As filed with the Securities and Exchange Commission on August 9, 1996 
                                Registration No.
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-3
             Registration Statement Under the Securities Act of 1933

                          FIRST MIDWEST FINANCIAL, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                     42-1406262
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation)
                                       
                            James S. Haahr, President
                          First Midwest Financial, Inc.
                                  Fifth at Erie
                             Storm Lake, Iowa 50588
                                 (712) 732-4117
                       (Name, address, including zip code,
                      and telephone number, including area
                           code, of agent for service)
                                                                             
                                  Fifth at Erie
                             Storm Lake, Iowa 50588
                                 (712) 732-4117
               (Address, including zip code, and telephone number,
            including area code, of registrant's principal executive
                                    offices)

                           WITH COPIES OF NOTICES TO:
                            JEFFREY M. WERTHAN, P.C.
                           CHRISTOPHER R. KELLY, P.C.
                           MICHAEL S. SADOW, ESQUIRE
                         Silver, Freedman & Taff, L.L.P.
                        (A Limited Liability Partnership
                      Including Professional Corporations)
                              Suite 700, East Tower
                           1100 New York Avenue, N.W.
                           Washington, D.C. 20005-3934

         Approximate  date of  commencement  of proposed sale to the public:  As
soon as practicable after this Registration Statement becomes effective.

         If the  securities  being  registered  on this Form are  being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. [  ]

         If any of the  securities  being  registered  on this  Form  are  being
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering. [ ] ____________

         If this  Form is a  post-effective  amendment  filed  pursuant  to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering.
                                [ ] ____________

         If delivery of the  prospectus  is expected to be made pursuant to Rule
434, please check the following box. [ ]

                                               
CALCULATION OF REGISTRATION FEE Proposed maximum Proposed maximum Title of each class of securities Amount to be offering price per aggregate offering Amount of to be registered registered share(1) price(1) registration fee(1) ---------------- ---------- -------- -------- ------------------- Common Stock, $.01 par value 190,000 shares $21.75 $4,132,500 $1,425
(1) Calculated in accordance with Rule 457(c) based on the average of the high and low sales prices of the Common Stock, as reported on The Nasdaq National Market on August 6, 1996, solely for the purpose of calculating the amount of the registration fee. The Company is registering the Shares (as defined in the Prospectus) in anticipation of demands for registration by the Selling Stockholders pursuant to the Shareholder Agreement, dated May 20, 1996 by and among the Company and the Selling Stockholders. The Company will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders. The Company will bear all of the costs of registering the Shares under the Securities Act of 1933, which will amount to approximately $16,000. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. PROSPECTUS 190,000 SHARES FIRST MIDWEST FINANCIAL, INC. COMMON STOCK ($.01 par value per share) The 190,000 shares (the "Shares") of common stock, $.01 par value per share ("Common Stock"), of First Midwest Financial, Inc., a Delaware corporation ("First Midwest" or the "Company"), may be offered for sale from time to time by and for the account of certain stockholders of the Company (the "Selling Stockholders"). See "Selling Stockholders." The Selling Stockholders acquired the Shares in connection with the merger (the "Merger") of Central West Bancorporation, an Iowa corporation ("CWB"), with and into the Company pursuant to the Agreement and Plan of Merger and Reorganization, dated May 20, 1996, by and between the Company and CWB (the "Merger Agreement"). The Company is registering the Shares in anticipation of demands for registration by the Selling Stockholders pursuant to the Shareholder Agreement, dated May 20, 1996, by and among the Company and the Selling Stockholders (the "Stockholder Agreement"). The Company will not receive any of the proceeds from the sale of the Shares by Selling Stockholders, but has agreed to bear all the expenses of registration of the Shares. See "Plan of Distribution." The Common Stock is traded on the Nasdaq Stock Market under the symbol "CASH." On September __, 1996, the last reported sale price of Common Stock on the Nasdaq Stock Market was $_________ per share. The Selling Stockholders, or their transferees, from time to time may offer and sell the Shares directly or through agents or broker-dealers on terms to be determined at the time of sale. See "Plan of Distribution" for information concerning commissions or discounts with respect to offers and sales of Shares. The Selling Stockholders and any agents or broker-dealers that participate with the Selling Stockholders in the distribution of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and, in such event, any commissions received by them and any profit on the resale of the Shares may be deemed to be underwriting commissions or discounts under the Securities Act. THE SECURITIES OFFERED HEREBY INVOLVE CERTAIN RISKS. SEE "RISK FACTORS" ON PAGE 2 HEREIN. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), THE OFFICE OF THRIFT SUPERVISION (THE "OTS"), ANY STATE SECURITIES COMMISSION, OR ANY OTHER GOVERNMENTAL AGENCY, NOR HAS THE SEC, THE OTS, ANY STATE SECURITIES COMMISSION OR ANY OTHER AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS SEPTEMBER ____, 1996. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices located at 7 World Trade Center, Suite 1300, New York, New York, 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can be obtained upon written request addressed to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a Web site that contains reports, proxy and information statements and other information regarding the Company's electronic filings with the Commission. The address of the Commission's Web site is "http://www.sec.gov". The Company has filed with the Commission a registration statement on Form S-3 (together with any amendments, the "Registration Statement") under the Securities Act, covering the shares of Common Stock being offered by this Prospectus. This Prospectus, which is part of the Registration Statement, does not contain all of the information and undertakings set forth in the Registration Statement and reference is made to such Registration Statement, including exhibits, which may be inspected and obtained in the manner and at the locations specified above, for further information with respect to the Company and the Common Stock. Statements contained in this Prospectus concerning the provisions of any document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents previously filed by the Company with the Commission are incorporated by reference into this Prospectus: (i) The Company's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1995; (ii) the Company's definitive Proxy Statement dated December 13, 1995 for its Annual Meeting of Stockholders held on January 23, 1996; (iii) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the annual report referred to in (i) above; and (iv) The description of Common Stock in the Company's registration statement on Form 8-A filed with the Commission (File No. 0-22140) on July 23, 1993, and all amendments or reports filed for the purpose of updating such description. In addition, all documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made pursuant to the Registration Statement shall be deemed to be incorporated by reference into and to be a part of this Prospectus from the date of filing of such documents. Any statement contained in a document so incorporated by reference shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in this Prospectus, or in any other subsequently filed document which is also incorporated by reference, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Prospectus except as so modified or superseded. This Prospectus incorporates documents by reference with respect to the Company that are not presented herein or delivered herewith. Copies of these documents (not including exhibits to such documents unless such exhibits are specifically incorporated by reference in such document or herein) are available without charge, upon written or oral request to the Company, to any person to whom this Prospectus is delivered: Fifth at Erie, P.O. Box 1307, Storm Lake, Iowa 50588, Attention: Kristi L. Frey; (712) 732-4117. RISK FACTORS Before investing in shares of the Common Stock offered hereby, prospective investors should consider carefully the matters presented below. REGULATORY OVERSIGHT The Company currently has two wholly-owned subsidiaries, First Federal Savings Bank of the Midwest, a federally-chartered thrift institution ("First Federal") and Security State Bank, an Iowa-chartered commercial bank ("Security" and when referred to with First Federal, the "Banks"). First Federal is subject to extensive regulation, supervision and examination by the OTS, as its chartering authority and primary federal regulator, and by the Federal Deposit Insurance Corporation (the "FDIC"), which insures its deposits up to applicable limits. First Federal is a member of the Federal Home Loan Bank System and is subject to certain limited regulation by the Board of Governors of the Federal Reserve System (the "FRB"). Such regulation and supervision governs the activities in which an institution can engage and the manner in which such activities are conducted, and is intended primarily for the protection of the insurance fund and depositors. Security is subject to extensive regulation, supervision and examination by the Iowa Superintendent of Banking (the "ISB") and the FRB, which are its state and primary federal regulators, respectively. It is also subject to regulation by the FDIC, which insures its deposits up to applicable limits. As with First Federal, such regulation and supervision governs the activities in which it can engage and the manner in which such activities are conducted and is intended primarily for the protection of the insurance fund and depositors. The Company is regulated as both a thrift holding company by the OTS and as a bank holding company by the FRB. As a thrift holding company, the Company must file reports with the OTS and is subject to regular examination by the OTS. Bank holding companies are subject to comprehensive regulation by the FRB under the Bank Holding Company Act of 1956 (the "BHCA") and the regulations of the FRB. As a bank holding company, the Company must also file reports with the FRB and such additional information as the FRB may require, and is subject to regular inspections by the FRB. The FRB also has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties, to issue cease and desist or removal orders and to require that a holding company divest subsidiaries (including its bank subsidiaries). In general, enforcement actions may be initiated for violations of law and regulations and unsafe or unsound practices. Similar authority exists for the OTS as the regulator of thrift holding companies. Although a thrift holding company's activities are generally unlimited, due to the dual nature of its holding company status, the Company is subject to the more restrictive activity limitations imposed under the BHCA and in general may engage in only those activities that the FRB has determined to be closely related to banking. Regulatory authorities have been granted extensive discretion in connection with their supervisory and enforcement activities which are intended to strengthen the financial condition of the banking industry, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution's allowance for loan losses. Any change in such regulation and oversight, whether by the OTS, the FDIC, the FRB or the Congress could have a material impact on the Company, First Federal or Security and their respective operations. INTEREST RATE RISK The profitability of the Banks, like that of most financial institutions, is dependent to a large extent upon their net interest income, which is the difference between their interest income on interest-earning assets, such as loans and investments, and their interest expense on interest-bearing liabilities, such as deposits. Increases in market rates of interest generally adversely affect the net interest income of most financial institutions. The Banks are subject to interest rate risk ("IRR") to the extent that their interest-bearing liabilities with short and intermediate-term maturities reprice more rapidly, or on a different basis, than their interest-earning assets. Management of the Banks believe it is important to manage the relationship between IRR and the effect on the Banks' net portfolio value ("NPV"). This approach calculates the difference between the present value of expected cash flows from assets and the present value of expected cash flows from liabilities, as well as cash flows from off-balance sheet contracts. Management of the Banks' assets and liabilities is done within the context of the marketplace, but also within limits established by the Banks' Boards of Directors on the amount of change in NPV which is acceptable given certain interest rate changes. OTS regulations use a net market value methodology to measure the IRR exposure of thrift institutions. Under OTS regulations, an institution's "normal" level of IRR in the event of an assumed change in interest rates is a decrease in the institution's NPV in an amount not exceeding 2% of the present value of its assets. Thrift institutions with greater than "normal" interest rate exposure must take a deduction from their total capital available to meet their risk-based capital requirement. The amount of the deduction is one-half of the difference between (a) the institution's actual calculated exposure to a 200 basis point interest rate increase or decrease (whichever results in the greater pro forma decrease in NPV) and (b) its "normal" level of exposure which is defined as 2% of the present value of its assets. The rule will not become effective until the OTS evaluates the process by which savings associations may appeal an IRR deduction determination. It is uncertain as to when this evaluation may be completed. Any savings association with less than $300 million in assets and a total capital ratio in excess of 12% is exempt from this requirement unless the OTS determines otherwise. Nevertheless, utilizing this measurement concept, at June 30, 1996, First Federal's IRR was considered "normal" under the OTS regulations and no additional risk-based capital was required. The FRB, together with the FDIC and the Office of the Comptroller of the Currency, have adopted a joint policy statement on the management of IRR for their respective regulated banks. Such policy statement provides guidance to banks in the management of IRR. The management of IRR is a factor to be considered by the agencies in assessing the capital adequacy of a bank and the agencies may require their regulated institutions to hold additional capital to account for IRR. Unlike the OTS rule, however, the banking agencies have not adopted an explicit supervisory model, such as the NPV model, for assessing IRR due to the diversity and complexity of a bank's balance sheet which generally is not concentrated in mortgage related assets. Management believes that Security's IRR profile at June 30, 1996 should not result in the need to hold additional capital. COMPETITIVE DISADVANTAGE CAUSED BY THE CURRENT DISPARITY BEWEEN BIF AND SAIF DEPOSIT INSURANCE PREMIUMS Federal law requires that the FDIC maintain reserves of at least 1.25% of insured deposits at both the Savings Association Insurance Fund (the "SAIF"), which insures First Federal's deposits, and the Bank Insurance Fund ("BIF"), which insures Security's deposits, up to applicable limits. The reserves are funded through the payment of insurance premiums by the insured institution members of each fund. The BIF reached this level during 1995 enabling the FDIC to reduce BIF insurance premiums to a range of .04% to .27% of deposits for the second half of 1996 (as compared to the previous range of 0.23% to 0.31% of deposits for both BIF and SAIF-insured institutions). Effective in January 1996, the FDIC again revised the premium schedule for BIF-insured banks to provide for a range of 0% to 0.23% of deposits with an annual statutory minimum payment of $2,000. The revised premium schedule became effective in January 1996. The FDIC action does not affect the premium rates currently applicable to SAIF members, such as First Federal, which continue to range from 0.23% to 0.31% of deposits depending on the institution's capital level and other factors. As a result, BIF members generally pay lower premiums than SAIF members. While the magnitude of the competitive advantage of BIF-insured institutions and its impact on First Federal's results of operations cannot be determined at this time, the decrease in BIF premiums could place First Federal and other SAIF members at a material competitive disadvantage. First Federal currently qualifies for the minimum SAIF premium level of 0.23% of deposits. PROPOSED SPECIAL ASSESSMENT ON SAIF-INSURED DEPOSITS Proposed federal legislation provides for a one-time assessment (in an amount sufficient for the SAIF to achieve the 1.25% reserve ratio), currently estimated at 0.80% to 0.90%, to be imposed on all SAIF-insured deposits, including those held by commercial banks, and for a portion of BIF deposit insurance premiums to be used to pay the Financing Corporation ("FICO") bond interest. If a requirement were implemented as of March 31, 1995 (as currently proposed) for First Federal to pay a one-time assessment equal to 0.90% of SAIF assessable deposits, the amount of such assessment would have been approximately $1.6 million, or $950,000 after related taxes. The final form of any such legislation has been subject of continuing negotiation and cannot be assured. If the legislation is enacted during the current Congressional session, however, it is anticipated the assessment would be payable in 1996. Accordingly, this special assessment would significantly increase noninterest expense and adversely affect First Federal's results of operations. Conversely, depending on First Federal's capital level and supervisory rating, and assuming, although there can be no assurance, that the insurance premium levels for BIF and SAIF members are again equalized, deposit insurance premiums could decrease significantly to the minimum assessment for future periods. As part of the legislation, Congress is considering requiring all federal thrift institutions, such as First Federal, to either convert to a national bank or a state-chartered depository institution by January 1, 1998. The OTS also would be abolished and its functions transferred among the other federal banking regulators. Certain aspects of the legislation remain to be resolved and therefore no assurance can be given as to whether or in what form the legislation will be enacted or its effect on the Company and First Federal. Congress has passed a bill, which is expected to be signed by the President in September 1996, which will require the recapture of a portion of the First Federal's tax bad debt reserve, which is approximately $900,000 as of June 30, 1996. The recapture would occur over a six-year period and would begin with First Federal's fiscal year ending September 30, 1997. TAKEOVER DEFENSIVE PROVISIONS Holding Company and Banks Governing Instruments. Certain provisions of the Company's Certificate of Incorporation and Bylaws assist the Company in maintaining its status as an independent publicly owned corporation. These provisions provide for, among other things, limiting voting rights of beneficial owners of more than 10% of the Common Stock, staggered terms for directors, noncumulative voting for directors, limits on the calling of special meetings, a fair price/supermajority vote requirement for certain business combinations and certain notice requirements (although the fair price/supermajority vote requirement is reduced to a majority vote if the Board of Directors votes in favor of a business combination). The 10% vote limitation would not affect the ability of an individual to solicit revocable proxies and to vote the shares represented by such proxies. In addition, provisions in First Federal's Charter that have an anti-takeover effect could also be applicable to changes in control of the Company as the sole shareholder of First Federal. First Federal's Charter includes a provision applicable for five years which prohibits acquisitions and offers to acquire, directly or indirectly, the beneficial ownership of more than 10% of First Federal's securities. Any person violating this restriction, which expires in September 1998, may not vote First Federal's securities in excess of 10%. Any or all of these provisions may serve to entrench current management and to discourage potential proxy contests and other takeover attempts, particularly those which have not been negotiated with the Board of Directors. Regulatory and Statutory Provisions. Federal law requires OTS approval prior to the acquisition of "control" (as defined in OTS regulations) of an insured institution, including a holding company thereof. In the event that holders of revocable proxies for more than 25% of the shares of Common Stock acting as a group or in concert with other proxy holders seek, among other things, to elect one-third or more of the Company's Board of Directors, to cause the Company's stockholders to approve the acquisition or corporate reorganization of the Company or to exert a continuing influence on a material aspect of the business operations of the Company, such actions could be deemed to be a change of control, subject to OTS approval. Similar regulations of the FRB apply to the Company due to its status as a bank holding company. A Delaware statute also limits the circumstances under which a Delaware corporation may engage in any business combinations (as defined by the statute) with an interested stockholder (i.e., any person or entity that owns 15% or more of the voting stock). Employment Agreements and Other Benefit Plans - Voting Control of Directors and Executive Officers. The employment agreements between First Federal and its executive officers and certain provisions of the Company's 1993 Stock Option and Incentive Plan provide for benefits and cash payments in the event of a change in control of the Company or First Federal. The Company's Management Recognition Plan provides for accelerated vesting of restricted stock awards in the event of a change in control. These provisions may increase the cost of, and thereby discourage, takeover attempts of the Company or First Federal. COMPETITION The Company experiences strong competition in its local market area in both originating loans and attracting deposits. This competition arises principally from commercial banks, as well as savings association, mortgage bankers, credit unions, insurance companies and brokerage houses. Such competition may limit the Company's growth in the future. THE COMPANY First Midwest was organized in 1993 to act as the holding company for First Federal upon completion of First Federal's conversion from the mutual to the stock form of organization (the "Conversion"). On September 20, 1993, the Company acquired all of the shares of First Federal in connection with the completion of the Conversion. First Federal, headquartered in Storm Lake, Iowa, was originally chartered in 1954 as an Iowa-chartered savings and loan association. During 1957, First Federal converted to a federal mutual charter and in September 1993, in connection with the Conversion, amended its charter to become a federal stock savings bank. Its deposits are insured up to the applicable limits by the FDIC. First Federal currently serves Buena Vista, Calhoun, Ida, Pocahontas, Polk and Sac counties in Iowa and Brookings County in South Dakota. First Federal conducts its business through its main office and branch office in Storm Lake, Iowa, six other locations in its primary market area in Iowa, and two offices in Brookings, South Dakota. At June 30, 1996, the Company had total assets of $342.1 million, deposits of $203.9 million, and shareholders' equity of $39.0 million. On September ____, 1996, the Company completed the acquisition of CWB, the holding company for Security, resulting in Security becoming a stand-alone first tier subsidiary of the Company. Upon consummation of the Merger, each CWB stockholder became entitled to receive ____________, for an aggregate Merger consideration of approximately $____ million. As of June 30, 1996, CWB had total consolidated assets of $30.0 million, deposits of $26.4 million and stockholders' equity of $2.5 million. Security currently conducts its business through its three full service offices in Casey, Menlo and Stuart, Iowa. For further financial information relating to CWB and Security, see "Unaudited Pro Forma Combined Financial Information" and "Unaudited Historical Financial Information of Central West Bancorporation" contained herein. First Federal and Security are community-oriented financial institutions offering a variety of financial services to meet the needs of the communities it serves. The principal business of First Federal historically has consisted of attracting retail deposits from the general public and investing those funds primarily in one- to four-family residential mortgage loans and, to a lesser extent, commercial and multi-family real estate, agricultural operating and real estate, construction, consumer and commercial business loans primarily in First Federal's market area. Recently, First Federal's lending activities have expanded to include an increased emphasis on originations and purchases of commercial and multi-family real estate loans. The principal business of Security has been and continues to be attracting retail deposits from the general public and investing those funds in agricultural real estate and operating loans and, to a lesser extent, one- to four-family residential, commercial business and consumer loans. The Company and the Banks also purchase mortgage-backed securities and invest in U.S. Government and agency obligations and other permissible investments. The Company's revenues are derived primarily from interest on mortgage loans, mortgage-backed securities, investments, consumer loans, agricultural operating loans, commercial business loans, income from service charges and loan originations, loan servicing fee income, and income from the sale of mutual funds, insurance products, annuities and brokerage services through its service corporation subsidiaries. The executive offices of First Midwest are located at Fifth at Erie, Storm Lake, Iowa 50588. Its telephone number at that address is (712) 732-4117. For additional information concerning the Company and First Federal, see "Incorporation of Certain Documents by Reference." USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the Shares. All of the proceeds from the sale of the Shares will be received by the Selling Stockholders. SELLING STOCKHOLDERS The Selling Stockholders are former CWB shareholders. The Shares were acquired by the Selling Stockholders in connection with the Merger. The following table sets forth the names of, and the number of shares of Common Stock to be owned upon consummation of the Merger by, each Selling Stockholder. Since the Selling Stockholders may sell all, some or none of their Shares, no estimate can be made of the aggregate number of Shares that are to be offered hereby or that will be owned by each Selling Stockholder upon completion of the offering to which this Prospectus relates. The Shares offered by this Prospectus may be offered from time to time by the Selling Stockholders named below:
SHARES OF SELLING STOCKHOLDER COMMON STOCK POSITIONS WITH CWB AND SECURITY - ------------------------- ------------ ------------------------------- Casey Cable Company 18,107 * Harl Oil Company, Inc. 7,052 ** William M. Wilson 8,791 Chairman of the Board of CWB and Director of Security Jack Ellis 8,793 Director of CWB Robert E. Feilmeyer 7,052 Director of CWB Earl M. Kading 18,326 Director of CWB Eugene A. Kading 9,491 Director of CWB Norman B. Kading Funnel Trust 17,584 *** E. Charlene Kalbach 19,762 Director of CWB and Security Marvin J. Larsen 7,052 Director and Vice President of CWB Wayne F. O'Brien 8,642 Director of CWB Darrell D. Ocheltree 7,052 Director of CWB and Security Donald E. Peers 17,584 Director of CWB Colleen G. Ruppert 18,323 Director of CWB Harold J. Scholl 7,052 Director of CWB and Chairman of the Board of Security Claude F. Havick 9,337 Director, Treasurer and Secretary of CWB; Director, President and Chief Executive Officer of Security
* Keith Caltrider, a Director of CWB, is the President of Casey Cable Company. ** James A. Harl, a Director of CWB and Vice Chairman of the Board of Directors of Security, is the President and owner of Harl Oil Company. *** Norman B. Kading, a Director of CWB, is the income beneficiary of the Norman B. Kading Funeral Trust. PLAN OF DISTRIBUTION The Selling Stockholders have advised the Company that the Shares may be sold from time to time by the Selling Stockholders, or their transferees, on the Nasdaq Stock Market or any national securities exchange or automated interdealer quotation system on which shares of Common Stock are then listed, or through negotiated transactions or otherwise. The Shares will not be sold in an underwritten public offering. The Shares will be sold at prices and on terms then prevailing, at prices related to the then-current market price, or at negotiated prices. The Selling Stockholders may effect sales of the Shares directly or by or through agents, brokers or dealers and the Shares may be sold by one or more of the following methods: (i) ordinary brokerage transactions, (ii) purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this Prospectus, and (iii) in "block" sales. In effecting sales, broker-dealers engaged by any Selling Stockholder and/or the purchasers of the Shares may arrange for other broker-dealers to participate. Broker-dealers will receive commissions, concessions or discounts from the Selling Stockholder and/or the purchasers of the Shares in amounts to be negotiated prior to the sale. Sales will be made only through broker-dealers registered as such in a subject jurisdiction or in transactions exempt from such registration. The Company is required under the Stockholder Agreement to comply with the requirements of Rule 144(c) under the Securities Act regarding the availability of current public information about the Company. In offering the Shares covered by this Prospectus, the Selling Stockholders and any brokers, dealers or agents who participate in a sale of the Shares by the Selling Stockholders may be considered "underwriters" within the meaning of Section 2(11) of the Securities Act, and the compensation of any broker/dealers may be deemed to be underwriting discounts and commissions. As required by the Stockholders Agreement, the Company has filed the Registration Statement, of which this Prospectus forms a part, with respect to the sale of the Shares. First Midwest has agreed to use all reasonable efforts to keep the Registration Statement effective for a period commencing on the effective date of the Registration Statement and terminating 24 months thereafter. The Company will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders. The Company will bear all of the costs of registering the Shares under the Securities Act. EXPERTS The consolidated financial statements and the related notes to financial statements incorporated in this Prospectus by reference from First Midwest's Annual Report on Form 10-KSB for the year ended September 30, 1995, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given their authority as experts in accounting and auditing. LEGAL MATTERS The validity of the Common Stock offered in this Prospectus will be passed upon for the Company by Silver, Freedman & Taff, L.L.P. (a limited liability partnership including professional corporations), Washington, D.C. UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION The unaudited pro forma combined financial statements are intended for informational purposes and are not necessarily indicative of the future financial position or future results of operations of the combined company, or of the financial position or the results of operations of the combined company that would have actually occurred had the acquisition been in effect as of the date or for the periods presented. The unaudited pro forma combined financial statements and the accompanying notes should be read in conjunction with and are qualified in their entirety by (i) the consolidated financial statements, including the accompanying notes, of First Midwest, which are contained in First Midwest's 1995 Annual Report to Stockholders and its Quarterly Reports on Form 10-QSB, which reports are incorporated by reference herein and (ii) the consolidated unaudited financial statements of CWB, which are contained elsewhere herein. See "Unaudited Historical Financial Information of Central West Bancorporation." First Midwest Financial, Inc. Pro Forma Consolidated Statement of Condition As of June 30, 1996
Pro Forma First First First First Midwest Federal Services Brookings Pro Forma Midwest Financial, Savings Bank Financial Service Security Consolidating Entries Financial, Inc. Ltd Corp State Bank Debits Credits Inc. ------- ------- ------- ------- ------- ------- ------- ------- Cash & Bank Accounts 1,138,552 6,841,480 393,779 332,883 655,480 (1) 743,475 8,618,699 Daily Funds 0 8,403,384 0 0 450,000 8,853,384 Investment Securities 1,548,005 46,767,219 0 0 10,169,009 58,484,233 Mortgage Backed Securities 0 37,815,732 0 0 0 37,815,732 Loans Receivable, net 3,467,200 220,261,161 0 0 17,127,227 (1) 967,200 239,888,388 Accrued Interest 64,037 3,515,504 0 0 497,627 4,077,167 Real Estate Owned 0 112,773 0 0 0 112,773 Investment in Subsidiary 37,681,877 781,527 0 0 0 (1) 38,463,404 0 Property and Equipment 113,256 2,690,677 1,785 73 956,442 3,762,233 Goodwill 0 2,578,788 0 0 2,765,459 5,344,247 Other Assets 204,711 5,804,984 4,054 96,912 50,980 (1) 22,463 6,139,177 --------- ----------- ------- ------- ---------- ----------- Total Assets 44,217,638 335,573,230 399,617 429,868 32,672,224 373,096,035 ========== =========== ======= ======= ========== =========== Deposits 0 204,657,241 0 0 26,437,616 (1) 743,475 230,351,382 FHLB Advances 0 93,290,539 0 0 0 93,290,539 Retail Repurchase Agreements 0 1,979,918 0 0 0 1,979,918 Other Borrowings - ESOP 0 967,200 0 0 0 (1) 967,200 0 Accrued Interest Payable 18,931 752,469 0 0 128,412 899,812 Accrued Income Taxes (22,314) 440,479 (466) 11,661 46,400 475,761 Other Liabilities 966,888 1,719,669 2,649 34,114 388,046 (1) 22,463 3,088,903 --------- ----------- ------- ------- ---------- ----------- Total Liabilities 963,506 303,807,515 2,182 45,776 27,000,474 330,086,314 --------- ----------- ------- ------- ---------- ----------- Common Stock 21,636 20,135 25,000 40,000 300,000 (1) 385,135 21,636 Add'l Paid in Capital 23,585,964 27,237,369 0 0 5,371,750 (1) 32,609,119 23,585,964 Retained Earnings 23,773,343 5,564,324 372,435 344,092 0 (1) 6,280,851 23,773,343 Unrealized Gain on AFS Securities 16,669 (244,412) 0 0 0 (227,743) Less: Treasury Stock at Cost (3,331,780) 0 0 0 0 (3,331,780) Less: Obligation under ESOP (811,700) (811,700) 0 0 0 (1) 811,700 (811,700) --------- ----------- ------- ------- ---------- ----------- Total Equity 43,254,132 31,765,715 397,435 384,092 5,671,750 43,009,720 --------- ----------- ------- ------- ---------- ----------- Total Liabilities & Equity 44,217,638 335,573,230 399,617 429,868 32,672,224 41,008,242 41,008,242 373,096,035 ========== =========== ======= ======= ========== ========== ========== ===========
(1) To record pro forma consolidating entrie. First Midwest Financial, Inc. (Holding Company Only) Pro Forma Statement of Condition As of June 30, 1996
Pro Forma Pro Forma First Midwest First Midwest Central West Adjustments Financial, Financial, Inc. Bancorporation Debits Credits Inc. ---------- --------- ------ ------- ---------- Cash & Bank Accounts 931,571 9,023 (1) 2,000,000 (2)(3) 1,802,042 1,138,552 Daily Funds 0 0 0 Investment Securities 1,548,005 0 1,548,005 Mortgage Backed Securities 0 0 0 Loans Receivable, net 3,467,200 0 3,467,200 Accrued Interest 64,037 0 64,037 Real Estate Owned 0 0 0 Investment in Subsidiary 34,010,127 2,906,291 (2) 2,765,459 (1) 2,000,000 37,681,877 Property and Equipment 15,106 98,150 113,256 Goodwill 0 0 0 Other Assets 180,711 24,000 204,711 ---------- --------- ---------- Total Assets 40,216,757 3,037,464 44,217,638 ========== ========= ========== Deposits 0 0 0 FHLB Advances 0 0 0 Retail Repurchase Agreements 0 0 0 Other Borrowings 0 475,000 (3) 475,000 0 Accrued Interest Payable 0 18,931 18,931 Accrued Income Taxes (22,314) 0 (22,314) Other Liabilities 966,066 822 966,888 ---------- --------- ---------- Total Liabilities 943,753 494,753 963,506 ---------- --------- ---------- Common Stock 19,905 727,500 (2) 727,500 (2) 1,731 21,636 Add'l Paid in Capital 19,606,567 9,000 (2) 9,000 (2) 3,979,397 23,585,964 Retained Earnings 23,773,343 1,806,211 (2) 1,806,211 23,773,343 Unrealized Gain on AFS Securities 16,669 0 16,669 Less: Treasury Stock at Cost (3,331,780) 0 (3,331,780) Less: Obligation under ESOP (811,700) 0 (811,700) ---------- --------- ---------- Total Equity 39,273,004 2,542,711 43,254,132 ---------- --------- ---------- Total Liabilities & Equity 40,216,757 3,037,464 7,783,170 7,783,170 44,217,638 ========== ========= ========= ========= ==========
(1) To record proposed dividend from First Federal Savings Bank of the Midwest. Debit Credit ----- ------ Cash & Bank Accounts 2,000,000 Investment in Subsidiary 2,000,000 (2) To record purchase of Central West Bancorporation. Debit Credit ----- ------ Common Stock - CWB 727,500 Additional Paid-in Capital - CWB 9,000 Retained Earnings 1,806,211 Investment in Subsidary (push-down of goodwill) 2,765,459 Cash & Bank Accounts 1,327,042 Common Stock - FMFI 1,731 Additional Paid-in Capital - FMFI 3,979,397 (Based on estimated total purchase price of $5,308,170, 25% in cash and 75% in stock valued at $23.00 per share) (3) To record repayment of debt. Debit Credit ----- ------ Other Borrowings 475,000 Cash & Bank Accounts 475,000 First Federal Savings Bank of the Midwest Pro Forma Statement of Condition As of June 30, 1996
Pro Forma Pro Forma First Federal Adjustments First Federal Savings Bank Debits Credits Savings Bank ------------ ------ ------- ------------- Cash & Bank Accounts 6,841,480 6,841,480 Daily Funds 10,403,384 (1) 2,000,000 8,403,384 Investment Securities 46,767,219 46,767,219 Mortgage Backed Securities 37,815,732 37,815,732 Loans Receivable, net 220,261,161 220,261,161 Accrued Interest 3,515,504 3,515,504 Real Estate Owned 112,773 112,773 Investment in Subsidiary 781,527 781,527 Property and Equipment 2,690,677 2,690,677 Goodwill 2,578,788 2,578,788 Other Assets 5,804,984 5,804,984 ----------- ----------- Total Assets 337,573,230 335,573,230 =========== =========== Deposits 204,657,241 204,657,241 FHLB Advances 93,290,539 93,290,539 Retail Repurchase Agreements 1,979,918 1,979,918 Other Borrowings - ESOP 967,200 967,200 Accrued Interest Payable 752,469 752,469 Accrued Income Taxes 440,479 440,479 Other Liabilities 1,719,669 1,719,669 ----------- ----------- Total Liabilities 303,807,515 303,807,515 ----------- ----------- Common Stock 20,135 20,135 Add'l Paid in Capital 27,237,369 27,237,369 Retained Earnings 7,564,324 (1) 2,000,000 5,564,324 Unrealized Gain on AFS Securities (244,412) (244,412) Less: Treasury Stock at Cost 0 0 Less: Obligation under ESOP (811,700) (811,700) ----------- ----------- Total Equity 33,765,715 31,765,715 ----------- ----------- Total Liabilities & Equity 337,573,230 2,000,000 2,000,000 335,573,230 =========== ========= ========= ===========
(1) To record proposed dividend to First Midwest Financial, Inc. Debit Credit Retained Earnings 2,000,000 Daily Funds 2,000,000 Security State Bank Pro Forma Statement of Condition As of June 30, 1996
Pro Forma Pro Forma Security Adjustments Security State Bank Debits Credits State Bank ---------- ------ ------- ---------- Cash & Bank Accounts 655,480 655,480 Daily Funds 450,000 450,000 Investment Securities 10,169,009 10,169,009 Mortgage Backed Securities 0 0 Loans Receivable, net 17,127,227 17,127,227 Accrued Interest 497,627 497,627 Real Estate Owned 0 0 Investment in Subsidiary 0 0 Property and Equipment 956,442 956,442 Goodwill 0 (1) 2,765,459 2,765,459 Other Assets 50,980 50,980 ---------- ---------- Total Assets 29,906,765 32,672,224 ========== ========== Deposits 26,437,616 26,437,616 FHLB Advances 0 0 Retail Repurchase Agreements 0 0 Other Borrowings 0 0 Accrued Interest Payable 128,412 128,412 Accrued Income Taxes 46,400 46,400 Other Liabilities 388,046 388,046 ---------- ---------- Total Liabilities 27,000,474 27,000,474 ---------- ---------- Common Stock 300,000 300,000 Add'l Paid in Capital 1,050,000 (1)(2) 4,321,750 5,371,750 Retained Earnings 1,556,291 (2) 1,556,291 0 Unrealized Gain on AFS Securities 0 0 Less: Treasury Stock at Cost 0 0 Less: Obligation under ESOP 0 0 ---------- ---------- Total Equity 2,906,291 5,671,750 ---------- ---------- Total Liabilities & Equity 29,906,765 4,321,750 4,321,750 32,672,224 ========== ========= ========= ==========
(1) To record push-down of goodwill from First Midwest Financial, Inc. Debit Credit ----- ------ Goodwill 2,765,459 Additional Paid-in Capital 2,765,459 (Goodwill estimated to be total purchase price less net equity of Central West Bancorporation) (2) To record transfer of retained earnings to additional paid-in capital in conjunction with purchase. Debit Credit ----- ------ Retained Earnings 1,556,291 Additional Paid-in Capital 1,556,291 First Midwest Financial, Inc. Pro Forma Statement of Income Giving Effect to Acquisition of Central West Bancorporation For the Nine Months Ended June 30, 1996
Pro Forma First Midwest First Midwest Financial, Central West Pro Forma Financial, Inc. Bancorporation Adjustments Inc. ------------ -------------- ----------- ------------ Interest on loans 13,639,540 1,183,957 14,823,497 Interest on investments 3,953,154 489,101 (1)(2) (56,061) 4,386,194 Other interest income 231,951 0 231,951 ---------- --------- ---------- Total interest income 17,824,645 1,673,058 19,441,642 Interest on deposits 7,179,840 869,255 8,049,095 Interest on borrowings 2,922,944 35,663 2,958,607 ---------- --------- ---------- Total interest expense 10,102,784 904,918 11,007,702 Interest income before provision for loss on loans 7,721,861 768,141 8,433,941 Provision for loss on loans 90,000 13,250 103,250 ---------- --------- ---------- Net interest income 7,631,861 754,891 8,330,691 Non-interest income: Loan fees and service charges 629,521 158,306 787,827 Gain/(loss) on sale of assets 56,366 (6,870) 49,496 Other non-interest income 363,089 36,219 399,308 ---------- --------- ---------- Total non-interest income 1,048,976 187,655 1,236,631 Non-interest expense: Compensation and benefits 2,810,482 326,072 3,136,554 Amortization of goodwill 107,536 0 (3) 138,273 245,809 Other non-interest expense 1,749,479 375,478 2,124,957 -------- -------- -------- Total non-interest expense 4,667,497 701,550 5,507,320 ---------- --------- ---------- Income before income tax 4,013,340 240,996 4,060,002 Income tax expense/(benefit) 1,617,507 71,409 (4) (21,303) 1,667,613 -------- -------- -------- -------- Net income 2,395,833 169,586 (173,031) 2,392,388 ========= ======== ======= ========= Net income per weighted average common share outstanding (fully-diluted) $1.34 $1.22 ========== ========= Weighted average common shares outstanding 1,793,254 1,966,347 Shares issued in transaction 173,093
(1) To adjust for reduction in interest earnings on cash paid: - Cash portion of purchase price x average federal funds rate during period. - ($1,327,042 x 5.50% x 9/12 = $54,740) (2) To adjust for reduction in interest income on cash dividends paid on additional outstanding shares: - Weighted average cash dividends paid (3 quarters) x average federal funds rate during period. - ($24,017 x 5.50% = $1,321) (3) To adjust for amortization of goodwill: - Estimated goodwill amortized straight-line over 15 years. - ($2,765,459 / 15 x 9/12 = $138,273) (4) To adjust for tax effect of reduced interest income: - Reduced interest income x effective tax rate. - ($56,061 x 38% = $21,303) First Midwest Financial, Inc. Pro Forma Statement of Income Giving Effect to Acquisition of Central West Bancorporation For the Fiscal Year Ended September 30, 1995
Pro Forma First Midwest First Midwest Financial, Central West Pro Forma Financial, Inc. Bancorporation Adjustments Inc. ---------- -------------- ----------- ------------- Interest on loans 13,768,064 1,424,846 15,192,910 Interest on investments 7,015,145 549,528 (1)(2) (75,313) 7,489,360 Other interest income 270,261 0 270,261 ---------- --------- ---------- Total interest income 21,053,470 1,974,374 22,952,531 Interest on deposits 8,245,227 985,159 9,230,386 Interest on borrowings 3,403,497 54,143 3,457,640 ---------- --------- ---------- Total interest expense 11,648,724 1,039,301 12,688,025 Interest income before provision for loss on loans 9,404,746 935,073 10,264,506 Provision for loss on loans 250,000 43,500 293,500 ---------- --------- ---------- Net interest income 9,154,746 891,573 9,971,006 Non-interest income: Loan fees and service charges 712,345 165,552 877,897 Gain/(loss) on sale of assets 1,070,247 (5,133) 1,065,114 Other non-interest income 503,878 38,381 542,259 ---------- --------- ---------- Total non-interest income 2,286,470 198,800 2,485,270 Non-interest expense: Compensation and benefits 3,400,190 410,342 3,810,532 Amortization of goodwill 125,160 0 (3) 184,364 309,524 Other non-interest expense 2,050,827 455,838 2,506,665 ---------- --------- ---------- Total non-interest expense 5,576,177 866,180 6,626,721 Income before income tax 5,865,039 224,193 5,829,555 Income tax expense/(benefit) 2,320,687 52,709 (4) (28,619) 2,344,777 --------- -------- -------- -------- Net income 3,544,352 171,485 (231,058) 3,484,779 ========= ======== ======= ========= Net income per weighted average common share outstanding (fully-diluted) $1.99 $1.78 Weighted average common shares outstanding 1,780,592 1,953,685 Shares issued in transaction 173,093
(1) To adjust for reduction in interest earnings on cash paid: - Cash portion of purchase price x average federal funds rate during period. - ($1,327,042 x 5.59% = $74,182) (2) To adjust for reduction in interest income on cash dividends paid on additional outstanding shares: - Weighted average cash dividends paid (3 quarters) x average federal funds rate during period. - ($19,473 x 5.81% = $1,131) To adjust for amortization of goodwill: - Estimated goodwill amortized straight-line over 15 years. - ($2,765,459 / 15 = $184,364) (4) To adjust for tax effect of reduced interest income: - Reduced interest income x effective tax rate. - ($75,313 x 38% = $28,619) UNAUDITED HISTORICAL FINANCIAL INFORMATION OF CENTRAL WEST BANCORPORATION The following table sets forth, for the periods indicated, the available financial information of CWB. The following financial data reflects, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to a fair presentation of such data. Results for the six months ended June 30, 1996 are not necessarily indicative of results which may be expected for any other interim period or for the year as a whole. Central West Bancorporation Consolidated Statement of Condition As of June 30, 1996
Central West Security Consolidating Entries Bancorporation State Bank Debits Credits Combined -------------- ---------- ------ ------- -------- Cash & Bank Accounts 9,023 655,480 664,503 Daily Funds 0 450,000 450,000 Investment Securities 0 10,169,009 10,169,009 Mortgage Backed Securities 0 0 0 Loans Receivable, net 0 17,127,227 17,127,227 Accrued Interest 0 497,627 497,627 Real Estate Owned 0 0 0 Investment in Subsidiary 2,906,291 0 (1) 2,906,291 0 Property and Equipment 98,150 956,442 1,054,592 Goodwill 0 0 0 Other Assets 24,000 50,980 74,980 --------- ---------- ---------- Total Assets 3,037,464 29,906,765 30,037,938 ========= ========== ========== Deposits 0 26,437,616 26,437,616 FHLB Advances 0 0 0 Retail Repurchase Agreements 0 0 0 Other Borrowings 475,000 0 475,000 Accrued Interest Payable 18,931 128,412 147,343 Accrued Income Taxes 0 46,400 46,400 Other Liabilities 822 388,046 388,868 ---------- ---------- ---------- Total Liabilities 494,753 27,000,474 27,495,227 ------- ---------- ---------- Common Stock 727,500 300,000 (1) 300,000 727,500 Add'l Paid in Capital 9,000 1,050,000 (1) 1,050,000 9,000 Retained Earnings 1,806,211 1,556,291 (1) 1,556,291 1,806,211 Unrealized Gain on AFS Securities 0 0 0 Less: Treasury Stock at Cost 0 0 0 Less: Obligation under ESOP 0 0 0 --------- --------- ---------- Total Equity 2,542,711 2,906,291 2,542,711 --------- --------- ---------- Total Liabilities & Equity 3,037,464 29,906,765 2,906,291 2,906,291 30,037,938 ========= ========== ========= ========= ==========
(1) To record consolidating entries. Central West Bancorporation Consolidated Statement of Condition As of December 31, 1995
Central West Security Consolidating Entries Bancorporation State Bank Debits Credits Combined -------------- ---------- ------ ------- -------- Cash & Bank Accounts 163,383 1,141,847 1,305,230 Daily Funds 0 0 0 Investment Securities 0 10,826,633 10,826,633 Mortgage Backed Securities 0 0 0 Loans Receivable, net 0 16,782,806 16,782,806 Accrued Interest 0 574,900 574,900 Real Estate Owned 0 0 0 Investment in Subsidiary 2,741,833 0 (1) 2,741,833 0 Property and Equipment 118,828 985,000 1,103,828 Goodwill 0 0 0 Other Assets 6,863 18,605 25,468 --------- ---------- ---------- Total Assets 3,030,907 30,329,791 30,618,865 ========= ========== ========== Deposits 0 26,824,488 26,824,488 FHLB Advances 0 0 0 Retail Repurchase Agreements 0 0 0 Other Borrowings 475,000 0 475,000 Accrued Interest Payable 50,420 119,881 170,301 Accrued Income Taxes 0 0 0 Other Liabilities 95,900 604,589 700,489 ------- ---------- ---------- Total Liabilities 621,320 27,548,958 28,170,278 ------- ---------- ---------- Common Stock 727,500 300,000 (1) 300,000 727,500 Add'l Paid in Capital 9,000 1,050,000 (1) 1,050,000 9,000 Retained Earnings 1,673,087 1,391,833 (1) 1,391,833 1,673,087 Unrealized Gain on AFS Securities 0 39,000 39,000 Less: Treasury Stock at Cost 0 0 0 Less: Obligation under ESOP 0 0 0 --------- ---------- ---------- Total Equity 2,409,587 2,780,833 2,448,587 --------- ---------- ---------- Total Liabilities & Equity 3,030,907 30,329,791 2,741,833 2,741,833 30,618,865 ========= ========== ========= ========= ==========
(1) To record consolidating entries. Central West Bancorporation Consolidated Statements of Income For the Six months Ended June 30, 1996 and the Years Ended December 31, 1995 and 1994
6/30/96 12/31/95 12/31/94 --------- --------- --------- Interest on loans 812,344 1,486,451 1,240,031 Interest on investments 344,155 579,785 458,755 Other interest income 0 0 0 --------- --------- --------- Total interest income 1,156,499 2,066,236 1,698,786 Interest on deposits 601,200 1,072,220 723,974 Interest on borrowings 21,477 56,742 46,344 --------- --------- --------- Total interest expense 622,677 1,128,962 770,318 Interest income before provision for loss on loans 533,822 937,274 928,468 Provision for loss on loans 0 53,000 15,000 --------- --------- --------- Net interest income 533,822 884,274 913,468 Non-interest income: Loan and service fees 118,476 159,318 184,253 Gain/(loss) on sale of assets (6,236) (2,535) (12,926) Other non-interest income 26,100 40,475 32,100 --------- --------- --------- Total non-interest income 138,340 197,258 203,427 Non-interest expense: Compensation and benefits 216,515 438,227 326,687 Amortization of goodwill 0 0 0 Other non-interest expense 258,023 469,819 413,893 --------- --------- --------- Total non-interest expense 474,538 908,046 740,580 Income before income tax 197,624 173,486 376,315 Income tax expense/(benefit) 64,500 27,637 127,924 --------- --------- --------- Net income 133,124 145,849 248,391 ========= ========= =========
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE IN THE PROSPECTUS The expenses relating to the registration of the shares of Common Stock being offered hereby will be borne by First Midwest Financial, Inc. ("First Midwest"). Such expenses are estimated as follows: Item Amount Securities and Exchange Commission $ 1,425 Registration Fee Legal Fees and Expenses 12,000 Accounting Fees and Expenses 1,500 Miscellaneous Expenses 1,075 ------- Total $16,000 ======= ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Article Tenth of First Midwest's Certificate of Incorporation provides for indemnification of directors and officers of First Midwest against any and all liabilities, judgments, fines and reasonable settlements, costs, expenses and attorneys' fees incurred in any actual, threatened or potential proceeding, except to the extent that such indemnification is limited by Delaware law and such law cannot be varied by contract or bylaw. Article Tenth also provides for the authority to purchase insurance with respect thereto. Section 145 of the General Corporation Law of the State of Delaware authorizes a corporation's Board of Directors to grant indemnity under certain circumstances to directors and officers, when made, or threatened to be made, parties to certain proceedings by reason of such status with the corporation, against judgments, fines, settlements and expenses, including attorneys' fees. In addition, under certain circumstances such persons may be indemnified against expenses actually and reasonably incurred in defense of a proceeding by or on behalf of the corporation. Similarly, the corporation, under certain circumstances, is authorized to indemnify directors and officers of other corporations or enterprises who are serving as such at the request of the corporation, when such persons are made, or threatened to be made, parties to certain proceedings by reason of such status, against judgments, fines, settlements and expenses, including attorneys' fees; and under certain circumstances, such persons may be indemnified against expenses actually and reasonably incurred in connection with the defense or settlement of a proceeding by or in the right of such other corporation or enterprise. Indemnification is permitted where such person (i) was acting in good faith; (ii) was acting in a manner he reasonably believed to be in or not opposed to the best interests of the corporation or other corporation or enterprise, as appropriate; (iii) with respect to a criminal proceeding, has no reasonable cause to believe his conduct was unlawful; and (iv) was not adjudged to be liable to the corporation or other corporation or enterprise (unless the court where the proceeding was brought determines that such person is fairly and reasonably entitled to indemnity). Unless ordered by a court, indemnification may be made only following a determination that such indemnification is permissible because the person being indemnified has met the requisite standard of conduct. Such determination may be made (i) by the Board of Directors of First Midwest by a majority vote of a quorum consisting of directors not at the time parties to such proceeding; or (ii) if such a quorum cannot be obtained or the quorum so directs, then by independent legal counsel in a written opinion; or (iii) by the stockholders. Section 145 also permits expenses incurred by directors and officers in defending a proceeding to be paid by the corporation in advance of the final disposition of such proceedings upon the receipt of an undertaking by the director or officer to repay such amount if it is ultimately determined that he is not entitled to be indemnified by the corporation against such expenses. First Midwest maintains directors and officers liability insurance. ITEM 16. EXHIBITS The following Exhibits are filed as part of this Registration Statement. 2 Agreement and Plan of Merger and Reorganization, dated as of May 20, 1996, by and between First Midwest and Central West Bancorporation. 4.1 Certificate of Incorporation of First Midwest (previously filed as Exhibit 3.1 to First Midwest's Registration Statement on Form S-1, dated June 17, 1993 (No. 33-64654) and incorporated herein by reference). 4.2 Bylaws of First Midwest (previously filed as Exhibit 3.2 to First Midwest's Registration Statement on Form S-1, dated June 17, 1993 (No. 33-64654) and incorporated herein by reference). 5 Opinion of Silver, Freedman & Taff, L.L.P. as to legality of the securities being registered 23.1 Consent of Silver, Freedman & Taff, L.L.P. 23.2 Consent of Deloitte & Touche LLP 24 Power of Attorney (set forth on signature page) ITEM7. UNDERTAKINGS (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Storm Lake, State of Iowa, on August 9, 1996. FIRST MIDWEST FINANCIAL, INC. By: /s/ James S. Haahr James S. Haahr, Chairman of the Board, President and Chief Executive Officer (Duly Authorized Representative) KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints James S. Haahr or Steven P. Myers, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming said attorneys-in-fact and agents or their substitutes or substitute may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. /s/ James S. Haahr Date: August 9, 1996 - ------------------ James S. Haahr, Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) /s/ Steven P. Myers Date: August 9, 1996 - ------------------- Steven P. Myers , Vice Chairman of the Board /s/E. Thurman Gaskill Date: August 9, 1996 - --------------------- E. Thurman Gaskill /s/ Rodney G. Muilenburg Date: August 9, 1996 - ------------------------ Rodney G. Muilenburg, Director /s/ J. Tyler Haahr Date: August 9, 1996 - ------------------ J. Tyler Haahr, Director /s/ E. Wayne Cooley Date: August 9, 1996 - ------------------------ E. Wayne Cooley, Director /s/Donald J. Winchell Date: August 9, 1996 - --------------------- Donald J. Winchell, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Jeanne Partlow Date: August 9, 1996 - ------------------ Jeanne Partlow, Director EXHIBIT INDEX The following Exhibits are filed in connection with the Registration Statement of First Midwest Financial, Inc. on Form S-3, pursuant to the requirements of Item 601 of Regulation S-B: Exhibit No. Exhibit 2 Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), dated as of May 20, 1996, by and between First Midwest Financial, Inc. ("First Midwest") and Central West Bancorporation. 4.1 Certificate of Incorporation of First Midwest (previously filed as Exhibit 3.1 to First Midwest's Registration Statement on Form S-1, dated June 17, 1993, No. 33-64654 and incorporated herein by reference). 4.2 Bylaws of First Midwest (previously filed as Exhibit 3.2 to First Midwest's Registration Statement on Form S-1, dated June 17, 1993, No. 33-64654 and incorporated herein by reference). 5 Opinion of Silver, Freedman & Taff, L.L.P. as to legality of the securities being registered. 23.1 Consent of Silver, Freedman & Taff, L.L.P. 23.2 Consent of Deloitte & Touche LLP. 24 Power of Attorney (set forth on signature page).

                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

                                 by and between

                          FIRST MIDWEST FINANCIAL, INC.

                                       and

                           CENTRAL WEST BANCORPORATION










                                  MAY 20, 1996





                                TABLE OF CONTENTS 


RECITALS

ARTICLE I

PLAN OF MERGER
      1.1     Merger; Surviving Corporation
      1.2     Effective Time of the Merger
      1.3     Merger
      1.4     Security State Bank Matters
      1.5     Closing
      1.6     Reservation of Right to Revise Transaction

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS OF CWB
      2.1     Organization and Authority
      2.2     Subsidiaries
      2.3     Capitalization
      2.4     Authorization
      2.5     CWB Financial Statements
      2.6     CWB Reports
      2.7     Properties and Leases
      2.8     Taxes
      2.9     Material Adverse Change
      2.10    Commitments and Contracts
      2.11    Litigation and Other Proceedings
      2.12    Insurance
      2.13    Compliance with Laws
      2.14    Labor
      2.15    Material Interests of Certain Persons
      2.16    Allowance for Loan Losses; Adjustments
      2.17    Employee Benefit Plans
      2.18    Conduct to Date
      2.19    Registration Statement; Regulatory Filings
      2.20    Registration Obligations
      2.21    Takeover Provisions Not Applicable
      2.22    Regulatory, Tax and Accounting Matters
      2.23    Brokers and Finders
      2.24    Accuracy of Information
      2.25    Community Reinvestment Act Compliance
      2.26    Governmental Approvals and Other Conditions
      2.27    Shareholder Agreement

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF FIRST MIDWEST
      3.1     Organization and Authority
      3.2     Capitalization of First Midwest
      3.3     Authorization
      3.4     First Midwest Statements
      3.5     First Midwest Reports
      3.6     Material Adverse Change
      3.7     Applications
      3.8     Brokers and FinderstionAct Compliance

      3.12    Compliance with Laws
      3.13    Governmental Approvals and Other Conditions

ARTICLE IV

CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
      4.1     Conduct of Businesses Prior to the Effective Time
      4.2     Forbearances

ARTICLE V

ADDITIONAL AGREEMENTS
      5.1     Access and Information
      5.2     Regulatory Matters
      5.3     Current Information
      5.4     Agreements of Affiliates
      5.5     Expenses
      5.6     Miscellaneous Agreements and Consents
      5.7     Press Releases
      5.8     Takeover Provisions
      5.9     Third Parties
      5.10    Assistance of Third Parties
      5.11    Insurance Policy Claims
      5.12    Updated Schedules

ARTICLE VI

CONDITIONS
      6.1     Conditions to Each Party's Obligation to Effect the Merger
      6.2     Conditions to Obligations of CWB to Effect the Merger
      6.3     Conditions to Obligations of First Midwest to Effect the Merger

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER
      7.1     Termination
      7.2     Effect of Termination
      7.3     Amendment
      7.4     Severability

ARTICLE VIII

GENERAL PROVISIONS
      8.1     Non-Survival of Representations, Warranties and Agreements
      8.2     Notices
      8.3     Miscellaneous
       Exhibit A - Form of Shareholder Agreement
       Exhibit B - Accounting Guidelines
       Exhibit C - Legal Opinion of Silver,  Freedman & Taff, L.L.P.
       Exhibit D - Legal Opinion of Davis, Brown, Koehn, Shors and Roberts, P.C.

                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION 

         THIS   AGREEMENT   AND  PLAN  OF  MERGER   AND   REORGANIZATION   (this
"Agreement"),  dated May 20, 1996, is by and between  FIRST  MIDWEST  FINANCIAL,
INC., a Delaware corporation ("First Midwest"), and CENTRAL WEST BANCORPORATION,
an Iowa corporation ("CWB").

         A. First  Midwest and CWB wish to provide for the terms and  conditions
of the following described business combination in which CWB will be merged with
and into  First  Midwest  (the  "Merger"),  resulting  in  Security  State  Bank
("Security State Bank"), a wholly owned first tier subsidiary of CWB, becoming a
stand-alone first tier subsidiary of First Midwest.

         B. For federal  income tax  purposes,  it is  intended  that the Merger
shall qualify as a reorganization  within the meaning of Section 368(a)(1)(A) of
the Internal  Revenue Code of 1986,  as amended (the "Code") and this  Agreement
shall constitute a plan of reorganization pursuant to Section 368 of the Code.

         C. For  accounting  purposes,  it is intended  that the Merger shall be
accounted for as a purchase.

         D.  The  parties   hereto  desire  to  make  certain   representations,
warranties,  covenants and agreements in connection  with the Merger and also to
prescribe various conditions to the Merger.

         E. The shareholders of CWB (the "CWB  Shareholders") have approved this
Agreement  and the Merger in  accordance  with the Iowa Act (as defined  below).
Concurrently  with  the  execution  and  delivery  of this  Agreement,  and as a
condition  and  inducement  to First  Midwest's  willingness  to enter into this
Agreement,  each of the  shareholders  of CWB has  executed  and  delivered  the
Shareholder Agreement in the form attached hereto as Exhibit A (the "Shareholder
Agreement").

         Accordingly,  and in consideration of the representations,  warranties,
covenants,  agreements and conditions herein contained, the parties hereto agree
as follows:
                                    ARTICLE I

                                 PLAN OF MERGER

         This Article I and the provisions  hereof shall  constitute the Plan of
Merger  between the parties under the Iowa Business  Corporation  Act (the "Iowa
Act") and the Delaware General Corporation Law (the "DGCL").

         1.1 Merger; Surviving Corporation.  Subject to the terms and conditions
of this Agreement,  and pursuant to the provisions of the DGCL and the Iowa Act,
CWB  shall be  merged  with and into  First  Midwest  pursuant  to the terms and
conditions set forth herein.  Upon the consummation of the Merger,  the separate
corporate  existence of CWB shall cease and First Midwest shall  continue as the
surviving  corporation.  The name of First Midwest, as the surviving corporation
of the Merger,  shall remain "First Midwest Financial,  Inc." From and after the
Effective Time, First Midwest, as the surviving corporation of the Merger, shall
possess  all  of  the  properties  and  rights  and  be  subject  to  all of the
liabilities  and  obligations  of  First  Midwest  and  CWB,  all as more  fully
described in the DGCL and the Iowa Act.

         1.2 Effective Time of the Merger.  As soon as practicable after each of
the conditions set forth in Article VI hereof have been satisfied or waived, the
parties  will file,  or cause to be filed,  with the  Secretary of the States of
Delaware and Iowa such certificate and articles of merger and other documents as

they may deem necessary or appropriate  for the Merger,  which  certificate  and
articles  of  merger  and  other  documents  shall  in each  case be in the form
required by and executed in  accordance  with the  applicable  provisions of the
DGCL and the Iowa Act,  respectively.  The Merger shall become  effective at the
time the  certificate  of merger for such merger is filed with the  Secretary of
State of Delaware  and the  articles of merger are filed with the  Secretary  of
State of the State of Iowa (the "Effective Time").

         1.3 Merger.

                  (a) Conversion of CWB Stock. At the Effective Time, each share
         of  common  stock of CWB,  $10.00  par value  per  share  ("CWB  Common
         Stock"),  issued and  outstanding  immediately  prior thereto shall, by
         virtue of the Merger and  without  any action on the part of the holder
         thereof,  be  converted  into the right to receive the Per Share Merger
         Consideration  as defined  below.  The Per Share  Merger  Consideration
         shall be payable as described  in this Section 1.3,  upon tender of the
         Certificates  as  provided  for  in  Section  1.3(i)  below  after  the
         Effective Time, without interest from the Effective Time to the time of
         payment.  The Per Share Merger  Consideration  shall be payable to each
         CWB Shareholder  directly or to an agent  authorized to receive payment
         on behalf of such CWB  Shareholder  by a writing  executed  by such CWB
         Shareholder reasonably satisfactory to First Midwest.

                  (b)  Merger  Consideration.  The term  "Merger  Consideration"
         shall  mean an  amount  equal  to the sum of (i)  the  product  of 2.05
         multiplied  by the Bank  Capital  (as defined  below),  (ii) the Excess
         Capital  (as defined  below),  if any,  and (iii) the  Holding  Company
         Assets (as defined below),  reduced by the Holding Company  Liabilities
         (as defined below).

                  The term "Maximum Merger  Consideration"  shall mean an amount
         equal to the sum of (i) 25% of the Merger Consideration,  plus (ii) (a)
         the  quotient  of 75% of the  Merger  Consideration  divided by $23.00,
         multiplied by (b) the Maximum Average Price (as defined below).

                  The term "Minimum Merger  Consideration"  shall mean an amount
         equal to the sum of (i) 25% of the Merger Consideration,  plus (ii) (a)
         the  quotient  of 75% of the  Merger  Consideration  divided by $23.00,
         multiplied by (b) the Minimum Average Price (as defined below).

                  The term "Maximum Average Price" shall mean $25.30.

                  The term "Minimum Average Price" shall mean $20.70.

                  The term "Bank  Capital"  shall mean an amount  equal to 8% of
         the lesser of (i)  $30,750,000  or (ii) the average daily amount of the
         assets of Security  State Bank  during the most  recent  full  calendar
         month prior to the Closing Date (as defined in Section 1.5 below).

                  The term "Excess Capital shall mean an amount equal to (i) the
         sum of the amounts of Security  State  Bank's  capital  stock,  capital
         surplus  and  retained  earnings  as of the end of the most recent full
         calendar  month  prior to  closing,  Pre-Closing  Earnings  (as defined
         below)  and the  tax-affected  amount of Excess  Reserves  (as  defined
         below),  if any,  reduced  by (ii)  Required  Additional  Reserves  (as
         defined below), if any, and reduced further by (iii) Bank Capital.

                  The term "Excess  Reserves"  shall mean an amount equal to the
         excess, if any, of the amount of Security State Bank's actual loan loss
         reserves as of the end of the most recent full calendar  month prior to
         the Closing Date over Minimum Reserves.

                  The term "Minimum  Reserves" shall mean an amount,  determined
         as of the end of the  most  recent  full  calendar  month  prior to the
         Closing Date, equal to the sum of (i) $75,000, (ii) except with respect
         to loans subject to Financial  Accounting Standard No. 114 ("FAS 114"),
         (a) 1% of the amount of Security State Bank's loan portfolio  exclusive
         of loans  classified as substandard,  doubtful and loss, (b) 15% of the
         amount of Security State Bank's assets classified substandard,  (c) 50%
         of the amount of Security State Bank's assets classified doubtful,  (d)
         100% of the amount of Security State Bank's assets classified loss, and
         (e) 2% of the amount of  Security  State  Bank's  assets  listed on its
         watch list;  and (iii) with  respect to  Security  State  Bank's  loans
         subject to FAS 114,  the amount of  reserves  required  pursuant to FAS
         114. All  classifications  of assets as substandard,  doubtful and loss
         shall be in accordance  with the DOS Manual of Examination  Policies of
         the Federal Deposit Insurance  Corporation ("FDIC") and assets shall be
         included on Security State Bank's watch list  consistent  with its past
         practice.  Prior to the  determination  of Minimum  Reserves,  Security
         State Bank shall  obtain  First  Midwest's  concurrence  as to Security
         State  Bank's  classification  of assets as  substandard,  doubtful and
         loss,  as to the  listing  of assets on its watch  list and as to loans
         subject to FAS 114 and the amount of reserves  required pursuant to FAS
         114 with respect to such loans.

                  The term "Required  Additional  Reserves" shall mean an amount
         equal to the  excess,  if any, of Minimum  Reserves  over the amount of
         Security  State Bank's  actual loan loss  reserves as of the end of the
         most recent full calendar month prior to the Closing Date.

                  The term  "Holding  Company  Assets"  shall mean the amount of
         CWB's assets,  other than its  investment in Security State Bank, as of
         the day prior to the Closing Date.

                  The term "Holding Company  Liabilities"  shall mean the amount
         of CWB's liabilities,  including,  without limitation,  (i) interest at
         the  contractual  rate  through the day prior to the Closing  Date with
         respect to CWB's  interest-bearing  liabilities  and (ii) the amount of
         CWB's   reasonable   expenses   relating  to  this  Agreement  and  the
         transactions contemplated thereby which are payable to third parties.

                  The term "Pre-Closing Earnings" shall mean:

                           (i) If the Closing  Date  occurs  prior to January 1,
                  1997, the sum of Security State Bank's net after-tax  earnings
                  for the period commencing on January 1, 1996 and concluding on
                  the last day of the most recent full  calendar  month prior to
                  the Closing Date plus the product of (a) Security State Bank's

                  daily   average  net   after-tax   earnings  for  such  period
                  multiplied  by (b) the  number of  calendar  days  during  the
                  period  commencing  on the first day of the month in which the
                  Closing  Date  occurs and  concluding  on the day prior to the
                  Closing Date.

                           (ii) If the Closing  Date occurs  after  December 31,
                  1996  but  prior to  February  1,  1997,  the  product  of (a)
                  Security State Bank's daily average net after-tax earnings for
                  the calendar  year 1996  multiplied  by (b) the number of days
                  during the period commencing on January 1, 1997 and concluding
                  on the day prior to the Closing Date.

                           (iii) If the Closing  Date occurs on February 1, 1997
                  or later,  the sum of  Security  State  Bank's  net  after-tax
                  earnings for the full  calendar  month or months in 1997 prior
                  to the  Closing  Date plus the product of (a)  Security  State
                  Bank's  daily  average  net  after-tax  earnings  for the full
                  calendar  month or months in 1997  prior to the  Closing  Date
                  multiplied  by (b)  the  number  of  days  during  the  period
                  commencing  on the first day of the month in which the Closing
                  Date  occurs and  concluding  on the day prior to the  Closing
                  Date.

                  With  respect  to all terms  defined in this  Section  1.3(b),
         amounts of capital stock, capital surplus,  retained earnings,  assets,
         liabilities,  net  after-tax  earnings and the  tax-affected  amount of
         Excess  Reserves  shall be  calculated  in  accordance  with  generally
         accepted accounting  principles ("GAAP"),  except that, with respect to
         Pre-Closing  Earnings,  notwithstanding the provisions of GAAP, (i) all
         unused vacation and sick pay and accruals for customary  annual bonuses
         (pro-rated monthly) shall be expensed or otherwise deducted from income
         in the  calculation  thereof;  and (ii)  the  guidelines  set  forth in
         Exhibit B shall be observed.

                  (c) Per Share Merger Consideration. The term "Per Share Merger
         Consideration" shall mean:

                           (i) if the  Average  Pre-Closing  Price  (as  defined
                  below) is less than or equal to the Maximum Average Price, and
                  greater than or equal to the Minimum  Average Price, an amount
                  equal to the quotient of the Merger  Consideration  divided by
                  72,750;

                           (ii) if the Average Pre-Closing Price is greater than
                  the Maximum  Average Price, an amount equal to the quotient of
                  the Maximum Merger Consideration divided by 72,750; or

                           (iii) if the Average  Pre-Closing  Price is less than
                  the Minimum  Average Price, an amount equal to the quotient of
                  the Minimum Merger Consideration divided by 72,750.

                  The term "Average  Pre-Closing Price" shall mean the mid-point
         of the average closing bid price and the average closing ask price of a
         share of the common  stock of First  Midwest,  par value $.01 per share
         (the "First Midwest Common Stock") on the NASDAQ National Market System
         for the ten  consecutive  trading  days ending on the date that is five
         trading days prior to the Closing Date.

                  Except as provided in Sections  1.3(d) and 1.3(e)  below,  the
         Per Share Merger Consideration shall be payable to each CWB Shareholder
         75% in shares of First Midwest Common Stock and 25% in cash.

                  (d) Maximum  Number of Shares of First  Midwest  Common Stock.
         Notwithstanding  the provisions of Section 1.3(c) above,  First Midwest
         shall issue no more than 190,000 shares (the "Maximum Shares") of First
         Midwest Common Stock.  In the event that the foregoing  sentence limits
         the number of shares of First Midwest  Common Stock to be issued in the
         Merger,  then the Per Share  Merger  Consideration  shall be payable to
         each CWB Shareholder as follows. Each CWB Shareholder shall receive (i)
         a number of shares of First  Midwest  Common Stock equal to the product
         of 190,000 (or the number of shares equal to the Maximum  Shares if the
         Maximum   Shares  are  adjusted   pursuant  to  Section  1.3(f)  below)
         multiplied by a fraction the numerator of which is the number of shares
         set forth  next to such CWB  Shareholder's  name on  Appendix  A of the
         Shareholder  Agreement and the denominator of which is 72,750, and (ii)
         an  amount  of  cash  equal  to the  excess  of the  Per  Share  Merger
         Consideration  over the product of such number of shares  multiplied by
         the  Average  Pre-Closing  Price;  provided  that in the event that the
         market value of the shares of First Midwest  Common Stock to be paid to
         the CWB  Shareholders  would not exceed 50% of the market  value at the
         Effective  Time of the shares of First  Midwest  Common  Stock and cash
         paid in the  Merger,  then (i) CWB  agrees to waive the  condition  set
         forth in Section 6.1(c) of this Agreement, and (ii) notwithstanding any
         other provisions of this Agreement, CWB shall have the right to require
         First  Midwest  to pay the Per Share  Merger  Consideration  to all CWB
         Shareholders entirely in cash.

                  (e) No Fractional Shares.  Notwithstanding any other provision
         of this Agreement, neither certificates nor scrip for fractional shares
         of First  Midwest  Common  Stock  shall be issued in the  Merger.  Each
         holder who otherwise  would have been entitled to a fraction of a share
         of First Midwest  Common Stock shall receive in lieu thereof cash in an
         amount determined by multiplying the fractional share interest to which
         such holder would  otherwise be entitled by (a) $23.00,  if the Average
         Pre-Closing  Price is less than or equal to the Maximum  Average  Price
         and greater  than or equal to the  Minimum  Average  Price,  or (b) the
         Average  Pre-Closing Price, if the Average Pre-Closing Price is greater
         than the Maximum  Average Price or less than the Minimum Average Price.
         No such holder  shall be entitled to  dividends,  voting  rights or any
         other rights in respect of any fractional share interest.

                  (f)  Adjustments  for Stock  Split,  Etc.  In the event  that,
         subsequent  to the date of this  Agreement  but prior to the  Effective
         Time   (as   defined   below),   there   occurs   a   reclassification,
         recapitalization,  stock  dividend,  stock split or reverse stock split
         with respect to the outstanding shares of First Midwest Common Stock, a
         conversion of the outstanding shares of First Midwest Common Stock into
         any other securities, or the establishment of a date during such period
         as the record  date for  determining  holders of First  Midwest  Common
         Stock with respect to any of the  foregoing,  then the Minimum  Average
         Price and the Maximum Average Price shall be adjusted accordingly,  and
         the Maximum Shares shall be adjusted to a number of shares  (rounded to
         the  nearest  whole  number)  which is 9.6% of the  number of shares of
         First Midwest  Common Stock  outstanding  immediately  after such event
         occurs.

                  (g) Rights of CWB  Shareholders.  At the Effective  Time,  the
         holders of certificates  representing  shares of CWB Common Stock shall
         cease to have any rights as shareholders of CWB, except such rights, if
         any,  as they may have  pursuant  to the Iowa Act.  Except as  provided
         herein, until certificates  representing shares of CWB Common Stock are
         tendered for exchange, each such certificate shall, after the Effective
         Time,  represent  for all purposes only the right to receive the number
         of whole shares of First Midwest Common Stock and cash into which their
         shares of CWB Common Stock shall have been  converted by the Merger and
         the right to receive the cash amount in lieu of any fraction of a share
         of First Midwest Common Stock as provided above.

                  (h)  Reservation of Shares.  Prior to the Effective  Time, the
         Board of  Directors  of First  Midwest  shall  reserve  for  issuance a
         sufficient  number  of  shares of First  Midwest  Common  Stock for the
         purpose  of  issuing  its shares to CWB's  shareholders  in  accordance
         herewith.

                  (i)      Exchange of CWB Common Stock

                           (i) As  soon  as  reasonably  practicable  after  the
                  Effective  Time,  holders of record of  certificates  formerly
                  representing  shares of CWB Common Stock (the  "Certificates")
                  shall tender such Certificates to First Midwest, appropriately
                  endorsed or  accompanied  by such  instruments  of transfer as
                  First Midwest may reasonably require.

                           (ii)  After  the  Effective  Time,  each  holder of a
                  Certificate  that so tenders such Certificate to First Midwest
                  shall, upon acceptance  thereof by First Midwest,  be entitled
                  to the Per Share  Merger  Consideration  payable in respect of
                  the shares represented thereby.

                           (iii) Until duly  surrendered to First Midwest,  each
                  outstanding  Certificate shall be deemed to evidence the right
                  to receive the Per Share  Merger  Consideration  in respect of
                  the shares represented thereby.

                           (iv)   After   the   Effective   Time,   holders   of
                  Certificates  shall cease to have  rights with  respect to the
                  CWB Common Stock previously  represented by such Certificates,
                  and their sole rights shall be to exchange  such  Certificates
                  for the Per  Share  Merger  Consideration  in  respect  of the
                  shares  represented  thereby.  After the Effective Time, there
                  shall  be no  further  transfer  on  the  records  of  CWB  of
                  Certificates,  and if such  Certificates  are presented to CWB
                  for transfer,  they shall be canceled  against delivery of the
                  Per  Share  Merger  Consideration  in  respect  of the  shares
                  represented  thereby.  First Midwest shall not be obligated to
                  deliver the Per Share  Merger  Consideration  to any holder of
                  CWB Common Stock until such holder tenders the Certificates as
                  provided herein. No dividends declared will be remitted to any
                  person  entitled to receive First  Midwest  Common Stock under
                  this Agreement  until such person  surrenders the  Certificate
                  representing  the right to receive such First  Midwest  Common
                  Stock,  at which time such dividends shall be remitted to such
                  person, without interest and less any taxes that may have been
                  imposed  thereon.  Certificates  tendered  for exchange by any
                  person shall not be exchanged  for  certificates  representing

                  First  Midwest  Common  Stock unless such person is a party to
                  the Shareholder Agreement.  No party to this Agreement nor any
                  affiliate  thereof shall be liable to any holder of CWB Common
                  Stock  represented by any  Certificate  for any  consideration
                  paid to a public  official  pursuant to  applicable  abandoned
                  property,  escheat or similar  laws.  First  Midwest  shall be
                  entitled  to rely  upon  the  stock  transfer  books of CWB to
                  establish  the identity of those  persons  entitled to receive
                  the  consideration  specified in this  Agreement,  which books
                  shall be conclusive  with respect  thereto.  In the event of a
                  dispute with respect to ownership of stock  represented by any
                  Certificate,  First  Midwest  shall be entitled to deposit any
                  consideration in respect thereof in escrow with an independent
                  third party and  thereafter  be relieved  with  respect to any
                  claims thereto.

                  (j) Certificate of  Incorporation  and Bylaws of the Surviving
         Corporation.  The  Certificate  of  Incorporation  and  bylaws of First
         Midwest, as in effect immediately prior to the Effective Time, shall be
         the Certificate of  Incorporation  and bylaws of First Midwest,  as the
         surviving corporation of the Merger, until either is thereafter amended
         in accordance with applicable law.

                  (k) Directors and Officers of the Surviving  Corporation.  The
         directors  and  officers  of  First  Midwest  immediately  prior to the
         Effective Time shall be the directors and officers of First Midwest, as
         the  surviving  corporation  of  the  Merger,  until  their  respective
         successors  shall be duly  elected  and  qualified  or  otherwise  duly
         selected.

         1.4 Security State Bank Matters.  CWB shall cause the present directors
of Security State Bank, except its President, to resign as of the Effective Time
and First  Midwest  shall then elect as  directors  of  Security  State Bank the
persons who are  serving as  directors  of its wholly  owned  subsidiary,  First
Federal Savings Bank of the Midwest ("First Federal").

         1.5  Closing.  Subject to the  provisions  of  Article  VI hereof,  the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place on a day  designated by First Midwest  reasonably  practicable  after
satisfaction or waiver of all of the conditions to Closing,  at such location as
is mutually  agreed to by First  Midwest and CWB.  The date on which the Closing
actually occurs is herein referred to as the "Closing Date."

         1.6  Reservation  of Right to Revise  Transaction.  First Midwest shall
have the unilateral right to change the method of structuring the Merger, to the
extent  permitted by applicable law and to the extent it deems such change to be
desirable;  provided, however, that no such change shall (a) alter or change the
amount or kind of the Merger  Consideration,  (b) materially impede or delay the
consummation  of the Merger or (c)  adversely  affect the tax  treatment  of CWB
shareholders  as a result of receiving the Merger  Consideration,  First Midwest
may  exercise  this right of revision by giving  written  notice  thereof in the
manner provided in Section 8.2 of this Agreement.

                                   ARTICLE II

                REPRESENTATIONS, WARRANTIES AND COVENANTS OF CWB

         CWB  represents  and warrants to and  covenants  with First  Midwest as
follows:

         2.1  Organization  and Authority.  CWB is a corporation duly organized,
validly  existing and in good  standing  under the laws of the State of Iowa, is
duly qualified to do business and is in good standing in all jurisdictions where
its ownership or leasing of property or the conduct of its business  requires it
to be so qualified, except where the failure to be so qualified would not have a
material adverse effect on the financial condition, assets, deposit liabilities,
results of operations or business (collectively, the "Condition") of CWB and the
CWB Subsidiaries, taken as a whole, and has the corporate power and authority to
own its  properties  and assets and to carry on its  business as it is now being
conducted.  The term  "Subsidiary" when used with respect to any party means any
entity (including without limitation any corporation, partnership, joint venture
or other organization,  whether incorporated or unincorporated)  which is or may
be  consolidated  with  such  party for  financial  reporting  purposes.  CWB is
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended  ("BHCA").  True and complete copies of the Articles of Incorporation
and Bylaws of CWB and of the  Articles of  Incorporation  and Bylaws of Security
State Bank, each as in effect on the date of this  Agreement,  together with all
amendments thereto, are set forth in Schedule 2.1 hereto.

         2.2  Subsidiaries.  Set forth in Schedule 2.2 is a complete and correct
list of all  Subsidiaries of CWB (each a "CWB  Subsidiary" and  collectively the
"CWB Subsidiaries").  Other than the CWB Subsidiaries,  there are no entities in
which CWB has a two percent or greater  direct or indirect  equity or  ownership
interest.  All outstanding Equity Securities (as defined in Section 2.3) of each
CWB Subsidiary  are owned directly or indirectly by CWB. All of the  outstanding
shares of capital stock of the CWB Subsidiaries  are validly issued,  fully paid
and  nonassessable and are owned directly or indirectly by CWB free and clear of
any lien, claim,  charge,  option,  encumbrance,  agreement,  mortgage,  pledge,
security  interest,  restriction or rights of third parties (each a "Lien") with
respect thereto.  Each of the CWB Subsidiaries is a corporation,  state bank, or
other entity duly  incorporated  or  organized,  validly  existing,  and in good
standing under the laws of its  jurisdiction of  incorporation  or organization,
and has the  corporate  power and authority to own or lease its  properties  and
assets and to carry on its  business as it is now being  conducted.  Each of the
CWB Subsidiaries is duly qualified to do business in each jurisdiction where its
ownership or leasing of property or the conduct of its  business  requires it so
to be qualified, except where the failure to be so qualified, individually or in
the aggregate,  would not have a material adverse effect on the Condition of CWB
and the CWB Subsidiaries, taken as a whole. Except as set forth on Schedule 2.2,
CWB does not own beneficially,  directly or indirectly,  any shares of any class
of Equity  Securities or similar  interests of any  corporation,  trust company,
bank, business trust,  association or similar organization.  Security State Bank
is a state bank  chartered by the State of Iowa.  The deposits of Security State
Bank are insured up to applicable  limits by the Bank  Insurance Fund ("BIF") of
the Federal Deposit Insurance Corporation (the "FDIC").

         2.3      Capitalization.

                  (a) The  authorized  capital  stock of CWB consists of 100,000
         shares of CWB Common Stock,  par value $10.00 per share of which, as of
         the date  hereof,  72,750  shares are issued  and  outstanding  and 825
         shares are held in the  treasury  of CWB.  The  issued and  outstanding

         shares of CWB  Common  Stock  comprise  all of the  outstanding  Equity
         Securities  issued  by CWB.  "Equity  Securities"  of an  issuer  means
         capital  stock or other  equity  securities  of such  issuer,  options,
         warrants,  scrip,  rights to subscribe to, calls or  commitments of any
         character  whatsoever  relating to, or securities or rights convertible
         into,  shares of any capital  stock or other equity  securities of such
         issuer,  or contracts,  commitments,  understandings or arrangements by
         which such issuer is or may become bound to issue additional  shares of
         its  capital  stock or  other  equity  securities  of such  issuer,  or
         options, warrants, scrip or rights to purchase,  acquire, subscribe to,
         calls on or  commitments  for any shares of its capital  stock or other
         equity  securities.  All of the  issued and  outstanding  shares of CWB
         Common Stock are validly issued, fully paid and nonassessable, and have
         not been issued in violation of any preemptive right of any shareholder
         of CWB.

                  (b) The  authorized  capital  stock  of  Security  State  Bank
         consists of 30,000 shares of common stock,  par value $20.00 per share,
         of which 15,000 shares are issued and outstanding and held by CWB. Such
         shares  comprise all of the outstanding  Equity  Securities of Security
         State  Bank.  All of the  issued and  outstanding  shares of the common
         stock  of  Security  State  Bank are  validly  issued,  fully  paid and
         nonassessable,  and have not been issued in violation of any preemptive
         right of any shareholder of Security State Bank.

         2.4      Authorization.

                  (a) CWB has the  corporate  power and  authority to enter into
         this  Agreement and to carry out its  obligations  hereunder.  The only
         shareholder  vote  required for CWB to approve this  Agreement  and the
         Merger is the vote  required  under  Iowa Code  Section  490.1103.  The
         execution,  delivery and  performance  of this Agreement by CWB and the
         consummation by CWB of the transactions  contemplated  hereby have been
         duly  authorized  by the Board of  Directors of CWB and approved by the
         shareholders  of CWB.  Subject  to the  receipt  of such  approvals  of
         Regulatory  Authorities  (as defined in Section 2.6) as may be required
         by  statute  or  regulation,  this  Agreement  is a valid  and  binding
         obligation of CWB enforceable against CWB in accordance with its terms,
         subject as to enforcement  to bankruptcy,  insolvency and other similar
         laws  of  general  applicability  affecting  creditors'  rights  and to
         general equity principles.

                  (b) Neither the  execution,  delivery or performance by CWB of
         this  Agreement,  nor  the  consummation  by CWB  of  the  transactions
         contemplated  hereby,  nor compliance by CWB with any of the provisions
         hereof,  will (i)  violate  or  conflict  with any term,  condition  or
         provision of the articles of incorporation and bylaws of CWB or any CWB
         Subsidiary,  (ii) violate,  conflict with, or result in a breach of any
         provisions of, or constitute a default (or an event which,  with notice
         or lapse of time or both,  would constitute a default) under, or result
         in the termination  of, or accelerate the  performance  required by, or
         result in a right of termination or  acceleration  of, or result in the
         creation of any Lien upon any of the properties or assets of CWB or any
         CWB Subsidiary under any of the terms, conditions or provisions of, any
         note,  bond,  mortgage,  indenture,  deed  of  trust,  license,  lease,
         agreement or other  instrument  or  obligation  to which CWB or any CWB
         Subsidiary  is a party or by which it may be bound,  or to which CWB or
         any CWB Subsidiary or any of their properties or assets may be subject,
         or (iii)  subject  to  compliance  with the  statutes  and  regulations

         referred  to in  subsection  (c) of  this  Section  2.4,  to  the  best
         knowledge  of the  senior  officers  and  directors  of CWB (the  "Best
         Knowledge  of  CWB"),  violate  any  judgment,   ruling,  order,  writ,
         injunction,  decree,  statute,  rule or regulation applicable to CWB or
         any CWB Subsidiary or any of their respective properties or assets.

                  (c)  Other  than  in  connection  or in  compliance  with  the
         provisions of the DGCL,  the Iowa Act, or filings,  consents,  reviews,
         authorizations,  approvals or exemptions  required under,  the BHCA and
         the Iowa Banking Act and regulations under such statutes, no notice to,
         filing  with,  exemption  or review  by, or  authorization,  consent or
         approval  of, any public body or  authority or third party is necessary
         on the part of CWB or any CWB  Subsidiary for the  consummation  of the
         transactions contemplated by this Agreement.

         2.5 CWB Financial Statements.  Except as disclosed on Schedule 2.5, the
CWB Historical  Balance Sheet, CWB Historical Income  Statement,  CWB Historical
Statement of Cash Flows,  Security State Bank Historical Balance Sheet, Security
State Bank  Historical  Income  Statement  and  Security  State Bank  Historical
Statement of Assets and Loan to Deposit Ratio,  all as provided to First Midwest
in the CWB Bid Information Materials, dated February 13, 1996, the Annual Report
of Bank Holding Companies - FR Y-6 as of the close of business December 31, 1995
filed by CWB, and the  Consolidated  Reports of Condition  and Income for a Bank
With  Domestic  Offices  Only and Total Assets of Less than $100 Million - FFIEC
034  filed  by  Security  State  Bank,  for the  period  ended  March  31,  1996
(collectively, the "CWB Financial Statements"), have been prepared in accordance
with generally  accepted  accounting  principles  applied on a consistent  basis
("GAAP"),  present  fairly the  financial  position  of the  entities  indicated
therein  at the  dates  indicated  therein  and are  derived  from the books and
records of CWB and the CWB Subsidiaries,  which are complete and accurate in all
material  respects and have been maintained  since August 10, 1988 in accordance
with good business  practices.  Neither CWB nor any of the CWB  Subsidiaries has
any material contingent  liabilities that are not described in the CWB Financial
Statements.

         2.6  CWB  Reports.  Since  August  10,  1988,  each  of CWB and the CWB
Subsidiaries  has filed all  material  reports,  registrations  and  statements,
together with any required material amendments thereto,  that it was required to
file  with  (i)  the  Superintendent  of  Banking  of the  State  of  Iowa  (the
"Superintendent"),  (ii) the Board of  Governors of the Federal  Reserve  System
(the "FRB"), (iii) the FDIC, and (iv) any other federal, state, municipal, local
or foreign  government,  securities,  banking,  other governmental or regulatory
authority  and the agencies and staffs  thereof (the  entities in the  foregoing
clauses (i) through (iv) together with the Office of Thrift Supervision  ("OTS")
being  referred  to herein  collectively  as the  "Regulatory  Authorities"  and
individually as a "Regulatory Authority"). All such reports and statements filed
with any such Regulatory  Authority are  collectively  referred to herein as the
"CWB  Reports."  As of its  respective  date,  each CWB Report  complied  in all
material  respects  with all of the rules  and  regulations  promulgated  by the
applicable  Regulatory  Authority and did not contain any untrue  statement of a
material fact or omit to state a material fact required to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

         2.7  Properties  and Leases.  Except (i) as may be reflected in the CWB
Financial  Statements,  (ii) any Lien for current taxes not yet  delinquent  and
(iii) with respect to assets  classified as other real estate owned, CWB and the
CWB  Subsidiaries  have good and marketable title free and clear of any material
Lien to all the real and  personal  property  reflected  in the CWB and Security

State Bank Historical  Balance Sheets  (described above) as of December 31, 1995
and, in each case,  all real and  personal  property  acquired  since such date,
except such real and personal  property as has been  disposed of since such date
for fair value in the ordinary course of business. All leases material to CWB or
any CWB  Subsidiary,  pursuant to which CWB or any CWB Subsidiary is a lessee or
lessor of real or personal property,  are valid and effective in accordance with
their respective terms, and there is not, under any of such leases, any material
existing default by CWB or any CWB Subsidiary or any event which, with notice or
lapse of time or both,  would  constitute  a material  default by CWB or any CWB
Subsidiary.  Except  as  disclosed  on  Schedule  2.7,  all of CWB's and the CWB
Subsidiaries' buildings,  structures and equipment in regular use have been well
maintained  and are in good  and  serviceable  condition,  normal  wear and tear
excepted.  None of the  buildings,  structures  and  equipment of CWB or any CWB
Subsidiary  violates  or  fails to  comply  with any  applicable  health,  fire,
environmental,  safety, zoning or building laws or ordinances or any restrictive
covenant pertaining thereto.

         2.8 Taxes.  Since August 10, 1988 (and to the Best Knowledge of CWB, at
all times prior  thereto),  CWB and each CWB Subsidiary  have timely  (including
extensions)  filed all required  tax returns and  reports,  and they will timely
(including  extensions) file all tax returns and reports required to be filed at
or  prior  to the  Closing  Date  ("CWB's  Returns").  Each  of CWB  and the CWB
Subsidiaries  has  paid,  or set up  adequate  reserves  on  the  CWB  Financial
Statements  for the  payment  of,  all taxes  required  to be paid or accrued in
respect of the periods covered by such returns and reports.  Neither CWB nor any
CWB Subsidiary will have any material  liability for any such taxes in excess of
the amounts so paid or reserves so established and no deficiencies  for any tax,
assessment  or  governmental  charge  have been  proposed,  asserted or assessed
(tentatively or definitely) against CWB or any CWB Subsidiary which would not be
covered by existing  reserves.  Neither CWB nor any CWB Subsidiary is delinquent
in the  payment  of any  tax,  assessment  or  governmental  charge,  nor has it
requested  any extension of time within which to file any tax returns or reports
which  have not since  been  filed and no  requests  for  waivers of the time to
assess any tax are  pending.  The federal  income tax returns of CWB and the CWB
Subsidiaries  have not been audited by the Internal  Revenue Service (the "IRS")
since  August  10,  1988.  The  state  income  tax  returns  of CWB  and the CWB
Subsidiaries  have not been  audited  during the past seven  years.  There is no
deficiency or refund  litigation or matter in controversy  with respect to CWB's
Returns.  Neither  CWB nor any CWB  Subsidiary  (i) has  extended  or waived any
statute of  limitations on the assessment of any tax due; (ii) is a party to any
agreement  providing  for the  allocation  or sharing of taxes  (other  than the
allocation  of federal  income  taxes as provided by  regulation  1.1552-1(a)(1)
under the Code); (iii) is required to include in income any adjustment  pursuant
to Section  481(a) of the Code,  by reason of a voluntary  change in  accounting
method  (nor  to the  Best  Knowledge  of CWB  has the  IRS  proposed  any  such
adjustment or change of accounting method); or (iv) has filed a consent pursuant
to Section  341(f) of the Code or agreed to have  Section  341(f)(2) of the Code
apply.

         2.9 Material Adverse Change. Except as set forth on Schedule 2.9, since
April 30, 1996,  there has been no material  adverse  change in the Condition of
CWB and the CWB Subsidiaries,  taken as a whole,  except as may have resulted or
may result from changes to laws and regulations,  generally accepted  accounting
principles or regulatory accounting principles or changes in economic conditions
applicable to depository institutions generally.

         2.10     Commitments and Contracts.

                  (a) Except as set forth in Schedule 2.10,  neither CWB nor any
         CWB  Subsidiary is a party or subject to any of the following  (whether
         written or oral, express or implied):

                           (i) any agreement,  arrangement or commitment (A) not
                  made in the  ordinary  course  of  business,  (B) by virtue of
                  which the consent or  approval of any third party  (other than
                  Regulatory  Authorities) is required for or in connection with
                  the execution,  delivery and  performance of this Agreement or
                  the consummation of the Merger or (C) pursuant to which CWB or
                  any of the CWB  Subsidiaries  is or may  become  obligated  to
                  invest in or contribute  capital to any CWB  Subsidiary or any
                  other entity;

                           (ii) any agreement, indenture or other instrument not
                  disclosed  in the CWB  Financial  Statements  relating  to the
                  borrowing  of  money  by  CWB  or any  CWB  Subsidiary  or the
                  guarantee by CWB or any CWB Subsidiary of any such  obligation
                  (other  than  trade   payables  or   instruments   related  to
                  transactions  entered into in the ordinary  course of business
                  by  Security   State  Bank,   such  as  deposits,   Fed  Funds
                  borrowings, FHLB advances and repurchase agreements);

                           (iii) any contract,  agreement or understanding  with
                  any labor union or collective bargaining organization;

                           (iv) any contract  containing  covenants  which limit
                  the  ability  of CWB or any CWB  Subsidiary  to compete in any
                  line  of  business  or  with  any  person  or  containing  any
                  restriction of the  geographical  area in which,  or method by
                  which,  CWB or any CWB  Subsidiary  may carry on its  business
                  (other  than  as may  be  required  by  law or any  applicable
                  Regulatory Authority);

                           (v)  any  off-balance  sheet  financial  instruments,
                  including  without  limitation  letters  of  credit,  unfunded
                  commitments  (other  than  unfunded  commitments  made  in the
                  ordinary course of business and consistent with past practice)
                  and derivative financial instruments; or

                           (vi)  any  contract  or  agreement  (A)  that  has  a
                  remaining  term as of the date hereof in excess of six months,
                  (B) is not  terminable  by CWB or any CWB  Subsidiary on 30 or
                  fewer days' notice without penalty or premium and (C) involves
                  a monetary obligation on the part of CWB or any CWB Subsidiary
                  in excess of $10,000.00.

                  (b) Neither CWB nor any CWB  Subsidiary is in violation of its
         organizational  documents  or bylaws or in material  default  under any
         agreement,  commitment,  arrangement, lease, insurance policy, or other
         instrument,  whether entered into in the ordinary course of business or
         otherwise and whether  written or oral,  and there has not occurred any
         event that,  with the lapse of time or giving of notice or both,  would
         constitute such a material default.

         2.11  Litigation  and  Other  Proceedings.  Other  than as set forth on
Schedule 2.11,  there is no claim,  action,  suit,  investigation or proceeding,
pending  or, to the Best  Knowledge  of CWB,  threatened  against CWB or any CWB
Subsidiary, nor are any of them subject to any order, judgment or decree, except
for matters  which do not involve a claim for damages for more than  $10,000.00,
but not excepting any actions,  suits or proceedings which request  non-monetary
relief or purport or seek to enjoin or restrain the transactions contemplated by
this Agreement.  Without limiting the generality of the foregoing, except as set
forth on Schedule  2.11 there are no  actions,  suits,  protests or  proceedings
pending  or, to the Best  Knowledge  of CWB,  threatened  against CWB or any CWB
Subsidiary or any of their  respective  officers or directors by any shareholder
of CWB or any CWB  Subsidiary  (or by any former  shareholder  of CWB or any CWB
Subsidiary  relating to or arising out of such person's  status as a shareholder
or former  shareholder)  or involving  claims under  federal or state banking or
securities laws, the Community  Reinvestment Act of 1977 (the "CRA") or the fair
lending laws.

         2.12  Insurance.  Set forth on Schedule 2.12 is a list of all insurance
policies  (excluding  policies  maintained  on one- to  four-family  residential
properties  acquired  through  foreclosure or on properties in which neither CWB
nor any CWB  Subsidiary  have any interest other than as collateral for mortgage
loans held by Security  State Bank)  maintained  by or for the benefit of CWB or
any of the CWB Subsidiaries or their respective directors,  officers,  employees
or agents.  Neither CWB nor any of the CWB Subsidiaries has, during the past two
years, had an insurance  policy canceled or been denied  insurance  coverage for
which any of such companies has applied.  To the best knowledge of CWB, there is
no pending  or  potential  claim,  suit,  action,  investigation  or  proceeding
pursuant to which any director or officer of CWB or any of the CWB  Subsidiaries
may be liable.

         2.13     Compliance with Laws.

                  (a) CWB and each of the CWB  Subsidiaries  have  all  material
         permits,  licenses,  authorizations,  orders and approvals of, and have
         made all material  filings,  applications and  registrations  with, all
         Regulatory Authorities that are required in order to permit them to own
         or lease their  properties and assets and to carry on their business as
         presently conducted; all such permits, licenses, authorizations, orders
         and approvals are in full force and effect;  and, to the Best Knowledge
         of CWB, no suspension or  cancellation of any of them is threatened and
         all such filings, applications and registrations are current.

                  (b) (i) Each of CWB and the CWB Subsidiaries has complied with
                  all laws, regulations and orders (including without limitation
                  zoning  ordinances,  building codes,  the Employee  Retirement
                  Income  Security Act of 1974 ("ERISA"),  and securities,  tax,
                  environmental,  civil  rights,  and  occupational  health  and
                  safety laws and regulations (and including without limitation,
                  in the case of  Security  State  Bank,  all  statutes,  rules,
                  regulations and policy statements pertaining to the conduct of
                  a banking,  deposit-taking,  lending or related  business) and
                  governing instruments applicable to them and to the conduct of
                  their business, except such noncompliance as, individually and
                  in the aggregate,  would not have a material adverse effect on
                  the  Condition  of CWB and the CWB  Subsidiaries,  taken  as a
                  whole,  and  Security  State  Bank  has  not  engaged  in  any
                  activities which would cause it to be subject to Division X of
                  Iowa Code Section 524, and

                           (ii) neither CWB nor any CWB Subsidiary is in default
                  under, and no event has occurred which, with the lapse of time
                  or notice or both,  could result in a default under, the terms
                  of any judgment,  order, writ,  decree,  permit, or license of
                  any  Regulatory  Authority,  other  administrative  agency  or
                  court, whether federal, state, municipal, or local and whether
                  at law or in equity.  Except that to the best knowledge of the
                  directors  and  officers  and  CWB  and  Security  State  Bank
                  (without   investigation),   Security   State  Bank's   office
                  properties   located  in  Casey  and  Menlo,   Iowa,  are  not
                  contaminated by and do not contain any lead-based paint, radon
                  or asbestos, nor has any such substance been stored,  disposed
                  of or placed on such  property,  nor used in the  construction
                  thereof,  and except as set forth in Schedule  2.13B,  neither
                  CWB nor any CWB Subsidiary is subject to or reasonably  likely
                  to incur  any  liability  as a result  of its past or  present
                  ownership,  operation,  or  use of any  Property  (as  defined
                  below) of CWB or any CWB Subsidiary  (whether  directly or, to
                  the Best  Knowledge of CWB, as a consequence  of such Property
                  being collateral for any loan or investment made by CWB or any
                  CWB  Subsidiary)  (A) that is  contaminated by or contains any
                  hazardous  waste,  toxic  substance,   or  related  materials,
                  including  without  limitation  asbestos,   PCBs,  pesticides,
                  herbicides, and any other substance or waste that is hazardous
                  to human  health or the  environment  (collectively,  a "Toxic
                  Substance")  or (B) on  which  any  Toxic  Substance  has been
                  stored,  disposed  of,  placed,  or used  in the  construction
                  thereof;  and  which,  in any such  case or in the  aggregate,
                  reasonably could be expected to have a material adverse effect
                  on the Condition of CWB and the CWB  Subsidiaries,  taken as a
                  whole. "Property" of a person shall include all property (real
                  or  personal)  owned,  leased or  controlled  by such  person,
                  including  without  limitation   property  under  foreclosure,
                  property held by such person or any  Subsidiary of such person
                  in its capacity as a trustee and property in which any venture
                  capital or similar  unit of such person or any  Subsidiary  of
                  such  person  has an  interest.  No claim,  action,  suit,  or
                  proceeding  is  pending  against  CWB  or any  CWB  Subsidiary
                  relating to Property of CWB or any CWB  Subsidiary  before any
                  court,  administrative agency or arbitration tribunal relating
                  to Toxic Substances,  pollution, or the environment, and there
                  is no outstanding judgment,  order, writ, injunction,  decree,
                  or award against or affecting CWB or any CWB  Subsidiary  with
                  respect  to the  same.  Except  for  statutory  or  regulatory
                  restrictions  of  general  application  or  as  set  forth  in
                  Schedule  2.13B,  no  Regulatory  Authority  has  currently in
                  effect  any  restriction  on the  business  of CWB or any  CWB
                  Subsidiary.

                  (c) Since  August 10,  1988,  except as set forth in  Schedule
         2.13C, neither CWB nor any CWB Subsidiary has received any notification
         or  communication as to any matter which has not been resolved from any
         Regulatory  Authority (i) asserting  that CWB or any CWB  Subsidiary is
         not in substantial compliance with any of the statutes,  regulations or
         ordinances that such Regulatory Authority enforces, (ii) threatening to
         revoke any license,  franchise,  permit or  governmental  authorization
         that is  material  to the  Condition  of CWB and the CWB  Subsidiaries,
         taken as a whole,  including without  limitation  Security State Bank's
         status as an insured  depository  institution under the Federal Deposit

         Insurance Act ("FDIA"),  (iii)  requiring or threatening to require CWB
         or any of the CWB  Subsidiaries,  or indicating  that CWB or any of the
         CWB Subsidiaries may be required, to enter into any order, agreement or
         memorandum  of  understanding  or any other  agreement  restricting  or
         limiting or purporting  to direct,  restrict or limit in any manner the
         operations  of CWB or any of the CWB  Subsidiaries,  including  without
         limitation any  restriction on the payment of dividends.  Except as set
         forth in Schedule 2.13B or C and  specifically  noted therein,  no such
         order,  agreement,  memorandum of  understanding  or other agreement or
         directive is currently in effect.

                  (d) Neither CWB nor any CWB  Subsidiary is required by Section
         32 of the FDIA or under  Iowa law to give prior  notice to any  federal
         banking  agency of the proposed  addition of an individual to its board
         of directors or the  employment of an individual as a senior  executive
         officer.

         2.14 Labor.  No work stoppage  involving  CWB or any CWB  Subsidiary is
pending or, to the Best  Knowledge of CWB,  threatened.  Neither CWB nor any CWB
Subsidiary is involved in, or, to the Best Knowledge of CWB,  threatened with or
affected  by,  any  labor  dispute,   arbitration,   lawsuit  or  administrative
proceeding  which reasonably could be expected to have a material adverse effect
on the Condition of CWB and the CWB Subsidiaries, taken as a whole. No employees
of CWB or  any  CWB  Subsidiary  are  represented  by  any  labor  union  or any
collective bargaining organization.

         2.15     Material Interests of Certain Persons.

                  (a)  Except  as set  forth  in  Schedule  2.15A,  to the  Best
         Knowledge of CWB, no officer or director of CWB or any CWB  Subsidiary,
         or any  "associate,"  as such term is defined  in Rule 14a-1  under the
         Securities  Exchange  Act of 1934  (the  "Exchange  Act"),  of any such
         officer or director, has any material interest in any material contract
         or property  (real or  personal,  tangible or  intangible),  used in or
         pertaining to the business of CWB or any CWB  Subsidiary,  which in the
         case of CWB would be required to be disclosed by Item 404 of Regulation
         S-B  promulgated  by the SEC if CWB were a reporting  company or in the
         case of any CWB Subsidiary would be required to be so disclosed if such
         CWB Subsidiary had a class of securities registered under Section 12 of
         the Exchange Act.

                  (b) Except as set forth in Schedule 2.15B,  there are no loans
         in excess of $10,000.00  from CWB or any CWB  Subsidiary to any present
         officer, director, employee or any associate or related interest of any
         such person which was or would be required under any rule or regulation
         to be approved by or reported to CWB's or any CWB Subsidiary's Board of
         Directors ("Insider Loans").  All outstanding Insider Loans from CWB or
         any CWB  Subsidiary  were  approved by or  reported to the  appropriate
         board of directors in accordance with applicable law and regulations.

         2.16     Allowance for Loan Losses; Adjustments.

                  (a)  The  allowances  for  loan  losses  contained  in the CWB
         Financial   Statements  as  of  March  31,  1996  were  established  in
         accordance  with the past practices and  experiences of CWB and the CWB
         Subsidiaries,  are in compliance with the  requirements of GAAP and the
         rules,  regulations and policies of the FRB, the Superintendent and the
         FDIC and are, in the opinion of management of CWB,  adequate to provide
         for possible  losses on loans  (including  without  limitation  accrued

         interest   receivable)  and  credit   commitments   (including  without
         limitation  stand-by  letters  of  credit)  outstanding  as of the date
         thereof.

                  (b) CWB agrees that, at the request of First Midwest, it shall
         make such adjustments, and shall cause Security State Bank to make such
         adjustments,  to the values of its or Security  State Bank's assets and
         liabilities,  and take such reserves and accruals, as First Midwest may
         reasonably  request  from time to time in order to cause  such  values,
         reserves and accruals to conform to GAAP.

         2.17     Employee Benefit Plans.

                  (a) Schedule 2.17A lists all pension, retirement, supplemental
         retirement,  stock option,  restricted  stock,  stock  purchase,  stock
         ownership,   savings,   stock  appreciation   right,   profit  sharing,
         employment, incentive compensation, deferred compensation,  consulting,
         bonus, medical,  disability,  workers'  compensation,  vacation,  group
         insurance, severance and other material employee benefit, incentive and
         welfare policies,  contracts, plans and arrangements,  and all trust or
         loan agreements or arrangements related thereto, maintained,  sponsored
         or contributed to by CWB or any CWB Subsidiary in respect of any of the
         present or former  directors,  officers,  or other  employees of and/or
         consultants  to CWB or  any  CWB  Subsidiary  (collectively,  the  "CWB
         Employee Plans").

                  (b) All of the CWB  Employee  Plans have been  maintained  and
         operated  materially  in  accordance  with  their  terms  and  with the
         material  requirements of all applicable  statutes,  orders,  rules and
         final regulations, including without limitation ERISA and the Code. All
         contributions  required to be made to the CWB Employee  Plans have been
         made.

                  (c) With respect to each of the CWB Employee  Plans which is a
         pension  plan (as  defined  in  Section  3(2) of ERISA)  (the  "Pension
         Plans"):  (i) each  Pension  Plan which is intended  to be  "qualified"
         within the meaning of Section  401(a) of the Code is so qualified  and,
         to the extent a  determination  letter has been  received  from the IRS
         with respect to any such Pension Plan,  such  determination  letter may
         still be relied upon,  and each related  trust is exempt from  taxation
         under  Section  501(a)  of the  Code;  (ii)  the  present  value of all
         benefits vested and all benefits  accrued under each Pension Plan which
         is subject to Title IV of ERISA,  valued using the  assumptions  in the
         most recent  actuarial  report,  did not, in each case,  as of the last
         applicable annual valuation date, exceed the value of the assets of the
         Pension Plan allocable to benefits on a plan termination  basis;  (iii)
         there has been no "prohibited  transaction," as such term is defined in
         Section 4975 of the Code or Section 406 of ERISA,  which could  subject
         any Pension Plan or associated trust, or CWB or any CWB Subsidiary,  to
         any material tax or penalty;  (iv) no Pension Plan or any trust created
         thereunder  has been  terminated,  nor have there been any  "reportable
         events"  with respect to any Pension  Plan,  as that term is defined in
         Section 4043 of ERISA since January 1, 1986; and (v) no Pension Plan or
         any trust  created  thereunder  has incurred any  "accumulated  funding
         deficiency,"  as such term is defined in Section 302 of ERISA  (whether
         or not waived). No Pension Plan is a "multiemployer  plan" as that term
         is defined in Section 3(37) of ERISA. With respect to each Pension Plan
         that is  described in Section  4063(a) of ERISA (a  "Multiple  Employer
         Pension Plan"):  (i) neither CWB nor any CWB Subsidiary  would have any

         liability or  obligation  to post a bond under Section 4063 of ERISA if
         CWB and all  CWB  Subsidiaries  were to  withdraw  from  such  Multiple
         Employer  Pension  Plan;  and (ii)  neither CWB nor any CWB  Subsidiary
         would have any  liability  under Section 4064 of ERISA if such Multiple
         Employer Pension Plan were to terminate.

                  (d) Neither CWB nor any CWB  Subsidiary  has any liability for
         any  post-retirement  health,  medical or  similar  benefit of any kind
         whatsoever except as required by statute.

                  (e)  Neither  CWB  nor  any CWB  Subsidiary  has any  material
         liability  under ERISA or the Code as a result of its being a member of
         a group described in Sections 414(b), (c), (m) or (o) of the Code.

                  (f)  Neither  CWB  nor  any CWB  Subsidiary  has any  material
         liability  under the  continuation  of health  care  provisions  of the
         Consolidated   Omnibus  Budget   Reconciliation  Act  of  1985  or  any
         comparable state law.

                  (g) Neither the execution nor delivery of this Agreement,  nor
         the consummation of any of the transactions  contemplated  hereby, will
         (i)  result  in any  material  payment  (including  without  limitation
         severance,  unemployment  compensation  or  golden  parachute  payment)
         becoming  due to any  current or former  director or employee of CWB or
         any CWB Subsidiary from any of such entities, (ii) increase any benefit
         otherwise  payable under any of the CWB Employee  Plans or (iii) result
         in the  acceleration  of the time of  payment of any such  benefit.  No
         amounts paid or to become payable by CWB, the CWB Subsidiaries or their
         successors  interest  to or  with  respect  to any  current  or  former
         director  or  employee  of CWB or any CWB  Subsidiary  will  fail to be
         deductible for federal income tax purposes by reason of Section 280G or
         162(m) of the Code or otherwise.

         2.18 Conduct to Date. From and after December 31, 1994 through the date
of this  Agreement,  except as set forth on Schedule  2.18:  (i) CWB and the CWB
Subsidiaries  have  conducted  their  respective  businesses in the ordinary and
usual  course  consistent  with past  practices;  (ii)  neither  CWB nor any CWB
Subsidiary  has issued,  sold,  granted,  conferred or awarded any of its Equity
Securities or any corporate debt securities which would be classified under GAAP
as long term debt on the Balance  Sheet of CWB;  (iii) CWB has not  effected any
stock  split or  adjusted,  combined,  reclassified  or  otherwise  changed  its
capitalization;  (iv) CWB has not  declared,  set aside or paid any  dividend or
other  distribution  in respect of its capital  stock,  or purchased,  redeemed,
retired,  repurchased,  or  exchanged,  or  otherwise  acquired or disposed  of,
directly or indirectly,  any of its Equity  Securities,  whether pursuant to the
terms of such Equity  Securities or otherwise,  except for the 825 shares of CWB
Common Stock held in CWB's treasury;  (v) neither CWB nor any CWB Subsidiary has
incurred any material obligation or liability  (absolute or contingent),  except
normal trade or business  obligations  or  liabilities  incurred in the ordinary
course of business,  or subjected to Lien any of its assets or properties  other
than in the ordinary course of business, (vi) neither CWB nor any CWB Subsidiary
has discharged or satisfied any material Lien or paid any material obligation or
liability  (absolute  or  contingent),  other  than in the  ordinary  course  of
business;  (vii)  neither  CWB  nor  any  CWB  Subsidiary  has  sold,  assigned,
transferred,  leased,  exchanged, or otherwise disposed of any of its properties
or assets  other  than for fair  consideration  (in the  reasonable  opinion  of
management) and in the ordinary course of business; (viii) except as required by
law,  neither  CWB  nor  any  CWB  Subsidiary  has  (A)  increased  the  rate of
compensation of, or paid any bonus to, any of its directors,  officers, or other

employees,   except  merit  or  promotion  increases  applicable  to  individual
employees  and  annual  increases  applicable  to  employees  generally,  all in
accordance  with past  practice,  or (B)  entered  into any new,  or  amended or
supplemented any existing,  employment,  management,  consulting,  compensation,
severance,  or  other  similar  contract,  (C)  entered  into,  terminated,   or
substantially  modified any of the CWB Employee Plans or (D) agreed to do any of
the foregoing; (ix) neither CWB nor any CWB Subsidiary has suffered any material
damage,  destruction,  or  loss,  whether  as the  result  of  fire,  explosion,
earthquake,  accident,  casualty,  labor  trouble,  requisition,  or  taking  of
property by any Regulatory Authority,  flood,  windstorm,  embargo, riot, act of
God or the enemy,  or other  casualty  or event,  and  whether or not covered by
insurance;  (x) other than in the ordinary  course of business  consistent  with
past  practice,  neither CWB nor any CWB  Subsidiary has canceled or compromised
any debt;  (xi) neither CWB nor any CWB Subsidiary has entered into any material
transaction,  contract or commitment outside the ordinary course of its business
and (xii) neither CWB nor any CWB  Subsidiary has made or guaranteed any loan to
any of the CWB Employee Plans.

         2.19  Registration   Statement;   Regulatory   Filings.   None  of  the
information  regarding CWB or any CWB  Subsidiary  supplied or to be supplied by
CWB for inclusion or included in (i) the registration statement to be filed with
the Securities and Exchange  Commission ("SEC") by First Midwest for the purpose
of  registering  the shares of First  Midwest  Common Stock to be exchanged  for
shares  of CWB  Common  Stock  pursuant  to the  provisions  of the  Shareholder
Agreement (the "Registration Statement") or (ii) any other documents to be filed
with any Regulatory  Authority in connection with the transactions  contemplated
hereby  will,  at the  respective  times  such  documents  are  filed  with  any
Regulatory  Authority  and,  in the  case of the  Registration  Statement,  when
provided,  and as of the Effective  Time, be false or misleading with respect to
any material fact, or omit to state any material fact necessary in order to make
the  statements  therein  not  misleading.  All  documents  which CWB or any CWB
Subsidiary is responsible for filing with any Regulatory Authority in connection
with  the  Merger  will  comply  as to form in all  material  respects  with the
provisions of applicable law.

         2.20  Registration  Obligations.  Neither CWB nor any CWB Subsidiary is
under any obligation, contingent or otherwise, to register any of its securities
under  the  Securities  Act  or  other  federal  or  state  securities  laws  or
regulations.

         2.21 Takeover Provisions Not Applicable.  This Agreement and the Merger
are not otherwise subject to any anti-takeover  protection  applicable to CWB or
any  CWB  Subsidiary.  CWB  and the CWB  Subsidiaries  are  not  subject  to any
agreement,  arrangement  or  legal  requirement  restricting  the  ownership  or
acquisition  of their  securities or imposing any "fair price" or  supermajority
director or shareholder vote requirements.

         2.22  Regulatory,  Tax and  Accounting  Matters.  CWB has not  taken or
agreed  to  take  any  action,  nor  does  it  have  knowledge  of any  fact  or
circumstance,  that would (i) materially impede or delay the consummation of the
transactions  contemplated  by this  Agreement  or the ability of the parties to
obtain any approval of any Regulatory  Authority  required for the  transactions
contemplated  by this  Agreement or to perform their  covenants  and  agreements
under  this  Agreement  or  (ii)  prevent  the  Merger  from   qualifying  as  a
reorganization within the meaning of Section 368(a)(1)(A) of the Code.

         2.23 Brokers and Finders. Neither CWB nor any CWB Subsidiary nor any of
their  respective  officers,  directors or employees  has employed any broker or
finder or incurred any  liability  for any financial  advisory  fees,  brokerage
fees,  commissions  or finder's  fees in connection  with this  Agreement or the
transactions contemplated hereby.

         2.24 Accuracy of  Information.  The statements of CWB contained in this
Agreement,  the  Schedules  hereto and any other written  document  executed and
delivered  by or on behalf of CWB  pursuant to the terms of this  Agreement  are
true and correct in all material respects.

         2.25 Community  Reinvestment Act Compliance.  Security State Bank is in
material  compliance  with  the  applicable   provisions  of  the  CRA  and  the
regulations promulgated  thereunder,  and, as of the date hereof, Security State
Bank has a CRA  rating  of  satisfactory  or better  from the FDIC.  To the Best
Knowledge  of  CWB,  there  is no  fact  or  circumstance  or  set of  facts  or
circumstances  which would  cause the CRA rating of Security  State Bank to fall
below satisfactory.

         2.26 Governmental Approvals and Other Conditions. To the Best Knowledge
of  CWB,  there  is no  reason  relating  specifically  to CWB or any of the CWB
Subsidiaries  why (a) the  approvals  that  are  required  to be  obtained  from
Regulatory   Authorities  having  approval  authority  in  connection  with  the
transactions  contemplated  hereby  should not be granted,  (b) such  regulatory
approvals  should be subject to a condition which would be unduly  burdensome to
First  Midwest  or any of its  Subsidiaries  or  would  differ  from  conditions
customarily   imposed  by  such  Regulatory   Authorities  in  orders  approving
acquisitions  of the  type  contemplated  hereby  or (c)  any of the  conditions
precedent  as specified  in Article VI hereof to the  obligations  of any of the
parties hereto to consummate the transactions  contemplated  hereby are unlikely
to be  fulfilled  within the  applicable  time  period or periods  required  for
satisfaction of such condition or conditions.

         2.27  Shareholder  Agreement.  Each shareholder of CWB has executed and
delivered the Shareholder Agreement.

                                   ARTICLE III 

           REPRESENTATIONS, WARRANTIES AND COVENANTS OF FIRST MIDWEST 

         First  Midwest  represents  and warrants to and  covenants  with CWB as
follows:

         3.1  Organization  and  Authority.   First  Midwest  and  each  of  its
Subsidiaries  (each a "First Midwest  Subsidiary"  and  collectively  the "First
Midwest  Subsidiaries")  is a  corporation,  savings  bank or other  entity duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction  of  organization,  is duly qualified to do business and is in good
standing in all jurisdictions  where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, except where the failure
to be so qualified would not have a material  adverse effect on the Condition of
First Midwest and the First Midwest Subsidiaries,  taken as a whole, and has the
corporate  power and authority to own its  properties and assets and to carry on
its business as it is now being  conducted.  First  Midwest is  registered  as a
savings and loan holding  company with the OTS. True and complete  copies of the
Certificate of  Incorporation  and bylaws of First Midwest,  as in effect on the
date of this Agreement, are set forth in Schedule 3.1.

         3.2  Capitalization of First Midwest.  The authorized  capital stock of
First Midwest consists of (i) 5,200,000 shares of First Midwest Common Stock, of
which,  as of March 31, 1996,  1,789,535  shares were issued and outstanding and

(ii) 800,000 shares of preferred stock,  issuable in series,  of which none were
issued or  outstanding  on such date.  As of March 31, 1996,  First  Midwest had
reserved  166,644  shares of First  Midwest  Common Stock for issuance  upon the
exercise of options under the First  Midwest  stock option and incentive  plans.
First  Midwest  and its  Subsidiaries  continually  evaluate  possible  business
combinations  and  may  prior  to the  Effective  Time  enter  into  one or more
agreements providing for, and may consummate,  business  combinations with other
bank or savings and loan holding  companies or other companies (or  acquisitions
of the assets thereof) for consideration that may include Equity Securities.  In
addition,  prior to the Effective Time, First Midwest and its Subsidiaries  may,
depending on market conditions and other factors,  otherwise  determine to issue
equity,    equity-linked   or   other   securities   for   financing   purposes.
Notwithstanding  the foregoing,  First Midwest will not take any action and does
not have knowledge of any fact or circumstance, that would (i) materially impede
or delay the consummation of the transactions  contemplated by this Agreement or
the ability of First  Midwest or CWB to obtain any  approval  of any  Regulatory
Authority  required for the  transactions  contemplated  by this Agreement or to
perform its covenants and  agreements  under this  Agreement or (ii) prevent the
Merger  from  qualifying  as a  reorganization  within  the  meaning  of Section
368(a)(1)(A) of the Code.  Except as set forth above,  there are no other Equity
Securities of First Midwest outstanding on March 31, 1996. All of the issued and
outstanding shares of First Midwest Common Stock are validly issued, fully paid,
and nonassessable, and have not been issued in violation of any preemptive right
of any shareholder of First Midwest. The First Midwest Common Stock to be issued
in the Merger will, upon issuance in accordance  with Article I hereof,  be duly
authorized,  validly  issued,  fully  paid and  non-assessable,  and will not be
issued in violation of any preemptive right of any shareholder of First Midwest.

         3.3      Authorization.

                  (a) First  Midwest has the  corporate  power and  authority to
         enter into this Agreement and to carry out its  obligations  hereunder.
         The  execution,  delivery and  performance  of this  Agreement by First
         Midwest  and the  consummation  by First  Midwest  of the  transactions
         contemplated   hereby  have  been  duly  authorized  by  all  requisite
         corporate  action of First  Midwest.  Subject  to the  receipt  of such
         approvals of the  Regulatory  Authorities as may be required by statute
         or  regulation,  this  Agreement is a valid and binding  obligation  of
         First  Midwest  enforceable  against it in  accordance  with its terms,
         subject as to enforcement  to bankruptcy,  insolvency and other similar
         laws  of  general  applicability  affecting  creditors'  rights  and to
         general equity principles.

                  (b) Neither the  execution,  delivery or  performance by First
         Midwest of this Agreement, nor the consummation by First Midwest of the
         transactions  contemplated hereby, nor compliance by First Midwest with
         any of the  provisions  hereof,  will (i) violate or conflict  with any
         term,  condition  or  provision of the  certificate  of  incorporation,
         charter  or bylaws of First  Midwest or any First  Midwest  Subsidiary,
         (ii) violate, conflict with or result in a breach of any provisions of,
         or  constitute  a default (or an event  which,  with notice or lapse of
         time or both,  would  constitute  a  default)  under,  or result in the
         termination of, or accelerate the performance required by, or result in
         a right of termination or acceleration of, or result in the creation of
         any Lien upon any of the material properties or assets of First Midwest
         or any First Midwest  Subsidiary under any of the terms,  conditions or
         provisions of, any material note, bond,  mortgage,  indenture,  deed of
         trust,  license,  lease,  agreement  or other  material  instrument  or
         obligation to which First Midwest or any First Midwest  Subsidiary is a

         party or by which it may be bound,  or to which  First  Midwest  or any
         First Midwest  Subsidiary or any of their  material  property or assets
         may be subject,  or (ii)  subject to  compliance  with the statutes and
         regulations  referred to in subsection  (c) of this Section 3.3, to the
         best  knowledge of the senior  officers and  directors of First Midwest
         (the "Best Knowledge of First Midwest"),  violate any judgment, ruling,
         order, writ, injunction, decree, statute, rule or regulation applicable
         to First  Midwest or any of the First  Midwest  Subsidiaries  or any of
         their respective material properties or assets.

                  (c) Other than in connection  with or in  compliance  with the
         provisions of the DGCL,  the Iowa Act, the Iowa Banking Act,  consents,
         reviews,  authorizations,  approvals or exemptions  required  under the
         BHCA,  the FDIA, the Home Owners' Loan Act and  regulations  under such
         statutes,  or any required  approvals of any Regulatory  Authority,  no
         notice to,  filing  with,  exemption  or review  by, or  authorization,
         consent or approval  of, any public body or authority or third party is
         necessary on the part of First  Midwest for the  consummation  by it of
         the transactions contemplated by this Agreement.

         3.4 First Midwest Statements.  The consolidated balance sheets of First
Midwest and the First Midwest Subsidiaries as of September 30, 1995 and 1994 and
related   consolidated   statements  of  income,   cash  flows  and  changes  in
shareholders'  equity for each of the three years in the three-year period ended
September  30,  1995,  together  with the notes  thereto,  audited by Deloitte &
Touche LLP and included in First  Midwest's  Annual  Report on Form 10-K for the
year ended  September 30, 1995 as filed with the SEC  (collectively,  the "First
Midwest Statements"), have been prepared in accordance with GAAP, present fairly
the  consolidated  financial  position of First  Midwest  and the First  Midwest
Subsidiaries at such dates,  and the  consolidated  results of operations,  cash
flows and changes in shareholders' equity of First Midwest and the First Midwest
Subsidiaries  for the periods  stated therein and are derived from the books and
records of First Midwest and the First Midwest Subsidiaries,  which are complete
and accurate in all material  respects and have been  maintained  in  accordance
with good business practices. Neither First Midwest nor any of the First Midwest
Subsidiaries has any material  contingent  liabilities that are not described in
the First Midwest Statements.

         3.5 First  Midwest  Reports.  Since  December 31,  1993,  each of First
Midwest  and the First  Midwest  Subsidiaries  has filed all  material  reports,
registrations  and statements,  together with any required  material  amendments
thereto,  that it was required to file with any Regulatory  Authority.  All such
reports and statements filed with any such Regulatory Authority are collectively
referred to herein as the "First Midwest  Reports." As of its  respective  date,
each First  Midwest  Report  complied in all material  respects  with all of the
applicable  rules  and  regulations  promulgated  by the  applicable  Regulatory
Authority  and,  in the case of First  Midwest  Reports  filed  pursuant  to the
Securities  Act or the Exchange  Act, did not contain any untrue  statement of a
material fact or omit to state a material fact required to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

         3.6 Material  Adverse Change.  Since September 30, 1995, there has been
no  material  adverse  change in the  Condition  of First  Midwest and the First
Midwest  Subsidiaries,  taken as a whole,  except  as may have  resulted  or may
result  from  changes to laws and  regulations,  GAAP or  regulatory  accounting
principles   or  changes  in  economic   conditions   applicable  to  depository
institutions generally.

         3.7  Applications.  None of the information  regarding First Midwest or
any of the First Midwest Subsidiaries included in any documents to be filed with
any Regulatory Authority in connection with the transactions contemplated hereby
will, at the respective  times when such documents are filed with any Regulatory
Authority be false or misleading  with respect to any material  fact, or omit to
state any material fact  necessary in order to make the  statements  therein not
misleading.  All  documents  which  First  Midwest  or any of the First  Midwest
Subsidiaries  is  responsible  for  filing  with  any  Regulatory  Authority  in
connection with the Merger will comply as to form in all material  respects with
the provisions of applicable law.

         3.8 Brokers and  Finders.  Neither  First  Midwest nor any of the First
Midwest  Subsidiaries  nor  any  of  their  respective  officers,  directors  or
employees  has employed any broker or finder or incurred any  liability  for any
financial  advisory fees,  brokerage fees,  commissions or finder's fees, and no
broker or finder has acted  directly or  indirectly  for First Midwest or any of
the  First  Midwest  Subsidiaries,  in  connection  with this  Agreement  or the
transactions contemplated hereby.

         3.9 Accuracy of Information.  The statements of First Midwest contained
in this  Agreement,  the  Schedules  hereto  and in any other  written  document
executed and delivered by or on behalf of First Midwest pursuant to the terms of
this Agreement are true and correct in all material respects.

         3.10 Community  Reinvestment  Act  Compliance.  First Federal,  a First
Midwest Subsidiary,  is in material compliance with the applicable provisions of
the CRA and the  regulations  promulgated  thereunder  and  currently  has a CRA
rating of  satisfactory  or better from the OTS. To the Best  Knowledge of First
Midwest, there is no fact or circumstance or set of facts or circumstances which
would cause the CRA rating of First Federal to fall below satisfactory.

         3.11 Litigation and Other  Proceedings.  Except as to matters set forth
in the First Midwest  Financial  Statements,  there is no claim,  action,  suit,
investigation or proceeding, pending or, to the Best Knowledge of First Midwest,
threatened against First Midwest or any First Midwest  Subsidiary,  nor are they
subject to any order,  judgment  or decree,  except for  matters  which,  in the
aggregate,  will not have,  or  reasonably  could  not be  expected  to have,  a
material  adverse effect on the Condition of First Midwest and the First Midwest
Subsidiaries,   taken  as  whole,  but  not  excepting  any  actions,  suits  or
proceedings  which  purport  or seek to  enjoin  or  restrain  the  transactions
contemplated  by  this  Agreement.   Without  limiting  the  generality  of  the
foregoing,  except as to matters set forth in the First Midwest  Reports,  there
are no actions, suits, or proceedings pending or, to the Best Knowledge of First
Midwest, threatened against First Midwest or any First Midwest Subsidiary or any
of their respective officers or directors by any shareholder of First Midwest or
any First Midwest  Subsidiary (or by any former  shareholder of First Midwest or
any First Midwest Subsidiary  relating to or arising out of such person's status
as a shareholder or former shareholder) or involving claims under the Securities
Act, the Exchange Act, the CRA or the fair lending laws.  Except with respect to
matters which reasonably could not be expected to have a material adverse effect
on the Condition of First Midwest and the First Midwest Subsidiaries, taken as a
whole,  since  September  30, 1995,  neither First Midwest nor any First Midwest
Subsidiary has received any  notification  or  communication  which has not been
resolved from any  Regulatory  Authority (i) asserting that First Midwest or any
First  Midwest  Subsidiary  is not in  substantial  compliance  with  any of the
statutes,  regulations or ordinances  that such Regulatory  Authority  enforces,
(ii)  threatening  to revoke  any  license,  franchise,  permit or  governmental
authorization,  including  without  limitation the status of First Federal as an

insured depository  institution under the FDIA or (iii) requiring or threatening
to require First Midwest or any of the First Midwest Subsidiaries, or indicating
that First Midwest or any of the First Midwest Subsidiaries may be required,  to
enter into a cease and desist order, agreement or memorandum of understanding or
any other agreement restricting or limiting or purporting to direct, restrict or
limit in any manner the  operations of First Midwest or any of the First Midwest
Subsidiaries,  including  without  limitation any  restriction on the payment of
dividends,  and no such cease and  desist  order,  agreement  or  memorandum  or
understanding or other agreement is currently in effect.

         3.12 Compliance with Laws.  First Midwest and each of the First Midwest
Subsidiaries have all material  permits,  licenses,  authorizations,  orders and
approvals of, and have made all material filings, applications and registrations
with,  all Regulatory  Authorities  that are required in order to permit them to
own or lease  their  properties  and  assets and to carry on their  business  as
presently  conducted,  except  where  the  failure  to have  all  such  permits,
licenses, authorizations,  orders and approvals or to have made all such filings
would not have a material  adverse  effect on the Condition of First Midwest and
the First Midwest  Subsidiaries,  taken as a whole; all such permits,  licenses,
authorizations,  orders and  approvals  are in full force and effect and, to the
Best Knowledge of First Midwest, no suspension or cancellation of any of them is
threatened and all such filings, applications and registrations are current.

         3.13 Governmental Approvals and Other Conditions. To the Best Knowledge
of First Midwest,  there is no reason relating  specifically to First Midwest or
any of the First Midwest Subsidiaries why (a) the approvals that are required to
be obtained from Regulatory  Authorities having approval authority in connection
with the  transactions  contemplated  hereby  should  not be  granted,  (b) such
regulatory  approvals  should be subject to a  condition  which  would be unduly
burdensome to First Midwest or any First Midwest Subsidiary or would differ from
conditions   customarily  imposed  by  such  Regulatory  Authorities  in  orders
approving  acquisitions  of the  type  contemplated  hereby  or  (c)  any of the
conditions precedent as specified in Article VI hereof to the obligations of any
of the parties hereto to consummate  the  transactions  contemplated  hereby are
unlikely to be fulfilled  within the applicable time period or periods  required
for satisfaction of such condition or conditions.

                                   ARTICLE IV

                CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME

         4.1  Conduct of  Businesses  Prior to the  Effective  Time.  During the
period from the date of this Agreement to the Effective Time, CWB shall,  and it
shall cause each of the CWB  Subsidiaries  to,  conduct its business only in the
ordinary and usual course  consistent  with past practices and shall,  and shall
cause each such Subsidiary to, use its best efforts to maintain and preserve its
business  organization,  employees and advantageous  business  relationships and
retain the services of its officers and key employees.

         4.2  Forbearances.  Except as  expressly  provided  herein,  during the
period from the date of this Agreement to the Effective Time,  without the prior
written consent of First Midwest,  CWB shall not and shall not permit any of the
CWB Subsidiaries to:

                  (a)  declare,   set  aside  or  pay  any  dividends  or  other
         distributions, directly or indirectly, in respect of its capital stock,
         except for any dividends to enable CWB to pay expenses relating to this
         Agreement and the transactions contemplated hereby;

                  (b) enter into or amend any  employment,  severance or similar
         agreement or arrangement  with any director or officer or employee,  or
         modify any of the CWB  Employee  Plans or  security  acquisition  loans
         relating  thereto  (or  prepay  in whole or in part any such  loans) or
         grant any salary or wage increase or  materially  increase any employee
         benefit  (including   incentive  or  bonus  payments),   except  normal
         individual bonuses and increases in compensation to employees,  in each
         case and in the  aggregate  consistent  with  past  practice  or to the
         extent required by law;

                  (c) negotiate,  authorize,  recommend,  propose or announce an
         intention to  authorize,  so  recommend  or propose,  or enter into any
         discussion  or an agreement  in principle  with respect to, any merger,
         consolidation  or business  combination  (other than the  Merger),  any
         acquisition  of  a  material  amount  of  assets  or  securities,   any
         disposition of a material amount of assets or securities or any release
         or relinquishment of any material contract rights;

                  (d) except as may be required to facilitate  the  consummation
         of  the  transactions   contemplated  herein,   propose  or  adopt  any
         amendments to its articles of incorporation or bylaws;

                  (e)  issue,  sell,  grant,  confer or award any of its  Equity
         Securities or effect any stock split or adjust, combine,  reclassify or
         otherwise  change its  capitalization  as it exists on the date of this
         Agreement;

                  (f) purchase,  redeem,  retire,  repurchase,  or exchange,  or
         otherwise  acquire or dispose of,  directly or  indirectly,  any of its
         Equity  Securities,  whether  pursuant  to the  terms  of  such  Equity
         Securities or otherwise;

                  (g) (i) change its underwriting  policies  relating to lending
         activities,  (ii) change its deposit-taking  policies, (iii) create any
         new  lending  or  deposit  products,  or (iv)  engage  in a new line of
         business;

                  (h) take any action that would (A) materially  impede or delay
         the consummation of the transactions  contemplated by this Agreement or
         the  ability  of First  Midwest or CWB to obtain  any  approval  of any
         Regulatory Authority required for the transactions contemplated by this
         Agreement  or to  perform  its  covenants  and  agreements  under  this
         Agreement or (B) prevent the Merger from qualifying as a reorganization
         within the meaning of Section 368(a)(1)(A) of the Code;

                  (i) other than in the ordinary  course of business  consistent
         with past practice,  incur any indebtedness for borrowed money, assume,
         guarantee,  endorse or otherwise as an accommodation become responsible
         or liable for the obligations of any other  individual,  corporation or
         other entity; or

                  (j) agree in writing or otherwise to take any of the foregoing
         actions or engage in any activity,  enter into any  transaction or take
         or  omit  to  take  any  other  act  which   would   make  any  of  the
         representations  and warranties in Article II of this Agreement  untrue
         or  incorrect in any  material  respect if made anew after  engaging in
         such activity,  entering into such  transaction,  or taking or omitting
         such other act.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

         5.1  Access  and  Information.  First  Midwest  and the  First  Midwest
Subsidiaries,  on the one hand, and CWB and the CWB  Subsidiaries,  on the other
hand, shall each afford to each other, and to the other's  accountants,  counsel
and other  representatives,  reasonable  access  during normal  business  hours,
during  the  period  prior  to  the  Effective  Time,  to all  their  respective
properties,  books, contracts,  commitments and records and, during such period,
each  shall  furnish  promptly  to the  other  all  information  concerning  its
business,  properties and personnel as such other party may reasonably  request.
Except as may be required by law, each party hereto  shall,  and shall cause its
advisors and representatives to, (A) hold confidential all information  obtained
in connection with any transaction contemplated hereby with respect to the other
party  which  is not  otherwise  public  knowledge,  (B)  return  all  documents
(including copies thereof) obtained hereunder from the other party to such other
party and (C) use its best efforts to cause all information obtained pursuant to
this  Agreement or in connection  with the  negotiation  of this Agreement to be
treated as confidential and not use, or knowingly permit others to use, any such
information unless such information becomes generally available to the public.

         5.2 Regulatory  Matters.  CWB and First Midwest shall cooperate and use
their respective best efforts to promptly prepare all  documentation,  to effect
all filings and to obtain all permits, consents, approvals and authorizations of
Regulatory Authorities necessary to consummate the transactions  contemplated by
this  Agreement  and, as and if directed by First  Midwest,  to consummate  such
other mergers,  consolidations  or asset transfers or other  transactions by and
among the First Midwest Subsidiaries and the CWB Subsidiaries  concurrently with
or following the Effective  Time,  provided that such actions do not  materially
impede  or delay  the  consummation  of the  transactions  contemplated  by this
Agreement.

         5.3  Current  Information.  During  the  period  from  the date of this
Agreement to the Effective  Time,  each party shall  promptly  furnish the other
with copies of all monthly and other  interim  financial  statements as the same
become  available and shall cause one or more of its designated  representatives
to confer on a regular  and  frequent  basis with  representatives  of the other
party.  Each party shall promptly  notify the other party of any material change
in its business or operations,  of any fact,  omission or condition  which makes
untrue or misleading or shows to have been untrue or misleading the  information
supplied  by  it  for  inclusion  in  the  Registration  Statement  and  of  any
governmental   complaints,   investigations   or  hearings  (or   communications
indicating that the same may be contemplated),  or the institution or the threat
of material litigation involving such party or any of its Subsidiaries and shall
keep the other party fully informed of such events.

         5.4 Agreements of Affiliates.  In the event that prior to the Effective
Time,  any person or persons who have not  executed  the  Shareholder  Agreement
becomes an "affiliate"  of CWB for purposes of Rule 145 of the  Securities  Act,
CWB shall promptly  identify such person to First Midwest and shall use its best
efforts to cause each  additional  person who is identified as an "affiliate" to
execute  a  written  agreement  as soon as  practicable,  in form and  substance
reasonably  satisfactory to First Midwest,  providing that from the date of such
agreement each such person will agree not to sell, pledge, transfer or otherwise
dispose of any shares of stock of CWB held by such person or any shares of First
Midwest  Common  Stock to be  received  by such  person in the Merger  except in
compliance  with the  applicable  provisions  of the  Securities  Act and  other
applicable laws and regulations

         5.5 Expenses. Each party hereto shall bear its own expenses incident to
preparing, entering into and carrying out this Agreement and to consummating the
Merger,  except  that  if this  Agreement  is  terminated  pursuant  to  Section
7.1(b)(ii),  then First Midwest shall pay to CWB in cash the aggregate amount of
its  documented  expenses for legal and  accounting  services  provided by third
parties in  connection  with this  Agreement and the  transactions  contemplated
hereby, provided that such amount shall not exceed $50,000.00.

         5.6  Miscellaneous  Agreements  and Consents.  Subject to the terms and
conditions  herein  provided,  each  of the  parties  hereto  agrees  to use its
respective best efforts to take, or cause to be taken,  all actions,  and to do,
or cause to be done, all things necessary,  proper or advisable under applicable
laws  and  regulations  to  consummate  and  make  effective  the   transactions
contemplated by this Agreement as expeditiously as possible,  including  without
limitation  using its respective  best efforts to lift or rescind any injunction
or  restraining  order  adversely  affecting  the  ability  of  the  parties  to
consummate the  transactions  contemplated  hereby.  Each party shall, and shall
cause each of its  respective  Subsidiaries  to, use its best  efforts to obtain
consents of Regulatory  Authorities  necessary or, in the reasonable  opinion of
First Midwest,  desirable for the consummation of the transactions  contemplated
by this Agreement.

         5.7 Press Releases. The initial press release concerning this Agreement
shall be as previously agreed upon by First Midwest and CWB. Except as CWB deems
necessary to comply with applicable law after consultation with its counsel, CWB
shall not issue any press  release  or  written  statement  for  general  public
circulation  relating to this Agreement or any transactions  contemplated hereby
without the prior written  consent of First Midwest,  which consent shall not be
unreasonably withheld or delayed.

         5.8 Takeover Provisions. CWB has taken or will take all steps necessary
to render the transactions  contemplated by this Agreement permissible under any
applicable  Iowa  takeover  or  similar  law and under any  takeover  or similar
provision in the organizational documents or bylaws of CWB or any CWB Subsidiary
restricting  the ownership,  acquisition or voting of securities or imposing any
"fair price" or supermajority director or shareholder vote requirements.

         5.9 Third Parties.  CWB and each CWB Subsidiary,  as applicable,  shall
(i) immediately  terminate all  negotiations  or discussions  with parties other
than First Midwest  concerning  any  transaction  by which CWB or any of the CWB
Subsidiaries would be acquired by or merged into any other person or any portion
of their assets or liabilities would be purchased or assumed by any person other
than First Midwest except in the ordinary course of business and consistent with
Article IV hereof and (ii) enforce the terms of all  confidentiality  agreements
with such other parties.

         5.10  Assistance  of  Third  Parties.  CWB and its  Subsidiaries  shall
cooperate with, and use all reasonable  efforts to assist,  First Midwest in (i)
gaining access to all of CWB's and CWB Subsidiaries'  third-party  vendors,  and
the landlords of each property  leased by them,  promptly after the date of this
Agreement,  and (ii) obtaining the cooperation of such third-parties in a smooth
transition  in  accordance  with  First  Midwest's  timetable  at or  after  the
Effective  Time.  CWB and the CWB  Subsidiaries  shall also, at First  Midwest's
reasonable  request,  give notice of termination of third-party  contracts to be
effective at or after the Effective  Time, and take such  reasonable  additional
action  as may be  necessary  or  reasonably  appropriate  to  ensure  that such
contracts are terminated at the date requested.

         5.11 Insurance  Policy Claims.  CWB shall inform First Midwest no later
than the Effective Time of any material unfiled,  insurance claims of CWB or any
CWB Subsidiary which it has knowledge and for which it believes coverage exists.

         5.12 Updated  Schedules.  If,  subsequent to the date of this Agreement
and prior to the  Effective  Time,  any events  occur which  renders  untrue any
representation  or  warranty  of CWB or First  Midwest  made at the date of this
Agreement  or  renders  incomplete  or  inaccurate  any  Schedule  or  Schedules
delivered  upon  execution of this  Agreement or Updated  Schedules  (as defined
below) delivered later (a "Trigger  Event"),  CWB or First Midwest,  as the case
may be, shall promptly deliver to the other a supplemental  writing (an "Updated
Schedule")  which  shall  contain  a  detailed  description  of any and all such
matters.  An Updated  Schedule  shall be delivered by within four  business days
after CWB or First  Midwest  learns of the  Trigger  Event but in no event later
than before the Closing.  The submission of an Updated  Schedule and the matters
therein  contained  shall not  constitute  a  default  or breach by CWB or First
Midwest  of any of its  respective  representations  and  warranties  under this
Agreement,  provided  that this  Section  5.12 is not  intended to permit CWB or
First  Midwest  to alter or amend its  representations  and  warranties  as made
herein  (including  the  Schedules)  as of the date of this  Agreement,  and any
Updated  Schedule shall not cure the  inaccuracy  thereof as of the date of this
Agreement for any purpose under this Agreement.

                                   ARTICLE VI

                                   CONDITIONS

         6.1  Conditions to Each Party's  Obligation  to Effect the Merger.  The
respective  obligations  of each party to effect the Merger  shall be subject to
the  fulfillment  or waiver at or prior to the  Effective  Time of the following
conditions:

                  (a)  All  requisite   approvals  of  this  Agreement  and  the
         transactions  contemplated  hereby  shall have been  received  from the
         Regulatory  Authorities  having approval  authority with respect to the
         Merger and all applicable waiting periods shall have expired.

                  (b)  Neither  First  Midwest  nor CWB shall be  subject to any
         order,  decree  or  injunction  of  a  court  or  agency  of  competent
         jurisdiction which enjoins or prohibits the consummation of the Merger.

                  (c) A tax opinion  addressed to both First  Midwest and CWB by
         counsel to First  Midwest  shall have been obtained with respect to the
         Merger,   based  on   customary   reliance  and  subject  to  customary
         qualifications, to the effect that for federal income tax purposes, the
         Merger will qualify as a "reorganization" under Section 368(a)(i)(A) of
         the Code.

         6.2  Conditions  to  Obligations  of  CWB to  Effect  the  Merger.  The
obligations  of CWB to effect the Merger shall be subject to the  fulfillment or
waiver at or prior to the Effective Time of the following additional conditions:

                  (a)  Representations  and Warranties.  The representations and
         warranties of First Midwest set forth in Article III of this  Agreement
         shall be true and correct as of the date of this  Agreement  and in all
         material respects as of the Effective Time (as though made on and as of
         the Effective Time), except (i) to the extent such  representations and
         warranties are by their express  provisions made as of a specified date
         and  (ii)  for  the  effect  of   transactions   contemplated  by  this

         Agreement),  and CWB shall have received a certificate of the president
         and chief executive officer of First Midwest to that effect,  dated the
         Closing Date.

                  (b)  Performance  of  Obligations.  First  Midwest  shall have
         performed  in all  material  respects  all  obligations  required to be
         performed by it under this Agreement  prior to the Effective  Time, and
         CWB shall  have  received  a  certificate  of the  president  and chief
         executive  officer of First  Midwest to that effect,  dated the Closing
         Date.

                  (c) Opinion of Counsel.  CWB shall have received an opinion of
         Silver,  Freedman & Taff, L.L.P.,  counsel to First Midwest,  dated the
         Closing Date, substantially in the form attached as Exhibit C, provided
         that, in the event that First Midwest exercises its right under Section
         1.6 of this  Agreement,  the form and  substance  of such form of legal
         opinion  shall be  appropriately  modified,  subject to the  reasonable
         satisfaction  of  CWB's  counsel  as  listed  in  Section  8.2 of  this
         Agreement.

         6.3  Conditions to  Obligations  of First Midwest to Effect the Merger.
The  obligations  of First  Midwest to effect the Merger shall be subject to the
fulfillment  or  waiver  at or  prior  to the  Effective  Time of the  following
additional conditions:

                  (a)  Representations  and Warranties.  The representations and
         warranties  of CWB set forth in Article II of this  Agreement  shall be
         true  and  correct  as of the date of this  Agreement  and,  except  as
         updated  pursuant to Section 5.1, as of the  Effective  Time (as though
         made on and as of the  Effective  Time,  except (i) to the extent  such
         representations  and warranties are by their express provisions made as
         of a specific date and (ii) for the effect of transactions contemplated
         by this Agreement,  and First Midwest shall have received a certificate
         of the  president  and chief  executive  officer of CWB to that effect,
         dated the Closing Date.

                  (b)  Performance of  Obligations.  CWB shall have performed in
         all material  respects all  obligations  required to be performed by it
         under this  Agreement  prior to the Effective  Time,  and First Midwest
         shall have received a certificate of the president and chief  executive
         officer of CWB to that effect, dated the Closing Date.

                  (c) Opinion of Counsel.  First  Midwest shall have received an
         opinion from Davis,  Brown,  Koehn,  Shors & Roberts,  P.C., counsel to
         CWB,  dated the Closing  Date,  substantially  in the form  attached as
         Exhibit D, provided that in the event that First Midwest  exercises its
         right  to  restructure  the  Merger  pursuant  to  Section  1.6 of this
         Agreement,  such form of legal opinion shall be appropriately modified,
         subject to the reasonable satisfaction of First Midwest's counsel.

                  (d) Waivers;  Shareholder  Agreement.  To the extent that this
         Agreement and the CWB Shareholders'  approval of this Agreement and the
         Merger (i) would give rise to rights of CWB under  Section  3.14 of its
         by-laws,  CWB shall have waived its rights  thereunder,  and (ii) would
         give rise to rights under that certain agreement entitled  "SHAREHOLDER
         AGREEMENT  CENTRAL WEST  BANCORPORATION,"  dated January 19, 1993,  all
         parties to such  agreement  shall have waived their rights  thereunder.
         The  shareholders of CWB shall have executed the Shareholder  Agreement
         and delivered an executed  original of such  Agreement to First Midwest

         as of the date hereof, together with evidence,  reasonably satisfactory
         to First  Midwest,  of the  authority of each person who executes  such
         Agreement  on  behalf  of a  shareholder  of CWB which is not a natural
         person (a "Corporate  Shareholder")  to execute such document on behalf
         of such Corporate Shareholder. First Midwest shall have received copies
         of the  resolutions  of  the  board  of  directors  of  CWB  and of the
         Shareholders  of CWB approving  this  Agreement and the Merger,  with a
         certification,  dated the Closing Date,  signed by the Secretary of CWB
         and stating that such  resolutions  have not been modified or rescinded
         since they were adopted.

                  (e) No Unduly Burdensome Condition or Commercial Banking Power
         Restriction.  No regulatory  approval  obtained in connection  with the
         transactions  contemplated  herein shall (i) contain a condition  which
         First  Midwest  reasonably  determines  is unduly  burdensome  to First
         Midwest or any First Midwest Subsidiary (including Security State Bank)
         or (ii) limit or restrict the powers of Security State Bank.

                  (f)  Agreements  of  Affiliates.  If CWB  has  identified  any
         additional  "affiliates"  pursuant  to Section  5.4 of this  Agreement,
         First  Midwest  shall  have  received  from such  persons  the  written
         affiliates' agreements described in Section 5.4.

                  (g) Significant Restriction on Activities. The consummation of
         the  Merger  will not  result  in any  significant  restriction  on the
         activities of, or significant  limitation  upon the conduct of business
         by, any existing  First  Midwest  Subsidiary,  other than a significant
         restriction  or  limitation  that can be cured by having  another First
         Midwest  Subsidiary  perform such  activity or conduct such business in
         the manner theretofore performed or conducted.

                  (h) Capital of Security  State Bank. At the Closing Date,  (i)
         the capital, surplus and undivided profits of Security State Bank, when
         reduced  by the  aggregate  amount  of  net  after-tax  earnings  to be
         distributed  to  shareholders  of CWB  pursuant  to Section 1.3 hereof,
         shall be at least  $2,400,000.00,  and (ii) on a pro forma  basis after
         such  distribution of such aggregate net after-tax  earnings,  Security
         State Bank  shall be "well  capitalized"  as  defined in 12 C.F.R.  ss.
         325.103(b)(1).

                  (i) No  Dissenters.  No holder of CWB Common  Stock shall be a
         Dissenter as defined in Iowa Code ss. 490.1301.3.

                                   ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

         7.1 Termination.  This Agreement may be terminated at any time prior to
the Effective Time, whether before or after any requisite shareholder approval:

                  (a) by mutual  consent  of the  Boards of  Directors  of First
         Midwest and CWB;

                  (b) by the Board of Directors of First Midwest or the Board of
         Directors  of CWB (i) at any time after March 31,  1997,  if the Merger
         shall  not  theretofore  have  been  consummated   (provided  that  the
         terminating party is not then in material breach of any representation,
         warranty,  covenant or other agreement contained herein) or (ii) if any
         Regulatory Authority denies approval of the Merger.

                  (c) by the Board of Directors of First Midwest in the event of
         a material breach by CWB of any representation,  warranty,  covenant or
         other agreement contained in this Agreement,  which breach is not cured
         within 30 days after written notice thereof to CWB by First Midwest.

                  (d) by the  Board  of  Directors  of  CWB  in the  event  of a
         material  breach  by First  Midwest  of any  representation,  warranty,
         covenant or other agreement  contained in this Agreement,  which breach
         is not cured within 30 days after  written  notice  thereof is given to
         First Midwest by CWB;

         7.2  Effect  of  Termination.  In the  event  of  termination  of  this
Agreement as provided in Sections 7.1(a) or 7.1(b) hereof,  this Agreement shall
forthwith  become void and there shall be no liability  under this  Agreement on
the part of First  Midwest  or CWB or their  respective  officers  or  directors
except as set forth in the second sentence of Section 5.1 and in Section 5.5. In
the event of a  termination  of this  Agreement  pursuant  to Section  7.1(c) or
7.1(d),  based upon a material breach by a party, the non-breaching  party shall
be entitled  to such relief and  remedies  against  the  breaching  party as are
available  at  law  or  in  equity,  including  but  not  limited  to,  specific
performance,  it being  agreed by the parties that the remedies of a party for a
material breach by the other party are inadequate at law.

         7.3 Amendment.  This Agreement and the Schedules  hereto may be amended
by the  parties  hereto,  by action  taken by or on  behalf of their  respective
Boards of Directors,  at any time before or after  approval of this Agreement by
the  shareholders  of  CWB;  provided,  however,  that,  after  approval  by the
shareholders of CWB, no such  modification  shall (i) alter or change the amount
or kind of consideration

to be received by holders of CWB Common  Stock as provided in this  Agreement or
(ii)  adversely  affect  the tax  treatment  to CWB  shareholders  of the Merger
Consideration, without securing the approval of the CWB shareholders by the vote
required  under the Iowa  Act.  First  Midwest  may  make,  and  CWB's  Board of
Directors  shall approve and its duly authorized  representative  shall execute,
such  amendments as are permitted by Section 1.6 hereof.  This Agreement may not
be amended  except by an instrument in writing signed on behalf of each of First
Midwest and CWB.

         7.4  Severability.   Any  term,  provision,   covenant  or  restriction
contained  in this  Agreement  held  by a court  or a  Regulatory  Authority  of
competent   jurisdiction  to  be  invalid,  void  or  unenforceable,   shall  be
ineffective to the extent of such invalidity, voidness or unenforceability,  but
neither the remaining terms, provisions,  covenants or restrictions contained in
this  Agreement  nor  the  validity  or  enforceability  thereof  in  any  other
jurisdictions  shall be  affected  or  impaired  thereby.  Any term,  provision,
covenant or  restriction  contained in this  Agreement that is so found to be so
broad  as to be  unenforceable  shall  be  interpreted  to  be  as  broad  as is
enforceable.

         7.5 Waiver.  Any term,  condition or provision of this Agreement may be
waived in writing at any time by the Board of  Directors  of the party which is,
or whose shareholders are, entitled to the benefits thereof.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

         8.1  Non-Survival of  Representations,  Warranties and  Agreements.  No
investigation  by the parties hereto made  heretofore or hereafter  shall affect
the representations and warranties of the parties which are contained herein and
each such  representation  and warranty  shall survive such  investigation.  All
representations,  warranties,  covenants and agreements in this Agreement of the
parties or in any  instrument  delivered by a party pursuant to or in connection
with this Agreement  shall not survive at the Effective Time or the  termination
of this  Agreement  in  accordance  with its  terms,  except  (i) in the case of
consummation  of  the  Merger,  the  obligations  of  First  Midwest  which  are
specifically  contemplated  to be  performed  after  the  Effective  Time  shall
survive,  (ii) in the case of the termination of this Agreement,  the agreements
contained  in or  referred  to in the  second  sentence  of  Section  5.1 and in
Sections 5.5 and 7.2 shall survive such termination,  and (iii)  representations
and warranties contained in the Shareholder Agreement shall survive the Merger.

         8.2 Notices. All notices and other communications hereunder shall be in
writing  and  shall be  deemed  to be duly  received  (i) on the  date  given if
delivered  personally  or (ii) upon  confirmation  of  receipt  if by  facsimile
transmission  or (iii) on the date received if mailed by registered or certified
mail (return  receipt  requested),  in each case to the parties at the following
addresses  (or at such other  address for a party as shall be  specified by like
notice):

         (i)      if to First Midwest:

                           First Midwest Financial, Inc.
                           Fifth at Erie
                           Storm Lake, Iowa 50588
                           Attention:       James S. Haahr, Chairman
                                            of the Board, President and Chief
                                             Executive Officer

                  Copies to:

                           Steven P. Myers
                           Vice Chairman of the Board and Senior Vice President
                           First Midwest Financial, Inc.
                           Fifth at Erie
                           Storm Lake, Iowa 50588

                           and

                           Jeffrey M. Werthan, P.C.
                           Silver, Freedman & Taff, L.L.P.
                           1100 New York Avenue, N.W.
                           Washington, D.C.  20005

         (ii)     if to CWB:

                           Central West Bancorporation
                           615 Division Street
                           Stuart, Iowa  50250

                           Attention:       William M. Wilson
                                            Chairman of the Board

                  Copy to:

                           Robert A. Gamble, Esq.
                           Davis, Brown, Koehn, Shors & Roberts, P.C.
                           666 Walnut Street, Suite 2500
                           Des Moines, Iowa  50309

         8.3 Miscellaneous.  This Agreement (including the Schedules referred to
herein) (i)  constitutes  the entire  agreement and  supersedes  all other prior
agreements and understandings,  both written and oral, among the parties, or any
of  them,   with  respect  to  the  subject   matter   hereof,   including   any
confidentiality  agreement between the parties hereto,  (ii) except as expressly
provided  herein,  is not  intended to confer upon any person not a party hereto
any rights or remedies hereunder, (iii) shall be binding upon and shall inure to
the benefit of the parties  hereto and their  respective  successors and assigns
and (iv) shall be  governed  in all  respects  by the laws of the State of Iowa,
except as otherwise  specifically  provided herein or required by federal law or
regulation.  The table of contents and headings  contained in this Agreement are

for  reference  purposes  only and shall not  affect in any way the  meaning  or
interpretation of this Agreement. This Agreement may be executed in counterparts
which together shall constitute a single agreement.

         First Midwest and CWB have caused this Agreement to be duly executed by
their authorized representatives on the date first above written.

CENTRAL WEST BANCORPORATION


By:                                               
        William M. Wilson, 
        Chairman of the Board                                     

        ATTESTED:                                 




By:                                               
        Claude F. Havick                          
        Secretary:                                
                                                  


FIRST MIDWEST FINANCIAL, INC.
                                                            
By:
        James S. Haahr, Chairman of the Board,  
        President and Chief Executive Officer    
                                                            
        ATTESTED:                                
                                                            
                                                            
                                                            
By: 
        Steven P. Myers                          
        Vice Chairman of the Board               
        and Senior Vice President            
                                                            






                                                                  August 9, 1996


Board of Directors
First Midwest Financial, Inc.
Fifth at Erie
Storm Lake, Iowa  50588

Members of the Board:

         Reference  is made to the  Registration  Statement  on  Form  S-3  (the
"Registration  Statement"),  under the Securities Act of 1933, as amended, being
filed by First Midwest Financial,  Inc., a Delaware corporation (the "Company"),
with the Securities and Exchange  Commission,  relating to the  registration  of
190,000 shares of the Company's  common stock,  par value of $.01 per share (the
"Shares"),  to be offered and sold by the Selling Shareholders  described in the
Registration Statement.

         In this connection,  we have reviewed originals or copies, certified or
otherwise  identified  to our  satisfaction,  of the  Company's  Certificate  of
Incorporation,  Bylaws,  resolutions  of its Board of  Directors  and such other
documents  and  corporate  records  as we deem  appropriate  for the  purpose of
rendering this opinion. In such examinations, we have assumed the genuineness of
all signatures,  the authenticity of all documents submitted to us as originals,
the conformity to original documents of all copies submitted to us as certified,
conformed or photostatic  copies,  and the authenticity of all originals of such
copies.

         Based upon the  foregoing,  it is our opinion  that the Shares will be,
when  and  if  issued,   duly  authorized,   validly  issued,   fully  paid  and
non-assessable.

                                                               Very truly yours,

                                             /s/ Silver, Freedman & Taff, L.L.P.

                                                 SILVER, FREEDMAN & TAFF, L.L.P.



                                                  August 9, 1996






Members of the Board:

         We hereby  consent to the inclusion of our opinion as Exhibit 5 of this
Registration  Statement  and the  reference  to our firm in the  Prospectus.  In
giving this consent,  we do not admit that we are within the category of persons
whose  consent is required  under  Section 7 of the  Securities  Act of 1933, as
amended,  or the rules and regulations of the Securities and Exchange Commission
thereunder.





                         SILVER, FREEDMAN & TAFF, L.L.P.

                       /s/ Silver, Freedman & Taff, L.L.P.





                         Independent Auditors' Consent 


         We consent  to the  incorporation  by  reference  in this  Registration
Statement  of First  Midwest  Financial,  Inc.  on Form S-3 of our report  dated
November 17, 1995,  appearing in Part II of Item 7 in the Annual  Report on Form
10-KSB of First Midwest  Financial,  Inc. for the year ended September 30, 1995,
and to reference to us under the heading  "Experts" in the Prospectus,  which is
part of the Registration Statement.


/s/ Deloitte & Touche LLP

Omaha, Nebraska
August 9, 1996