FORM 10-Q



                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                          OF THE SECURITIES ACT OF 1934



For Quarter Ended:  September 30, 1997

Commission File Number:  2-95465-S 

                     WESTAR FINANCIAL SERVICES INCORPORATED
                                  successor to
                         REPUBLIC LEASING INCORPORATED                          
             (Exact name of registrant as specified in its charter)

              Washington                             91-1715252
    (State or other jurisdiction of     (IRS Employer Identification Number)    
     Incorporation or organization)

            The Republic Building;  Olympia, WA               98501
          (Address of principal executive office)          (Zip Code)

Registrant's telephone number, including area code:  (360) 754-6227


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 and (2) has been subject to such
filing requirements for the past 90 days.

                       Yes:  X          No     
                            ---             ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:

             Common Stock                              1,781,300
                Class              Number of Shares Issued at October 31, 1997




PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Westar Financial Services Incorporated and Subsidiaries
Consolidated Balance Sheet
as of September 30, 1997 and March 31, 1997


                                                      September 30    March 31
                                                      (Unaudited)
                                                       ---------      --------
Cash                                                $    317,697   $   191,380
Accounts receivable, net of allowance 
  for credit losses                                      170,842       333,497
Credit enhancement receivable, net of 
  allowance for credit losses                            914,886     1,066,015
Net investment in direct finance leases, net of
  allowance for credit losses                         15,176,055     7,962,805
Deferred tax asset                                     2,732,152     2,263,075
Other assets                                             504,998       475,144
                                                      ----------     ---------
                                                    $ 19,816,630   $12,291,916
                                                      ==========    ==========


Accounts payable                                    $    424,954   $   560,356
Notes payable - bank                                  15,182,617     8,287,619
Notes payable - subordinated                           2,018,688     1,027,048
Other liabilities                                        660,090       259,076
                                                       ---------     ---------
                                                      18,286,349    10,134,099
                                                      ----------    ----------

Redeemable preferred stock                             4,248,000     4,248,000
                                                       ---------     ---------

Common stock, no par value                             2,982,795     2,874,795
Paid in capital - stock warrants                         371,495              
Accumulated deficit                                   (6,072,009)   (4,964,978)
                                                      ----------     ---------
                                                      (2,717,719)   (2,090,183)
                                                      ----------     ---------
                                                    $ 19,816,630   $12,291,916
                                                      ==========    ==========











See accompanying notes to consolidated financial statements.


Westar Financial Services Incorporated and Subsidiaries
Consolidated Statement of Operations
For the three and six months ended September 30, 1997 and 1996
(Unaudited)

                                  Three Months Ended       Six Months Ended
                                   1997        1996         1997      1996 

Revenues:
Earned income-direct financing
  leases                       $  267,835   $  112,038   $ 482,292 $   261,618
Revenues from sales and 
  securitizations                 160,836    9,743,319     294,202  10,499,663
Administrative fee income          36,362        7,390      89,300       7,390
Service fee income                 24,423        4,000      48,293       4,000
Other income                        4,000       40,378       9,939      66,959
                               ----------   ----------  ----------   ---------
Total revenues                    493,456    9,907,125     924,026  10,839,630
                               ----------   ----------  ----------   ---------
Direct Costs:
Interest                          298,758      125,803     520,501     274,875
Costs related to sales and
  securitizations                 152,581   10,438,340     271,163  11,194,550
Provision for credit losses        14,685       32,933      40,000      56,822
Other                              29,848       12,698      69,342      18,742
                               ----------   ----------  ----------   ---------
Total direct costs                495,872   10,609,774     901,006  11,544,989
                               ----------   ----------  ----------   ---------
                                   (2,416)    (702,649)     23,020    (705,359)

General and 
  administrative expenses         553,030      471,243   1,061,613   1,011,700
                               ----------   ----------  ----------   ---------
Operating loss before other expense
  and income tax benefit         (555,446)  (1,173,892) (1,038,593) (1,717,059)

Non-cash interest expense         186,763                  341,045             
                               ----------   ----------  ----------   --------- 
Loss before income tax benefit   (742,209)  (1,173,892) (1,379,638) (1,717,059)

Income tax benefit                252,351      405,740     469,077     583,798 
                               ----------   ----------  ----------   --------- 
Net Loss                         (489,858)    (768,152)   (910,561) (1,133,261)

Dividends on redeemable
  preferred stock                 (98,235)     (98,235)   (196,470)   (196,470)
                               ----------   ----------  ----------   --------- 
Net loss applicable to           
  common stock                  $(588,093)   $(866,387)$(1,107,031)$(1,329,731)
                               ==========   ==========  ==========  ========== 
  
Net loss per common share           $(.33)       $(.57)      $(.63)      $(.89)
                                      ===          ===         ===         === 
Weighted average number
  of shares                     1,765,967    1,506,980   1,751,633   1,498,580 
                               ==========   ==========  ==========  ========== 

See accompanying notes to consolidated financial statements.

Westar Financial Services Incorporated and Subsidiaries
Consolidated Statement of Cash Flows
For the six months ended September 30, 1997 and 1996
(Unaudited)

                                                          1997          1996   
                                                          ----          ----   


Net cash used in operating activities              $   (494,619)  $ (1,881,022)
                                                      ----------     ----------

Cash flows from investing activities:
Recovery of equipment costs and residual
   interests                                             834,050    11,034,297
Purchases of equipment for lease                      (8,078,428)  (10,222,877)
Other                                                     36,694       (33,700)
                                                       ---------     --------- 
Net cash provided by (used in)
  investing activities                                (7,207,684)      777,720 
                                                       ---------     --------- 

Cash flows from financing activities:
Redemption of redeemable preferred stock                                (2,000)
Proceeds from issuance of common stock                   108,000       913,840 
Additions to notes payable to banks                    8,558,884     9,562,638 
Payments on notes payable to banks                    (1,663,885)   (9,711,450)
Additions to notes payable - subordinated              1,542,023               
Payments on notes payable - subordinated                (519,932)              
Increase in advances from affiliate                                    546,119 
Dividends paid on preferred stock                       (196,470)     (196,470)
                                                       ---------     --------- 
Net cash provided by financing activities              7,828,620     1,112,677 
                                                       ---------     --------- 
Net increase in cash                                     126,317         9,375 

Cash:
Beginning of period                                      191,380       190,841 
                                                       ---------       ------- 
End of period                                        $   317,697     $ 200,216 
                                                       =========       ======= 















See accompanying notes to consolidated financial statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company's consolidated annual financial statements presented in the 1997
Annual Report on Form 10-K of the Company includes a summary of significant 
accounting policies and should be read in conjunction with this Form 10-Q.  
The consolidated financial statements include the accounts of Westar Auto
Holding Co., Inc. ("WestAH"), a 100%-owned subsidiary of the Company, Westar
Auto Finance L.L.C. ("WestAF"), a limited liability company owned 99% by the
Company and 1% by WestAH, and Westar Lease Origination Trust, a Massachusetts
business trust registered in the State of Washington beneficially owned by 
WestAF. The statements for the three and six months ended September 30, 1997 
and 1996, are unaudited, condensed and do not contain all information required 
by generally accepted accounting principles to be included in a full set of 
annual financial statements.  In the opinion of Management, all adjustments 
(consisting only of normal recurring adjustments) necessary to present fairly
the results of operations for such periods have been included.  All significant
inter-company balances and transactions have been eliminated.  The results of 
operations for the three and six months ended September 30, 1997, are not 
necessarily indicative of the results of operations for the entire year.

2. The Company paid cash for interest of $352,821 and $272,459 for the six
months ended September 30, 1997 and 1996, respectively.

3. In April 1997, the Company entered into an agreement to borrow
$1,500,000 from a Preferred Shareholder/Director.  The loan is to be repaid
no later than November 30, 1997 and bears interest at the rate of 6%.  The 
borrowings are subordinated to bank borrowings, guaranteed by one of the 
Company's executive officers and are secured by certain Company assets.  The
agreement grants the lender warrants exercisable for five years to purchase
3.75% of the Company's then outstanding common stock for $.01 a share.  The 
Company recorded a discount for the fair value of the warrants, which is the
difference between the fair value of the common stock and the exercise price.
This difference is amortized over the life of the note and charged to non-cash
interest expense.

4. During the six months ended September 30, 1997, the Company issued 53,000 
shares in various option transactions for $106,000 and 4,000 shares in warrant
transactions for $2,000.  

5. Earnings per share are computed using the weighted-average number of common
shares outstanding for the three months ended September 30, 1997 and 1996,
respectively.  Net loss used in the computation of earnings per share has
been increased to include the redeemable preferred stock dividends.  The
outstanding shares used in the earnings per share calculation have been adjusted
for the 2-for-1 stock split paid in June 1996.  Earnings per share does not
include common stock warrants or common stock options as the effect is anti-
dilutive.



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.


RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL POSITION

Six months ended September 30, 1997 compared to six months ended 
   September 30, 1996
-----------------------------------------------------------------------------
Total revenues decreased by approximately $9,915,000, from $10,839,000 to 
$924,000. The decrease was caused by a reduction in revenues from sales and 
securitizations of $10,204,000 offset by an increase of earned income from 
direct financing leases of $220,000 and an increase of other income of $69,000.
The decrease in revenues from sales and securitizations is due primarily to the
lack of an Asset Backed Securitization "ABS" this quarter compared to a year 
ago. The Company is currently planning on securitization transactions occurring
in larger denominations compared to the prior year.  The increase in direct 
financing lease income is due to the increased volume of leases warehoused. 
Other revenues increased primarily due to the increased revenues generated by
administrative and service fee income.

Direct costs decreased by $10,644,000, from $11,545,000 to $901,000.  The 
decrease was attributable to a decrease in costs related to sales and 
securitizations of approximately $10,923,000 offset by an increase of direct
interest of approximately $246,000 and an increase of other expenses of 
$33,000. The decrease in costs related to sales and securitizations is 
explained in the preceding paragraph. Interest costs related to warehousing
leases prior to securitization increased due to the increased volume of leases
warehoused.

General and administrative expenses increased by approximately $50,000, from
$1,012,000 to $1,062,000.  

The Company incurred a non-cash interest charge of $341,000 due to the 
realization of a discount related to the issuance of subordinated debt with 
warrants. The warrants are convertible into common stock at a discount from 
market price of the common stock.  The difference is recorded as non-cash 
interest and is amortized over the term of the note and, when fully amortized,
will have no effect on stockholder's equity and operating income.


LIQUIDITY AND CAPITAL RESOURCES

The Company's business requires substantial cash to implement its business
strategy, including cash to: (i) acquire vehicles, (ii) pay securitization
costs, including amounts required for credit enhancement (iii) satisfy working
capital requirements (iv) pay operating expenses, (v) satisfy debt service and
(vi) pay preferred stock dividends. Many of these cash requirements increase as
the Company's volume of leases increases. A substantial portion of the 
Company's revenues in any period is represented by revenues from 
securitizations of leases in such period, if any, but a portion of the cash 
underlying such revenues is received over the life of the leases. The 
Company expects to continue to operate with a negative cash flow as long as the
volume of leases continues to grow. The Company has historically funded 
negative operating cash flows principally through borrowings from financial
institutions and sales of equity and debt securities.

The Company completed securitizations in both the second and third quarter 
of fiscal year 1997 and has approximately $18.6 million of leases securitized
as of September 30, 1997. As the Company retains the servicing of leases 
securitized, it receives servicing income from the securitized pools.  The 
Company is currently planning on securitization transactions occurring in larger
denominations in fiscal year 1998.

The revolving credit facility provided by Bank One is the primary source of 
cash to finance the acquisition of vehicle leases until they are securitized 
through the facility made available by the Industrial Bank of Japan (IBJ). 
During the third quarter of fiscal year ended 1997, Bank One agreed to increase
the revolving warehouse line of credit, subject to certain conditions, from 
$12,000,000 to $25,000,000. After repayment of the related borrowings from Bank
One, the net proceeds from the IBJ securitizations provide a source of cash for
future acquisition of vehicle leases and general and administrative expenses.

The Company records a deferred tax asset related to its operating losses as it
believes that it has the ability to provide funding for the lease volumes 
necessary to generate sufficient taxable income for realization of the deferred
tax asset.

During the six months ended September 30, 1997, the Company issued 53,000 
shares in various option transactions for $106,000 and 4,000 shares in warrant
transactions for $2,000.

In April 1997, the Company entered into an agreement to borrow $1,500,000 of
subordinated debt from a Preferred Shareholder/Director. The agreement grants
the lender warrants exercisable for five years to purchase 3.75% of the 
Company's common stock for $.01 a share.  The proceeds of the note were used
primarily to reduce notes payable - banks and notes payable - subordinated debt.

In August 1997, the Company reached an agreement in principle to sell Secured 
Subordinated Notes ("Notes") with an initial $10 million face value, due 2002,
plus warrants, (collectively referred to as the "Securities") to an unrelated 
third party (the "Buyer").  The Notes will bear interest at a fixed rate of the 
greater of 10.5% or the bid side yield of U.S. Treasury Securities with a 
average life plus 4.5% or at a variable rate of three month LIBOR 
plus 4.25%.  The Buyer will elect which rate applies and interest will be 
payable quarterly.  The Notes will be secured by a subordinated lien on the 
Company's assets.

The Warrants will provide the Buyer an option to purchase 49.9% of the 
Company's common stock on a fully diluted basis at an exercise price of $.01
per share (exercise price not to exceed $100 in the aggregate). These warrants
will expire 20 years from issuance.

The sale of these Securities is subject to, among other things, the Company and 
the Buyer reaching final agreement upon specific terms of the related documents
and the Company issuing an additional $3 million of common stock.

It is the opinion of management that, as of September 30, 1997, the liquidity
sources discussed above are sufficient to meet the Company's immediate cash 
flow needs for operations and for the acquisition of leases in the normal 
course of business. It will be necessary, however, to obtain additional capital
through both private and public financing to provide for the Company's planned 
growth over the next several years.


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None

ITEM 2.  CHANGES IN SECURITIES

During the six months ended September 30, 1997, the Company issued 53,000 
shares in various option transactions for $106,000 and 4,000 shares in warrant
transactions for $2,000.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        (a)  Index to Exhibits

              2.  Plan of acquisition, reorganization, arrangement, liquidation
                  or succession

                  2.1  Plan and Agreement of Merger between Westar Financial
                       Services Incorporated and Republic Leasing Incorporated
                       incorporated by reference to the Exhibit to Form 10-K
                       dated June 11, 1996.

              3.  Articles of Incorporation and Bylaws

                  3.1  The Articles of Incorporation of Westar Financial
                       Services Incorporated filed on February 13, 1996
                       incorporated by reference to the Exhibit to Form 10-K
                       dated June 11, 1996.

                  3.2  The Bylaws of Westar Financial Services Incorporated
                       adopted on February 21, 1996 incorporated by reference to
                       the Exhibit to Form 10-K dated June 11, 1996.

              4.  Instruments defining the rights of security holders, including
                  indentures.

                  4.1  Designation of Rights and Preferences of Republic Leasing
                       Incorporated Series 1 Preferred Stock incorporated by
                       reference to the Exhibit to Form 10-K dated
                       June 11, 1996.

                  4.2  Designation of Rights and Preferences of Republic Leasing
                       Incorporated Series 2 Preferred Stock incorporated by
                       reference to the Exhibit to Form 10-K dated
                       June 11, 1996.

                  4.3  Designation of Rights and Preferences of Republic Leasing
                       Incorporated Series 3 Preferred Stock incorporated by
                       reference to the Exhibit to Form 10-K dated
                       June 11, 1996.

                  4.4  Designation of Rights and Preferences of Republic Leasing
                       Incorporated Series 4 Preferred Stock incorporated by
                       reference to the Exhibit to Form 10-K dated
                       June 11, 1996.

             10.  Material Contracts.

                  10.1  Republic Leasing Incorporated 1994 Stock Option Plan
                        incorporated by reference to the Exhibit to Form 10-K
                        dated June 11, 1996.

                  10.2  The Letter Agreement between Republic Leasing
                        Incorporated and The Industrial Bank of Japan, Limited
                        dated March 3, 1995 incorporated by reference to the
                        Exhibit to Form 10-K dated June 11, 1996.

                  10.3  Revolving Credit Agreement among Westar Auto Finance,
                        L.L.C. as Borrower, Republic Leasing Incorporated as
                        Guarantor and Bank One, Columbus, N.A., as Lender dated
                        July 12, 1995 incorporated by reference to the Exhibit
                        to Form 10-K dated June 11, 1996.

                  10.4  Amendment, dated February 15, 1996, to the Revolving
                        Credit Agreement with Bank One, Columbus, N.A., dated
                        July 12, 1995 incorporated by reference to the Exhibit
                        to Form 10-K dated June 11, 1996.

                  10.5  The Promissory Note between Westar Financial Services
                        Incorporated and Mud Bay Holdings Ltd., as a lender
                        dated January 15, 1997 incorporated by reference to the
                        Exhibit to Form 10-K dated September 9, 1997.

                  10.6  The Promissory Note between Westar Financial Services
                        Incorporated and & Capital Inc., as the lender dated
                        April 15, 1997 incorporated by reference to the Exhibit
                        to Form 10-Q dated September 22, 1997.

                  10.7  The Amended and Restated Revolving Credit Loan agreement
                        between Westar Financial Services Incorporated and Bank
                        One, as the lender dated July 22, 1997.

                  10.8  The Amended agreement between Westar Financial Services
                        Incorporated and & Capital, Partners, L.P., as the 
                        lender dated October 20, 1997.

             27.  Financial Data Schedule

        (b)  Reports on Form 8-K

             None

                              SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the Regi-
strant has duly caused this Report to be signed on its behalf by the under-
signed, thereunto duly authorized.

                                       WESTAR FINANCIAL SERVICES INCORPORATED




November 14, 1997                      R. W. Christensen, Jr., President
(Date)                                 (Signature)


November 14, 1997                      T. M. Foley, Vice President, Finance
(Date)                                 (Signature)