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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

        [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                  AMENDED
                    For the Quarter Ended September 30, 1998

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For    the     transition     period from______to_____ .

Commission File No. 0-16880

--------------------------------------------------------------------------------



                            BNL FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)

          IOWA                                            42-1239454
(State of incorporation)                    (I.R.S. Employer Identification No.)

       2100 W. William Cannon, Suite L
                Austin, Texas                              78745
 (Address of principal executive offices)               (Zip Code)



Registrant's telephone number, including area code:  (512) 383-0220

--------------------------------------------------------------------------------


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                Yes __X__ No____

As of September 30, 1998, the Registrant had 23,311,944  shares of Common Stock,
no par value, outstanding.

Transitional Small Business Disclosure Format  (check one)  Yes___ No__X__


<PAGE>










                       BNL FINANCIAL CORPORATION AND SUBSIDIARY
                             CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>


                                          September 30, 1998   December 31,
                                              (Unaudited)        1997
                                          ------------------ ---------------
<S>                                       <C>             <C>
ASSETS
Investments:
   Investments available for sale, at
        fair value .......................   $10,021,817     $11,765,947
   Equity securities, common stock .......         2,838          20,438
   Cash and cash investments .............     2,449,442         714,539
                                             -----------     -----------
        Total Investments                     12,474,097      12,500,924
Accrued investment income ................       182,549         225,042
Furniture and equipment ..................       227,895         261,312
Deferred policy acquisition costs ........       413,081         433,695
Receivable from reinsurer ................        26,677          26,677
Premiums due and unpaid...................       488,858         355,793
Other assets .............................       312,687         344,410
                                             -----------      ----------
       TOTAL ASSETS                          $14,125,844     $14,147,853
                                             ===========      ==========
     LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Liability for future policy benefits .     $1,404,608      $1,352,555
   Policy claims payable.................      1,940,000       1,368,630
   Premium deposit fund .................        122,221         127,697
   Annuity deposits .....................      3,260,519       3,336,323
   Deferred annuity profits .............        617,872         615,737
   Supplementary contracts without
       life contingencies ...............        135,611          56,031
   Advanced and unallocated premium......        379,276         328,814 
   Commissions payable...................        239,661         184,677
   Other liabilities ....................        429,583         364,429
                                              ----------      ----------
       Total liabilities                       8,529,351       7,734,893
                                              ----------      ----------
SHAREHOLDERS' EQUITY:
   Common stock .........................        466,239         466,239
   Additional paid-in capital ...........     14,308,230      14,308,230
   Accumulated other comprehensive 
        income...........................        268,558         170,530
   Treasury stock .......................        (64,105)        (64,105)
   Accumulated deficit ..................     (9,382,429)     (8,467,934)
                                              ----------     -----------
     Total shareholders' equity                5,596,493       6,412,960
                                              ----------      ----------
TOTAL LIABILITIES & SHAREHOLDER'S EQUITY     $14,125,844     $14,147,853
                                              ==========      ==========
<FN>
       (See Notes to Consolidated Financial Statements)
</FN>
</TABLE>
                                       -2-

<PAGE>

                      BNL FINANCIAL CORPORATION AND SUBSIDIARY
                       CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                         Three Months Ended                 Nine Months Ended
                                                           September 30,                      September 30,    
                                                    ---------------------------        -----------------------------  
                                                         1998           1997                1998            1997     
                                                    -------------   -----------        -------------     -----------  
<S>                                                   <C>            <C>               <C>              <C>

REVENUES:
   Premium income ..................................  $5,649,343     $3,042,004        $ 15,041,756    $  7,864,273  
   Investment income ...............................     204,120        213,311             621,118         652,818  
   Realized gains on investments ...................       7,411         33,843              61,929          75,754  
                                                    -------------   ------------        -----------     -----------  
    Total income ...................................   5,860,874      3,289,158          15,724,803       8,592,845  
                                                    -------------   ------------        -----------     -----------  

EXPENSES:
   Policy benefits and other insurance costs .......   5,276,681      2,679,266          13,501,308       6,826,907  
   Increase in liability for future policy benefits.      11,670          7,325              52,053          11,466  
   Amortization of deferred policy acquisition costs       6,012          8,089              20,614          32,930  
   Operating expenses ..............................     878,365        663,104           2,570,398       2,022,335  
   Taxes, other than on income .....................     172,836         94,471             494,925         294,111  
                                                    -------------   ------------        -----------     -----------  

    Total expenses .................................   6,345,563      3,452,255          16,639,297       9,187,749  
                                                    -------------   ------------        -----------     -----------  

    OPERATING LOSS .................................   ($484,690)     ($163,097)           (914,495)       (594,904) 

Provision for income taxes .........................           0              0                   0               0  
                                                    -------------   ------------        -----------     -----------  
    NET LOSS .......................................   ($484,690)     ($163,097)          ($914,495)      ($594,904) 
                                                    =============   ============        ===========     =========== 
Other comprehensive income, net of tax:
   Unrealized gains on securities:
      Unrealized holding gains arising during 
         period.....................................    $149,416        $84,066            $159,957        $128,134 
   Reclassification adjustment for gains
         included in net income.....................      (7,411)       (33,843)            (61,929)        (75,754)
                                                    -------------   ------------        -----------     -----------
Other comprehensive income (loss)...................     142,005         50,223              98,028          52,380
                                                    -------------   ------------        -----------     -----------

     COMPREHENSIVE LOSS ............................   ($342,685)     ($112,874)          ($816,467)      ($542,524)
                                                    =============   ============        ===========     ===========

   Net loss per share ..............................      ($0.02)        ($0.01)             ($0.04)         ($0.03) 
                                                    =============   ============        ===========     ===========  

    Weighted average number
    of shares ......................................   23,311,944     23,311,944         23,311,944      23,311,944  
                                                    =============   ============        ===========     =========== 


<FN>

                  (See Notes to Consolidated Financial Statements)
</FN>                  
</TABLE>
                                      -3-
<PAGE>



<TABLE>

                 BNL FINANCIAL CORPORATION AND SUBSIDIARY
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                              (Unaudited)
<CAPTION>

                                                                   Nine Months
                                                               Ended          Ended
                                                              09/30/98       09/30/97
                                                              --------       --------
<S>                                                         <C>            <C>
Cash flows from operating activities:
Net loss ...................................................($  914,495)   ($  594,904)
Adjustments to reconcile  net loss to net cash  provided by (used in)  operating
  activities:
 Realized (gain) loss on investments .......................    (61,929)       (79,833)
 Realized (gain) loss on sale of furniture and equipment....          0          4,079
 Depreciation ..............................................     77,227         70,130
 Amortization of deferred acquisition
    costs and state licenses acquired ......................     22,945         32,930
 Accretion of bond discount ................................     (2,631)        (2,711)

Change in assets and liabilities:
 Decrease in accrued investment income .....................     42,493         38,165 
 (Increase) decrease in receivable from reinsurer...........   (133,065)         5,161  
 Decrease in premium deposit fund ..........................     (5,476)       (41,658)
 Decrease in annuity deposits and deferred profits..........    (73,669)       (64,757)
 Increase in liability for future policy
    benefits ...............................................     52,053         17,966 
 Increase in policy claims payable..........................    571,370        328,500
 Increase in advanced and unallocated premium...............     50,462        166,932 
 Increase in commissions payable............................     54,984         67,681
 Other net .................................................     96,005        (70,590)                                            
                                                              ----------      ---------
     Total Adjustments .....................................    690,770        471,995
                                                              ----------      ---------
     Total cash provided by (used in)
         operating activities ..............................   (223,725)      (122,909)
                                                              ----------      ---------
Cash flows from investing activities:
  Sales of debt securities .................................  8,735,728      2,744,592
  Sales of equity securities ...............................          0              0 
  Sales of furniture and equipment .........................          0            201
  Purchase of equity securities ............................          0              0
  Purchase of furniture and equipment ......................    (45,270)       (68,812)
  Purchase of fixed maturity securities .................... (6,811,410)    (2,416,459)
                                                              ---------      ---------
      Net cash provided by (used in) investing activities     1,879,048)       259,522 
                                                              ---------      ---------
Cash flows from financing activities:
  Payments on supplementary contracts ......................     79,579        (10,787)
                                                               ---------     ----------
      Net cash provided by (used in) financing activities        79,579        (10,787)
                                                              ---------     ----------
Net increase (decrease) in cash and cash equivalents .......  1,734,902        125,826

Cash and cash equivalents, beginning of year ............       714,539        702,769
                                                              ---------      ---------
Cash and cash equivalents, end of period ................   $ 2,449,441    $   828,595
                                                              =========      =========
<FN>
        (See notes to Consolidated Financial Statements)
</FN>
</TABLE>
                                       -4-
<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


The financial  statements  included herein reflect all adjustments which are, in
the opinion of management,  necessary to present a fair statement of the interim
results on a basis  consistent  with the prior period.  The statements have been
prepared to conform to the  requirements  of Form 10-QSB and do not  necessarily
include all disclosures  required by generally  accepted  accounting  principles
(GAAP).  The reader should refer to the  Company's  Annual Report on Form 10-KSB
for the year ended December 31, 1997, previously filed with the Commission,  for
financial  statements  for  the  year  ended  December  31,  1997,  prepared  in
accordance  with GAAP.  Net income  (loss) per share of common stock is based on
the weighted average number of outstanding common shares.

The Company  adopted  SFAS # 130  "Reporting  Comprehensive  Income"  during the
second  quarter of 1998.  SFAS #130  requires  the Company to report the year to
date change in unrealized  gains or losses on its  investments as  comprehensive
income on the Statement of Income.  Unrealized  gains or losses  reported in the
equity  section  of the  balance  sheet  have been  renamed  "accumulated  other
comprehensive income."

                                      -5-

<PAGE>


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

Liquidity and Capital Resources
At September  30, 1998,  the Company had liquid  assets of  $2,449,492  in cash,
money market savings  accounts and short-term  certificates  of deposit,  all of
which can readily be converted to cash.

The major  components of operating cash flows are premium,  annuity deposits and
investment  income.  In the  first  three  quarters  of  1998,  BNLAC  collected
$15,264,449 of premiums and annuity deposits (gross before  reinsurance) and the
Company had consolidated investment income of $621,118.

The  Company's  investments  are  primarily in U.S.  Government  and  Government
Agencies and other  investment  grade bonds which have been marked to market and
classified as available for sale.

The  Company's  insurance  operations  are  conducted  through its wholly  owned
subsidiary,  Brokers National Life Assurance  Company (BNLAC).  At September 30,
1998, BNLAC had statutory  capital and surplus of $4,506,368.  BNLAC is required
to maintain  minimum  levels of statutory  capital and surplus as a condition to
conducting business in the states in which it is licensed.  Each of these states
had different rules regarding the minimum level of capital and surplus  required
in that  state.  The state of  Arkansas,  which is the legal  domicile of BNLAC,
requires a minimum of $2,300,000 in capital and surplus.

Results of Operations
Premium income for the first three quarters of 1998 was $15,041,756  compared to
$7,864,273 for the same period in 1997. The increase of $7,177,483,  or 91%, was
due to an increase in insurance premiums written during the first three quarters
of 1998.

Net  investment  income was  $621,118 for the period  ended  September  30, 1998
compared  to  $652,818  for the same  period in 1997.  The  decrease  was due to
interest  received on GIC bonds in 1997 but not received in 1998 and a reduction
in the bond  inventory due to  government  agency bonds that were called and the
proceeds invested in short term investments with a lower yield.

Realized  gains on  investments  were  $61,929 in the first nine  months of 1998
compared to $75,754 for the same period in 1997.  The decrease in realized gains
was due to a  decrease  in bonds  sold in the  normal  course  of the  Company's
investment activity.

In the first three quarters of 1998,  policy  benefits and other insurance costs
were  $13,501,308  compared  to  $6,826,907  for the same  period  in 1997.  The
increase  was due to an increase in claims and  commissions  resulting  from the
increase in insurance business in force. In addition, the claims ratio on dental
insurance  was 3.2  percentage  points  higher at  September  30, 1998 this year
compared  to the same  period last year.  The  increase  in dental  costs in the
dental  insurance  industry  that became  apparent in mid-1997 is  continuing to
impact the company's claims ratio. The company is addressing the increase in the
claims  ratio by  increasing  rates and  modifying  benefits  and other  actions
designed to reduce the claims ratio.

For the period ended  September  30, 1998,  the increase in liability for future
policy  benefits was $52,053  compared to $11,466 in 1997.  The increase in 1998
was due to an increase in unearned premium reserves.

Amortization of deferred policy  acquisition  costs were $20,614 and $32,930 for
the first three quarters of 1998 and 1997 respectively. Amortization of deferred
policy  acquisition  costs  may  vary in the  future  in  relation  to new  life
insurance sales and lapses or surrenders of existing policies.

Operating  expenses  increased to $2,570,398 in the first three quarters of 1998
compared to  $2,022,335  for the same period in 1997.  The increase in operating
expenses was primarily due to an increase in data  processing  expense,  payroll
and claims administrative  expense - which are all attributable to the increased
volume of  insurance  in force.  An increase in legal  expense of  approximately
$63,000 relating to legal proceedings  described in Part II, Item 1, was another
primary factor in the increase in operating expense.

Taxes,  other than on income,  fees and assessments  were $494,925 for the first
three  quarters of 1998  compared to $294,111  for the same period in 1997.  The
increase  was  primarily  due to an increase in premium  taxes on the  increased
premiums collected.

The net loss from  operations  for the first three quarters of 1998 was $914,495
compared to $594,904 for the same period in 1997.  The increase is primarily due
to the increase in the claims ratio described above.

The Company  adopted  SFAS # 130  "Reporting  Comprehensive  Income"  during the
second  quarter of 1998.  SFAS #130  requires  the Company to report the year to
date change in unrealized  gains or losses on its  investments as  comprehensive
income on the Statement of Income.  Unrealized  gains or losses  reported in the
equity  section  of the  balance  sheet  have been  renamed  "accumulated  other
comprehensive   income."   During  the  first  three   quarters  of  1998  other
comprehensive  income was  $98,028  compared  to $52,380  for the same period in
1997.  The  increase in 1998 was due to an  increase in the market  value of the
bond portfolio since December 31, 1997.


                                      -6-

<PAGE>

The "Year 2000" Issue


The "Year 2000" (or "Y2K") Issue is the  inability of  computers  and  computing
technology to recognize  correctly the Year 2000 date change.  The problem arose
because many software  programs were written using two digits for the year (e.g.
98) rather than four digits (e.g. 1998). These systems automatically assume that
the first two  digits  are "1" and "9",  which  will  cause  these  programs  to
misinterpret dates occurring after December 31, 1999.

The Company has 3 primary sources of computer data. They are:
1.   VIP  Systems,  Inc.  (VIP) -  Independent  provider of  mainframe  computer
     support  for all of the  Company's  data  except  dental  insurance  claims
     payments.
2.   ASO North  America,  Inc. (ASO) - Third Party  Administrator  (TPA) for the
     Company's dental insurance claims payments and claims records.
3.   In-house  programs  which  provide a majority of the  Company's  management
     reports.

The Y2K compliance status of each of these three systems is as follows:

      VIP

      All VIP  application  software  programs were  originally  written with an
      8-digit  date  field,  including 4 digits for the year  designation.  As a
      result,  VIP has represented to the Company that its application  software
      is Y2K compliant.

      VIP is in the process of converting its existing  application  software to
      PC  based  hardware  using  Windows  NT  operating  system  (which  is Y2K
      compliant). The conversion process includes testing for Y2K compliance and
      is  scheduled  for  completion  by mid-1999.  On August 1, 1999,  VIP will
      decide which system (the current

       mainframe  system or the new PC system)  will be in use at year end 1999.
      BNL will perform final Y2K compliance verification tests at that time.

      VIP's  mainframe  computer  used  an  operating  system  that  was not Y2K
      compliant.  VIP recently  acquired and implemented  all necessary  program
      "patches"  required to make its mainframe  operating system Y2K compliant.
      On  January  12,  1999,  VIP  informed  the  Company  that tests have been
      performed without problems and that the mainframe and operating system are
      Y2K compliant.


      ASO

      In December  1998,  ASO completed the first of a two step  conversion to a
      Y2K compliant  computer  system.  The second step will be a system upgrade
      and is scheduled for  completion by July 1, 1999.  ASO has  represented to
      BNL that the upgrade is fully Y2K  compliant.  BNL will perform  final Y2K
      compliance  verification tests when the upgrade has been installed. In the
      event the verification  tests fail, the Company's backup alternative is to
      retain a new TPA that is Y2K compliant.



      In-House Programs

      The Company's Internal Systems  Management (ISM) department  implemented a
      year 2000  strategy in January  1998 to evaluate all hardware and in-house
      program  software to determine  their Y2K  readiness.  The ISM  department
      identified the following hardware and software problems:
1.   Computer  system board BIOS's would not understand  year 2000 date. 2. Some
     computers were still using operating systems that were not Y2K compliant.
3.   Internal network software was not Y2K compliant.
4.   Internal databases had some Y2K issues.

The ISM  department  evaluated  these problems and by January 1999 had taken the
following actions to correct the problems  identified: 

1.   Replaced  all computer  system  boards with boards Y2K approved by National
     Software Testing Laboratories.
2.   Upgraded all computers to a Y2K compliant operating system.
3.   Converted the internal network to new network software with all appropriate
     upgrades.
4.   Upgraded the internal database with millennium edition software.

Full  scale  testing  has been  performed  in a year  2000  environment  with no
problems  being  found.  As of  February  1,1999 the  Company's  ISM  department
believes that in-house programs are Y2K compliant.

The cost incurred to date by the Company to correct the Y2K problem has not been
material.  The Company does not expect to incur any additional material costs to
become  compliant  nor does it  foresee  a need for any  substantial  amount  of
in-house staff training.

                                      -7-
<PAGE>

                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.
On April  30,  1996,  Myra Jo  Pearson  and Paul  Pearson  filed a class  action
complaint in the Circuit Court of Pulaski County, Arkansas (3rd Division) naming
the Company,  BNL Equity  Corporation  and several  officers of the Company,  as
defendants.  The  plaintiffs  have  alleged  that the  defendants  violated  the
Arkansas  Securities  Act in  several  respects  in  connection  with the public
offerings of securities made by United Arkansas  Corporation  ("UAC") (now known
as BNL Equity  Corporation)  during the period from  January,  1989,  until May,
1992. On August 27, 1998, the Court entered a ruling certifying the lawsuit as a
class action, with the class of plaintiffs including all Arkansas purchasers who
participated in the public offerings of securities by UAC during the stated time
frame.  The Company  believes that serious  errors were made in  certifying  the
class,  and  the  Company  is  in  the  process  of  filing  an  appeal  of  the
certification order.

The Company has  retained  the firm of Friday,  Eldredge & Clark,  Little  Rock,
Arkansas,  to handle the defense of the action on behalf of all defendants.  The
company  believes the action is frivolous and that  substantial  evidence exists
which directly refutes the allegations.  The Company is vigorously defending the
matter and is in the process of seeking sanctions against appropriate parties.

Item 2.  Changes in Securities.
None of the  rights  of the  holders  of any of the  Company's  securities  were
materially  modified during the period covered by this report.  In addition,  no
class of  securities  of the  Company was issued or  modified  which  materially
limited or qualified any class of its registered securities.

Item 3. Defaults Upon Senior Securities.
During the period  covered by this report  there was no material  default in the
payment of any principal, interest, sinking or purchase fund installment, or any
other material default not cured within 30 days with respect to any indebtedness
of the Company.

Item 4.  Submission of Matters to a Vote of Security Holders.
No items were submitted to a vote of security holders during the current period.

Item 5.  Other Information.
None

                                      -8-


<PAGE>

<TABLE>
<CAPTION>

 Item 6. Exhibits and Reports on Form 10-QSB
  No.                            Description                                      Page or Method of Filing
---------    ----------------------------------------------------    ---------------------------------------------------
<S>          <C>                                                     <C> 

   3.1        Articles  of  Incorporation   of  BNL  Financial        Incorporated  by reference to Exhibit 3.1 of the 
             Corporation  (formerly  United Iowa Corporation),       Company's  Annual  Report on Form 10-K for the dated
             January 27, 1984 and Amendment to Articles              period ending  December 31, 1993.
             of Incorporation of BNL Financial Corporation,
             dated November 13, 1987.

  3.2        Bylaws of BNL Financial Corporation                     Incorporated by reference to Exhibit 3.2 of the
                                                                     Company's Registration Statement No. 33-70318

  4.1        Instruments defining the rights of security             Incorporated by reference to Exhibit 4 of the
             holders, including indentures                           Company's Registration Statement No. 2-94538 and
                                                                     Exhibits 3.5 and 4 of Post-Effective Amendment
                                                                     No. 3 thereto.

  4.2        Articles  of  Incorporation   of  BNL  Financial        Incorporated  by reference to Exhibit 3.1 of the
             Corporation  (formerly  United Iowa Corporation),       Company's  Annual  Report on Form 10-K for the 
             dated January 27, 1984 and Amendment to Articles        period ending  December 31, 1993.
             of  Incorporation on BNL Financial Corporation,
             dated November 13, 1987.

  10.1       Form of Agreement between Commonwealth Industries       Filed with 10-QSB for the period ended September
             Corporation, American Investors Corporation and         30, 1994.
             Wayne E. Ahart regarding rights to purchase shares
             of the Company.

  10.2       Agreement dated December 21, 1990 between               Filed with 10-QSB for the period ended March 31,
             Registrant and C. Donald Byrd granting Registrant       1996.
             right of first refusal as to future transfers of
             Mr. Byrd's shares of the Company's common stock.


  10.3       Subscription Agreement dated March 2, 1994              Incorporated by reference to S-4 Registration
                                                                     Statement No. 33-70318

  10.4       Stock Escrow Agreement dated February 28, 1994          Incorporated by reference to S-4 Registration
                                                                     Statement No. 33-70318

  10.5       Merger Agreement between United Arkansas                Incorporated by reference to S-4 Registration
             Corporation and USSA Acquisition Inc. dated             Statement No. 33-70318
             February 11, 1994

  10.6       Merger Agreement between Iowa Life Assurance            Filed with 10-QSB for the period ended March 31,
             Company and United Arkansas Life Assurance Company      1994
             dated March  2, 1994

  10.7       Office lease dated March 24, 1994, between Brokers      Filed with 10-QSB for the period ended September
             National Life Assurance Company (formerly Iowa          30, 1994
             Life Assurance Company) and Enclave KOW, Ltd., for
             premises in Austin, Texas.


  10.8       Amendment Number Two to the Quota Share                 Filed with Form 8-K dated January 18, 1995
             Reinsurance Agreement dated 8/10/91 between
             Registrant and UniLife Insurance Co. of San
             Antonio, Texas

  10.9       Stock Bonus Agreement between BNL Financial             Filed with 10-QSB for the period ended June
             Corporation and C. Donald Bryd and Kenneth Tobey        30, 1997

   11        Statement re computation of per share earnings          Not applicable

   12        Statements re computation of ratios                     Not applicable

   22        BNL Brokerage Corporation, Brokers National
             Life Assurance Company and BNL Equity 
             Corporation, all wholly owned by Registrant       

</TABLE>
  
(b) Reports on Form 8-K
On September 25, 1998, the Company filed a form 8-K that disclosed the Court had
entered a ruling on August 27, 1998, certifying the lawsuit mentioned in Part 2,
Item 1 as a class action  suit.  The class of  plaintiffs  includes all Arkansas
purchasers who  participated in the public offerings of securities by UAC during
the stated time frame.  The company  believes  that serious  errors were made in
certifying  the class,  and the Company is in the process of filing an appeal of
the certification order.





                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                      BNL FINANCIAL CORPORATION
                                  (Registrant)



Date: November 14, 1998               /s/ Wayne E. Ahart
                                      --------------------------------   
                    By: Wayne E. Ahart, Chairman of the Board
                                          (Chief Executive Officer)


Date: November 14, 1998              /s/ Barry N. Shamas
                                     ---------------------------------   
                                     By: Barry N. Shamas, Executive V.P.
                                         (Chief Financial Officer)


                                    -9-