UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM-10QSB

[x]  QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

For  the  quarterly  period  ended  June  30,  2003

[ ]  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:  1-15277

                           Rampart Capital Corporation
             (Exact Name of Registrant as specified in its charter)

<TABLE>
<CAPTION>
           TEXAS                              6159                     76-0427502
-------------------------------   ----------------------------   ----------------------
<S>                               <C>                            <C>
(State or other jurisdiction of   (Primary Standard Industrial      (I.R.S. Employer
incorporation or organization)    Classification Code Number)    Identification Number)
</TABLE>


                            16401 Country Club Drive
                                  Crosby, Texas
                     (Address of Principal Executive Office)


                                      77532
                                   (Zip Code)


                                  713-223-4610
                         (Registrant's Telephone Number)



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

As  of  August  5,  2003,  the  registrant  had 2,905,143 shares of common stock
outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one):
     Yes   [   ]
     No    [ x ]


<PAGE>
<TABLE>
<CAPTION>
                                                  INDEX

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements                                                                        Page No.
<S>                                                                                                  <C>
         Consolidated Balance Sheets at June 30, 2003 (unaudited) and December 31, 2002 (audited) .         1
         Unaudited Consolidated Statements of Operations for the Three Months and Six Months ended
          June 30, 2003 and 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         3
         Unaudited Consolidated Statements of Cash Flows for the Six Months ended
          June 30, 2003 and 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         4
         Notes to the Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . .         6

Item 2.  Management's Discussion and Analysis or Plan of Operation. . . . . . . . . . . . . . . . .        11

Item 3.  Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        16


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        17

Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        17
</TABLE>


<PAGE>
                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                          RAMPART CAPITAL CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                JUNE 30, 2003    DECEMBER 31, 2002
                                                               ---------------  -------------------
                                                                 (UNAUDITED)         (AUDITED)
<S>                                                            <C>              <C>
Current assets
   Cash and cash equivalents                                   $       464,679  $           558,559
   Purchased asset pools                                               222,960              717,960
   Commercial real estate                                            2,946,420            3,611,683
   Investment real estate                                              546,550              627,428
   Notes receivable - real estate financing                          5,512,713            5,444,811
   Notes receivable - other                                            116,994              431,732
   Notes receivable - related parties                                        -               11,597
   Other current assets                                                157,939              193,182
                                                               ---------------  -------------------
     Total current assets                                            9,968,255           11,596,952
                                                               ---------------  -------------------

Property and equipment, net                                            317,765              360,849

Investments and other long-term assets
   Purchased asset pools, net of current portion                       591,912              700,109
   Commercial real estate, net of current portion                    2,468,631            3,343,089
   Investment real estate, net of current portion                    5,780,573            1,594,380
   Investment in real estate joint ventures                          1,034,139            1,744,169
   Notes receivable - related parties, net of current portion           34,868              147,347
   Other long-term assets                                              132,510              177,090
                                                               ---------------  -------------------

Total investments and other long-term assets                        10,042,633            7,706,184
                                                               ---------------  -------------------

Total assets                                                   $    20,328,653  $        19,663,985
                                                               ---------------  -------------------
</TABLE>


See Notes to Consolidated Financial Statements


                                        1
<PAGE>
<TABLE>
<CAPTION>
                              LIABILITIES AND STOCKHOLDERS' EQUITY


                                                            JUNE 30, 2003    DECEMBER 31, 2002
                                                           ---------------  -------------------
                                                             (UNAUDITED)         (AUDITED)

<S>                                                        <C>              <C>
Current liabilities
   Accounts payable and accrued expenses                   $      721,532   $          814,363
   Notes payable                                                2,694,190            6,297,203
   Notes payable - related parties                              2,432,604            1,056,019
                                                           ---------------  -------------------

     Total current liabilities                                  5,848,326            8,167,585
                                                           ---------------  -------------------

Notes payable, net of current portion                           3,201,512               53,223
                                                           ---------------  -------------------

     Total liabilities                                          9,049,838            8,220,808
                                                           ---------------  -------------------

Commitments and contingencies                                           -                    -

Stockholders' equity
   Preferred Stock, $.01 par value; 10,000,000 shares
      authorized; none issued

   Common stock, $.01 par value; 10,000,000 shares
      authorized; 3,050,000 shares issued and outstanding          30,500               30,500
   Additional paid-in-capital                                   6,194,255            6,194,255
   Retained earnings                                            5,432,559            5,596,921
   Treasury stock, 144,857 shares, at cost                       (378,499)            (378,499)
                                                           ---------------  -------------------

     Total stockholders' equity                                11,278,815           11,443,177
                                                           ---------------  -------------------

Total liabilities and stockholders' equity                 $   20,328,653   $       19,663,985
                                                           ---------------  -------------------
</TABLE>


See Notes to Consolidated Financial Statements


                                        2
<PAGE>
<TABLE>
<CAPTION>
                          RAMPART CAPITAL CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (UNAUDITED)


                                             THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                          --------------------------------  -------------------------------
                                                2003             2002             2003            2002
                                          ----------------  --------------  ----------------  -------------
<S>                                       <C>               <C>             <C>               <C>
Net gain on collections on asset pools    $        499,676  $     153,208   $     1,210,254   $    328,983
Commercial real estate ventures income           1,081,719        608,257         2,077,174      1,126,405
Investment real estate income                      287,440        127,202           372,533        193,388
Equity in earnings of investment real
   estate ventures                                  52,182         49,614             9,246         77,555
Real estate bridge lending income, net             276,398        154,690           610,701        243,713
Other financing income (loss), net                   3,642         74,727            (6,548)        31,329
Interest income                                        660            780             1,715          2,650
Other income                                         2,400          5,400            44,800         10,800
                                          ----------------  --------------  ----------------  -------------

     Total revenue                               2,204,117      1,173,878         4,319,875      2,014,823
                                          ----------------  --------------  ----------------  -------------

Costs of real estate sales                         481,365         58,095           904,617         61,521
Operating and other costs                          592,571        499,109         1,169,453        957,287
                                          ----------------  --------------  ----------------  -------------

     Total cost of sales                         1,073,936        557,204         2,074,070      1,018,808
                                          ----------------  --------------  ----------------  -------------

     Gross Profit                                1,130,181        616,674         2,245,805        996,015

General and administrative expenses                892,809        700,635         1,524,763      1,302,185
Interest expense                                    55,647        137,686           143,230        174,929
Minority interests                                       -              -                 -         (8,272)
Loss on impairment of long-lived assets                  -              -           742,174              -
                                          ----------------  --------------  ----------------  -------------
     Total operating expense                       948,456        838,321         2,410,167      1,468,842
                                          ----------------  --------------  ----------------  -------------

Income (loss) before income tax benefit
   and extraordinary item                          181,725       (221,647)         (164,362)      (472,827)
Income tax benefit                                       -         54,000                 -        104,000
                                          ----------------  --------------  ----------------  -------------
Net income (loss) before extraordinary
   Item                                            181,725       (167,647)         (164,362)      (368,827)
                                          ----------------  --------------  ----------------  -------------
Extraordinary item, extinguishment of
   debt, net of taxes                                    -              -                 -        430,000
                                          ----------------  --------------  ----------------  -------------
Net income (loss)                         $        181,725  $    (167,647)  $      (164,362)  $     61,173
Basic and diluted earnings (loss) per
   common share:
   Net income (loss) from operations      $           0.06  $       (0.06)  $         (0.06)  $      (0.13)
   Extraordinary item                                    -              -                 -           0.15
                                          ----------------  --------------  ----------------  -------------
   Net income (loss) per common share     $           0.06  $       (0.06)  $         (0.06)  $       0.02
                                          ----------------  --------------  ----------------  -------------
Average common shares outstanding                2,905,143      2,905,143         2,905,143      2,905,143
                                          ----------------  --------------  ----------------  -------------
</TABLE>


See Notes to Consolidated Financial Statements


                                        3
<PAGE>
<TABLE>
<CAPTION>
                          RAMPART CAPITAL CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (UNAUDITED)


                                                                SIX MONTHS ENDED
                                                                    JUNE 30,
                                                            -------------------------
                                                               2003          2002
                                                            -----------  ------------
<S>                                                         <C>          <C>
Cash flows from operating activities:
Net income (loss)                                           $ (164,362)  $    61,173
Adjustments to reconcile net income (loss) to net cash
  provided (used) by operating activities:
   Depreciation                                                105,352       100,736
   Amortization of cost of asset pools                         532,544       114,790
   Amortization of deferred gain on joint venture assets       (47,707)      (68,703)
   Cost of commercial real estate sold                         659,096             -
   Cost of investment real estate sold                         245,522             -
   Change in loan loss reserve                                  69,560             -
   Change in loan loss reserve, related parties                 26,239       120,000
   Equity in (earnings) loss of real estate joint venture       (9,246)      (77,555)
   Loss on impairments of long-lived assets                    742,174             -
   Minority interests                                                -        (8,272)
   Deferred taxes                                                    -      (104,000)
   Extraordinary item                                                -      (430,000)
Changes in operating assets and liabilities:
   Other assets                                                 79,822       198,226
   Accrued interest income                                    (304,031)       27,746
   Accrued interest income, related parties                     (8,746)       (8,746)
   Accounts payable and accrued expenses                       270,554      (273,005)
   Accrued interest expense                                    106,005         2,638
                                                            -----------  ------------
     Net cash provided by (used in) operating activities     2,302,776      (344,972)
                                                            -----------  ------------

Cash flows from investing activities:
   Purchase of commercial real estate                          (14,026)     (744,058)
   Purchase of investment real estate                         (244,920)     (757,395)
   Real estate joint ventures:
       Investments                                            (365,000)     (165,000)
       Distributions                                           323,419       231,455
   Notes receivable:
       Advances                                                (24,673)     (525,000)
       Collections                                             212,155       368,170
   Proceeds from notes receivable from related parties         106,583         1,116
   Purchase of notes receivable from related parties                 -      (110,000)
   Purchase of property and equipment                          (10,050)      (37,860)
                                                            -----------  ------------
      Net cash provided by (used in) investing activities      (16,512)   (1,738,572)
                                                            -----------  ------------
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                              RAMPART CAPITAL CORPORATION

                         CONSOLIDATED STATEMENTS OF CASH FLOWS

                                      (CONTINUED)

                                                                  SIX MONTHS ENDED
                                                                      JUNE 30,
                                                             -------------------------
                                                                 2003         2002
                                                             ------------  -----------
<S>                                                          <C>           <C>
Cash flows from financing activities:
   Proceeds from notes payable                                         -    1,691,606
   Proceeds from notes payable to related parties              1,400,000      465,000
   Payments on notes payable                                  (3,756,729)    (524,172)
   Payments on notes payable to related parties                  (23,415)     (24,841)
                                                             ------------  -----------
     Net cash provided by (used in) financing activities      (2,380,144)   1,607,593
                                                             ------------  -----------

Net decrease in cash                                             (93,880)    (475,951)

Cash at beginning of period                                      558,559    1,071,223
                                                             ------------  -----------

Cash at end of period                                        $   464,679   $  595,272
                                                             ------------  -----------

Supplemental cash flow information:
     Cash paid for interest                                  $   323,466   $  172,291
                                                             ------------  -----------
</TABLE>


See Notes to Consolidated Financial Statements


                                        5
<PAGE>
                           RAMPART CAPITAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 2003

                                   (UNAUDITED)


NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Interim financial information
          -----------------------------

               The accompanying unaudited consolidated financial statements have
               been prepared without audit in accordance with accounting
               standards generally accepted in the United States of America for
               interim financial information on a basis consistent with the
               annual audited consolidated financial statements and with the
               instructions to Form 10-QSB and Article 10 of Regulation S-X.
               Accordingly, they do not include all of the information and
               footnotes required by accounting principles generally accepted in
               the United States of America for complete financial statements.
               The results of operations of interim periods are not necessarily
               indicative of results to be expected for an entire year. In the
               opinion of management, all adjustments (consisting of normal
               recurring accruals) and disclosures considered necessary for a
               fair presentation of the results of operations and cash flows for
               the periods presented have been included. The consolidated
               financial statements should be read in conjunction with the
               Company's audited consolidated financial statements included in
               the Company's Annual Report on Form 10-KSB for the year ended
               December 31, 2002.

          Principles of Consolidation
          ---------------------------

               The consolidated financial statements include the assets of
               Rampart Capital Corporation and its wholly owned subsidiaries
               (herein referred to as "Rampart" or the "Company"). As of March
               31, 2002, the Company assumed a 100% interest in a partnership
               that is reported using the full consolidation method. Before
               March 31, 2002, the Company owned a 51% interest in the
               partnership and reported the ownership interests of minority
               participants as minority interest. The consolidated financial
               statements of the Company include 100% of the assets and
               liabilities of the partnership. As of March 31, 2002, when the
               Company became the 100% owner of the partnership interest, all
               minority interest was eliminated and became part of the Company's
               investment in the partnership.

               The Company has an undivided 50% ownership interest in the
               Newport real estate project. The project is being reported as a
               joint venture and is being accounted for using the equity method
               of accounting since the Company exercised significant influence,
               but not financial or operating control over the joint venture.

               In December of 2001, the Company purchased a 50% interest in a
               real estate development partnership. During the first quarter of
               2003, the Company became the 100% owner of the partnership
               interest. Before becoming the 100% owner, the Company accounted
               for this entity using the equity method of accounting. During the
               first quarter of 2003, as a result of becoming the 100% owner of
               the partnership interest, the Company began using the full
               consolidation method of accounting for the assets and liabilities
               of this entity.

          Real estate financing
          ---------------------

               Revenues from real estate financing, which include both real
               estate bridge lending and other financing, are reported net of
               direct financing costs, primarily interest expenses, associated
               with the financing of each project. The gross real estate
               financing revenues and financing costs for the three and six
               months ending June 30, 2003 and 2002 were as follows:


                                        6
<PAGE>
                           RAMPART CAPITAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 JUNE 30, 2003

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED       SIX MONTHS ENDED
                                                    JUNE 30,                JUNE 30,
                                           ------------------------  ----------------------
                                               2003         2002        2003        2002
<S>                                        <C>           <C>         <C>         <C>
Gross real estate bridge lending revenues  $   432,996   $ 185,063   $ 878,874   $ 351,431
Less: Bridge lending costs                   ( 156,598)   ( 30,373)   (268,173)   (107,718)
                                           ------------  ----------  ----------  ----------
Real estate bridge lending income, net     $   276,398   $ 154,690   $ 610,701   $ 243,713
                                           ------------  ----------  ----------  ----------

Gross other financing revenues             $     8,015   $  74,727   $  19,691   $ 151,329
Less: Other financing costs                     (4,373)          -     (26,239)   (120,000)
                                           ------------  ----------  ----------  ----------
Other financing income (loss), net         $     3,642   $  74,727   $  (6,548)  $  31,329
                                           ------------  ----------  ----------  ----------
</TABLE>

          Other income
          ------------

          Other income is comprised of investment income and miscellaneous
          revenue. Revenue is recognized as earned.

          Impairment of long-lived assets
          -------------------------------

          In October 2001, the Financial Accounting Standards Board ("FASB")
          issued SFAS No. 144, "Accounting for the Impairment or Disposal of
          Long-Lived Assets," applicable to financial statements issued for
          fiscal years beginning after December 15, 2001. The FASB's new rules
          on asset impairment supersede SFAS No. 121 and portions of Accounting
          Principles Board Opinion ("APB") 30, "Reporting the Results of
          Operations of Businesses to be Disposed of." SFAS No. 144 provides a
          single accounting model for long-lived assets to be disposed of and
          significantly changes the criteria that would have to be met to
          classify an asset as held-for-sale. Classification as held-for-sale is
          an important distinction since such assets are not depreciated and are
          stated at the lower of fair value and carrying amount. SFAS No. 144
          also requires expected future operating losses from discontinued
          operations to be displayed in the period(s) in which the losses are
          incurred, rather than as of the measurement date, as previously
          required.

          The Company evaluates its portfolio of long-lived assets for
          impairment on a periodic basis or when there is an indication that an
          impairment has occurred. During the first quarter of 2003, the Company
          recognized an impairment loss of $742,174 on the Newport Golf Course
          and Conference Center. Despite significant marketing efforts and
          improvements made to the Golf Course and Conference Center after it
          was acquired in 1999, and recent improvements made to the golf course
          in late 2002, the Company continues to incur losses operating this
          facility. The impairment was based on an appraisal dated June 13,
          2003, which valued the golf course and conference center and related
          real estate at $2,500,000. The decline in appraised value is due to
          the depressed golf market in the Houston area primarily caused by an
          overbuilding of golf courses.

          Assets held for sale
          --------------------

          A large portion of the Company's operations is comprised of the
          acquisition for resale of various types of commercial and investment
          real estate assets. The Company has a portfolio of commercial and
          investment real estate assets that are actively being marketed for
          immediate sale. In addition, the Company, through its investment in
          the Newport Joint Venture, has various residential lots that are being
          actively marketed to individuals and reputable housing developers. The
          Company's portfolio of assets held for sale that are expected to
          qualify for sale recognition within one year are classified as a
          current asset.


                                        7
<PAGE>
          Recent Accounting Pronouncements
          --------------------------------

          In May 2003, the Financial Accounting Standards Board (the "FASB")
          issued SFAS No. 150, "Accounting for Certain Instruments with
          Characteristics of Both Liabilities and Equity." SFAS No. 150
          clarifies the accounting for certain financial instruments with
          characteristics of both liabilities and equity and requires that those
          instruments be classified as liabilities in statements of financial
          position. Previously, many of those financial instruments were
          classified as equity. SFAS No. 150 is effective for financial
          instruments entered into or modified after May 31, 2003 and otherwise
          is effective at the beginning of the first interim period beginning
          after June 15, 2003.

          In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
          No. 133 on Derivative Instruments and Hedging Activities." SFAS No.
          149 amends and clarifies financial accounting and reporting for
          derivative instruments, including certain derivative instruments
          embedded in other contracts (collectively referred to as derivatives)
          and for hedging activities under SFAS No. 133, "Accounting for
          Derivative Instruments and Hedging Activities." This Statement is
          effective for contracts entered into or modified after June 30, 2003.

          In January 2003, the FASB issued Financial Interpretation ("FIN") No.
          46, "Consolidation of Variable Interest Entities." In general, a
          variable interest entity is a corporation, partnership, trust, or any
          other legal entity used for business purposes that either (a) does not
          have equity investors with voting rights or (b) has equity investors
          that do not provide sufficient financial resources for the entity to
          support its activities. FIN No. 46 requires certain variable interest
          entities to be consolidated by the primary beneficiary of the entity
          if the investors in the entity do not have the characteristics of a
          controlling financial interest or do not have sufficient equity at
          risk for the entity to finance its activities without additional
          subordinated financial support from other parties. The consolidation
          requirements of FIN No. 46 apply immediately to variable interest
          entities created after January 31, 2003. The consolidation
          requirements apply to older entities in the first fiscal year or
          interim period beginning after June 15, 2003. Certain of the
          disclosure requirements apply to all financial statements issued after
          January 31, 2003, regardless of when the variable interest entity was
          established. The Company did not participate in any applicable
          activities as of and for the period ended June 30, 2003.

          In December 2002, the FASB issued SFAS No. 148, "Accounting for
          Stock-Based Compensation-Transition and Disclosure." This standard
          amends SFAS No. 123 to provide alternative methods of transition for a
          voluntary change to the fair value based method of accounting for
          stock-based employee compensation. Additionally, the standard also
          requires in both annual and interim financial statements prominent
          disclosures in the Company's financial statements about the method of
          accounting used for stock-based employee compensation, and the effect
          of the method used when reporting financial results. The Company is
          required to follow the prescribed disclosure format and has provided
          the additional disclosures required by SFAS No. 148 for the quarterly
          period ended June 30, 2003.

          In June 2002, the FASB issued SFAS No. 146, "Accounting for Exit or
          Disposal Activities." SFAS No. 146 addresses significant issues
          regarding the recognition, measurement and reporting of disposal
          activities, including restructuring activities that are currently
          covered in EITF Issue No. 94-3, "Liability Recognition for Certain
          Employee Termination Activity." The provisions of SFAS No. 146 are
          effective for exit or disposal activities initiated after December 31,
          2002. The Company did not participate in any applicable activities as
          of and for the period ended June 30, 2003.

          In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
          Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
          Technical Corrections." This statement rescinds SFAS No. 4, Reporting
          Gains and Losses from Extinguishment of Debt, which required all gains
          and losses from extinguishment of debt to be aggregated and, if
          material, classified as an extraordinary item, net of income taxes. As
          a result, the criteria in APB No. 30 will now be used to classify
          those gains and losses. Any gain or loss on the extinguishment of debt
          that was classified as an extraordinary item in prior periods
          presented that does not meet the criteria in APB 30 for classification
          as an extraordinary item shall be reclassified. The provisions of this
          Statement are effective for fiscal years beginning after January 1,
          2003. The Company did not participate in any
          applicable activities as of and for the period ended June 30, 2003.

          In November 2002, the FASB issued FIN No. 45, "Guarantor's Accounting
          and Disclosure Requirements for Guarantees, Including Indirect
          Guarantees of Indebtedness of Others," an interpretation of FASB
          Statements No. 5, 57 and 107, and rescission of FASB Interpretation
          No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others."
          FIN No. 45 elaborates on the disclosures to be made by the guarantor
          in its interim and annual financial statements about its obligations
          under certain guarantees that it has issued. It also requires that a
          guarantor recognize, at the inception of a guarantee, a liability for
          the fair value of the obligation undertaken in issuing the guarantee.
          The initial recognition and measurement provisions of this
          interpretation are applicable on a prospective basis to guarantees
          issued or modified after December 31, 2002, while the provisions of
          the disclosure requirements are effective for financial statements for
          interim or annual periods ending after December 15, 2002. The Company
          did not participate in any applicable activities as of and for the
          period ended June 30, 2003.


                                        8
<PAGE>
          The Company does not expect the adoption of any of the above-mentioned
          standards to have a material impact on the Company's future financial
          condition or results of operations.

NOTE 2 -  NET INCOME (LOSS) PER COMMON SHARE

          Net income (loss) per common share has been computed for all periods
          presented and is based on the weighted average number of shares of
          common stock and common stock equivalents outstanding during each
          period. There are no common stock equivalents resulting from dilutive
          stock purchase warrants or options.

NOTE 3 -  ACQUISITIONS

          On January 7, 2000, the Company finalized the acquisition of a 51%
          interest in Greater Houston Gulf Partners, LTD (the "Partnership). The
          Partnership was formed to acquire, own and manage a townhome
          redevelopment project (the "Project"). In connection with the
          Project's initial acquisition, the Company made a loan to the
          Partnership for $1.1 million to provide financing for the acquisition
          of the Project. The balance of the Project purchase price and
          developmental funds were provided to the Partnership by a bank loan in
          the amount of $2.9 million and additional loans of $1.4 million from
          the partners. Subsequently, the bank loan was reduced by flood
          insurance proceeds and renewed at $1.8 million. On March 31, 2002, the
          minority partners forgave $660,000 in debt to the Partnership and the
          Company assumed a 100% ownership interest in the Partnership. The
          extraordinary gain was recorded net of an adjustment of approximately
          $230,000 representing the holding cost of the townhome units, which
          are reported at the lower of cost or market value.

          On December 31, 2001, the Company entered into a real estate limited
          partnership (the "Partnership") with a real estate developer to
          develop a 470 acre parcel of land for residential resale located near
          Lake Houston. The Company's purchase price for the limited partnership
          interest was $680,000. During January 2003, the general partner of the
          Partnership (West Lake Houston 470, Ltd), who is also the developer,
          defaulted on its obligation to fund interest and property tax
          obligations of the Partnership and was removed as the general partner.
          Correspondingly, the provisions of the partnership agreement provide
          that in the event of a default by the general partner, its 50%
          interest would be forfeited to the remaining venturers. Accordingly,
          the Company became the 100% owner of the partnership.

NOTE 4 -  NOTES RECEIVABLE IN DEFAULT

          During the first quarter of 2003, a borrower defaulted under the terms
          of two real estate bridge financing notes totaling $3,751,969. The
          Company attempted to foreclose on the underlying collateral; however,
          the borrower filed for bankruptcy protection to prevent foreclosure by
          the Company. The Company has a first lien and security position in two
          parcels of real estate, totaling 96 acres, that secure the notes
          receivable. Approximately 80 of the 96 foreclosed acres are located on
          or near an eroding beachfront as determined by the City of Galveston.
          As such, there are some restrictions on development of these 80 acres.
          Nevertheless, management of the Company believes that the value of the
          real estate collateral will exceed the amount of the notes receivable
          balances and no impairment will result from foreclosure. On July 1,
          2003, the Company foreclosed the collateral. The total amount bid in
          by the Company at the foreclosure was $4,074,627 which included the
          note principal balances, accrued interest, paid property taxes and all
          legal and filing expenses. There were no competitive bidders for the
          real estate collateral.

          As referred to in Note 5, in conducting its real estate bridge lending
          activities, the Company generally secures financing of up to 80% of
          the amount of the note receivable advance which in turn is secured by
          the underlying real estate. As of June 30, 2003, the Company had notes
          payable of $1,300,000 outstanding with a third party financial
          institution related to the notes receivable that are in default of
          which $1,040,000 is guaranteed by an officer of the Company.

NOTE 5 -  RELATED PARTY ACTIVITIES

          Related party transactions
          --------------------------

          A director and an officer of the Company are partners, along with
          other non-related individuals, in a partnership which holds a 6.75%
          net cash profits interest in two of the Company's purchased asset
          pools. As of June 30, 2003, undistributed net profits of $115,505 are
          owed to this partnership and will be paid when collections are
          received. During the three months ended June 30, 2003 and 2002, the
          Company made no payments to the partnership for its participation in
          cash collections on these asset pools. During the six months ended
          June 30, 2003 and 2002, the Company paid a total of $0 and $63,408,
          respectively, representing the partnership's participation in cash
          collections on these asset pools.


                                        9
<PAGE>
          During October 2002, the Company obtained a $1,300,000 note from a
          financial institution. As a component of the terms of the loan, an
          officer of the Company pledged 600,000 shares of personally owned
          common stock of the Company to guarantee $1,040,000 of the loan
          amount. The officer received compensation of $52,000 during 2002, or
          5% of the guaranteed amount, as a fee for the pledge.

          Notes payable related parties
          -----------------------------

          From time to time, the Company enters into note payable agreements
          with certain related parties, some of which are officers and directors
          of the Company, to provide working capital necessary for its real
          estate bridge lending program. Generally these second-lien notes have
          a term not to exceed 12 months and bear interest at a fixed rate of
          18% per annum. During the six months ended June 30, 2003 and 2002, the
          Company received $1,400,000 and $465,000, respectively, from related
          party borrowings and repaid $23,415 and $24,841, respectively, under
          the terms of these related party note agreements. The total
          outstanding as of June 30, 2003 was $2,432,604. For the three months
          and six months ended June 30, 2003 and 2002, total interest accrued
          and paid was $98,076 and $38,756, respectively, and $185,822 and
          $76,248, respectively.

          Notes receivable related parties
          --------------------------------

          During June 1998, the Company sold real estate property from its asset
          pool to related parties in exchange for four notes receivable totaling
          $525,000. These notes are secured by certain investments in common
          stock held by the related parties. Principal plus interest at 10% per
          annum was due June 2001 for each of the notes. During June 2001, the
          Company elected to extend the terms of the notes to mature on June 30,
          2004 and to reduce the interest rates from 10% to 4.07% per annum.

          The outstanding notes receivable from related parties plus accrued
          interest was $548,820 and $540,074 at June 30, 2003 and December 31,
          2002, respectively. During the year ended December 31, 2002, and again
          during the first six months of 2003, the fair value of the underlying
          collateral of these notes was determined to be impaired. In accordance
          with SFAS No. 114, the Company provided an allowance of $120,000
          during 2002 and an additional allowance of $26,239 during the first
          six months of 2003 to reduce the notes to their estimated net
          realizable value. There were no principal or interest payments
          received during the year ended December 31, 2002 nor during the six
          months ended June 30, 2003.

          On March 15, 2002, the Company entered into a 15-year note receivable
          of $110,000 with an officer of the Company. The note bears interest at
          a rate of prime plus 2% (6.00% at June 30, 2003) and matures on March
          15, 2017. The note is secured by residential real estate. Total
          principal and interest payments received on this note were $108,861
          during the six months ended June 30, 2003. Total interest income
          earned on this note during the six months ended June 30, 2003 was
          $2,264. This note was repaid in full during the second quarter of
          2003.

NOTE 6 -  SEGMENT REPORTING

          The Company operates in four business segments: (i) collections of
          purchased asset pools, (ii) commercial real estate ventures, (iii)
          investment real estate and joint ventures and (iv) real estate
          financing. The purchased asset pools segment involves the acquisition,
          management, servicing and realization of income from collections on or
          sales of portfolios of undervalued financial assets, and in some
          instances, real estate the Company may acquire as part of an asset
          pool or by foreclosing on the collateral underlying an acquired real
          estate debt. The commercial real estate ventures segment involves
          holding foreclosed and acquired improved real estate for appreciation
          and the production of income. The investment real estate and joint
          ventures segment involves holding foreclosed and acquired unimproved
          real estate for future appreciation and acquiring unimproved real
          estate in conjunction with short-term funding for developers. The real
          estate financing segment is comprised of short-term financing of real
          estate ("bridge lending") at high yields and real estate notes held by
          the Company from financing the sale of Company assets. The notes are
          fully secured by real estate or other collateral. "Unallocated"
          represents activities that are general corporate in nature and do not
          relate specifically to any one segment. Unallocated segment assets
          consist of cash, prepaid assets and non-segmental property and
          equipment. Unallocated revenue consists of interest income generated
          from overnight money market invested funds and miscellaneous other
          income. Financial information by reportable operating segment is as
          follows:


                                       10
<PAGE>
<TABLE>
<CAPTION>
                                             As of and for the Six Months Ended June 30, 2003
                                -----------------------------------------------------------------------
                                 Purchased     Commercial     Investment    Real Estate
                                Asset Pools    Real Estate    Real Estate    Financing     Unallocated      Totals
                                ------------  -------------  -------------  ------------  -------------  ------------
<S>                             <C>           <C>            <C>            <C>           <C>            <C>

Revenue                         $  1,210,254  $  2,077,174   $    381,779   $    604,153  $     46,515   $ 4,319,875
Equity in earnings of
  real estate joint ventures               -             -          9,246              -             -         9,246
Segment profit (loss)                904,149    (1,151,253)       (98,645)       476,794      (295,407)     (164,362)
Assets of real estate joint
   ventures, equity method                 -             -      1,439,139              -             -     1,439,139
Identifiable assets                  814,872     5,698,303      7,361,262      5,664,575       789,641    20,328,653
Depreciation and amortization              -        96,482              -              -         8,870       105,352
Capital expenditures                       -        14,026              -              -        10,050        24,076
Investment in segment assets               -             -        609,920         24,673             -       634,593
Interest expense                           -        82,216         59,545              -         1,469       143,230
</TABLE>

<TABLE>
<CAPTION>
                                              As of and for the Six Months Ended June 30, 2002
                                --------------------------------------------------------------------
                                 Purchased    Commercial     Investment   Real Estate
                                Asset Pools   Real Estate   Real Estate    Financing    Unallocated      Totals
                                -----------  -------------  ------------  ------------  ------------  ------------
<S>                             <C>          <C>            <C>           <C>           <C>           <C>

Revenue                         $   328,983  $  1,126,405   $    270,943  $    275,042  $    13,450   $ 2,014,823
Equity in earnings of
  real estate joint ventures              -             -         77,555             -       77,555
Segment profit (loss)                91,676      (472,132)        27,436       185,859     (305,666)     (472,827)
Extraordinary item                        -       430,000              -             -            -       430,000
Assets of real estate joint
  ventures, equity method                 -             -      1,904,829             -            -     1,904,829
Identifiable assets               1,458,087     7,473,098      4,236,915     6,183,120    1,187,752    20,538,972
Depreciation and amortization             -        92,454              -             -        8,282       100,736
Capital expenditures                      -       781,740              -             -       25,178       806,918
Investment in segment assets              -             -        165,000       610,000            -       775,000
Interest expense                          -        78,299         76,247             -       20,383       174,929
</TABLE>


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

Revenues increased $2,305,052 from $2,014,823 during the six months ending June
30, 2002 to $4,319,875 during the same period of 2003.  The increase in revenues
consisted of higher net gains on collections on asset pools of $881,271,
increased commercial real estate ventures revenues of $950,769, higher
investment real estate revenues of $110,836, higher real estate financing net
revenues of $329,111, and higher unallocated revenues of $33,065.  Higher net
gains on collections on asset pools were due primarily to the collection of
three major litigation claims which produced net gains of approximately
$1,150,000 during the first six months of 2003 for which there were
approximately $250,000 corresponding major collections on asset pools in the
first six months of 2002.  Increased commercial real estate ventures revenue was
due to the sale of 14 residential units at our townhome redevelopment project
for $1,059,000 during the first six months of 2003 for which there were no
corresponding sales during the first six months of 2002. This increase was
offset by lower revenues from Newport Golf Club and Conference Center of
approximately $106,000.  There was no change in the level of  rental revenues
from our Dallas and San Antonio retail centers during the first six months of
2003 as compared to the same six months of 2002.  The increase in investment
real estate revenues was primarily due to the sale of our Broadwater property
for $149,900 for which there was no corresponding sales revenue in the first
half of 2002.  This revenue increase was offset by a decrease in real estate
sales from the Newport project of $12,664 and lower rental revenues from our
Conroe properties of  $26,400.  Although sales of residential lots to our joint


                                       11
<PAGE>
venture partner was higher by approximately $49,000 during the first six months
of 2003 as compared to the first six months of 2002, the Company reported a
lower gain from the Newport project as a whole of approximately $89,000 from our
share of the Newport joint venture which was primarily due to incurring over
$200,000 in rollback taxes on one of its properties.  The decrease in revenues
from the Conroe properties was due to the fact that the Company sold these
properties during 2002 and therefore had no corresponding rental revenues from
them in the first six months of 2003 as compared to the same six months of 2002.
The increase in real estate financing net revenues is due to higher yield
spreads between our lending and borrowing rates, which resulted in higher net
revenues of $329,111 during the first six months of 2003 as compared to the same
six months in 2002.  In addition, the Company reported loan loss impairments of
$26,239 during the first six months of 2003 compared to loan loss impairments of
$120,000 reported during the first six months of 2002.  A loan loss impairment
is required when the value of the asset securing the loan declines to less than
the amount due on the loan.  Some of our loans are secured by publicly traded
stock, which declined below the carrying value of the loans and, as such,
appropriate impairment losses were recognized.  The amount of the impairment
will be increased for any further declines in the value of the collateral, and
decreased for any increases in the value of the collateral or principal
reductions in the amounts of the notes receivable.  On June 30, 2003, we had
$5,664,575 in project loans receivable compared to $6,183,120 on June 30, 2002.

Costs of real estate sales were $843,096 higher in the six months ended June 30,
2003 compared to the corresponding six months in 2002.  Cost of real estate
sales from the townhome redevelopment project was $659,096 for the first six
months of 2003.  There were no sales at the townhome project during the first
six months of 2002.  In the same comparative quarters, the Company also
experienced an increase in cost of real estate sales from the sale of the
Broadwater property of $155,045 for which there was no corresponding cost of
sales in the first half of 2002.  During the first six months of 2003, the
Newport project had higher cost of sales of $28,955 as compared to the same
period in 2002, which resulted from increased lot sales to the Company's joint
venture partner.

Operating and other costs increased by $212,166 from $957,287 for the six months
ending June 30, 2002 to $1,169,453 for the same period in 2003.  These operating
cost increases were primarily the result of selling costs of approximately
$323,000 at the townhome redevelopment project and $16,000 from the Broadwater
property for which there were no costs in the corresponding period of 2002.
These increases in operating costs were partially offset by lower operating
costs at Newport Golf Club and Conference Center of approximately $127,000,
which was due to lower sales activity and various cost cutting measures.

General and administrative ("G&A") expenses increased $222,578 from $1,302,185
in the first six months of 2002 to $1,524,763 in the same six months of 2003.
G&A expenses that increased significantly included:

     -    expenses of approximately $200,000 for a special committee to study
          the optimization of stockholder value and for the Company to complete
          the recommended plan of going private; and

     -    salaries, which increased by approximately $83,000 due to bonuses
          accrued or paid to certain employees upon achievement of designated
          goals, and general salary increases.

     -    These increases were partially offset by decreases in G&A expenses
          related to legal expenses, which were lower by approximately $69,000
          in the first six months of 2003 due to a decrease in litigation
          activities as compared to the same period in 2002.

Minority interests expense was eliminated at the end of the first quarter of
2002 when the Company became the 100% owner of the townhome redevelopment
project.  During the six months ended June 30, 2002, the Company reported a
reduction in total operating expenses of $8,272 from minority interest
allocations for which there was no corresponding minority interest expense
during the same period of 2003.  Minority interests expense represents the
minority partners' share of the townhome redevelopment project's revenues and
expenses.  The Company held a 51% ownership interest in the Partnership until
March 31, 2002, when it assumed a 100% ownership interest.  As a result of
assuming full ownership in the project, no further minority interest income or
expense from the project will be recorded in the future.

Interest expense decreased $31,699 from $174,929 in the first six months of 2002
to $143,230 for the same period in 2003.  Interest expense decreased by $16,702
in the investment real estate segment because debt was retired entirely at the
Galveston project and was partially reduced at the West Lake Houston project in
the third quarter of  2002.  Interest expense unallocated to any specific
segment also decreased by $18,914 during the first half of 2003 as compared to
the same period of 2002.  These decreases were offset by an increase of $3,917
in interest expense in the commercial real estate segment which was primarily
caused by the loan fees incurred when renewing the project loan of the townhome
redevelopment project.

FASB No. 144 requires the impairment of costs of long -lived assets when
circumstances occur that would cause the Company to realize less than the costs
capitalized for that asset.  The golf market in the Houston area has been
affected by overbuilding and a drop in overall play resulting in continued
losses by most Houston area golf country clubs and significant declines in golf
property values.  Despite increased marketing efforts and significant
improvements to the golf course, the Company has experienced significant losses
at Newport Golf Course for the last three years.  Accordingly, during the first
six months of 2003, the Company recognized an impairment loss of $742,174 on the
Newport Golf Course and Conference Center.  The impairment was based on an
independent appraisal dated June 13, 2003, which valued the golf course and
conference center and related real estate at $2,500,000.  There was no
corresponding loss impairment of any long-lived asset during the first six
months of 2002.  The decline in appraised value is due to the continued
depressed golf market in the entire Houston area.


                                       12
<PAGE>
Our net loss before income taxes and extraordinary items decreased $308,465 from
a loss before taxes of $(472,827) during the first six months of 2002 to a loss
of $(164,362) for the same period in 2003.  The decreased loss consisted of an
increase of income of $812,473 from net gains on collections on purchased asset
pools, an increase of income of $290,935 from real estate financing activities,
and an increase of $10,259 in income before income taxes from revenues and
expenses not allocated in any specific segment.  These increases in income
before taxes were offset by a decrease in income of $679,121 from commercial
ventures, and a decrease of $126,081 from investment real estate.  The increase
in income before income taxes in net gains on collections on purchased asset
pools was due to the collection of three major claims during the first six
months of 2003 of which there was only one significant collection during the
same period of 2002.   Real estate financing reported higher income before taxes
due to wider yield spreads between our lending and borrowing interest rates of
approximately $235,000 and reduced loan impairment expenses of approximately
$94,000, offset by higher overhead expenses of approximately $38,000.  The
decrease in income before income taxes in the commercial venture segment
resulted primarily from the large impairment loss of $742,174 recorded at the
Newport Golf Club and Conference Center during the first six months of 2003.  In
addition, there was lower income of approximately $15,000 from the townhome
redevelopment project due to higher operating and maintenance costs being
incurred at this project during the first six months of 2003 as compared to the
first six months of 2002 when most expenses were still being capitalized during
the flood restoration.  These losses were offset by higher income of
approximately $49,000 from the operations at Newport Golf Club and Conference
Center, of approximately $23,000 at our Dallas and San Antonio Retail Centers,
and of approximately $6,000 of revenue and expense items not allocated to any
specific project within the commercial ventures segment.  The decrease in income
before income taxes from investment real estate was almost entirely due to
decreased income from the Newport joint venture of approximately $101,000 which
was caused primarily by the large property rollback tax expense incurred in the
first six months of 2003 for which there was no rollback tax expense in the
first six months of 2002.  In addition, the Company recorded a loss on the sale
of its Broadwater property of approximately $24,000.

Income tax benefit was $104,000 in 2002 compared to no tax benefit in 2003.

We recorded a gain on an extraordinary item of $430,000 during the first six
months of 2002 for which there was no corresponding gain in the same six months
of 2003.  The gain arose from the forgiveness of debt owed by the townhome
redevelopment project to one of its minority interest partners.  The debt was
forgiven in exchange for a sales option granting exclusive sales rights to the
former minority partners of the townhome project and limiting our gain on the
sale of the project for a period of 90 days, or until June 30, 2002.  As part of
the same option agreement, and as consideration for our not immediately
foreclosing our senior debt, we were granted the remaining 49% interest in the
townhome redevelopment project.  The extraordinary gain was recorded net of an
adjustment of approximately $230,000 representing the holding cost of the
townhome units, which are reported at the lower of cost or market value.

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

Revenues increased $1,030,239 from $1,173,878 during the quarter ending June 30,
2002 to $2,204,117 during the second quarter of 2003.  The increase in revenues
consisted of higher net gains on collections on asset pools of $346,468,
increased commercial real estate ventures revenues of $473,462, higher
investment real estate revenues of $162,806, and higher real estate financing
net revenues of $50,623, which increases were offset by reduced unallocated
revenues of $3,120.  Higher net gains on collections on asset pools were due
primarily to the collection of a major litigation claim which produced a net
gain of approximately $487,000 during the second quarter of 2003 which
corresponded to a number of smaller collections during the same period in 2002
that produced net gains of approximately $110,000.  Increased commercial
ventures revenue was due to the sale of six residential units at our townhome
redevelopment project for $439,000 during the second quarter of 2003 for which
there were no corresponding sales during the second quarter of 2002.  The
Company also reported higher revenues of approximately $13,000 from Newport Golf
Club and Conference Center and higher revenues of approximately $21,000 from its
Dallas and San Antonio Retail Centers during the second quarter of 2003 as
compared to the same period in 2002.  The increase in investment real estate
revenues was due primarily to the sale of the Company's Broadwater property for
approximately $150,000 during the second quarter of 2003, for which there was no
corresponding sale in the same quarter of 2002.  In addition to this increase,
sales from the Newport project were higher by approximately $26,000 during the
second quarter of 2003 as compared to the second quarter of 2002.  These
increases were offset by  lower revenues from our Conroe properties of
approximately $13,000 during the second quarter of 2003, because these
properties were sold during 2002 and generated no revenue in 2003.  The increase
in real estate financing net revenues is due to higher yield spreads between our
lending and borrowing rates, which resulted in higher net revenues of
approximately $51,000 during the second quarter of 2003 as compared to the same
quarter in 2002.  On June 30, 2003, we had $5,664,575 in project loans compared
to $6,183,120 on June 30, 2002.

Costs of real estate sales were $423,270 higher in the quarter ended June 30,
2003 compared to the corresponding quarter in 2002.  Cost of real estate sales
from the townhome redevelopment project was $272,760 for the second quarter of
2003.  There were no sales at the townhome project during the second quarter of


                                       13
<PAGE>
2002.  In the same comparative quarters, the Company also experienced an
increase in cost of real estate sales of  $155,045 from the sale of our
Broadwater property.  These higher costs of sales were offset by lower cost of
lot sales at the Newport project of  $4,535 during the second quarter of 2003 as
compared to the same quarter of 2002.

Operating and other costs increased by $93,462 from $499,109 for the quarter
ending June 30, 2002 to $592,571 for the same period in 2003.  These operating
cost increases were primarily the result of higher selling costs of
approximately $119,000 at the townhome redevelopment project and from the
Broadwater property sale offset by lower operating costs at Newport Golf Club
and Conference Center of approximately $26,000.

General and administrative ("G&A") expenses increased $192,174 from $700,635 in
the second quarter of 2002 to $892,809 in the same quarter of 2003.  G&A
expenses that increased significantly included:

     -    expenses of approximately $200,000 were incurred in 2003 for a special
          committee to study the optimization of stockholder value and for the
          Company to complete the recommended plan of going private; and

     -    salaries, which increased by approximately $75,000 due to bonuses
          accrued or paid to certain employees upon achievement of designated
          goals, and general salary increases.

These increases were partially offset by decreases in G&A expenses related to:

     -    legal expenses, which were lower by approximately $59,000 in the
          second quarter of 2003 due to a decrease in litigation activities as
          compared to the same quarter in 2002; and

     -    appraisal fees, which decreased by approximately $31,000 due the
          decline in the number of appraisals needed.


Minority interests expense was eliminated at the end of the first quarter of
2002 when the Company became the 100% owner of the townhome redevelopment
project.  Therefore there were no minority interest expenses in either the
second quarter of 2002 or during the same period of 2003.  Minority interests
expense represents the minority partners' share of the townhome redevelopment
project's revenues and expenses.  The Company held a 51% ownership interest in
the Partnership until March 31, 2002, when it assumed a 100% ownership interest.
As a result of assuming full ownership in the project, no further minority
interest income or expense from the project will be recorded in the future.

Interest expense decreased $82,039 from $137,686 in the second quarter of 2002
to $55,647 for the same period in 2003.  There was approximately $19,000 less
interest expense incurred at the townhome redevelopment project during the
second quarter of 2003 compared to the same quarter in 2002 and approximately
$6,000 less interest from the Galveston property, both of which were due to the
reduction of project debt between these two time periods.  Interest expense also
decreased by approximately $30,000 as a result of reclassifying the interest at
the West Lake Houston real estate project from net revenues of real estate
financing to interest expense during the second quarter of 2002 for which there
was no corresponding reclassification necessary in the second quarter of 2003.

FASB No. 144 requires the impairment of costs of long -lived assets when
circumstances occur that would cause the Company to realize less than the costs
capitalized for that asset.  Although an impairment of costs of long lived
assets was taken in the first quarter of 2003, no such impairment was necessary
during the second quarter of either 2003 or 2002.

Our income (loss) before income taxes increased $403,372 from a loss before
taxes of $(221,647) during the second quarter of 2002 to income of $181,725 for
the same period in 2003.  The increased income consisted of an increase of
income of $323,680 from net gains on collections on purchased asset pools, an
increase of $132,763 from commercial real estate ventures, and an increase of
income of $35,638 from real estate financing activities.  These increases were
offset by  a decrease of $29,429 from investment real estate and a decrease of
$59,280 in income before income taxes from revenues and expenses not allocated
in any specific segment.  The increase in income from net gains on collections
of purchased asset pools was mainly due to the collection of a major litigation
claim during the second quarter of 2003 for which there were no corresponding
large collection on asset pools in the second quarter of 2002.  The increase in
income before income taxes in the commercial real estate ventures segment
resulted primarily from higher sales at the townhome redevelopment project which
resulted in higher income of approximately $85,000 during the second quarter of
2003 as compared to the same quarter of 2002.  During these same comparative
periods, the income from the Company's Dallas and San Antonio Retail Centers
increased by approximately $47,000.  Real estate financing reported higher
income before taxes due to wider yield spreads between our lending and borrowing
interest rates of approximately $51,000, which was partially offset by higher
overhead expenses of approximately $16,000.  The decrease in income before
income taxes from investment real estate was due to decreased income of
approximately $59,000 as a result of slower sales from the Newport project,
which was partially offset by an increase in income from the West Lake Houston
project of approximately $30,000.

Income tax benefit was $54,000 in the second quarter of 2002 compared to no tax
benefit in the same quarter of 2003.


                                       14
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

We had cash and cash equivalents of $464,679 at June 30, 2003 compared to
$558,559 at December 31, 2002.

During the first six months of 2003, we continued to invest a substantial
portion of our cash reserves in various projects, most notably was an investment
of approximately $482,000 in the Newport project in order to purchase additional
properties for future resale and approximately $127,000 in capitalized interest,
taxes and development costs at the West Lake Houston project.  During the first
six months of 2003, we have also made substantial reductions of our outstanding
debt, most notably a reduction of  $1,677,000 on our revolving credit facility,
a reduction of $654,000 in the townhome redevelopment project loan, and a
liquidation of a $1,400,000 real estate financing project loan.  Cash flow from
real estate financing activities during the first six months of 2003 was
$187,000.  We also received repayment of a long-term note of $107,000 from James
H. Carpenter, our president and chief operating officer.  Borrowings to fund our
real estate financing activities for the six months ended June 30, 2003
consisted of two renewed first lien notes from a national lending institution
totaling $2,200,000, bearing interest at the rate of 7% and of prime plus 1%,
respectively.  We also borrowed an additional $1,400,000 in first lien notes
from a related group of individual investors including Charles W. Janke, our
chairman and chief executive officer, In Source Financial Corporation, which is
controlled by James H. Carpenter, our president and chief operating officer, and
Alfred Janke, the father of Charles W. Janke.  These notes bear interest at 18%,
are due on January 31, 2004, and are secured by the real estate secured
financing loans we originated.

Due to the capital-intensive nature of our business, we have experienced, and
expect to continue to experience substantial working capital needs.  Future cash
flows from operations and future borrowings available under our revolving credit
facility will be sufficient to fund our capital expenditures and working capital
requirements as they currently exist.  However, demand for our real estate
secured bridge financing exceeds our funds available from current sources.

During June 2003, we renewed our revolving credit facility of $3,000,000 to
mature on September 24, 2003.  This revolving credit facility is secured by
notes receivable and real estate in purchased asset pools, commercial and
investment real estate, notes receivable from real estate financing, and
equipment.  Principal is payable at maturity with interest payable monthly at
the bank's prime rate plus 1.0% per annum (5.00% as of June 30, 2003).
Management is negotiating with its existing lender and other financial
institutions to increase the amount of credit facilities available.  The
revolving credit facility provides for certain financial covenants.  As of the
filing date of this quarterly report, we are in compliance with these covenants.

At a cash-out price of $3.25 per pre-split share, (see Reverse Stock Split,
below) we estimate that the aggregate cash-out price for fractional shares in
the reverse split of our common stock described below will be $2,097,000.  We
believe that our cash on hand and available under our revolving credit facility
will be sufficient to meet such needs.

INVESTMENTS IN REAL ESTATE JOINT VENTURES

The Company currently has an investment in a real estate joint venture which is
accounted for using the equity method of accounting.  Our proportionate interest
in the total assets and total debt of this joint venture is approximately $3.2
million and $0.7 million, respectively.  In the event of default on the debt by
the joint venture, the debt of this joint venture is non-recourse to the
Company.

STOCK REPURCHASE PLAN

On January 11, 2000, the Board of Directors approved a stock repurchase plan
under Rule 10b-18 of the Securities Exchange Act of 1934, for the purchase of up
to $2.0 million worth of our outstanding common stock in open market
transactions.  Acquired shares will be held as treasury stock, and will be
available for future acquisitions, financing or awards as granted under our 1998
Stock Compensation Plan.  At June 30, 2003, our treasury share holdings were
144,857 shares at a cost of $378,499, or $2.61 per share.

REVERSE STOCK SPLIT

On June 10, 2003 the Company announced that its board of directors had approved
a reverse split of its common stock ("Common Stock") as the initial step to take
the Company private.  Once the reverse stock split is completed, Rampart plans
to make application to have the Common Stock delisted from the American Stock
Exchange ("AMEX") and terminate registration of the Common Stock under the
Securities Exchange Act of 1934.  The reverse split is designed to cash out all
common shareholders holding less than one share after the split and to reduce
the number of common shareholders after the split to two. Rampart common
shareholders holding less than one share after the split would receive $3.25 per
pre-split share in lieu of receiving a fractional share.

The Company's board of directors approved the reverse split and related
transactions based in part upon the unanimous recommendation of a special
committee of the board of directors established to represent the interests of
the minority common shareholders, as well as the opinion of the special
committee's financial advisor that the cash price being paid to the minority
common shareholders is fair from a financial point of view.  Due to the timing
and the assets acquired as a result of the real estate foreclosure described in
"Subsequent Events" below, the board of directors and the special committee of
the board of directors are evaluating the effect of the foreclosure, if any, on
the terms of the reverse split.


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Currently, Mr. Janke beneficially owns 1,500,000 shares of Common Stock and Mr.
Carpenter beneficially owns 760,000 shares of Common Stock, which shares
together represent approximately 77.8% of Rampart's outstanding common shares.
The reverse stock split is subject to the approval of the Company's common
shareholders, as well as the board of directors' and the special committee's
consideration of the effect of the July 2003 real estate foreclosure, if any, on
the terms of the reverse split.  Messrs. Janke and Carpenter have indicated that
they intend to vote their common shares for the approval of the reverse stock
split, which shares are sufficient to approve the transaction on its current
terms. The Company intends to present the reverse split proposal at its annual
meeting of shareholders and has currently set August 4, 2003 as the record date
for purposes of determining the common shareholders entitled to vote at the
annual meeting.

SUBSEQUENT EVENTS

On July 1, 2003, the Company foreclosed on the real estate collateral underlying
two bridge financing notes that had been in default (see Note 4).  The total
amount bid in by the Company at the foreclosure was $4,074,627, which included
the two note principal balances, accrued interest, paid property taxes, and all
legal and filing expenses.   In July 2003, the Company reclassified the
aforementioned items on its financial statements into the cost of the foreclosed
land as investment real estate.

FORWARD LOOKING STATEMENTS

This quarterly report on Form 10-QSB contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this report including,
without limitation, statements regarding our business strategy, plans,
objectives, expectations, intent, and beliefs of management for future
operations are forward-looking statements. Such statements are based on certain
assumptions and analyses made by our management in light of their experience and
their perception of historical trends, current conditions, expected future
developments and other factors they believe to be appropriate. The
forward-looking statements included in this report are also subject to a number
of material risks and uncertainties. Important factors that could cause actual
results to differ materially from our expectations include (1) tightening of the
credit markets, (2) volatility in the real estate markets and interest rates,
(3) emerging competition, (4) changes in regulations in the industries we serve,
(5) general economic declines, particularly within the regions in which we
operate, (6) market valuation risks, and (7) terrorist activities.
Forward-looking statements are not guarantees of future performance and actual
results, developments and business decisions may differ from those contemplated
by such forward-looking statements.

ITEM 3.   CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer, Chief Operating Officer,
and Chief Financial Officer, have conducted an evaluation of the effectiveness
of our disclosure controls and procedures as of the end of the quarter covered
by this report.  Based upon that evaluation, our Chief Executive Officer, Chief
Operating Officer, and Chief Financial Officer have concluded, that our
disclosure controls and procedures are effective for timely gathering, analyzing
and disclosing the information we are required to disclose in our reports filed
under the Securities Exchange Act of 1934, as amended.  There were no changes in
our internal control over financial reporting that occurred during the quarter
covered by this report that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.


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                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits - See "Index of Exhibits" below which lists the documents filed as
     exhibits herewith.
(b)  Reports on Form 8-K

     On May 16, 2003, Rampart filed a current report on Form 8-K regarding its
     first quarter 2003 results.

     On June 11, 2003, Rampart filed a current report on Form 8-K regarding
     announcement of a proposed reverse split of its common stock.




                                   Signatures

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Rampart Capital Corporation



By:  /s/ C. W. JANKE                           August 14, 2003
     C. W. Janke
     Chairman of the Board
     Chief Executive Officer
     (Principal Executive Officer)


By:  /s/ J. H. CARPENTER                       August 14, 2003
     J. H. Carpenter
     President
     Chief Operating Officer


By:  /s/ CHARLES F. PRESLEY                    August 14, 2003
     Charles F. Presley
     Vice-President
     Chief Financial Officer
     Treasurer
     (Principal Financial Officer)


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                           RAMPART CAPITAL CORPORATION
                             EXHIBITS TO FORM 10-QSB
                       FOR THE QUARTER ENDED JUNE 30, 2003

                                INDEX OF EXHIBITS



EXHIBIT
  NO.                            DESCRIPTION
-------                          -----------
    3.1   Restated Articles of Incorporation (Exhibit 3.1 to Rampart's
          Registration Statement on Form SB-2 (Reg. No. 333-71089) and
          incorporated herein by reference).

   3.2    Bylaws (Exhibit 3.2 to Rampart's Registration Statement on Form SB-2
          (Reg. No. 333-71089) and incorporated herein by reference).

   4.1    Form of Warrant Agreement Between Rampart and American Stock Transfer
          and Trust Company (Exhibit 4.1 to Rampart's Registration Statement on
          Form SB-2 (Reg. No. 333-71089) and incorporated herein by reference).

   4.2    First Amendment of Warrant Agreement (Exhibit 4.1 to Rampart's Form
          8-K filed April 12, 2001 (File No. 1-15277) and incorporated herein by
          reference).

 *10.1    Fifteenth Amendment to Loan Agreement with Southwest Bank of Texas N.
          A., amended June 26, 2003.

 *31.1    Certification of Chief Executive Officer Pursuant to Rules 13a-14(a)
          and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
          Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 *31.2    Certification of Chief Operating Officer Pursuant to Rules 13a-14(a)
          and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
          Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 *31.3    Certification of Chief Financial Officer Pursuant to Rules 13a-14(a)
          and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
          Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 *32.1    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.


----------------------------
   *   Filed herewith.


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