HEARTLAND GROUP OF COMPANIES INC
10QSB, 1997-07-11
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES
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             U.S. Securities and Exchange Commission
                      Washington D.C. 20549

                           Form 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
  For the quarterly period ended                        May 31, 1997            

     Commission file number                          33-65292C                  

           Heartland Group of Companies, Inc., dba, THE BANC STOCK GROUP
         (Exact name of small business issuer as specified in its charter)

                   FLORIDA                            65-0190407                

   (State of incorporation)                (IRS Employer Identification No.)

             6230 BUSCH BOULEVARD, COLUMBUS, OHIO  43229                        
             (Address of principal executive offices)

                       (614) 848-5100                                           
                   (Issuer's telephone number)

  Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.
Yes  X     No        

  State the number of shares outstanding of each of the issuer's classes of 
common equity, as of June 30, 1997:
     CLASS                                     NUMBER OF SHARES
Class A shares, No Par Value                       7,931,717
Class C shares, No Par Value                         480,000

     TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE)

     Yes     X                               No                          


       HEARTLAND GROUP OF COMPANIES, INC. AND SUBSIDIARIES
                   DBA, THE BANC STOCK GROUP

                              INDEX

                                             PAGE

Part I Financial Information:                       

     Item 1.  Consolidated Financial Statements          3-7

     Notes to Consolidated Financial Statements          8-17

     Item 2.  Management's Discussion and Analysis
             of Financial Condition and Results of
             Operations                                 18-21

Part II Other Information:

     Item  1 through Item 6                                22

Signatures                                                 23


       HEARTLAND GROUP OF COMPANIES, INC. AND SUBSIDIARIES
                   DBA, THE BANC STOCK GROUP

                              PART I

                      FINANCIAL INFORMATION

ITEM 1.   Financial Statements

The accompanying consolidated financial statements of Heartland Group of
Companies, Inc., dba The Banc Stock Group,  are unaudited but, in the opinion of
management, reflect all adjustments (which include only normal recurring 
accruals) necessary to present fairly such information for the periods and at 
the dates indicated and to make the consolidated financial statements not 
misleading.  The results of operations for the three months ended May 31, 1997 
may not be indicative of the results of operations for the year ending 
February 28, 1998.  Since the accompanying consolidated financial statements 
have been prepared in accordance with Item 310 of Regulation S-B, they do not 
contain all information and footnotes normally contained in annual consolidated 
financial statements; accordingly, they should be read in conjunction with the 
consolidated financial statements and notes thereto appearing in the Company's 
Annual Report.


HEARTLAND GROUP of COMPANIES, INC. and SUBSIDIARIES, DBA,
THE BANC STOCK GROUP
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
AS OF MAY 31, 1997
(UNAUDITED)



ASSETS
Cash                                                $       35,185
Securities owned:
  Marketable equity securities, at market value          9,500,847
  Not readily marketable equity securities at estimate     743,357
Mortgage participation notes                               100,000
Accounts receivable:

  Affiliates                                                27,159
  Pending securities settlements                            79,113
Notes and interest receivable                               18,011
Equity investment in Banc Stock Exchange of America        500,240
Property and equipment, net of accumulated depreciatio      89,733
Goodwill, net of accumulated amortization of $202,665      427,302
Deposits and other                                          96,837

    Total assets                                    $   11,617,784

LIABILITIES

Margin accounts payable to broker-dealers           $      891,350
Unearned commisions                                         34,560
Accounts payable to broker-dealers and other                31,003

Accrued expenses                                           507,903

    Total liabilities                                    1,464,816

SHAREHOLDERS' EQUITY

Preference stock, 50,000,000 shares authorized,             -
    none issued or outstanding
Common stock:
  Class A, no par value, 149,400,000 shares
    authorized, 8,234,762 shares issued
    and 7,931,717 shares outstanding                     9,102,556
  Class C, no par value, 480,000 shares
    authorized, issued and outstanding                         -
  Treasury stock, at cost
    (303,045 Class A shares)                              (385,403)
Retained earnings                                        1,435,815

    Total shareholders' equity                          10,152,968

    Total liabilities and shareholders' equity      $   11,617,784


The accompanying notes are an integral part of these consolidated financial 
statements.


HEARTLAND GROUP of COMPANIES, INC. and SUBSIDIARIES, DBA,
THE BANC STOCK GROUP
CONSOLIDATED  STATEMENTS OF INCOME
FOR THE QUARTERS ENDED MAY 31, 1997 and 1996
(UNAUDITED)





                                                 1997        1996
REVENUES:
 Principal transactions                    $     835,326 $   400,783
 Commission revenue                              270,178     238,040
 Dividends                                        37,164      21,573
 Interest and other                               10,249       9,431

   Total revenues                              1,152,917     669,827

EXPENSES:
 Brokers' commission                             193,231     120,494
 Salaries, benefits and payroll taxes            123,569      95,670
 Interest                                         20,805       6,307
 General and administrative                      265,075     193,170

   Total expenses                                602,680     415,641

INCOME BEFORE TAXES                              550,237     254,186

PROVISION FOR INCOME TAXES                        -            -

INCOME BEFORE EQUITY IN NET EARNINGS 
 OF AFFILIATED COMPANY                           550,237     254,186

Equity in net earnings of Banc Stock Exchange     11,080      (2,930)

NET  INCOME                                $     561,317 $   251,256

 WEIGHTED AVERAGED SHARES,
   COMMON AND COMMON
   STOCK EQUIVALENTS                           8,411,717   8,411,677


 PRIMARY AND FULLY DILUTED
   NET INCOME  PER COMMON SHARE            $        0.07 $      0.03

The accompanying notes are an integral part of these consolicated financial 
statements.


HEARTLAND GROUP of COMPANIES, INC. and SUBSIDIARIES, DBA,
THE BANC STOCK GROUP
CONSOLIDATED STATEMENTS of CHANGES in SHAREHOLDERS' EQUITY
FOR THE QUARTER ENDED MAY 31, 1997
(UNAUDITED)





                                              Treasury     Retained
                      Class A  Class C        Stock        Earnings   Total

 Balance at 2/28/97 $9,102,556   -           ($385,403)    $874,498   $9,591,651


 Net income                 -             -         -       561,317      561,317


 Balance 5/31/1997  $9,102,556       -       ($385,403)  $1,435,815  $10,152,968

The accompanying notes are an integral part of these consolidated financial 
statements.



HEARTLAND GROUP of COMPANIES, INC. and SUBSIDIARIES, DBA,
THE BANC STOCK GROUP
CONSOLIDATED STATEMENTS of CASH FLOWS
FOR THE QUARTERS ENDED MAY 31, 1997 and 1996
(UNAUDITED)


                                                   1997         1996
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                  $    561,317 $    251,256
  Adjustments to reconcile net income 
    to net cash used in operating activities:
    Depreciation and amortization                   17,624       15,477
    Equity in earnings of Banc Stock Exchange of
       America                                     (11,080)       2,930
    (Increase) decrease in certain assets-
      Accounts receivable                          (34,820)      (6,441)
      Securities owned, net                       (768,679)    (885,271)
      Other assets                                 (10,720)       1,807
    Increase (decrease) in certain liabilities-
      Accounts payable broker-dealers & other       10,036      (22,835)
      Unearned commissions                          34,560        -
      Accrued expenses and other                   (61,067)     (65,573)
         Net cash used in operating activities    (262,829)    (708,650)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Collections of notes receivable                    9,138       10,650
  Issuance of notes receivable                      (4,304)      (3,659)
  Purchase of property and equipment               (10,623)      (3,989)
         Net cash (used in) provided by investin    (5,789)       3,002

CASH FLOWS FROM FINANCING ACTIVITIES:
  Margin accounts payable to broker-dealers        165,893      375,295
  Advances from affiliates                          61,454       34,449
  Advances to affiliates                           (83,970)     (26,616)
       Net cash provided by financing activities   143,377      383,128

NET DECREASE IN CASH                              (125,241)    (322,520)

CASH, BEGINNING OF PERIOD                          160,426      405,338

CASH, END OF PERIOD                           $     35,185 $     82,818


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                                     1997         1996
  Cash paid during the period for:
    Interest                                  $     20,805 $      6,307


The accompanying notes are an integral part of these consolidated financial 
statements.

                                
               HEARTLAND GROUP OF COMPANIES, INC.
                   DBA, THE BANC STOCK GROUP
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MAY 31, 1997


(1)  ORGANIZATION AND NATURE OF BUSINESS

Heartland Group of Companies, Inc., dba, The Banc Stock Group, (the Company) 
is a Florida corporation incorporated in April, 1990.  At the Annual Meeting 
of Shareholders held on June 19, 1997, the Shareholders amended the Articles
of Incorporation to change the name of the corporation to The Banc Stock Group, 
Inc.  The Company was organized for the purpose of investing in financial 
services companies (such as stock brokerage companies) as well as trading and 
investing in minority interests of independent bank stocks.  The Company has 
three wholly-owned subsidiary operating companies.
  
Banc Stock Financial Services, Inc. (BSFS), an Ohio corporation, is an NASD 
registered broker-dealer specializing in the trading of bank stocks nationwide. 
BSFS is registered with the Securities  and Exchange Commission  and the 
securities commissions of seventeen states, including Ohio.  BSFS trades 
securities on a fully-disclosed basis and clears customer transactions 
through an unaffiliated broker-dealer which also maintains the customer 
accounts.  BSFS derives a significant portion of its revenues from providing 
private portfolio management and brokerage services.

Heartland Advisory Group, Inc. (HAG), is a registered investment advisor 
offering advisory accounts to qualified investors.

Buckeye Bancstocks, Inc., is an Ohio corporation established in 1977, to act 
as an intrastate broker-dealer trading primarily in Ohio bank stocks.




(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 the reported amounts 
of revenues and expenses for the period.  Actual results could differ from those
estimates.

The following is a summary of the Company's significant accounting policies:

Principles of Consolidation
     
The accompanying consolidated financial statements include the operations of the
Company, BSFS, HAG and  Buckeye Bancstocks.  All intercompany transactions and
balances have been eliminated in consolidation.

Cash

The Company has defined cash as demand deposits and money market accounts.

Valuation of Securities Owned

Bank securities and related options traded on national securities markets and 
securities not traded on national securities markets, but with readily 
ascertainable market values, are valued at market value.  Other bank securities 
for which market quotations are not readily available, due to infrequency of 
transactions, are valued at fair value as determined in good faith by the 
management of the Company. Realized and unrealized gains and losses are 
included in principal transactions.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation.  
Depreciation is calculated using the straight-line method over estimated lives 
of five to seven years.

Goodwill

The excess purchase price over the fair market value of the net assets acquired 
from Buckeye Bancstocks and BSFS is being amortized on a straight line basis 
over 20 years.

Revenues

Securities transactions and commissions are accounted for on the trade date 
basis.  Dividend income is recorded on the ex-dividend date and interest 
income is accrued as earned.  Realized gains and losses from sales of 
securities are determined utilizing the first-in, first-out method (FIFO).

Earnings Per Share

Primary and fully diluted earnings per common share were computed by dividing 
net income by the weighted average number of shares of common stock outstanding
during the periods.

Recent Accounting Pronouncement

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share," which supersedes
existing standards for determining earnings per share.  The statement will be 
effective for the Company for the year ending February 28, 1998.  Primary 
earnings per share will be replaced by "basic earnings per share," which will 
be determined solely by the weighted average number of shares outstanding for 
the period.  Fully diluted earnings per share will be replaced by "diluted 
earnings per share, " which will reflect the potential dilution that could 
occur if securities or other contracts to issue common stock were exercised or 
converted into common stock or resulted in the issuance of common stock that 
then shared in the earnings of the Company.  The statement will also require 
a reconciliation of the numerator and denominator of basic earnings per share 
with the numerator and denominator of diluted earnings per share.  Management
does not believe the new statement will result in a significant difference in 
amounts per share reported in these financial statements.  

Fair Value of Financial Instruments

Substantially all of the Company's financial instruments are carried at fair 
value or amounts approximating fair value.  Assets, including cash, accounts 
receivable, mortgage participation notes, notes and interest receivable and 
securities owned are carried at amounts which approximate fair value.  
Similarly, liabilities, including margin accounts payable to broker-dealers, 
accounts payable and accrued expenses are carried at amounts approximating 
fair value.

Equity Investment in Banc Stock Exchange of America

The Banc Stock Exchange of America (BSA) is establishing an electronic bank 
stock information exchange.  BSA is under common management with the Company.  
The Company currently holds 16% of the outstanding common stock of BSA.  The
Company's investment in BSA is accounted for on the equity method.  The 
difference between the carrying amount of the investment accounted for under 
the equity method and the underlying equity in net assets results from the 
Company's policy of expensing pre-operating costs as incurred.
 
(3)  CAPITAL STOCK

Common Stock 

Class A Common shares have been registered with the Securities and Exchange
Commission since  March 24, 1994.  Commencing December 1, 1991, shares of Class
C common stock automatically convert to Class A common stock at the rate of
120,000 shares per year.  The Class C common shares are subordinate to Class A
common stock in that Class A common stock has a liquidation preference over the
Class C common stock equal to $1.50 per share.  In all other respects, Class A 
and Class C common stock have equal rights.
 
Treasury Stock

As of May 31, 1997, Buckeye Bancstocks held 206,240 Class A shares of the
Company.  These shares are treated as treasury stock for financial reporting 
purposes.
     
Authorization of Preference Stock

The Company's Articles of Incorporation authorize the issuance of 50,000,000 
shares of "blank check" preference stock with such designations, rights and 
preferences as may be determined from time to time by the Company's Board of 
Directors.  The Board of Directors is empowered, without shareholder approval, 
to issue preference stock with dividend, liquidation, conversion, voting, or 
other rights which could adversely affect the voting or other rights of the 
holders of the common stock.  

(4)  SECURITIES OWNED

Marketable equity securities at May 31, 1997 consist of bank stocks at market 
value, as follows:

       Traded on national securities markets                 $6,559,579
       Not traded on national securities               
         markets, but with readily ascertainable
         market value                                         2,941,268

               Total marketable equity securities            $9,500,847

The Company, at any given time, may have a significant amount of its securities
owned and related income generated from a few specific bank stocks.  As of 
May 31, 1997, the Company had no single investment representing more than 10% 
of its marketable equity securities.

Securities not readily marketable include securities for which there is no 
market on a securities exchange and no independent publicly quoted market.  
These securities at May 31, 1997 were $743,357 at fair value with a cost of 
$649,160.  As of May 31, 1997, the Company had investments in one bank stock 
amounting to 62% of its not readily marketable securities.

(5)  MARGIN ACCOUNTS PAYABLE TO BROKER-DEALERS

The Company maintains margin account balances due to unaffiliated broker-dealers
bearing interest at variable rates which averaged 7.5% at May 31, 1997.  These
margin accounts are secured by the respective securities held by broker-dealers.
The market value of the securities held by broker-dealers with margin account 
balances was approximately $4,917,000 at May 31, 1997.

(6)  RELATED PARTY TRANSACTIONS

Securities Transactions

The Company purchases from and sells securities owned to BSA at the prevailing
market price at the time of the transaction.  However, during the quarters ended
May 31, 1997 and 1996 no purchases were made from, nor sales made to, BSA.

Operating Expenses

The Company and BSA are under common management.  Certain expenses are paid
by the Company and allocated to BSA based upon predetermined percentages as
approved by the officers of the Companies.  Operating expenses in the 
allocation are primarily salaries and benefits.  Total expenses allocated to 
BSA were $24,457 and $20,230 for the quarters ended May 31, 1997 and 1996, 
respectively.

(7)  INCOME TAXES

The Company files a consolidated Federal income tax return.  It is the policy 
of the Parent to allocate the consolidated tax provision to subsidiaries as if 
each subsidiary's tax liability or benefit were determined on a separate 
company basis.  As part of the consolidated group, subsidiaries transfer to the 
Parent their current Federal tax liability or assets.
     
The provision for income taxes for the quarter ended May 31, 1997 is composed of
the following:
                              
Current Federal income taxes                      $      -
Deferred Federal income taxes                       190,000
Change in valuation allowance                      (190,000)
Provision for income taxes                        $      -       

Deferred tax assets and liabilities consist of the following at May 31, 1997:
                                    
Deferred tax benefit of NOL carryforward                 $1,040,000
Deferred tax liabilities on unrealized gains
    on securities owned                                    (940,000) 
Net deferred tax benefit                                    100,000
Valuation allowance                                        (100,000)
Deferred taxes                                            $     -        

(8)  OPERATING LEASES

The Company leases certain facilities, a vehicle and office equipment under 
operating leases.  Total lease expenses were approximately $87,000 in fiscal 
year ended February 28, 1997.  As of May 31, 1997 the future minimum lease 
payments under existing leases are as follows:
                                      Amount
                    1998            $ 116,000
                    1999              118,000
                    2000               88,200
                    2001               92,500
                    2002               94,300
                    2003               39,300
                                    $ 548,300

(9) EMPLOYEE INCENTIVE PLANS

Incentive Compensation Plan

All full-time executive employees of the Company are eligible to participate 
in the Heartland Incentive Compensation Plan.  The Plan provides that a bonus 
fund will be established in an amount equal to 20% of the pre-tax realized 
profits of the Company in excess of a 15% pre-tax return on equity.  The 
amount of the bonus fund is calculated each fiscal quarter on a cumulative 
basis.  The allocation of the bonus fund is to be made by the President of 
the Company.  The Company incurred an expense of $93,000 under the Plan for 
the year ended February 28, 1997.

Stock Option Plan

The Company has a Non-Qualified and Incentive Stock Option Plan which authorizes
the grant of options to purchase an aggregate of 1,000,000 shares of the 
Company's Class A Common Stock.  The Plan provides that the Board of Directors, 
or a committee appointed by the Board, may grant options and otherwise 
administer the Option Plan.  The exercise price of each incentive stock option 
or non-qualified stock option must be at least 100% of the fair market value 
of the Class A Shares at the date of grant, and no such option may be 
exercisable for more than 10 years after the date of grant.  However, the 
exercise price of each incentive stock option granted to any shareholder 
possessing more than 10% of the combined voting power of all classes of 
capital stock of the Company on the date of grant must not be less than 110% 
of the fair market value on that date, and no such option may be exercisable
more than 5 years after the date of grant.

Effective September 28, 1995, the following options and warrants were granted 
under this plan with a ten year term and exercise price of $2.875.

(a)  154,000 non-qualified stock options granted to employees with immediate 
vesting.

(b)  55,000 non-qualified stock options granted to brokers with immediate 
vesting.

(c)  145,000 non-qualified stock options granted to brokers, vesting over five 
years.

(d)  121,000 qualified stock options granted to employees, vesting over five 
years.

(e)  105,000 warrants granted to directors and an officer with immediate 
vesting.

Effective February 29,  1996, 25,000 options were granted under this plan to the
President of the Company with a ten year term and exercise price of $2.875.

Effective March 7, 1997, the following options and warrants were granted under 
this plan with a ten year term and exercise price of $2.125.

(a)  61,000 non-qualified stock options granted to employees with immediate 
vesting.

(b)  47,500 non-qualified stock options granted to brokers with immediate 
vesting.

(c)  32,500 non-qualified stock options granted to brokers, vesting over five 
years.

(d)  61,000 qualified stock options granted to employees, vesting over five 
years.

(e)  65,000 warrants granted to directors and an officer with immediate vesting.

Effective May 4,  1997, 7,500 options which vest immediately and 7,500 options
which vest over five years, were granted under this plan to an employee  with 
a ten year term and exercise price of $2.375.  

The Company applies Accounting Principles Board Opinion 25 and related
Interpretations in accounting for its plans.  Accordingly, no compensation 
cost has been recognized for its fixed stock option plans and warrants.  Had 
compensation cost for the Company's  stock-based compensation plans been 
determined based on the fair value , as computed in accordance with Statement 
of Financial Accounting Standards No. 123 (FAS 123), at the grant dates for 
awards under those plans, the Company's net income and earnings per share 
would have been reduced to the pro forma amounts indicated below:
                                        
                                                 Quarter Ended
                                        May 31, 1997   May 31, 1996

     Net income          As reported    $ 561,317      $ 251,256
                         Pro forma      $ 216,016      $ 204,970

     Primary  and fully diluted
      earnings per share As reported    $ 0.07              $ 0.03
                         Pro forma      $ 0.03              $ 0.02

To make the computations of pro forma results under FAS 123, the fair value of 
each option grant is estimated on the date of grant using the Black-Scholes 
option-pricing model with the following weighted-average assumptions: no 
dividend yield for all years; expected volatility of 31.5% and 61%; and 
expected lives of ten years.  The assumed risk-free interest rates for the 
September 28, 1995 grants is 5.83%; 6.79% for the February 29, 1996 grant;
7.03% for the March 7, 1997 grants; and 6.82% for the May 4, 1997 grants.  The 
options and warrants granted under these plans are not registered and 
accordingly, there is no quoted market price.

A summary of the status of the Company's stock option and warrants plans as of 
May 31, 1997  and changes during the quarter is presented below:

                                  Options                 Warrants             
                                        Exercise                 Exercise
                              Shares    Price        Shares      Price     
Outstanding March 1,  1997    480,000   $2.875      105,000      $2.875
Granted                       232,000   $2.141       65,000      $2.125
Outstanding May 31, 1997      712,000   $2.636      170,000      $2.588


Exercisable May 31, 1997      395,200   $2.660      170,000      $2.588

Weighted-average fair value
   of options and warrants
   granted during the quarter,     
   computed in accordance 
   with FAS 123                         $1.651                     N/A

The following table summarizes information about fixed stock options and 
warrants outstanding at May 31, 1997:

                                   Options        Warrants         
Number outstanding                 712,000        170,000
Weighted-average remaining
   contractual life in years             8.80            8.88
Weighted-average exercise price         $2.660          $2.588
Number exercisable                 395,200        170,000


(10)  REGULATORY REQUIREMENTS

BSFS is subject to the uniform net capital rule of the Securities and Exchange
Commission (Rule 15c3-1), which requires that the ratio of "aggregate  
indebtedness" to "net capital" not exceed 15 to 1 (as those terms are defined 
by the Rule).  BSFS had net capital of $794,310 as of May 31, 1997, which was 
in excess of its required minimum net capital of $100,000.  The  ratio of 
aggregate indebtedness to net capital was .39 to 1 as of May 31, 1997.  BSFS 
is also subject to regulations of the District of Columbia and seventeen states 
in which it is registered as a licensed broker-dealer. 


Buckeye Bancstocks is required by the Ohio Division of Securities to maintain an
"allowable net worth" of $25,000.  The Company has guaranteed this allowable net
worth.

HAG is a Registered Investment Advisor and is subject to regulation by the SEC
pursuant to the Investment Advisors Act of 1940.

(11) CONCENTRATIONS OF CREDIT RISK AND FINANCIAL INSTRUMENTS WITH 
         OFF-BALANCE SHEET RISK

The Company's NASD broker-dealer subsidiary under the correspondent agreement
with its clearing broker, has agreed to indemnify the clearing broker from 
damages or losses resulting from customer transactions.  The Company is, 
therefore, exposed to off-balance sheet risk of loss in the event that customers
are unable to fulfill contractual obligations.  The Company manages this risk 
by requiring customers to have sufficient cash in their account before a buy 
order is executed and to have the subject securities in their account before a 
sell order is executed.  The Company has not incurred any losses from customers
unable to fulfill contractual obligations.

In the normal course of business, the Company periodically sells securities 
not yet purchased (short sales) for its own account and writes options.  The 
establishment of short positions and option contracts expose the Company to 
off-balance sheet market risks in the event prices change, as the Company may 
be obligated to cover such positions at a loss. At May 31, 1997, the Company 
had no short security positions, the Company had not written any option 
contracts and did not own any options. The Company did not experience any 
credit losses due to the failure of any counterparties to perform during the 
quarter ended May 31, 1997.  Senior management of the Company is responsible 
for reviewing trading positions, exposures, profits and losses, trading 
strategies and hedging strategies on a daily basis.

The Company's significant industry concentrations, which arises within its 
normal course of business activities, is with financial institutions for bank 
securities transactions. The most significant concentrations of financial 
instruments are in Midwest and California bank stocks.

ITEM 2:   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

Quarter Ended May 31, 1997, Compared to the Quarter Ended May 31, 1996

Revenues for the quarter ended May 31, 1997 increased to $1,152,919 compared to
$669,827 for the quarter ended May 31, 1996, an increase of 72%.  This increase
results primarily from increases in revenue from principal transactions.  

Revenues from principal transactions involving the trading portfolio were 
$835,326 for the quarter ended May 31, 1997 compared to $400,783 for the 
quarter ended May 31, 1996, an increase of 108%.  This represents an annual 
rate of return on the average portfolio of 34% for the quarter ended May 31, 
1997 compared to 27% for the quarter ended May 31, 1996 due to increases in 
market values.

Banc Stock Financial Services, Inc. (BSFS), the Company's NASD broker-dealer
subsidiary, generated commission revenue of $270,178 for the quarter ended 
May 31, 1997 compared to $238,040 for the quarter ended May 31, 1996, an 
increase of 14%.  BSFS continues to make a concerted effort to increase its 
level of business activity, especially portfolio management services.

Operating expenses for the quarter ended May 31, 1997 increased to $602,680
compared to $415,641 for the quarter ended May 31, 1996, an increase of 45%. 
Brokers' commission expenses increased to $193,231 for the quarter ended May 31,
1997 compared to $120,494 for the quarter ended May 31, 1996, an increase of
60%.  This increase reflects management's decision to increase commissions 
paid to brokers to provide incentives to increase the level of business 
activity.  Salaries, benefits, and payroll taxes increased to $123,569 for the 
quarter ended May 31, 1997 compared to $95,670 for the quarter ended May 31, 
1996, an increase of 29%.  This increase reflects management's decision to 
add three additional employees to establish additional revenue sources in the 
future.  Interest expense increased to $20,805 for the quarter ended May 31, 
1997 compared to $6,307 for the quarter ended May 31, 1996, an increase of 230%.
This increase results from additional margin positions with broker-dealers 
established to buy additional securities to take advantage of favorable market 
conditions.  General and administrative expenses increased to $265,075 for the 
quarter ended May 31, 1997 compared to $193,170 for the quarter ended May 31, 
1996, an increase of 37%.  This increase is primarily the result of marketing 
costs incurred to launch The Banc Stock Group Fund, a mutual fund investing in 
community bank stocks, which is sponsored by a subsidiary of the Company and 
will be launched in August.

The Banc Stock Exchange of America, Inc. (BSA) has established an electronic 
bank stock information exchange.  BSA is separately owned but under common
management with the Company.  The Company currently holds 16% of the
outstanding common stock of BSA.  The Company's investment in BSA is accounted
for on the equity method.   Equity in BSA's earnings was $11,080 for the quarter
ended May 31, 1997 compared to a loss of $2,930 for the quarter ended May 31,
1996.  BSA was a development stage enterprise through February 28, 1997, 
however, operations began March 1, 1997.

Liquidity and Capital Resources

Approximately 7% of the value of the Company's trading portfolio is comprised of
small bank stocks which are thinly traded and there can be no assurance that 
active markets will develop.  The failure of such markets to develop could 
negatively affect the Company's operations and financial condition.  
Approximately 93% of the Company's trading portfolio is readily marketable, 
providing a high degree of liquidity. Investments in bank securities traded on 
national securities markets and securities not traded on national securities 
markets, but with readily ascertainable market values are valued at market 
value.  Other bank securities for which market quotations are not readily 
available, due to infrequency of transactions, are valued at fair value as
determined in good faith by management of the Company.  While management
employs objective criteria to ascertain these values, there is no independent 
benchmark by which the values assigned by management can be judged.

As of May 31, 1997 the Company had working capital of approximately $9,000,000
compared to approximately $7,465,000 as of May 31, 1996.  Working capital
includes cash, securities owned and accounts and notes receivable, net of all 
liabilities.  The Company has no long term debt.

The Company's NASD broker-dealer subsidiary under the correspondent agreement
with its clearing broker, has agreed to indemnify the clearing broker from 
damages or losses resulting from customer transactions.  The Company is, 
therefore, exposed to off-balance sheet risk of loss in the event that customers
are unable to fulfill contractual obligations.  The Company manages this risk 
by requiring customers to have sufficient cash in their account before a buy 
order is executed and to have the subject securities in their account before a 
sell order is executed.  The Company has not incurred any losses from customers 
unable to fulfill contractual obligations.


In the normal course of business, the Company periodically sells securities 
not yet purchased (short sales) for its own account and writes options.  The 
establishment of short positions and option contracts expose the Company to 
off-balance sheet market risks in the event prices change, as the Company may 
be obligated to cover such positions at a loss.

At May 31, 1997 the Company had no short security positions.  Short security
positions do not expose the Company to credit risk since the counterparty is not
obligated to perform.

At May 31, 1997 the Company had not written any option contracts.  Short option
positions do not expose the Company to credit risk since the counterparty is not
obligated to perform.

The Company did not own any options as of May 31, 1997.  The Company did not
experience any credit losses due to the failure of any counterparties to 
perform during the quarter ended May 31, 1997.  Senior management of the 
Company is responsible for reviewing trading positions, exposures, profits 
and losses, trading strategies and hedging strategies on a daily basis.

The Company's most significant industry concentration, which arises within its 
normal course of business activities, is with financial institutions for bank 
securities transactions.  The most significant concentration of financial 
instruments is in Midwest and California bank stocks.

Historically, the operations of the Company have been funded by returns on
investments, raising of capital, and limited bank financing.  Management 
believes that the Company's existing resources, including available cash and 
cash provided by operating activities, will be sufficient to satisfy its 
working capital requirements in the foreseeable future.  However, no assurance 
can be given that additional funds will not be required.  To the extent that 
returns on investments are less than or expenses are greater than anticipated, 
the Company may be required to reduce its activities, liquidate inventory or 
seek additional financing.  This financing may not be available on acceptable 
terms, if at all.  No significant capital expenditures are expected in the
foreseeable future, however, the Company is moving its offices during the second
fiscal quarter.  The cost of this move is expected to approximate $75,000 and 
the new space will increase annual lease cost approximately 12%.  The new space 
is approximately 25% larger than the previous space.  Working capital will be 
used to fund these expenditures.


Impact of Inflation and Other Factors

The Company's operations have not been significantly affected by inflation.  The
Revenue Reconciliation Act of 1993 includes Mark-to-Market Rules which 
essentially require dealers in securities to include unrealized gains on the 
trading portfolio, in taxable income for income tax purposes.  The Revenue 
Reconciliation Act of 1993 was effective for the Company's tax year beginning 
March 1, 1993.  Unrealized gains on inventory as of February 28, 1993 will be 
reported as taxable income over five years.  Securities held for investment 
rather than inventory are not subject to the Mark-to-Market Rules.  In light of 
the Company's net operating loss carried forward, the Mark-to-Market Rules 
currently are not expected to have a significant impact on operations.  However,
after the net operating loss carried forward, currently available to the
Company, is fully utilized, these Rules could have a materially adverse impact 
on the Company's cash flow.


       HEARTLAND GROUP OF COMPANIES, INC. AND SUBSIDIARIES
                   DBA, THE BANC STOCK GROUP

                             PART II

                        OTHER INFORMATION

Item 1.  Legal Proceedings -                      None

Item 2.  Changes in Securities -                  None

Item 3.  Defaults Upon Senior Securities -        None

Item 4.  Submission of Matters to a Vote of
         Security Holders -                        None
                     
Item 5.  Other Information -  At the Annual Meeting of Shareholders held on 
         June 19, 1997, the Shareholders amended the Articles of Incorporation 
         to change the name of the corporation to The Banc Stock Group, Inc.

Item 6.  Exhibits and Reports on Form 8-K
         a)  Furnish the exhibits required by 
            Item 601 of Regulation S-B -            None

         b)  Reports on Form 8-K -                  None


                            SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused 
this report to be signed on its behalf by the undersigned, thereunto duly 
authorized.

  HEARTLAND GROUP OF COMPANIES, INC., DBA THE BANC STOCK GROUP
                             (Registrant)


Date     July 11, 1997                  /S/ Michael E. Guirlinger           
                                        Michael E. Guirlinger
                                        President, Treasurer and Chief
                                        Executive Officer




Date     July 11, 1997                  /S/ Jeffrey C. Barton                 
                                        Jeffrey C. Barton
                                        Chief Financial Officer


                     Financial Data Schedule



WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>
                             
<ARTICLE>                          BD
<LEGEND>                           0
<RESTATED>                         
<CIK>                              0
<NAME>                             0
<MULTIPLIER>                       1
<CURRENCY>                         U.S. DOLLARS
<PERIOD-START>                     MAR-01-1996
<PERIOD-TYPE>                      QUARTER
<FISCAL-YEAR-END>                  FEB-28-1998
<PERIOD-END>                       MAY-31-1997
<EXCHANGE-RATE>                    1
<CASH>                             35,185
<RECEIVABLES>                      124,283
<SECURITIES-RESALE>                0
<SECURITIES-BORROWED>              0
<INSTRUMENTS-OWNED>                10,344,204
<PP&E>                             89,733
<TOTAL-ASSETS>                     11,617,784
<SHORT-TERM>                       0
<PAYABLES>                         922,353
<REPOS-SOLD>                       0
<SECURITIES-LOANED>                0
<INSTRUMENTS-SOLD>                 0
<LONG-TERM>                        0
              0
                        0
<COMMON>                           8,717,153
<OTHER-SE>                         1,435,815
[TOTAL-LIABILITIES-AND-EQUITY]     11,617,784
<TRADING-REVENUE>                  835,326
<INTEREST-DIVIDENDS>               47,413
<COMMISSIONS>                      147,363
<INVESTMENT-BANKING-REVENUES>      0
<FEE-REVENUE>                      122,815
<INTEREST-EXPENSE>                 20,805
<COMPENSATION>                     123,569                  
<INCOME-PRETAX>                    550,237
<INCOME-PRE-EXTRAORDINARY>         550,237
<EXTRAORDINARY>                    0
<CHANGES>                          0
<NET-INCOME>                       561,317
<EPS-PRIMARY>                      .07
<EPS-DILUTED>                      .07



</TABLE>


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