UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549
                            FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
           For the Fiscal Year Ended December 31, 1997
                                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 0-16637

                  BROAD NATIONAL BANCORPORATION
      (Exact name of registrant as specified in its charter)

     New Jersey                               22-2395057
(State or other jurisdiction               (I.R.S. Employer
of incorporation or organization)       Identification Number)

905 Broad Street, Newark, New Jersey            07102
(Address of principal executive offices)     (Zip Code)

Registrant's telephone number, including area code: (973)624-2300

   SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                               NONE
   SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
             Common Stock, par value $1.00 per share

     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes   X    No

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     The aggregate market value of the 3,341,405 shares of voting
stock of the Registrant held by non-affiliates of the Registrant
on March 2, 1998, computed by reference to the closing sale price
of such stock as reported on NASDAQ, was approximately
$65,993,000.  As of March 2, 1998, there were 4,708,476 shares of
the Registrant's Common Stock outstanding.

               DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document are incorporated by reference
into the indicated parts of this report: definitive Proxy
Statement for the 1998 Annual Meeting of Shareholders to be filed
with the Commission pursuant to Regulation 14A - Part III.


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                              PART I

ITEM 1.  BUSINESS.

                    BUSINESS OF BANCORPORATION

GENERAL

          Broad National Bancorporation ("Bancorporation") is a
bank holding company registered under the Bank Holding Company
Act of 1956, as amended (the "BHC Act").  Although Bancorporation
was incorporated under the laws of the State of New Jersey on
April 7, 1981, it did not engage in any business activity until
February 1, 1983.  On that date, it acquired all of the issued
and outstanding capital stock of Broad National Bank, a national
banking association (the "Bank") pursuant to a corporate
reorganization involving an exchange of shares.  Bancorporation's
activities currently are limited to ownership of the outstanding
common securities of BNB Capital Trust (the "Issuer Trust"), as
well as the outstanding capital stock of the Bank and to
performing certain services for the Bank.  Except as otherwise
provided herein, references herein to "Bancorporation" include
Bancorporation and its consolidated subsidiaries.

          Bancorporation's principal executive offices are
located at 905 Broad Street, Newark, New Jersey 07102, and its
telephone number is (973) 624-2300.

DESCRIPTION OF BUSINESS

          BANCORPORATION

          Bancorporation is a bank holding company registered
under the BHC Act.  Bancorporation's activities currently are
limited to ownership of the outstanding capital stock of the Bank
and to performing certain services for the Bank.

          THE ISSUER TRUST

          The Issuer Trust is a statutory business trust formed
under Delaware law pursuant to (i) a trust agreement, as amended
and restated, dated as of June 9, 1997, executed by
Bancorporation, as Depositor, Bankers Trust Company, as Property
Trustee, and Bankers Trust (Delaware), as Delaware Trustee, and
(ii) the filing of a Certificate of Trust with the Delaware
Secretary of State on June 9, 1997.  The Issuer Trust is wholly
owned by Bancorporation.  Bancorporation, while holder of all of
the beneficial interests represented by common securities of the
Issuer Trust (the "Common Securities"), has selected two
individuals who are employees of Bancorporation to serve as
Administrators.  The Issuer Trust's business and affairs are
conducted by its Property Trustee, Delaware Trustee, and the two

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Administrators.  The Issuer Trust exists for the exclusive
purposes of (i) issuing and selling the 9.5% Cumulative Trust
Preferred Securities (the "Preferred Securities") and the Common
Securities, (ii) using the proceeds from the sale of the
Preferred Securities and the Common Securities to acquire the
9.5% Junior Subordinated Debentures (the "Junior Subordinated
Debentures") issued by Bancorporation and (iii) engaging in only
those other activities necessary, advisable or incidental thereto
(such as registering the transfer of the Preferred Securities).
Accordingly, the Junior Subordinated Debentures are the sole
asset of the Issuer Trust and payments under the Junior
Subordinated Debentures are the sole revenue of the Issuer Trust.
Bancorporation has entered into several contractual arrangements
for the purpose of fully and unconditionally supporting the
Issuer Trust's payment of distributions on, payments on any
redemption of, and any liquidation distribution with respect to,
the Preferred Securities.  These contractual arrangements
constitute a full and unconditional guarantee by Bancorporation
of the Issuer Trust's obligations under the Preferred Securities.
The Issuer Trust has a term of 31 years, but may terminate
earlier as provided in the Trust Agreement.  The principal
executive office of the Issuer Trust is 905 Broad Street, Newark,
New Jersey, 07102 and its telephone number is (973)624-2300.  See
"Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations, and Item 8.  Financial
Statements and Supplementary Data.

          THE BANK

          The Bank is a national banking association organized in
1925 under the laws of the United States with offices in Newark
(7 offices), East Orange, Millburn, North Arlington, Livingston,
Perth Amboy, Kearny and Elizabeth (2 offices), New Jersey.  The
Bank is a full service commercial bank and offers a broad range
of commercial and retail banking services.  It offers checking
accounts, savings accounts, money market accounts and individual
retirement accounts (IRAs), as well as various other types of
time deposits which are insured by the Bank Insurance Fund
("BIF") administered by the Federal Deposit Insurance Corporation
("FDIC") to the full extent provided by law.  The Bank also
provides typical bank services such as cashiers checks, United
States Savings Bonds and travelers checks.  The Bank had total
deposits of $485,073,000 as of December 31, 1996 and of
$518,238,000 as of December 31, 1997.  See "Item 7.  Management's
Discussion and Analysis of Financial Condition and Results of
Operation."

          The Bank originates and services both secured and
unsecured loans which totaled $278,585,000 as of December 31,
1996 and $315,554,000 as of December 31, 1997, in each case, net
of deferred loan fees and the allowance for possible loan losses.
Commercial lending operations include various types of credit for



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the Bank's commercial and industrial customers.  The Bank's
installment loan department makes direct loans to individuals.
The Bank's mortgage loan department makes a variety of
residential, industrial, and commercial loans secured by real
estate.  See "Item 7.  Management's Discussion and Analysis of
Financial Condition and Results of Operation."

          The Bank also provides agency and custody services for
individuals and institutional accounts. The Bank has trust powers
which permit it to administer trusts and estates, although the
Bank has no trust accounts at this time.

          The Bank currently has fourteen branch banking
facilities in addition to its main location.  See "Item 2.
Properties."

          EMPLOYEES

          Bancorporation and the Bank have approximately 205
full-time employees and 35 part-time employees.  Neither
Bancorporation nor the Bank is a party to any collective
bargaining agreement and employee relations are deemed to be
satisfactory.

          SERVICE AREA AND COMPETITION

          The principal market is defined as all of Essex County,
the southern quadrant of Bergen County, the southern quadrant of
Hudson County, the northeast quadrant of Union County and the
northeast quadrant of Middlesex County, New Jersey.  This market
area is highly competitive with many banks and financial
institutions vying for the same business.  Most of the Bank's
competitors are institutions of far greater size and the Bank's
deposits constitute less than one percent of the commercial bank
deposits in its market area.

          The Bank encounters intense competition in local and
national markets from non-banking as well as banking sources in
all of its activities, including many competitors which have
substantially greater resources, name recognition and market
presence than the Bank.  As a lender it competes not only with
other banks but also with savings and loan associations, savings
banks, credit unions, finance companies, mortgage companies,
factoring companies, insurance companies, and other financial
institutions, many of which have higher legal lending limits.  It
competes for deposits with other banks, savings banks, savings
and loan associations, credit unions, mutual funds, money market
funds, and issuers of commercial paper and other securities.
Such competition is particularly intense from the Bank's Newark,
New Jersey-based competitors.  Trends toward the consolidation of
the banking industry may make it more difficult for smaller banks


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and financial institutions, such as the Bank, to compete with
large, national and regional banking institutions.

SUPERVISION AND REGULATION

          FEDERAL BANK HOLDING COMPANY ACT

          GENERAL.  Bancorporation is a registered bank holding
company within the meaning of the BHC Act, subject to the
supervision of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board").  Bancorporation is required
to file with the Federal Reserve Board an annual report and such
other additional information as the Federal Reserve Board may
require pursuant to the BHC Act.  Also, the Federal Reserve Board
periodically examines Bancorporation.  The Federal Reserve Board
has authority to issue cease and desist orders against bank
holding companies if it determines that their actions represent
unsafe and unsound practices or violations of law.  In addition,
the Federal Reserve Board is empowered to impose substantial
civil money penalties for violations of banking statutes and
regulations.  Regulation by the Federal Reserve Board is intended
to protect depositors of the Bank, not shareholders of
Bancorporation.

          SOURCE OF STRENGTH.  Federal Reserve Board policy
requires a bank holding company to serve as a source of financial
and managerial strength to its subsidiary banks.  Under this
policy, a bank holding company is expected to stand ready to use
its available resources to provide adequate capital funds to its
subsidiary banks during periods of financial stress or adversity,
and to maintain resources and the capacity to raise capital which
it can commit to its subsidiary banks.  It is the Federal Reserve
Board's position that the failure of a bank holding company to
serve as a source of strength to a distressed subsidiary bank is
an unsafe and unsound banking practice.  This has become known as
the "source of strength doctrine."  It is not clear whether the
source of strength doctrine is legally enforceable by the Federal
Reserve Board.

          LIMITATION ON ACQUISITIONS.  The BHC Act requires every
bank holding company to obtain the prior approval of the Federal
Reserve Board before (i) taking any action that causes a bank to
become a controlled subsidiary of the bank holding company, (ii)
acquiring direct or indirect ownership or control of voting
shares of any bank or bank holding company, if the acquisition
results in the acquiring bank holding company having control of
more than 5% of the outstanding shares of any class of voting
securities of such bank or holding company and such bank or bank
holding company is not majority-owned by the acquiring bank
holding company prior to the acquisition, (iii) the acquisition
by a bank holding company or any nonbank subsidiary thereof of

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all or substantially all of the assets of a bank, or (iv) a
merger or consolidation with another bank holding company.

          In determining whether to approve a proposed
acquisition, merger or consolidation, the Federal Reserve Board
is required to take into account the competitive effects of the
proposed acquisition, the convenience and needs of the community
to be served, and the financial and managerial resources and
future prospects of the bank holding companies and banks
concerned.  If a proposed acquisition, merger or consolidation
might have the effect in any section of the United States to
substantially lessen competition or to tend to create a monopoly,
or if such proposed acquisition, merger, or consolidation
otherwise would be in restraint of trade, then the Federal
Reserve Board may not approve it unless it finds that the
anticompetitive effects are clearly outweighed in the public
interest by the probable effect of the proposed transaction in
meeting the convenience and needs of the community to be served.
Bancorporation has no current plans to acquire any interest in
the voting stock or assets of any bank or other financial
institution, although such an acquisition may be considered in
the future.

          LIMITATION ON CERTAIN ACTIVITIES.  The BHC Act also
prohibits a bank holding company, with certain exceptions, from
engaging in, and from acquiring direct or indirect ownership or
control of the voting shares or assets of any company engaged in
any activity other than banking or managing or controlling banks,
and any activity which the Federal Reserve Board determines to be
so closely related to banking, or managing or controlling banks,
as to be a proper incident thereto.  In acting on an application
to engage in such an activity, the Federal Reserve Board is
required to weigh the expected benefits to the public, such as
greater convenience, increased competition or gains in
efficiency, against the risks of possible adverse effects, such
as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices.
This consideration includes an evaluation of the financial and
managerial resources of the applicant, including its
subsidiaries, and any company to be acquired, and the effect of
the proposed transaction on those resources.

          To date, the Federal Reserve Board, by regulation, has
determined that, subject to expressed limitations, certain
activities are permissible for bank holding companies and their
subsidiaries and may be engaged in upon notice to the Federal
Reserve Board without prior approval.  These permissible
activities include furnishing or providing services for the
internal operations of the bank holding company and its
subsidiaries, operating a safe deposit business, making and
servicing loans, operating an industrial bank, performing certain
trust company functions, acting as an investment or financial


<PAGE>



advisor in certain capacities, leasing certain real or personal
property, making certain investments to promote community
development, providing certain data processing services,
performing certain insurance agency and underwriting functions,
owning, controlling and operating a savings association,
providing specified courier services, providing management
consulting advice to nonaffiliated banks and nonbank depository
institutions, selling certain money orders, United States savings
bonds and traveler's checks, performing appraisals of real and
personal property, arranging certain commercial real estate
equity financing, providing certain securities brokerage
services, underwriting and dealing in certain government
obligations and money market instruments, providing foreign
exchange advisory and transactional services, acting as a futures
commission merchant, providing investment advice on financial
futures and options on futures, providing consumer financial
counseling, providing tax planning and preparation services,
providing certain check guaranty services, operating a collection
agency and operating a credit bureau.

          The Federal Reserve Board has also determined that
certain other activities, including real estate brokerage and
syndication, land development, property management, management
consulting, underwriting of life insurance not sold in connection
with a credit transaction, and insurance premium funding are
improper activities for bank holding companies and their
subsidiaries.  In the future the Federal Reserve Board may take
additional actions adding and refusing to add particular
activities to the list of activities that the Federal Reserve
Board deems to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.  Certain
bank holding companies and their subsidiaries possess
"grandfather rights" giving them authority to engage in one or
more of the activities which are not generally permissible
because they were engaged in such activities prior to the
adoption of legislation restricting such activities.

          Under cross-guaranty provisions of the Federal Deposit
Insurance Act (the "FDIA"), bank subsidiaries of a bank holding
company are liable for any loss incurred (or reasonably
anticipated to be incurred) by the Bank Insurance Fund (the
"BIF"), the federal deposit insurance fund for banks, in
connection with the failure of any other bank subsidiary of the
bank holding company.  Liability under such cross-guaranty would
be junior to deposit liabilities and most secured obligations,
but senior to obligations to shareholders and most obligations to
affiliates.  The Federal Deposit Insurance Corporation (the
"FDIC") has authority to prospectively waive the cross-guaranty
provision.  Currently the Bank is the only bank subsidiary of
Bancorporation.



<PAGE>



          A bank holding company and its subsidiaries are
prohibited from engaging in certain tie-in arrangements in
connection with the extension of credit or the lease or sale of
any property or the furnishing of services.  Subsidiary banks of
a bank holding company are also subject to certain restrictions
imposed by the Federal Reserve Act on any extensions of credit to
the bank holding company or any of its subsidiaries, or
investment in the stock or other securities thereof, and on the
taking of such stocks or securities as collateral for loans.

          REGULATORY CAPITAL REQUIREMENTS.  The Federal Reserve
Board has promulgated "capital adequacy guidelines" for use in
its examination and supervision of bank holding companies.  A
holding company's ability to pay dividends and expand its
business through the acquisition of new banking subsidiaries can
be restricted if its capital falls below levels established by
these guidelines.  In addition, holding companies whose capital
falls below specified levels can be required to implement a plan
to increase capital.

          The Federal Reserve Board's capital adequacy guidelines
provide for the following types of capital:  Tier 1 capital (also
referred to as core capital), Tier 2 capital (also referred to as
supplementary capital), Tier 3 capital (consisting of short-term
subordinated debt that meets certain conditions and used only in
the measure of market risk, as discussed below) and Total
capital.  A bank holding company's Tier 1 capital generally
includes the following elements: common shareholders' equity
(excluding unrealized gain (loss) on securities available-for-
sale), qualifying noncumulative perpetual preferred stock and
related surplus, qualifying cumulative perpetual preferred stock
and related surplus (limited to a maximum of 25% of Tier 1
capital elements) and minority interests in the equity accounts
of consolidated subsidiaries.  Goodwill is generally excluded
from Tier 1 capital.  Most intangible assets also are deducted
from Tier 1 capital.  A bank holding company's Tier 2 capital
generally includes allowances for loan and lease losses (limited
to 1.25% of risk-weighted assets), most perpetual preferred stock
and any related surplus (noncumulative and cumulative, without
percentage limits), certain hybrid capital instruments, perpetual
debt and mandatory convertible debt securities, and certain
intermediate-term preferred stock and intermediate-term
subordinated debt instruments (to a maximum of 50% of Tier 1
capital excluding goodwill, but phased-out as the instrument
matures).  The maximum amount of supplementary capital that
qualifies as Tier 2 capital is limited to 100% of Tier 1 capital
(net of goodwill).  For purposes of calculating the total
risk-based capital ratio, Total capital generally includes Tier 1
capital, plus qualifying Tier 2 capital, minus investments in
unconsolidated subsidiaries, reciprocal holdings of bank holding
company capital securities, certain deferred tax assets and other
deductions as determined by the Federal Reserve Board.



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          The Federal Reserve Board issued a regulation that
limits the amount of intangible assets which may be included in
Tier 1 capital.  Under the regulation, mortgage servicing rights
("MSRs") and purchased credit card relationships ("PCCRs") would
be included in Tier 1 capital to the extent that, in the
aggregate, they do not exceed 50% of Tier 1 capital and, to the
further extent that PCCRs, individually, do not exceed 25% of
Tier 1 capital.  MSRs and PCCRs in excess of these limits, as
well as core deposit intangibles ("CDI") and all other identified
intangible assets, must be deducted in determining Tier 1
capital.  As of December 31, 1997, Bancorporation did not have
MSRs, PCCRs, CDIs or other identified intangible assets.

          The Federal Reserve Board issued a press release on
October 21, 1996 stating that it would treat trust preferred
securities as part of Tier 1 capital for bank holding companies
subject to the following conditions: (1) the instrument must
provide for a minimum five-year consecutive deferral period on
distributions to preferred shareholders; (2) the underlying
intercompany loan must be subordinated to all other debt and have
the longest feasible maturity; (3) these securities together with
other cumulative preferred stock issued by a bank holding company
can only constitute 25 percent of the holding company's Tier 1
capital; and (4) prior Federal Reserve approval is required
before the preferred security may be redeemed.  The $11,500,000
of preferred securities issued by Bancorporation meet these
requirements.

          The Federal Reserve Board's capital adequacy guidelines
require a bank holding company to satisfy a Tier 1 Leverage
Ratio, a total risk-based capital ratio and a Tier 1 risk-based
capital ratio.  Under the Tier 1 Leverage Ratio capital
guideline, a bank holding company must have and maintain Tier 1
capital in an amount equal to at least 3.0% of its average total
consolidated assets.  In general, average total consolidated
assets means the quarterly average total assets (net of the
allowance for loan and lease losses) reported on a bank holding
company's Consolidated Financial Statements (FR Y-9C Report),
minus goodwill and any other intangible assets or investments in
subsidiaries which are deducted from Tier 1 capital.  The 3.0%
minimum Tier 1 Leverage Ratio is considered the absolute minimum
amount of Tier 1 capital which the most highly rated bank holding
companies (those rated composite 1 under the BOPEC rating system
for bank holding companies) are required to maintain.  All other
bank holding companies must maintain a minimum Tier 1 Leverage
Ratio of 3.0% plus an additional cushion of at least 100 to 200
basis points.

          Under the Federal Reserve Board's capital adequacy
guidelines, a bank holding company must have and maintain a ratio
of Total capital to risk-weighted assets of 8.00%, and a ratio of
Tier 1 capital to risk-weighted assets of 4.00%.  The amount of a


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bank holding company's risk-weighted assets is determined by
multiplying the balance sheet amount of each of the bank holding
company's consolidated assets by a specified risk-weight factor
of 0%, 20%, 50% or 100%, in accordance with the relative risk
level of the asset.  In determining risk-weighted assets, off-
balance sheet items, such as standby letters of credit, are
converted to an on-balance sheet credit equivalent amount by
multiplying the face amount of the off-balance sheet item by a
credit conversion factor of 0%, 20%, 50% or 100%, in accordance
with the probability that the off-balance sheet item will become
a credit extended by the bank holding company.  In general,
intangible assets and other assets which are deducted in
determining Tier 1 capital and Total capital must also be
excluded from risk-weighted assets.

          The Federal Reserve Board has proposed to permit
portions of claims (including repurchase agreements)
collateralized by cash on deposit with the lending institution or
by securities issued or guaranteed by the U.S. Treasury, U.S.
government agencies, or the central governments in other OECD
countries to be eligible for a zero percent risk weight.  The
effect of this proposal is to allow banks and bank holding
companies to hold less capital for these types of collateralized
transactions.

          Under the Federal Reserve Board's market risk rules, an
institution with significant trading activities must measure and
hold capital for exposure to general market risk arising from
fluctuations in interest rates, equity prices, foreign exchange
rates and commodity prices and exposure to specific risk
associated with debt and equity positions in the trading
portfolio.   This regulation applies to any bank or bank holding
company (i) whose trading activity equals 10% or more of its
total assets or (ii) whose trading activity equals $1 billion or
more.  General market risk refers to changes in the market value
of on-balance sheet assets and off-balance sheet items resulting
from broad market movements.  Specific risk refers to changes in
the market value of individual positions due to factors other
than broad market movements and includes such risks as the credit
risk of an instrument's issuer.  Under the Federal Reserve
Board's rules, an institution must measure its general market
risk using its internal risk measurement model to calculate a
"value-at-risk" based capital charge.  An institution must also
measure its specific risk either through a valid internal model
or by a so-called standardized approach.  The standardized
approach for the measurement of specific risk uses a risk-
weighing process developed by the Federal Reserve which
categorizes individual instruments and then assesses a fixed
capital charge.  Until September, 1997, an institution that used
an internal model to measure specific risk, rather than the
standardized approach, was required to hold capital for specific
risk at least equal to 50 percent of the specific risk charge



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calculated when using the standardized approach (the minimum
specific risk charge).  If that portion of an institution's
"value-at-risk" capital charge which was attributable to specific
risk did not equal the minimum specific risk charge, the
institution was subject to additional charges to make up for such
difference.  As of September, 1997, the Federal Reserve has
eliminated the use of the minimum specific risk charge and
consequently, the need for a dual calculation if an institution
uses its internal model to measure specific risk.  Therefore, an
institution using a valid internal model to measure specific risk
may use the "value-at-risk" measures generated by its model
without being required to compare the model-generated risk charge
to the minimum specific risk charge as calculated under the
standardized approach.

          The regulation supplements the existing credit risk-
based capital standards by requiring an affected institution to
adjust its risk-based capital ratio to reflect market risk.  In
measuring market risk, institutions may use Tier 3 capital to
meet the market risk capital requirements.  Tier 3 capital is
subordinated debt that is unsecured, fully paid up, has an
original maturity of at least two years, is not redeemable before
maturity without the prior approval of the institution's
supervisor, is subject to a lock-in clause that prevents the
issuer from repaying the debt even at maturity if the issuer's
capital ratio is, or with repayment, would become, less than the
minimum 8% risk-based capital ratio, and does not contain and is
not covered by any covenants, terms or restrictions that may be
inconsistent with safe and sound banking practices.

          On December 31, 1997, Bancorporation was in compliance
with all of the Federal Reserve Board's capital guidelines.  On
such date, Bancorporation had a Tier 1 Leverage Ratio of 8.19%
(compared with a requirement of 4% to 5%), and a ratio of total
capital to risk-weighted assets of 14.41% (compared with a
requirement of 8%) and a ratio of Tier 1 capital to risk-weighted
assets of 13.16% (compared with a requirement of 4%).  The
capital ratios include the preferred securities which are 23.10%
of the Tier 1 capital. There can be no assurance, however, that
Bancorporation will remain in compliance with regulatory capital
requirements.  For additional information on Bancorporation
capital, see "Item 7.  Management's Discussion and Analysis of
Financial Condition and Results of Operations--Financial
Condition--Shareholders' Equity."

          LIMITATION ON INCURRED DEBT.  Bancorporation currently
has no plans to incur any additional indebtedness.  If
Bancorporation determines to do so in the future, it will be
subject to the general statutory and regulatory restrictions.

          INTERSTATE BANKING AND BRANCHING.  Under the Riegle-
Neal Interstate Banking and Branching Efficiency Act of 1994 (the


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"Riegle-Neal Act"), bank holding companies may acquire the stock
or substantially all of the assets of banks located in any state
regardless of whether such transaction is prohibited under the
laws of any state.  The Federal Reserve Board, however, may not
approve an interstate acquisition if as a result of the
acquisition the bank holding company would control more than 10%
of the total amount of insured deposits in the United States or
would control more than 30% of the insured deposits in the home
state of the acquired bank.  The 30% of insured deposits state
limit does not apply if the acquisition is the initial entry into
a state by a bank holding company or if the home state waives
such limit.

          Under the Riegle-Neal Act, individual states may
restrict interstate acquisitions in two ways.  First, a state may
prohibit an out-of-state bank holding company from acquiring a
bank located in the state unless the target bank has been in
existence for a specified minimum period of time (not to exceed
five years).  Second, a state may establish limits on the total
amount of insured deposits within the state which are controlled
by a single bank holding company (a "deposit cap"), provided that
such deposit limit does not discriminate against out-of-state
bank holding companies.

          The Riegle-Neal Act now permits affiliated banks in
different states to act as agents for each other for purposes of
receiving deposits, renewing time deposits, closing loans,
servicing loans and receiving payments on loans and other
obligations.  A bank acting as an agent for an affiliated bank is
not considered a branch of the affiliated bank.

          Beginning on June 1, 1997, the Riegle-Neal Act
authorized interstate branching by a merger of banks with
different home states which results in a single bank with
branches in both states.  The Riegle-Neal Act gave states the
right to "opt out" and prohibit interstate mergers by passing
legislation before June 1, 1997 that expressly prohibits all
merger transactions with out-of-state banks.  The Riegle-Neal Act
also gave states the right to "opt in" and authorize early
interstate mergers by passing legislation that expressly permits
interstate merger transactions with all out-of-state banks.  The
Riegle-Neal Act authorized banks to establish and operate a de
novo branch in a state (other than the bank's home state) only if
the host state "opts in" to authorize de novo interstate banking
by passing legislation that expressly permits all out-of-state
banks to establish de novo branches in the state.  As of June 1,
1997, approximately 44 states acted on the Riegle-Neal Act.  Only
two states, Texas and Montana, opted out.  The states of New
Jersey, New York, Connecticut, Pennsylvania, Delaware and
Maryland opted into the Riegle-Neal Act, and of those states,
Connecticut, Pennsylvania, and Maryland permit de novo interstate

<PAGE>



branching for banks located in any state which enacts a
reciprocal statute.

          Effective October 10, 1997, the Riegle-Neal Act
prohibits any bank from establishing or acquiring a branch or
branches outside its home state primarily for the purpose of
deposit production.  An interstate branch must reasonably help
meet the credit needs of the communities served as determined by
a loan-to-deposit ratio screen.  The FDIC and other banking
agencies, under the final rule, will determine a bank's total
loan-to-deposit ratio for all branches opened in a particular
state one year or more after the bank has established an
interstate branch.  If the ratio is 50 percent of the average
loan-to-deposit ratio for all banks headquartered in that state,
the banking regulators will try to determine whether the branches
are making a "reasonable" effort to meet the needs of the
community served in that state by using six mitigating factors.
The agencies may impose sanctions on institutions found not to
meet the community credit needs.  The regulators may require the
bank to close branches in the state where it has a low loan-to
deposit ratio, and may prohibit the bank from opening any new
branches unless the institution assures the agencies that it will
attempt to meet those credit needs.

          STATE BRANCHING LIMITATIONS

          In general, New Jersey law permits a bank, with prior
regulatory approval, to establish a full branch office, a
mini-branch office or a communications terminal branch office
anywhere in the State.  Furthermore, no bank shall establish a
full branch office unless its capital shall equal or exceed the
minimum capital established by the commissioner by regulation.

FEDERAL BANK REGULATION

          GENERAL.  As a national bank, the Bank is subject to
regulation and examination primarily by the Office of the
Comptroller of the Currency (the "OCC").  The Bank is also
regulated by the Federal Reserve Board and the FDIC.  Regulation
by these agencies is designed to protect depositors of the Bank
rather than shareholders of Bancorporation.  The OCC has the
authority to issue cease and desist orders if it determines that
activities of the Bank represent unsafe and unsound banking
practices or violations of law.  In addition, the OCC is
empowered to impose substantial civil money penalties for
violations of banking statutes and regulations.

          REGULATORY CAPITAL REQUIREMENTS.  The OCC has adopted
minimum capital requirements applicable to national banks which
are substantially similar to the capital adequacy guidelines
established by the Federal Reserve Board for bank holding


<PAGE>


companies.  There are, however, technical differences in the
methodologies used to calculate the capital ratios.

          On December 31, 1997, the Bank was in compliance with
all of the OCC's minimum capital requirements.  On such date, the
Bank had a Tier 1 Leverage Ratio of 7.33% (compared with a
requirement for the Bank of 4% to 5%), and a ratio of Total
capital to risk-weighted assets of 13.03% (compared with a
requirement of 8%), and a ratio of Tier 1 capital to
risk-weighted assets of 11.77% (compared with a requirement of
4%).

          CLASSIFICATION OF BANKS.  Federal banking laws classify
financial institutions in one of the following five categories,
depending upon the amount of their capital: well-capitalized,
adequately capitalized, undercapitalized, significantly
undercapitalized or critically undercapitalized.  Under OCC
regulations, a bank is deemed to be (i) "well capitalized" if it
has a total risk-based capital ratio of 10% or greater, a Tier 1
risk-based capital ratio of 6% or greater and a Tier 1 leverage
ratio of 5% or greater (and is not subject to any order or
written directive specifying any higher capital ratio), (ii)
"adequately capitalized" if it has a total risk-based capital
ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4%
or greater and a Tier 1 leverage ratio of 4% or greater (or a
Tier 1 leverage ratio of 3% or greater, if the bank has a CAMEL
rating of 1), (iii) "undercapitalized" if it has a total
risk-based capital ratio that is less than 8%, a Tier 1
risk-based capital ratio that is less than 4% or a Tier 1
leverage ratio that is less than 4% (or a Tier 1 leverage ratio
that is less than 3%, if the bank has a CAMEL rating of 1), (iv)
"significantly undercapitalized" if it has a total risk-based
capital ratio that is less than 6%, a Tier 1 risk based capital
ratio that is less than 3% or a Tier 1 leverage ratio that is
less than 3%, and (v) "critically undercapitalized" if it has a
Tier 1 leverage ratio that is equal to or less than 2%.  Federal
banking laws require the federal regulatory agencies to take
prompt corrective action against undercapitalized financial
institutions.  Under OCC regulations, the Bank was a well
capitalized institution as of December 31, 1997.

          DEPOSIT INSURANCE AND ASSESSMENTS.  The deposits of the
Bank are insured by the BIF administered by the FDIC, in general,
to a maximum of $100,000 per insured depositor.  Under FDIA and
FDIC regulations, the Bank is required to pay annual assessments
to the FDIC for deposit insurance.  The FDIC has adopted a
risk-based assessment system.  Under the risk-based assessment
system, BIF members pay varying assessment rates depending upon
the level of the institution's capital and the degree of
supervisory concern over the institution.  The assessment rates
are set by the FDIC semiannually.  The FDIC's assessment rates
range from zero (0) cents to 27 cents per $100 of insured



<PAGE>




deposits.  Institutions qualifying for the $0 assessment rate are
no longer required to pay the minimum deposit premium payment of
$2,000 annually.  As of January 1, 1998, the Bank's assessment
rate was zero cents per $100 of insured deposits.  The FDIC has
authority to increase the annual assessment rate if it determines
that a higher assessment rate is necessary to increase BIF's
reserve ratio.  There is no cap on the annual assessment rate
which the FDIC may impose.

          In addition to any assessments that may be imposed by
the FDIC as described above, the Deposit Insurance Funds Act of
1996 provides for the imposition of annual assessments by the
Financing Corporation on Savings Association Insurance Fund-
assessable deposits and BIF-assessable deposits.  These
assessments are scheduled to remain in effect from January 1,
1997 through December 31, 1999.  As of January 1, 1998, the
annual assessment rate applicable to the Bank was approximately
1.26 basis points of its assessable deposits.

          INTEREST RATES.  The rate of interest a bank may charge
on certain classes of loans is limited by state and federal law.
At certain times in the past, these limitations, in conjunction
with national monetary and fiscal policies that affect the
interest rates paid by banks on deposits and borrowings, have
resulted in reductions of net interest margins on certain classes
of loans.  Such circumstances may recur in the future, although
the trend of recent federal and state legislation has been to
eliminate restrictions on the rates of interest which may be
charged on some types of loans and to allow maximum rates on
other types of loans to be determined by market factors.

          LOANS TO ONE BORROWER.  In addition to limiting the
rate of interest chargeable by banks on certain loans, federal
law imposes additional restrictions on a national bank's lending
activities.  Under federal law the maximum amount that a national
bank may lend to one borrower (and certain related interests of
such borrower) generally is limited to 15% of the bank's
unimpaired capital and unimpaired surplus, plus an additional 10%
for loans fully secured by readily marketable collateral.  There
are certain exceptions to the general rule including loans fully
secured by government securities or deposit accounts in the bank.
As of December 31, 1997, the Bank's lending limit under this
regulation was approximately $7,728,000.

          PAYMENT OF DIVIDENDS.  The National Bank Act restricts
the payment of dividends by a national bank as follows:  (i) no
dividends may be paid if the bank has no undivided profits or
retained earnings then on hand; (ii) until the surplus fund of
the bank is equal to its capital stock, no dividends may be
declared unless there has been carried to the surplus fund not
less than one-tenth of the bank's net profits of the preceding
half-year period in the case of quarterly or semiannual



<PAGE>




dividends, or not less than one-tenth of the net profits of the
preceding two consecutive half-year periods in the case of annual
dividends; and (iii) the approval of the OCC is required if
dividends declared by the bank in any year would exceed the total
of net profits for that year combined with retained net profits
for the preceding two years, less any required transfers to
surplus.

          As of December 31, 1997, retained earnings of the Bank
of $9,765,000 were available for payment of dividends to
Bancorporation without regulatory approval.  For additional
information on the Bank's capital, see "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Financial Condition--Shareholders' Equity."

          COMMUNITY REINVESTMENT ACT.  On May 4, 1995, the
Federal Reserve Board, the FDIC and the OCC adopted regulations
relating to the Community Reinvestment Act (the "CRA").  The
purpose of the CRA regulations is to establish the framework and
criteria by which the bank regulatory agencies assess an
institution's record of helping to meet the credit needs of its
community, including low- and moderate-income neighborhoods, and
to provide that the agencies' assessment shall be taken into
account in reviewing certain applications.  The regulations seek
to emphasize an institution's performance rather than the
process, to promote consistency in evaluation of institutions,
and to eliminate unnecessary reporting burdens.  The regulations
replace the previous twelve assessment factors for large banks
with three tests: (i) a lending test, (ii) a service test, and
(iii) an investment test.  While documentation requirements have
been substantially reduced, the safe harbors from CRA protest
have also been eliminated.

          OTHER REGULATORY LIMITATIONS.  Bancorporation and the
Bank are "affiliates" within the meaning of the Federal Reserve
Act.  As such, the amount of loans or extensions of credit which
the Bank may make to Bancorporation or to third parties secured
by securities or obligations of Bancorporation are substantially
limited by the Federal Reserve Act and the FDIA.  Such acts
further restrict the range of permissible transactions between a
bank and an affiliated company.  A bank and its subsidiaries may
engage in certain transactions, including loans and purchases of
assets, with an affiliated company only if the terms and
conditions of the transaction, including credit standards, are
substantially the same as, or at least as favorable to the bank
as, those prevailing at the time for comparable transactions with
non-affiliated companies or, in the absence of comparable
transactions, on terms and conditions that would be offered to
non-affiliated companies.

          The Bank is also authorized to invest in a service
corporation that can offer the same services as the banking



<PAGE>




related services that bank holding companies are authorized to
provide.  However, prior regulatory approval must generally be
obtained prior to making such an investment or performing such
services.

          BANKING ACTIVITIES.  The investments and activities of
the Bank are subject to substantial regulation by the OCC and the
FDIC, including without limitation investments in subsidiaries,
investments for their own account (including limitations on
investments in junk bonds and equity securities), investments in
loans, loans to officers, directors and affiliates, security
requirements, truth-in-lending, community reinvestment, the types
of interest bearing deposit accounts which they can offer, trust
department operations, brokered deposits, audit requirements,
issuance of securities, branching and mergers and acquisitions.

          MONETARY POLICY AND ECONOMIC CONDITIONS.  The principal
sources of funds essential to the business of banks and bank
holding companies are deposits, shareholders' equity, and
borrowed funds.  The availability of these various sources of
funds and other potential sources such as preferred stock or
commercial paper and the extent to which they are utilized depend
on many factors, the most important of which are the monetary
policies of the Federal Reserve Board and the relative costs of
different types of funds.

          An important function of the Federal Reserve Board is
to regulate the national supply of bank credit in order to combat
recession and curb inflationary pressures.  Among the instruments
of monetary policy used by the Federal Reserve Board to implement
these objectives are open market operations in U.S. Government
securities, changes in the discount rate on bank borrowings, and
changes in reserve requirements against bank deposits.

          The Bank is subject to regulations issued by the
Federal Reserve Board which require depository institutions to
maintain non-interest-bearing reserves against their transaction
accounts and non-personal time deposits.  These regulations
currently require depository institutions to maintain reserves
equal to 3% of transaction accounts up to $47.8 million plus 10%
(subject to adjustment by the Federal Reserve Board between 8%
and 14%) of the total over $47.8 million.  In addition, reserves,
subject to adjustment by the Federal Reserve Board between 0% and
9%, must be maintained on non-personal time deposits.  This
reserve percentage is currently 0%.  Depository institutions may
designate and exempt up to $4.4 million of reservable liabilities
from the above reserve requirements.  Because these reserves must
generally be maintained in cash or non-interest-bearing accounts,
the effect of the reserve requirements is to increase the cost of
funds to depository institutions.  As of December 31, 1997, the
Bank was required to maintain a reserve balance of $3.4 million.




<PAGE>




          Substantially all of the restrictions on the maximum
interest rates banks are permitted to pay on deposits have been
removed, although banks are still prohibited from paying interest
on demand deposits.  Consequently, banks and thrift organizations
are substantially free to pay interest at any rate.  Deregulation
has increased competition among such institutions for attracting
deposits and has resulted in an overall increase in such
institutions' cost of funds.

          The monetary policies of the Federal Reserve Board have
had a significant effect on the operating results of commercial
banks in the past and are expected to continue to do so in the
future.  In view of continuing changes in regulations affecting
commercial banks and other actions and proposed actions by the
Federal government and its monetary and fiscal authorities,
including proposed changes in the structure of banking in the
United States and general economic conditions, no prediction can
be made as to future changes in interest rates, credit
availability, deposit levels, loan demand, or the overall
performance of banks generally and of the Bank and Bancorporation
in particular.

          The references in the foregoing discussion to various
aspects of statutes and regulations are merely summaries which do
not purport to be complete and which are qualified in their
entirety by reference to the actual statutes and regulations.

Item 2.  Properties.

          The main offices of both the Bank and Bancorporation
are located at 905 Broad Street, Newark, New Jersey 07102.  The
building, which is owned by the Bank, is a two-story structure
constructed in 1960.  It has approximately 18,000 square feet of
usable office space, which currently are used for the Bank's
operations.  A wholly-owned subsidiary of the Bank owns the
five-story (approximately 45,000 square feet) Western Union
Building at 909 Broad Street in Newark, New Jersey, adjacent to
the Bank's main office.  Approximately 81% of this building is
used by the Bank and the remaining 19% of the building is leased
to nonaffiliated companies.

          The Bank currently has fourteen branch banking
facilities as described below in addition to its main location:

                              Approximate         Expiration
     Location                 Square Feet         Date of Lease

Plaza Banking Center            5,092            December 31,
745 Broad Street                                 1998 /5/
Newark, New Jersey




<PAGE>




Ironbound Banking Center        4,100            February 28,
7 Wheeler Point Road                             1999 /1/
Newark, New Jersey

North Newark Banking Center     3,500            December 31,
466 Bloomfield Avenue                            2002 /1/
Newark, New Jersey

Millburn Banking Center         2,600            March 31,
225 Millburn Avenue                                   2001  /1/
Millburn, New Jersey

Gateway III Banking Center      2,076            September 30,
100 Mulberry Street                                   1999 /1/
Newark, New Jersey

North Arlington Banking Center  1,700            October 7,
65 River Road                                    1998 /4/
North Arlington, New Jersey

Jackson Street Banking Center  10,900            Owned
123-133 Jackson Street
Newark, New Jersey

Bayway Banking Center           3,700            April 30,
1000 South Elmora Avenue                              2006 /2/
Elizabeth, New Jersey

Livingston Banking Center       3,450            November 30,
30 W. Mt. Pleasant Avenue                        2001 /3/
Livingston, New Jersey

Perth Amboy Banking Center      3,400            August 31,
Convery Plaza, Route 35                          2002 /5/
Perth Amboy, New Jersey

East Orange Central             6,070            Owned
  Banking Center
554 Central Avenue
East Orange, New Jersey

Elizabeth Banking Center           3,190         Owned
826 Elizabeth Avenue
Elizabeth, New Jersey

Kearny Banking Center             700            March 31,
180 Schuyler Ave.                                2000 /5/
Kearny, New Jersey




<PAGE>




East Ferry Office                 800            November 30,
290 Ferry Street                                 2000 /2/
Newark, New Jersey
_______________________

/1/ The Bank has the option to extend the term of the lease for
    one additional five year period.

/2/ The Bank has the option to extend the term of the lease for
    up to four additional five year periods.

/3/ The Bank has the option to extend the term of the lease for
    up to one additional five year period and one additional ten
    year period.

/4/ The Bank has the option to extend the term of the lease for
    two additional one year periods.

/5/ The Bank has the option to extend the term of the lease for
    two additional five year periods.

         The Bank also owns an 18,000 square foot building
located at 465 Bloomfield Avenue, Bloomfield, New Jersey.  Under
a lease agreement dated August 1993 between the Bank and EDS, all
of the space in the Bloomfield Avenue building is being leased to
EDS, which uses the space to provide data processing services,
related professional services, information processing and related
outsourcing services to the Bank and other financial
institutions.

         During 1998, the Bank will open a new full-service
banking center in Newark, New Jersey.

         Bancorporation neither owns nor leases any property.

ITEM 3.  LEGAL PROCEEDINGS.

         Neither Bancorporation nor the Bank is involved in any
material pending legal proceedings, other than routine litigation
incidental to their respective businesses.

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

         No matter was submitted to a vote of Bancorporation's
shareholders during the fourth quarter of the year ended
December 31, 1997.




<PAGE>




ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT.

         Executive officers of Bancorporation and of the Bank
are elected annually and serve until their successors are elected
and qualified at the next annual meeting of the directors of the
respective corporations.  The following table sets forth
information with respect to the executive officers of
Bancorporation and of the Bank.

                        Position with
                        Bancorporation
                        and Bank and Year        Principal
    Name           Age  First Elected            Occupation /1/

Donald M. Karp     61   Chairman of              Position with
                        the Board of             Bancorporation
                        Bancorporation (1985)    and the Bank/2/
                        and the Bank (1985);
                        Chief Executive Officer
                        of Bancorporation (1991)
                        and the Bank (1991);
                        Vice Chairman of the
                        Board of Bancorporation
                        (1981-1985) and the
                        Bank (1978-1985);
                        Director (1972)

John A. Dorman     59   President of             Position with
                        Bancorporation (1992)    Bancorporation
                        and the Bank (1992);     and the Bank
                        Director (1992)

Fred S. Campo      48   Senior Vice President    Position with
                        of the Bank (1986);      Bancorporation
                        Secretary of             and the Bank
                        Bancorporation (1982)
                        and the Bank (1991)

Fred Perry, Jr.    68   Senior Vice              Position with
                        President of             the Bank
                        the Bank (1978)

Peter Kenny        52   First Vice               Position with
                        President of             the Bank
                        the Bank (1991);
                        Senior Vice
                        President of the
                        Bank (1992)




<PAGE>




James Boyle        47   Treasurer of             Position with
                        Bancorporation;          Bancorporation
                        Comptroller of the
                        Bank (1988); Senior
                        Vice President of the
                        Bank (1992)

Ellen Rogoff       48   First Vice President     Position with
                        of the Bank (1993);      the Bank /3/
                        Senior Vice President
                        of the Bank (1994)

Ronald E. Schwarz  43   Senior Vice President    Position with
                        of the Bank (1997)       the Bank/4/

___________________

/1/ Unless otherwise indicated, each of the persons listed has
    been employed in the indicated principal occupation during
    the last five years.

/2/ Mrs. Donald M. Karp is the niece of Stanley J. Lesnik and
    the daughter of Harriet M. Alpert, a principal shareholder
    of Bancorporation.

/3/ For the three years prior to joining the Bank, Ms. Rogoff
    was Manager of Human Resources for Bristol Myers.  For at
    least two years prior to joining Bristol Myers, Ms. Rogoff
    was Manager of Human Resources for Action Tungsram.

/4/ Prior to joining the Bank, from June of 1995 to April of
    1997, Mr. Schwarz was Senior Vice President, Regional
    President Bergen/Passaic Counties for Hudson United Bank
    (successor to Urban National Bank).  From 1992 to June of
    1995, Mr. Schwarz was Senior Vice President, Director of
    Retail Banking for Urban National Bank.

         There are no arrangements or understandings between any
of the executive officers or any other persons pursuant to which
any of the executive officers have been selected to their
respective positions.


<PAGE>

                             PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         SHAREHOLDER MATTERS

         Shares of the Common Stock of Bancorporation have been
traded under the symbol BNBC on the NASDAQ National Market System
since June 2, 1988, and in the over-the-counter market prior to
this date.  The following table sets forth the range of high and
low closing sale price quotations per share for Bancorporation's
Common Stock as reported by NASDAQ, together with cash dividends
per share paid on Bancorporation's Common Stock, during the
periods indicated.

         The market price information does not include retail
markups, markdowns or commissions, but is based on actual
transactions.

Bancorporation             High*    Low*  Dividend*

1997 1st Quarter         $16 1/4   $10 3/4   $.10
     2nd Quarter          17 5/8    14        .10
     3rd Quarter          20 1/2    16 3/8    .10
     4th Quarter          24 1/2    15 5/8    .11

1996 1st Quarter         $10 1/8   $8        $.06
     2nd Quarter          10 1/8    9         .06
     3rd Quarter           9 1/2    8 5/8     .07
     4th Quarter          11 5/8    9         .08

____________
*   The market prices and dividends have been restated to give
    effect to the 5% stock dividend declared December 18, 1997
    and distributed January 6, 1998, and the 10% stock dividend
    which was declared September 19, 1996 and distributed
    October 4, 1996.

         As of January 31, 1998, there were 4,707,321 shares of
Bancorporation's Common Stock outstanding and approximately 900
holders of record of such stock.

ITEM 6.  SELECTED FINANCIAL DATA.

         The following table sets forth certain historical
financial data with respect to Bancorporation on a consolidated
basis.  The information contained in this table should be read in
conjunction with Bancorporation's historical Consolidated
Financial Statements and related notes thereto included elsewhere
in this Report.



<PAGE>

                                   December 31,
                  1997      1996      1995          1994      1993
                              (Dollars in thousands)
SELECTED CONSOLIDATED
STATEMENTS OF CONDITION
INFORMATION

Total assets     $601,669 $533,615   $481,185      $428,630  $438,532
Loans, gross      322,752  287,364    267,419       267,422   265,920
Investment
  securities      206,407  159,214    116,212       110,933   102,165
Total deposits    518,238  485,073    429,681       391,466   406,066
Short-term
  borrowings       13,000    1,000        782           177       342
Long-term debt      9,000        0          0             0         0
9.5% Cumulative
 Trust Preferred
 Securities        11,500        0          0             0           0
Shareholders'
  equity           39,231     38,358   34,529        30,266      27,421



<PAGE>
                                              December 31,
                         1997        1996         1995      1994      1993
                              (Dollars in thousands)

CONSOLIDATED STATEMENTS OF INCOME
   INFORMATION
Interest income        $ 40,855    $ 35,162     $ 33,398  $ 29,795   $28,313
Interest expense         15,930      11,818       10,082     7,464     8,082
Net interest income      24,925      23,344       23,316    22,331    20,231
Provision for
  possible loan
  losses                  1,800       1,350          720       450       900
Net interest income
  after provision
  for possible loan
  losses                  23,125     21,994       22,596    21,881    19,331
Non-interest income        7,117      6,556        4,491     3,649     4,023
Non-interest expense      19,549     19,849       19,536    20,073    19,813
Provision for income
  taxes                    4,282     3,428         3,131       768     1,491
Net income before
  cumulative effect of
  a change in
  accounting
  principle                 6,411    5,273         4,420     4,689     2,050
Cumulative effect of
  a change in
  accounting
 principle                      0        0              0         0     1,086
Net income               $  6,411  $ 5,273        $ 4,420   $ 4,689    $3,136
Per Share Data
Net income per
 common share
   Basic
     Before cumulative
      effect of a change
      in accounting
      principle            $1.34     $1.10        $1.13       $1.23     $0.44
      Cumulative effect of
      a change in
      accounting
      principle             0.00      0.00         0.00      0.00      0.33
Basic earnings per
  common share           $1.34       $1.10        $1.13     $1.23     $0.77
  Diluted
   Before cumulative
    effect of a change
    in accounting
    principle            $1.29        1.06         0.89      0.96      0.43
   Cumulative effect
    of a change in
    accounting
    principle             0.00        0.00         0.00      0.00      0.23
  Diluted earnings
   per common share      $1.29       $1.06        $0.89     $0.96     $0.66
Cash dividends per
  common share           $0.37       $0.27        $0.16     $0.15     $0.00
Book value per
  common share            8.33        7.82         7.05      6.81      5.96
Dividend payout ratio    27.16%      24.54%       26.58%    24.05%    20.37%
Weighted average number
 of common shares
 outstanding
 (in thousands):
      Basic                 4,788   4,789        3,407     3,322     3,276
      Diluted               4,957   4,998        4,959     4,896     4,781

FINANCIAL RATIOS
Return on average
  assets                  1.13%      1.05%        0.97%     1.04%     0.48%
Return on average
 shareholders' equity    16.33      14.58        13.52     16.16      7.83
Average equity to
 average assets           6.94       7.20         7.14      6.44      6.12
Earnings to fixed
 charges /1/              1.56       1.74         1.71      1.68      1.30
Net interest margin       4.70       5.05         5.59      5.41      5.12
Net interest spread       3.89       4.33         4.88      4.92      4.55
Asset Quality Ratios
Non-performing loans
 as a % of gross loans    1.49%      3.39%        3.82%     3.63%     7.72%
Non-performing loans
 as a % of total assets   0.80       1.82         2.12      2.26      4.68
Allowance for possible
 loan losses as a %
 of gross loans           2.16       2.97         2.77      2.84      4.23
Allowance for possible
 loan losses as a %
 of non-performing
 loans                  145.00      87.65        72.47     78.32     54.81
Net chargeoffs as a %
  of average gross
  loans                   1.10       0.08         0.35      1.56      0.90
Non-performing assets
 as a % of loans and
 OREO                     2.19       5.03         6.00      5.81     10.03
Capital Ratios
Leverage capital          8.19%      6.92%        7.17%      7.00%    6.23%
Tier 1 capital to total
 risk-weighted assets    13.16      11.17        10.58       9.96     9.16
Total capital to total
risk-weighted assets     14.41        12.44        11.85      11.22    10.45

/1/  The ratio of earnings to fixed charges is computed by dividing the sum
of income before taxes, fixed charges and preferred stock dividends by the sum
of fixed charges and preferred stock dividends.  Fixed charges represent
interest expense and payment of debt.





<PAGE>




ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE
STATEMENTS MADE IN THIS REPORT ON FORM 10-K ARE FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
BANCORPORATION'S ACTUAL RESULTS, FINANCIAL CONDITION OR BUSINESS
COULD DIFFER MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL
CONDITION OR BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL
CONDITION OR BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING
STATEMENTS.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED
BELOW UNDER THE CAPTION "FACTORS THAT MAY AFFECT FUTURE RESULTS
OF OPERATIONS, FINANCIAL CONDITION OR BUSINESS," AS WELL AS THOSE
DISCUSSED ELSEWHERE IN BANCORPORATION'S REPORTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.

          The following discussion and analysis is intended to
provide information about the financial condition and results of
operations of Broad National Bancorporation and its subsidiaries
on a consolidated basis and should be read in conjunction with
the Consolidated Financial Statements and their related notes.
As used in the following discussion, the term "Company" refers to
Broad National Bancorporation and its subsidiaries on a
consolidated basis; the term "Bank" refers to Broad National Bank
and its subsidiaries on a consolidated basis; and the term
"Bancorporation" refers to Broad National Bancorporation on a
parent company only basis.  When necessary, reclassifications
have been made to prior years' data throughout the following
discussion and analysis for purposes of comparability with 1997
data.

                             SUMMARY

     The Company recorded net income of $6,411,000 or diluted per
share earnings of $1.29 in 1997, compared to net income of
$5,273,000 or diluted per share earnings of $1.06 in 1996, and
net income of $4,420,000 or diluted per share earnings of $.89 in
1995.

     The per-share data for 1996 and 1995 have been restated to
reflect the effects of the 5% stock dividend declared December
18, 1997 and distributed January 6, 1998, as well as all prior
stock dividends.

     An improvement in net interest income and non-interest
income as well as a decrease in non-interest expense contributed
to the increase in income for 1997 as compared to 1996.

     An improvement in non-interest income, particularly the
increase in service charges on deposit accounts resulting from a
more consistent collection of fee income for services provided,



<PAGE>




is the primary reason for the increase in net income for 1996 as
compared to 1995.

     The Company's return on average assets was 1.13% for 1997,
1.05% for 1996 and 0.97% for 1995.  The Company's return on
average shareholders' equity was 16.33% for 1997, 14.58% for 1996
and 13.52% for 1995.

     The Company's total assets increased $68,054,000 or 12.8% in
1997 following an increase of $52,430,000 or 10.9% in 1996.
Total deposits increased $33,165,000 or 6.8% in 1997 following an
increase of $55,392,000 or 12.9% in 1996.  Total loans, net of
the allowance for possible loan losses and unearned income,
increased $36,969,000 or 13.3% in 1997 following growth of
$18,857,000 or 7.3% in 1996.

RESULTS OF OPERATIONS

Net Interest Income

     Net interest income, the primary source of earnings for the
Company, is the difference between interest and fees earned on
loans and other earning assets, and interest paid on deposits and
other interest bearing liabilities.  Earning assets include
loans, investment securities and federal funds sold.  Interest
bearing liabilities include savings, interest bearing demand and
time deposits, short-term borrowings, long-term debt and 9.5%
Cumulative Trust Preferred Securities.

     The following table shows the Company's consolidated average
balance of assets, liabilities, and shareholders' equity as well
as the amount of interest income or interest expense and the
average rate for each category of interest-earning assets and
interest-bearing liabilities.  Non-accrual loans are included in
average loans and interest on loans includes loan fees.
Nontaxable income from investment securities and loans is
presented on a tax-equivalent basis assuming a 34% tax rate.


<PAGE>

<TABLE>

                                                   NET INTEREST INCOME

                                        1997                               1996                             1995

                    Average   Interest   Average      Average   Interest   Average     Average   Interest   Average
                    Balance   and Fees   Rate         Balance   and Fees    Rate       Balance   and Fees    Rate
                                                                 (Dollars in Thousands)
<CAPTION>

<S>                 <C>        <C>       <C>        <C>        <C>         <C>       <C>        <C>         <C>
ASSETS

Federal funds
sold                $ 51,321   $ 2,813   5.48%      $ 48,201    $ 2,567     5.33%    $ 38,383    $ 2,253     5.87%
Investment
 Securities
 Securities
 held-to-
 maturity /1/         82,241     5,243   6.38         75,403      4,745     6.29       87,128      5,154     5.92
  Securities
  available-
  for-sale/4/         93,135     5,894   6.33         61,948      3,689     5.95       27,029      1,682     6.22
Total investment
  securities         175,376    11,137   6.35 /2/    137,351      8,434     6.14 /2/  114,157      6,836     5.99 /2/
Loans
  Mortgage           197,324    17,476    8.86        186,717     16,188     8.67      179,371     16,425     9.16
  Installment         23,214     2,088    8.99         15,083      1,460     9.68       11,328      1,125     9.93
  Commercial          83,687     7,370    8.81         75,459      6,485     8.59       74,248      6,691     9.01
  States and political
  subdivisions /1/         5         1  12.48            756         88    11.64        1,148        146     12.72
  Total loans        304,230    26,935   8.85 /2/    278,015     24,221     8.71 /2/  266,095     24,387     9.16 /2/
  Total interest
  earning assets     530,927   $40,885   7.70%/2/    463,567    $35,222     7.60%/2/  418,635    $33,476     8.00%/2/
Less-Allowance for
  possible
  loan losses          8,599                            7,869                            7,558
All other assets      43,683                           46,517                           46,749
Total assets        $566,011                        $ 502,215                         $457,826

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest bearing
  deposits Savings,
  money market and
  interest bearing
  demand deposits   $214,666   $ 4,756   2.22%      $222,912      $4,899    2.20%     $221,749   $ 4,900      2.21%
  Time deposits:
   Under $100,000     96,429     4,990    5.17         84,077       4,222    5.02        78,511     3,973      5.06
   Over $100,000      93,127     5,182    5.56         52,891       2,639    4.99        20,279     1,040      5.13
  Total interest
   bearing deposits  404,222    14,928    3.69        359,880      11,760    3.27       320,539     9,913      3.09
Short-term
 borrowings            4,885       281    5.75          1,149          58    5.05         2,808       169      6.02
Long-term debt         2,752       175    6.36              0           0       0             0         0         0
9.5% Cumulative Trust
  Preferred
  Securities           5,750       546   9.50               0           0       0             0         0         0
Total interest
 bearing
 liabilities         417,609   $15,930    3.81%       361,029     $11,818    3.27%      323,347   $10,082     3.12%
Other liabilities      9,085                            7,831                             6,516
Demand deposits      100,055                           97,197                            95,264
Shareholders'
  equity              39,262                           36,158                            32,699
Total liabilities
and shareholders'
equity              $566,011                          $502,215                           $457,826

NET INTEREST INCOME            $24,955                             $23,404                        $23,394
NET INTEREST SPREAD                       3.89%                               4.33%                            4.88%
NET INTEREST MARGIN                       4.70%/3/                            5.05%/3/                         5.59%/3/

     /1/ Interest income for investments in states and political subdivisions includes tax-equivalent adjustments at a
         34% rate.
     /2/ Average rates reflect the tax-equivalent adjusted yields on non-taxable investments and loans.
     /3/ Represents the difference between interest earned and interest paid, divided by total interest-earning assets.
     /4/ Securities available-for-sale are presented at amortized cost.

<TABLE\>


Rate/Volume Analysis Of Net Interest Income

     The effect of changes in average balance and rate from the
corresponding prior period on interest income, interest expense
and net interest income for the years ended December 31, 1997 and
1996 is set forth below.




<PAGE>




     The effect of a change in average balance has been
determined by applying the average rate for the earlier period to
the change in average balance for the later period, as compared
with the earlier period.  The effect of a change in the average
rate has been determined by applying the average balance for the
earlier period to the change in average rate for the later
period, as compared with the earlier period.  The variances
attributable to simultaneous balance and rate changes have been
allocated in proportion to the relationship of the dollar amount
of change in each category.



</TABLE>
<TABLE>

                                    1997 Compared with 1996             1996 Compared with 1995
                                      Increase (Decrease)                 Increase (Decrease)
                                       Due to a Change in                  Due to a Change in

                              Average     Average                 Average    Average
                              Balance       Rate      Total       Balance     Rate     Total
                                                       (Dollars in Thousands)

<CAPTION>

<S>                           <C>          <C>           <C>         <C>       <C>       <C>
Interest earned on:
  Loans                          $ 2,316     $   398     $2,714       $1,073   $(1,239)  $ (166)
  Investment securities            2,415         288      2,703        1,421       177    1,598
  Federal funds sold                 164          82        246          578      (264)     314
  Total interest income            4,895         768      5,663        3,072    (1,326)   1,746
Interest paid on:
  Savings, money market and
     interest bearing demand
     deposits                       (246)        103       (143)           1        (2)     (1)
  Time deposits:
    Under $100,000                   642         126        768          282       (33)     249
    Over $100,000                  2,242         301      2,543        1,673       (74)   1,599
  Short-term borrowings              222           1        223          (87)      (24)    (111)
  Long-term debt                     175           0        175            0         0        0
  9.5% Cumulative Trust
     Preferred Securities             546           0      546            0         0        0
  Total interest expense           3,581         531      4,112        1,869      (133)   1,736
Change in net interest income    $ 1,314       $ 237     $1,551       $1,203   $(1,193)  $   10
Percent increase in
  net interest income over the
  prior period                                             6.63%                           0.04%

<TABLE\>


     Total tax equivalent interest income of $40,885,000 for 1997
represents an increase of $5,663,000 or 16.1% over total tax
equivalent interest income of $35,222,000 for 1996.  This
improvement is primarily due to an increase of $67,360,000 in the
average balance of interest earning assets for 1997 as compared
to 1996.  The average balance of total investment securities was
$38,025,000 higher for 1997 than for 1996, while the average
balance of total loans was $26,215,000 higher for 1997 than for



<PAGE>




1996.  The increase in the average balance of interest earning
assets contributed an additional $4,895,000 to total tax
equivalent interest income for 1997 as compared to 1996.  An
increase in the average rate earned on interest earning assets
contributed an additional $768,000 to total tax equivalent
interest income for 1997 as compared to 1996.  The average tax
equivalent yield for total average interest earning assets was
7.70% for 1997 as compared to 7.60% for 1996, an increase of 10
basis points.

     Total interest expense of $15,930,000 for 1997 was
$4,112,000 or 34.8% higher than 1996.  An increase of $56,580,000
in total interest-bearing liabilities is the primary reason for
this increase, resulting in an additional $3,581,000 of interest
expense for 1997 as compared to 1996.  1997 interest expense
increased an additional $531,000 due to an increase in the cost
of total interest-bearing liabilities.  The average cost of
interest-bearing liabilities was 3.81%, an increase of 54 basis
points from 3.27% in 1996.  The funding of asset growth through
an increase in relatively higher costing time deposits as well as
the addition of higher costing short-term and long-term
borrowings contributed to the increase in the cost of interest-
bearing liabilities for 1997.

     Tax equivalent net interest income for 1997 was $24,955,000,
an increase of $1,551,000 or 6.63% from $23,404,000 for 1996,
primarily due to the average balance of total interest earning
assets increasing more than the average balance of total interest
bearing liabilities.  However, the net interest spread on a tax
equivalent basis declined 44 basis points to 3.89% for 1997
compared to 4.33% for 1996, and the net interest margin, which is
tax equivalent net interest income expressed as a percentage of
average interest earning assets, declined 35 basis points to
4.70% for 1997 compared to 5.05% for 1996.  This reflects the
fact that the growth of interest earning assets outpaced the
growth in net interest income, resulting from the use of higher
costing time deposits as well as short-term and long-term
borrowings to fund the growth of average interest earning assets.

     Total tax equivalent interest income of $35,222,000 for 1996
represents an increase of $1,746,000 or 5.2% over total tax
equivalent interest income of $33,476,000 for 1995.  This
improvement is primarily due to an increase of $44,932,000 in the
average balance of interest earning assets for 1996 as compared
to 1995.  The largest increase in average balances is reflected
in total investment securities, for which the average balance of
$137,351,000 for 1996 is $23,194,000 higher than 1995.  The
average balances of total loans and federal funds sold for 1996
as compared to 1995 increased $11,920,000 and $9,818,000,
respectively.  The overall increase in the average balance of
total interest earning assets contributed an additional
$3,072,000 to total tax equivalent interest income for 1996 as



<PAGE>




compared to 1995.  However, this increase was partially offset by
a decrease of $1,326,000 in total tax equivalent interest income
for 1996 as compared to 1995, resulting from a decline of 40
basis points in the average rate earned on interest earning
assets.  Decreases in the federal funds rate and the prime rate
are the primary reasons for the decline in the average rates
earned on total interest earning assets.

     Total interest expense of $11,818,000 for 1996 was
$1,736,000 or 17.2% higher than 1995.  The cost of total interest
bearing liabilities increased to 3.27% for 1996 as compared to
3.12% for 1995.  An increase of $37,682,000 in total interest
bearing liabilities, and a change in the mix of interest bearing
liabilities contributed to the increase in total interest expense
for 1996 as compared to 1995.  Total average time deposits of
$136,968,000 for 1996 were $38,178,000 or 38.7% higher than 1995
total average time deposits.  This increase in average time
deposit balances increased 1996 interest expense by $1,955,000 as
compared to 1995 interest expense.  The increase in the average
balance of total time deposits also resulted in higher cost time
deposits representing 37.9% of total interest bearing liabilities
for 1996 as compared to 30.6% of total interest bearing
liabilities for 1995.  This change in the mix of interest bearing
liabilities contributed to the increase in the cost of interest
bearing liabilities to 3.27%  for 1996 as compared to 3.12% for
1995.

     Tax equivalent net interest income for 1996 was $10,000 or
 .04% higher than 1995 tax equivalent net interest income.  The
decline in the average rate on interest earning assets and the
increase in the volume of interest bearing liabilities,
particularly higher cost time deposits, offset the increased
interest income which resulted from the increased volume of
interest earning assets.

PROVISION FOR POSSIBLE LOAN LOSSES

     In determining the provision for possible loan losses,
management considers historical loan loss experience, changes in
composition and volume of the portfolio, the level and
composition of non-performing loans, the adequacy of the
allowance for possible loan losses, and prevailing economic
conditions.  The provision for possible loan losses was
$1,800,000, $1,350,000 and $720,000 for 1997, 1996 and 1995,
respectively.  The increase in the provision for possible loan
losses during 1997 was primarily due to the increase in loans
outstanding, as well as the increase in net loan charge-offs.
The increase in the provision for possible loan losses during
1996 was primarily due to the increase in loans outstanding, as
well as management's efforts to address specific problem loans
and improve the Company's asset quality ratios.




<PAGE>




     Actual net loan charge-offs were $3,357,000 or 1.10% of
average total loans, $221,000 or .08% of average total loans and
$920,000 or .35% of average total loans for 1997, 1996 and 1995,
respectively.

NON-INTEREST INCOME AND NON-INTEREST EXPENSES

     Total non-interest income of $7,117,000 for 1997 was
$561,000 or 8.6% higher than 1996.  Service charges on deposit
accounts increased $575,000 or 10.7% to $5,945,000 for 1997.
This growth occurred during the first six months of 1997 and
represents primarily non-sufficient funds fees from demand
deposit accounts.

     Other non-interest income declined $146,000 or 11.9% to
$1,085,000 for 1997.  1996 other non-interest income included a
non-recurring damage award of $285,000.  Exclusive of this non-
recurring item for 1996, other non-interest income for 1997 was
$139,000 higher than 1996, primarily due to ATM non-customer
convenience fees.

     For 1997, gains from the sale of securities available-for-
sale were $84,000, an improvement of $129,000 over the loss of
$45,000 recorded in 1996.

     Total non-interest income of $6,556,000 for 1996 was
$2,065,000 or 46% higher than 1995.  The most significant
component of this increase was represented by service charges on
deposit accounts, which were $1,855,000 or 52.8% higher for 1996
as compared to 1995.  This improvement was attributable to a more
consistent application and collection of certain deposit fee
income for services provided to the existing base of deposit
accounts.

     Other non-interest income increased $344,000 in 1996 as
compared to 1995.  The largest component of this increase was a
non-recurring recognition of $285,000 which represented damages
awarded to the bank in settlement of a lawsuit it had filed
against an outside service provider for breach of duty.  Non-
interest income for 1996 also included a loss of $45,000 from the
sale of securities available-for-sale, compared to a gain of
$71,000 from the sale of securities available-for-sale in 1995.

     Total non-interest expenses of $19,549,000 for 1997 were
$300,000 or 1.5% lower than 1996.  Reductions in employee
benefits and other real estate expenses, offset to a certain
extent by an increase in other expenses, were the primary reasons
for the decrease in non-interest expenses.

     Salaries increased $104,000 or 1.3% in 1997 to $8,000,000
primarily as the result of incentive salary programs.  Employee
benefits expense was $2,094,000 for 1997, a reduction of $392,000



<PAGE>




or 15.8% from 1996.  This decrease is the result of a decline in
hospital and medical insurance claims.

     The improvement in other real estate expenses is
attributable to gains of $343,000 from the sales in 1997 of
properties classified as other real estate owned.

     Other non-interest expenses increased $345,000, or 24.5%, in
1997, reflecting increased costs associated with employee
training programs and temporary help, as well as expenses
associated with the issuance in 1997 of the 9.5% Cumulative Trust
Preferred Securities (see Note 11 of the Notes to Consolidated
Financial Statements).

     Total non-interest expense of $19,849,000 for 1996 was
$313,000 or 1.6% higher than 1995.

     Salaries expense totaled $7,896,000 for 1996, an increase of
$161,000, or 2.1%, compared to 1995.  Merit increases and
increased incentive salary programs were partially offset by
reductions in staff.  Employee benefits expense was $231,000 or
10.2% higher for 1996 as compared to 1995.  Most of this increase
was attributable to higher costs for hospital and medical
insurance and pension plans.

     Furniture and equipment expense of $1,090,000 for 1996 was
$123,000 or 10.1% lower than 1995.  This was primarily
attributable to the reduction of equipment rental costs resulting
from the Company's decision to purchase rather than lease its
personal computer equipment.

     Legal fees totaled $858,000 for 1996, an increase of
$311,000, or 56.9%, as compared to 1995.  Most of this increase
was attributable to increased legal expenses associated with the
Bank's efforts to work out its problem loans.

     Professional fees of $1,307,000 for 1996 were $488,000 or
59.6% higher than for 1995.  The largest contributing factor to
this increase were fees of approximately $625,000 paid to an
outside consulting firm which assisted management with a
reengineering project for the Bank.

     FDIC and OCC assessments totaled $112,000 for 1996, a
decrease of $455,000, or 80.2%, compared to 1995.  The FDIC
assessment declined from $461,000 in 1995 to the $2,000 minimum
assessment which the Bank was required to pay in 1996 as a well
capitalized institution as defined in the regulatory prompt
corrective action framework for capital adequacy requirements.

     Other real estate expense of $202,000 for 1996 was $103,000
or 104% higher than for 1995.  A significant factor contributing



<PAGE>




to this increase was a loss of approximately $95,000 resulting
from the sale of an OREO property during 1996.

Income Taxes

     The effective tax rates for 1997, 1996 and 1995 were 40.0%,
39.4% and 41.5%, respectively.  The decrease in the effective tax
rate to 39.4% for 1996 was primarily due to the recognition of
tax benefits resulting from the adjustment of the valuation
allowance for deferred tax assets.

     There was no change in the total valuation allowance for
1997. The net change in the total valuation allowance for 1996
was a decrease of $160,000, which was primarily the result of the
reduction of the Bank's state tax loss carry forward during 1996.


                       FINANCIAL CONDITION

Loans

     Total loans, net of deferred loan fees, of $322,528,000 at
December 31, 1997 increased $35,412,000 or 12.3% from the
December 31, 1996 balance of $287,116,000.  The most significant
growth occurred in the commercial loan and commercial mortgage
categories.  Average loans totaled $304,230,000 for 1997, an
increase of $26,215,000 or 9.4% compared to an average of
$278,015,000 for 1996.  For 1997, average loans represented 57.3%
of total interest earning assets, compared to 60.0% of total
interest earning assets for 1996.

The following table shows the classification of loans by major
category, at December 31, for each of the past five years.

                                          December 31,
                      1997          1996       1995         1994         1993
                                      (Dollars in Thousands)
Real estate loans:
  Construction     $ 10,844      $  5,990   $  4,097      $ 3,913      $ 5,209
  Mortgage
    Residential      78,654        72,791     62,168       63,646       66,409
    Commercial      141,464       126,050    122,346      114,901      108,749
Commercial loans     82,524        73,171     68,479       76,465       66,612
Installment loans     8,576         8,341      9,641        7,496        7,339
Other loans             690         1,021        688        1,001          559
Loans held for sale
  (market value
  $11,153)                0             0          0            0       11,043
  Total gross
   loans           $322,752      $287,364   $267,419     $267,422     $265,920

     Real estate loans include construction mortgages,
residential mortgages (including home equity loans), and
commercial mortgages.




<PAGE>




     Construction loans are predominately floating rate loans and
the term thereof generally does not exceed one year.  The
majority of the Bank's construction loans consist of loans
secured by single family dwellings located in the Bank's primary
market area.

     Residential mortgage loans include mortgages for the
purchase or refinancing of residential properties and are secured
by first liens on those properties.  This category also includes
home equity loans which are secured by either a first or second
lien on real estate.

     Commercial mortgages include mortgages on owner occupied
buildings and investment properties, secured by first mortgages
on these properties.  Amortization is generally based on terms of
15 years or less, and most loans have interest rate reset terms
of five years or less.

     Commercial loans primarily represent loans to commercial
borrowers for working capital and other short-term needs and term
loans for the acquisition of assets.  The terms of such loans
generally range from one to five years.

     Installment loans are granted primarily to individuals on an
installment basis, may be secured by liens on personally held
assets or may be unsecured, and include auto loans, home
improvement loans, student loans, revolving credit plans and
personal loans.

The following table summarizes the contractual maturities of
certain loan categories at December 31, 1997.


                 Within      1-5      Over
               One Year      Years   5 Years      Total
                           (Dollars in Thousands)
Real estate loans:
  Construction  $10,036    $    808   $      0  $ 10,844
  Mortgage       26,414      33,018    160,686    220,118
Commercial
  loans          38,786      33,835      9,903      82,524

     The table below presents the breakdown of loans with fixed
and variable rates at December 31, 1997 for loans with a term of
greater than one year in the following categories:

                           Fixed               Variable
                        Interest Rates       Interest Rates
                                 (Dollars in Thousands)
Real Estate loans:
  Mortgage               $ 89,065                $104,639
Commercial loans           19,245                  24,493





<PAGE>




     The Company's loan portfolio is varied, with no undue
concentration in any single industry, although most of the loans
in the Company's loan portfolio have been made to borrowers in
New Jersey.  The Company's home equity loan portfolio (which is
included in real estate mortgages in the table above) and a
substantial portion of its commercial loan portfolio have
interest rates that reprice with changes in the prime rate.

Allowance for Possible Loan Losses

     The allowance for possible loan losses is maintained at an
amount considered adequate by management and the Board of
Directors to provide for potential credit losses based upon a
periodic evaluation of the risk characteristics of the loan
portfolio.

     Management and the Board of Directors of the Company review
the allowance for possible loan losses on a regular basis.
Management and the Board evaluate a number of factors in
determining the appropriate level of the allowance for possible
loan losses.  Weakening credits are evaluated individually and
factors such as the creditworthiness of the borrower, the
adequacy of underlying collateral and the probable impact of
business and economic conditions upon the borrower are examined.
The review process also takes into consideration the possibility
that there may be losses in the loan portfolio which cannot
currently be identified, and the degree of risk inherent in the
composition of the loan portfolio.  The volume of non-performing
and other classified loans and their relationship to the loan
portfolio, as well as historical charge-off experience, are also
examined.

The following table summarizes the activity in the allowance for
possible loan losses over each of the past five years.  Also
presented are certain key ratios regarding the allowance.



<PAGE>

                                  December 31,
               1997         1996         1995       1994       1993
                                 (Dollars in Thousands)

Average loans
outstanding
during the year  $304,230    $278,015     $266,095     $262,053   $255,634

Total gross
loans at
period end       $322,752    $287,364     $267,419     $267,422   $265,920

Allowance,
beginning of
the year         $  8,531    $  7,402     $  7,602     $ 11,252   $ 12,659

Loans charged-off
during the year:
  Commercial        2,370         569        1,952        2,184      2,047
  Mortgage          1,403         520           80        2,809        379
  Installment         185         175           91          148        157

Total loans
charged-off
during the year     3,958       1,264        2,123        5,141      2,583

Recoveries
during the year:
  Commercial          369         804        1,005          890        111
  Mortgage            132         104          142           10          0
  Installment         100         135           56          141        165

Total recoveries
during the year       601        1,043        1,203        1,041        276

Net loans
charged-off
during the year     3,357          221          920        4,100      2,307

Provision charged
to operations       1,800       1,350          720          450        900

Allowance,
end of the year  $  6,974     $ 8,531       $7,402     $  7,602  $  11,252

Ratio of net
loans charged-off
to average
loans outstanding
during the year     1.10%       0.08%        0.35%        1.56%      0.90%

Allowance for
possible loan
losses as a
percentage of
total gross loans   2.16%       2.97%        2.77%        2.84%      4.23%


The following table reflects the allowance for possible loan
losses by category as of December 31, for each of the past five
years:


</TABLE>
<TABLE>
                                                  December 31,
                       1997           1996                1995           1994           1993

                          Percent            Percent          Percent            Percent          Percent
                          of Loans          of Loans          of Loans           of Loans         of Loans
                            to                 to                to                to               to
                  Dollar   Total    Dollar   Total    Dollar   Total    Dollar   Total    Dollar   Total
                  Amount   Loans    Amount   Loans    Amount   Loans    Amount   Loans    Amount   Loans
                                                  (Dollars in Thousands)
<CAPTION>

<S>               <C>      <C>      <C>      <C>        <C>     <C>       <C>      <C>     <C>      <C>
Real Estate Loans:
  Construction    $   57       3%   $   30       2%     $  163     2%     $  163     2%    $   817     2%
  Mortgage         1,257      68     1,880      69       1,765    68       1,984    66       3,370    65
Commercial
 loans             5,340      26     6,303      26       5,052    26       5,147    29       6,664    25
Installment
  loans              182       3       171       3         271     4         308     3         401     4
Other                138       *       147       *         151     *           0     *           0     4
  Total           $6,974     100%   $8,531     100%     $7,402    100%    $ 7,602   100%   $11,252   100%
*  Less than 1.0%


<TABLE\>


     During 1997, total loans charged off increased $2,694,000 or
213% to $3,958,000.  Of the total 1997 charge-offs of $3,958,000,
$1,926,000 represented loans that had been classified and
reported as non-accrual loans at or prior to December 31, 1996.
An additional $1,798,000 represented the loan of a single
borrower.  This loan had previously been restructured and was
being reported by the Company as a restructured loan and a non-
performing asset.  This loan was performing in accordance with
its restructured terms until October of 1997, at which time the
Company noted a significant deterioration in the financial
condition of the borrower sufficient to create doubt as to the



<PAGE>




collectibility of the remaining outstanding loan balance and
resulting in the loan being charged off.

     The allowance for possible loan losses includes an
allocation for all loans classified as special mention,
substandard, doubtful or loss (See "Asset Quality" below for
definitions of such classifications).  After allocating the
allowance for classified loans, an allocation is made for all
non-classified loans.  The allocation for non-classified loans is
made by loan category, based upon the historical loss experience
for each loan category as well as perceived risk of loss for each
loan category.  The amount of the allowance applicable to
non-classified loans was $4,770,000 and $5,819,000 at December
31, 1997 and December 31, 1996, respectively.  Since these
factors are subject to change, the allocation of the allowance
for possible loan losses should not be interpreted as an
indication that such amounts or proportions will continue or
indicate future trends.

     The specific amount of the allowance in any particular
category may prove excessive or inadequate and consequently may
be reallocated in the future to reflect current conditions.
Accordingly, the Company considers the entire reserve to be
available to absorb losses in any category.

Asset Quality

     Various degrees of credit risk are associated with
substantially all investing activities.  Management believes that
the lending function, however, carries the greatest risk of loss.

     The Bank's credit due diligence begins at the time a
borrower and the Bank begin to discuss the origination of a loan.
Documentation including a borrower's credit history, materials
establishing the value and liquidity of potential collateral, the
purpose of the loan, the source and timing of the repayment of
the loan and other factors are analyzed before a loan is
submitted for approval.

     The Company attempts to minimize overall credit risk through
loan diversification.  The Company's loan portfolio is varied,
with no undue concentration in any single industry, although most
of the loans in the Company's loan portfolio have been made to
borrowers in New Jersey.

     Individual loan officers are assigned to monitor
non-installment and non-residential mortgage loans and are
responsible for the periodic updating of their reviews of such
loans.  Loan officers are actively encouraged to identify
potential deteriorating loan situations through a self-reporting
system.




<PAGE>




     Installment and residential mortgage loans are primarily
monitored through an analysis of their payment status.

     Classified loan reports are prepared and reviewed regularly
by the problem loan committee.  Classified loans are placed into
one of several categories, depending upon the condition of the
borrower and the strength and amount of collateral.

     Classifications consist of "special mention loans," defined
as loans with only modest deficiencies in documentation and with
potentially weakening credit features; "substandard loans,"
defined as loans that have a well-defined credit weakness;
"doubtful loans," defined as loans that have a significantly
higher probability of loss than substandard loans; and "loss"
loans which are charged-off when they are deemed uncollectible.

     Non-performing assets consist of (i) non-performing loans,
which include non-accrual loans and loans past due 90 days or
more as to interest or principal payments but not placed on
non-accrual status; (ii) loans that have been restructured due to
a weakening in the financial position of the borrower
(restructured loans) and (iii) other real estate owned ("OREO"),
net of reserves.

The following table reflects the components of non-performing
assets at December 31, for each of the past five years:

<PAGE>



</TABLE>
<TABLE>

                                                                December 31,
                               1997             1996             1995             1994             1993
                                                          (Dollars in Thousands)
<CAPTION>

<S>                           <C>            <C>                <C>              <C>              <C>
Past due, 90 days or more:
  Mortgage                    $  434          $1,068            $1,938           $1,388           $4,535
  Commercial                     477             247             1,167              714            1,434
  Installment                     20              34                18               23               53
Total past due 90 days
  or more                     $  931          $1,349            $3,123           $2,125           $6,022
Non-accrual loans:
  Mortgage                    $  652          $2,800            $4,042           $4,357           $9,858
  Commercial                   3,229           5,584             3,049            3,222            4,641
  Installment                     10               0                 0                2                7
Total non-accrual loans        $3,891         $8,384            $7,091          $ 7,581          $14,506
Total non-performing loans     $4,822         $9,733           $10,214          $ 9,706          $20,528
Restructured loans
  (excluding amounts
  classified as
  non-performing loans)         1,619          3,934             5,105            5,445            5,721
Other real estate
  owned, net                      648            841               772              400              461
Total non-performing assets  $  7,089         $14,508           $16,091          $15,551          $26,710
Non-performing loans as a
  percent of total gross
  loans                         1.49%           3.39%             3.82%            3.63%            7.72%
Non-performing loans as a
  percent of total assets       0.80%           1.82%             2.12%            2.26%            4.68%
Non-performing assets as a
  percent of loans and other
  real estate owned             2.19%           5.03%             6.00%            5.81%           10.03%
Allowance for possible
  loan losses                   $6,974         $ 8,531           $ 7,402          $ 7,602          $11,252
Allowance for possible
  loan losses as a percent
  of non-performing loans      144.63%          87.65%            72.47%           78.32%           54.81%

<TABLE\>

     During 1997 non-performing loans decreased $4,911,000 or 50%
to $4,822,000.  The major components of this reduction were
chargeoffs of $1,926,000, payments received of $931,000,
transfers to other Real Estate Owned in the amount of $212,000
and loans totaling $1,629,000 returned to accrual status.

     The decline of $2,315,000 in restructured loans during 1997
is primarily due to the chargeoff of a single loan in the amount
of $1,798,000, as previously discussed under Allowance for
Possible Loan Losses.

     It is the Company's general policy to discontinue the
accrual of interest and reverse previously accrued but unpaid
interest as to a particular loan when interest or principal is
more than 90 days past due on such loan or other circumstances
indicate that full collection is questionable, unless the loan is
adequately secured and in the process of collection.  Income on
non-accrual loans is recognized only in the period in which it is
collected.

     In addition to the non-performing and restructured loans as
of December 31, 1997 and 1996, the Company had classified an
additional $4,539,000 and $3,088,000, respectively, as
substandard loans.   A loan loss reserve has been allocated to
such loans in accordance with the Company's policies.

     In the course of resolving non-performing loans, the Bank
may restructure the contractual terms of its loans with its



<PAGE>




borrowers.  If, prior to such restructuring, the loan was
classified as non-accrual, it is the Bank's policy to continue to
carry these restructured loans on non-accrual status for a period
of time (typically six months) before management considers their
return to accrual status.  At December 31, 1997, one loan in the
amount of $1,619,000 was categorized as restructured.  This loan
is currently performing in accordance with its modified terms.

     At December 31, 1997 and 1996, the recorded investment in
loans that are considered to be impaired was $7,334,000 and
$10,109,000, respectively.  The related allowance for credit
losses was $0 at December 31, 1997, and $500,000 at December 31,
1996.  The impaired loan portfolio is primarily collateral
dependent.  The change in the allowance for impaired loans
represented a recovery of $500,000 during 1997, as compared to a
recovery of $270,000 during 1996.  The average investment in
impaired loans during the years ended December 31, 1997 and 1996
was approximately $9,334,000 and $9,657,000, respectively.  For
the years ended December 31, 1997 and 1996, the Company
recognized cash basis interest income on these impaired loans of
$344,000 and $265,500, respectively.

     The level of non-performing assets is heavily dependent upon
local economic conditions.  The December 31, 1997 total
non-performing assets of $7,089,000 represents a decrease of
$7,419,000 or 51% from December 31, 1996.  There can be no
assurance that the level of the Company's non-performing assets
will not increase in the future.

Investment Securities and Federal Funds Sold

     The Company invests a portion of its available funds in
short-term and longer-term instruments, including federal funds
sold and investment securities.

     Federal funds sold are used primarily for daily cash
management purposes.  Average federal funds sold of $51,321,000
for 1997 represented 9.7% of total average interest earning
assets, as compared to 10.4% for 1996.

     Investment securities include obligations of the U.S.
Government or its agencies, obligations of states and political
subdivisions, Federal Reserve Bank stock and debt securities.
The Company's investment securities portfolio is utilized to
collateralize certain of the Bank's lines of credit and public
and fiduciary deposits.  It also provides liquidity through
proceeds from scheduled maturities.  The majority of the
Company's investment securities carry fixed interest rates.

     The Company does not have trading securities.  It classifies
its securities holdings between held-to-maturity and
available-for-sale.  The accounting standard provides a different



<PAGE>




accounting treatment for each category.  Management determines
the appropriate classification of securities at the time of
purchase.

     If management has the positive intent and the Company has
the ability at the time of purchase to hold securities until
maturity, they are classified as held-to-maturity securities.
Such securities are stated at amortized cost, adjusted for
unamortized purchase premiums and discounts.

     Securities in the available-for-sale category are those for
which the Company does not have the positive intent and ability
to hold to maturity.  Available-for-sale securities are reported
at fair value.  Any unrealized appreciation or depreciation in
the available-for-sale securities, net of tax effects, is
reported as a separate component of equity capital.  At December
31, 1997 and 1996, the Company reported net unrealized securities
gains of $244,000 and $146,000, respectively, in the
Shareholders' Equity section of the Consolidated Statement of
Condition.

     At December 31, 1997, securities held-to-maturity of
$65,330,000 represented 31.7% of the total investment securities
portfolio, as compared to 56.6% at December 31, 1996.  Securities
available-for-sale of $141,077,000 at December 31, 1997
represented 68.3% of the total investment securities portfolio,
as compared to 43.4% at December 31, 1996.  This shift in the
composition of the securities portfolio is intended to give
management the ability to actively manage a larger percentage of
the overall portfolio.  While proceeds from the maturities of
securities held-to-maturity amounted to $31,211,000 during 1997,
only $6,716,000 was reinvested into the held-to-maturity
portfolio.  The remaining proceeds were used to purchase
securities for the available-for-sale portfolio.  Total average
investment securities of $175,376,000 for 1997 represented 33.0%
of 1997 total average interest earning assets, up from 29.6% of
total average interest earning assets for 1996.

     The table below presents the amortized cost and total
estimated fair values of securities held-to-maturity as of year
end for each of the past five years:


                  1997        1996          1995          1994         1993
                                (Dollars in Thousands)
U.S. Treasury
 Notes          $     0     $     0       $     0       $11,795       $ 8,804
U.S. Government
  Agencies       13,149       33,862        11,055        3,080         1,089
Mortgage-backed
 securities      47,869       52,946        46,108       73,204        59,670
States and
 political
 subdivisions     1,683        1,182         1,875        1,336         1,009
Other             2,629        2,180         1,228          374           376
Amortized cost  $65,330      $90,170       $60,266      $89,789       $70,948
Estimated fair
 value          $65,203     $89,482       $59,948       $84,188       $70,759




<PAGE>




     Maturities and weighted average yields of securities
held-to-maturity at December 31, 1997 segregated by contractual
maturity, are illustrated below.  Expected maturities will differ
from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment
penalties.


</TABLE>
<TABLE>
                                                          Maturing
                                                       After One      After Five
                                 Within                But Within     But Within           After
                                One Year               Five Years      Ten Years          Ten Years      Total
                           Amount    Yield  Amount  Yield   Amount   Yield   Amount   Yield   Amount     Yield
                                                                    (Dollars in Thousands)
<CAPTION>

<S>                        <C>        <C>   <C>      <C>    <C>       <C>    <C>       <C>    <C>       <C>
U.S. Government
    Agencies               $    --    --%  $ 1,999   6.05%  $ 7,150   6.85%  $ 4,000    7.50% $13,149    6.93%
Mortgage-backed
    securities               2,349   4.01   29,429   5.96    12,236   6.61     3,855    6.90   47,869    6.11
States and political
    subdivisions /1/           972   6.27      711   6.71       --      --       --      --     1,683    6.45
Other                           --    --       --     --        --      --     2,629    6.01    2,629    6.01
Total amortized cost      $  3,321   4.68% $32,139   5.99%  $19,386   6.70%  $10,484    6.91% $65,330    6.29%

/1/ The weighted average yields have been computed based on a tax-equivalent basis, assuming a 34% income tax rate.

<TABLE\>


     The table below presents the amortized cost and total
estimated fair values of securities available-for-sale as of year
end for each of the past five years.

                                        December 31,
                       1997       1996         1995        1994      1993
                                      (Dollars in Thousands)

U.S. Treasury Notes    $ 12,499    $12,513      $14,745     $10,932    $14,008
U.S. Government
  Agencies               32,967      1,000        1,000           0          0
Mortgage-backed
  securities             93,537     55,309       39,774      11,297     17,209
States and
 political
 subdivisions               325          0            0           0          0
Other                     1,377          0            0           0          0
Amortized cost         $140,705    $68,822      $55,519     $22,229    $31,217
Estimated fair value   $141,077    $69,044      $55,946     $21,144    $31,303

     Maturities and weighted average yields of securities
available-for-sale at December 31, 1997, segregated by
contractual maturity, are illustrated below.  Expected maturities
will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call
or prepayment penalties.



</TABLE>
<TABLE>

                                                                Maturing
                                          After One          After Five
                         Within           But Within         But Within           After
                        One Year          Five Years         Ten Years          Ten Years             Total
                    Amount   Yield     Amount   Yield      Amount   Yield      Amount   Yield     Amount   Yield
                                                                    (Dollars in Thousands)

<CAPTION>

<S>                <C>      <C>     <C>       <C>      <C>          <C>       <C>    <C>        <C>        <C>
U.S. Treasury
 Notes             $4,487   5.82%   $ 8,012   6.47%     $   --       --%      $ --    --%$      12,499     6.24%
U.S. Government
  Agencies         1,000    5.76      6,996    6.61       24,971     6.91        --    --        32,967     6.80
Mortgage-backed
 securities           --      --     14,167    6.49       18,359     6.64      61,011  6.82      93,537     6.73
States and political
  subdivisions        --      --        --       --          325     6.78       --     --           325     6.78
Other                  --     --        --       --           --      --        1,377  7.45       1,377     7.45
Total amortized
 cost              $5,487   5.81%    $29,175   6.52%     $43,655    6.79%      $62,388 6.83%   $140,705     6.70%

<TABLE\>





<PAGE>




     Realized gains (losses) from the sale of securities
available-for-sale were $84,000, ($45,000), and $71,000 for 1997,
1996, and 1995, respectively.

Deposits

     The Bank's deposit base is its primary source of funds.  The
Bank offers a broad range of deposit products, including
non-interest bearing demand deposits, savings, money market and
interest bearing demand accounts, and certificates of deposit.

     The December 31, 1997 total deposit balance of $518,238,000
represents an increase of $33,165,000 or 6.8% from the December
31, 1996 balance of $485,073,000.  The most significant component
of this increase was reflected in time deposits, which were
$17,839,000 higher at December 31, 1997 than at December 31,
1996.  The majority of this increase was in certificates of
deposits with terms of 9 months and 15 months.

     Average total deposits were $504,277,000 for 1997, an
increase of $47,200,000 or 10.3% over average total deposits of
$457,077,000 for 1996.

     Average demand deposits were $100,055,000 for 1997, an
increase of $2,858,000 or 2.9% over the prior year.  Demand
deposit growth occurred primarily in small business checking
accounts.

     Average savings, money market and interest bearing demand
accounts declined $8,246,000 or 3.7% during 1997.  This is
attributable in part to the increased demand on the part of
depositors for higher yielding investment alternatives.  The
average cost of savings, money market and interest bearing demand
accounts was 2.22% for 1997, as compared to 2.20% for 1996.

     Time deposits under $100,000 averaged $96,429,000 for 1997,
an increase of $12,352,000 or 14.7% over 1996.  Most of this
growth is reflected in time deposits with maturities of 9 months
and 15 months.  The average cost of time deposits under $100,000
was 5.17% for 1997, and increase of 15 basis points from the
average cost of 5.02% for 1996.

     The average balance of time deposits of $100,000 or more
increased $40,236,000 or 76.1% to $93,127,000 for 1997.  The
majority of these deposits, which usually bear maturities from
thirty to ninety days, were from municipal government units
within markets served by the bank, and served as alternatives to
other sources of borrowed funds.  The average cost of time
deposits over $100,000 was 5.56% for 1997, an increase of 57
basis points from the average cost of 4.99% for 1996.




<PAGE>




     Time deposits represented 46.9% of average total interest
bearing deposits for 1997 as compared to 38.1% for 1996.  This
increase in higher costing deposits was a significant
contributing factor to the overall increase in the cost of funds
for 1997 as compared to 1996.

     The following table shows a breakdown of the average
balances and average rates paid on the following deposit
categories for each of the past three years:


</TABLE>
<TABLE>

                                                  Year Ended December 31,
                                1997                   1996                   1995
                         Average    Average     Average    Average     Average    Average
                         Balance      Rate      Balance      Rate      Balance      Rate
                                             (Dollars in thousands)
<CAPTION>

<S>                        <C>          <C>       <C>          <C>        <C>         <C>
Non-interest bearing
 demand deposits           $100,055       - %     $ 97,197       - %      $ 95,264    -%
Savings, money market
 and interest  bearing
 demand deposits            214,666     2.22       222,912     2.20        221,749   2.21
Time deposits               189,556     5.37       136,968     5.01         98,790   5.07
Total average deposits     $504,277     2.96%     $457,077     2.57%      $415,803   2.38%

<TABLE\>


     The following is a breakdown of the maturity of time
certificates of deposit and other time deposits in excess of
$100,000 as of December 31, 1997 and December 31, 1996,
respectively:

                                    1997                1996
                                      (Dollars in Thousands)

Under three months                $77,157             $71,160
Three to six months                 7,524               5,851
Six to twelve months                5,422               2,993
Over twelve months                    597               1,160
  Total                           $90,700             $81,164


Short-Term Borrowings

     Short-term borrowings represent Federal Home Loan Bank
(FHLB) advances and securities sold under agreements to
repurchase, which are used to supplement the Bank's deposit base
as a source of funding.  The FHLB advances have remaining
maturities of less than one year, while the securities sold under
agreements to repurchase generally have terms ranging from one to
thirty days.  These balances increased $12,000,000 during 1997,
primarily due to the Federal Home Loan Bank advances.  The
average balance of short-term borrowings increased to $4,885,000
for 1997 and the average cost of <PAGE> short-term borrowings increased
to 5.75%, both increases attributable primarily to the Federal
Home Loan Bank advances.

    Short-term borrowings at December 31 consisted of the
following (dollars in thousands):

      1997                         1996
Securities sold under
 agreements to repurchase         $ 1,000            $1,000
Federal Home Loan Bank
 advances                          12,000                 0
                                  $13,000            $1,000

     Information regarding the levels of short-term borrowings
for each of the past three years is as follows:

                               December 31,
                      1997               1996        1995
                             (Dollars in Thousands)
Balance, end of year  $13,000        $ 1,000       $   782
Maximum outstanding
  during the year
  at any month end    $13,000        $ 1,282       $21,345
Average interest
  rate, end of year     5.88%          4.95%        5.69%
Average outstanding
  during the year     $ 4,885        $ 1,149       $ 2,808
Average interest
 rate for the year      5.75%          5.05%        6.02%

The average amounts outstanding were computed from daily averages
and the average interest rates for the period were computed by
dividing the respective interest expense by the average balance
outstanding.

Long Term Debt

     Long term debt of $9,000,000 at December 31, 1997 represents
Federal Home Loan Bank advances with remaining maturities of
greater than one year.  This debt represents a series of nine
$1,000,000 advances with interest rates ranging from 6.16% to
6.28%, and maturities from January 29, 1999 to September 30,
1999.  The advances are secured by residential mortgages and
securities under a blanket collateral agreement.

Company-Obligated Mandatorily Redeemable Cumulative Trust
Preferred Securities of a Subsidiary Trust Holding Solely Junior
Subordinated Debentures of the Company (9.5% Cumulative Trust
Preferred Securities).

    On June 30, 1997, $11.5 million of 9.5% Cumulative Trust
Preferred Securities were issued by BNB Capital Trust, a Delaware
statutory business trust formed and wholly-owned by
Bancorporation.  The net proceeds from this issuance were
invested in Bancorporation in exchange for Bancorporation's
junior subordinated debentures.  <PAGE> The sole asset of BNB Capital
Trust, the obligor on the 9.5% Cumulative Trust Preferred
Securities, is $11,855,670 principal amount of 9.5% Junior
Subordinated Debentures of Bancorporation due June 30, 2027.
Bancorporation has entered into several contractual arrangements
for the purpose of fully and unconditionally supporting BNB
Capital Trust's payment of distributions on, payments on any
redemption of, and any liquidation distribution with respect to,
the 9.5% Cumulative Trust Preferred Securities.  These
contractual arrangements constitute a full and unconditional
guarantee by Bancorporation of BNB Capital Trust's obligations
under the 9.5% Cumulative Trust Preferred Securities.

     The proceeds have been used by Bancorporation to fund stock
repurchases and for general corporate purposes as well as to meet
debt service obligations pursuant to the junior subordinated
debentures.  Additionally, some of the proceeds have been
invested in both long-term and short-term securities with yields
substantially less than the cost of the 9.5% Cumulative Trust
Preferred Securities.  The cost of the 9.5% Cumulative Trust
Preferred Securities has contributed to the increase in the cost
of funds and a reduction of the net interest margin during 1997.
The $11,500,000 of 9.5% Cumulative Trust Preferred Securities
qualified as regulatory Tier 1 Capital at December 31, 1997.

Liquidity of the Bank

     The Bank actively monitors its liquidity position to ensure
that it has sufficient funds to provide for cash outflows without
incurring losses from the premature liquidation of assets or the
unexpected acquisition of costly liabilities.  The Bank's cash
outflows encompass interest paid to depositors and other
creditors, deposit withdrawals, and disbursements to acquire
assets and pay general operating costs.  The Bank obtains cash
from customers in the form of interest and principal payments on
loans, fees paid for services, and from new deposits.  Investment
maturities also provide a source of cash.

     Many different measurements of liquidity are used in the
banking industry.  The ratios of cash and cash equivalents
(including federal funds sold) and short-term securities to total
assets and net loans to total deposits are among some of the more
commonly used indicators.  These measurements are set forth below
as of December 31, 1997 and 1996.

                                Dec. 31, 1997    Dec. 31, 1996

Cash and cash equivalents
  and securities maturing in
  one year to total assets           11.3%             14.9%
Net loans to total deposits          60.9%             57.4%




<PAGE>




     The Consolidated Statements of Cash Flows present the change
in cash from operating, investing and financing activities.
During 1997, cash and cash equivalents decreased by $17,624,000,
primarily to fund growth in the loan and securities portfolios.

     Net cash provided by operating activities was $8,719,000 for
1997, representing primarily the results of operations adjusted
for depreciation, amortization and the provision for possible
loan losses.

     Net cash used in investing activities was $86,524,000, which
was used primarily to fund the growth in the loan and the
securities portfolio.

     Net cash provided by financing activities was $60,181,000,
reflecting increases in short-term and long-term debt, the
issuance of 9.5% Cumulative Trust Preferred Securities and
increases in deposits, partially offset by the payment of
dividends to shareholders and the purchase of Treasury Stock.

     To assist in the management of its liquidity, the Bank had
available $26,318,000 in lines of credit for overnight borrowing
with correspondent banks and the Federal Home Loan Bank, which
lines were not in use at December 31, 1997.

     Managing the Bank's liquidity position involves a
significant degree of analytical estimation and other objective
factors.  Although customer demand for funds, in the form of
loans or deposit withdrawals, is largely dependent on general
economic factors outside of the Bank's control, management
believes that its present liquidity structure is adequate to meet
such needs.

Liquidity of Bancorporation

     Bancorporation's ability to meet its cash requirements,
including dividend payments, is generally dependent upon the
declaration and payment of dividends by the Bank to
Bancorporation.

     Under Federal law, the approval of the Comptroller of the
Currency is required for the payment of dividends in any calendar
year by Broad National Bank to Broad National Bancorporation if
the total of all dividends declared in any calendar year exceeds
the net income for that year combined with the retained net
income for the preceding two calendar years.  As of December 31,
1997, retained earnings of the Bank of $9,765,000 are available
for payment of dividends to the parent company without regulatory
approval.

     Additionally, at December 31, 1997, Bancorporation had
available $5,212,000 of cash and interest bearing balances with
banks for the purpose of paying future dividends, interest and
operating costs.  However, a change in circumstances, such as
changes in regulatory requirements or in the Bank's financial



<PAGE>




condition, could result in Bancorporation being required by
regulatory authorities to utilize its funds to increase the
Bank's capital.  In such event, Bancorporation may not have
sufficient cash for operations or to make interest or dividend
payments and may be required to seek other sources of capital and
liquidity, if available.

Market Risk

     The Company does not have assets held for trading purposes,
and does not currently use derivatives to manage market risk.

     Market risk is the risk of loss from changes in market
prices and rates.  The Company's market risk arises primarily
from interest rate risk inherent in its lending and deposit
taking activities.  Interest rate risk can be defined as the
exposure of the Company's net interest income to adverse
movements in interest rates.

     The Company's interest rate risk management is the
responsibility of the Company's Asset/Liability Committee.  Tools
used by the Asset/Liability Committee to monitor interest rate
risk include the GAP report and an interest rate shock simulation
report (See "Interest Rate Sensitivity").

     The table below represents in tabular form the contractual
balances of the Company's on balance sheet financial instruments,
categorized by expected maturity dates, and the instruments' fair
values at December 31, 1997.  Expected maturities are contractual
maturities adjusted for repayments, and, where prepayment
information is available, prepayments of principal.

     The Company uses certain assumptions to estimate fair values
and expected maturities.

     Expected maturities for loans reflect contractual maturities
adjusted for projected scheduled repayments.  Investment
securities reflect contractual maturities adjusted for
prepayments, which prepayments reflect the most recent three
month prepayment speeds.  Deposits, other than time deposits,
reflect decay rates based upon industry accepted assumptions.
Time deposits, short term borrowings, long term debt and 9.5%
Cumulative Trust Preferred Securities reflect contractual
maturities.

     The fair value of federal funds sold approximates book value
due to the short maturity.  The fair value of investment
securities is based on quotations from security dealers.  The
fair value of loans are estimated using the discounted value of
future cash flows expected to be received using estimated market
discount rates.  The fair value of savings, money market and
interest bearing demand accounts is the amount payable upon
demand.  The fair value of time deposits is based upon the
discounted value of contractual cash flows, which is estimated
using current rates offered for deposits <PAGE> of similar remaining
terms.  The fair value of short-term borrowings and long-term
debt is estimated by discounting the cash flows through maturity
based upon current rates offered for similar instruments with
similar maturities.  The fair value of the 9.5% Cumulative Trust
Preferred Securities is estimated by discounting the cash flows
through maturity based upon current rates for similar Trust
Preferred Securities.




<PAGE>



</TABLE>
<TABLE>

TABLE OF MARKET RISK SENSITIVE INSTRUMENTS

Expected Maturity/Principal Repayments as of December 31, 1997
(Dollars in Thousands)

                                                                              Fair
                 1998     1999      2000     2001    2002    Beyond   Total   Value
<CAPTION>

<S>             <C>       <C>       <C>      <C>     <C>     <C>      <C>       <C>
INTEREST
SENSITIVE
ASSETS

Federal funds    $37,300  $ --      $ --     $ --    $ --    $ --     $37,300   $37,300
 Weighted average
 interest rate     5.42%    --        --       --      --      --       5.42%     5.42%
Investment
 securities       43,075  35,979    34,734   20,934  16,489   54,824  206,035   206,280
 Weighted average
  interest rate    6.42%   6.58%     6.16%    6.51%   6.59%    6.75%    6.47%     6.48%
Fixed loans       55,534  24,540    11,725    9,973   9,536   39,331  150,639   150,444
 Weighted average
  interest rate    9.00%   9.04%     9.70%    8.53%   8.60%    8.51%    8.77%     8.54%
Variable loans    38,746  15,359    10,762   11,496  11,648   84,102  172,113   174,582
 Weighted average
  interest rate    9.69%   9.26%     9.41%    9.28%   9.26%    8.59%    8.95%     8.37%

INTEREST
SENSITIVE
LIABILITIES

Savings, money
market and
interest
bearing
demand
deposits         83,755   36,678    36,678   36,678  36,678    --     230,467   231,226

 Weighted
average
interest rate      2.44%   2.44%     2.44%    2.44%   2.44%    --       2.44%     2.29%
Time deposits    178,217   3,490     1,744      510     276      480  184,717   184,961
 Weighted
average
interest rate      5.37%   5.32%     5.78%    5.44%   5.70%    3.24%    5.37%     5.23%

Short-term
borrowings        13,000     --       --       --      --      --      13,000    13,037
 Weighted
average
interest rate      5.87%     --       --       --      --      --       5.87%     5.66%

Long-term debt      --     9,000      --       --      --      --       9,000     9,065

 Weighted
average
interest rate       --     6.22%      --       --      --      --       6.22%     5.72%

9.5% Cumulative
Trust Preferred
Securities          --       --       --        --       --   11,500   11,500    12,269

 Weighted
average
interest rate       --       --       --       --      --      9.50%    9.50%     8.28%

<TABLE\>

<PAGE>


      Because of assumptions used to estimate fair values and
expected maturities, actual future changes in fair value could
differ from those reflected in the table.

Interest Rate Sensitivity

     Management of interest rate sensitivity involves matching
the maturity and repricing dates of interest-earning assets with
those of interest-bearing liabilities in an effort to reduce the
impact of fluctuating net interest rates on net interest margins
and to promote consistent growth of net interest income during
periods of changing interest rates.

     The Company's Asset/Liability Committee (the "Committee")
meets regularly to establish, communicate, coordinate and control
asset/liability management procedures.  The purpose of the
Committee is to monitor the volume and mix of the Company's
interest sensitive assets and liabilities consistent with the
Company's overall liquidity, capital, growth, risk and
profitability goals.

     Interest rate risk arises from mismatches (i.e., the
interest sensitivity gap) between the dollar amount of repricing
or maturing assets and liabilities, and is measured in terms of
the ratio of the interest rate sensitivity gap to total assets.
More assets repricing or maturing than liabilities over a given
time period is considered asset-sensitive and is reflected as a
positive gap, and more liabilities repricing or maturing than
assets over a given time period is considered liability-sensitive
and is reflected as a negative gap.  An asset-sensitive position
(i.e., a positive gap) will generally enhance earnings in a
rising interest rate environment and will negatively impact
earnings in a falling interest rate environment, while a
liability-sensitive position (i.e., a negative gap) will
generally enhance earnings in a falling interest rate environment
and negatively impact earnings in a rising interest rate
environment.  Fluctuations in interest rates are not predictable
or controllable.

     The table below indicates as of December 31, 1997 the time
period in which interest-earning assets and interest-bearing
liabilities are scheduled to mature or reprice in accordance with
their contractual terms.

<PAGE>


</TABLE>
<TABLE>

                                               After         After        After
                                               Three          Six          One
                                    Three      Through      Through      Through
                                   Months       Six         Twelve        Five        After
                                   Or Less     Months       Months       Years       Five Years      Total
                                                            (Dollars in Thousands)
<CAPTION>

<S>                               <C>          <C>           <C>          <C>          <C>          <C>
INTEREST SENSITIVE ASSETS
Investment securities             $  2,231      $     0      $47,732      $ 93,873      $ 62,571    $206,407
Loans                              110,592       11,050       16,429        59,466       125,215     322,752
Federal funds sold                  37,300            0            0             0             0      37,300
Total interest sensitive assets   $150,123      $11,050      $64,161      $153,339      $187,786    $566,459

INTEREST SENSITIVE LIABILITIES

Savings, money market
 and interest
 bearing demand
 accounts                         $27,919      $27,918      $27,918      $146,712      $      0    $230,467
Time deposits                     109,929       35,098       33,190         6,020           480     184,717
Short term borrowings               4,000        3,000        6,000             0             0      13,000
Long term debt                          0            0            0         9,000             0       9,000
9.5% cumulative trust
 preferred securities                   0            0            0             0        11,500      11,500

Total interest sensitive liabilities
                                $141,848      $66,016     $ 67,108      $161,732      $ 11,980    $448,684
Sensitivity gap                 $  8,275      $(54,966)   $ (2,947)     $ (8,393)     $175,806    $117,775
Gap as a percentage of
  total assets                     1.38%        -9.14%       -0.49%        -1.39%        29.22%
Cumulative sensitivity gap       $ 8,275       $(46,691)   $ (49,638)     $(58,031)    $117,775
Cumulative gap as a
 percentage of total assets        1.38%        -7.76%      -8.25%         -9.65%       19.57%
Cumulative sensitivity ratio     105.83%        77.54%      81.95%         86.71%      126.25%

<TABLE\>


     At December 31, 1997, the Company had a one year cumulative
negative gap of 8.3%.  This negative one year gap position may,
as noted above, have a negative impact on earnings in a rising
interest rate environment.

     This interest sensitivity table is not a complete picture of
the possible effect of interest rate changes on net interest
income for various reasons, among them: the table represents a
one-day position; variations occur daily as the Company adjusts
its interest sensitivity throughout the year; changes in the
general level of interest rates will not affect all categories of
assets and liabilities equally or simultaneously; and the
repricing distribution of interest sensitive assets may not be
indicative of the liquidity of those assets.  Additionally, the
calculation of these interest sensitivity gap positions involves
certain assumptions as to the repricing period of interest
earning assets and interest bearing liabilities.  These gap
positions are significantly impacted by assumptions made as to
the prepayments of loans and investment securities as well as to
the repricing of deposit accounts.  The significant assumptions
used in the above table include: fixed rate loans reflect
contractual maturities adjusted for projected scheduled
repayments; investment securities reflect contractual maturities
adjusted for prepayments on mortgage backed securities, which
prepayments reflect the most recent three month prepayment
speeds; deposits, other than time deposits, reflect decay rates
based upon industry accepted assumptions; and time deposits,
short-term borrowings and long term debt reflect contractual
maturities.  The impact of actual repayments, repricings and
changes in interest rates may differ from that indicated in the



<PAGE>




table above. Consequently, these static measurements are best
used as early indicators of potential interest rate exposure.

     The Company also uses simulation modeling techniques which
apply alternative interest rate scenarios to forecasts of future
business activity.  The results of such simulation modeling
techniques may differ from the implications derived from the
interest sensitivity gap analysis, and the use of such simulation
modeling techniques provides further assistance to management in
its efforts to achieve earnings growth in varying interest rate
environments.

     The Company currently does not use derivatives to manage
interest rate risk.

Shareholders' Equity

     Shareholders' equity of $39,231,000 at December 31, 1997 was
$873,000 or 2.3% higher as compared to December 31, 1996.  The
ratio of average total equity to average total assets was 6.9%
for 1997 compared to 7.2% for 1996.  Book value per common share
increased to $8.33 at December 31, 1997 from $7.82 at December
31, 1996.

     During 1997, the Company purchased an additional 237,000
shares of treasury stock at a cost of $4,053,000.

     The Company and its bank subsidiary are subject to various
regulatory capital requirements.  Capital adequacy for the
Company is measured against guidelines established by the Federal
Reserve Board.

     The Bank is subject to generally similar capital
requirements adopted by the OCC.

     For information on regulatory capital, see Note 15 of the
Notes to the Consolidated Financial Statements.

Recent Accounting Pronouncements and Other Matters

     Statement of Financial Accounting Standards No. 128,
"Earnings per Share" ("SFAS 128") establishes standards for
computing and presenting earnings per share (EPS) and applies to
entities with publicly held common stock or potential common
stock.  SFAS 128 replaces the presentation of primary EPS with a
presentation of basic EPS and requires dual presentation of basic
and diluted EPS on the face of the income statement for all
entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS
computation.  SFAS 128 is effective for financial statements
issued for periods ending after December 15, 1997, including
interim periods; earlier application is not permitted and
requires restatement of all prior-period EPS data presented.




<PAGE>




     The Company has adopted SFAS 128 and has made the required
disclosures, including restatement of all prior-period EPS data
presented, in the Consolidated Statements of Income and the
accompanying Notes to the Consolidated Financial Statements.

     Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income ("SFAS 130") establishes standards
for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set
of general - purpose financial statements.  SFAS 130 requires
that all items that are required to be recognized under
accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same
prominence as other financial statements.  SFAS 130 does not
require a specific format for that financial statement but
requires that an enterprise display an amount representing total
comprehensive income for the period in that financial statement.
SFAS 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and
(b) display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid in capital
in the equity section of a statement of financial position.  SFAS
130 is effective for fiscal years beginning after December 15,
1997.  Reclassification of financial statements for earlier
periods provided for comparative purposes is required.

     In June 1997, the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information."  SFAS
131 requires public companies to report information about
business segments in their annual financial statements and
selected business segment information in quarterly reports issued
to shareholders.  SFAS 131 requires entity-wide disclosures about
the products and services an entity provides, the material
countries in which it holds assets and reports revenues, and its
major customers.  This statement supersedes SFAS 14, "Financial
Reporting for Segments of a Business Enterprise".  SFAS 131 is
effective for fiscal years beginning after December 15, 1997.

Year 2000

     In 1997, Broad National Bank conducted a review of its
computer systems to determine the systems that would be affected
by the Year 2000 issue.  A steering committee comprised of Senior
Management has been formed to ensure that adequate resources are
allocated to this project and to monitor the progress and testing
of the Year 2000 transition.

     The Bank's primary computer applications are handled by an
outside processor.  To date, the Bank has received confirmation
that this processor has developed a plan of action for the
testing and implementation of Year 2000 enhancements.  The Bank
will use internal resources to identify and test all vendor
applications for Year 2000 compliance.  Testing is scheduled to
begin June 1998 and be completed by March 1999.  The Bank does
not expect the costs associated with the Year 2000 transition to
be material.




<PAGE>




     Except for the historical information contained herein, the
matters discussed in this report are forward looking statements
that involve risks and uncertainties, including risks and
uncertainties associated with quarterly fluctuations in results,
the impact of changes in interest rates on the Bank's net
interest income, the quality of the Bank's loans and other assets
and the credit risk associated with lending activities, the
fluctuations in the general economic and real estate climate in
the Bank's primary market area of New Jersey, the impact of
competition from other banking institutions and financial service
providers and the increasing consolidation of the banking
industry, the enforcement of federal and state bank regulations
and the effect of changes in such regulations, and other risks
and uncertainties detailed from time to time in the Company's SEC
reports.  Actual results may vary materially from those expressed
in any forward-looking statements herein.

FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS, FINANCIAL
CONDITION OR BUSINESS

     In order to take advantage of the safe harbor provisions for
forward-looking statements contained in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, added to those Acts
by the Private Securities Litigation Reform Act of 1995,
Bancorporation is hereby identifying important risks and
uncertainties that could affect Bancorporation's actual results
of operations, financial condition or business and could cause
Bancorporation's actual results of operations, financial
condition or business to differ materially from its historical
results of operations, financial condition or business, or the
results of operations, financial condition or business
contemplated by forward-looking statements made herein or
elsewhere orally or in writing, by, or on behalf of,
Bancorporation.  Factors that could cause or contribute to such
differences include, but are not limited to, those factors
described below.

ECONOMIC CONDITIONS IN BANCORPORATION'S PRIMARY MARKET AREA

     The profitability of Bancorporation is dependant on the
profitability of its subsidiary, Broad National Bank, which is a
national banking association operating out of New Jersey.  The
Bank's financial condition is affected by fluctuations in the
economic conditions prevailing in that portion of New Jersey in
which the Bank's banking operations are located.  Accordingly,
the financial conditions of  both the Bank and Bancorporation
would be adversely affected by deterioration in the general
economic and real estate climate in the State of New Jersey.  The
Bank's business is also subject to fluctuations in interest
rates, national and local economic <PAGE> conditions, monetary and
regulatory policies and consumer and institutional confidence in
the Bank.  The fluctuations are neither predictable nor
controllable and may have materially adverse consequences upon
the operations and financial condition of the Bank and
Bancorporation in the future even if other favorable events
occur.

IMPORTANCE OF NET INTEREST INCOME AND SUSCEPTIBILITY TO CHANGES
IN INTEREST RATES

     The primary source of earnings for the Bank and
Bancorporation is net interest income, which is the difference
between interest and fees earned on loans and other interest-
earning assets, and the interest paid on deposits and other
interest-bearing liabilities.  There may be a difference between
the amount of interest-earning assets scheduled to reprice in any
given period and the amount of interest-bearing liabilities
scheduled to reprice over the same time.  Any difference can
create a lag between the time it takes the rate the bank earns
interest to respond to market fluctuations and the time it takes
the rate the bank incurs interest costs to respond to market
fluctuations, and vice-versa.  Because of these "interest
sensitivity gaps," the amount of net interest income may be
affected by fluctuations in the interest rate.

ASSET QUALITY AND LENDING RISKS

     Success in the banking industry largely depends on the
quality of loans and other assets.  The Bank's loan officers are
actively encouraged to identify deteriorating loans.  Loans are
also monitored and categorized through an analysis of their
payment status.  The Bank's failure to timely and accurately
monitor the quality of its loans and other assets could have a
materially adverse effect on the operations and financial
condition of the Bank and Bancorporation.  There is a degree of
credit risk associated with any lending activity.  Bancorporation
attempts to minimize its credit risk through loan
diversification.  Although Bancorporation's loan portfolio is
varied, with no undue concentration in any one industry,
substantially all of the loans in the portfolio have been made to
borrowers in New Jersey.  Therefore, the loan portfolio is
susceptible to factors affecting the New Jersey area and the
level of non-performing assets is heavily dependant upon local
conditions.  See "Economic Conditions in Bancorporation's Primary
Market Area."  There can be no assurance that the level of
Bancorporation's non-performing assets will not increase above
current levels.  High levels of non-performing assets could have
a materially adverse effect on the operations and financial
condition of the Bank and Bancorporation.




<PAGE>




PROVISIONS FOR POSSIBLE LOAN LOSSES

     Bancorporation makes a provision for possible loan losses
based upon management's analysis of potential losses in the loan
portfolio and consideration of prevailing economic conditions.
Bancorporation may need to increase the provision for loan losses
through additional provisions in the future if the financial
condition of any of its borrowers deteriorates or if real estate
values decline.  See "Asset Quality and Lending Risks."
Furthermore, various regulatory agencies, as an integral part of
their examination process, periodically review Bancorporation's
loan portfolio, provision for loan losses, in-substance
foreclosed loans, and real estate acquired by foreclosure.  Such
agencies may require, and in the past have required,
Bancorporation to recognize additions to the provision for loan
losses based on their judgments of information available to them
at the time of the examination.  Any additional provisions for
possible loan losses, whether required as a result of regulatory
review or initiated by Bancorporation itself, may materially
alter the financial outlook of the Bank and Bancorporation.

COMPETITION IN BANCORPORATION'S MARKET AREA

     Vigorous competition exists in all major areas where
Bancorporation and the Bank presently engage in business.  The
Bank faces intense competition in local and national markets from
other major banking institutions.  The Bank is in direct
competition with some larger institutions that have substantially
greater resources, better name recognition, stronger market
presence, and the ability to offer a wider range of services.
Competition from larger institutions is especially prevalent due
to the accelerated pace of bank mergers in the New Jersey area.
The long-term impact of such mergers and consolidations on the
New Jersey market area is uncertain.  The Bank may face even more
intense competition because of the proliferation of bank mergers.
An increase in the intensity of competition from other banks in
the New Jersey market could have a materially adverse impact on
the operations and financial condition of the Bank and
Bancorporation.

     In addition to the competition from rival banking companies,
the Bank faces competition from non-bank institutions including:
finance companies; mortgage lenders; small loan companies; credit
unions; insurance companies; and a variety of other financial
service and advisory companies.  The stock market, mutual funds,
and other non-federally insured investments also compete with the
Bank for customer deposits.  The Bank may face more intense
competition from these and other non-banking industries and
investments in the future.  A failure of the Bank to be
competitive could have a materially adverse effect on the Bank
and Bancorporation.




<PAGE>




REGULATION

     Banks and bank holding companies such as Bancorporation are
subject to regulation by both federal and state bank regulatory
agencies.  The regulations, which are designed to protect
borrowers and promote certain social policies, include
limitations on the operations of banks and bank holding
companies, such as minimum capital requirements and restrictions
on dividend payments.  These regulations are not necessarily
designed to maximize the profitability of banking institutions.
Future changes in the banking laws and regulations could have a
materially adverse effect on the operations and financial
condition of the Bank and Bancorporation.

IMPORTANCE OF EXECUTIVE OFFICERS

          The success of the Bank and Bancorporation has been
largely dependant on the efforts of Donald Karp, John Dorman and
the other executive officers.  These individuals are expected to
continue to perform their services.  However, the loss of the
services of Donald Karp, John Dorman, or any of the other key
executive officers could have a materially adverse effect on the
Bank and Bancorporation.

YEAR 2000 COMPLIANCE

     The Company's Year 2000 steering committee has been
designated to monitor the progress and testing of the action plan
for Year 2000 compliance, with the objective of ensuring that all
computerized systems and software programs are capable of
functioning in the next century.  The Company anticipates that
the incremental cost of ensuring that its computer systems are
Year 2000 compliant may be significant but is not anticipated to
be material to its business, financial condition or results of
operations.  However, if such modifications and conversions are
not made, or are not completed timely, the Year 2000 issue could
have a materially adverse effect on the Bank and the Company.

ADDITIONAL FACTORS

     Additional risks and uncertainties that may affect the
future results of operations, financial condition or business of
the Bank and Bancorporation include, but are not limited to: (i)
the ability to keep pace with technological change including
developing and implementing technological advances timely and
cost-effectively in order to provide better service and remain
competitive; (ii) adverse publicity, news coverage by the media,
or negative reports by brokerage firms, industry and financial
analysts regarding the Bank or Bancorporation; and (iii) changes
in accounting policies and practices.




<PAGE>




ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market Risk

     The Company does not have assets held for trading purposes,
and does not currently use derivatives to manage market risk.

     Market risk is the risk of loss from changes in market
prices and rates.  The Company's market risk arises primarily
from interest rate risk inherent in its lending and deposit
taking activities.  Interest rate risk can be defined as the
exposure of the Company's net interest income to adverse
movements in interest rates.

     The Company's interest rate risk management is the
responsibility of the Company's Asset/Liability Committee.  Tools
used by the Asset/Liability Committee to monitor interest rate
risk include the GAP report and an interest rate shock simulation
report (See "Interest Rate Sensitivity").

     The table below represents in tabular form the contractual
balances of the Company's on balance sheet financial instruments,
categorized by expected maturity dates, and the instruments' fair
values at December 31, 1997.  Expected maturities are contractual
maturities adjusted for repayments, and, where prepayment
information is available, prepayments of principal.

     The Company uses certain assumptions to estimate fair values
and expected maturities.

     Expected maturities for loans reflect contractual maturities
adjusted for projected scheduled repayments.  Investment
securities reflect contractual maturities adjusted for
prepayments, which prepayments reflect the most recent three
month prepayment speeds.  Deposits, other than time deposits,
reflect decay rates based upon industry accepted assumptions.
Time deposits, short term borrowings, long term debt and 9.5%
Cumulative Trust Preferred Securities reflect contractual
maturities.

     The fair value of federal funds sold approximates book value
due to the short maturity.  The fair value of investment
securities is based on quotations from security dealers.  The
fair value of loans are estimated using the discounted value of
future cash flows expected to be received using estimated market
discount rates.  The fair value of savings, money market and
interest bearing demand accounts is the amount payable upon
demand.  The fair value of time deposits is based upon the



<PAGE>




discounted value of contractual cash flows, which is estimated
using current rates offered for deposits of similar remaining
terms.  The fair value of short-term borrowings and long-term
debt is estimated by discounting the cash flows through maturity
based upon current rates offered for similar instruments with
similar maturities.  The fair value of the 9.5% Cumulative Trust
Preferred Securities is estimated by discounting the cash flows
through maturity based upon current rates for similar Trust
Preferred Securities.




<PAGE>


</TABLE>
<TABLE>


TABLE OF MARKET RISK SENSITIVE INSTRUMENTS

Expected Maturity/Principal Repayments as of December 31, 1997
(Dollars in Thousands)

                                                                              Fair
                 1998     1999      2000     2001    2002    Beyond   Total   Value
<CAPTION>

<S>              <C>      <C>       <C>      <C>     <C>     <C>       <C>     <C>
INTEREST
SENSITIVE
ASSETS

Federal funds    $37,300  $ --      $ --     $ --    $ --    $ --     $37,300   $37,300
 Weighted average
 interest rate     5.42%    --        --       --      --      --       5.42%     5.42%
Investment
 securities       43,075  35,979    34,734   20,934  16,489   54,824  206,035   206,280
 Weighted average
  interest rate    6.42%   6.58%     6.16%    6.51%   6.59%    6.75%    6.47%     6.48%
Fixed loans       55,534  24,540    11,725    9,973   9,536   39,331  150,639   150,444
 Weighted average
  interest rate    9.00%   9.04%     9.70%    8.53%   8.60%    8.51%    8.77%     8.54%
Variable loans    38,746  15,359    10,762   11,496  11,648   84,102  172,113   174,582
 Weighted average
  interest rate    9.69%   9.26%     9.41%    9.28%   9.26%    8.59%    8.95%     8.37%

INTEREST
SENSITIVE
LIABILITIES

Savings, money
market and
interest
bearing
demand
deposits         83,755   36,678    36,678   36,678  36,678    --     230,467   231,226

 Weighted
average
interest rate      2.44%   2.44%     2.44%    2.44%   2.44%    --       2.44%     2.29%
Time deposits    178,217   3,490     1,744      510     276      480  184,717   184,961
 Weighted
average
interest rate      5.37%   5.32%     5.78%    5.44%   5.70%    3.24%    5.37%     5.23%

Short-term
borrowings        13,000     --       --       --      --      --      13,000    13,037
 Weighted
average
interest rate      5.87%     --       --       --      --      --       5.87%     5.66%

Long-term debt      --     9,000      --       --      --      --       9,000     9,065

 Weighted
average
interest rate       --     6.22%      --       --      --      --       6.22%     5.72%

9.5% Cumulative
Trust Preferred
Securities          --       --       --        --       --   11,500   11,500    12,269

 Weighted
average
interest rate       --       --       --       --      --      9.50%    9.50%     8.28%

<TABLE\>





<PAGE>




      Because of assumptions used to estimate fair values and
expected maturities, actual future changes in fair value could
differ from those reflected in the table.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          BROAD NATIONAL BANCORPORATION AND SUBSIDIARIES
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                             Page

Independent Auditors' Report as of December 31, 1997
     and 1996 and for the years ended December 31, 1997,
     1996 and 1995                                             64

Consolidated Statements of Condition as of December 31,
     1997 and 1996                                             65

Consolidated Statements of Income for each of the years
     ended December 31, 1997, 1996 and 1995                    66

Consolidated Statements of Changes in Shareholders' Equity
     for the years ended December 31, 1997, 1996 and 1995      68

Consolidated Statements of Cash Flows for each of the
     years ended December 31, 1997, 1996 and 1995              69

Notes to Consolidated Financial Statements                     70


All schedules are omitted because they are not applicable, or not
required, or because the required information is included in the
financial statements or the notes thereto.




<PAGE>




INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Board of Directors of
Broad National Bancorporation:

     We have audited the accompanying consolidated statements of
condition of Broad National Bancorporation and subsidiaries as of
December 31, 1997 and 1996 and the related consolidated
statements of income, changes in shareholders' equity, and cash
flows for each of the years in the three-year period ended
December 31, 1997.  These consolidated financial statements are
the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.

     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

     In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of Broad National Bancorporation and
subsidiaries as of December 31, 1997 and 1996, and the results of
their operations and their cash flows for each of the years in
the three-year period ended December 31, 1997 in conformity with
generally accepted accounting principles.



                                        /s/ KPMG Peat Marwick LLP


Short Hills, New Jersey
January 15, 1998





<PAGE>




Broad National Bancorporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CONDITION
December 31, 1997 and 1996
(Dollars in thousands, except share amounts)

                                           1997          1996

ASSETS
CASH AND DUE FROM BANKS (Note 12)         $ 21,933      $ 19,782
FEDERAL FUNDS SOLD                          37,300        57,075
CASH AND CASH EQUIVALENTS                   59,233        76,857
SECURITIES HELD-TO-MATURITY
 (aggregate market value $65,203
  and $89,482, respectively) (Note 2)       65,330        90,170
SECURITIES AVAILABLE-FOR-SALE (Note 2)     141,077        69,044
LOANS, net of deferred loan fees
  (Note 3)                                 322,528       287,116

  LESS - Allowance for possible
    loan losses (Note 4)                     6,974         8,531
    NET LOANS                              315,554       278,585
PREMISES AND EQUIPMENT, net (Note 5)         8,991         8,888
ACCRUED INTEREST RECEIVABLE                  4,020         3,351
OTHER ASSETS (Note 6)                        7,464         6,720
TOTAL ASSETS                              $601,669      $533,615

LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS
  Non-interest bearing demand             $103,054      $100,945
  Savings, money market and
   interest bearing demand                 230,467       217,250
  Time deposits less than $100,000          94,017        85,714
  Time deposits of $100,000 or more         90,700        81,164
        Total deposits                     518,238       485,073
SHORT-TERM BORROWINGS (Note 9)              13,000         1,000
LONG-TERM DEBT (Note 10)                     9,000             0

COMPANY-OBLIGATED MANDATORILY
    REDEEMABLE CUMULATIVE TRUST
    PREFERRED SECURITIES OF A
    SUBSIDIARY TRUST HOLDING
    SOLELY JUNIOR SUBORDINATED
    DEBENTURES OF BANCORPORATION
    (Note 11)                               11,500             0

ACCRUED TAXES, INTEREST AND
    OTHER LIABILITIES (Note 7)              10,700         9,184
 TOTAL LIABILITIES                         562,438       495,257
COMMITMENTS AND CONTINGENCIES
    (Notes 2, 3 and 12)
SHAREHOLDERS' EQUITY (Notes 13,
    14 and 15)
Common stock, $1 par value,
    authorized 10,000,000 shares
    in 1997 and 5,500,000 shares
    in 1996; issued: 1997,
    4,948,921 shares; 1996,
    4,677,188 shares                         4,949         4,677
Capital surplus                             30,996        26,589
Retained earnings                            7,153         7,004
Common stock in treasury,
    at cost: 242,000 shares
    in 1997 and 5,000 shares in 1996        (4,111)         (58)
Unrealized gain on securities
  available-for-sale, net                      244           146
  TOTAL SHAREHOLDERS' EQUITY                39,231        38,358

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                      $601,669      $533,615

The accompanying notes to the consolidated financial statements
are an integral part of these statements.





<PAGE>




Broad National Bancorporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 1997, 1996 and 1995
(In thousands, except per share amounts)


                                        1997    1996     1995
  INTEREST INCOME
  Interest and fees on loans
   (Note 3)                           $26,935  $24,190   $24,337
  Interest on securities
    held-to-maturity
   Taxable                              5,152    4,667     5,071
   Tax exempt                              61       49        55
  Interest on securities
    available-for-sale                  5,894    3,689     1,682
  Interest on federal funds sold        2,813    2,567     2,253
   TOTAL INTEREST INCOME               40,855   35,162    33,398
INTEREST EXPENSE
   Interest on savings and
        interest bearing
       demand deposits                  4,756    4,899     4,900
   Interest on time certificates of
       deposit of $100,000 or more      5,182    2,639     1,040
    Interest on other time deposits     4,990    4,222     3,973
   Interest on short-term borrowings      281       58       169
   Interest on 9.5% Cumulative Trust
        Preferred Securities              546        0         0
   Interest on long-term debt             175        0         0
   TOTAL INTEREST EXPENSE              15,930   11,818    10,082
   NET INTEREST INCOME                 24,925   23,344    23,316
PROVISION FOR POSSIBLE LOAN LOSSES
    (Note 4)                            1,800    1,350       720
NET INTEREST INCOME AFTER PROVISION FOR
 POSSIBLE LOAN LOSSES                  23,125   21,994    22,596
NON-INTEREST INCOME
 Service charges on deposit accounts    5,945    5,370     3,515
 Other income                           1,085    1,231       887
 Gain (loss) on sale of securities
    available-for-sale (Note 2)            84      (45)       71
 Gain on sale of loans                      3        0        18
 TOTAL NON-INTEREST INCOME              7,117    6,556     4,491
NON-INTEREST EXPENSES
 Salaries and wages                     8,000    7,896     7,735
 Employee benefits (Note 7)             2,094    2,486     2,255
 Occupancy expense (Note 12)            2,009    1,923     1,975
 Furniture and equipment expense        1,167    1,090     1,213
 Advertising                              589      406       425
 Data processing fees                   1,083    1,070     1,086
 Legal fees                               747      858       547
 Professional fees                      1,133    1,307       819
 Insurance                                287      413       415
 Postage, delivery and communication      721      675       624
 FDIC and OCC assessments                 182      112       567
 Other real estate (income) expense      (219)     202        99
 Other expenses                         1,756    1,411     1,776
    TOTAL NON-INTEREST EXPENSES        19,549   19,849    19,536





<PAGE>




Broad National Bancorporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 1997, 1996 and 1995
(In thousands, except per share amounts)


                                       1997     1996     1995

INCOME BEFORE INCOME TAXES            $10,693  $8,701    $7,551
PROVISION FOR INCOME TAXES (Note 6)     4,282   3,428     3,131
NET INCOME                            $ 6,411  $5,273    $4,420
NET INCOME APPLICABLE TO
    COMMON STOCK (Note 13)            $ 6,411  $5,273    $3,840
AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING (Note 13)
     BASIC                              4,788   4,789     3,407
     DILUTED                            4,957   4,998     4,959
EARNINGS PER COMMON SHARE (Note 13)
    BASIC                               $1.34   $1.10     $1.13
    DILUTED                             $1.29   $1.06     $0.89



The accompanying notes to the consolidated financial statements
are an integral part of these
statements.





<PAGE>



</TABLE>
<TABLE>

Broad National Bancorporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the years ended December 31, 1997, 1996, and 1995
(In thousands, except per share amounts)
                                                                                                   Unrealized
                                                                                                      Gain
                                                                                                    (Loss) On
                             Number                                                                 Securities
                           Of Common Preferred   Preferred   Common  Capital   Retained   Treasury  Available-
                            Shares   Stock-1985  Stock-1992  Stock   Surplus   Earnings    Stock    for-Sale, Net  Total
<CAPTION>

<S>                         <C>       <C>         <C>        <C>     <C>       <C>         <C>      <C>          <C>
BALANCE, DECEMBER 31,
  1994                       2,883     $171        $653      $2,883  $23,213    $4,062      --        $(716)     $30,266
NET INCOME - 1995              --       --          --          --       --      4,420      --           --        4,420
CONVERSION OF 1992
 PREFERRED STOCK               173      --          (90)        173     (83)       --       --           --          --
EXERCISE OF STOCK
  OPTIONS                        3      --          --            3      15        --       --          --           18
CASH DIVIDENDS DECLARED
 COMMON STOCK-$0.17 PER
   SHARE                        --      --          --           --     --       (595)     --           --         (595)
 PREFERRED STOCK - 1992
   - $0.85 PER SHARE            --      --          --           --     --       (521)     --           --         (521)
 PREFERRED STOCK - 1985
   - $3.42 PER SHARE            --      --          --           --     --        (59)     --           --          (59)
NET CHANGE IN UNREALIZED
  GAIN (LOSS) ON SECURITIES
  AVAILABLE-FOR-SALE, NET       --      --           --          --      --         --     --          1,000       1,000
BALANCE, DECEMBER 31, 1995   3,059     $171         $563       $3,059  $23,145   7,307     --         $  284     $34,529
NET INCOME - 1996               --      --           --          --      --      5,273     --            --        5,273
REDEMPTION OF 1985
 PREFERRED STOCK                        (2)          --          --         (6)     --     --            --          (8)
CONVERSION OF 1985
  PREFERRED STOCK              110     (169)         --         110         59      --     --            --         --
REDEMPTION OF 1992
  PREFERRED STOCK               --       --          (4)         --        (35)     (5)    --            --         (44)
CONVERSION OF 1992
  PREFERRED STOCK            1,067       --        (559)      1,067       (508)     --     --             --         --
EXERCISE OF STOCK OPTION        16       --          --          16         82      --     --             --         98
EFFECT OF 10% STOCK
  DIVIDEND                     425       --          --         425      3,852   (4,277)   --             --         --
CASH DIVIDENDS DECLARED
  COMMON STOCK - $0.27
  PER SHARE                     --       --          --          --        --    (1,294)   --             --     (1,294)
PURCHASE OF TREASURY STOCK      --       --          --          --        --      --     (58)            --        (58)
NET CHANGE IN UNREALIZED
  GAIN (LOSS) ON SECURITIES
  AVAILABLE-FOR-SALE, NET       --       --          --          --        --      --      --           (138)      (138)
BALANCE, DECEMBER 31, 1996   4,677     $  0        $  0       $4,677   $26,589   7,004   $ (58)         $146     $38,358
NET INCOME - 1997               --       --          --          --              6,411     --             --       6,411
EXERCISE OF STOCK OPTIONS       48       --          --           48       260     --      --                        308
EFFECT OF 5% STOCK DIVIDEND    224       --          --          224     4,147  (4,371)    --             --        --
CASH DIVIDENDS DECLARED
  COMMON STOCK - $0.41
  PER SHARE                     --       --          --           --        --  (1,891)    --             --     (1,891)
PURCHASE OF TREASURY STOCK      --       --          --           --        --     --   (4,053)           --     (4,053)
NET CHANGE IN UNREALIZED
 GAIN (LOSS) ON SECURITIES
 AVAILABLE-FOR-SALE, NET        --       --          --           --        --      --      --             98        98
BALANCE, DECEMBER 31, 1997    4,949    $  0       $    0       $4,949    $30,996  $7,153  $(4,111)       $244   $39,231

The accompanying notes to the consolidated financial statements are an integral part of these statements.

<TABLE\>
                                                          FS-4




<PAGE>




Broad National Bancorporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996 and 1995
(In thousands)

                                  1997           1996      1995
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                    $   6,411   $  5,273   $ 4,420
    Adjustments to reconcile
      net income to net cash
      provided by (used in)
      operating activities
    Depreciation and amortization     1,329      1,229     1,185
    Amortization of securities
      premium, net                      655        709       440
    Amortization of deferred
      points and fees and deferral
      of loan origination costs        (393)      (297)    (571)
Provision for possible loan
      losses                          1,800      1,350       720
    Deferred tax (benefit)
     provision                         (220)      (392)      899
    Increase (decrease)in
      accrued taxes, interest,
      and other liabilities           1,515     (7,009)    9,472
    (Gain) loss on sale of
      securities available-
     for-sale                           (84)        45      (71)
    (Gain) on sale of loans              (3)         0      (18)
    (Gain) loss on the sale of
      other real estate owned          (343)        96        23
    (Increase) decrease in
      accrued interest receivable      (669)      (532)       41
    Other assets, net                (1,279)      (747)  (3,040)
    Net cash provided by (used in)
      operating activities        $   8,719   ($   275)  $13,500

CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from the sale of
     other real estate owned      $     890   $    292   $   308
    Net (increase) decrease in
     loan balances                  (38,558)   (19,909)    1,144
    Proceeds from the sale of
      loans                             181          0     1,432
    Proceeds from the maturities of
      securities held-to-maturity    31,211     14,745     8,936
   Purchase of securities
     held-to-maturity                (6,716)   (44,986) (17,722)
    Proceeds from the maturities
      of securities available-
     for-sale                        15,814     15,795     1,846
   Proceeds from the sale of
      securities available-
     for-sale                        25,910     17,103    18,896
   Purchase of securities
     available-for-sale            (113,824)   (46,623) (16,093)
    Capital expenditures             (1,432)      (699)  (1,077)
  Net cash used in investing
    activities                    $ (86,524)  $(64,282) $(2,330)

CASH FLOWS FROM FINANCING ACTIVITIES
    Net increase in time deposits $  17,839   $ 59,462   $32,028
    Net increase (decrease) in
      demand deposits, savings,
      money market and interest
      bearing demand deposits        15,328     (4,070)    6,187
   Net increase in short term
      borrowings                     12,000        218       605
   Dividends paid                    (1,741)    (1,294)   (1,175)
   Issuance of 9.5% Cumulative
    Trust Preferred Securities       11,500          0         0
   Increase in long-term debt         9,000          0         0
   Issuance of Common Stock             308         98         0
   Redemption of Preferred Stock          0        (52)        0
   Purchase of Treasury Stock        (4,053)       (58)        0
   Net cash provided by
    financing activities          $  60,181   $ 54,304   $37,645

NET (DECREASE) INCREASE IN
 CASH AND CASH EQUIVALENTS          (17,624)   (10,253)   48,815
CASH AND CASH EQUIVALENTS,
  beginning of year                  76,857     87,110    38,295
CASH AND CASH EQUIVALENTS,
  end of year                     $  59,233   $ 76,857   $87,110
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
   Cash paid during the year for
     Interest                     $  15,412   $ 11,939   $ 8,823
     Income taxes                     5,551      2,847     3,031
NONCASH OPERATING ACTIVITIES
   Transfer of loans to other
      real estate owned           $     311   $    458   $   702
   Transfer of securities
     held-to-maturity to
     securities available-
        for-sale                   $       0  $      0    $37,911


The accompanying notes to the consolidated financial statements
are an integral part of these
statements.
                                             FS-5






<PAGE>




Broad National Bancorporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The more significant accounting policies not described
elsewhere in these notes are as follows:

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts
of Broad National Bancorporation (the Company), its wholly owned
subsidiaries BNB Capital Trust and Broad National Bank (the Bank)
and the Bank's wholly owned subsidiaries, BNB Investment
Corporation, Broad National Realty Corporation and Bronatoreo.
All intercompany accounts and transactions have been eliminated.

BASIS OF FINANCIAL STATEMENT PRESENTATION

     In preparing the consolidated financial statements,
management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities as of the
date of the statements of condition and results of operations for
the periods indicated.  Actual results could differ significantly
from those estimates.

     Material estimates that are particularly susceptible to
significant change in the near-term relate to the determination
of the allowance for possible loan losses and the valuation of
other real estate owned.  In connection with the determination of
these allowances, management generally obtains independent
appraisals.

     While management uses available information to recognize
losses on loans and other real estate owned, future additions may
be necessary based on changes in economic conditions.  In
addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's
allowance for possible losses on loans, and valuation of other
real estate owned.  Such agencies may require the Company to
recognize additions to the allowance or changes in valuation
based on their judgments of information available to them at the
time of their examination.

     A substantial portion of the Company's loans are secured by
real estate in New Jersey.  Accordingly, as with most financial
institutions in this market area, the ultimate collectibility of
a substantial portion of the Company's loan portfolio is
susceptible to changes in New Jersey's market conditions.




<PAGE>




FEDERAL HOME LOAN BANK OF NEW YORK (FHLBNY) STOCK

     The Bank, as a member of the FHLBNY, is required to hold
shares of capital stock of FHLBNY, which are carried at cost,
based upon a specified formula.

INVESTMENT SECURITIES

     The Company does not have trading securities, but does
differentiate between  held-to-maturity securities and
available-for-sale securities.  Management determines the
appropriate classification of securities at the time of purchase.

     If management has the positive intent and the Company has
the ability at the time of purchase to hold securities until
maturity, they are classified as held-to-maturity securities.
Such securities are stated at amortized cost, adjusted for
unamortized purchase premiums and discounts.

     Securities in the available-for-sale category are those for
which the Company does not have the positive intent and ability
to hold to maturity.   Available-for-sale securities are reported
at fair value.  Any unrealized appreciation or depreciation in
the available-for-sale securities, net of tax effects, is
reported as a separate component of shareholders' equity.
Realized gains or losses on the sale of securities available-
for-sale are recognized using the specific identification method.

LOANS AND LOAN FEES

     Loans are stated at their principal amount outstanding, net
of deferred loan fees and costs.

     Non-refundable fees and costs associated with originating or
acquiring loans are deferred and amortized over the expected
remaining life of the related loans by use of a method which
approximates the level yield method.

     It is the policy of the Bank to discontinue the accrual of
interest and reverse previously accrued but unpaid interest where
interest or principal is more than 90 days past due or when other
circumstances indicate that collection is questionable, unless
the loans are adequately secured and in the process of
collection.  Income on these loans is recognized only in the
period in which it is collected.  A loan is returned to accrual
status when it is brought current as to principal and interest
and its future collectibility is assured.




<PAGE>




ALLOWANCE FOR POSSIBLE LOAN LOSSES

     The allowance for possible loan losses is maintained at a
level considered adequate to provide for potential loan losses.
The allowance is increased by provisions charged to expense and
reduced by net charge-offs.  The level of the allowance is based
upon management's evaluation of potential losses in the loan
portfolio, after consideration of prevailing economic conditions.

     The Bank has identified the population of loans to be
evaluated for impairment to be non-accrual loans and loans
internally classified as substandard or below and in each
instance above an established dollar threshold. The value of an
impaired loan is measured based upon the present value of
expected future cash flows discounted at the loan's effective
interest rate, or the fair value of the collateral if the loan is
collateral dependent.  Smaller balance homogeneous loans that are
collectively evaluated for impairment, such as residential
mortgage loans and installment loans, are specifically excluded
from impaired loans.  The impaired loan portfolio is primarily
collateral dependent.  Impaired loans are assessed to determine
that each loan's carrying value is not in excess of the fair
value of the related collateral or the present value of expected
future cash flows.

OTHER REAL ESTATE OWNED

     Other real estate owned is composed of foreclosed properties
where the Bank has actually received title.  Such properties are
carried at the lower of cost or fair value less estimated cost to
sell.  The fair value of such assets is determined based upon
independent appraisals and other relevant factors.  Operating
expenses, and gains or losses from the sale of other real estate
owned are charged or credited to other real estate expense.

     Other real estate owned is included in "Other Assets" in the
Consolidated Statements of Condition.

PREMISES AND EQUIPMENT

     These assets are stated at cost less accumulated
depreciation and amortization, which are computed primarily using
the straight-line method over the estimated useful lives of the
assets.  Gains or losses on dispositions are reflected in current
operations.  Maintenance and repairs are charged to expense as
incurred.




<PAGE>




INCOME TAXES

     Bancorporation and the Bank file a consolidated federal
income tax return.  State income tax returns are filed on a
separate basis.

     The Company accounts for income taxes using the asset and
liability method. Temporary differences between the basis of
assets and liabilities for financial reporting and tax purposes
are measured as of the balance sheet date.  Deferred tax
liabilities or recognizable deferred tax assets are calculated on
such differences, using current statutory rates which result in
future taxable or deductible amounts.  The effect on deferred
taxes of a change in tax rates is recognized in income in the
period that includes the enactment date.

NET INCOME PER SHARE

     On March 3, 1997, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
128, "Earnings Per Share" ("SFAS 128").  SFAS 128 established new
standards for the computation of earnings per share ("EPS") by
simplifying the standards prescribed in APB Opinion No. 15.
Under the new requirements, the Company is required to present
both basic and diluted EPS on the face of the income statement.
Basic EPS replaced the current EPS terminology and is computed by
dividing income available to common shareholders by the weighted-
average number of common shares outstanding.  Diluted EPS
includes any additional common shares as if all potentially
dilutive common shares were issued (e.g. stock options).  The
Company was required to adopt SFAS 128 for the period ended
December 31, 1997.  All prior-period EPS data is restated as
required.

     All share and per share amounts have been restated to
reflect the 5% stock dividend declared in December 1997 and
distributed in January 1998 and the 10% stock dividend
distributed in October 1996.

STOCK COMPENSATION PLANS

     Prior to January 1, 1996, the Bank accounted for its stock
option plans in accordance with the provisions of Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations.  As such,
compensation expense would be recorded on the date of grant only
if the current market price of the underlying stock exceeded the
exercise price.  On January 1, 1996, the Bank adopted Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" (SFAS 123), which permits entities to
recognize as expense over the vesting period the fair value of
all stock-based <PAGE> awards on the date of grant.  Alternatively, SFAS
123 also allows entities to continue to apply the provisions of
APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants
made in 1995 and future years as if the fair-value-based method
defined in SFAS 123 had been applied.  The Bank has elected to
continue to apply the provisions of APB Opinion No. 25 and
provide the pro forma disclosure provisions of SFAS 123.

STATEMENT OF CASH FLOWS

     For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, noninterest bearing amounts due
from banks, and federal funds sold.

RECENT ACCOUNTING PRONOUNCEMENTS

      Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income ("SFAS 130") establishes standards
for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set
of general - purpose financial statements.  SFAS 130 requires
that all items that are required to be recognized under
accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same
prominence as other financial statements.  SFAS 130 does not
require a specific format for that financial statement but
requires that an enterprise display an amount representing total
comprehensive income for the period in that financial statement.
SFAS 130 requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and
(b) display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid in capital
in the equity section of a statement of financial position.  SFAS
130 is effective for fiscal years beginning after December 15,
1997.  Reclassification of financial statements for earlier
periods provided for comparative purposes is required.

      In June 1997, the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information".  SFAS
131 requires public companies to report information about
business segments in their annual financial statements and
selected business segment information in quarterly reports issued
to shareholders.  SFAS 131 requires entity-wide disclosures about
the products and services an entity provides, the material
countries in which it holds assets and reports revenues, and its
major customers.  This statement supersedes SFAS 14, "Financial
Reporting for Segments of a Business Enterprise".  SFAS 131 is
effective for fiscal years beginning after December 15, 1997.




<PAGE>




RECLASSIFICATIONS

     Certain amounts in the consolidated financial statements
presented for prior periods have been reclassified to conform
with the 1997 presentation.


NOTE 2:  INVESTMENT SECURITIES

     The amortized costs, gross unrealized gains and losses and
estimated fair values of securities held-to-maturity are as
follows (in thousands):


</TABLE>
<TABLE>


                                             December 31
                                 1997                                 1996
                              Gross       Gross    Estimated    Gross     Gross     Estimated
               Amortized   Unrealized   Unrealized    Fair    Amortized  Unrealized  Unrealized      Fair
                 Cost       Gains       Losses        Value     Cost       Gains       Losses       Value

<CAPTION>


<S>             <C>        <C>          <C>        <C>          <C>         <C>        <C>        <C>
U.S. Government
Agencies        $13,149    $  1          $( 39)    $ 13,111     $33,862     $ 42       $ (177)     $33,727
Mortgage-Backed
  Securities     47,869     131           (233)       47,767     52,946       30         (591)      52,385
States and
  Political
  Subdivisions    1,683      13               0        1,696      1,182        8            0        1,190
Other Bonds          30       0               0           30         32        0            0           32
Total Debt
 Securities      $62,731   $ 145          $(272)     $62,604    $88,022      $80       $ (768)     $87,334
FRB and FHLB
  Stock            2,599      0               0        2,599      2,148        0            0        2,148
Total Securities
  Held-to-
  Maturity       $65,330   $ 145          $(272)     $65,203    $90,170      $80       $ (768)     $89,482

<TABLE\>

The amortized cost and estimated fair value of securities
held-to-maturity at December 31, 1997, by contractual maturity,
are shown below.  Expected maturities will differ from
contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment
penalties.

                                                       Estimated
                                         Amortized       Fair
                                           Cost         Value
                                               (in Thousands)

Due in one year or less                 $ 3,321        $ 3,314
Due in one year through five years       32,139         31,958
Due after five years through ten years   19,386         19,427
Due after ten years                       7,885          7,905
Total Debt Securities                   $62,731        $62,604
FRB and FHLB Stock                        2,599          2,599
Total Securities Held-To-Maturity       $65,330        $65,203

     The amortized costs, gross unrealized gains and losses and
estimated fair values of securities available-for-sale are as
follows (in thousands):



<PAGE>


</TABLE>
<TABLE>

                                                     December 31
                                 1997                                 1996
                             Gross         Gross    Estimated    Gross     Gross     Estimated
               Amortized   Unrealized   Unrealized    Fair    Amortized  Unrealized  Unrealized    Fair
                  Cost       Gains       Losses      Value     Cost       Gains       Losses       Value

<CAPTION>

<S>             <C>           <C>       <C>       <C>           <C>          <C>       <C>         <C>
U. S. Treasury
  Notes         $ 12,499      $120      $   0     $ 12,619       $12,513      $ 83       $ (1)     $12,595
U.S. Government
  Agencies        32,967        39        (63)      32,943         1,000         0         (4)         996
Mortgage Backed
  Securities      93,537       428       (154)      93,811        55,309       280        (136)      55,453

States and
  Political
  Subdivisions       325        10           0          335             0         0          0            0
Other              1,377         0          (8)       1,369             0         0          0            0
                $140,705      $597        $(225)   $141,077       $68,822      $363      $(141)     $69,044

<TABLE\>

     The amortized cost and estimated fair value of securities
available-for-sale at December 31, 1997, by contractual maturity,
are shown below.  Expected maturities will differ from
contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment
penalties.

                                                       Estimated
                                        Amortized        Fair
                                           Cost          Value
                                             (in thousands)

Due in one year or less                 $  5,487       $  5,493
Due in one year through five years        29,175         29,371
Due after five years through ten years    43,655         43,681
Due after ten years                       62,388         62,532
                                        $140,705       $141,077

     Gross realized gains (losses) from the sale of securities
available-for-sale were $149,000 and ($65,000) during 1997,
$52,000 and ($97,000) during 1996 and $71,000 and ($0) during
1995.

     At December 31, 1997 and 1996, securities having a book
value of $53,199,000 and $75,559,000 respectively, were pledged
to secure lines of credit, letters of credit, public deposits and
for other purposes as required by law.

NOTE 3:  LOANS

     Loans are summarized as follows (in thousands):

                                                                                                       December 31



<PAGE>




                                        1997       1996
Real Estate loans
  Construction                      $ 10,844     $  5,990
  Secured conventional
    Residential                       78,654       72,791
    Nonresidential                   141,464      126,050
Commercial and industrial loans       82,524       73,171
Loans to individuals
  Automobile                           2,743        2,488
  Revolving credit                       290          315
  Other installment loans              5,543        5,538
All other loans                          690        1,021
Total loans                          322,752      287,364
Less deferred loan fees                 (224)        (248)
Total loans net of deferred
  loan fees                         $322,528     $287,116

     Non-performing loans and non-performing assets include the
following (in thousands):

                                             December 31
                                       1997            1996
Non-accrual loans                    $ 3,891          $8,384
Accruing loans past due
  90 days or more                        931           1,349
Total non-performing loans           $ 4,822          $9,733
Restructured loans
  (excluding amounts
  classified as non-
  performing loans)                    1,619          3,934
Other real estate owned, net             648            841
Total non-performing assets          $ 7,089        $14,508

     If the non-accrual loans had continued to accrue interest in
accordance with their original contract terms, interest income
would have increased approximately $387,284, $710,500 and
$689,000 in 1997, 1996 and 1995, respectively.  No interest
income was collected on these loans subsequent to their
classification as non-accrual in 1997, 1996 and 1995.

     At December 31, 1997 and 1996, the recorded investment in
impaired loans was $7,334,000 and $10,109,000, respectively.  The
related allowance for credit losses was $0 at December 31, 1997,
and $500,000 at December 31, 1996.  The impaired loan portfolio
is primarily collateral dependent.  The change in the allowance
for impaired loans represented a recovery of $500,000 during
1997, as compared to a recovery of $270,000 during 1996.  The
average recorded investment in impaired loans during the years
ended December 31, 1997 and 1996 was approximately $9,334,000 and
$9,657,000, respectively.  For the years ended December 31, 1997,
1996 and 1995 the Company recognized cash basis interest income
on these impaired loans of $344,000, $265,500 and $70,000,
respectively.

     All loans to directors, executive officers, significant
shareholders and their related interests are current as to
principal and interest payments at December 31, 1997.  The
following summarizes the <PAGE> activity for related party loans for the
year ended December 31, 1997 (in thousands):

Balance, beginning of year                      $1,758
Additions                                          252
Payments                                           147
Balance, end of year                            $1,863

     The Bank is party to financial instruments with
off-balance-sheet risk in the normal course of business to meet
the financial needs of its customers.  These financial
instruments include commercial and standby letters of credit and
unused lines of credit and involve, to varying degrees, elements
of credit risk in excess of the amount recognized in the
statements of condition.  The contract or notional amounts of
these instruments express the extent of involvement the Bank has
in each class of financial instruments.

     The Bank's exposure to credit loss from non-performance by
the other party to the above mentioned financial instruments is
represented by the contractual amount of those instruments.  The
Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments.

     Unless otherwise noted, the Bank does not require collateral
or other security to support financial instruments with
off-balance-sheet credit risk.

                                                   Contract or
                                                Notional Amount
Financial Instruments Whose Contract          at December 31,1997
Amounts Represent Credit Risk                      (in Thousands)

Commercial and standby letters of credit                $ 3,904
Outstanding loan commitments-fixed rate                 $16,259
Outstanding loan commitments-variable rate             $53,341

     Commercial and standby letters of credit are conditional
commitments issued by the Bank guaranteeing performance by a
customer to a third party.  Outstanding loan commitments
represent the unused portion of loan commitments available to
individuals and companies as long as there is no violation of any
condition established in the contract.  Outstanding loan
commitments generally have a fixed expiration date of one year or
less, except for home equity lines of credit commitments which
generally have an expiration date of 15 years.  The Bank
evaluates each customer's credit worthiness on a case-by-case
basis.  The amount of collateral obtained, if deemed necessary by
the Bank upon extension of credit, is based upon management's
credit evaluation of the customer.  Various types of collateral
may be held, including property and marketable securities.




<PAGE>




     The credit risk involved in these financial instruments is
essentially the same as that involved in extending loan
facilities to customers.

NOTE 4:
     ALLOWANCE FOR POSSIBLE LOAN LOSSES

     The allowance for possible loan losses is based upon
estimates, and ultimate losses may vary from the current
estimates.  These estimates are reviewed periodically and, as
adjustments become necessary, they are reported in earnings in
the periods in which they become known.

     The following summarizes the activity in the allowance for
possible loan losses (in thousands):

                                      Year Ended December 31,
                                    1997        1996        1995

Balance, beginning of year        $ 8,531     $ 7,402     $ 7,602
Provisions charged to operations    1,800       1,350         720
Loans charged-off                 ( 3,958)     (1,264)    (2,123)
Recoveries of charged-off loans       601       1,043       1,203
Balance, end of year              $ 6,974     $ 8,531     $ 7,402


     The allowance for loan losses for Federal income tax
purposes was $2,352,000 at December 31, 1997, $3,024,000 at
December 31, 1996 and $3,360,000 at December 31, 1995.

NOTE 5:
     PREMISES AND EQUIPMENT

     The detail of premises and equipment is as follows (in
     thousands):

                                           December 31
                                      1997             1996

Land                                $ 1,309          $ 1,309
Building                              8,653            8,550
Furniture and equipment               8,718            7,609
Leasehold improvements                4,203            4,058
                                    $22,883          $21,526
Less-Accumulated depreciation
  and amortization                   13,892           12,638
                                    $ 8,991          $ 8,888

NOTE 6:
     INCOME TAXES

     The provision for income taxes (benefit) comprises the
following components (in thousands):




<PAGE>




                                     Year Ended December 31
                              1997          1996          1995

Federal
  Current tax expense         $3,659        $3,124       $2,126
  Deferred tax (benefit)
   expense                      (187)         (334)         563
State
  Current tax expense            843           696          106
  Deferred tax (benefit)
   expense                       (33)          (58)         336
                              $4,282        $3,428       $3,131

     Deferred tax expense (benefit) of $74,000, ($68,000) and
$143,000 has been provided through shareholders' equity to
reflect unrealized gains (losses) on available-for-sale
securities at December 31, 1997, 1996 and 1995, respectively.

     The following is a reconciliation of the Federal income tax
expense as reported with the statutory Federal tax on income
before income taxes (in thousands):

                                  Year Ended December 31
                               1997        1996        1995

Tax at statutory rate         $ 3,636      $2,958      $2,567
Tax exempt interest income        (14)        (15)        (38)
State income taxes, net of
  federal tax benefit             535         421         292
Contributions and other            39          31          34
Valuation allowance                 0        (160)          0
Other, net                          86         193         276
Total                          $ 4,282      $3,428      $3,131
Effective tax rate                40.0%       39.4%       41.5%


     The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities are as follows (in thousands):



<PAGE>


                                            December 31

                                        1997             1996
Deferred tax assets
  Deferred fee income                $     0         $    93
  Allowance for possible loan
    losses                             1,858           2,228
  Nonaccrual loan interest             1,382           1,185
  Allowance for losses on OREO            38              38
  Pension expense                        583             440
  Premises and equipment,
    principally due to
    differences in depreciation          914             789
  Other                                  350             110
Total deferred tax asset               5,125           4,883
Valuation allowance                     (270)           (270)
Total gross deferred tax asset        $ 4,855          $4,613
Deferred tax liabilities
  Deferred fee income                 $    19          $    0
  Investment securities,
    principally due to
    accretion of discounts                 28              25
  Unrealized gain-securities
    available-for-sale                    149              75
Total gross deferred tax liabilities  $   196         $   100
Net deferred tax asset                $ 4,659         $ 4,513

     Management has projected that the Company will generate
sufficient future taxable income to utilize the net deferred tax
asset.  There can be no assurance, however, that the Company will
generate any earnings or any specific level of continuing
earnings.

     The valuation allowance for deferred tax assets as of
December 31, 1997 and 1996 was $270,000. There was no change in
the valuation allowance for 1997.

NOTE 7:  BENEFITS PLANS
PENSION PLAN:

     The Bank has a noncontributory defined benefit pension plan
which covers substantially all employees.  The Company makes
annual contributions to the plan equal to the amount accrued for
pension expense if deductible for tax purposes.

     The following table sets forth the plan's funded status and
amounts recognized in the Company's consolidated financial
statements (in thousands):





<PAGE>


                                                          December 31
                                                       1997             1996

Actuarial present value of benefit obligation
  Accumulated benefit obligations,
    including vested benefits of $2,773 and
    $2,425 in 1997 and 1996, respectively             $2,905          $2,554

Plan assets at fair value, primarily
  listed stocks, U.S. Bonds, and
  commingled funds                                    $4,985          $4,141
Projected benefit obligation for service
  rendered to date                                     5,227           4,874
Plan assets less than projected
  benefit obligation                                    (242)          (733)
Unrecognized net gain due to past experience
  different from assumptions made and effects
  of changes in assumptions                             (952)          (218)
Unrecognized prior service cost                          190             211
Unrecognized transition asset being amortized
  over 15 years                                         (122)          (146)
Accrued pension cost included in other liabilities   $(1,126)         $(886)

     Net pension cost for 1997, 1996 and 1995 included the
following components (in thousands):

                                      Year Ended December 31
                                   1997        1996        1995

Service cost-benefits earned
  during the year                 $ 529       $ 543       $ 387
Interest cost on projected
  benefit obligation                313         289         250
Actual return
  on plan assets                   (724)       (377)       (697)
Net deferral and amortization       366          68         448
Net pension cost                   $484       $ 523       $ 388

     In determining the projected benefit obligation, the
weighted average assumed discount rate was 7% for 1997 and 1996
and 8% for 1995, while the rate of increase in future salary
levels was 5% for 1997, 1996 and 1995, respectively.  The
expected long term rate of return on assets, used in determining
the net period pension cost was 8% for all years presented.

     Effective in 1995, the Bank established a non-qualified
deferred compensation plan for certain officers.  All benefits
provided under this plan are unfunded.  As of December 31, 1997
and 1996, approximately $246,000 and $138,000, respectively, was
included in accrued expense for this plan.  For the years ended
December 31,1997, 1996 and 1995, expenses related to this plan
were $108,000, $51,000 and $87,000, respectively.




<PAGE>




401K PLAN:

     The Bank sponsors a 401k Plan which provides several tax
deferred investment opportunities to salaried employees of the
Bank who have satisfied the service requirements of the Plan.
The Plan allows eligible employees to make periodic contributions
of certain percentages of their salary, subject to the Internal
Revenue Code limits on maximum annual contributions.  The Bank
matches part of these contributions.  The Bank's matching
contribution expense was $114,600, $62,300 and $65,100 for 1997,
1996, and 1995, respectively.

NOTE 8: STOCK COMPENSATION PLANS

     At December 31, 1997, the Company had five stock based
compensation plans, which are described below.  The Company
applies APB Opinion No. 25 and related interpretations in
accounting for its plans.  Accordingly, no compensation cost is
recognized for its stock option plans.  Had compensation cost for
the Company's five stock -based compensation plans been
determined consistent with SFAS NO.123, the Company's net income
and earnings per share would have been reduced to the proforma
amounts indicated below (in thousands, except per share amounts):

                                1997     1996       1995
Net income      As Reported    $6,411   $5,273     $4,420
                Pro forma      $6,150   $5,152     $4,368

Basic earnings  As Reported     $1.34    $1.10      $1.13
per share       Pro forma       $1.28    $1.08      $1.11

Diluted
 earnings       As Reported     $1.29    $1.06      $0.89
 per share      Pro forma       $1.24    $1.03      $0.88

     The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants in 1997,
1996 and 1995, respectively: dividend yield of 1.7 percent, 2.4
percent and 2.3 percent; expected volatility of 45 percent for
all periods; risk-free interest rates of 7.0 percent, 6.7
percent, and 7.0 percent for the 1993 Non-Statutory Plan options,
5.9 percent, 6.3 percent, and 5.7 percent for the 1993 and 1996
Incentive Plan options; and expected lives of 8 years for all
periods for the 1993 and 1996 Non-Statutory Plan options; and 7
years for all periods for the 1993 and 1996 Incentive Plan
options.  The effects of applying SFAS 123 on the pro forma net
income may not be representative of the effects on the pro forma
net income for future years.




<PAGE>




STOCK OPTION PLANS:

     The Company has five option plans.  The 1986 Incentive Stock
Option Plan expired April 16, 1996.  No additional options are
available for granting under this plan.  The 9,690 options issued
and outstanding prior to April 16,1996 remain available for
exercise until their expiration dates.

     Under the 1993 Broad National Incentive Stock Option Plan
(1993 Incentive Plan), the Company may grant options to its
management personnel for up to 242,550 shares of common stock.

     Under the 1993 Broad National Directors Non-Statutory Stock
Option Plan (1993 Non-Statutory Plan), the Company may grant
options to its directors for up to 90,956 shares of common stock.

     Under the 1996 Broad National Bancorporation Incentive Stock
Option Plan (1996 Incentive Plan), the Company may grant options
to its management personnel for up to 210,000 shares of common
stock.

     Under the 1996 Broad National Directors Non-Statutory Stock
Option Plan (1996 Non-Statutory Plan), the Company may grant
options to its directors for up to 78,750 shares of common stock.

     Under all plans, the exercise price of each option is no
less than the market price of the Company's stock on the date of
grant, and an option's maximum term is ten years.

     Options granted under the 1993 and 1996 Non-Statutory Plans
vest at the expiration of two years from the granting date.

     Vesting under the 1993 and the 1996 Incentive Plans is
subject to the authority of the committee which administers these
plans, and all options granted to date under these plans vest 40%
at the end of the second year and 20% each year over the next
three years.

     A summary of the status of the Company's stock option plans
as of December 31, 1995, 1996 and 1997, and changes during the
years ended on those dates is presented below:



<PAGE>


                                   Shares Under           Weighted-Avg.
                                      Option              Exercise Price

Outstanding at December 31, 1994      250,315                   $5.90
Exercised in 1995                     ( 3,751)                   5.00
Granted in 1995                        87,202                    8.26
Expired unexercised in 1995           ( 2,250)                   8.52
Outstanding at December 31, 1995      331,516                    6.51
Exercised in 1996                     (19,003)                   5.17
Granted in 1996                        81,007                   11.58
Expired unexercised in 1996           ( 7,972)                   6.56
Outstanding at December 31, 1996      385,548                    7.65
Exercised in 1997                     (51,425)                   6.43
Granted in 1997                        89,350                   19.67
Expired unexercised in 1997           ( 7,489)                   8.28
Outstanding at December 31, 1997      415,984                   10.37
Weighted-average fair value              1997       1996         1995
of options granted during the year      $9.22      $5.30        $4.09


The following table summarizes information about stock options
outstanding at December 31, 1997:

                   Options Outstanding               Options Exercisable
Range        Number   Weighted-Avg.   Number
 Of       Outstanding  Remaining    Weighted-Avg.  Exercisable   Weighted-Avg.
Exercise  at 12/31/97  Contractual  Exercise Price at 12/31/97    Exercise
Prices                    Life                                       Price

$ 5.57 -
  6.71     172,251      5.8 years       $ 5.84        132,070        $  5.80

  8.23 -
  9.53      82,458      6.9               8.51         27,885           8.38

 11.55 -
 14.70      89,775      8.3              12.37              0           0.00

 20.50 -
 22.55      71,500      9.0              20.93              0           0.00

$ 5.57 -
$22.55     415,984      7.1             $10.37         159,955        $ 6.25


NOTE 9:  SHORT-TERM BORROWINGS

     Short-term borrowings at December 31, 1997 and 1996
consisted of the following (in thousands):

                                              1997      1996
   Securities sold under agreements
     to repurchase                           $ 1,000   $1,000
   Federal Home Loan Bank advances            12,000        0
                                             $13,000   $1,000

Details with respect to short-term borrowings are as follows (in
thousands):



<PAGE>
                                                                                                         December 31


                                        1997             1996

Balance, end of year                   $13,000          $ 1,000
Maximum outstanding during the year
  at any month end                      $13,000          $ 1,282
Average interest rate, end of year        5.88%            4.95%
Average outstanding during the year     $ 4,885          $ 1,149
Average interest rate for the year        5.75%            5.05%

     The average amounts outstanding were computed primarily from
daily averages and the average interest rate for the year and at
the end of the year were computed by dividing the respective
interest expenses by the average balances outstanding.

     The Bank has available $26,318,000 in lines of credit with
correspondent banks.  At December 31, 1997, these lines of credit
were not in use.

NOTE 10:  LONG-TERM DEBT

     Long-term debt of $9,000,000 at December 31, 1997 represents
Federal Home Loan Bank Advances with remaining maturities of
greater than one year.  This debt represents a series of nine
$1,000,000 advances with interest rates ranging from 6.16% to
6.28%,and maturities from January 29, 1999 to September 30, 1999.
The advances are secured by residential mortgages and securities
under a blanket collateral agreement.

NOTE 11:  COMPANY-OBLIGATED MANDATORILY REDEEMABLE CUMULATIVE
TRUST PREFERRED SECURITIES OF A SUBSIDIARY TRUST HOLDING SOLELY
JUNIOR SUBORDINATED DEBENTURES OF BANCORPORATION (9.5% CUMULATIVE
TRUST PREFERRED SECURITIES).

     On June 30, 1997, $11.5 million of 9.5% Cumulative Trust
Preferred Securities were issued by BNB Capital Trust, a Delaware
statutory business trust formed and wholly-owned by
Bancorporation.  The net proceeds from this issuance were
invested in Bancorporation in exchange for Bancorporation's
junior subordinated debentures.  The sole asset of BNB Capital
Trust, the obligor on the 9.5% Cumulative Trust Preferred
Securities, is $11,855,670 principal amount of 9.5% Junior
Subordinated Debentures of Bancorporation due June 30, 2027.
Bancorporation has entered into several contractual arrangements
for the purpose of fully and unconditionally supporting BNB
Capital Trust's payment of distributions on, payments on any
redemption of, and any liquidation distribution with respect to,
the 9.5% Cumulative Trust Preferred Securities.  These
contractual arrangements constitute a full and unconditional
guarantee by Bancorporation of BNB Capital Trust's obligations
under the 9.5% Cumulative Trust Preferred Securities.




<PAGE>




     Cash distributions on both the 9.5% Cumulative Trust
Preferred Securities and the 9.5% Junior Subordinated Debentures
are payable quarterly in arrears on the last day of March, June,
September and December of each year.

     The 9.5% Cumulative Trust Preferred Securities are subject
to mandatory redemption (i) in whole, but not in part, upon
repayment of the Junior Subordinated Debentures at Stated
Maturity or, at the option of Bancorporation, their earlier
redemption in whole upon the occurrence of certain changes in the
tax treatment or capital treatment of the 9.5% Cumulative Trust
Preferred Securities, or a change in the law so that BNB Capital
Trust would be considered an investment company and (ii) in whole
or in part at any time on or after June 30, 2002
contemporaneously with the optional redemption by Bancorporation
of the Junior Subordinated Debentures in whole or part.  The
Junior Subordinated Debentures are redeemable prior to maturity
at the option of the Bancorporation (i) on or after June 30,
2002, in whole at any time or in part from time to time, or (ii)
in whole, but not in part, at any time within 90 days following
the occurrence and continuation of certain changes in the tax
treatment or capital treatment of the 9.5% Cumulative Trust
Preferred Securities, or a change in the law so that BNB Capital
Trust would be considered an investment company.  The ability of
the Bancorporation to exercise its rights to redeem the Junior
Subordinated Debentures or to cause the redemption of the
Preferred Securities prior to the Stated Maturity may be subject
to prior regulatory approval by the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), if then required
under applicable Federal Reserve capital guidelines or policies.

NOTE 12:  COMMITMENTS AND CONTINGENCIES

     In the ordinary course of business, the Company and the Bank
may be a party to outstanding legal proceedings and claims.  In
its judgement, management does not believe that the Company's
consolidated financial position or results of operations will be
materially affected by any of these present proceedings.

     Cash balances reserved to meet the requirements of the bank
regulatory authorities amounted to $3,395,000 at December 31,
1997.

     The Bank has lease commitments on certain of its branches
expiring at various dates through 2007.  Rental expense on these
leases charged to operations amounted to $577,000, $544,000 and
$567,000 for the years ended December 31, 1997, 1996, and 1995
respectively.  The minimum annual rentals under the terms of the
leases as of December 31, 1997 were as follows:




<PAGE>





          1998            $533,000
          1999             515,000
          2000             408,000
          2001             345,000
          2002             193,000
    Thereafter             485,000

NOTE 13:  EARNINGS PER SHARE

     The following reconciles the income available to common
shareholders (numerator) and the weighted average common stock
outstanding (denominator) for both basic and diluted earnings per
share for 1997, 1996 and 1995:

                                           1997          1996        1995
Net Income                                $6,411        $5,273      $4,420
Less: Preferred Stock Dividends              --            --         (580)
  Income Available to Common
    Shareholders Basic and Diluted        $6,411        $5,273      $3,840
Weighted Average
  common shares outstanding-Basic          4,788         4,789       3,407
Effect of Dilutive Securities
  Stock options                              169            93          60
  Convertible preferred stock                --            116       1,492
Weighted Average
  common shares outstanding-Diluted        4,957         4,998       4,959

NOTE 14:  SHAREHOLDERS' EQUITY
STOCK DIVIDENDS:

     On December 18, 1997, the Board of Directors of the Company
declared a 5% stock dividend which was distributed January 6,
1998.

     On September 19, 1996, the Board of Directors of the Company
declared a 10% stock dividend which was distributed October 4,
1996.

     All per share data included in the accompanying financial
statements and notes thereto reflect the retroactive effect of
these stock dividends.

PREFERRED STOCK 1992 CLASS:

     On April 8, 1996, the Company completed the redemption of
the 1992 Preferred Stock.  As a result of the redemption
programs, 3,750 shares of 1992 Preferred Stock were redeemed at
the price of $10.60 per share, for a total redemption price of
$43,750.  In lieu of redemption, 558,803 shares of 1992 Preferred
Stock were converted into 1,066,616 shares of common stock.  Cash
was paid for fractional shares resulting from conversion.





<PAGE>




PREFERRED STOCK 1985 CLASS:

     The redemption of the 1985 Preferred Stock was completed on
January 7, 1996 and 197 shares of the 1985 Preferred Stock were
redeemed at a price of $38 per share, for a total redemption
price of $7,486.  In lieu of redemption, 16,927 shares of the
1985 Preferred Stock were converted into 109,916 shares of common
stock.  Cash was paid for fractional shares resulting from
conversion.

STOCK BUYBACK PROGRAM:

     On November 21, 1996, the Board of Directors of the Company
authorized the repurchase of up to 100,000 of its outstanding
common shares.  Additionally, on June 19, 1997 the Board of
Directors of the Company authorized the purchase, through open
market transactions, of up to an additional $4,000,000 market
value of the Company's common stock.  These repurchases will be
made from time to time in the open market, subject to prevailing
conditions and in a manner to avoid disrupting the market.
Purchasing activities may be discontinued and resumed at any
time, as market conditions warrant.  The repurchased shares will
be held in treasury and may be used by the Company for general
corporate purposes including stock-based employee benefit plans
and stock dividends.

     At December 31, 1997, the Company had repurchased 242,000
shares of common stock.

NOTE 15: REGULATORY MATTERS

     Capital adequacy for the Company is measured against
regulations established by the Federal Reserve Board (FRB).  The
Bank is subject to generally similar capital regulations adopted
by the Office of the Comptroller of the Currency (the OCC).
These regulations require the Company and the Bank to maintain
minimum levels of regulatory capital.  Under the regulations in
effect at December 31,1997, the Company and the Bank were
required to maintain (i) a minimum leverage ratio of Tier 1
capital to total adjusted assets of 4.0%, and (ii) minimum ratios
of Tier 1 and total capital to risk-weighted assets of 4.0% and
8.0%, respectively.

     Under its prompt corrective action regulations, the FDIC is
required to take certain supervisory actions ( and may take
additional discretionary actions) with respect to an
undercapitalized institution.  Such actions could have a direct
material effect on the institution's financial statements.  The
regulations establish a framework for the classification of
financial institutions into five categories: well capitalized,
adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized.  Generally, an
institution is considered well capitalized if it has a
leverage(Tier 1) capital ratio of at least 5.0%; a Tier 1 risk-
based capital ratio <PAGE> of at least 6.0%; and a total risk-based
capital ratio of at least 10.0%.

     The foregoing capital ratios are based in part on specific
quantitative measures of assets, liabilities and certain off-
balance sheet items as calculated under regulatory accounting
practices.  Capital amounts and classifications are also subject
to qualitative judgments by the FRB, the OCC and the FDIC about
capital components, risk weightings and other factors.

     Management believes that, as of December 31, 1997, the
Company and the Bank meet all capital adequacy requirements to
which they are subject.  Further, the most recent FDIC
notification categorized the Bank as a well-capitalized
institution under the prompt corrective action regulations.
There have been no conditions or events since that notification
that management believes have changed the Bank's capital
classification.

     The following is a summary of the Company's and the Bank's
actual capital amounts and ratios as of December 31, 1997 and
1996, compared to the regulatory minimum capital adequacy
requirements and the regulatory requirements for classification
as a well-capitalized institution:

                                Regulatory Requirements
                                    Minimum Capital     For Classification
                  Company Actual        Adequacy        as Well Capitalized
                  Amount    Ratio    Amount    Ratio      Amount     Ratio
                                       (Dollars in Thousands)
December 31, 1997
Leverage (Tier 1)
  capital         $49,787   8.19%   $24,318    4.00%   $30,397     5.00%
Risk-based capital
 Tier 1           $49,787  13.16%   $15,138    4.00%   $22,706     6.00%
 Total            $54,545  14.41%   $30,276    8.00%   $37,844    10.00%
December 31, 1996
Leverage (Tier 1)
  capital         $37,512   6.92%   $21,676    4.00%   $27,095     5.00%
Risk-based capital:
 Tier 1           $37,512   11.17%   $13,434    4.00%  $20,151     6.00%
 Total            $41,764   12.44%   $26,868    8.00%  $33,585    10.00%

                                 Regulatory Requirements
                                      Minimum Capital  For Classification
                     Bank Actual          Adequacy      as Well Capitalized
                   Amount    Ratio    Amount    Ratio      Amount    Ratio
                                          (Dollars in Thousands)
December 31, 1997
Leverage (Tier 1)
  capital         $44,544    7.33%   $24,318    4.00%     $30,397   5.00%
Risk-based capital
 Tier 1           $44,544    11.77%   $15,138    4.00%    $22,706   6.00%
 Total            $49,302    13.03%   $30,276    8.00%    $37,844  10.00%

December 31, 1996
Leverage (Tier 1)
  capital         $36,939     6.82%   $21,676    4.00%    $27,095   5.00%
Risk-based capital:
 Tier 1           $36,939    11.00%   $13,434    4.00%    $20,151   6.00%
 Total            $41,191    12.26%   $26,868    8.00%    $33,585  10.00%





<PAGE>




NOTE 16:  Fair values of financial instruments

     Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments" ("SFAS
107") requires that the Company disclose estimated fair values
for its financial instruments whether or not recognized in the
Statement of Financial Condition.

     Limitations: The fair value estimates made at December 31,
1997 and 1996 were based on pertinent market data and relevant
information on the financial instrument at that time.  These
estimates do not reflect any premium or discount that could
result from offering for sale at one time the entire portion of
the financial instruments.  Because no market exists for a
portion of the financial instruments, fair value estimates may be
based on judgments regarding future expected loss experience,
current economic conditions, risk characteristics of various
financial instruments, and other factors.  These estimates are
subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with
precision.  Changes in assumptions could significantly affect the
estimates.

     Fair value estimates are based on existing on-and-off
balance sheet financial instruments without attempting to
estimate the value of anticipated future business and the value
of assets and liabilities that are not considered financial
instruments.  In addition, the tax implications related to the
realization of the unrealized gains and losses can have a
significant effect on fair value estimates and have not been
considered in many of the estimates.

     Fair value estimates, methods and assumptions are set forth
below for the Company's financial instruments (in thousands):

                                         At December 31,
                                     1997               1996
                                        Estimated            Estimated
                              Carrying    Fair     Carrying     Fair
                               Amount     Value     Amount      Value

Financial Assets
  Cash and short-term
    investments                $ 59,233  $ 59,233  $ 76,857    $ 76,857
  Securities held-to-maturity    65,330    65,203    90,170      89,482
  Securities available-
    for-sale                    141,077   141,077    69,044      69,044
  Loans, net                    315,554   317,828   278,585     281,052
Financial Liabilities
   Deposits                      518,238  519,241   485,073     485,042
   Short term borrowings          13,000   13,037     1,000       1,000
   Long term debt                  9,000    9,065         0           0
   9.5% Cumulative Trust
    Preferred Securities          11,500   12,269         0           0

     The following methods and assumptions were used to estimate
the fair value of each class of financial instrument:




<PAGE>




Cash and short-term investments

     The carrying amount approximates fair value.

Investment Securities

     The fair values are based on quoted market prices obtained
from outside sources.


Loans

     The fair value of the loan portfolio was estimated using the
discounted value of the future cash flows expected to be received
using a market discount rate.  For loans that have short-term
maturities or that reprice to market rates, the carrying value
was used as an estimate of fair value.

Deposit liabilities

     The fair value of deposits is equal to the amount payable on
demand at the reporting dates except for the fair value of fixed
maturity certificates of deposit which were estimated by
discounting the value of the future cash flows expected to be
paid on deposits.

Long term debt

     The fair value is estimated by discounting the cash flows
through maturity based upon current rates offered by the FHLB for
advances with similar maturities.

9.5% Cumulative Trust Preferred Securities

     The fair value is estimated by discounting the cash flows
through maturity based upon current rates for similar Trust
Preferred Securities.

Short term borrowings

     The fair value is estimated by discounting the cash flows
through maturity based upon current rates offered for similar
instruments with similar maturities.

Commitments to extend credit and letters of credit

     The fair market value of unearned fees associated with
financial instruments with off-balance sheet risk at December 31,
1997 approximates the fees received.   Amount is not material.




<PAGE>




NOTE 17:  CONDENSED FINANCIAL INFORMATION OF BANCORPORATION
(PARENT COMPANY ONLY)

Condensed Statements of Condition (in thousands):

                                          December 31,

                                        1997          1996
Assets
  Cash, principally on deposit with
    subsidiary bank                   $ 5,212       $   684
  Investment in subsidiaries           45,844        37,784
  Other assets                            637           375
Total Assets                          $51,693       $38,843
Liabilities and Shareholders' Equity
  Subordinated debentures             $11,856       $     0
  Other liabilities                       606           485
  Shareholders' equity                 39,231        38,358
Total Liabilities and
  Shareholders' Equity                $51,693       $38,843

     Condensed Statements of Income for the years ended December
31, 1997, 1996 and 1995 (in thousands):

                                                     December 31,
                                             1997       1996       1995
Income
Dividends received from banking
    subsidiary                              $1,455     $1,230      $1,818
Interest income from bank/nonbank
    subsidiaries                                 98          0           0
                                              1,553      1,230       1,818
Expenses
Interest on subordinated debentures             563          0           0
Salaries and related benefits                    39         39          39
Other                                          145          78         141
                                               747         117         180
Income before equity in undistributed
       income of subsidiaries                  806       1,113       1,638
Equity in undistributed income
    of subsidiaries                          5,605       4,160       2,782
Net income                                  $6,411      $5,273      $4,420




<PAGE>




     Condensed Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995 (in thousands):

                                                      December 31,
                                               1997       1996         1995
Cash flows from operating activities
Net income                                 $ 6,411  $ 5,273   $ 4,420
Less-
Equity in undistributed income
      of subsidiary                          (5,605)  (4,160)   (2,782)
Increase in other liabilities                   122       56       123
Increase in other assets                      (263)        0         0
Other, net                                    (151)      601      (975)
Net cash provided by operating
      activities                           $    514  $ 1,770   $   786
Cash flows from investing activities
Investments in and advances to
   subsidiaries                            $  (356)    $     0   $     0
Net cash used in investing activities      $  (356)    $     0   $     0
Cash flows from financing activities
Redemption of preferred stock              $     0     $   (52)  $     0
Proceeds from issuance of subordinated
      debentures                            11,856           0         0
Capital contribution to bank subsidiary     (2,000)          0         0
Proceeds from issuance of common stock         308          98        18
Dividends to shareholders                   (1,741)     (1,294)   (1,175)
Purchase of treasury stock                  (4,053)        (58)        0
Net cash provided by (used in)
      financing activities                 $ 4,370     $(1,306)  $(1,157)
Net increase (decrease) in cash and
      cash equivalents                       4,528         464      (371)
Cash and cash equivalents-beginning
   of year                                         684               220       591
Cash and cash equivalents-end of year       $ 5,212    $   684   $   220


NOTE 18:  Selected quarterly financial information (unaudited)

     The following quarterly financial information for the two
years ended December 31, 1997 and 1996, is unaudited.  However,
in the opinion of management all adjustments, which include only
normal recurring adjustments necessary to present fairly the
results of operations for the periods, are reflected.  Results of
operations for these three-month periods are not necessarily
indicative of the results for the entire year or any other
interim period (in thousands, except per share amounts):

                                          1997
                           March     June       September   December

Interest income          $ 9,682  $10,013         $10,416       $10,744
Interest expense           3,521    3,790           4,095         4,524
Provision for possible
  loan losses                450      450              450          450
Non-interest income        1,893    1,783             1,658       1,783
Non-interest expenses      4,690    5,056             4,826       4,977
Net income                 1,661    1,659             1,495       1,596
Net income per common share:
 Basic earnings per common
   share                 $  0.34  $  0.34           $  0.32     $  0.34
 Diluted earnings per common
  share                  $  0.33  $  0.33           $  0.30     $  0.33



<PAGE>


                                               1996
                                 March     June     September   December

Interest income                $ 8,104   $8,474       $9,060     $9,524
Interest expense                 2,613    2,658        3,118      3,429
Provision for possible loan
  losses                           225      225          450        450
Non-interest income              1,072    1,306        1,685      2,493
Non-interest expenses            4,700    5,076        5,007      5,066
Net income                       1,037    1,127        1,262      1,847
Net income per common share:
Basic earnings per common
  share                        $  0.23   $ 0.23       $ 0.26     $ 0.38
Diluted earnings per common
 share                          $  0.21  $ 0.23       $ 0.25     $ 0.37

Item 9.   Changes in and Disagreements on Accounting and
          Financial Disclosure.

          None.


                             PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

          Pursuant to General Instruction G(3) to Form 10-K, the
information required by this Item (except for the information set
forth in Item 4A of Part I hereof with respect to the
Registrant's executive officers) is incorporated herein by
reference to (i) the information under the caption "Election of
Directors" (except that the information set forth under the
following subcaptions thereunder is expressly excluded from such
incorporation:  "Compensation of Directors" and "Meetings of the
Board and Committees") and (ii) the information under the caption
"Compliance with Section 16(a) of the Securities Exchange Act of
1934," in each case, in the Registrant's definitive Proxy
Statement for its 1998 Annual Meeting of Shareholders to be filed
pursuant to Regulation 14A.

ITEM 11.  EXECUTIVE COMPENSATION.

          Pursuant to General Instruction G(3) to Form 10-K, the
information required by this Item is incorporated herein by
reference to the information under the caption "Executive
Compensation and Other Information" (except that the information
set forth under the following subcaptions thereunder is expressly
excluded from such incorporation:  "Compensation Committee and
Board of Directors Report on Executive Compensation" and "Company
Performance") in the Registrant's definitive Proxy Statement for
its 1998 Annual Meeting of Shareholders to be filed pursuant to
Regulation 14A.




<PAGE>




ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

          Pursuant to General Instruction G(3) to Form 10-K, the
information required by this Item is incorporated herein by
reference to the information under the caption "Ownership of
Bancorporation Capital Stock" in the Registrant's definitive
Proxy Statement for its 1998 Annual Meeting of Shareholders to be
filed pursuant to Regulation 14A.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          Pursuant to General Instruction G(2) to Form 10-K, the
information required by this Item is incorporated herein by
reference to the information under the caption "Transactions With
Management and Others" in the Registrant's definitive Proxy
Statement for its 1998 Annual Meeting of Shareholders to be filed
pursuant to Regulation 14A.


                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K.

          (a)  Exhibits and Financial Statement Schedules:

     1.  The following consolidated financial statements of the
Registrant and subsidiaries and report of the Registrant's
independent auditors included in Item 8 to this report:

          Independent Auditors' Report as of December 31,
     1997 and 1996 and for the years ended December 31,
     1997, 1996 and 1995.

          Consolidated Statements of Condition as of
     December 31, 1997 and 1996.

          Consolidated Statements of Income for each of the
     years ended December 31, 1997, 1996 and 1995.

          Consolidated Statements of Changes in
     Shareholders' Equity for the years ended December 31,
     1997, 1996 and 1995.

          Consolidated Statements of Cash Flows for each of
     the years ended December 31, 1997, 1996 and 1995.

          Notes to Consolidated Financial Statements

     2.  Financial Statement Schedules:  All schedules are
omitted because they are not applicable, or not required, or



<PAGE>




because the required information is included in the financial
statements or the notes thereto.

     3.  Exhibits:

Number                        Description
3.1       Restated Certificate of Incorporation of the Registrant
          as amended through and including June 29, 1995 (filed
          September 18, 1997 as Exhibit 4.2 to the Registrant's
          Registration Statement under cover of Form 8-A/A (No.
          0-16637) and incorporated herein by reference).

3.1.1     Certificate of Amendment of Certificate of
          Incorporation of the Registrant, respecting the
          Amendment of ARTICLE THIRD to increase the number of
          authorized shares of capital stock (filed September 18,
          1997 as Exhibit 4.2.1 to the Registrant's Registration
          Statement under cover of Form 8-A/A (No. 0-16637) and
          incorporated herein by reference).

3.1.2     Certificate of Amendment of Certificate of
          Incorporation of the Registrant, respecting the
          Amendment of ARTICLE THIRD to establish certain
          limitations with respect to preemptive rights of
          shareholders (filed September 18, 1997 as Exhibit 4.2.2
          to the Registrant's Registration Statement under cover
          of Form 8-A/A (No. 0-16637) and incorporated herein by
          reference).

3.2       Bylaws of the Registrant, as amended to date (filed as
          Exhibit 3(d) to the Registrant's Form 10-K Report for
          the fiscal year ended December 31, 1989 and
          incorporated herein by reference).

10.1      Lease between The Prudential Insurance Company of
          America and Broad National Bank dated as of December
          15, 1988 (filed as Exhibit 3(e) to the Registrant's
          Form 10-K Report for the fiscal year ended December 31,
          1989 and incorporated herein by reference).

10.1.1    Amendment of Lease between The Prudential Insurance
          Company of America and Broad National Bank dated as of
          February 7, 1996 (filed as Exhibit 10.1.1 to the
          Registrant's Form 10-K Report for the fiscal year ended
          December 31, 1995 and incorporated herein by
          reference).

10.2      Lease between Third Newark Gateway Urban Renewal
          Association and Broad National Bank, dated September 7,
          1984 (filed as Exhibit 10(b) to Registration Statement
          No. 33-01560 and incorporated herein by reference).




<PAGE>




10.3      Lease between O. Navigador Bar, Inc. and Broad National
          Bank (filed as Exhibit 10(c) to Amendment No. 1 to
          Registration Statement No. 2-78220 and incorporated
          herein by reference).

10.4      Lease between Millburn Common Associates and Broad
          National Bank dated June 16, 1976, and Amendment to
          such Lease, dated September 10, 1985 (filed as Exhibit
          10(d) to Registration Statement No. 33-01560 and
          incorporated herein by reference).

10.5      Lease between Cada Holding Corp. and Broad National
          Bank dated October 8, 1976 (filed as Exhibit 10(e) to
          Amendment No. 1 to Registration Statement No. 2-78220
          and incorporated herein by reference).

10.6      Lease between Euro Associates and Broad National Bank
          acknowledged by the parties on December 12, 1985 and
          December 10, 1985 (filed with Amendment No. 2 to the
          Registrant's Registration Statement No. 33-53658 as
          Exhibit 10.6 and incorporated herein by reference).

10.7      Workletter Agreement between Euro Associates and Broad
          National Bank (filed with Amendment No. 2 to the
          Registrant's Registration Statement No. 33-53658 as
          Exhibit 10.7 and incorporated herein by reference).

10.8      Lease between 1000 South Elmora Associates and Broad
          National Bank dated May 18, 1986 (filed with Amendment
          No. 2 to the Registrant's Registration Statement No.
          33-53658 as Exhibit 10.8 and incorporated herein by
          reference).

10.9      Lease between Convery Associates and Broad National
          Bank dated July 1, 1987, and Rider to Lease Agreement,
          dated September 1, 1992 (filed with Amendment No. 2 to
          the Registrant's Registration Statement No. 33-53658 as
          Exhibit 10.10 and incorporated herein by reference).

10.10     Lease Agreement and Amendment between 466 Bloomfield
          Avenue Associates, Inc. and Broad National Bank dated
          February 9, 1988 (filed as Exhibit 10(l) to the
          Registrant's Form 10-K Report for the fiscal year ended
          December 31, 1989 and incorporated herein by
          reference).




<PAGE>




10.11     Lease Agreement between George Zeik and Broad National
          Bank dated September 1, 1989 (filed as Exhibit 10(m) to
          the Registrant's Form 10-K Report for the fiscal year
          ended December 31, 1989 and incorporated herein by
          reference).

10.12     Lease between Broad National Realty Corporation and
          Broad National Bank dated May 1, 1990 (filed as Exhibit
          10(n) to the Registrant's Form 10-K for the fiscal year
          ended December 31, 1990 and incorporated by reference
          herein).

10.12.1   Rider to Lease Agreement between Broad National Realty
          and Broad National Bank dated December 21, 1993 (filed
          as Exhibit 10.13.1 to the Registrant's Form 10-K for
          the fiscal year ended December 31, 1993 and
          incorporated herein by reference).

10.13     Broad National Bank Employees' Retirement Plan (filed
          as Exhibit 10(g) to Registration Statement No. 2-78220
          and as Exhibit 10(f) to Amendment No. 1 to Registration
          Statement No. 2-78220 and incorporated herein by
          reference).*

10.14     Form of Amendment to Sections 2.1 and 3.1(c) of the
          Broad National Bank Employees' Retirement Plan (filed
          as Exhibit 10(p) to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1990 and incorporated by
          reference herein).*

10.15     Description of Bonus Plan for Designated Officers and
          Employees (appears on page 10 of the Registrant's
          definitive proxy statement for its 1991 Annual Meeting
          of Shareholders and is incorporated herein by
          reference).*

10.16     Incentive Stock Option Plan for certain employees
          adopted on March 26, 1987, and amended April 27, 1989
          (filed as Exhibit 10.18 to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1992 and
          incorporated by reference herein).*

10.17     Non-Statutory Stock Option Plan for directors adopted
          on March 26, 1987 (filed with Amendment No. 2 to the
          Registrant's Registration Statement No. 33-53658 as
          Exhibit 10.19 and incorporated herein by reference).*




<PAGE>




10.18     Employment Agreement between Donald M. Karp and the
          Registrant dated December 31, 1997.*

10.19     Employment Agreement among John A. Dorman, Broad
          National Bank and the Registrant, dated December 31,
          1997.*

10.19.1   Employment Agreement Amendment among John A. Dorman,
          Broad National Bank and the Registrant, dated February
          6, 1998.*

10.20     Consultant Agreement between Stanley J. Lesnik and the
          Registrant dated January 1, 1998.*

10.21     Lease between Broad National Bank, landlord, and
          Newtrend L.P., tenant, dated August 10, 1993 (filed as
          Exhibit 10.22 to the Registrant's Form 10-K for the
          fiscal year ended December 31, 1993 and incorporated
          herein by reference).

10.22     Newtrend Service Bureau Agreement between Newtrend,
          Inc. and Broad National Bank dated August 10, 1993
          (filed as Exhibit 10.23 to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1993 and
          incorporated herein by reference).

10.23     Newtrend Item Processing Addendum between Newtrend,
          Inc. and Broad National Bank dated August 10, 1993
          (filed as Exhibit 10.24 to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1993 and
          incorporated herein by reference).

10.24     1993 Broad National Incentive Stock Option Plan for
          certain employees adopted on September 19, 1994 (filed
          as Exhibit 10.24 to the Registrant's Form 10-K Report
          for the fiscal year ended December 31, 1994 and
          incorporated herein by reference).*

10.25     1993 Broad National Directors Non-Statutory Stock
          Option Plan for directors adopted on September 19, 1994
          (filed as Exhibit 10.25 to the Registrant's Form 10-K
          Report for the fiscal year ended December 31, 1994 and
          incorporated herein by reference).*

10.26     Lease between Lucky Realty LLC and Broad National Bank
          (filed as Exhibit 10.26 to the Registrant's Form 10-K
          Report for the fiscal year ended December 31, 1995 and
          incorporated herein by reference).




<PAGE>




10.27     Lease between A.J. Seabra Supermarkets V, Inc. and
          Broad National Bank dated as of April 20, 1995 (filed
          as Exhibit 10.27 to the Registrant's Form 10-K Report
          for the fiscal year ended December 31, 1995 and
          incorporated herein by reference).

10.28     1996 Broad National Bancorporation Incentive Stock
          Option Plan for certain employees adopted on December
          19, 1996 and subsequently amended on January 16, 1997
          (filed as Exhibit 10.28 to the Registrant's Form 10-K
          Report for the fiscal year ended December 31, 1996 and
          incorporated herein by reference).*

10.29     1996 Broad National Bancorporation Directors Non-
          Statutory Stock Option Plan for directors adopted on
          December 19, 1996 (filed as Exhibit 10.29 to the
          Registrant's Form 10-K Report for the fiscal year ended
          December 31, 1996 and incorporated herein by
          reference).*

10.30     Broad National Bank Long-Term Capital Accumulation Plan
          for certain employees adopted on October 19, 1995
          (filed as Exhibit 10.30 to the Registrant's Form 10-K
          Report for the fiscal year ended December 31, 1996 and
          incorporated herein by reference).*

10.31     Broad National Bank Deferred Compensation Plan for
          certain employees and directors adopted on October 19,
          1995 (filed as Exhibit 10.31 to the Registrant's Form
          10-K Report for the fiscal year ended December 31, 1996
          and incorporated herein by reference).*

10.32     Broad National Bank Management Incentive Plan for
          certain employees adopted on October 19, 1995 (filed as
          Exhibit 10.32 to the Registrant's Form 10-K Report for
          the fiscal year ended December 31, 1996 and
          incorporated herein by reference).*

10.33     Form of Change of Control Agreement and Schedule of
          Parties Thereto.*

10.34     Junior Subordinated Indenture, dated as of June 30,
          1997, between Broad National Bancorporation and
          Bankers Trust Company.


<PAGE>




10.35     9.50% Junior Subordinated Debenture, dated as of
          June 30, 1997, made and given by Broad National
          Bancorporation to and for the benefit of BNB
          Capital Trust.

10.36     Trust Agreement, dated as of June 9, 1997, between
          Broad National Bancorporation and Bankers Trust
          (Delaware).

10.37     Amended and Restated Trust Agreement, dated as of
          June 30, 1997, among Broad National Bancorporation
          Bankers Trust Company and Bankers Trust (Delaware).

10.38     Form of Certificate Evidencing Preferred Securities
          issued by BNB Capital Trust.

10.39     Guarantee Agreement, dated as of June 30, 1997,
          between Broad National Bancorporation, as Guarantor,
          and Bankers Trust Company, as Trustee.

11        Statement re Computation of Net Income Per Share.

22        List of Subsidiaries (filed with Amendment No. 3 to the
          Registrant's Registration Statement No. 33-53658 as
          Exhibit 22 and incorporated herein by reference).




<PAGE>




24        Consent of KPMG Peat Marwick LLP with regard to
          Bancorporation's Registration Statement on Form S-8
          (Reg. No. 33-28183).

27        Financial Data Schedule.
______________________

*    Management contracts or compensatory plans or arrangements
     required to be identified by Item 14(a)(3).

          (b)  Reports on Form 8-K

               No reports on Form 8-K were filed during the last
               quarter of 1997.

          (c)  Exhibits

               See Exhibits identified above under Item 14(a)(3).

          (d)  Financial Statement Schedules

               See Item 14(a)(2) above.



<PAGE>

                            SIGNATURES



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

                         BROAD NATIONAL BANCORPORATION


                         By /s/ Donald M. Karp
                            Donald M. Karp
                            Chairman of the Board and
                            Chief Executive Officer

Dated: March 19, 1998

          Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated:

          Signature and Title                          Date


/s/ Donald M. Karp                                March 19, 1998
Donald M. Karp, Director, Chairman
   of the Board and Chief Executive
   Officer (Principal Executive Officer)


/s/ John A. Dorman                                March 19, 1998
John A. Dorman, Director, President
   and Chief Operating Officer


/s/ James Boyle                                   March 19, 1998
James Boyle, Treasurer and Comptroller
   (Principal Financial and Accounting
   Officer)


/s/ Licinio Cruz                                  March 19, 1998
Licinio Cruz, Director





<PAGE>




/s/ Arthur Fischman                               March 19, 1998
Arthur Fischman, Director


/s/ John J. Iannuzzi                              March 19, 1998
John J. Iannuzzi, Director


                                                  March ___, 1998
James J. Lazarus, Director


/s/ Edward J. Lenihan                             March 19, 1998
Edward J. Lenihan, Director


/s/ Stanley J. Lesnik                             March 19, 1998
Stanley J. Lesnik, Director


/s/ Louis J. Owen                                 March 19, 1998
Louis J. Owen, Director


/s/ Catherine McFarland                           March 19, 1998
Catherine McFarland, Director


/s/ A. Harold Schwartz                            March 19, 1998
A. Harold Schwartz, Director


/s/ Hubert Williams                               March 19, 1998
Hubert Williams, Director



<PAGE>


                          EXHIBIT INDEX

Exhibit No.                Description                  Page No.

3.1       Restated Certificate of Incorporation of the      **
          Registrant as amended through and including
          June 29, 1995 (filed September 18, 1997 as
          Exhibit 4.2 to the Registrant's Registration
          Statement under cover of Form 8-A/A (No. 0-16637)
          and incorporated herein by reference).

 3.1.1    Certificate of Amendment of Certificate of        **
          Incorporation of the Registrant, respecting
          the Amendment of ARTICLE THIRD to increase
          the number of authorized shares of capital stock
          (filed September 18, 1997 as Exhibit 4.2.1 to
          the Registrant's Registration Statement under
          cover of Form 8-A/A (No. 0-16637) and
          incorporated herein by reference).

 3.1.2    Certificate of Amendment of Certificate of        **
          Incorporation of the Registrant, respecting
          the Amendment of ARTICLE THIRD to establish
          certain limitations with respect to preemptive
          rights of shareholders (filed September 18,
          1997 as Exhibit 4.2.2 to the Registrant's
          Registration Statement under cover of Form
          8-A/A (No. 0-16637) and incorporated herein by
          reference).

3.2       Bylaws of the Registrant, as amended to date      **
          (filed as Exhibit 3(d) to the Registrant's Form
          10-K Report for the fiscal year ended December 31,
          1989 and incorporated herein by reference).

10.1      Lease between The Prudential Insurance Company    **
          of America and Broad National Bank dated as of
          December 15, 1988 (filed as Exhibit 3(e) to the
          Registrant's Form 10-K Report for the fiscal year
          ended December 31, 1989 and incorporated herein by
          reference).

10.1.1    Amendment of Lease between The Prudential         **
          Insurance Company of America and Broad National
          Bank dated as of February 7, 1996 (filed as
          Exhibit 10.1.1 to the Registrant's Form 10-K
          Report for the fiscal year ended December 31,
          1995 and incorporated herein by reference).

10.2      Lease between Third Newark Gateway Urban          **
          Renewal Association and Broad National Bank,
          dated September 7, 1984 (filed as Exhibit 10(b)
          to Registration Statement No. 33-01560 and
          incorporated herein by reference).




<PAGE>




10.3      Lease between O. Navigador Bar, Inc. and Broad    **
          National Bank (filed as Exhibit 10(c) to
          Amendment No. 1 to Registration Statement No.
          2-78220 and incorporated herein by reference).

10.4      Lease between Millburn Common Associates and      **
          Broad National Bank dated June 16, 1976, and
          Amendment to such Lease, dated September 10,
          1985 (filed as Exhibit 10(d) to Registration
          Statement No. 33-01560 and incorporated herein
          by reference).

10.5      Lease between Cada Holding Corp. and Broad        **
          National Bank dated October 8, 1976 (filed as
          Exhibit 10(e) to Amendment No. 1 to Registration
          Statement No. 2-78220 and incorporated herein by
          reference).

10.6      Lease between Euro Associates and Broad National  **
          Bank acknowledged by the parties on December 12,
          1985 and December 10, 1985 (filed with Amendment
          No. 2 to the Registrant's Registration Statement
          No. 33-53658 as Exhibit 10.6 and incorporated
          herein by reference).

10.7      Workletter Agreement between Euro Associates and  **
          Broad National Bank (filed with Amendment No. 2
          to the Registrant's Registration Statement No.
          33-53658 as Exhibit 10.7 and incorporated herein
          by reference).

10.8      Lease between 1000 South Elmora Associates and    **
          Broad National Bank dated May 18, 1986 (filed with
          Amendment No. 2 to the Registrant's Registration
          Statement No. 33-53658 as Exhibit 10.8 and
          incorporated herein by reference).

10.9      Lease between Convery Associates and Broad        **
          National Bank dated July 1, 1987, and Rider to
          Lease Agreement, dated September 1, 1992 (filed
          with Amendment No. 2 to the Registrant's
          Registration Statement No. 33-53658 as Exhibit
          10.10 and incorporated herein by reference).

10.10     Lease Agreement and Amendment between 466         **
          Bloomfield Avenue Associates, Inc. and Broad
          National Bank dated February 9, 1988 (filed as
          Exhibit 10(1) to the Registrant's Form 10-K
          Report for the fiscal year ended December 31,
          1989 and incorporated herein by reference).




<PAGE>




10.11     Lease Agreement between George Zeik and Broad     **
          National Bank dated September 1, 1989 (filed as
          Exhibit 10(m) to the Registrant's Form 10-K
          Report for the fiscal year ended December 31,
          1989 and incorporated herein by reference).

10.12     Lease between Broad National Realty Corporation   **
          and Broad National Bank dated May 1, 1990 (filed
          as Exhibit 10(n) to the Registrant's Form 10-K
          for the fiscal year ended December 31, 1990 and
          incorporated by reference herein).

10.12.1   Rider to Lease Agreement between Broad National   **
          Realty and Broad National Bank dated December 21,
          1993 (filed as Exhibit 10.13.1 to the Registrant's
          Form 10-K for the fiscal year ended December 31,
          1993 and incorporated herein by reference).

10.13     Broad National Bank Employees' Retirement Plan    **
          (filed as Exhibit 10(g) to Registration Statement
          No. 2-78220 and as Exhibit 10(f) to Amendment No. 1
          to Registration Statement No. 2-78220 and
          incorporated herein by reference ).*

10.14     Form of Amendment to Sections 2.1 and 3.1(c) **
          of the Broad National Bank Employees' Retirement
          Plan (filed as Exhibit 10(p) to the Registrant's
          Form 10-K for the fiscal year ended December 31,
          1990 and incorporated by reference herein).*

10.15     Description of Bonus Plan for Designated Officers **
          and Employees (appears on page 10 of the
          Registrant's definitive proxy statement for its
          1991 Annual Meeting of Shareholders and is
          incorporated herein by reference).*

10.16     Incentive Stock Option Plan for certain employees **
          adopted on March 26, 1987, and amended April 27,
          1989 (filed as Exhibit 10.18 to the Registrant's
          Form 10-K for the fiscal year ended December 31,
          1992 and incorporated by reference herein).*

10.17     Non-Statutory Stock Option Plan for directors     **
          adopted on March 26, 1987 (filed with Amendment
          No. 2 to the Registrant's Registration Statement
          No. 33-53658 as Exhibit 10.19 and incorporated
          herein by reference).*

10.18     Employment Agreement between Donald M. Karp and   __
          the Registrant dated December 31, 1997.*




<PAGE>




10.19     Employment Agreement among John A. Dorman         __
          Broad National Bank and the Registrant,
          dated December 31, 1997.*

10.19.1   Employment Agreement Amendment among              __
          John A. Dorman, Broad National Bank
          and the Registrant, dated December 31,
          1997.*

10.20     Consultant Agreement between Stanley J. Lesnik    __
          and the Registrant dated January 1, 1998.*

10.21     Lease between Broad National Bank, landlord,      **
          and Newtrend, L.P., tenant, dated August 10,
          1993 (filed as Exhibit 10.22 to the Registrant's
          Form 10-K for the fiscal year ended December 31,
          1993 and incorporated herein by reference).

10.22     Newtrend Service Bureau Agreement between         **
          Newtrend, Inc. and Broad National Bank dated
          August 10, 1993 (filed as Exhibit 10.23 to the
          Registrant's Form 10-K for the fiscal year
          ended December 31, 1993 and incorporated herein
          by reference).

10.23     Newtrend Item Processing Addendum between         **
          Newtrend, Inc. and Broad National Bank dated
          August 10, 1993 (filed as Exhibit 10.24 to the
          Registrant's Form 10-K for the fiscal year ended
          December 31, 1993 and incorporated herein by
          reference).

10.24     1993 Broad National Incentive Stock Option Plan   **
          for certain employees adopted on September 19,
          1994 (filed as Exhibit 10.24 to the Registrant's
          Form 10-K Report for the fiscal year ended
          December 31, 1994 and incorporated herein by
          reference).*

10.25     1993 Broad National Directors Non-Statutory Stock **
          Option Plan for directors adopted on September 19,
          1994 (filed as Exhibit 10.25 to the Registrant's
          Form 10-K Report for the fiscal year ended
          December 31, 1994 and incorporated herein by
          reference).*

10.26     Lease between Lucky Realty LLC and Broad National **
          Bank (filed as Exhibit 10.26 to the Registrant's
          Form 10-K Report for the fiscal year ended
          December 31, 1995 and incorporated herein by
          reference).




<PAGE>




10.27     Lease between A.J. Seabra Supermarkets V, Inc.    **
          and Broad National Bank dated as of April 20,
          1995 (filed as Exhibit 10.27 to the Registrant's
          Form 10-K Report for the fiscal year ended
          December 31, 1995 and incorporated herein by
          reference).

10.28     1996 Broad National Bancorporation Incentive      **
          Stock Option Plan for certain employees adopted
          on December 19, 1996 and subsequently amended
          on January 16, 1997 (filed as Exhibit 10.28 to
          the Registrant's Form 10-K Report for the fiscal
          year ended December 31, 1996 and incorporated
          herein by reference).*

10.29     1996 Broad National Bancorporation Directors      **
          Non-Statutory Stock Option Plan for directors
          adopted on December 19, 1996 (filed as Exhibit
          10.29 to the Registrant's Form 10-K Report for
          the fiscal year ended December 31, 1996 and
          incorporated herein by reference).*

10.30     Broad National Bank Long-Term Capital             **
          Accumulation Plan for certain employees adopted
          on October 19, 1995 (filed as Exhibit 10.30 to
          the Registrant's Form 10-K Report for the fiscal
          year ended December 31, 1996 and incorporated
          herein by reference).*

10.31     Broad National Bank Deferred Compensation Plan    **
          for certain employees and directors adopted on
          October 19, 1995 (filed as Exhibit 10.31 to the
          Registrant's Form 10-K Report for the fiscal
          year ended December 31, 1996 and incorporated
          herein by reference).*

10.32     Broad National Bank Management Incentive Plan     **
          for certain employees adopted on October 19,
          1995 (filed as Exhibit 10.32 to the Registrant's
          Form 10-K Report for the fiscal year ended
          December 31, 1996 and incorporated herein
          by reference).*

10.33     Form of Change of Control Agreement and           __
          Schedule of Parties Thereto.*

10.34     Junior Subordinated Indenture, dated as of        __
          June 30, 1997, between Broad National
          Bancorporation and Bankers Trust Company.


<PAGE>




10.35     9.50% Junior Subordinated Debenture, dated as of    __
          June 30, 1997, made and given by Broad National
          Bancorporation to and for the benefit of BNB
          Capital Trust.

10.36     Trust Agreement, dated as of June 9, 1997, between  __
          Broad National Bancorporation and Bankers Trust
          (Delaware).

10.37     Amended and Restated Trust Agreement, dated as of   __
          June 30, 1997, among Broad National Bancorporation
          Bankers Trust Company and Bankers Trust (Delaware).

10.38     Form of Certificate Evidencing Preferred Securities __
          issued by BNB Capital Trust.

10.39     Guarantee Agreement, dated as of June 30, 1997,     __
          between Broad National Bancorporation, as Guarantor,
          and Bankers Trust Company, as Trustee.




11        Statement re Computation of Net Income Per Share. __

22        List of Subsidiaries (filed with Amendment No. 3  **
          to the Registrant's Registration Statement No.
          33-53658 as Exhibit 22 and incorporated herein
          by reference).




<PAGE>




24        Consent of KPMG Peat Marwick LLP with regard to   __
          Bancorporation's Registration Statement on Form
          S-8 (Reg. No. 33-28183).

27        Financial Data Schedule.                          __

__________________________

*    Management contracts or compensatory plans or arrangements
     required to be identified by Item 14(a)(3).

**   Incorporated by reference from previous filings.



</TABLE>