<PAGE>
                                
                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           Form 10-QSB
                                
     [X]  Quarterly Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934
         For the quarterly period ended March 31, 1999.
                                
                               or
                                
   [  ]  Transition Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934
          For the transition period from _____ to _____
                                
                Commission file number 001-13819
                                
                 MegaBank Financial Corporation
(Exact name of small business issuer as specified in its charter)
                                
       Colorado                          84-0949755
(State or other jurisdiction of    (I.R.S. Employer
incorporation or organization)     Identification Number)

   8100 E. Arapahoe Road, Suite 214, Englewood, Colorado 80112
    (Address of principal executive offices)       (Zip code)

                                
                         (303) 740-2265
                   (Issuer's telephone number)
                                
Check  mark whether the issuer (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.
[X] Yes [  ]No


At April 15, 1999, there were 7,769,709 shares of the issuer's
common stock, no par value, outstanding.

Transitional Small Business Disclosure Format
     [  ] Yes  [X] No


<PAGE>
                 MEGABANK FINANCIAL CORPORATION
                                
                        TABLE OF CONTENTS


PART I.   FINANCIAL INFORMATION                   PAGE NO.

          Item 1.   Financial Statements              3

          Item 2.   Management's Discussion and
                    Analysis of Financial Condition
                    And Results of Operations         8

PART II.  OTHER INFORMATION

          Item 2.   Changes in Securities and
                    Use of Proceeds                  14

          Item 6.   Exhibits and Reports on Form 8-K 14

          SIGNATURES                                 15



                               -2-
<PAGE>
                 PART I.  FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1.  Financial Statements
         MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                      (Dollars in thousands)
                                          March 31,   December 31,
                                            1999         1998
                                            ----         ----
                                               (unaudited)
<S>                                   <C>          <C>  
     ASSETS                                                        
Cash and due from banks                   $ 11,048    $ 10,326
Interest-bearing deposits                       97         128
Federal funds sold                           1,175       5,625
                                            ------      ------
Cash and cash equivalents                   12,320      16,079
                                                              
Investment securities available for sale    15,776      15,677
                                                              
Loans                                      205,940     189,602
   Less allowance for loan losses           (2,747)     (2,610)
                                           -------     -------                             
                                           203,193     186,992
                                                              
Federal Home Loan Bank stock, at cost          491         482
Bank premises, leasehold improvements and                     
   equipment, net                            9,462       8,846
Accrued interest receivable                  1,335       1,104
Deferred tax asset                             721         718
Preferred securities issuance costs, net       721         729
Other                                          311         192
                                           -------     -------
Total assets                              $244,330    $230,819
					  ========    ========                                                               
          
     LIABILITIES AND SHAREHOLDERS' EQUITY                          
Liabilities                                                   
Deposits                                                      
Demand, non-interest bearing              $ 52,239    $ 54,093
Demand, interest bearing                    74,576      72,444
Savings                                      7,259       6,271
Time                                        66,337      57,071
                                           -------     ------- 
Total deposits                             200,411     189,879
                                                              
Federal Home Loan Bank borrowings            1,000           -
Securities sold under agreement to
   repurchase                                  421         443 
Income taxes payable                           654          71
Accrued interest payable                       564         434
Other                                          573         601
                                           -------     -------
Total liabilities                          203,623     191,428

Company obligated manditorily redeemable               
  preferred securities of subsidiary trust   
  holding solely Junior Subordinated
  Debentures                                12,000      12,000    
                                                              
Shareholders' equity                                          
 Preferred stock; no par value, 10,000,000        
  shares authorized, none issued                 -           -
 Common stock; no par value, 50,000,000      
  shares authorized, 7,607,340
  shares issues and outstanding             13,974      13,974
Retained earnings                           14,591      13,383
Accumulated other comprehensive income         142          34
                                           -------     -------
Total shareholders' equity                  28,707      27,391
Total liabilities and shareholders'       
  equity                                  $244,330    $230,819
                                          ========    ========                                  
</TABLE>
The accompanying notes are an integral part of these statements.
                              -3-
<PAGE>
<TABLE>
<CAPTION>
         MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
     Three months ended March 31, 1999 and 1998 (Unaudited)
          (Dollars in thousands, except per share data)
                                
                                     Three months ended March 31,
                                          1999         1998
                                          ----         ----
                                             (Unaudited)
<S>                                 <C>         <C>  
Interest income                                           
   Loans, including fees                 $5,540       $3,902
   Taxable investment securities             86           72
   Nontaxable investment securities         176          187
   Funds sold                                 7          106
   Other interest                            43           35
                                          -----        ----- 
        Total interest income             5,852        4,302
                                                            
Interest expense               
   Deposits                               1,542        1,265
   Borrowed funds                            62           73
   Trust preferred securities               288          149
   Notes payable                              -           19
                                          -----        -----
        Total interest expense            1,892        1,506
                                          -----        -----
        Net interest income               3,960        2,796
   Provision for loan losses                150           90
                                          -----        -----
        Net interest income after              
         provision for loan losses        3,810        2,706
                                                            
Other income                                             
   Service charges on deposit accounts       42           28
   Gain on sale of investment securities      -           25
   Other income                             243          168
					  -----        ----- 
        Total other income                  285          221
                                                     
Other expenses                                           
   Salaries and employee benefits         1,282          896
   Occupancy expenses of premises           328          185
   Furniture and equipment expense          125          115
   Other expenses                           513          699
                                          -----        -----
        Total other expenses              2,248        1,895
                                          -----        -----
        Income before income taxes        1,847        1,032
Income tax expense                          639          349
                                          -----        ----- 
   Net income                            $1,208       $  683
                                                            
Other comprehensive income, net of tax
  Unrealized gains (losses) on invest-                            
   ment securities available for sale       108           (3)
                                          -----        -----  
  Other comprehensive income (loss)         108           (3)
                                          -----        ----- 
   Comprehensive income                  $1,316       $  680
                                          =====        =====
Income per share                                         
   Basic earnings per share              $  .16       $  .11
                                          =====        =====
   Common shares outstanding          7,607,340    6,407,340
                                      =========    =========       
</TABLE>
The accompanying notes are an integral part of these statements.
                                  -4-
<PAGE>
<TABLE>
<CAPTION>
         MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
     Three months ended March 31, 1999 and 1998 (unaudited)
                      (Dollars in thousands)
                                
                                           Three months ended March 31,
                                                   1999     1998
                                                   ----     ----
                                                  (Unaudited)
<S>                                          <C>       <C>
Cash flows from operating activities                    
 Net income                                      $1,208    $  683
 Adjustments to reconcile net income to net              
  cash provided by operating activities
   Provision for loan losses                        150        90
   Depreciation and amortization                    140       110
   Gain on sale of investment securities                   
    available for sale                              -         (25)
   Deferred income taxes                             (3)       (1)
 Changes in deferrals and accruals                       
   Interest receivable                             (231)      (95)
   Interest payable                                 130       162
   Income taxes payable                             583       158
   Other, net                                      (119)      (63)
                                                 ------    ------
     Net cash provided by operating activities    1,858     1,019
                                                        
Cash flows from investing activities                    
 Net (increase) decrease in federal funds sold    4,450   (24,370)
 Net decrease in interest-bearing deposits           31        97
 Purchase of securities available for sale            -      (150)
 Proceeds from maturities of investment                  
  securities available for sale                       -         -
 Proceeds from sales of securities available             
  for sale                                            -       175
 Net increase in loans                          (16,351)   (3,535)
 Expenditures for bank premises and equipment      (748)     (117)
                                                 ------    ------
     Net cash used in investing activities      (12,618)  (27,900)
                                         
                                                        
Cash flows from financing activities                    
 Net increase in deposits                        10,532    21,041
 Net increase (decrease) in advances from                
  Federal Home Loan Bank                          1,000    (1,423)
 Net increase (decrease) in repurchase                   
  agreements                                        (22)    1,025
 Proceeds from trust preferred securities             -    12,000
 Debt issuance costs                                  -      (496)
 Principal payments on notes payable                  -    (2,000)
 Other                                              (28)     (167)
                                                 ------    ------
     Net cash provided by financing activities   11,482    29,980
                                                 ------    ------                                                        
Net increase in cash and due from banks             722     3,099
Cash and due from banks at beginning of period   10,326     9,910
                                                 ------    ------
Cash and due from banks at end of period        $11,048   $13,009
                                                 ======    ======                                                        
Supplemental disclosures of cash flow                   
information
 Cash paid year to date for:                             
   Interest expense                             $ 1,762   $ 1,324
Income taxes                                         17       179
</TABLE>
                                
 The accompanying notes are an integral part of these statements.
                                 -5-
<PAGE>
         MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        Three month period ended March 31, 1999 and 1998
                           (Unaudited)


1.   Unaudited Financial Statements

     The accompanying unaudited interim financial statements have
been prepared in accordance with the instructions for Form 10-QSB
and  do not include all of the information and footnotes required
by   generally   accepted  accounting  principles  for   complete
financial  statements.  All adjustments that are, in the  opinion
of  management, of a normal recurring nature necessary to a  fair
statement of results for the interim periods presented have  been
made.  The results of operations for such interim periods are not
necessarily indicative of results of operations for a full  year.
The statements should be read in conjunction with the summary  of
significant   accounting  policies  and  notes  to   consolidated
financial  statements included in the Form 10-KSB  for  the  year
ended December 31, 1998.

     In  the  opinion  of management, the accompanying  financial
statements  contain all adjustments necessary to  present  fairly
the  financial position of the Company at March 31, 1999, and the
results of operations and cash flows for the quarters ended March
31, 1999 and 1998.

     The  consolidated financial statements include the  accounts
of   the   Company's  respective  subsidiaries.    All   material
intercompany transactions have been eliminated.


2.   Nature of Operations

     MegaBank  Financial Corporation (the "Company") was  founded
in 1984 with the objective of building a banking franchise in the
Denver,  Colorado metropolitan area that would  deliver  a  broad
based  package  of  products  and  services  to  businesses   and
individuals.   The  Company's banking subsidiary,  MegaBank  (the
"Bank"),  was  organized in 1983.  Since  the  advent  of  branch
banking in Colorado in 1993, the Bank has opened seven additional
banking locations throughout the Denver area for a total of eight
locations,  with  two  more branches  are  in  the  planning  and
construction phases.  The eighth branch is scheduled to open  the
2nd quarter of 1999.


3.   Trust Preferred Securities

     On  February  9,  1998  the  Company  and  its  wholly-owned
subsidiary,  MB Capital I (the "Trust"), completed  the  sale  of
$12.0  million of 8.75% Cumulative Trust Preferred Securities  of
the  Trust.  Net proceeds were approximately $11.2 million  after
payment  of sales commissions and other offering costs, and  were
invested  in Junior Subordinated Debentures maturing February  9,
2028,  issued by the Company to the Trust in connection with  the
public  offering.  Interest on the Junior Subordinated Debentures
will  be  paid  by  the Company to the Trust, will  be  the  sole
revenues  of  the Trust and the source for distributions  by  the
Trust to the holders of the Trust Preferred Securities.
                             -6-
<PAGE>
     For financial reporting purposes, the Trust is treated as  a
subsidiary of the Company, and accordingly, the accounts  of  the
Trust  are  included in the consolidated financial statements  of
the  Company.  The Trust Preferred Securities are presented as  a
separate  line item in the consolidated balance sheet  under  the
caption   "Company  obligated  mandatorily  redeemable  preferred
securities of subsidiary trust holding solely Junior Subordinated
Debentures."   For  financial  reporting  purposes,  the  Company
records  distributions payable on the Trust Preferred  Securities
as interest expense in the consolidated statements of income.

     The  Junior Subordinated Debentures are unsecured  and  rank
junior and are subordinate to all senior debt of the Company  and
constitute  a  full and unconditional guarantee on a subordinated
basis  by  the Company of the obligations of the Trust under  the
Preferred Securities.
                             -7-     
<PAGE>     
Item  2.        Management's Discussion and Analysis of Financial
Condition and Results of Operations

Overview

     It  is  presumed  that  readers of these  interim  financial
statements   have  read  or  have  access  to  the   Management's
Discussion  and  Analysis of Financial Condition and  Results  of
Operations for the year ended December 31, 1998, included in  the
Company's  Form  10-KSB,  SEC File No.  1-13819.   The  following
discussion of the financial condition and results of operation of
the  Company  should  be read in conjunction with  the  unaudited
consolidated   financial  statements  of  the  Company   included
elsewhere herein.

       Information  herein  contains  forward-looking  statements
within  the  meaning of the Private Securities Litigation  Reform
Act  of  1995,  which can be identified by words such  as  "may,"
"will,"   "expect,"  "anticipate,"  "believe,"   "estimate,"   or
"continue,"  or  comparable words.  In addition,  all  statements
other than statements of historical facts that address activities
that the Company expects or anticipates will or may occur in  the
future are forward-looking statements.  Readers are encouraged to
read the SEC reports of the Company, particularly its Form 10-KSB
for  the  Year Ended December 31, 1998, for meaningful cautionary
language  disclosing why actual results may vary materially  from
those anticipated by management.

Results of Operations

     In  the  quarter ended March 31, 1999, the Company generated
interest income of $5.9 million compared to $4.3 million for  the
same  period last year.  The increase was due to higher  balances
of interest earning assets.  Interest expense for the same period
was  $1.9  million compared to $1.5 million.  Additional interest
bearing deposits contributed to the increase in interest expense,
as well as the additional interest expense of the Trust Preferred
Securities  offering  discussed elsewhere herein.   Other  income
generated  in  the  first quarter of 1999 increased  slightly  to
approximately  $285,000  as compared to $221,000  for  the  first
quarter of 1998. This increase is attributable to an increase  in
service and bank charges.  Other expenses in the first quarter of
1999  were $2.2 million as compared to $1.9 million for the  same
period last year.  An increase in other expenses is primarily due
to  additional employee and occupancy expenses required by branch
expansion and internal growth.

     In  the  quarter ended March 31, 1999, the Company generated
net  income  after  provisions for income  tax  of  $1.2  million
compared to approximately $683,000 for the same period last year.
This  improvement is attributable to the overall  growth  of  the
Bank.   Total  assets  of the Company were  approximately  $244.3
million   and  $189.4  million  at  March  31,  1999  and   1998,
respectively.

     With  a  portion of the net proceeds obtained in the  public
offering  of Trust Preferred Securities, the Company infused  the
Bank  with $6 million in capital of which $2 million was targeted
for  additional branch expansion.  In November 1998, the  Company
completed  an  initial public offering of 1.2 million  shares  of
common stock, with resulting net proceeds of approximately  $12.0
million.  Approximately $5.0 million of these proceeds were  also
infused  into the Bank.  This additional capital has allowed  the
Bank to increase its legal lending limits.  The increased lending
limit   is  designed  to  further  the  Bank's  internal   growth
objectives.   This  growth is evidenced by the  amount  of  loans
generated  and the growth in assets during the first  quarter  of
1999.
                              -8-
<PAGE>
     Net  increases in loans were $16.3 million and $3.5  million
during  the quarters ended March 31, 1999 and 1998, respectively.
It  is  important  to note that this was a net increase.   Actual
origination of new loans was approximately $109.6 million  during
the first quarter of 1999 as compared to $60.6 million during the
same period in 1998.

     Net  increases in deposits were $10.5 million for the  first
quarter  of 1999 compared to a net increase of $21.0 million  for
the same time period in 1998.  Although the net increase is lower
than  the previous year, total deposits were approximately $200.4
million at March 31, 1999 compared to $162.9 million at March 31,
1998.

     Analysis  of  Allowance for Loan Losses.  The allowance  for
loan  losses represents management's recognition of the risks  of
extending  credit and its evaluation of the quality of  the  loan
portfolio.   The  allowance is maintained at a  level  considered
adequate  to  provide  for  anticipated  loan  losses  based   on
management's  assessment of various factors  affecting  the  loan
portfolio.   The allowance is increased by additional charges  to
operating  income  and  reduced by  loans  charged  off,  net  of
recoveries.  Management added an additional $150,000 in loan loss
reserves for the first quarter of 1999.

     The following table sets forth information regarding changes
in  the  allowance for loan losses of the Company for the  period
indicated.
<TABLE>
<CAPTION>
                              Three Months Ended March 31, 1999
                                   (Dollars in thousands)
<S>                                     <C>
Average total loans                       $198,536
                                          ========
Total loans at end of period              $205,940
                                          ========
Allowance at beginning of period          $  2,610

Charge-offs:
     Construction                                -
     Commercial and industrial                 (13)
     Installment                                 -
     Mortgage                                    -
     Other                                       -
                                          -------- 
          Total charge-offs                    (13)
Recoveries:
     Construction                                -
     Commercial and industrial                   -
     Installment                                 -
     Mortgage                                    -
     Other                                       -
                                          -------- 
          Total recoveries                       -
                                          -------- 
Net (charge-offs) recoveries                   (13)
Provisions for loan losses                     150

Allowance at end of period               $   2,747
                                          ========
Ratio of net (charge-offs) recoveries
     to average loans                         0.01%
Allowance to total loans at end of period     1.33%
Allowance to nonperforming loans             79.62%
</TABLE>
                               -9-
<PAGE> 
     The   Company's   lending  personnel  are  responsible   for
continuous  monitoring of the quality of  loan  portfolios.   The
loan  portfolios are also monitored and examined by  the  Company
loan  review personnel.  The allowance for loan losses  is  based
primarily on management's estimates of possible loan losses  from
the   foregoing  processes  and  historical  experience.    These
estimates involve ongoing judgments and may be adjusted over time
depending   on   economic  conditions  and  changing   historical
experience.

     State  and federal regulatory agencies, as an integral  part
of  their examination process, review the Company's loans and its
allowance  for  loan  losses.   Management  believes   that   the
Company's  allowance  for  loan  losses  is  adequate  to   cover
anticipated  losses.   There can be no assurance,  however,  that
management  will not determine a need to increase  the  allowance
for  loan losses or that regulators, when reviewing the Company's
loan  portfolios in the future, will not require the  Company  to
increase  such allowance, either of which could adversely  affect
the  Company's earnings.  Further, there can be no assurance that
the  Company's  actual loan losses will not exceed its  allowance
for loan losses.

     Nonperforming loans.  Nonperforming loans consist  of  loans
90   days   or  more  delinquent  and  still  accruing  interest,
nonaccrual loans and restructured loans.  When, in the opinion of
management, a reasonable doubt exists as to the collectibility of
interest,  regardless of the delinquency status of  a  loan,  the
accrual  of interest income is discontinued and interest  accrued
during  the current year is reversed through a charge to  current
year's  earnings.   While  the  loan  is  on  nonaccrual  status,
interest income is recognized only upon receipt and then only if,
in the judgment of management, there is no reasonable doubt as to
the  collectibility of the principal balance.  Loans 90  days  or
more delinquent generally are changed to nonaccrual status unless
the   loan  is  in  the  process  of  collection  and  management
determines that full collection of principal and accrued interest
is probable.

     Restructured   loans   are  those  for  which   concessions,
including  the reduction of interest rates below a rate otherwise
available  to  the  borrower  or  the  deferral  of  interest  or
principal,  have  been  granted due to  the  borrower's  weakened
financial  condition.  Interest on restructured loans is  accrued
at  the restructured rates when it is anticipated that no loss of
original  principal will occur.  The Company  did  not  have  any
restructured loans as of March 31, 1999.

     The  following  table sets forth information concerning  the
nonperforming assets of the Company at the dates indicated:
<TABLE>
<CAPTION>
                                        March 31,     December 31,
                                          1999            1998
                                          ----            ----
<S>                                    <C>            <C>
Nonaccrual loans                         $3,450          $3,388
Other loans 90 days past due                  -               -
Other real estate                             -               -
                                         ------          ------ 
Total nonperforming loans                $3,450          $3,388
                                         ======          ======
Ratio of nonaccrual and other loans 
  90 days past due to total loans          1.70%           1.81%
Ratio of nonperforming assets to 
  total loans plus other real estate       1.70            1.81
Ratio of nonperforming assets to 
  total assets                             1.41            1.47
</TABLE>
                                -10-
<PAGE>
     Of  the  amount  of nonaccrual loans as of March  31,  1999,
approximately $1.4 million is the Bank's portion of five  related
loans totaling approximately $4.0 million, which are subject to a
Chapter  11 bankruptcy proceeding.  The loans were originated  by
the  Bank  and were made at various times during 1994, 1995,  and
1997  in  connection with a real estate development on which  the
developer had constructed a residential building assembly  plant.
The  loans  are secured by real estate, certificates of  deposit,
and two personal guarantees from the owners of the developer,  as
well as a guarantee by a related limited partnership.

     In  addition  to the above, the Bank has a loan position  of
approximately  $2.0  million of two loans totaling  $2.8  million
that  was placed on nonaccrual status just prior to December  31,
1998.   During the quarter ended March 31, 1999, one loan to  the
same  borrower in the amount of $178,000 was paid off.  The loans
were  originated  as acquisition and development  loans  and  are
secured  by  real  estate,  and  a  personal  residence.    Legal
proceedings  have been suspended temporarily.  The  borrower  has
contracts  on various parcels of land and the Bank is  continuing
to work with the borrower to pay off the remaining loan.

     Management believes that the Company is adequately protected
on  these  loans.  Management is not aware of any  adverse  trend
relating to the Company's loan portfolio.

     As  of  March 31, 1999, there was no significant balance  of
loans excluded from nonperforming loans set forth above.  Nor was
there  known  information  about  possible  credit  problems   of
borrowers  causes  management to have serious doubts  as  to  the
ability  of  such  borrowers  to comply  with  the  present  loan
repayment  terms  and  which may result in  such  loans  becoming
nonperforming.


Liquidity and Capital Resources

     The  Company has two basic sources of liquidity.  The  first
source  is  its  retail  deposit market  served  by  its  banking
offices.  The Company has increased core deposits through  growth
of  its  existing  deposits and through  promotions  directed  at
existing  and potential customers.  Deposits increased to  $200.4
million at March 31, 1999 compared to $162.9 million at March 31,
1998.

     The second source of the Company's liquidity is Federal Home
Loan  Bank  ("FHLB") advances and Company lines of credit.   FHLB
advances are used regularly in the cash management function  both
to fund a portion of the lending portfolio and to manage the day-
to-day   fluctuations  in  liquidity  resulting  from  needs   of
depositors  and  borrowers.  At March 31, 1999, the  Company  had
available  $20.0  million of unused borrowing capacity  from  the
FHLB  and  $15.5  million from its other  lenders.   The  Company
anticipates that it will continue to rely primarily upon customer
deposits,   FHLB   borrowings,  other   lending   sources,   loan
repayments,   loan  sales  and  retained  earnings   to   provide
liquidity,  and will use funds provided primarily to  make  loans
and to purchase investment securities.
                                -11-
<PAGE>
     The Office of Thrift Supervision capital regulations require
savings  associations  to meet three capital  standards:  a  1.5%
tangible  capital standard, a 4% leverage ratio (or core  capital
ratio) and an 8% risk-based capital standard.
<TABLE>
<CAPTION>
                                         At March 31, 1999
                                                    Minimum
Ratio                                    Actual     Required
<S>                                   <C>         <C>
Tangible capital                        12.39%      1.50%
Core (Tier 1) capital                   12.39%      4.00%
Risk-Based capital                      14.76%      8.00%
</TABLE>

Year 2000 Considerations

     As  the  year 2000 approaches, a significant business  issue
has  emerged regarding existing application software programs and
operating systems and their ability to accommodate the date value
for  the year 2000.  Many existing software application products,
including products used by the Bank, its suppliers and customers,
were  designed to accommodate only a two-digit date  value  which
represents  the year.  For example, information relating  to  the
year 1996 is stored in the system as "96."  As a result, the year
1999  (i.e.,  "99") could be the maximum date  value  that  these
systems  will  be  able to process accurately.   In  response  to
concerns  about  this issue, regulatory agencies  have  begun  to
monitor  financial  institutions  and  their  holding  companies'
readiness  for  the year 2000 as part of the regular  examination
process.
  
     The  Company  presently believes that with modifications  to
existing  software and conversion to new software, the year  2000
issue  will  not  pose significant operational problems  for  the
Company's    computer    systems    or    business    operations.
Implementation  of the Company's plan to test in-house  and  out-
sourced  software  has been underway since the first  quarter  of
1998.    Testing  of  applications  considered  to  be   "mission
critical"  was  completed  in  the  first  quarter  of  1999  and
modifications  and  changes necessary  have  been  completed  and
tested.  Compliance for all systems is expected by management  to
be  completed by the third quarter of 1999.  Management currently
estimates  that  such total compliance will not exceed  $150,000.
Costs incurred through March 31, 1999 were approximately $26,400.
Compliance  audits performed to date have been  positive  and  no
specific items of improvement were noted.  The team for the  plan
is  responsible for the implementation of the plan and reports to
the  Company's  Board of Directors on a monthly basis  until  the
plan is completed.
  
     However, if the modifications and conversions are not  made,
or  are  not completed timely, the year 2000 issue could  have  a
material  adverse  impact  on  the  operations  of  the  Company.
Because  of  the  factors  discussed  below,  management   cannot
estimate with any reasonable degree of certainty the magnitude of
lost  revenues should management's reasonable worst case scenario
develop in which the Company would need to use an outside  vendor
to  become  year  2000 compliant and noncompliant customers  were
unable to repay their loans.
  
     Even  though  the Company's "mission critical" systems  have
tested  year 2000 compliant, the Company has in place a  business
resumption contingency plan in the event of an unforeseen problem
in  its computer systems.  This plan details actions to be  taken
in  the  unlikely  event of problems in the change  over  to  the
millennium.   This  process of validation is in  accordance  with
Federal Financial Institutions Examination Council guidelines.
  
     The Bank has sent direct mail to its customers regarding the
year  2000  issue  and  the  need  for  readiness,  pursuant   to
guidelines of the banking industry regulators. Management intends
to  continue  to solicit customer response on this  matter.   The
Bank  has also instituted a policy requiring a loan applicant  to
sign  a year 2000 acknowledgement certificate at closing as  part
of a loan package.  Failure of the Company's customers to prepare
for  year  2000  compatibility could have a  significant  adverse
effect   of   customers'  operations  and   profitability,   thus
inhibiting  their ability to repay loans and adversely  affecting
the  Company's operations.  The Company does not have  sufficient
information accumulated from customers to enable the  Company  to
assess  the degree to which customers' operations are susceptible
to  potential  problems  relating to  the  year  2000  issue  or,
further, to quantify the potential lost revenue to the Company in
this case.
                              -12-
<PAGE>  
Other Events

     The  Company  formed a wholly owned real estate  development
subsidiary,  Empire/MB Land Company on February 24,  1999.   This
subsidiary  intends to purchase real estate for  development  and
sale  to  homebuilders.  Management believes that  this  activity
should  supplement  the  Company's revenues  since  many  smaller
homebuilders do not have the resources to develop sites for  home
building.   Management believes that the subsidiary can  generate
revenues  through the sale of individual or bulk  lots  to  these
homebuilders.   Also,  management  believes  that  the  Bank  can
provide construction lending in connection with the sales of lots
to  homebuilders, thereby providing additional loans to the Bank.
The subsidiary is not yet active.

      The Company also formed a wholly owned subsidiary, MB Title
Company,  on  February 24, 1999.  The subsidiary was formed  with
the  intention  of  engaging in the real estate  title  business,
which  management  believes will complement its banking  services
and proposed real estate investment and development activities.

Subsequent Events

     On April 5, 1999, the Company merged Empire Title and Escrow
Corporation  and MB Title Company, a newly formed,  wholly  owned
subsidiaries  of  the  Company.  The consideration  paid  to  the
stockholders of Empire Title and Escrow Corporation consisted  of
the  Company's  common  stock and cash.  MB  Title  Company  then
changed   its   name  to  Empire  Title  and  Escrow  Corporation
("Empire").

     Empire provides a full range of title insurance products and
services to the real estate community including homebuilders  and
real  estate firms.  The current officers and management team  of
Empire  will continue to direct Empire's operations.   Management
expects  that  this  merger  will provide  Empire  the  resources
necessary  to accelerate its expansion plans while continuing  to
provide  services  to the Colorado real estate  community.   This
merger  also  allows  the Company to offer  a  broader  array  of
financial products and services to its customers.

      Empire  will  operate as a subsidiary of  the  Company  and
accordingly, the accounts of the subsidiary will be  included  in
the consolidated financial statements of the Company.

                                -13-
<PAGE>

                   PART II.  OTHER INFORMATION
                                
      
      
Item 2.    Changes in Securities and Use of Proceeds

      On  April  5,  1999, the Company merged  Empire  Title  and
      Escrow  Corporation and MB Title Company, a  newly  formed,
      wholly  owned subsidiary of the Company.  MB Title  Company
      then   changed  its  name  to  Empire  Title   and   Escrow
      Corporation  ("Empire").   The consideration  paid  to  the
      seven  stockholders of Empire consisted  of  the  Company's
      common  stock  and  cash.  On April 5,  1999,  162,369  new
      shares  of  common stock were issued as a portion  of  this
      compensation.     The   Company   used   exemptions    from
      registration  in  Section 4(2) of  the  Securities  Act  of
      1933,  as  well  as  Regulation D adopted thereunder  based
      upon  the limited number of offerees and the sophistication
      and worth of the purchasers.
      
Item 6.   Exhibits and Reports on Form 8-K
      a.  Exhibits.
          Exhibit 27 - Financial Data Schedule (filed
          electronically only).
          
      b.  Reports on Form 8-K.
          Subsequent  to the three months ended March  31,  1999,
          the Registrant filed a current report on Form 8-K dated
          April   5,   1999,  under  "Item  5.   Other   Events."
          describing  the  merger  of  Empire  Title  and  Escrow
          Corporation  and  MB  Title Company,  a  newly  formed,
          wholly-owned subsidiary of the Company.

                                  -14-
<PAGE>
                           SIGNATURES
                                
                                
                                
                                

Pursuant  to the requirements 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.

                                
                                
                               MEGABANK FINANCIAL CORPORATION
                               (Registrant )

                               /s/ Hiram J. Welton
                               -----------------------------
Date:  April 16, 1999          Hiram J. Welton
                               Treasurer, Duly authorized officer
                                 and Chief Accounting Officer

                                
                                
                                
                                    -15-