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 June 30, 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 July 21, 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
<PAGE>
                 PART I.  FINANCIAL INFORMATION
Item 1.                Financial Statements
<TABLE>
<CAPTION>
           MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                      (Dollars in thousands)
                                          June 30,  December 31,
                                            1999       1998
                                        (unaudited)
<S>                                     <C>        <C>
          ASSETS
Cash and due from banks                   $ 13,414   $ 10,326
Interest-bearing deposits                      105        128
Federal funds sold                           3,100      5,625
                                           -------    -------
     Cash and cash equivalents              16,619     16,079

Investment securities available for sale    21,293     15,677

Loans                                      228,728    189,602
Less allowance for loan losses              (3,137)    (2,610)
                                           -------    -------
                                           225,591    186,992
Federal Home Loan Bank stock, at cost          742        482
Bank premises, leasehold improvements and
  equipment, net                             9,759      8,846
Accrued interest receivable                  1,401      1,104
Deferred tax asset                             868        718
Preferred securities issuance costs, net       715        729
Goodwill                                     2,641          -
Other                                        1,296        192
                                           -------    -------
          Total assets                    $280,925   $230,819
                                           =======    =======

          LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Demand, non-interest bearing              $ 62,363   $ 54,093
Demand, interest bearing                    69,478     72,444
Savings                                      7,255      6,271
Time                                        93,779     57,071
                                           -------    -------
          Total deposits                   232,875    189,879

Federal Home Loan Bank borrowings            1,000          -
Securities sold under agreement to             561        443
  repurchase
Income taxes payable                           348         71
Accrued interest payable                       749        434
Other                                        1,545        601
                                           -------    -------
          Total liabilities                237,078    191,428

Company obligated manditorily redeemable
  preferred securities of subsidiary trust
  holding solely Junior Subordinated
  Debentures                                12,000     12,000
Minority interest in subsidiary                133          -

Shareholders' equity
  Preferred stock; no par value, 10,000,000
   shares authorized, none issued                -          -
  Common stock; no par value, 50,000,000
   shares authorized, 7,769,709
   and 7,607,340 shares issued and
   outstanding in 1999 and 1998             15,473     13,974
  Retained earnings                         16,135     13,383
  Accumulated other comprehensive income       106         34
                                           -------    -------
          Total shareholders' equity        31,714     27,391
          Total liabilities and
            shareholders'equity           $280,925   $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
          (Dollars in thousands, except per share data)

                                     Three months ended   Six months ended
                                          June 30,            June 30,
                                        1999     1998       1999     1998
                                                  (Unaudited)
<S>                                  <C>       <C>        <C>      <C>
Interest income
Loans, including fees                 $6,812    $4,380    $12,352   $8,282
Taxable investment                       164        70        250      142
Nontaxable investment securities         165       187        383      374
Funds sold                                10       201         17      307
Other interest                             8        53          9       88
                                       -----     -----     ------    -----
     Total interest income             7,159     4,891     13,011    9,193

Interest expense
Deposits                               1,762     1,400      3,304    2,665
Borrowed funds                            82        11        144       84
Trust preferred securities               237       269        525      418
Notes payable                              -         -          -       19
                                       -----     -----      -----    -----
     Total interest expense            2,081     1,680      3,973    3,186
                                       -----     -----      -----    -----
     Net interest income               5,078     3,211      9,038    6,007
Provision for loan losses                440       130        590      220
     Net interest income after
      provision for loan losses        4,638     3,081      8,448    5,787

Other income
Title fees                             1,021         -      1,021        -
Service charges on deposit accounts      330       221        488      249
Gain on sale of investment securities      -         -          -       25
Other income                              78        20        205      188
                                       -----     -----      -----    -----
     Total other income                1,429       241      1,714      462

Other expenses

Salaries and employee benefits         2,012     1,008      3,294    1,904
Occupancy expenses of premises           270       202        598      387
Furniture and equipment expense          222       114        347      229
Other expenses                         1,220       481      1,733    1,180
                                       -----     -----      -----    -----
     Total other expenses              3,724     1,805      5,972    3,700
                                       -----     -----      -----    -----
     Income before income taxes        2,343     1,517      4,190    2,549
Income tax expense                       799       485      1,438      834
                                       -----     -----      -----    -----
Net income                            $1,544    $1,032     $2,752   $1,715


Other comprehensive income, net of tax
  Unrealized gains (losses)on investment
   securities available for sale         (36)       24         72       21
                                       -----     -----      -----    -----
Comprehensive income                  $1,508    $1,056     $2,824   $1,736
                                       =====     =====      =====    =====
Income per share
      Basic earnings per share        $  .20    $  .16     $  .36   $  .27
Weighted average common
  shares outstanding               7,760,788 6,407,340  7,684.488 6,470,340
</TABLE>
   The accompanying notes are an integral part of these statements.

                                  -4-
<PAGE>
        MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                     (Dollars in thousands)
<TABLE>
<CAPTION>
                                                   Six months ended
                                                       June 30,
                                                     1999      1998
                                                      (Unaudited)
<S>                                              <C>       <C>
Cash flows from operating activities
 Net income                                       $  2,752  $  1,715
 Adjustments to reconcile net income to net
 cash provided by operating activities
  Provision for loan losses                            590       220
  Depreciation and amortization                        400       233
  Amortization of preferred securities issuance
    costs                                               14        10
  Gain on sale of investment securities
    available for sale                                   -       (25)
  Net discount accretion on investment
    activities                                           -       (12)
  Federal Home Loan Bank stock dividend                 (9)      (14)
  Amortization of goodwill                              27         -
  Deferred income taxes                               (192)      (65)
 Changes in deferrals and accruals
  Interest receivable                                 (297)     (145)
  Interest payable                                     315       220
  Income taxes payable                                 277        56
  Minority interest                                     (1)        -
  Other, net                                           721      (270)
                                                    ------    ------
      Net cash provided by operating activities      4,597     1,923

Cash flows from investing activities
 Purchase of securities available for sale          (5,503)   (3,479)
 Purchase of Federal Home Loan Bank stock             (251)        -
 Proceeds from maturities of investment
   securities available for sale                         -       750
 Proceeds from sales of securities available
   for sale                                              -       606
 Acquisition of company under the purchase
   method of accounting,net of cash acquired        (1,500)        -
 Net (increase) in loans                           (39,189)  (21,326)
  Expenditures for bank premises and equipment      (1,728)   (2,783)
                                                    ------    ------
      Net cash used in investing activities        (48,171)  (26,232)

Cash flows from financing activities
 Net increase in deposits                           42,996    29,856
 Net increase (decrease) in advances from
  Federal Home Loan Bank                             1,000    (1,423)
 Net increase in repurchase agreements                 118     1,253
 Proceeds from trust preferred securities                -    12,000
 Trust preferred securities issuance costs               -      (495)
 Principal payments on notes payable                     -    (2,000)
                                                    ------    ------
      Net cash provided by financing activities     44,114    39,191
                                                    ------    ------

Net increase in cash and cash equivalents              540    14,882
Cash and cash equivalents at beginning of period    16,079    13,155
                                                     -----     -----
Cash and cash equivalents at end of period         $16,619   $28,037
                                                    ======    ======
Supplemental disclosures of cash flow information
  Cash paid year to date for:
    Interest expense                               $ 3,839    $2,955
    Income taxes                                     1,355       854
</TABLE>
The accompanying notes are an integral part of these statements.

                               -5-
<PAGE>
        MEGABANK FINANCIAL CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          Six month period ended June 30, 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 June 30, 1999, and  the
results  of  operations and cash flows for the quarters  and  six
months ended June 30, 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 eight additional
banking locations throughout the Denver area for a total of  nine
locations, with one more branch in the planning phase.

On  April 5, 1999, the Company purchased Empire Title and  Escrow
Corporation  and  subsequently merged it with MB  Title  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").  The purchase  price  for  Empire
includes  the potential for additional consideration  based  upon
the future performance of Empire during the three years following
the  purchase (the "Post-Effective Time Consideration").   Empire
provides a full range of title insurance products and services to
the  real estate community including homebuilders and real estate
firms.  Management  expects that this  acquisition  will  provide
Empire the resources necessary to accelerate its expansion  plans
while  continuing to provide services to the Colorado real estate
community.  This acquisition also allows the Company to  offer  a
broader  array  of  financial  products  and  services   to   its
customers.     Empire operates as a subsidiary of the Company and
accordingly, the accounts of the subsidiary are included  in  the
consolidated financial statements of the Company.

                               -6-
<PAGE>
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.

     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  included in the Company's Form 10-KSB  for  the  year
ended  December  31, 1998, 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

      Net  interest  income was $8.4 million for the  six  months
ended  June  30,  1999,  an increase of $2.6  million  from  $5.8
million for the same period in 1998.  Net interest income for the
three  months ended June 30, 1999 and 1998 was $4.6  million  and
$3.1  million, respectively.  Interest income for the six  months
ended  June 30, 1999 and 1998 was $13.0 million and $9.2 million,
respectively, and $7.2 million compared to $4.9 million  for  the
three  month  period ended June 30, 1999 and 1998,  respectively.
The  increases  were due to higher balances of  interest  earning
assets resulting from internal growth.  Interest expense for  the
same  six-month period was $4.0 million in 1999 compared to  $3.2
million  in  1998 and the three month period ended June  30,  was
$2.1   million  in  1999  compared  to  $1.7  million  in   1998.
Additional interest bearing deposits contributed to the  increase
in  interest  expense.  Other income generated in the  first  two
quarters  of  1999  increased to approximately  $1.7  million  as
compared to $462,000 for the first two quarters of 1998, and $1.4
million and $241,000 for the three months ended June 30, 1999 and
1998,  respectively.   This  overall  increase  was  attributable
primarily  to additional fee income from an increase  in  service
charges  and  from Empire.  Other expenses in the first  half  of
1999  were $6.0 million as compared to $3.7 million for the  same
period  the  previous year.  Other expenses in the  three  months
ended  June  30, 1999 were $3.7 million compared to $1.8  million
for  the three months ended June 30, 1998.  An increase in  other
expenses  was primarily due to additional employee and  occupancy
expense required by internal growth and additional expenses  from
Empire.

      For  the  six  months  ended June  30,  1999,  the  Company
generated  net  income after provisions for income  tax  of  $2.8
million  compared to $1.7 million for the same period  last  year
and  $1.5  million compared to $1.0 million for the three  months
ended June 30, 1999 and 1998, respectively.  This improvement  is
attributable to the overall growth of the Bank.  Total assets  of
the  Company were approximately $280.9 million and $230.8 million
at June 30, 1999 and December 31, 1998, respectively.


      Net increases in loans were $39.2 million and $21.3 million
during  the six months ended June 30, 1999 and 1998, respectively
and  $22.8  million and $17.8 million for the three months  ended
June  30, 1999 and 1998, respectively.   It is important to  note

                               -8-
<PAGE>
that  this  was a net increase.  Actual origination of new  loans
was approximately $231.6 million for the first six months of 1999
compared to $143.8 million during the same period in 1998.

     Net increases in deposits increased $13.1 million from $29.9
million  to $43.0 million for the six months ended June 30,  1998
and 1999, respectively.  Total deposits were approximately $232.9
million  at June 30, 1999 compared to $171.7 million at June  30,
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.  Based on the increase in loans of $22.8  million  or
11.7%  growth  from  the  three  months  ended  March  31,  1999,
management determined to add an additional $440,000 in loan  loss
reserves  as of June 30, 1999.  The Company's allowance for  loan
losses to total loans has remained relatively level.

     The following table sets forth information regarding changes
in  the  allowance for loan losses of the Company for the  period
indicated.
<TABLE>
<CAPTION>
                              Six Months Ended June 30, 1999
                                   (Dollars in thousands)
<S>                                          <C>
Average total loans                            $208,411
                                                =======
Total loans at end of period                   $228,728
                                                =======
Allowance at beginning of period               $  2,610
Charge-offs:
     Construction                                     -
     Commercial and industrial                      (63)
     Installment                                      -
     Mortgage                                         -
     Other                                            -
                                                  -----
          Total charge-offs                         (63)
Recoveries:
     Construction                                     -
     Commercial and industrial                        -
     Installment                                      -
     Mortgage                                         -
     Other                                            -
                                                  -----
          Total recoveries                            -

Net (charge-offs) recoveries                        (63)
Provisions for loan losses                          590
                                                  -----
Allowance at end of period                     $  3,137
                                                  =====
Ratio of net (charge-offs) recoveries
     to average loans                              0.03%
Allowance to total loans at end of period          1.37%
Allowance to nonperforming loans                 189.66%
</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 June 30, 1999.

     The  following  table sets forth information concerning  the
nonperforming assets of the Company at the dates indicated:
<TABLE>
<CAPTION>
                                                       June 30,     December 31,
                                                        1999             1998
<S>                                                   <C>              <C>
Nonaccrual loans                                        $1,628          $3,388
Other loans 90 days past due                                26               -
Other real estate                                            -               -
                                                         -----           -----
Total nonperforming loans                               $1,654          $3,388

Ratio of nonaccrual and other loans 90 days past
     due to total loans                                   0.72%           1.81%
Ratio of nonperforming assets to total loans plus
     other real estate                                    0.72            1.81
Ratio  of  nonperforming assets to total  assets          0.59            1.47
</TABLE>
     Of  the  amount  of nonaccrual loans as of  June  30,  1999,
approximately $1.6 million is the Bank's portion of five  related
loans totaling approximately $4.1 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
1996  in  connection with a real estate development on which  the
developer had constructed a residential building assembly  plant.

                              -10-
<PAGE>
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.  Subsequent
to  June  30,  1999, the loan has been further  reduced  to  $1.2
million  from the proceeds of the sale of a portion of  the  real
estate held as collateral for the loan.

      In  addition to the above, the Bank had 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. During  the
quarter  ended  June  30,  1999,  the  loan  was  paid  down   to
approximately  $923,000 and the interest  brought  current.   The
loan has been removed from nonaccrual status.

     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  June  30, 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.  Additionally, in  compliance
with the Bank's Liquidity Policy, the Company supplemented retail
deposit  growth  by  obtaining  deposits  of  $20  million   from
wholesale sources.  Deposits increased to $232.9 million at  June
30,  1999  compared to $171.7 million at June 30, 1998.  Deposits
from  wholesale  sources totaled approximately $28.0  million  at
June  30,  1999.   Management's determination to use  an  outside
funding  source may continue in the future depending  on  funding
needs  and the cost of these funds.  Currently, wholesale sources
increase  the  Bank's  cost  of interest-bearing  liabilities  by
approximately  0.02%, effectively securing funds  at  an  overall
lower rate than if the Bank had to internally generate additional
deposits through promotions or other methods.

     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 June 30, 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
and  brokered  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.

     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.

                                -11-
<PAGE>
<TABLE>
<CAPTION>
                                         At June 30, 1999
                                                   Minimum
Ratio                                   Actual     Required
<S>                                    <C>         <C>
Tangible capital                        11.53%      1.50%
Core (Tier 1) capital                   11.53%      4.00%
Risk-Based capital                      13.95%      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  that
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 June 30, 1999 were approximately $44,100.
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

                              -12-
<PAGE>
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.

                              -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
      authorized but unissued shares of common stock were  issued
      as  a  portion  of  this  transaction.   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.

          Form 8-K dated April 5, 1999 - "Item 5.  Other Events."
          describes  the  merger  of  Empire  Title  and   Escrow
          Corporation  and  MB  Title Company,  a  newly  formed,
          wholly-owned subsidiary of the Company.

          Form  8-K  dated  June  1,  1999  -  Pursuant  to   the
          requirements of Section 11(a) of the Securities Act  of
          1933,   as  amended,  and  Rule  158  thereunder,   the
          Registrant  filed  an  earnings  statement  covering  a
          period  of  at  least 12 consecutive  months  beginning
          after  the effective date of February 9, 1998  for  its
          Registration Statement (SEC File Nos. 333-42189 and 333-
          42191)  reflecting  the  issuance  of  1,200,000  Trust
          Preferred Securities.

                                   -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:  July 22, 1999           Hiram J. Welton
                               Treasurer
                                 Duly authorized officer and
                                 Chief Accounting Officer

                                 -15-






</TABLE>