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

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the quarterly period ended March 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: 0-15196

                            US FACILITIES CORPORATION
                            -------------------------
             (Exact name of Registrant as specified in its charter)

             DELAWARE                              33-0097221
             --------                              ----------
    (State or other jurisdiction of             (I.R.S. Employer
    incorporation or organization)            Identification Number)

             650 Town Center Drive, Suite 1600, Costa Mesa, CA 92626
             -------------------------------------------------------
               (Address of principal executive offices) (Zip code)

                                  (714)549-1600
                                  -------------
              (Registrant's telephone number, including area code)

                                 Not applicable
                                 --------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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

Number of shares  outstanding of each class of the Registrant's  Common Stock as
of May 7, 1997:

Common Stock, par value $.01 per share:  5,960,148
Common Stock Purchase Rights:  5,960,148


<PAGE>



                                      INDEX



Part I     FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS
                Condensed  Consolidated Financial Statements:

           Balance Sheets as of March 31, 1997 and
           December 31, 1996..................................................2

           Income Statements for the Quarters Ended
           March 31, 1997 and 1996............................................3

           Statements of Cash Flows for the Quarters Ended
           March 31, 1997 and 1996............................................4

           Notes to Condensed Consolidated Financial Statements...............5

Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................6

Part II    OTHER  INFORMATION

Item 6.    EXHIBITS and REPORTS ON FORM 8-K..................................12

SIGNATURES...................................................................14

<PAGE>


                          PART I FINANCIAL INFORMATION

ITEM 1   FINANCIAL STATEMENTS
         Condensed Consolidated Financial Statements:
<TABLE>
                            US FACILITIES CORPORATION
                      Condensed Consolidated Balance Sheets
                             (Dollars in thousands)

<CAPTION>
                                                               March 31, 1997              December 31,1996
                                                               --------------              ----------------
ASSETS
   <S>                                                             <C>                          <C>
   Investments, at market (amortized cost
   $187,414 at March 31, 1997, $185,472 at
   December 31,1996)                                               $  193,003                   $   194,352
   Cash and invested cash                                              10,470                        11,132
   Restricted cash and short term investments                          25,582                        23,771
   Accrued investment income                                            2,489                         2,653
   Receivables:
        Reinsurance losses and reserves                                22,809                        23,975
        Premiums                                                       21,252                        16,841
   Prepaid reinsurance premiums                                         6,933                         6,495
   Deferred policy acquisition costs                                    3,740                         3,644
   Other assets                                                        11,281                         5,880
                                                                     --------                      --------

  Total assets                                                       $297,559                      $288,743
                                                                     ========                      ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
     Insurance liabilities:
        Amounts due insurance companies                             $  30,872                     $  27,148
        Losses and loss adjustment expenses                           101,636                        94,669
        Unearned premiums                                              24,522                        22,936
     Note payable                                                      34,375                        35,000
     Accounts payable and accrued expenses                              2,712                         6,626
                                                                      -------                       -------
        Total liabilities                                             194,117                       186,379

   Stockholders' Equity                                               103,442                       102,364
                                                                      -------                       -------

     Total liabilities and stockholders' equity                      $297,559                      $288,743
                                                                     ========                      ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

<TABLE>
                            US FACILITIES CORPORATION
                    Condensed Consolidated Income Statements
                  (Dollars in thousands, except per share data)
<CAPTION>

                                                       Quarter ended March 31,
                                                       -----------------------
                                                        1997             1996
                                                        ----             ----
    <S>                                                <C>              <C>
    Revenues:
       Premiums earned                                 $39,283          $29,152
       Commissions and fees                              8,042            6,589
       Net investment income                             2,691            2,442
       Realized investment gains                           177              735
                                                        ------          -------

         Total revenues                                 50,193           38,918
                                                        ------           ------

    Operating Expenses:
       Losses and loss adjustment expenses
         incurred                                       27,996           20,842
       Policy acquisition expenses                      11,909            8,874
       General and administrative expenses               4,454            3,545
       Interest                                            614              680
                                                        ------           ------
         Total operating expenses                       44,973           33,941
                                                        ------           ------

    Income before income taxes                           5,220            4,977

       Income tax expense                                1,560            1,169
                                                         -----            -----

    Net income                                         $ 3,660          $ 3,808
                                                       =======          =======

    Net income per common and common
       equivalent share                                $  0.60          $  0.64
                                                       =======          =======

    Weighted average number of common and
        common equivalent shares outstanding
        during period                                    6,094            5,979
                                                         =====            =====
</TABLE>

   See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>


<TABLE>

                            US FACILITIES CORPORATION
                 Condensed Consolidated Statements of Cash Flows
                             (Dollars in thousands)
<CAPTION>
                                                        Quarter ended March 31,
                                                        -----------------------
                                                        1997              1996
                                                        ----              ----
   <S>                                            <C>               <C>
   Cash provided by operating activities          $    2,381        $    7,787

   Cash flows from investing activities:
       Purchases of fixed maturity investments        (9,572)          (11,835)
       Purchases of equity securities                  ( 189)             (487)
       Proceeds from sales of investment
       securities                                      4,612            10,619
       Net sales (purchases) of short term
       investments                                     3,529            (6,365)
       Purchases of property and equipment              (443)             (243)
                                                    ---------       -----------

   Cash used in investing activities                  (2,063)           (8,311)
                                                   ----------       -----------

   Cash flows from financing activities:
       Dividends paid                                   (358)             (350)
       Exercise of stock options                           3               626
       Payments on note payable                         (625)               -
                                                   ----------       -----------
   Cash (used in) provided by financing                 (980)              276
                                                   ----------       -----------
       activities
   Net decrease in cash and invested cash               (662)             (248)

   Cash and invested cash at beginning of period      11,132             8,165
                                                   ----------       ----------

   Cash and invested cash at end of period         $  10,470        $    7,917
                                                   =========        ==========

   Supplemental disclosure of cash flow information:

   Interest paid                                   $     582        $      ---
                                                  ==========        ==========

   Income taxes paid, net                          $     818        $       61
                                                  ==========        ===========

</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>


                            US FACILITIES CORPORATION
              Notes to Condensed Consolidated Financial Statements

1.   General

         The accompanying  unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted  accounting  principles
and the instructions to Form 10-Q.  Accordingly,  they do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.  In the opinion of management all adjustments
(consisting only of normal recurring accruals)  considered  necessary for a fair
presentation have been included.  The results of operations for the three months
ended March 31,1997 are not necessarily indicative of the results to be expected
for the full year. For further information,  refer to the consolidated financial
statements and footnotes thereto for the year ended December 31,1996 included in
the  US  Facilities   Corporation   (the   "Company")   1996  Annual  Report  to
Stockholders.

2.    Other
         SFAS No. 128,  "Earnings per Share and Disclosure of Information  about
Capital  Structure"  will be adopted by the Company for the year ended  December
31,  1997.  Adoption of this  pronouncement  is not  expected to have a material
effect on the financial statements or the related disclosures of the Company.

3.    Acquisition
         Effective  January 1,1997,  the Company  acquired the medical stop loss
business of Global Excess Re, Inc.("Global") in a transaction accounted for as a
purchase.  The purchase transaction was not material to the financial statements
of the Company.  The results of operations of Global since the acquisition  date
are included in the accompanying condensed consolidated financial statements.

                                       5
<PAGE>


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

Results Of Operations
---------------------

Consolidated  revenues for the 1997 first quarter  increased 29% to  $50,193,000
from $38,918,000 in the 1996 quarter.  Revenue improvements in the first quarter
of 1997 were primarily attributable to growth in the property/casualty  segment,
additional  medical stop loss business  resulting from the acquisition of Global
Excess Re in January 1997, and increased production of provider excess coverage.
Net investment  income  reflects a 10% increase over the 1996 period as a result
of higher levels of invested assets.

Consolidated  net income  decreased to $3,660,000 in the 1997 first quarter from
$3,808,000 in the 1996 quarter,  primarily due to a decline in realized gains to
$177,000 from $735,000 in the 1996 quarter.  The level of realized  gains in the
1996 period resulted primarily from two transactions. First quarter 1997 results
reflect the changes in revenues noted above, an increase in medical lines claims
cost experience, and increases in income tax expenses as prior tax benefits were
no longer available. US Facilities Corporation's (the "Company") continued focus
on  productivity  and expense  control  maintained  general  and  administrative
expenses at 9% of revenues in both periods.

Income  taxes as a  percentage  of pre-tax  income  fluctuate  depending  on the
proportion of tax exempt investment  income to total pre-tax income,  the effect
of available tax benefits,  and the  proportion of total income subject to state
income taxes.

Insurance and reinsurance companies establish reserves for losses incurred,  but
not yet paid,  in order to match such losses with the related  premiums  earned.
The process of establishing loss reserves is subject to uncertainties that are a
normal,  recurring  aspect of the insurance  business  which requires the use of
informed  judgments and  estimates.  Loss and loss  adjustment  expense  reserve
development  is reviewed on a regular basis,  incorporating  analysis of current
trends,  market  changes  in the  Company's  business  segments  and  historical
experience  to  analyze  the  Company's  actuarial  assumptions.  As  additional
experience and other data becomes available,  the Company's  actuarial estimates
may be revised. Such revisions may impact earnings.  Policy acquisition expenses
vary on the basis of market conditions and mix of business.

                                       6
<PAGE>



The  statutory  combined  ratio is the  traditional  indicator of the  potential
underwriting  profitability  of  an  insurance  company's  business.   Statutory
combined  ratios as  previously  reported  by the Company  have been  revised to
conform to rating agency and industry association  presentations which recognize
insurance  company net management fee revenues in calculating  such ratios.  The
Company's  statutory  combined  ratio,  as  revised,  was  98.8 and 98.4 for the
quarters ended March 31, 1997 and 1996, respectively.

Business Segments
-----------------
The Company conducts business in two segments:

Medical  lines  includes   medical   stop-loss  and  provider  excess  coverages
underwritten by the Company's  subsidiary,  USBenefits Insurance Services,  Inc.
("USBenefits") on behalf of The Continental  Insurance Company  ("Continental"),
one of the CNA Insurance  Companies,  and reinsurance of 50% of such business by
the Company's USF RE INSURANCE COMPANY ("USF RE") subsidiary.  USBenefits is the
managing  general  underwriter  and  marketing  organization  for medical  lines
coverages  issued  by  Continental.  Medical  stop-loss  coverage  is a form  of
insurance that protects  employers that  self-insure  their employee  healthcare
plans by  limiting  their  exposure  from the risk of loss to a  pre-established
amount. Provider excess coverage limits the financial risks healthcare providers
face  from  medical  plans  that  prepay  the  providers  fixed  sums  per  plan
participant (capitated fees) or provide specified rates for services. USBenefits
also  markets  other  employee  benefits  related  products on behalf of several
national life insurance companies. Medical lines products are marketed through a
network of unaffiliated third party  administrators,  insurance agents,  brokers
and consultants  ("Producers").  Producers have non-exclusive  arrangements with
USBenefits that enable them to submit requests for coverage quotations.

Property/Casualty  reinsurance and insurance underwriting is conducted by USF RE
and  its  wholly-owned   subsidiary  USF  Insurance  Company  ("USFIC").   These
subsidiaries  both  carry  an A  (Excellent)  rating  from  A.M.  Best  Company.
Insurance companies purchase reinsurance in order to control and manage the risk
they  accept when they issue  policies.  USF RE assumes  facultative  and treaty
reinsurance from unaffiliated insurance companies, primarily through reinsurance
intermediaries.   Facultative  is  reinsurance  of  an  individual  risk;  while
reinsurance  treaties  cover  risks  written or assumed by another  insurer in a
particular  class or classes  of  business.  USF RE  concentrates  its  casualty
writings in general liability, commercial auto liability and products liability.
It also  provides  a broad  range  of  coverages  for  most  types  of  property
exposures. USFIC writes surplus lines insurance on commercial  property/casualty
risks which are marketed through independent excess and surplus lines brokers.

                                       7
<PAGE>


The tables set forth below present  pre-tax  operating  information  by business
segment  and  holding  company  operations  (including  realized  gains) for the
quarters ended March 31, 1997 and 1996, respectively.

<TABLE>
Medical  Lines
--------------
<CAPTION>
(Dollars in thousands)
                                             Quarter Ended
                                                March 31
                                             1997     1996            % Change
                                             ----     ----            --------
       <S>                                <C>      <C>                    <C>
       Revenues:
           Premiums earned                $25,032  $20,321                23 %
           Commissions and fees             8,042    6,589                22 %
           Investment income                  865      749                15 %
                                          -------      ---               
           Total revenues                  33,939   27,659                23 %
                                          -------  -------               
       Expenses:
           Losses and loss adjustment      17,886   13,838                29 %
           Policy acquisition               8,606    6,856                26 %
           General and administrative       3,339    2,472                35 %
                                          -------  -------                
           Total expenses                  29,831   23,166                29 %
                                           ------   ------                
       Income before income taxes          $4,108  $ 4,493                (9)%
                                           ======  =======                ====
</TABLE>

Increases  in  revenues  for the first  quarter of 1997 are due to growth in the
provider  excess line and  additional  medical stop loss business from
the  acquisition of Global Excess Re in January 1997. As a result,  medical
lines  segment  production  increased  23% in the  1997  quarter  over  the 1996
quarter,  generating the changes noted above in premiums  earned and commissions
and fees revenues.

Loss and loss adjustment  expenses in the 1997 quarter reflect  increases in the
cost of healthcare  which are not mitigated by increases in premium rates due to
continued  competitive industry conditions as well as an increase in claims cost
experience.

Policy  acquisition  expenses  vary  due  to  the  mix of  business  and  market
conditions. Increases in such expenses between periods presented are a result of
higher production levels during the 1997 period.

Increases in general and  administrative  expenses in the 1997 quarter primarily
result from expenses related to the operations of Global Excess Re.

                                       8
<PAGE>


<TABLE>
Property/Casualty
-----------------
<CAPTION>
(Dollars in thousands)
                                             Quarter ended
                                                March 31
                                             1997     1996              % Change
                                             ----     ----              --------
       <S>                                <C>       <C>                   <C>
       Revenues:
           Premiums earned                $ 14,251  $8,831                 61 %
           Investment income                 1,814   1,674                  8 %
                                          --------  ------                
           Total revenues                   16,065  10,505                 53 %
                                          --------  ------                
       Expenses:
           Losses and loss adjustment       10,110   7,004                 44 %
           Policy acquisition                3,303   2,018                 64 %
           General and administrative          898     850                  6 %
                                            ------  ------                
           Total expenses                   14,311   9,872                 45 %
                                            ------   -----                
       Income before income taxes          $ 1,754   $ 633                177 %
                                           =======   =====                =====
</TABLE>

The increase in premiums  earned  during the first quarter of 1997 over the 1996
period  primarily  resulted from growth in the treaty  reinsurance line based on
the foundation developed during the last two years.

Changes in losses and loss adjustment  expenses between periods reflect improved
loss experience in 1997. The increase in policy acquisition  expenses in 1997 as
compared to 1996  results  from the  continued  growth of the  property/casualty
business lines and changes in the mix of business.

<TABLE>
Holding Company
---------------
<CAPTION>
(Dollars in thousands)
                                             Quarter ended
                                                March 31
                                             1997     1996             % Change
                                             ----     ----             --------
       <S>                                   <C>      <C>                <C>
       Revenues:
           Investment income                 $ 12     $ 19               (37) %
           Realized gains                     177      735               (76) %
                                             ----     ----               
           Total revenues                     189      754               (75) %
                                             ----     ----               
       Expenses:
           General and administrative         217      223                (3) %
           Interest                           614      680               (10) %
                                             ----     ----               
            Total expenses                    831      903                (8) %
                                             ----     ----               
       Loss before income taxes             $(642)   $(149)
                                            ======   ======
</TABLE>
                                       9
<PAGE>

Inflation
---------

Inflation can negatively impact insurance and reinsurance  operations by causing
higher claims  settlements  than may have originally  been estimated,  while not
necessarily  allowing an immediate  increase in premiums to a level necessary to
maintain  profit  margins.  Historically,  the  Company  has  made  no  explicit
provisions for inflation,  but trends are considered  when setting  underwriting
terms and claim  reserves.  Such reserves are subjected to a continual  internal
and external  review process to assess their adequacy and are adjusted as deemed
appropriate.  Overall economic trends also affect interest rates,  which in turn
affect  investment  income  and the  market  value of the  Company's  investment
portfolio.


Liquidity and Capital Resources
-------------------------------

The Company  utilizes cash from operations and maturing  investments to meet its
insurance  obligations  to  policyholders  and  claimants,  as  well  as to meet
operating  costs.  Primary  sources  of cash  from  operations  include  premium
collections,  investment  income and commissions and fees. The principal uses of
cash from operations are for premium payments to insurance  companies,  payments
of claims under USF RE's and USFIC's  reinsurance and insurance  contracts,  and
operating  expenses such as salaries,  commissions,  taxes and general overhead.
The Credit  Agreement  with the Company's  lender  contains  certain  covenants,
restrictions  and  dividend  payment  limitations  with which the Company was in
compliance at March 31, 1997.

The Company  anticipates that it will continue to generate  sufficient cash flow
from  operations to cover its short-term  (1-18 months) and long-term (18 months
to 3 years) liquidity needs.  While the Company currently has no immediate plans
for significant capital outlays,  from time to time it contemplates  acquisition
opportunities that complement its business operations.

The  Company  currently  invests  primarily  in the  highest  grades  of  bonds,
equities, certificates of deposit and short-term instruments. At March 31, 1997,
99% of the fixed income portfolio was in securities rated A or better.  All such
securities are carried at quoted market values at the latest balance sheet date.
The Company does not invest in real estate, derivatives or high yield bonds.






                                       10

<PAGE>


Legislative and Regulatory Developments
---------------------------------------

As noted in prior  filings with the  Securities  and Exchange  Commission by the
Company,  various  federal  and  state  healthcare  legislative  and  regulatory
proposals  which could impact the financing and delivery of healthcare have been
considered.  The 104th Congress enacted certain federal proposals, some covering
self-insured  benefit  plans,  and  the  105th  Congress  is  considering  other
legislative  proposals.  Management  cannot predict at this time what impact, if
any, these  enactments or new legislative  proposals would have on the Company's
medical lines  business.  However,  based on  management's  review of the latest
information  received,  management  believes that these enactments and proposals
will not have an adverse impact on our business.

Some of the statements included within  Management's  Discussion and Analysis of
Financial  Condition and Results of Operations  and the  Consolidated  Financial
Statements and related Notes may be considered to be forward looking  statements
(as that term is  defined in the  Private  Securities  Litigation  Reform Act of
1995),  and which are subject to certain  risks and  uncertainties.  Among those
factors  which could cause the actual  results to differ  materially  from those
suggested by such statements are:  catastrophe losses in the Company's insurance
lines or a  material  aggregation  of  losses;  changes  in federal or state law
affecting  an  employer's  ability  to  self-insure;  availability  of  adequate
retrocessional  insurance  coverage  at  appropriate  prices;  a downturn in the
general  economy;  the  effects  of  competitive  market  pressures  within  the
stop-loss or property/casualty  marketplaces;  the effect of changes required by
generally accepted accounting practices or statutory accounting  practices;  and
other risks which are described from time to time in the Company's  filings with
the Securities and Exchange Commission.


                                       11
<PAGE>


                            PART II OTHER INFORMATION

Item 6.  EXHIBITS and REPORTS ON FORM 8-K.

     (a)  The  following is a list of exhibits  required to be filed as part of
          this Form 10-Q by Item 601 of Regulation S-K:

             3.1, 4.1      Restated   Certificate  of   Incorporation,   as
                           amended,  as presently  in effect.  Filed as Exhibits
                           3.1 and 3.1.1 to the Company's Form S-1  Registration
                           Statement  declared  effective by the  Securities and
                           Exchange   Commission   on  October   31,  1986  (the
                           "Registration Statement"), and incorporated herein by
                           this  reference;  and as  Exhibit 3 to the  Company's
                           Current  Report on Form 8-K dated May 24,  1990,  and
                           incorporated herein by this reference.

             3.2, 4.2      Bylaws of US Facilities Corporation,  as amended,
                           as presently  in effect.  Filed as Exhibit 4.2 to the
                           Company's  Quarterly  Report  on  Form  10-Q  for the
                           quarter ended June 30, 1994, and incorporated  herein
                           by this reference.

                  4.3      Common   Stock    Certificate    of   US   Facilities
                           Corporation.  Filed as Exhibit  4.3 to the  Company's
                           Annual  Report  on  Form  10-K  for  the  year  ended
                           December 31, 1996,  and  incorporated  herein by this
                           reference.

                  4.4      Rights Agreement. Filed as Exhibit 2 to the Company's
                           Current Report on Form 8-K dated May 24, 1990, and
                           incorporated herein by this reference.

                  4.5      First  Amendment  to  Rights  Agreement.  Filed  as 
                           Exhibit 1 to the Company's Current Report on Form 8-K
                           dated January 16, 1992, and incorporated herein by
                           this reference.

                  4.6      Second Amendment to Rights Agreement.  Filed as
                           Exhibit 10.1 to the Company's Current Report on Form
                           8-K dated April 29, 1994, and incorporated herein by
                           this reference.

                  4.7      Third Amendment to Rights Agreement.  Filed as 
                           Exhibit 4 to the Company's Current Report on Form 8-K
                           dated September 28, 1995, and incorporated herein by
                           this reference.

                  11*      US Facilities Corporation and Subsidiaries
                           Computation of Earnings Per Share.

                                       12
<PAGE>

                  15*      Independent Auditors' letter regarding unaudited
                           interim financial information.

                  27*      Financial Data Schedules

     (b)  No reports on Form 8-K were filed by the Company  during the  quarter
          ended March 31, 1997.

































* Describes the exhibits filed with this Quarterly Report on Form 10-Q.


                                       13
<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         US FACILITIES CORPORATION



Date:    May 13, 1997                    By: /S/DAVID L. CARGILE
                                            --------------------
                                            DAVID L. CARGILE
                                            Chairman of the Board, President and
                                            Chief Executive Officer



Date:    May 13, 1997                    By: /S/MARK BURKE
                                             -------------
                                             MARK BURKE
                                             Senior Vice President, Chief
                                             Financial Officer and Treasurer
                                             (Principal Financial and Accounting
                                             Officer)


                                       14
<PAGE>