLE>

Accumulated deferred income tax assets are included in other assets in the
consolidated statements of condition. There was no valuation allowance at
December 31, 1997, or 1996. A summary of the temporary differences resulting
in deferred income taxes and the related tax effect on each follows:

<TABLE>
<CAPTION>
(In thousands) 1997 1996

<S> <C> <C>
Allowance for loan losses $4,575 3,962
Unrealized gains on
securities available for sale (2,006) (670)
Deposit base intangibles (489) (315)
Premises and equipment (468) (588)
Stock compensation plan 1,077 682
Real estate mortgage
loan points deferred (283) (300)
Other, net (536) (251)

$1,870 2,520

</TABLE>

(9) Other Short-Term Borrowings

The Company had short-term borrowings with the Federal Home Loan Bank of Des
Moines (FHLB) totaling $73,700,000 and $34,150,000 at December 31, 1997, and
1996, respectively. The average rate on these borrowings at December 31, 1997
was 6.02 percent. These borrowings were secured by residential mortgage loans
equal to 150 percent of the borrowings and FHLB stock.
The Parent Company has arranged an unsecured line of credit of $2,000,000
which was unused at December 31, 1997. It is at the prime interest rate and
is subject to annual review and renewal.

(10) Long-Term Borrowings

Long-term borrowings consisted of the following at December 31:

<TABLE>
<CAPTION>
(In thousands) 1997 1996

<S> <C> <C>
Capital notes, 6.00% to 10.00%
Total Parent Company $ 10,112 11,248
Borrowings from FHLB, average rate
of 6.09% at December 31, 1997 26,550 23,550
Mortgage debt --- 62

$ 36,662 34,860

</TABLE>

Borrowings from the FHLB were secured by residential mortgage loans equal to
150 percent of the borrowings and FHLB stock.
The mortgage debt and borrowings from the FHLB were direct obligations of
the individual subsidiaries.
Scheduled maturities of long-term borrowings at December 31, 1997,
follow:

<TABLE>
<CAPTION>
Parent
(In thousands) Company Consolidated

<S> <C> <C>
1998 $ 1,090 1,090
1999 1,417 23,467
2000 853 5,353
2001 1,383 1,383
2002 853 853
Thereafter 4,516 4,516

$10,112 36,662

</TABLE>

<PAGE>
(11) Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments were as
follows:

<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
Recorded Fair Recorded Fair
(In thousands) Amount Value Amount Value
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from banks $ 77,468 77,468 76,901 76,901
Interest-bearing deposits with
banks 1,320 1,320 732 732
Federal funds sold and securities
purchased under agreements to
resell 9,300 9,300 15,200 15,200
Trading account securities 77 77 --- ---
Investment securities 555,733 556,506 533,854 534,415
Loans held for sale 19,303 19,303 5,870 5,870
Loans, net 980,457 981,664 930,615 929,113

Financial liabilities:
Deposits $ 1,364,270 1,369,448 1,353,057 1,360,457
Federal funds purchased, securities
sold under agreements to repurchase
and other short-term borrowings 166,333 166,333 100,976 100,976
Long-term borrowings 36,662 37,156 34,860 35,025
Off-balance-sheet assets (liabilities):
Commitments to extend credit $ --- --- --- ---
Letters of credit --- (111) --- (59)
Interest rate swaps --- (34) --- (69)
Interest rate floor 195 206 --- ---
</TABLE>

The recorded amount of cash and due from banks and interest-bearing deposits
with banks approximates fair value.
The recorded amount of federal funds sold and securities purchased under
agreements to resell and trading account securities approximates fair value as
a result of the short-term nature of the instruments.
The estimated fair value of investment securities has been determined
using available quoted market prices for similar securities.
The estimated fair value of loans is net of an adjustment for credit
risk. For loans with floating interest rates, it is presumed that estimated
fair values generally approximate the recorded book balances. Real estate
loans secured by 1-4 family residential property were valued using trading
prices for similar pools of mortgage-backed securities. Other fixed-rate
loans were valued using a present-value discounted cash flow with a discount
rate approximating the market for similar assets.
Deposit liabilities with no stated maturities have an estimated fair
value equal to the recorded balance. Deposits with stated maturities have
been valued using a present-value discounted cash flow with a discount rate
approximating the current market for similar deposits. The fair-value
estimate does not include the benefit that results from the low-cost funding
provided by the deposit liabilities compared to the cost of borrowing funds in
the market. The Company believes the value of these depositor relationships
to be significant.
The recorded amount of the federal funds purchased, securities sold under
agreements to repurchase and short-term borrowings approximates fair value as
a result of the short-term nature of these instruments.
The estimated fair value of long-term borrowings was determined using a
present-value discounted cash flow with a discount rate approximating the
current market for similar borrowings.
The fair value of commitments to extend credit and standby letters of
credit are estimated using the fees currently charged to enter into similar
agreements.
The fair value of interest rate swaps and the interest rate floor
contract is the estimated amount that the Company would receive or pay to
terminate the swap and floor agreements at the reporting date.

<PAGE>
(12) Regulatory Capital

The Company is subject to various regulatory capital requirements administered
by both federal and state banking agencies. Failure to comply with minimum
capital requirements could result in actions taken by regulators that could
have a direct material impact on the Company's financial statements. Under
the capital adequacy guidelines established by regulators, the Company must
meet specific capital guidelines that involve the measurement of the Company's
assets, liabilities and certain off-balance sheet items. The Company's capital
amounts and classification are also subject to qualitative judgments by the
regulators as it relates to components, risk weightings and other factors.
Quantitative measures established by regulators to ensure capital
adequacy require the Company to maintain minimum amounts and ratios (set forth
in the following table) of total and tier 1 capital to risk weighted assets
and of tier 1 capital to average assets.
As of December 31, 1997, management believes the Company is well-
capitalized, as defined under the regulatory framework for prompt corrective
action. To be categorized as well-capitalized, the Company must maintain
minimum total risk-based, tier 1 risk-based and tier 1 leverage ratios as set
forth in the table. The Company's actual capital amounts and ratios are also
presented in the table.

<TABLE>
<CAPTION>
To Be Well-
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions

Amount Ratio Amount Ratio Amount Ratio
(Dollar amounts in thousands)

<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1997:
Total Capital
(to Risk Weighted Assets):
Consolidated $141,688 11.95% $94,832 > 8.0% N/A
_
Brenton Bank 132,756 11.87 89,443 > 8.0 $111,804 > 10.0%
_ _
Tier 1 Capital
(to Risk Weighted Assets):
Consolidated 128,931 10.88 47,416 > 4.0 N/A
_
Brenton Bank 120,887 10.81 44,722 > 4.0 67,082 > 6.0
_ _
Tier 1 Capital
(to Average Assets):
Consolidated 128,931 7.63 50,703 > 3.0 N/A
_
Brenton Bank 120,887 7.69 62,852 > 4.0 78,565 > 5.0
_ _
</TABLE>

(13) Common Stock Transactions

In January 1998, the Company declared a 2-for-1 stock split for holders of
record as of February 10, 1998. As a result, the par value of the Company's
common stock was changed from $5.00 to $2.50 per share, the number of
outstanding shares doubled and authorized shares were increased to 50 million.
In May 1997, the Company declared a 10 percent common stock dividend. As a
result of this action, 1,586,762 shares of common stock were issued and
$3,966,905 was transferred from retained earnings to common stock. Fractional
shares resulting from this stock dividend were paid in cash. In October 1996,
the Company declared a 10 percent common stock dividend. This transaction
resulted in the issuance of 1,473,686 shares of common stock and the transfer
of $3,684,215 from retained earnings to common stock. Fractional shares
resulting from this stock dividend were paid in cash. Net income and cash
dividends per share information in the financial statements have been
retroactively restated to reflect these transactions.
As part of the Company's ongoing stock repurchase plan, in 1997 the Board
of Directors authorized additional common stock repurchases of $10 million in
1997. For the years ended December 31, 1997, 1996 and 1995, the Company
repurchased 695,480, 695,400 and 516,266 shares (restated for the 2-for-1
stock split), respectively, at a total cost of $10,014,087, $8,248,331 and
$4,830,111.

(14) Dividend Restrictions

The Parent Company derives a substantial portion of its cash flow, including
that available for dividend payments to stockholders, from the subsidiary
banks in the form of dividends received. State and savings banks are subject
to certain statutory and regulatory restrictions that affect dividend
payments.
Based on minimum regulatory capital guidelines as published by those
regulators, the maximum dividends which could be paid by the subsidiary banks
to the Parent Company at December 31, 1997, were approximately $15 million.

(15) Employee Retirement Plan

The Company provides a defined contribution retirement plan for the benefit of
employees. The plan is a combination profit sharing

<PAGE>
and 401(k) plan. All employees 21 years of age or older and employed by the
Company for at least one year are eligible for the plan. The Company
contributes 4 1/2 percent of eligible compensation of all participants to the
profit sharing portion of the plan, and matches employee contributions to the
401(k) portion of the plan up to a maximum of 3 percent of each employee's
eligible compensation. Retirement plan costs charged to operating expenses in
1997, 1996 and 1995 amounted to $1,290,000, $1,284,000 and $1,263,000,
respectively. The Company offers no material post-retirement benefits.

(16) Stock Plans

In 1996, the Company adopted the 1996 Stock Option Plan (the "Plan"), which
was approved by a vote of stockholders. The Plan authorizes the granting of
options on up to 1,210,000 shares of the Company's common stock to key
employees of the Company. The price at which options may be exercised cannot
be less than the fair market value of the shares at the date the options are
granted. The options are subject to certain performance vesting requirements,
but if vesting is not achieved from performance vesting, 100 percent vesting
occurs nine years and six months following the grant date. Options expire ten
years and one month following the grant date.
The per-share weighted average fair value of stock options granted during
1997 was $4.11 based on the date of grant using the Company's option pricing
model with the following weighted average assumptions: expected dividend yield
of 2.05 percent, risk-free interest rate of 6.52 percent, expected life of 7.5
years and expected volatility of stock price of 18.5 percent.
The Company applies APB Opinion No. 25 in accounting for its Plan and,
accordingly, no compensation cost has been recognized for its stock options in
the financial statements. Had the Company determined compensation cost based
on the fair value at the grant date for its stock options under SFAS No. 123,
the Company's net income and earnings per share would have been reduced to the
pro forma amounts indicated below:

<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Net income:
As reported $18,010,107 14,015,430
Pro forma 17,734,878 13,768,662

Basic earnings per share:
As reported $1.03 .78
Pro forma 1.01 .76

Diluted earnings per share:
As reported $1.01 .76
Pro forma .99 .74

</TABLE>
Pro forma net income reflects only options granted in 1997 and 1996.
Therefore, the full impact of calculating compensation cost for stock options
under SFAS No. 123 is not reflected in the pro forma net income amounts
presented above because compensation cost is reflected over the options'
expected life of 7.5 years.
Changes in options outstanding during 1997 and 1996 were as follows
(restated for the 2-for-1 stock split effective February 1998 and the 10
percent common stock dividends effective in 1997 and 1996):

<TABLE>
<CAPTION>
Options Option Price
Outstanding Per Share
<S> <C> <C>
December 31, 1995 --- $ ---
Granted - 1996 1,035,760 10.07-10.74

December 31, 1996 1,035,760 10.07-10.74
Granted - 1997 87,180 12.50-16.75
Forfeited - 1997 (36,300) 10.07

December 31, 1997
(123,360 shares available
for grant) 1,086,640 $10.07-16.75

</TABLE>
A total of 845,913 shares were granted to key management personnel under
the Company's long-term stock compensation plan. Under provisions of the plan,
no grants were made after 1995. Each grant of shares covers a three-year
performance period, 35 percent of which vests upon completion of employment
for the performance period and 65 percent of which vests based on a tiered
achievement scale tied to financial performance goals established by the Board
of Directors. The total stock compensation expense associated with this plan
was $1,731,000, $1,302,000 and $425,000 for 1997, 1996 and 1995, respectively.
Changes in outstanding grant shares during 1997, 1996 and 1995 were as
follows (restated for the 2-for-1 stock split effective February 1998 and the
10 percent common stock dividends effective in 1997 and 1996):

<TABLE>
<CAPTION>
Performance 1992 to 1993 to 1994 to 1995 to
Period 1994 1995 1996 1997

<S> <C> <C> <C> <C>
December 31, 1994 221,412 185,506 218,511 ---
Granted - 1995 --- --- --- 215,673
Forfeited - 1995 --- (20,275) (32,393) (16,032)
Expired - 1995 (143,919) --- --- ---
Vested - 1995 (77,493) --- --- ---

December 31, 1995 --- 165,231 186,118 199,641
Forfeited - 1996 --- --- (20,953) (22,812)
Expired - 1996 --- (107,402) --- ---
Vested - 1996 --- (57,829) --- ---

December 31, 1996 --- --- 165,165 176,829
Forfeited - 1997 --- --- --- (23,713)
Expired - 1997 --- --- (107,353) ---
Vested - 1997 --- --- (57,812) ---

Outstanding grant
shares at
December 31, 1997 --- --- --- 153,116

</TABLE>

For the performance period 1995 to 1997, 153,116 shares vested on January 1,
1998.
The Company's 1987 nonqualified stock option plan permits the Board of
Directors to grant options to purchase up to 726,000 shares of the Company's
$2.50 par value common stock. Under provisions of the plan, no further grants
can be made and no grants were made in 1997. The options may be granted to
officers of the Company. The price at which options may be exercised cannot
be less than the fair market value of the shares at the date the options are
granted. The options are subject to certain vesting requirements and maximum
exercise periods, as established by the Board of Directors.

<PAGE>
Changes in options outstanding and exercisable during 1997, 1996 and 1995
were as follows (restated for the 2-for-1 stock split effective February 1998
and the 10 percent common stock dividends effective in 1997 and 1996):

<TABLE>
<CAPTION>
Exercisable Outstanding Option Price
Options Options Per Share

<S> <C> <C> <C>
December 31, 1994 339,889 377,641 $1.83-8.12
Vested - 1995 7,260 --- 3.63-3.91
Exercised - 1995 (47,795) (47,795) 1.83
Forfeited - 1995 --- (30,492) 3.63-8.12

December 31, 1995 299,354 299,354 1.83-3.91
Exercised - 1996 (58,960) (58,960) 1.83

December 31, 1996 240,394 240,394 1.83-3.91
Exercised - 1997 (204,094) (204,094) 1.83-3.91

December 31, 1997 36,300 36,300 $2.65

</TABLE>

The Company's Employee Stock Purchase Plan allows qualifying employees to
purchase the Company's common stock at 85 percent of the current market price
on four defined purchase dates during the year. During 1997 and 1996, 37,516
and 33,224 shares (restated for the 2-for-1 stock split effective February
1998), respectively, of common stock were purchased by employees under this
plan.

(17) Lease Commitments

Rental expense included in the consolidated statements of operations amounted
to $1,963,000, $1,919,000 and $1,937,000 in 1997, 1996 and 1995, respectively.
Future minimum rental commitments for all noncancelable leases with terms of
one year or more total approximately $900,000 per year through 2002, $500,000
per year through 2007, $90,000 per year through 2012, and $40,000 per year
through 2013, with a total commitment of $7,200,000.

(18) Commitments and Contingencies

In the normal course of business, the Company is party to financial
instruments necessary to meet the financial needs of clients, which are not
reflected on the consolidated statements of condition. These financial
instruments include commitments to extend credit, standby letters of credit
and interest rate swaps. The Company's risk exposure in the event of
nonperformance by the other parties to these financial instruments is
represented by the contractual amount of these instruments. The Company is
also party to an interest rate floor contract which is designated as a hedge
of certain client deposit accounts with contracted minimum interest rates.
The notional amount for an interest rate floor does not represent the amount
at risk because the notional amount will not be exchanged. The Company uses
the same credit policies in making commitments as it does in making loans.
Commitments to extend credit are legally binding agreements to lend to
clients. Commitments generally have fixed expiration dates and may require
payment of a fee. Based upon management's credit assessment of the client,
collateral may be obtained. The type and amount of collateral varies, but may
include real estate under construction, property, equipment and other business
assets. In many cases, commitments expire without being drawn upon, so the
total amount of commitments does not necessarily represent future liquidity
requirements. The Company had outstanding commitments to extend credit of $245
million and $221 million at December 31, 1997, and 1996, respectively.
Standby letters of credit are conditional commitments issued by the
Company guaranteeing the financial performance of a client to a third party.
The credit risk involved in issuing letters of credit is essentially the same
as that involved in extending loans. Outstanding standby letters of credit
totaled $22,150,000 and $11,770,000 at December 31, 1997, and 1996,
respectively. The Company does not anticipate losses as a result of issuing
commitments to extend credit or standby letters of credit.
The Company enters into interest rate swap agreements as part of its
asset/liability management strategy to manage interest-rate risk. The
notional value of these agreements was $11,690,000 and $16,205,000 at December
31, 1997, and 1996, respectively. The interest rate swap agreements subject
the Company to market risk associated with changes in interest rates, as well
as the risk of default by the counterparty to the agreement. The credit
worthiness of the counterparties was evaluated by the Company's loan committee
prior to entering into the agreements. The agreements run through various
dates in 1998.
In December 1997, the Company entered into an interest rate floor
agreement to manage interest-rate risk. The notional value of this agreement
was $100,000,000 and expires on December 31, 1999. The interest rate floor
agreement requires the counterparty to pay the Company, at specified dates,
the amount, if any, by which the market interest rate falls below the agreed-
upon floor, applied to the notional principal amount. The credit worthiness
of the counterparty was evaluated by the Company's loan committee prior to
entering into the agreement.
Brenton Savings Bank, FSB converted from a mutual savings and loan
association to a federal stock savings bank in 1990, at which time a $4
million liquidation account was established. Each eligible savings account
holder who had maintained a deposit account since the conversion would be
entitled to a distribution if the savings bank were completely liquidated.
This distribution to savers would have priority over distribution to the
Parent Company. The Company does not anticipate such a liquidation.
The Company maintains a data processing agreement with ALLTEL Information
Services, Inc. (ALLTEL), formerly Systematics, Inc., whereby ALLTEL manages
and operates the Company's data processing facility. The contract involves
fixed payments of $2,004,000 in 1998 through 2001 and $1,002,000 in 2002.
These fixed payments will be adjusted for inflation and volume fluctuations.
The Company is involved with various claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial statements.

<PAGE>
(19) Brenton Banks, Inc. (Parent Company) Condensed Financial Information

<TABLE>
<CAPTION>
Statements of Condition
December 31 (In thousands) 1997 1996
<S> <C> <C>
Assets
Interest-bearing deposits with banks $ 3,596 5,638
Investments in:
Bank subsidiaries 132,008 124,383
Bank-related subsidiaries --- 45
Excess cost over net assets 1,753 1,826
Premises and equipment 563 618
Other assets 5,103 3,168
________ _______
$ 143,023 135,678

Liabilities and Stockholders' Equity
Accrued expenses payable
and other liabilities $ 3,532 2,476
Long-term borrowings 10,112 11,248
Common stockholders' equity 129,379 121,954
_______ _______
$ 143,023 135,678
</TABLE>

<TABLE>
<CAPTION>
Statements of Operations
Years Ended December 31 (In thousands) 1997 1996 1995
<S> <C> <C> <C>
Income
Dividends from subsidiaries $ 14,850 10,766 8,997
Interest income 213 341 442
Management fees --- --- 1,634
Other operating income 119 43 2,644
________ ______ ______
15,182 11,150 13,717
Expense
Compensation and benefits 2,331 1,884 4,021
Interest on long-term borrowings 849 970 1,046
Other operating expense 584 655 2,006
________ ______ ______
3,764 3,509 7,073

Income before income taxes and
equity in undistributed earnings
of subsidiaries 11,418 7,641 6,644
Income taxes (1,155) (1,040) (759)
Income before equity in undistributed
earnings of subsidiaries 12,573 8,681 7,403
Equity in undistributed earnings of subsidiaries 5,437 5,334 3,004
________ ______ ______
Net income $ 18,010 14,015 10,407
</TABLE>

<PAGE>
(19) Brenton Banks, Inc. (Parent Company) Condensed Financial Information

<TABLE>
<CAPTION>
Statements of Cash Flows
Years Ended December 31 (In thousands) 1997 1996 1995
<S> <C> <C> <C>
Operating Activities
Net income $ 18,010 14,015 10,407
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in undistributed earnings of subsidiaries (5,437) (5,334) (3,004)
Depreciation and amortization 163 163 230
Net (increase) decrease in other assets (1,962) 18 49
Net increase (decrease) in accrued expenses
payable and other liabilities 1,056 871 (148)
________ ______ ______
Net cash provided by operating activities 11,830 9,733 7,534
Investing Activities
Decrease in short-term investments --- 7,500 1,000
Redemption (purchase) of subsidiary equity, net --- (7) 156
Principal collected from or (advances to)
subsidiaries --- 115 (97)
Purchase of premises and equipment, net (8) 669 (512)
________ ______ ______
Net cash provided (used) by investing activities (8) 8,277 547

Financing Activities
Net repayment of long-term borrowings (1,136) (1,187) (209)
Proceeds from issuance of common stock under the
long-term stock compensation plan 247 335 362
Proceeds from issuance of common stock under the
stock option plan 1,286 291 188
Proceeds from issuance of common stock under the
employee stock purchase plan 551 72 ---
Payment for shares reacquired under common stock
repurchase plan (10,014) (8,248) (4,830)
Payment for fractional shares from common stock (16) (14) ---
dividends
Dividends on common stock (4,782) (3,749) (3,498)
________ ______ ______
Net cash used by financing activities (13,864) (12,500) (7,987)
Net increase (decrease) in cash and interest-
bearing deposits (2,042) 5,510 94
Cash and interest-bearing deposits at the
beginning of the year 5,638 128 34
Cash and interest-bearing deposits at the end
of the year $ 3,596 5,638 128
</TABLE>

<PAGE>
(20) Unaudited Quarterly Financial Information

The following is a summary of unaudited quarterly financial information (in
thousands, except per common share data):

<TABLE>
<CAPTION>
1997
Three months ended March 31 June 30 Sept. 30 Dec. 31
<S> <C> <C> <C> <C>
Interest income $ 28,473 29,182 30,168 30,416
Interest expense 13,855 14,448 14,631 15,171
_______ ______ ______ ______
Net interest income 14,618 14,734 15,537 15,245
Provision for loan losses 900 900 1,100 1,000
_______ ______ ______ ______
Net interest income after
provision for loan losses 13,718 13,834 14,437 14,245
Noninterest income 6,449 6,239 7,839 6,979
Noninterest expense 14,036 13,674 14,881 15,108
_______ ______ ______ ______
Income before income taxes
and minority interest 6,131 6,399 7,395 6,116
Income taxes 1,754 1,809 2,176 1,549
Minority interest 176 183 209 175
_______ ______ ______ ______
Net income $ 4,201 4,407 5,010 4,392
Per common share:
Net income-basic $ .24 .25 .29 .25
Net income-diluted .23 .25 .28 .25

</TABLE>

<TABLE>
<CAPTION>
1996
Three months ended March 31 June 30 Sept. 30 Dec. 31
<S> <C> <C> <C> <C>
Interest income $ 27,370 27,512 27,923 28,578
Interest expense 13,701 13,645 13,813 14,172
_______ ______ ______ ______
Net interest income 13,669 13,867 14,110 14,406
Provision for loan losses 700 800 600 800
_______ ______ ______ ______
Net interest income after
provision for loan losses 12,969 13,067 13,510 13,606
Noninterest income 5,552 5,622 5,776 6,377
Noninterest expense 13,355 13,471 14,685 14,579
_______ ______ ______ ______
Income before income taxes
and minority interest 5,166 5,218 4,601 5,404
Income taxes 1,446 1,497 1,275 1,553
Minority interest 140 153 153 157
_______ ______ ______ ______
Net income $ 3,580 3,568 3,173 3,694
Per common share:
Net income-basic $ .19 .20 .18 .21
Net income-diluted .19 .19 .18 .20

</TABLE>

<PAGE>
MANAGEMENT'S REPORT

The management of Brenton Banks, Inc. is responsible for the content of
the consolidated financial statements and other information included in this
annual report. Management believes that the consolidated financial statements
have been prepared in conformity with generally accepted accounting principles
appropriate to reflect, in all material respects, the substance of events and
transactions that should be included. In preparing the consolidated financial
statements, management has made judgments and estimates of the expected
effects of events and transactions that are accounted for or disclosed.
Management of the Company believes in the importance of maintaining a
strong internal accounting control system, which is designed to provide
reasonable assurance that assets are safeguarded and transactions are
appropriately authorized. The Company maintains a staff of qualified internal
auditors who perform periodic reviews of the internal accounting control
system. Management believes that the internal accounting control system
provides reasonable assurance that errors or irregularities that could be
material to the consolidated financial statements are prevented or detected
and corrected on a timely basis.
The Board of Directors has established an Audit Committee to assist in
assuring the maintenance of a strong internal accounting control system. The
Audit Committee meets periodically with management, the internal auditors and
the independent auditors to discuss the internal accounting control system and
the related internal and external audit efforts. The internal auditors and
the independent auditors have free access to the Audit Committee without
management present. There were no matters considered to be reportable
conditions under Statement of Auditing Standards No. 60 by the independent
auditors.
The consolidated financial statements of Brenton Banks, Inc. and
subsidiaries are examined by independent auditors. Their role is to render an
opinion on the fairness of the consolidated financial statements based upon
audit procedures they consider necessary in the circumstances.

Brenton Banks, Inc.

Robert L. DeMeulenaere
President and Chief Executive Officer

Steven T. Schuler
Chief Financial Officer/Treasurer/Secretary

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders of Brenton Banks, Inc:

We have audited the accompanying consolidated statements of condition of
Brenton Banks, Inc. and subsidiaries as of December 31, 1997, and 1996, and
the related consolidated statements of operations, changes in common
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1997. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Brenton
Banks, Inc. and subsidiaries at December 31, 1997, and 1996, and the results
of their operations and their cash flows for each of the years in the three-
year period ended December 31, 1997, in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP

Des Moines, Iowa
January 30, 1998

<PAGE>
STOCK INFORMATION

Brenton Banks, Inc. common stock is traded on the NASDAQ National Market and
quotations are furnished by the NASDAQ System. There were 1,571 common
stockholders of record on December 31, 1997.

<TABLE>
<CAPTION>
MARKET AND DIVIDEND INFORMATION

1997 High Low Dividends

<S> <C> <C> <C> <C>
1st quarter $12.96 12.39 .059
2nd quarter 13.75 12.56 .064
3rd quarter 16.50 13.56 .070
4th quarter 20.38 15.06 .080
</TABLE>

1996 High Low Dividends

<S> <C> <C> <C> <C>
1st quarter $10.02 8.68 .050
2nd quarter 10.02 9.40 .050
3rd quarter 10.33 9.71 .053
4th quarter 12.73 10.23 .054

</TABLE>

The above table sets forth the high and low sales prices and cash dividends
per share for the Company's common stock, after the effect of the
February 1998 2-for-1 stock split and May 1997 and October 1996 10%
common stock dividends.
The market quotations, reported by NASDAQ, represent prices between dealers
and do not include retail markup, markdown or commissions.

NASDAQ Symbol: BRBK
Wall Street Journal and
Other Newspapers: BrentB

Market Makers
ABN AMRO Chicago Corporation
Herzog, Heine, Geduld, Inc.
Howe, Barnes Investments, Inc.
Keefe, Bruyette & Woods, Inc.
Sandler, O'Neill & Partners, L.P.
Stifel, Nicolaus & Co., Inc.

FORM 10-K
COPIES OF BRENTON BANKS, INC. ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION FORM 10-K WILL BE MAILED WHEN AVAILABLE WITHOUT
CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST TO STEVEN T. SCHULER, CHIEF
FINANCIAL OFFICER/ TREASURER/SECRETARY, AT THE CORPORATE HEADQUARTERS.
IT IS ALSO AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S
INTERNET WEB SISTE AT HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR.

STOCKHOLDER INFORMATION

Corporate Headquarters
Suite 200, Capital Square
400 Locust Street
Des Moines, Iowa 50309
Telephone 800/820-0088

Annual Shareholders' Meeting
Wednesday, May 20, 1998, 5:00 p.m.
West Des Moines Marriott Hotel
1250 74th Street
West Des Moines, Iowa 50266

Transfer Agent/Registrar/
Dividend Disbursing Agent
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606

Legal Counsel
Brown, Winick, Graves, Gross,
Baskerville and Schoenebaum, P.L.C.
Suite 1100, Two Ruan Center
601 Locust Street
Des Moines, Iowa 50309

Independent Auditors
KPMG Peat Marwick LLP
2500 Ruan Center
666 Grand Avenue
Des Moines, Iowa 50309

<PAGE>
CORPORATE STRUCTURE

BRENTON BANKS, INC.
BOARD OF DIRECTORS

C. Robert Brenton
Chairman of the Board
Brenton Banks, Inc.

William H. Brenton
Past Chairman and President
Brenton Banks, Inc.

J.C. Brenton
Past President
Brenton Banks, Inc.

Gary M. Christensen
President & CEO
Pella Corporation

Robert J. Currey
President
21st Century Telecom Group, Inc.

Robert L. DeMeulenaere
President and Chief Executive Officer
Brenton Banks, Inc.

R. Dean Duben
Past Vice Chairman and President
Brenton Bank - Davenport

Hubert G. Ferguson
Financial Services Consultant
New Brighton, Minnesota

BRENTON BANKS, INC.
EXECUTIVE OFFICERS

C. Robert Brenton
Chairman of the Board

Robert L. DeMeulenaere
President and Chief Executive Officer

Steven T. Schuler
Chief Financial Officer/Treasurer/
Secretary

BRENTON BANK
SENIOR OFFICERS AND
LINE OF BUSINESS MANAGERS

Robert L. DeMeulenaere
Chairman and Chief Executive Officer

Larry A. Mindrup
President

Phillip L. Risley
Executive Vice President

Perry C. Atwood
Chief Sales Officer

Woodward G. Brenton
Chief Commercial Banking Officer

Elizabeth M. Piper/Bach
Chief Financial Services Officer

Steven T. Schuler
Chief Financial Officer/Treasurer/
Secretary

Norman D. Schuneman
Chief Credit Officer

Judy S. Bohrofen
Director of Human Resources

Gregory M. Cole
Director of Credit Underwriting

W. Bradley Cunningham
Investment/ALCO Officer

Marsha A. Findlay
Senior Retail Banking Officer

Charles N. Funk
Regional President
President, Des Moines

Dennis H. Hanson
Regional President
President, Grinnell

Mark J. Hoffschneider
President, Brenton Mortgages

Steven C. Hyland
Senior Vice President,
Brenton Insurance

Ronald D. Larson
Regional President
President, Cedar Rapids

Douglas F. Lenehan
President, Diversified Commercial
Services Division

Marc J. Meyer
Regional President
President, Adel

Catherine I. Reed
Director of Marketing

Allen W. Shafer
President, Business Banking Division

Thomas J. Vincent
President, Agricultural Banking
Division

Steven D. Agan
President, Knoxville

John H. Anderson
President, Davenport

Thomas J. Friedman
President, Ankeny

Kevin Z. Geis
President, Brenton Savings Bank, FSB
Ames

Robert L. German
President, Dallas Center

John M. Hand
President, Emmetsburg

Richard H. Jones
President, Perry

V. Blaine Lenz
President, Eagle Grove

James L. Lowrance
President, Marshalltown

Clay A. Miller
President, Clarion

Jeffrey J. Nolan
President, Jefferson

Brenton Banks, Inc. 1997 Annual Report

Centered in the middle of the page is:

Partnership Is
The Difference

97 is in big numbers in the lower right hand corner.

Brenton Bank

<PAGE>
Text on the left hand side of the page:

CONTENTS

1997 Financial Highlights 2

Letter to Shareholders 3

Financial Review 9

For more information about Brenton products and services, visit our
Internet web site at www.brentonbank.com.

Text from two-thirds of page to right hand edge of the page:

Common goals. Clear focus. A shared vision of unmatched client
commitment and mutual success. Working as a team to meet challenges,
provide solutions and create opportunities. These are the fundamentals
of partnership. They are at the very heart of the working relationships
shared by Brenton associates and our clients - families, individuals,
farmers, businesses and communities across Iowa. Together, we are united
in our goal to become Iowa's premier banking organization. And in 1997,
we continued working creatively and diligently to build a more rewarding
financial future for our clients, our shareholders and ourselves.

Brenton Banks, Inc. is the largest, Iowa-based bank holding company,
with 46 service locations in metropolitan markets and regional economic
centers across the state. The Company offers a complete range of
financial products and services - including retail, agricultural,
commercial and business banking; trust and investment management
services; investment, insurance and real estate brokerage; mortgage
banking; cash management and international banking services; as well as
our own proprietary mutual funds. Brenton emphasizes convenience banking
by delivering products and services via telephone through Brenton Direct
and our computerized Anytime Line, as well as through Brenton Photo
SmartCheck transaction cards, ATMs, direct deposit and automatic payment
programs. The Company's stock trades on the NASDAQ national market under
the symbol BRBK or BrentB.
1

<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

Brenton Banks, Inc. and Subsidiaries
1997 1996 1995
<S> <C> <C> <C>
Operating Results
Net interest income $ 60,133,764 56,052,142 53,332,143
Provision for loan losses 3,900,000 2,900,000 1,864,801
Total noninterest income 27,505,789 23,327,441 17,846,740
Total noninterest expense 57,698,564 56,090,571 55,051,267
Income before income
taxes and minority
interest 26,040,989 20,389,012 14,262,815
Net income 18,010,107 14,015,430 10,407,354

Three bar graphs on the left hand side of the page:

Graph showing Common Stock Closing Bid Price (Restated for stock
split/dividends) (1988-1997):
<TABLE>
<CAPTION>
88 89 90 91 92 93 94 95 96 97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2.72 4.20 3.72 5.72 7.16 7.23 7.54 8.78 12.56 19.63
</TABLE>

Dual Graph showing Diluted Net Income per Common Share and Dividends per
Common Share (Restated for stock splits/dividends) (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
Net Income 0.74 0.52 0.55 0.76 1.01
Dividends 0.165 0.182 0.186 0.207 0.273
</TABLE>

Graph showing Return on Average Equity (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
13.82 9.03 9.04 11.76 14.47
</TABLE>

Brenton Banks, Inc. 1997 Annual Report 2
<PAGE>
Picture of President on left hand side of page - reads as follows:

Robert L. DeMeulenaere, President

Text from two-thirds of page to right hand edge of the page:

To Our Shareholders

In 1997, Brenton associates unquestionably proved that our vision of
partnership works. Together, we produced record earnings of $18.010
million, a 28.5 percent increase over 1996 net income of $14.015
million. Diluted earnings per common share advanced 32.9 percent to
$1.01, which has been restated to reflect a 2-for-1 stock split
effective February 10, 1998. Total assets grew 5.3 percent to $1.718
billion. Shareholders' equity rose 6.1 percent to $129.379 million.
3
<PAGE>
Text from left hand edge of the page to two-thirds of page:

We continued to invest in sales training and developing sales management
and market competence skills. Our work in motivating Brenton associates,
supporting them with advanced communication and information technology,
and creating more opportunities for them to serve growing numbers of
valued clients clearly paid off.
In our second consecutive year of significant earnings growth, 1997
noninterest income increased 17.4 percent to $27.012 million (excluding
securities gains and losses), thanks to expanding production in
investments, trust, credit insurance and mortgages, as well as growth in
our more traditional sources of fee income. The Company continues to
focus on the development of strategic improvements in noninterest
income.
These dramatic revenue increases were offset by a slight rise in
noninterest expenses which were up 2.9 percent to $57.699 million,
compared to $56.090 million in 1996. To enhance operating efficiency
throughout the organization, the Company monitors the rate of
noninterest expense growth. Detailed information about changes in
noninterest income and expense is included in the Financial Review
section of this report.
Net interest income advanced 7.3 percent to $60.134 million in
1997, compared to $56.052 million in 1996. Net interest margin rose to
4.16 percent, compared to 4.03 percent a year ago. Total loans grew 5.4
percent to $993.2 million. The provision for loan losses increased
$1.000 million to $3.900 million, due to the increase in total loans.
Loan quality remained strong at year-end 1997 with reserves standing at
189.69 percent of nonperforming loans and 1.28 percent of total loans.
We appreciate the growing number of firms and industry analysts who
have recommended our stock for purchase, and we are pleased to reward
the confidence of our clients and shareholders. In 1997, Brenton's price
per common share rose 56.3 percent, closing at a bid price of $19.63* on
December 31, 1997. Cash dividends were $.273 per share, up 31.9 percent
over 1996. As part of our capital management plan, the Company
repurchased 695,480 shares* of common stock in 1997 at a cost of $10.014
million.

Text on the right hand side of the page:

Selling Together As A Team

While every Brenton associate has specific sales or sales support goals
and responsibilities, it is the work and commitment of all our people -
of the entire Brenton team - that we celebrate in the pages of this
annual report. Only by working together can we achieve our own and our
clients' objectives. But working together, in true partnership, is not
as easy as it sounds. It requires discipline at all levels, with clearly
defined responsibilities for every member of the team. Every sales and
service process must be easily understood and structured to facilitate
reporting, feedback and continuous improvement. There must be mutual
respect among all team members - with everyone knowing that we have the
right people with the right skill sets doing the right jobs every day.
With all the success we've enjoyed to date at Brenton, we've only begun
to scratch the surface of what we can accomplish together. That's what's
so exciting! The culture is in place. The processes clearly work. And
nothing but opportunities lies ahead.

Text from left hand edge of the page to two-thirds of page:

*Per share data restated to reflect the 2-for-1 stock split effective
February 10, 1998

Brenton Banks, Inc. 1997 Annual Report 4
<PAGE>

Text on the left hand side of the page:

Anticipating Client Needs, Being There When They Need Us

In just a few short years, the evolution of telephone banking has
created a revolution in the ways we serve our clients. The old joke
about "bankers' hours" has been transformed into a new paradigm, where
early morning, after dinner and weekend banking are the order of the
day. In 1997, specialists in our Brenton Direct telephone center handled
as many as 1,500 calls per day. In addition to opening new deposit and
consumer loan accounts, these sales and service professionals can help
clients obtain new mortgages and consumer loans, insure their homes and
cars, and satisfy many other personal and business financial needs.

Creating convenience for our clients is only part of the story. We are
also opening the lines of communication between all Brenton offices and
lines of business - so we can talk with each other, as well as our
clients. By working together to understand everyone's needs, we can
become more proactive in successfully satisfying our clients, one by
one.

Text from two-thirds of page to right hand edge of the page:

Our clients' financial needs are as unique and varied as the constantly
changing Iowa countryside. Yet, we are committed to being a single,
convenient, value-centered resource for satisfying as many of those
needs as possible. Buying a first home. Expanding a business. Building
equity. Investing for the future. Enjoying a secure retirement. And
more! By growing and nurturing lifelong partnerships with targeted
clients, we create rewarding futures for everyone associated with
Brenton.

Even after 116 years, we continue working to know and understand the
people we serve. We visit them in their homes and businesses. We talk
with them over the phone. We watch their children grow up. And we share
their hopes and dreams. While we can't be all things to all people, we
can be an invaluable resource of financial leadership and expertise for
the thousands of Iowans we are best positioned to serve. In 1997, in
every line of business, Brenton associates devoted considerable effort
to better understand our marketplaces and identify those clients who can
benefit most from an ongoing relationship with the Company. Our growing
market competence, together with our maturing sales culture, produced
outstanding results in every line of business.
5
<PAGE>

Text from left hand edge of the page to two-thirds of page:

On the retail side, Brenton personal bankers grew direct consumer
loans by more than $40 million for the second consecutive year. Credit
life and accident & health insurance commissions nearly doubled to $1.4
million. Our strengthened ability and commitment to partner between
lines of business produced growing numbers of referrals. And with our
One Bank technical and operational infrastructure in place, personal
bankers were able to devote virtually all of their time to direct client
contact, sales training, partner support and production. By the end of
the year, 70 top loan producers achieved membership in our Million
Dollar Club - up from 35 in 1996.
Brenton Investments, a reorganized line of business that
consolidates our investment brokerage, trust, investment management and
insurance operations, also produced strong results in 1997. Our growing
team of 34 investment executives used the favorable markets to more than
double brokerage pre-tax net income to $1.029 million. Our 28 trust
employees provided leadership in serving the 401(k) needs of Iowa
businesses and employees, which helped drive trust revenues up 14
percent. Brenton's employee benefits administrative expertise,
proprietary family of mutual funds, on-staff investment management group
and high standards of service continue to make us the Company of choice
for businesses seeking to provide long-term security for their
employees. Local staff in communities across Iowa stand ready to provide
on-site employee education for participating client companies. By
focusing on personal insurance coverage and developing an effective
sales and service partnership with Brenton Direct, we positioned our
insurance operations for renewed prosperity in 1998 and beyond.
Brenton commercial banking professionals focus on serving the
complex needs of large businesses with annual revenues of $5 million or
more and credit needs exceeding $250,000. By partnering with these
businesses and providing highly competitive products and services,
tailored to their needs, we are already beginning to realize significant
results. International banking fees were up 28 percent. Cash management
revenues rose 68 percent to $1.6 million, while our new commercial
services capabilities helped to attract new business and expand
relationships with current clients.
Our new business banking unit, which became operational in October,
focuses on building full relationships - both business and personal -
with professionals, farmers and business owners whose annual sales are
less than $5 million. These clients, who tend to have smaller credit
needs, have often been underserved by the financial community in the
past. But Brenton is very well positioned to build strong relationships
with smaller businesses. By partnering - externally and internally,
across all lines of business - we can provide insurance, investments,
retirement plans, credit and cash management products and services. We
can help Iowa businesses grow.

Text on the right hand side of the page:

A Great Year For Residential Mortgages

Mortgage loan originations rose more than 60 percent in 1997, thanks to
our increased staff of mortgage bankers, a growing stream of bank
referrals, low interest rates and Iowa's strong economy. Expansion in
three markets - Newton, Pella and Dubuque - produced very satisfying
volume. We see mortgages as great foundations for building long-term
client relationships. Our loan servicing portfolio, which represents
valuable, long-term relationships with home-owning clients, grew by 24
percent during the year. As the largest Iowa lender in an experimental
Fannie Mae program called Iowa Flex, we helped many Iowans buy their
first homes. A hybrid of this program, called Brenton Flex, will roll
out in rural communities in 1998. Also in 1998, our new origination
system will be linked directly to Fannie Mae and Freddie Mac automated
underwriting - speeding approvals and providing greater client service.

Brenton Banks, Inc. 1997 Annual Report 6
<PAGE>

Text on the left hand side of the page:

Working To Become Iowa's Premier Ag Bank

Brenton's 116-year commitment to agriculture grew even stronger in 1997,
as we set our sights on becoming Iowa's premier agricultural banking
organization by the year 2000. To accomplish this, our ag banking
division began to leverage and expand our relationships with farm
machinery dealers. We established a point-of-sale finance program,
enabling farm supply dealers to provide their customers with convenient
financing for agronomy and crop input purchases. We're working very
closely with trade associations and leading agribusinesses to develop
mutually beneficial partnerships. In addition, we formed an alliance
with MetLife to offer long-term, fixed-rate financing for clients
purchasing farm real estate or developing large facilities. Our ag
relationship managers work closely with Brenton business bankers,
particularly in rural areas, to identify potential new clients and
provide sophisticated ag-finance expertise. All of these initiatives are
producing positive results.

Text from two-thirds of page to right hand edge of the page:

No other financial institution is as perfectly positioned as Brenton to
serve the growing needs of Iowa farmers and businesses. We are large
enough to serve the deposit, credit and investment needs of nearly every
enterprise, institution and municipality across the state. With our 116
years of service and strong roots in communities across Iowa, we have
extensive knowledge of our clients and their operations. They respect
our Iowa-born values and traditions, and they appreciate our commitment
to bring a world of financial products, services and experience to their
doorstep.

In 1998, we will continue building on the successful initiatives
and results we experienced in the year just past. We will refine our
market competence and selling skills, as we work to strengthen new and
existing partnerships with clients across Iowa. We will continue to
develop additional convenience banking opportunities for our clients.
And we will aggressively pursue strategies to increase loans, fee income
and core deposits, while controlling costs.
Our direction is clear. Our commitment is strong. And exciting
opportunities lie ahead. Brenton associates - in every office and line
of business - are working together, as never before. We are partnering
to provide lifetime financial solutions for our clients, growing value
for our shareholders, local leadership for our communities and rewarding
careers for our people.
By any standard of measure, we are succeeding every day.

/s/ /s/
C. Robert Brenton Robert L. DeMeulenaere
Chairman President and Chief Executive Officer
7
<PAGE>

Text from left hand edge of the page to two-thirds of page:

43 years of service, vision, and true partnership

Following more than four decades of leadership, Bob Brenton is retiring
from day-to-day management of our Company in 1998. Under his direction,
Brenton has grown from a small Iowa banking company to become the
largest Iowa-based banking organization. Indeed, our Company now ranks
among the top three percent of all banks in America, based on assets.
Clearly, Bob is a builder by any standard of measure. He is a
pioneer, having been an early advocate for the delivery of investments
and other financial services within the banking environment. According
to Brenton president Bob DeMeulenaere, "Bob is a leader and a visionary
who welcomes change and is willing to embrace new ideas. He has been
extremely supportive. He never said he was my boss; he always said we
were partners. I've enjoyed our partnership and learned a great deal
from him."
Throughout his career, Bob has been a civic and industry leader, as
well. Like his father before him, he served as national president of the
American Bankers Association. As president of the Iowa Bankers
Association, Bob was one of the founders of the Iowa Transfer System,
Inc. He has been a major supporter of Iowa State University,
particularly the School of Agriculture, and he has chaired the Iowa
State University Foundation. Since 1973, he has served on the Board of
Directors of Pioneer Hi-Bred International.
Bob would be the first to admit that he planned to be a farmer, not
a banker. His ag roots run deep. But we are fortunate that he elected to
be a part of Brenton Bank, to nurture it and help it grow. He will
continue to serve as Chairman of the Board. And we will continue to be
guided by his vision of providing service and security for our clients
and communities, superior value for our shareholders and exciting career
opportunities for our associates.

Picture of Chairman on right hand side of page - reads as follows:

C. Robert Brenton, Chairman

Brenton Banks, Inc. 1997 Annual Report 8
<PAGE>
Financial Review Contents

Text flushed with left hand side of page:

Independent Auditors' Report 9
Selected Financial Data 10
Financial Review / Graphs 11
Consolidated Statements of Condition 15
Consolidated Statements of Operations 16
Consolidated Statements of Cash Flow 17
Consolidated Statements of Changes in Common Stockholders' Equity 18
Allowance for Loan Losses 18
Consolidated Average Balances and Rates 19
Stock Information 20
Corporate Structure 21
Brenton Service Locations 22

Text from two-thirds of page to right hand edge of the page:

Independent Auditors' Report

The Board of Directors of Brenton Banks, Inc.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated statements of condition of Brenton Banks,
Inc. and subsidiaries as of December 31, 1997, and 1996, and the related
consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the years in the three-year period ended
December 31, 1997; and in our report dated January 30, 1998, we
expressed an unqualified opinion on those consolidated financial
statements.
In our opinion, the information set forth in the condensed
consolidated financial information appearing on pages 15 to 18 is fairly
presented, in all material respects, in relation to the consolidated
financial statements from which it has been derived.

/s/
KPMG Peat Marwick LLP

Des Moines, Iowa
January 30, 1998
9

<PAGE>
<TABLE>
<CAPTION>
Selected Financial Data

Brenton Banks, Inc. and Subsidiaries

Brenton Banks, Inc. 1997 Annual Report 10
<PAGE>

Brenton Banks, Inc. Financial Review

Two bar graphs on the left hand side of the page:

Graph showing Net Income (in thousands) (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
14,250 10,107 10,407 14,015 18,010
</TABLE>

Graph showing Return on Average Assets (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
1.04 0.70 0.71 0.92 1.14
</TABLE>

Text from two-thirds of page to right hand edge of the page:

This summary annual report contains a condensed version of the financial
statements and a review of operations for Brenton Banks, Inc. and
subsidiaries (the "Company"). The full financial statements and
management's discussion and analysis are included in the Appendix to the
Proxy Statement filed with the Securities and Exchange Commission, which
has been provided to all shareholders. Copies are available upon
request.

Earnings Analysis

For the year ended December 31, 1997, Brenton Banks, Inc. recorded net
income of $18,010,107, an increase of 28.5 percent over 1996, which
totaled $14,015,430. The increase in earnings is attributable to both
increases in net interest income and noninterest income. Diluted
earnings per common share were $1.01 compared to $.76 for 1996. Earnings
per common share have been restated to reflect a 2-for-1 stock split
effective in February 1998. Return on average assets (ROA) was 1.14
percent in 1997, compared to .92 percent in 1996. The return on average
equity (ROE) was 14.47 percent, compared to 11.76 percent one year
earlier.
Net interest income rose 7.3 percent to $60,133,764 for 1997. The
increase in net interest income is directly attributable to both
favorable rate and volume variances. Net interest margin, which is tax
equivalent net interest income as a percent of average earning assets,
increased 13 basis points from 4.03 percent in 1996 to 4.16 percent in
1997. The yield on average earning assets increased 15 basis points,
while the average rate paid on interest-bearing liabilities increased
only 4 basis points.
The Company achieved record levels of noninterest income in 1997.
Total noninterest income (excluding securities transactions) increased
17.4 percent to $27,011,967 from $23,006,185 in 1996. Noninterest income
(excluding securities gains and losses) for 1997 represented 1.6 percent
of average assets and 31.0 percent of total operating income, which were
the highest levels in the history of the Company. All categories of
noninterest income, except insurance commissions and fees, reflect
strong growth from the prior year.
Service charges on deposits increased 8.6 percent to $7,290,765.
This growth related to a continued focus on collecting a higher
percentage of fees assessed and increased sales of fee-generating
accounts, particularly commercial accounts. Successful new sales
initiatives and strong financial markets drove investment brokerage
commissions up 27.7 percent to $4,808,048. Mortgage banking income
increased $1,105,622, or 51.0 percent, due to increased mortgage loan
originations, which totaled $179.1 million in 1997. Fiduciary revenues
were up 14.3 percent due to increased volumes of personal trusts,
investment management fees and employee benefit plan fees. The Company's
continued focus on sales and offering our clients a broad array of
products and services was rewarded with higher revenues in all of these
areas.
Other service charges and fees increased 23.8 percent to $3,441,454
compared to 1996 due to increases from letter of credit fees, fees
received from purchased receivables and real estate commissions. Other
operating income increased $338,840 from one year ago. The increase was
due to income from bank-owned life insurance policies which did
11
<PAGE>

Text from left hand edge of the page to two-thirds of page:

not exist until December 1996 and a gain on the sale of the Company's
insurance agency in Marshalltown, Iowa. The Company is committed to the
insurance business but desires to grow its insurance operations through
other distribution channels. Insurance commissions and fees in total
declined 3.8 percent due to the above sale. The decrease in property
and casualty commission income due to the agency sale was largely offset
by a 68.8 percent increase in credit-related insurance commissions. The
significant increase was due to a strong increase in direct consumer
lending and increased sales efforts during 1997.
Noninterest expense for 1997 increased just 2.9 percent to
$57,698,564, compared to $56,090,571 for 1996. Exclusive of a special
assessment by the FDIC totaling $1,288,000 in 1996, noninterest expense
increased 5.3 percent.
Compensation, the largest component of noninterest expense,
increased $1,363,843, or 5.4 percent, over 1996. This increase is
primarily due to commissions and incentives paid on higher sales of the
fee-related products, and expense tied to bonuses and a stock
performance plan which were both directly related to higher 1997
earnings and the Company's advancing stock price. Fixed salaries, which
comprised 67.5 percent of total salaries and wages, actually decreased
by 3.8 percent compared to 1996. The Company has adopted a pay for
performance philosophy and is focusing more on variable compensation
tied to performance.
Occupancy expense totaled $5,609,600 for 1997, compared to
$5,502,904 for 1996, an increase of 1.9 percent. The increase was
primarily related to building repairs and maintenance. Depreciation
expense declined slightly and lease expense increased due to the sale
and relocation of one facility in late 1996.
Furniture and equipment expense declined to $3,634,336, a 2.4
percent reduction from the prior year. Decreases in furniture
depreciation, repairs and maintenance, and furniture and equipment
rentals more than offset an increase in depreciation expense for
technology-related equipment. The Company continues to focus on using
technology to improve efficiency and provide better service to our
clients.
Data processing expense increased $258,910, or 10.0 percent, due to
increased costs during 1997 associated with contracted core processing.
Expense related to the FDIC deposit assessments declined $1,520,230
from 1996 to $281,416. Last year's expense included the previously-
discussed, one-time $1,288,000 assessment to fully fund SAIF. The
Company continues to pay the lowest premiums available under the FDIC's
risk-based premium system.
Marketing and supplies expenses declined 22.5 and 15.2 percent,
respectively, for 1997. These cost reductions were the result of
concerted efforts to minimize the growth of overall noninterest expense
and renegotiating pricing with various vendors. Also, 1996 supplies
expense included one-time charges related to the 1995 merger of the
commercial banks.
Other operating expenses increased by $2,040,604 or 21.3 percent
when comparing 1997 results to 1996. The increase was primarily due to
increases in check processing, consulting and legal fees and
miscellaneous losses.
The Company's net noninterest margin, which measures operating
efficiency, was (1.86)

Two bar graphs on the right hand side of the page:

Graph showing Net Interest Margin (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
4.28 4.12 3.89 4.03 4.16
</TABLE>

Graph showing Noninterest Income as a Percent of Total Operating Income
(1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
24.15 23.61 25.08 29.10 31.00
</TABLE>

Brenton Banks, Inc. 1997 Annual Report 12
<PAGE>

Two bar graphs on the left hand side of the page:

Graph showing Net Noninterest Margin (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
2.31 2.61 2.38 2.09 1.86
</TABLE>

Graph showing Total Assets (in millions) (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
1,481 1,581 1,583 1,632 1,718
</TABLE>

Text from two-thirds of page to right hand edge of the page:

percent for 1997, compared to (2.09) percent in 1996. The Company's
efficiency ratio was 63.66 percent, compared to 68.27 percent one year
ago. To enhance operating efficiency throughout the organization, the
Company continues to focus on cost management and the development of
strategic improvements in noninterest income and expense.

Balance Sheet Analysis

Total assets at December 31, 1997, were $1,718,484,000, an increase of
5.3 percent over December 31, 1996. On average, total assets increased
4.2 percent. A change in the mix of earning assets contributed to a
favorable increase in the net interest margin for the Company.
Loans increased 5.4 percent over 1996 year-end to reach a balance
of $993,189,000 at December 31, 1997. To improve net interest income and
lessen interest rate risk, management continued its strategy of de-
emphasizing fixed-rate portfolio real estate loans and developing more
commercial and consumer loan business. The highest yielding segment of
the loan portfolio, direct consumer loans, increased $39.6 million from
a year earlier. The Company continues to focus on reducing interest rate
risk by emphasizing growth in variable rate loans.
The balance of investment securities increased from December 31,
1996, by $21.9 million, or 4.1 percent. This increase in investments was
partially funded by a $5.9 million decrease in the balance of federal
funds sold.
Core customer funds, which are a source of stable and relatively
low-cost financing for the Company, increased 6.6 percent over the prior
year. Core customer funds include noninterest-bearing demand, interest-
bearing demand and savings, and securities sold under agreements to
repurchase. The Company also utilizes advances from the Federal Home
Loan Bank as a source of funding. At December 31, 1997, FHLB advances
totaled $100.3 million.

Asset/Liability Management

The Company has a fully-integrated asset/liability management
system to assist in managing the balance sheet. The process, which is
used to project the results of alternative investment decisions,
includes the development of simulations that reflect the effects of
various interest rate scenarios on net interest income. Management
utilizes the simulations to manage interest rate risk, the net interest
margin and levels of net interest income.
The asset/liability management simulations indicate that net
interest income should not fluctuate significantly due to interest rate
changes in the market place. The Company currently believes that net
interest income would fall by less than 5 percent if interest rates
increased or decreased by 300 basis points over a one-year time horizon.
This is within the Company's policy limits.

Loan Quality

Nonperforming loans at December 31, 1997, were $6,712,000, which
represented .68 percent of total loans. This was an increase of $545,000
from one year ago, when the ratio was .65 percent of total loans. Loan
quality remained strong at December 31, 1997, with
13
<PAGE>

Text from left hand edge of the page to two-thirds of page:

reserves standing at 189.7 percent of nonperforming loans and 1.28
percent of total loans.
The provision for loan losses totaled $3,900,000 for the year ended
December 31, 1997, compared to $2,900,000 for 1996. The increase of
$1,000,000 over 1996 was related to the 5.4 percent increase in the loan
portfolio. The Company's net charge-offs as a percent of average loans
was .26 percent for 1997 compared to .29 percent for 1996, both of which
were better than historical industry peer group averages.

Capital Resources

Common stockholders' equity totaled $129,379,000 at December 31, 1997,
an increase of 6.1 percent over the prior year. As part of a stock
repurchase plan which originated in 1994, the Company repurchased
695,480 shares of common stock (restated for the 2-for-1 stock split)
during 1997 at a cost of $10,014,000. The Company currently plans to
continue the repurchase of stock during 1998.
The Company continues to monitor its capital position to balance
the goals of maximizing return on average equity, while maintaining
adequate capital levels for regulatory purposes. The Company's risk-
based core capital ratio at December 31, 1997, was 10.88 percent and the
total risk-based capital ratio was 11.95 percent. These ratios exceeded
the minimum regulatory requirements of 4.00 and 8.00 percent,
respectively. The Company's tier 1 leverage capital ratio, which
measures capital excluding intangible assets, was 7.63 percent at
December 31, 1997, exceeding the regulatory minimum requirement for
well-capitalized institutions of 5.0 percent.
In January 1998, the Board of Directors declared a 2-for-1 stock
split for holders of record as of February 10, 1998. Dividends paid to
common stockholders totaled $4,781,675, or $.273 per share, for 1997, an
increase of 31.9 percent from the prior year. In addition to these cash
dividends, the Company distributed a 10 percent common stock dividend in
May 1997.
Brenton Banks, Inc. common stock closed on December 31, 1997, at a
bid price of $19.63 (restated for the 2-for-1 stock split), an increase
of 56.3 percent over the prior year-end. The closing price at December
31, 1997, was 263.1 percent of the book value per share of $7.46 on the
same date. The year-end stock price represented a price-to-1997-diluted-
earnings multiple of 19.4 times.
Brenton Banks, Inc. continues to pursue acquisition and expansion
opportunities which fit the strategic direction of the Company and will
enhance the financial performance of the Company as well as strengthen
the Company's presence in current and new markets. There are currently
no pending acquisitions that would require Brenton Banks, Inc. to secure
capital from public or private markets.

Two bar graphs on the right hand side of the page:

Dual Bar Graph showing Primary Capital Ratio and Tier 1 Leverage Capital
Ratio (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
Primary 8.31 8.18 8.40 8.33 8.32
Tier 1 7.36 7.23 7.45 7.62 7.63
</TABLE>

Dual Bar Graph showing Nonperforming Loans as a Percent of Loans and Net
Charge-offs as a Percent of Average Loans (1993-1997):
<TABLE>
<CAPTION>
93 94 95 96 97
<S> <C> <C> <C> <C> <C>
Nonperforming 0.46 0.52 0.62 0.65 0.68
Net Charge-offs 0.05 0.10 0.18 0.29 0.26
</TABLE>

Brenton Banks, Inc. 1997 Annual Report 14

<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Condition

Brenton Banks, Inc. and Subsidiaries
December 31 1997 1996
<S> <C> <C>
Assets:
Cash and due from banks $ 77,468,210 76,900,524
Interest-bearing deposits with banks 1,319,700 731,554
Federal funds sold and securities purchased
under agreements to resell 9,300,000 15,200,000
Trading account securities 77,220 ---

Investment securities:
Available for sale 486,653,872 461,099,272
Held to maturity (market value of
$69,852,000 and $73,316,000
at December 31, 1997, and 1996,
respectively) 69,079,622 72,754,985

Investment securities 555,733,494 533,854,257
Loans held for sale 19,303,411 5,870,298
Loans 993,189,110 941,943,513
Allowance for loan losses (12,732,131) (11,328,359)
Loans, net 980,456,979 930,615,154
Premises and equipment 28,898,589 30,379,446
Accrued interest receivable 15,233,682 14,417,786
Other assets 30,692,512 24,126,063
$ 1,718,483,797 1,632,095,082

Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing $ 161,007,156 153,284,094
Interest-bearing:
Demand 117,664,352 99,277,477
Savings 527,364,856 527,791,360
Time 558,234,127 572,704,180
Total deposits 1,364,270,491 1,353,057,111
Federal funds purchased and securities sold
under agreements to repurchase 92,632,576 66,826,120
Other short-term borrowings 73,700,000 34,150,000
Accrued expenses and other liabilities 16,980,763 16,633,068
Long-term borrowings 36,662,000 34,860,024
Total liabilities 1,584,245,830 1,505,526,323
Minority interest in consolidated subsidiaries 4,858,668 4,614,530
Redeemable preferred stock, $1 par; 500,000
shares authorized; issuable in series, none
issued --- ---
Common stockholders' equity:
Common stock, $2.50 par; 50,000,000 shares
authorized; 17,334,048 and 16,171,368 shares
issued and outstanding at December 31, 1997,
and 1996, respectively* 43,335,120 40,428,420
Capital surplus --- ---
Retained earnings 82,824,333 80,448,768
Unrealized gains on securities available for
sale, net 3,219,846 1,077,041
Total common stockholders' equity 129,379,299 121,954,229
$ 1,718,483,797 1,632,095,082
<FN>
* Restated for the 2-for-1 stock split effective February 1998.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Operations

Brenton Banks, Inc. and Subsidiaries
Years Ended December 31 1997 1996 1995
<S> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 86,020,464 80,301,707 82,525,850
Interest and dividends on investments:
Available for sale-taxable 21,969,148 20,063,114 14,577,652
Available for sale-tax-exempt 4,929,898 4,250,463 4,446,824
Held to maturity-taxable 811,729 2,878,982 4,069,617
Held to maturity-tax-exempt 2,647,149 2,404,155 3,090,185
Interest on federal funds sold and
securities purchased under agreements
to resell 1,742,284 1,416,539 2,263,734
Other interest income 118,695 68,157 66,705
___________ ___________ ___________
Total interest income 118,239,367 111,383,117 111,040,567

Interest Expense:
Interest on deposits 49,310,346 49,507,425 53,075,352
Interest on federal funds purchased and
securities sold under agreements to
repurchase 3,413,432 2,469,939 1,641,516
Interest on other short-term borrowings 3,183,053 1,015,110 370,642
Interest on long-term borrowings 2,198,772 2,338,501 2,620,914
___________ ___________ ___________
Total interest expense 58,105,603 55,330,975 57,708,424
Net interest income 60,133,764 56,052,142 53,332,143
Provision for loan losses 3,900,000 2,900,000 1,864,801
___________ ___________ ___________
Net interest income after provision for
loan losses 56,233,764 53,152,142 51,467,342

Noninterest Income:
Service charges on deposit accounts 7,290,765 6,712,874 5,547,796
Investment brokerage commissions 4,808,048 3,766,436 3,044,107
Mortgage banking income 3,274,215 2,168,593 1,427,342
Fiduciary income 3,136,078 2,744,530 2,425,105
Insurance commissions and fees 2,803,983 2,915,666 2,339,817
Other service charges, collection and
exchange charges, commissions and fees 3,441,454 2,779,502 2,435,132
Net realized gains (losses) from
securities available for sale 493,822 321,256 (3,003)
Other operating income 2,257,424 1,918,584 630,444
___________ ___________ ___________
Total noninterest income 27,505,789 23,327,441 17,846,740

Noninterest Expense:
Compensation 26,824,307 25,460,464 22,815,220
Employee benefits 4,303,104 4,245,682 4,158,580
Occupancy expense of premises, net 5,609,600 5,502,904 4,912,417
Furniture and equipment expense 3,634,336 3,725,150 3,747,021
Data processing expense 2,850,395 2,591,485 2,379,920
Marketing 1,361,963 1,756,473 1,741,390
Supplies 1,195,762 1,409,690 1,326,928
FDIC deposit insurance assessment 281,416 1,801,646 1,783,213
Other operating expense 11,637,681 9,597,077 12,186,578
___________ ___________ ___________
Total noninterest expense 57,698,564 56,090,571 55,051,267

Income before income taxes and
minority interest 26,040,989 20,389,012 14,262,815
Income taxes 7,287,628 5,770,600 3,204,687
___________ ___________ ___________
Income before minority interest 18,753,361 14,618,412 11,058,128
Minority interest 743,254 602,982 650,774
___________ ___________ ___________
Net income $ 18,010,107 14,015,430 10,407,354
Per common share:*
Net income-basic $ 1.03 .78 .56
Net income-diluted 1.01 .76 .55
Cash dividends .273 .207 .186
<FN>
* Restated for the 2-for-1 stock split effective February 1998 and the 10% common
stock dividends effective in 1997 and 1996.
</TABLE>

Brenton Banks, Inc. 1997 Annual Report 16
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows

Brenton Banks, Inc. and Subsidiaries
Years Ended December 31 1997 1996 1995
<S> <C> <C> <C>
Operating Activities:
Net income $ 18,010,107 14,015,430 10,407,354
Adjustments to reconcile net income to
net cash provided by operating
activities:
Provision for loan losses 3,900,000 2,900,000 1,864,801
Depreciation and amortization 4,216,828 4,301,776 4,097,022
Deferred income taxes (685,223) 949,396 (25,181)
Net realized (gains) losses from
securities available for sale (493,822) (321,256) 3,003
Net (increase) decrease in loans held
for sale (13,433,113) 2,837,011 (6,602,817)
Net increase in accrued interest receivable
and other assets (3,501,066) (1,402,881) (1,678,132)
Net increase in accrued expenses, other
liabilities and minority interest 509,873 1,735,569 322,324
_____________ ____________ ____________
Net cash provided by operating activities 8,523,584 25,015,045 8,388,374

Financing Activities:
Net increase in noninterest-bearing,
interest-bearing demand and savings
deposits 25,683,433 22,335,320 51,054,199
Net increase (decrease) in time deposits (14,470,053) (31,220,924) (29,394,594)
Net increase (decrease) in federal funds
purchased and securities sold under
agreements to repurchase 25,806,456 25,718,709 (29,596,325)
Net increase (decrease) in other
short-term borrowings 25,550,000 15,500,000 (9,500,000)
Proceeds of long-term borrowings 17,806,000 14,604,000 12,429,000
Repayment of long-term borrowings (2,004,024) (1,771,779) (3,190,610)
Dividends on common stock (4,781,675) (3,748,653) (3,498,220)
Proceeds from issuance of common stock
under the employee stock purchase plan 551,247 71,675 ---
Proceeds from issuance of common stock
under the stock option plan 1,286,157 290,748 187,213
Proceeds from issuance of common stock
under the long-term stock compensation
plan 246,915 334,834 361,602
Payment for shares acquired under common
stock repurchase plan (10,014,087) (8,248,331) (4,830,111)
Payment for fractional shares resulting
from common stock dividend (16,399) (13,744) ---
_____________ ____________ ____________
Net cash provided (used) by financing
activities 65,643,970 33,851,855 (15,977,846)
_____________ ____________ ____________
Net decrease in cash and
cash equivalents (4,666,948) (16,192,072) (8,824,260)
Cash and cash equivalents at the
beginning of the year 92,832,078 109,024,150 117,848,410
_____________ ____________ ____________
Cash and cash equivalents at the end
of the year $ 88,165,130 92,832,078 109,024,150
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Common Stockholders' Equity

Brenton Banks, Inc. and Subsidiaries
Common Capital Retained Unrealized
Stock Surplus Earnings Gains (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance, December 31,
1994 $39,357,730 5,210,344 70,979,317 (5,117,046) 110,430,345
Net income --- --- 10,407,354 --- 10,407,354
Net change in
unrealized gains
(losses) --- --- --- 6,475,448 6,475,448
Dividends on common
stock
$.186 per share* --- --- (3,498,220) --- (3,498,220)
Issuance of shares of
common stock under
the stock option
plan 98,750 88,463 --- --- 187,213
Issuance of shares of
common stock under
the stock compensation
plan 100,445 261,157 --- --- 361,602
Shares reacquired under
stock repurchase plan (1,290,665) (3,539,446) --- --- (4,830,111)

Balance, December 31,
1995 38,266,260 2,020,518 77,888,451 1,358,402 119,533,631
Net income --- --- 14,015,430 --- 14,015,430
Net change in
unrealized gains
(losses) --- --- --- (281,361) (281,361)
Dividends on common
stock
$.207 per share* --- --- (3,748,653) --- (3,748,653)
10% common stock
dividend 3,684,215 --- (3,684,215) --- ---
Fractional shares
resulting from common
stock dividend --- --- (13,744) --- (13,744)
Issuance of shares of
common stock under
the stock option
plan 128,000 162,748 --- --- 290,748
Issuance of shares of
common stock under
the stock compensation
plan 73,590 261,244 --- --- 334,834
Issuance of shares
of common stock
under the employee
stock purchase plan 14,855 56,820 --- --- 71,675
Shares reacquired under
stock repurchase plan (1,738,500) (2,501,330) (4,008,501) --- (8,248,331)

Balance, December 31,
1996 $40,428,420 --- 80,448,768 1,077,041 121,954,229
Net income --- --- 18,010,107 --- 18,010,107
Net change in
unrealized gains
(losses) --- --- --- 2,142,805 2,142,805
Dividends on common
stock
$.273 per share** --- --- (4,781,675) --- (4,781,675)
10% common stock
dividend 3,966,905 --- (3,966,905) --- ---
Fractional shares
resulting from common
stock dividend --- --- (16,399) --- (16,399)
Issuance of shares of
common stock under
the stock option
plan 501,760 784,397 --- --- 1,286,157
Issuance of shares of
common stock under
the stock compensation
plan 82,945 163,970 --- --- 246,915
Issuance of shares
of common stock
under the employee
stock purchase plan 93,790 457,457 --- --- 551,247
Shares reacquired under
stock repurchase plan (1,738,700) (1,405,824) (6,869,563) --- (10,014,087)

<TABLE>
<CAPTION>
Allowance for Loan Losses

Brenton Banks, Inc. and Subsidiaries
Years End December 31 1997 1996 1995
<S> <C> <C> <C>
Balance at beginning of year $11,328,359 11,069,869 10,913,043
Provision for loan losses 3,900,000 2,900,000 1,864,801
Loans charged off (4,229,385) (4,061,211) (3,377,002)
Loan loss recoveries 1,733,157 1,419,701 1,669,027
Balance at end of year $12,732,131 11,328,359 11,069,869
</TABLE>

Brenton Banks, Inc. 1997 Annual Report 18
<PAGE>
<TABLE>
<CAPTION>
Consolidated Average Balances and Rates

Brenton Banks, Inc. and Subsidiaries
Average Balances (In thousands) 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Assets:
Cash and due from banks $ 58,681 65,439 57,138 46,301 46,025
Interest-bearing deposits
with banks 2,460 1,393 1,076 124 762
Federal funds sold and
securities purchased under
agreements to resell 31,472 26,188 39,763 37,666 23,725
Trading account securities 12 --- --- 116 ---
Investment securities:
Available for sale-taxable 348,232 330,002 244,786 245,913 53,174
Available for sale-tax-exempt 99,868 85,471 100,859 132,040 ---
Held to maturity-taxable 12,700 46,271 65,959 35,794 299,993
Held to maturity-tax-exempt 56,204 51,639 50,235 44,584 164,520
Loans held for sale 10,284 7,983 5,908 2,575 6,165
Loans 970,115 919,578 945,724 936,370 802,088
Allowance for loan losses (12,171) (11,440) (11,166) (10,502) (9,615)
Premises and equipment 29,841 31,728 31,436 24,545 23,045
Other 41,771 28,642 29,508 25,663 26,543
__________ _________ _________ _________ _________
$ 1,649,469 1,582,894 1,561,226 1,521,189 1,436,425

Average rates paid:
Deposits 4.11% 4.12 4.37 3.55 3.70
Federal funds purchased and
securities sold under agreements
to repurchase 4.36 4.17 4.08 3.38 2.41
Other short-term borrowings 5.98 5.87 5.67 5.42 3.63
Long-term borrowings 6.86 7.07 7.03 6.86 8.60
Average yield on interest-earning
assets 7.95% 7.80 7.86 7.31 7.57
Average rate paid on interest-
bearing liabilities 4.26 4.22 4.45 3.62 3.71
Net interest spread 3.69 3.58 3.41 3.69 3.86
Net interest margin 4.16 4.03 3.89 4.12 4.28
<FN>
* The variance in average balances between 1997 and 1996 is due to an internal
reclassification in late 1996 of certain accounts. The internal account
reclassification was implemented to reduce Federal Reserve Bank reserve
requirements.
</TABLE>
19

Stock Information

Brenton Banks, Inc. common stock is traded on the Nasdaq National Market
and quotations are furnished by the Nasdaq System. There were 1,571
common stockholders of record on December 31, 1997.

Market and Dividend Information

<TABLE>
<CAPTION>
Market and Dividend Information
1997 High Low Dividends
<S> <C> <C> <C>
1st quarter $12.96 12.39 .059
2nd quarter 13.75 12.56 .064
3rd quarter 16.50 13.56 .070
4th quarter 20.38 15.06 .080
</TABLE>

<TABLE>
<CAPTION>
1996 High Low Dividends
<S> <C> <C> <C>
1st quarter $10.02 8.68 .050
2nd quarter 10.02 9.40 .050
3rd quarter 10.33 9.71 .053
4th quarter 12.73 10.23 .054
</TABLE>

The above table sets forth the high and low sales prices and cash
dividends per share for the Company's common stock, after the effect of
the February 1998 2-for-1 stock split and May 1997 and October 1996 10%
common stock dividends. The market quotations, reported by Nasdaq,
represent prices between dealers and do not include retail markup,
markdown or commissions.

Nasdaq Symbol: BRBK
Wall Street Journal and
Other Newspapers: BrentB

Market Makers
ABN AMRO Chicago Corporation
Herzog, Heine, Geduld, Inc.
Howe, Barnes Investments, Inc.
Keefe, Bruyette & Woods, Inc.
Sandler O'Neill & Partners, L.P.
Stifel, Nicolaus & Co., Inc.

FORM 10-K
COPIES OF BRENTON BANKS, INC. ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION FORM 10-K WILL BE MAILED WHEN AVAILABLE WITHOUT
CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST TO STEVEN T. SCHULER, CHIEF
FINANCIAL OFFICER/TREASURER/SECRETARY, AT THE CORPORATE HEADQUARTERS. IT
IS ALSO AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S INTERNET
WEB SITE AT HTTP://WWW.SEC.GOV/CGI-BIN/SRCH-EDGAR.

Stockholder Information

Corporate Headquarters
Suite 200, Capital Square
400 Locust Street
Des Moines, Iowa 50309
Telephone 800/820-0088

Annual Shareholders' Meeting
Wednesday, May 20, 1998, 5:00 p.m.
West Des Moines Marriott Hotel
1250 74th Street
West Des Moines, Iowa 50266

Transfer Agent/Registrar/
Dividend Disbursing Agent
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606

Legal Counsel
Brown, Winick, Graves, Gross,
Baskerville and Schoenebaum, P.L.C.
Suite 1100, Two Ruan Center
601 Locust Street
Des Moines, Iowa 50309

Independent Auditors
KPMG Peat Marwick LLP
2500 Ruan Center
666 Grand Avenue
Des Moines, Iowa 50309

Design: Designgroup, Inc.

Brenton Banks, Inc. 1997 Annual Report 20
<PAGE>
Corporate Structure

Brenton Banks, Inc.
Board of Directors

C. Robert Brenton
Chairman of the Board
Brenton Banks, Inc.

William H. Brenton
Past Chairman and President
Brenton Banks, Inc.

J.C. Brenton
Past President
Brenton Banks, Inc.

Gary M. Christensen
President & CEO
Pella Corporation

Robert J. Currey
President
21st Century Telecom Group, Inc.

Robert L. DeMeulenaere
President and Chief Executive Officer
Brenton Banks, Inc.

R. Dean Duben
Past Vice Chairman of the Board
and President
Brenton Bank - Davenport

Hubert G. Ferguson
Financial Services Consultant
New Brighton, Minnesota

Brenton Banks, Inc.
Executive Officers

C. Robert Brenton
Chairman of the Board

Robert L. DeMeulenaere
President and Chief Executive Officer

Steven T. Schuler
Chief Financial Officer/Treasurer/Secretary

Brenton Bank
Senior Officers and
Line of Business Managers

Robert L. DeMeulenaere
Chairman and Chief Executive Officer

Larry A. Mindrup
President

Phillip L. Risley
Executive Vice President

Perry C. Atwood
Chief Sales Officer

Woodward G. Brenton
Chief Commercial Banking Officer

Elizabeth M. Piper/Bach
Chief Financial Services Officer

Steven T. Schuler
Chief Financial Officer/Treasurer/Secretary

Norman D. Schuneman
Chief Credit Officer

Judy S. Bohrofen
Director of Human Resources

Gregory M. Cole
Director of Credit Underwriting

W. Bradley Cunningham
Investment/ALCO Officer

Marsha A. Findlay
Senior Retail Banking Officer

Charles N. Funk
Regional President
President, Des Moines

Dennis H. Hanson
Regional President
President, Grinnell

Mark J. Hoffschneider
President, Brenton Mortgages

Steven C. Hyland
Senior Vice President, Brenton Insurance

Ronald D. Larson
Regional President
President, Cedar Rapids

Douglas F. Lenehan
President, Diversified Commercial
Services Division

Marc J. Meyer
Regional President
President, Adel

Catherine I. Reed
Director of Marketing

Allen W. Shafer
President, Business Banking Division

Thomas J. Vincent
President, Agricultural Banking Division

Steven D. Agan
President, Knoxville

John H. Anderson
President, Davenport

Thomas J. Friedman
President, Ankeny

Kevin Z. Geis
President, Brenton Savings Bank, FSB
Ames

Robert L. German
President, Dallas Center

John M. Hand
President, Emmetsburg

Richard H. Jones
President, Perry

V. Blaine Lenz
President, Eagle Grove

James L. Lowrance
President, Marshalltown

Clay A. Miller
President, Clarion

Jeffrey J. Nolan
President, Jefferson

21
<PAGE>
Brenton Service Locations - Iowa

Adel

Ames, 424 Main Street

Ames, North Grand Mall

Ankeny

Ayrshire

Cedar Rapids, 150 First Avenue, NE

Cedar Rapids, 3010 Williams Blvd., SW

Cedar Rapids, 1800 51st Street, NE

Cedar Rapids, 2300 Edgewood Road, SW

Clarion

Clive, 10101 University

Clive, 13631 University

Dallas Center

Davenport, 1618 N. Main Street

Davenport, Village Shopping Center

Davenport, West Third and Division

Davenport, 53rd and Utica Ridge

Des Moines, 400 Locust Street

Des Moines, 29th & Ingersoll

Des Moines, 2805 Beaver

Des Moines, S.W. 9th and McKinley

Dexter

Dubuque*

Eagle Grove

Emmetsburg

Granger

Grinnell

Indianola

Iowa City

Jefferson

Johnston

Knoxville

Mallard

Marion

Marshalltown, 102 South Center

Marshalltown, 1724 South Center

Newton*

Perry**

Redfield

Story City

Urbandale

Van Meter

Waukee

West Des Moines***

Woodward

* Investment, insurance and mortgages services only.
** Mortgage services only.
*** Telephone center only.

On the bottom of the page is a map of Iowa with dots showing the
location of the above banks.

Brenton Banks, Inc. 1997 Annual Report 22

<PAGE>
Text centered in the middle of the page:

Brenton Bank
Corporate Vision
Brenton will be the most respected financial
services provider by the client segments
we serve and will be regarded as
the bank of choice by these client groups.
We will gain this respect through
our commitment to clients.

Brenton Banks, Inc.
Suite 200, Capital Square
400 Locust Street
Des Moines, Iowa 50309
Telephone 800/820-0088
www.brentonbank.com

<PAGE>
Appendix to Annual Report
Referencing Graphic and Image Material

All graphic and image material has been described in text of the annual
report. Set forth below is a list of such material.

1. Cover - first unnumbered page of the Annual Report.

2. Bar graphs (right hand side), on page 2 of the Annual Report,
showing Common Stock Closing Bid Price (Restated for stock
splits/dividends) from 1988-1997; Diluted Net Income per Common Share
and Dividends per Common Share (Restated for stock splits/dividends)
from 1993-1997; and Return on Average Equity from 1993-1997.

3. One photograph (left hand side) of Robert L. DeMeulenaere on page 3
of the Annual Report.

4. Text (right hand side) on page 4 of the Annual Report.

5. Text (left hand side) on page 5 of the Annual Report.

6. Text (right hand side) on page 6 of the Annual Report.

7. Text (left hand side) on page 7 of the Annual Report.

8. One photograph (right hand side) of C. Robert Brenton on page 8 of
the Annual Report.

9. Bar graphs (left hand side) showing the Net Income from 1993-1997
and the Return on Average Assets from 1993-1997, on page 11 of the
Annual Report.

10. Bar graphs (right hand side) showing the Net Interest Margin from
1993-1997 and the Noninterest Income as a Percent of Total Operating
Income from 1993-1997, on page 12 of the Annual Report.

11. Bar graphs (left hand side) showing the Net Noninterest Margin from
1993-1997 and the Total Assets from 1993-1997, on page 13 of the Annual
Report.

12. Bar graphs (right hand side) showing the Primary Capital Ratio from
1993-1997 and the Nonperforming Loans as a Percent of Loans and Net
Charge-Offs as a Percent of Average Loans from 1993-1997, on page 14 of
the Annual Report.

13. Map of Iowa on page 22 of the Annual Report showing service
location of Company.