=================================================================
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549

                             FORM 10-Q
(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For 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 no. 2-26080
 
                         CAPITAL BANCORP                          
      ------------------------------------------------------
       (Exact name of registrant as specified in its charter)

      FLORIDA                                  59-2160717
------------------------------             -------------------
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)           Identification Number) 


         1221 Brickell Avenue, Miami, Florida           33131
-------------------------------------------------------------------
(Address of Principal Executive Offices)               (Zip Code)

                           (305) 536-1500
          ----------------------------------------------------
          (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.
___X___    Yes   ______  No

As of May 9, 1997, there were 7,573,595 shares of the registrant's
Common Stock outstanding.
=================================================================

<PAGE>


ITEM 1.           PART I.  FINANCIAL INFORMATION
                 CAPITAL BANCORP AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CONDITION
                    (In Thousands of Dollars)

                                      March 31,       December 31,
                                        1997             1996
                                     -----------      ------------
                                      (Unaudited)      (Audited)

ASSETS
   Cash and due from banks              $  105,771       $  128,359
   Federal funds sold and securities
    purchased under agreement to resell     10,000           52,900
                                        ----------       ----------
       Cash and cash equivalents           115,771          181,259
                                        ----------       ----------
   Securities held to maturity 
   (market value 3/31/97 - $29,331, 
   12/31/96 - $ 31,647)                     29,396           31,425
   Securities available for sale 
   (at market value)                       187,512          187,061
                                        ----------       ----------
       Total securities                    216,908          218,486
                                        ----------       ----------
  
   Loans                                   854,742         830,330
     Less allowance for loan losses         (9,718)         (9,333)
     Less unearned income                   (3,388)         (2,964)
                                        ----------      ---------- 
        Loans, net                         841,636         818,033
                                        ----------      ----------

   Accounts receivable - factoring 
     subsidiary, net                       479,822         449,528
   Premises and equipment, net              28,935          29,171
   Due from customers on acceptances        21,613          29,900
   Other real estate                         3,469           3,632
   Accrued interest and other assets        31,533          32,889
                                        ----------      ----------
       Total assets                     $1,739,687      $1,762,898
                                        ==========      ==========
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
   Deposits:
     Non-interest bearing
      deposits                          $  288,127      $  315,800
     Savings and money market deposits     297,754         302,651
     Time deposits                         478,742         478,374
                                        ----------      ----------
       Total deposits                    1,064,623       1,096,825
                                        ----------      ----------
   Funds purchased and securities sold
     under agreements to repurchase         87,953          79,905
   Bank acceptances outstanding             21,613          29,900
   Due to clients - factoring subsidiary   189,986         191,489
   Long-term debt                          211,420         202,220
   Other liabilities                        12,741          15,207
                                        ----------      ----------
       Total liabilities                 1,588,336       1,615,546
                                        ----------      ----------
   Minority interest in 
     consolidated subsidiary                12,044          11,610
                                        ----------      ----------
   Stockholders' equity:
     Common stock, $1.00 par value
       Authorized - 20,000,000 shares   
       Issued and outstanding - 7,562,131 
       shares - 3/31/97, 7,533,726 
       shares - 12/31/96                     7,562           7,534
     Capital surplus                        13,455          13,219
     Retained earnings                     120,384         115,827
     Unrealized loss on securities 
      available for sale, 
      net of applicable taxes               (2,094)           (838)
                                        ----------      ----------
       Total stockholders' equity          139,307         135,742
                                        ----------      ----------
       Total liabilities, minority 
       interest and stockholders' 
       equity                           $1,739,687       $1,762,898
                                        ==========       ==========
See accompanying notes to consolidated financial statements.


                               Page 2
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<PAGE>


                CAPITAL BANCORP AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME
            (In Thousands of Dollars Except Per Share Data)
                           (Unaudited)

                                         Three Months Ended
                                             March 31,
                                         -------------------
                                         1997       1996
                                        -------    -------
INTEREST INCOME:
   Loans                                $19,554     $17,309
   Advances-factoring clients             7,858       6,032
   Securities                             3,495       3,628
   Federal funds sold                       651         636
   Other                                    120         340
                                        -------     -------
      Total interest income              31,678      27,945
                                        -------     -------
INTEREST EXPENSE:
   Savings and money market deposits      1,776       1,711
   Time deposits                          6,509       5,619
   Short-term borrowings                    976         905
   Long-term debt                         3,695       3,132
                                        -------     -------
      Total interest expense             12,956      11,367
                                        -------     -------
      Net interest income                18,722      16,578
   Provision for loan losses              1,525         600
   Provision for doubtful accounts-
     factoring subsidiary                 1,400       1,100
                                        -------     -------
      Net interest income after 
        provisions                       15,797      14,878
                                        -------     -------
OTHER INCOME:
   Factoring revenues                     7,987       6,480
   Service charges on deposits            3,492       2,962
   Fees on letters of credit              1,005       1,143
   Securities gains                          57          --
   Other operating income                 1,280       1,193
                                        -------     -------
      Total other income                 13,821      11,778
                                        -------     -------
OTHER EXPENSES:   
   Salaries and employee benefits        11,555      10,026
   Occupancy expense, net                 1,518       2,016
   Other operating expenses,net           7,560       7,533
                                        -------     -------
      Total other expenses               20,633      19,575
                                        -------     -------
   Minority interest in net income of
      consolidated subsidiaRy                434          --
                                         -------     ------
   Income before income taxes              8,551       7,081
   Provision for income taxes              3,364       2,679
                                         -------     -------
      
   Net income                            $ 5,187     $ 4,402
                                         =======     =======
   Earnings per common and common
      equivalent share:
         Primary                        $   .64     $   .54
                                        =======     =======
         Fully diluted                  $   .64     $   .54
                                        =======     =======
   Cash dividends declared per share of
      common stock                      $ .0833     $ .0833
                                        =======     =======

   See accompanying notes to consolidated financial statements.   

                           Page 3
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<PAGE>


              CAPITAL BANCORP AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CASH FLOWS
                (In Thousands of Dollars)
                       (Unaudited)
                                                                  
                                              Three Months Ended
                                                  March 31,
                                            ----------------------
                                               1997         1996
                                             --------    -------- 

Cash flows from operating activities:
   Net income                                $  5,187   $  4,402
   Adjustments to reconcile net income
   to net cash provided by operating 
   activities:
   Provision for loan losses                    1,525        600
   Provision for doubtful accounts-factoring
     subsidiary                                 1,400      1,100
   Depreciation and amortization                1,203      1,187
   Net losses on other real estate                 75        212
   Securities gains                               (57)        --
   (Gain) loss on disposal of premises
     and equipment                                 (1)         5
   Minority interest in net income of
     consolidated subsidiary                      434         --
   Decrease in accrued interest
     and other assets                           2,098       1,969
   (Decrease) increase in other liabilities    (2,468)        436 
                                             --------    --------
      Net cash provided by operating
       activities                               9,396       9,911
                                             --------    --------
Cash flows from investing activities:
   Proceeds from maturities of securities
      held to maturity                          2,032       6,034
   Purchase of securities held to maturity         --     (12,000)
   Proceeds from sale of securities 
     available for sale                         7,028          --
   Proceeds from maturities of securities
      available for sale                        5,549       34,168
   Purchase of securities available 
      for sale                                (14,971)     (15,941)
   Net (increase) decrease in loans           (25,188)      10,445
   Proceeds from sale of premises
     and equipment                                  3           --
   Purchase of premises and equipment            (970)        (775)
   Proceeds from sale of other real estate        201          770
   Improvements to other real estate              (53)        (110)
   Increase in accounts receivable-factoring
      subsidiary (net of due to clients)      (33,197)     (33,039)
                                             --------     --------
      Net cash used in investing activities   (59,566)     (10,448)
                                             --------     --------
Cash flows from financing activities:
   Net decrease in deposits                   (32,202)     (53,798)
   Net increase (decrease) in Federal
     funds purchased and securities sold
     under agreements to repurchase             8,048       (6,076)
   Proceeds from issuance of long-term debt     9,200           --
   Cash dividends paid                           (628)        (621)
   Proceeds from exercise of stock options        280           83
   Repurchase of Common Stock                     (16)          --
                                             --------     --------
      Net cash used in financing activities   (15,318)     (60,412)
                                             --------     --------
Net decrease in cash and cash equivalents     (65,488)     (60,949)
Cash and cash equivalents at beginning
  of period                                   181,259      213,903
                                             --------     --------
Cash and cash equivalents at end of period   $115,771     $152,954
                                             ========     ========
Supplemental Disclosures

Cash paid during the period for:
   Interest                                  $ 12,978     $ 11,491
                                             ========     ========
   Income taxes                              $     --     $    536
                                             ========     ========
Non-cash activities:
   Increase in the unrealized loss on
    securities available for sale, net of
    applicable benefits in 1997 - ($742)
    and in 1996 - $(710)                     $ (1,256)    $ (1,201)
                                             ========     ========
   Loans transferred to other real estate    $     60     $    597
                                             ========     ========


See accompanying notes to consolidated financial statements.

                           Page 4
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<PAGE>
                CAPITAL BANCORP AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        March 31, 1997


NOTE 1:  Basis of Presentation
------------------------------

The Consolidated Statements of Condition for Capital Bancorp and
its subsidiaries (the "Company") as of March 31, 1997 and December
31, 1996, the Consolidated Statements of Income for the three-month
periods ended March 31, 1997 and 1996 and the Consolidated
Statements of Cash Flows for the three-month periods ended March
31, 1997 and 1996 included in this Form 10-Q have been prepared by
the Company in conformity with the instructions to Form 10-Q and
Article 10 of Regulation S-X and, therefore, do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.  The
statements are unaudited except for the Consolidated Statement of
Condition as of December 31, 1996.  

The accounting policies followed for interim financial reporting
are consistent with the accounting policies set forth in Note 1 to
the Consolidated Financial Statements appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996 as
filed with the Securities and Exchange Commission.  

The consolidated financial statements include the accounts of
Capital Bancorp ("Bancorp"), Capital Bank (the "Bank") and its
subsidiaries, and Capital Factors Holding, Inc. and its
subsidiaries ("Capital Factors").  All significant intercompany
transactions and balances have been eliminated in consolidation. 
In the opinion of management, the interim consolidated financial
statements reflect all adjustments (which include only normal
recurring adjustments) necessary for a fair presentation of the
information contained therein.  The interim results of operations
are not necessarily indicative of the results which may be expected
for the full year.  

NOTE 2: Risk Elements - Loans and Advances
------------------------------------------
Foreign Outstandings
--------------------

Foreign outstandings included in the loan portfolio consisted of
the following (in thousands of dollars):
                                 March 31             December 31,
                                   1997                  1996
                                -------------         ------------
   Performing trade credits       $130,880               $141,620
   Other performing loans           14,627                  3,767
   Non-accrual loans                    96                     96
                                  --------               --------
                                  $145,603               $145,483
                                  ========               ========

Performing trade credits consist primarily of refinanced letters of
credit, acceptances purchased and pre-export financings principally
to banks that are located in foreign countries.  Cash collateral
maintained at the Bank as offsets to outstanding foreign loans
totaled $24.7 million at March 31, 1997 compared to $23.9 million
at year end 1996.  In addition to the outstanding foreign loans, at
March 31, 1997 and December 31, 1996 there were $20.3 million and
$20.8 million, respectively, due primarily from foreign customers
on acceptances, offset by $2.6 million and $2.3 million,
respectively, of cash collateral maintained at the Bank.  

Cross border outstandings include loans, acceptances, acceptances
purchased, pre-export financings and other interest bearing assets. 
The following is a list of cross border outstandings at March 31,
1997 and December 31, 1996 for those countries for which the total
amount of outstandings, net of (a) any written guarantees of
principal or interest by domestic or other non-local third parties
(other than the foreign government) and (b) the value of any
tangible liquid collateral that may be netted against the
outstandings, exceeded 1% of consolidated total assets (in
thousands of dollars):

                      March 31                  December 31,
                        1997                       1996        
                     -----------                -----------
   Brazil              $22,931       Peru            $29,127
   Argentina            20,916       Brazil           23,153
   Peru                 18,804       Argentina        20,243
                                     Guatemala        17,632
                       -------                       -------
                       $62,651                       $90,155
                       =======                       =======
                           Page 5
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<PAGE>

At March 31, 1997, the Bank had cross border outstandings to
Ecuador and Guatemala aggregating $15.1 million and $14.7 million,
respectively, which exceeded .75%, but were less than 1% of
consolidated total assets.  At December 31, 1996, the Bank had no
net cross border outstandings that exceeded .75% but were less than
1% of consolidated total assets.  

At March 31, 1997 and December 31, 1996, the Bank held other
interest earning assets totaling $7.6 million issued by debtors
located in foreign countries.  

Impaired Loans
--------------

At March 31, 1997 and December 31, 1996, the recorded investment in
certain loans that was considered impaired under SFAS No. 114 was
$5.9 million and $4.9 million, respectively, all of which were on
non-accrual status at the respective dates.  Measurement for
impairment of $5.5 million and $4.3 million of these loans was
based on the estimated value of collateral at March 31, 1997 and
December 31, 1996, respectively, and the remainder was measured
based on the present value of projected cash flows.  These loans
required a SFAS No. 114 reserve for possible credit losses of $1.9
million and $1.3 million, which is included within the overall
allowance for loan losses at March 31, 1997 and December 31, 1996,
respectively.  The average recorded investment in impaired loans
during the three months ended March 31, 1997 and 1996 was $5.5
million and $5.7 million, respectively.  

At March 31, 1997 and December 31, 1996, the recorded investment in
client advances that were considered impaired under SFAS No. 114
was $1.3 million and $660,000, respectively, all of which were on
non-accrual status at the respective dates.  Measurement for
impairment was based on the estimated value of collateral.  These
advances required a SFAS No. 114 reserve for possible credit losses
of $150,000 and $30,000 at March 31, 1997 and December 31, 1996,
respectively, which is included within the overall allowance for
doubtful accounts.

Non-accrual and Past Due Loans and Advances
-------------------------------------------

Management evaluates past due and non-accrual loans and advances
regularly in connection with estimating the provisions and the
allowances for loan losses and doubtful accounts, taking into
consideration the value of collateral and the prospects for
repayment of principal and collectibility of interest.  Loans and
advances are classified on a non-accrual basis when management
deems that collectibility of interest is doubtful, which is after
90 days of past due status, or at an earlier date if full
collectIbility is doubtful, unless the loan or advance is well
secured and in the process of collection.  Charge offs to the
allowances are made when a loss is deemed probable.

At March 31, 1997 there were $233,000 of loans that were over 90
days past due and still accruing interest, as compared to $264,000
at December 31, 1996.  Included in loans 90 days past due and still
accruing interest were commercial and consumer loans of $120,000
and $113,000, respectively, at March 31, 1997 as compared to
commercial and consumer loans of $152,000 and $112,000,
respectively, at December 31, 1996.  Loans which are over 90 days
past due and still accruing interest are in the process of
collection and are deemed to be well secured.

Following is a summary of non-accrual loans and advances (in
thousands of dollars):

                                     March 31        December 31,
                                        1997             1996     
                                    -----------     ------------
   Commercial loans                   $ 4,015          $ 2,874
   Foreign loans                           96               96
   Real estate loans                    1,824            1,881
   Consumer loans                       1,026              546
                                      -------          -------
   Total                                6,961            5,397

   Advances                             1,287              660
                                      -------          -------
   Total non-accrual loans
     and advances                     $ 8,248          $ 6,057
                                      =======          =======

Non-accrual loans increased to $7.0 million at March 31, 1997,
reflecting increases in commercial and consumer non-accrual loans. 
The increase in commercial non-accrual loans is primarily the
result of loans totaling $1.5 million that were transferred to non-
accrual status in 1997, of which $1.4 million was with three
borrowers.  The increase in non-accrual advances is primarily the
result of the transfer of advances to one client to non-accrual
status partially offset by payoffs of advances previously on non-
accrual status.  Management has instituted collection procedures in
connection with non-accrual loans and advances and has established
allowances for loan losses and doubtful accounts deemed adequate to
absorb potential losses, based on information currently available. 
Many of the factors considered in management's determination as to
the adequacy of the allowances involve a significant degree of
estimation and are subject to rapid changes that may be unforeseen
by management.  

                           Page 6
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<PAGE>


Changes to these factors could result in future adjustments to the
allowances for loan losses and doubtful accounts.

NOTE 3:  Litigation
-------------------

The Company and certain of its present and former directors and
officers are defendants in two lawsuits, one of which is a
shareholder derivative law suit.  Such law suits allege that
certain of the defendants engaged in a number of allegedly improper
and illegal activities.  No monetary relief is sought from the
Company other than costs in the derivative action.  The Company
does not believe that the outcome of the foregoing litigation will
have a material adverse effect on the consolidated financial
condition, results of operations or liquidity of the Company.  

In addition to these lawsuits, various legal actions and
proceedings are pending or are threatened against the Company, the
Bank and Capital Factors, some of which seek relief or damages in
amounts that are substantial.  Unlike the aforementioned matters,
however, these actions or proceedings arose in the ordinary course
of business.  Due to the complex nature of some of these matters,
it may be a number of years before they are ultimately resolved. 
After consultation with legal counsel, management believes the
aggregate liability, if any, to the Company, the Bank and/or
Capital Factors resulting from such pending or threatened actions
and proceedings will not have a material adverse effect on the
Company's consolidated financial condition, results of operations
or liquidity.

NOTE 4:  Subsequent Event
-------------------------

On April 30, 1997, the trust formed by Capital Factors, Inc. in
connection with the securitization of its factored advances issued
a foUrth series of variable rate asset-backed securities (the
"Variable Funding Certificates").  The Variable Funding
Certificates include the issuance of $96.25 million of senior
certificates, which bear interest at LIBOR plus 0.75%, and $4.75
million of senior subordinated certificates, which bear interest at
LIBOR plus 1.50%.  Unlike the previously issued series of asset
backed certificates that were fixed as to principal amount, the
Variable Funding Certificates provide for a monthly settlement of
principal, which may increase or decrease the outstanding amount. 
Approximately $37.8 million of the Variable Funding Certificates
were funded at closing.  Additional borrowings of up to the full
$100.0 million may be made to the extent that Capital Factors, Inc.
generates additional eligible advances.  The Variable Funding
Certificates mature in April 2002.


                           Page 7
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<PAGE>

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

INTRODUCTION
------------

Capital Bancorp ("Bancorp") is a bank holding company which
conducts operations principally through Capital Bank (the "Bank"),
a wholly-owned subsidiary, and Capital Factors Holding, Inc., an
81%-owned  subsidiary of the Bank.  The Bank operates a commercial
banking franchise through 28 offices located in the South Florida
area.  Capital Factors Holding, Inc. and its subsidiaries ("Capital
Factors") are principally engaged in providing receivables-based
commercial financing and related fee-based credit, collection and
management information services through offices located in Ft.
Lauderdale, Florida; New York, New York; Los Angeles, California;
Charlotte, North Carolina and a limited service office in Atlanta,
Georgia.  Throughout this discussion, Bancorp and its subsidiaries
are collectively referred to as the "Company."

In addition, this Form 10-Q contains certain "forward-looking
statements" which represent the Company's expectations or beliefs,
including, but not limited to, statements concerning industry
performance and the Company's operations, performance, financial
condition, growth and strategies.  For this purpose, any statements
contained in the Form 10-Q that are not statements of historical
fact may be deemed to be forward-looking statements.  These
statements by their nature involve substantial risks and
uncertainties, certain of which are beyond the Company's control,
and actual results may differ materially depending on a variety of
important factors which are noted herein, including, but not
limited to, potential impact of changes in interest rates, credit
risks and collateral, dependence on management and key personnel,
supervision and regulation issues, competition, changes in regional
economic conditions, ability of the Company to continue its
operating strategies and current litigation and regulatory matters.

FINANCIAL CONDITION - MARCH 31, 1997 VS. DECEMBER 31, 1996
----------------------------------------------------------

Overview
--------

Total consolidated assets decreased $23.2 million, or 1%, during
the first three months of 1997, which included a decrease of $33.7
million in non-interest earning assets offset by an increase of
$10.5 million in interest earning assets.  The decrease in total
consolidated assets was comprised primarily of decreases of $65.5
million in cash and cash equivalents and $8.3 million in due from
customers on acceptances and was offset by increases of $30.3
million in net accounts receivable - factoring subsidiary and $23.6
million in net loans.  Total consolidated liabilities decreased
$27.2 million and included a decrease of $39.9 million in non-
interest bearing balances (of which $27.7 million relates to non-
interest bearing deposits) offset by an increase of $12.7 million
in interest bearing balances.  Total stockholders' equity increased
$3.6 million, to $139.3 million, primarily as a result of earnings
in excess of dividends declared.

Loans
-----

During the first three months of 1997, total loans increased $24.4
million, or 3%, with an increase primarily in real estate loans
offset by a decrease in commercial loans.  

Substantially all of the Company's real estate lending is
commercial in nature, including construction financing for new
residential developments and short-term (5 to 7 years) first
mortgages on income producing properties.  Real estate loans
increased $34.6 million, or 13%, during the first three months of
1997, including increases of $20.6 million in mortgage loans and
$14.2 million in construction loans.  Real estate loans totaled
$309.8 million and $275.1 million at March 31, 1997 and December
31, 1996, respectively.  

At March 31, 1997, commercial loans totaled $213.3 million, $40.3
million of which were asset-based loans at Capital Factors.  Asset-
based loans are collateralized primarily by receivables owned by
the borrowers.  The risks associated with asset-based lending are
similar to those involved in Capital Factors' traditional factoring
activities and primarily involve the credit quality of the
receivables accepted as collateral.  The experience in monitoring
receivables that Capital Factors has gained through its traditional
factoring activities is beneficial in managing this activity. 
During 1997 commercial loans decreased $9.5 million, or 4%.

Cash and Cash Equivalents
-------------------------

The decrease in cash and cash equivalents was composed of decreases
of $42.9 million in federal funds sold and securities purchased
                           Page 8
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<PAGE>

under agreements to resell and $22.6 million in cash and due from
banks.  Cash and cash equivalents were used to invest in loans and
accounts receivable advances, as well as to fund deposit
withdrawals.  

Accounts Receivable - Factoring Subsidiary
------------------------------------------

Accounts receivable - factoring subsidiary, net increased $30.3
million, or 7%, to $479.8 million as a result of an overall
increase in factoring volume.  Capital Factors, as well as the
factoring industry, has historically experienced and expects to
continue to experience seasonal fluctuations in its factored sales
volume and factoring fees, which generally is highest during the
period from August to November.  A principal reason for the
fluctuation is the seasonality in the sales of certain of Capital
Factors' clients, especially those in the apparel industry. 
Factored sales volume and factoring fees also typically increase
during the first quarter as a result of the apparel industry, which
ships more goods during March as compared to December in order to
fill increased customer orders in anticipation of the ensuing
spring season.  Capital Factors purchases receivables from its
clients and records a liability payable to the clients at the time
of such purchase.  From time to time, the liability is reduced by
advance payments by Capital Factors to the clients, prior to the
contractual payment date for the receivables purchased.  Such
advance payments are interest earning balances of Capital Factors. 
Interest earning advances, net of client interest bearing credit
balances, amounted to $296.3 million at March 31, 1997, compared to
$263.5 million at December 31, 1996.  Balances due to factoring
clients for receivables purchased were $190.0 million and $191.5
million at March 31, 1997 and December 31, 1996, respectively. 
Non-accrual advances were $1.3 million and $660,000 at March 31,
1997 and December 31, 1996, respectively, and are considered in the
assessment of the allowance for doubtful accounts for adequacy (see
"Provision for Doubtful Accounts - Capital Factors" below).

Deposits
--------

Total deposits were $1,064.6 million at March 31, 1997 and $1,096.8
million at December 31, 1996.  The decrease in total deposits
included a decrease of $27.7 million in non-interest bearing
deposits and a decrease of $20.5 million decrease in commercial and
industrial demand deposits.  Management believes that such deposit
outflows are in the normal course of business.  

The Company does not operate any foreign offices; however, as a
result of the activities of the Bank's International Division,
foreign customers maintain deposit accounts with the Bank. 
Deposits by foreign customers amounted to $188.2 million at March
31, 1997 and $190.7 million at December 31, 1996, representing 18%
of total deposits at both dates.  The level of these deposits is,
in part, related to the level of trade finance activity conducted
by the Company, and is also affected by economic trends in foreign
countries.  

Short-Term Borrowings
---------------------

The Company's short-term borrowings primarily represent securities
sold under agreements to repurchase on an overnight basis involving
retail customers.  From time to time, the Company may also access
wholesale repurchase sources for seven to 90 day periods for short-
term liquidity management purposes.  Retail repurchase agreements
increased $8.0 million to $88.0 million during the first three
months of 1997.

Long-Term Debt
--------------

At March 31, 1997 Capital Factors had outstanding three series of
Variable Rate Asset Backed Certificates aggregating $175.0 million. 
Such certificates bear interest at LIBOR plus 1.25% (6.69% at March
31, 1997, excluding annualized transaction costs of 0.37%) before
transaction costs and are scheduled to mature in December 1999
($100.0 million), June 2000 ($25.0 million) and January 2001 ($50.0
million).

Capital Factors has also established a $40 million revolving credit
facility with an unaffiliated lender.  Borrowings under this
facility bear interest at LIBOR plus 2.15% (7.59% at March 31,
1997) and mature in March 1999.  During 1997 borrowings under this
credit facility increased $9.2 million to $25.1 million at March
31, 1997.  Also, Capital Factors has privately placed a $10 million
subordinated note with an unaffiliated lender.  The note bears
interest at a fixed rate of 7.95% and matures in July 2001.

On April 30, 1997, the trust formed by Capital Factors, Inc. in
connection with the securitization of its factored advances issued
a fourth series of variable rate asset-backed securities (the
"Variable Funding Certificates").  The Variable Funding
Certificates include the issuance of $96.25 million of senior
certificates, which bear interest at LIBOR plus 0.75%, and $4.75
million of senior subordinated certificates, which bear interest at
LIBOR plus 1.50%.  Unlike the previously issued series of asset
backed certificates that were fixed as to principal amount, the
Variable Funding Certificates provide for a monthly settlement of
principal, which may increase or decrease the outstanding amount. 
Approximately $37.8 million of the Variable Funding Certificates
were funded at closing.  Additional borrowings of up to the full
$100.0 million may be made to the extent that Capital Factors, Inc.
generates additional eligible advances.  The Variable Funding
Certificates mature in April 2002.


                           Page 9
------------------------------------------------------------------
<PAGE>

CAPITAL RESOURCES
-----------------

Stockholders' equity increased $3.6 million during the first three
months of 1997 primarily as a result of net income of $5.2 million
and was offset by an increase in the unrealized loss on securities
available for sale of $1.3 million (net of tax) and dividends
declared of $600,000.

The Florida Department of Banking and Finance (the "FDBF"), the
Federal Deposit Insurance Corporation (the "FDIC") and the Board of
Governors of the Federal Reserve System (the "Federal Reserve") use
guidelines in assessing the adequacy of capital of financial
institutions under their supervision.  These guidelines, which
include required minimum leverage, tier one risk-based and total
risk-based capital ratios, are considered in regulators'
examinations and are reviewed periodically for potential
adjustments based upon changes in the economy, financial markets
and banking practices.  Regulators can take a variety of actions if
capital guidelines are not met.  Bancorp is supervised by the
Federal Reserve.  The Bank is supervised by the FDIC and the FDBF.

At March 31, 1997 and December 31, 1996, the regulatory capital
ratios of the Company and the Bank were as follows:
                                                                  
                                                        Minimum
                     Company            Bank         Requirement of
               -----------------  -----------------  --------------
               3/31/97  12/31/96  3/31/97  12/31/96
               -------  --------  -------  --------
Leverage ratio   8.65%     8.38%    8.27%     8.03%        3%*

Tier One ratio  10.66%    10.84%   10.17%    10.37%        4%

Total ratio     11.58%    11.75%   11.09%    11.28%        8%

--------------------
  *Banking regulators expect institutions to maintain an excess of
   1 to 2% above the minimum.

In the opinion of management, these ratios are sufficient to
protect depositors and facilitate future growth.  The Company's
management continuously reviews capital adequacy.  The various
alternatives for generating equity from internal and external
sources are constantly under review to ascertain the most effective
approach for the Company.  The Company has traditionally provided
most of its capital through retained earnings.  For the first three
months of 1997 and 1996, the Company's annualized internal capital
generation ratio was 13.61% and 13.37%, respectively.

Bancorp currently pays stockholder dividends of 8.33 cents per
share per quarter.  This dividend policy is dependent upon the
ability of the Bank and its subsidiaries to continue the payment of
dividends to Bancorp.  Unforeseen changes in the financial
condition of the Bank and its subsidiaries, or actions by
regulatory authorities, could result in changes in the dividend
policy.   


LIQUIDITY AND ASSET/LIABILITY MANAGEMENT
----------------------------------------

Liquidity
---------

Liquidity represents the Company's ability to meet customers'
borrowing needs, take advantage of investment opportunities, fund
deposit withdrawals and maintain reserve requirements.  On the
asset side, the primary sources of liquidity are cash and due from
banks, interest bearing deposits with banks, Federal funds sold and
other short-term investments, scheduled maturities and paydowns of
securities  held to maturity, securities available for sale and
scheduled repayments on outstanding loans and receivables.  The
liquidity available from any of the foregoing sources is reduced to
the extent they are pledged against any liabilities or otherwise
restricted.  On the liability side, the principal source of
liquidity is growth in deposits and other borrowings.  These
primary sources of liquidity are supplemented by cash flows from
the Company's operating activities.

Cash and cash equivalents totaled $115.8 million and $181.3 million
at March 31, 1997 and  December 31, 1996, respectively.  During the
first three months of 1997, the Company used $59.6 million and
$15.3 million in investing and financing activities, respectively,
while generating $9.4 million from operating activities.

                           Page 10
------------------------------------------------------------------


<PAGE>

During the first three months of 1997, net new advances by Capital
Factors amounted to $33.2 million, and net new loans amounted to
$25.2 million.  The Company also used cash and cash equivalents to
fund net deposit outflows of $32.2 million.  The Company provided
cash and cash equivalents from its financing activities by
borrowing an additional $9.2 million under Capital Factors'
revolving credit facility and purchasing $8.0 million of Federal
funds and securities sold under agreements to repurchase.  Although
the decrease in deposits used $32.2 million in cash flows, deposits
are expected to remain a primary source of liquidity.

The liquidity position is monitored daily by management to maintain
a level of liquidity conducive to efficient operations and is
continuously evaluated as part of the asset/liability management
process (as discussed further below in "Asset/Liability Management
and Interest Rate Risk") to maintain liquidity levels conducive to
efficient operations.  Considerations in managing the Company's
liquidity position include scheduled cash flows from existing 
assets and liabilities, as well as projected liquidity needs
arising from commitments to lend.

In the normal course of business, the Company utilizes various
financial instruments with off-balance sheet risk to meet the
financing needs of its customers.  These off-balance sheet
activities include commitments to extend credit, commercial letters
of credit and standby letters of credit.  The liquidity, credit and
market risks associated with these financial instruments are
generally managed in conjunction with the Company's balance sheet
activities and are subject to normal credit policies, financial
controls and risk limiting and monitoring procedures.  At March 31,
1997, the Company had outstanding commitments to extend credit,
commercial letters of credit and standby letters of credit
amounting to $253.2 million, $94.2 million and $18.5 million,
respectively.  In the normal course of business, some of these
commitments may expire without being drawn upon.  The Company
expects to meet funding requirements resulting from these
commitments by using its traditional sources of liquidity.

Credit losses may be incurred when one of the parties fails to
perform in accordance with the terms of the contract.  The
Company's exposure to credit loss is represented by the contractual
amount of the commitments to extend credit, commercial letters of
credit and standby letters of credit, reduced by the value of any
associated collateral obtained.  This is the maximum potential loss
of principal in the event the commitment is drawn upon and the
counter-party defaults.  In addition, the measurement of the risks
associated with these financial instruments is meaningful only when
all related and offsetting transactions are considered.  

Liquidity is also important for Bancorp and the ability of Bancorp
to meet debt service requirements, pay dividends to stockholders
and satisfy other liquidity needs is primarily dependent on the
Bank's ability to continue the payment of dividends.  The ability
of the Bank to pay dividends is governed by Florida statutes.  At
periodic intervals, state or federal regulatory agencies routinely
examine Bancorp and the Bank as part of their legally prescribed
oversight of the banking industry and may further restrict the
payment of dividends or other activities by regulatory action.  At
March 31, 1997, the Bank was not subject to any restrictions on the
payment of dividends other than statutory.  

For the 12 months commencing March 31, 1997, Bancorp's estimated
debt service and stockholder dividend requirements total
approximately $2.9 million.  At March 31, 1997, Bancorp had
available cash balances of $8.6 million and management believes
liquidity at March 31, 1997 was satisfactory. 

Asset/Liability Management and Interest Rate Risk
-------------------------------------------------

The Company's exposure to interest rate changes is managed by a
review of the maturity and repricing characteristics of assets and
liabilities, as well as the composition of these items.  Attention
is directed primarily to assets and liabilities that mature or can
be repriced within a period of 30 to 365 days.  The Company matches
the maturities of a significant portion of its assets and
liabilities to minimize variability in net interest income within
a 12 to 18 month period.  This practice serves to minimize
liquidity risk and interest rate risks.  Prudent risks are taken,
however, by leaving certain assets and liabilities unmatched in an
effort to benefit from the interest rate sensitivity created. The
Company currently does not use off-balance sheet derivative
instruments to manage interest rate risk.

                           Page 11
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<PAGE>

Interest rates earned and paid on interest earning assets and
interest bearing liabilities are influenced both by factors outside
the control of management, such as current market interest rates
(e.g., prime, LIBOR) and factors controlled by management (e.g.,
rates paid on deposits).  Management can further influence net
interest income by adjusting the mix of assets and liabilities
between fixed and floating rate instruments, or adjusting the
duration of these items.  To an extent, management's ability to
control these factors is contingent upon customer demand or
acceptance of the products offered by the Company.  At March 31,
1997, the Company's cumulative one-year gap (the difference between
interest earning assets and interest bearing liabilities) was
negative $69.4 million, or approximately 5% of total earning
assets.  Management does not believe the Company's operating
results will be significantly impacted by changes in interest rates
over the next year.  

Maintenance of satisfactory funding levels allows the Company to
position itself so that the risks of interest rate fluctuations are
decreased.  This, together with a high percentage of variable rate
assets, provides a more consistent margin between interest earning
assets and interest bearing liabilities.  For the first three
months of 1997, the average yield on interest earning assets was
9.24%.  For the first three months of 1997, the average rate paid
on interest bearing deposit liabilities was 4.32%, while the
average rate paid for other interest bearing liabilities was 6.50%. 
To the extent that non-deposit liabilities grow faster than
deposits, the Company's overall cost of funds will likely rise,
contributing to a decrease in net interest income.  At this time,
management does not believe these factors will have a significant
adverse impact on net interest income.  

The following table provides a summary analysis of maturity and
repricing characteristics of the Company's interest earning assets
and interest bearing liabilities at March 31, 1997.  For purposes
of this analysis, regular passbook savings and NOW and money market
accounts are included as repricing in 90 days or less.  The
difference between the maturities and repricing intervals
applicable to interest earning assets and interest bearing
liabilities is commonly referred to as the "gap."

            INTEREST RATE SENSITIVITY BY MATURITY
                      OR REPRICING DATES
                   (In Millions of Dollars)

                       90 days  91-180   181-365   Over
                       or less   days     days   one year   Total
                       -------  ------   ------  --------  ------
Interest earning assets:
Securities              $ 25.2  $ 12.2   $ 8.3   $ 171.2   $ 216.9 
Loans(1)                 450.0    67.2    50.3     280.3     847.8
Other earning assets(2)  314.4      --      --        .2     314.6
                        ------  ------  ------   -------   -------
Total interest 
  earning assets         789.6    79.4    58.6     451.7   1,379.3
                        ------  ------  ------   -------   -------
Interest bearing 
  liabilities:
Interest bearing
   deposits              494.2    97.4   116.0      68.9     776.5
Short-term borrowings     88.0      --      --        --      88.0
Long-term debt           201.4      --      --      10.0     211.4
                        ------  ------  ------   -------   -------
Total interest
  bearing liabilities    783.6    97.4   116.0      78.9   1,075.9
                        ------  ------  ------   -------   -------

Gap                        6.0   (18.0)  (57.4)    372.8   $ 303.4
                        ------  ------  ------   -------   =======
Cumulative Gap          $  6.0  $(12.0) $(69.4)  $ 303.4        
                        ======  ======  ======   =======

-------------------------
(1) Excludes non-accrual loans of $7.0 million.
(2) Excludes non-accrual advances of $1.3 million.

                           Page 12
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<PAGE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1997 AND 1996
------------------------------------------------------------------

General
-------

The Company recorded net income of $5.2 million for the three
months ended March 31, 1997, compared to $4.4 million for the three
months ended March 31, 1996.  The increase was primarily a result
of an improved net interest margin and higher factoring revenue
offset by higher provisions for credit losses and higher salaries
and employee benefits.  Both primary and fully diluted earnings per
share were $.64 for the three months ended March 31, 1997 compared
to $.54, for the same period in 1996.  For the three months ended
March 31, 1997, the Company's annualized returns on average assets
was 1.20% compared to 1.15% for the same period in 1996.  The
annualized return on average stockholders' equity was 15.26% in
1997 compared to 15.34% in 1996.   

Lines of Business
--------------------

Set forth below is a summary of operating results for the Company's
domestic and international banking activities, as well as its
factoring activities.  Revenues and expenses relating to factoring
activities are generally segregated and are easily identifiable. 
Non-interest revenues and expenses associated with banking
activities include allocations of certain items based on
management's assumptions, some of which are subjective in nature. 
Furthermore, interest income and expense of banking activities
reflect funds transfer pricing which, while based on the Bank's
actual external costs, may not reflect actual results which may be
achieved on a stand-alone basis.

                 BUSINESS SEGMENT DATA
                (In Thousands of Dollars)

                                            Three Months Ended
                                                March 31,
                                       -------------------------
                                         1997            1996
                                       --------        --------
Net interest income and
 non-interest income:
  Domestic banking activities         $  17,867     $  16,288
  Foreign banking activities              2,535         2,513
                                     ----------    ----------
   Total banking activities              20,402        18,801

  Factoring activities                   12,214         9,571
  Inter company                             (73)(1)       (16)(1)
                                     ----------    ----------
      Total                          $   32,543        28,356
                                     ==========    ==========

Income before income taxes:
  Domestic banking activities        $    4,968    $    5,684
  Foreign banking activities              1,643            22
                                     ----------    ----------
      Total banking activities            6,611         5,706

  Factoring activities                    3,800         3,129
  Minority interest in factoring
    activities, net of applicable taxes    (434)           --
  Corporate and other                    (1,426)(2)    (1,754)(2)
                                     ----------    ----------
      Total                          $    8,551    $    7,081
                                     ==========    ==========

-------------------------
(1)  Inter company operating results primarily reflect service
     charges on Capital Factors' accounts at the Bank.

(2)  Corporate and other includes costs associated with various
     activities and functions, including the operations of Bancorp
     (parent only), certain senior management of the Bank and other
     administrative costs. 

                           Page 13
------------------------------------------------------------------
<PAGE>


Net interest income derived from domestic banking activities
amounted to $13.1 million and $12.2 million for the three months
ended March 31, 1997 and 1996, respectively, primarily reflecting
higher levels of average interest earning assets.  Non-interest
income from domestic banking activities amounted to $4.7 million
and $4.1 million in 1997 and 1996, respectively.  The increase in
non-interest income in 1997 compared to 1996 was primarily due to
an increase in service charges on deposits.  Operating results from
domestic activities was also affected by higher provisions for
domestic loan losses.  Based on management's assessment of the
allowance for loan losses and the domestic loan portfolio, the
provision for domestic loan losses increased $2.3 million, from a
credit of $600,000 for the three months ended March 31, 1996 to a
provision of $1.7 million for the comparable period of 1997.  See
"ASSET QUALITY REVIEW" and "Allowance for Loan Losses" below for
additional discussion.
  
The Company does not operate any foreign offices.  Foreign banking
operations principally arise from the Company's trade finance
lending to, and issuance of letters of credit on behalf of, banks
and financial institutions located in Central and South America. 
Net interest income from foreign banking activities totaled $1.5
million and $1.4 million in 1997 and 1996, respectively.  Net
interest income increased in 1997 compared to 1996 primarily as a
result of higher levels of average earning foreign loans and higher
average rates earned on those loans.  Non-interest income from
foreign banking activities primarily represents letter of credit
fees and amounted to $1.0 million and $1.2 million in 1997 and
1996, respectively.  Operating results from foreign banking
activities increased primarily as a result of lower provisions for
foreign loan losses.  The provision for foreign loan losses
decreased $1.1 million, from $1.2 million for the three months
ended March 31, 1996 to a credit of $196,000 for the comparable
period of 1997.  The 1996 provision reflects approximately $1.1
million for certain exposures in connection with several loans to
a Panamanian bank for which the Panamanian government suspended
operations during the first quarter. 

The Company's factoring activities continued to grow in 1997, due
primarily to the increase in new clients.  Non-interest income,
which primarily represents factoring commissions, amounted to $8.1
million and $6.6 million in 1997 and 1996, respectively, reflecting
increased accounts receivable purchased from $564.0 million in 1996
to $730.2 million in 1997.  Net interest income derived from
factoring activities amounted to $4.1 million and $3.0 million in
1997 and 1996, respectively.  Growth in average interest earning
assets, primarily in advances, due to business development gave
rise to this increase.  The increases in net interest income and
non-interest income were offset by increases in non-interest
expenses and provisions for doubtful accounts.   The increase in
non-interest expenses was primarily the result of the expansion of
factoring activities.


Net Interest Income
-------------------
Net interest income is the difference between interest and fees
earned on loans and investments and interest paid on deposits and
other sources of funds.  Net interest income totaled $18.7 million
and $16.6 million for the three months ended March 31, 1997 and
1996, respectively.  Loan fees included in net interest income
amounted to $556,000 and $451,000 in 1997 and 1996, respectively. 
Net interest income on a fully tax-equivalent basis, including loan
fees, totaled $18.9 million in 1997 compared to $16.9 million in
1996.

The following table sets forth information on yields earned and
rates paid by the Company for the three month periods ended March
31, 1997 and 1996, and should be read in conjunction with the net
interest income analysis directly following such table.  Yield and
interest on tax-exempt loans and securities have been adjusted to
reflect tax-equivalent basis using the Federal tax rate of 35%. 
Loans and accounts receivable-advances on non-accrual status have
been included in average balances for purposes of computing average
yield or rate.  Yields on securities available for sale have been
computed based on amortized cost.


                           Page 14
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<PAGE>


<PAGE>
<TABLE>

                                               YIELDS EARNED AND RATES PAID
                                             (All Dollar Amounts in Thousands)
<CAPTION>
                                              FOR THE THREE MONTHS ENDED MARCH 31
                                      --------------------------------------------------------------------------
                                                 1997                                         1996
                                      -----------------------------              -------------------------------
                                                            Average                                      Average
                                       Average               Yield                 Average                Yield
                                       Balance    Interest  Or Rate                Balance    Interest   Or Rate
                                      ----------  --------  -------              -----------  --------  -------- 
<S>                                   <C>         <C>       <C>                   <C>         <C>       <C>
ASSETS
Interest earning assets:
  Loans, net of unearned income:
   U.S. Borrowers                     $  678,639  $  16,522   9.87%               $  575,633  $ 14,105     9.86%
   Foreign Borrowers                     151,050      2,730   7.33                   133,234     2,398     7.24
   Tax-exempt                             11,802        465  16.00                    17,305       697    16.20
                                      ----------  ---------  -----                ----------  --------    -----
     Total loans                         841,491     19,717   9.50                   726,172    17,200     9.53

  Accounts receivable 
   advances - factoring
   subsidiary                            277,196      7,859  11.50                   204,615     6,032    11.86

         Securities:

  Securities held to maturity:
   Taxable                                26,994        497   7.47                    20,799       411     7.95
   Tax-exempt                              2,208         59  10.90                     3,092        83    10.75
  Securities available for sale:
   Taxable                               190,537      2,959   6.30                   211,318     3,163     6.02
  Federal funds sold 
   and other interest earning
   assets                                 59,470        771   5.26                    71,379       976     5.50
                                      ----------  ---------  -----                ----------  --------    -----

    Total interest earning 
     assets                            1,397,896     31,862   9.24                 1,237,375    27,865     9.06
                                                  ---------                                   --------

Less allowance for loan losses
 and doubtful accounts                   (12,764)                                    (14,623)
Cash and due from banks                  100,566                                      88,208
Due from customers on 
  acceptances                             22,835                                      28,565
Other real estate                          3,606                                       6,792
Other assets                             242,048                                     189,176
                                      ----------                                  ----------
    Total                             $1,754,187                                  $1,535,493
                                      ==========                                  ==========
</TABLE>

                           Page 15
------------------------------------------------------------------<PAGE>
<TABLE>

                                   YIELDS EARNED AND RATES PAID
                                  (All Dollar Amounts in Thousands)
<CAPTION>
                                 FOR THE THREE MONTHS ENDED MARCH 31
                           --------------------------------------------------------------------------
                                                    1997                                       1996
                                      -----------------------------              -------------------------------
                                                            Average                                      Average
                                       Average               Yield                 Average                Yield
                                       Balance    Interest  Or Rate                Balance    Interest   Or Rate
                                      ----------  --------  -------              ----------  ---------  -------- 
  
<S>                                   <C>         <C>        <C>                  <C>         <C>         <C> 
LIABILITIES, MINORITY INTEREST AND
  STOCKHOLDERS' EQUITY
Interest bearing liabilities:
 Deposits:
  Savings and Money Market            $  295,289  $   1,775   2.44%               $  279,467  $  1,711     2.46%
  Time                                   483,183      6,509   5.46                   409,419     5,619     5.52
                                      ----------  ---------  -----                ----------  --------    ----- 
         Total interest bearing 
     deposits                            778,472      8,284   4.32                   688,886     7,330     4.28

Short-term borrowings                     88,940        976   4.45                    79,931       898     4.52

Long-term borrowings                     203,461      3,696   7.37                   176,650     3,139     7.15
                                      ----------  ---------  -----                ----------  --------    -----
           Total interest bearing 
            liabilities                1,070,873     12,956   4.91                   945,467    11,367     4.84
                                      ----------  ---------  -----                ----------  --------    -----
Non-interest bearing 
  deposits                               303,721                                     305,495
Bank acceptances outstanding              22,835                                      28,565
Other liabilities                        207,067                                     140,531
Minority interest in
  consolidated subsidiary                 11,806                                          --
Stockholders' equity                     137,885                                     115,435
                                      ----------                                  ----------
    Total liabilities,
     minority interest and
     stockholders' equity             $1,754,187                                  $1,535,493
                                      ==========                                  ==========
    Net interest earnings/
     yield                                        $  18,906   5.48%                          $ 16,498     5.36%
                                                  =========  =====                           ========    =====

    Net interest spread                                       4.33%                                       4.22%
                                                             =====                                       =====
    Utilization rate                                         79.69%                                      80.59%
                                                             =====                                       =====

                           Page 16
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/TABLE
<PAGE>
<PAGE>

Net interest income in the first three months of 1997 increased
$2.1 million over the same period in 1996 and was comprised of an
increase of $3.7 million in interest income offset by an increase
of $1.6 million in interest expense.  The increase in net interest
income was due to an increase in average interest earning assets
(primarily loans and advances) to $1.4 billion in 1997 from $1.2
billion in 1996, and an increase in the net interest margin to
5.48% in 1997 from 5.36% in 1996.  Average interest bearing
liabilities increased to $1.1 billion in 1997 from $945.5 million
in 1996.  The increase in average interest bearing liabilities
occurred primarily in time deposits and long-term borrowings. 
Approximately 60% of the increase in interest expense was
attributable to interest expense on deposits and is primarily the
result of an increase in average time deposits partially offset by
lower average rates paid on such deposits.  Average time deposits
increased $73.8 million, or 18%, for the first three months of 1997
to $483.2 million and represented 62% of average interest bearing
deposits in 1997 compared to 59% in 1996.

See "Asset/Liability Management and Interest Rate Risk" above for
a discussion of factors that may affect net interest income.  

Provision for Loan Losses
-------------------------

For the first three months of 1997, the provision for loan losses
increased $925,000 to $1.5 million as compared to $600,000 during
the same period in 1996.  The increase reflects the increase in
non-accrual and other potential problem loans in the Bank's
domestic loan portfolio.  The assessment of the adequacy of the
provision involves a significant degree of estimation and is
subject to change.  See "ASSET QUALITY REVIEW" and "Allowance for
Loan Losses" below for additional discussion.

Provision for Doubtful Accounts - Capital Factors
-------------------------------------------------

For the first three months in 1997, the provision for doubtful
accounts amounted to $1.4 million compared to $1.1 million for the
same period in 1996.  For the three months ended March 31, 1997 and
1996, net charge offs as a percentage of accounts receivable
purchased was .14% and .25%, respectively.  For the same periods,
the percentage of provision for doubtful accounts to accounts
receivable purchased was .19% and .20%, respectively.  Based on
these relationships, and a review of the recorded allowance and
accounts receivable at each period end, management believes the
provisions and allowance to be adequate to absorb known and
inherent losses in the accounts receivable portfolio.  Because the
assessment of the adequacy of the allowance and provisions for
credit losses involves a significant degree of estimation and is
subject to change, future provisions for credit losses may be
greater or less than actual charge offs.  See "ASSET QUALITY REVIEW
-- Allowance for Doubtful Accounts - Capital Factors" below for
additional discussion.

Other Income
------------

Other income increased $2.0 million, or 17% for the three months
ended March 31, 1997 compared to the same period in 1996.  The
increase in other income consisted primarily of an increase of $1.5
million in factoring revenues.  The Company, through Capital
Factors, operates factoring offices in Fort Lauderdale, Florida,
Los Angeles, California, New York, New York, Charlotte, North
Carolina, and a limited service office in Atlanta, Georgia. 
Capital Factors is a specialized financial services company
principally engaged in providing receivables-based commercial
financing and related fee-based credit, collection and management
information services.  Capital Factors' clients are primarily small
to medium size companies in various industries, including textile,
apparel and furniture manufacturing and, recently, entities
involved in the health care and temporary employment services
industries.

Accounts receivable purchased totaled $730.2 million and $564.0
million for the first three months of 1997 and 1996, respectively,
representing an increase of 29%.  Factoring commissions increased
24% for the same period and totaled $6.8 million or 49% of total
other income for the three months ended March 31, 1997 compared to
$5.5 million or 47% of total other income for the same period in
1996.  Although Capital Factors experienced increased commission
income as a result of increased factored accounts receivable,
commission income as a percentage of factored accounts receivable
declined from .98% in 1996 to .93% in 1997. This decline was
primarily the result of lower factoring fees charged to high volume
clients in the New York market and a lower fee structure, partly
because of high volume clients, in the Charlotte market.  Capital
Factors typically receives lower factoring fees from high volume
customers because, among other reasons, high volume clients do not
have the same servicing needs as smaller clients, requiring less
labor intensive services to be performed by Capital Factors, and
because there is increased competition for such client's business.

                           Page 17
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<PAGE>

Other Expenses
--------------

Other expenses increased $1.1 million, or 5%, consisting primarily
of an increase of $1.5 million in salaries and employee benefits
offset by a decrease of $498,000 in net occupancy expense.  

Salaries and employee benefits totaled $11.6 million in 1997
compared to $10.0 million in 1996.  Approximately $1.2 million of
the $1.5 million increase was at Capital Factors due to expansion
of factoring activities.  

Net occupancy expense totaled $1.5 million in 1997 compared to $2.0
million in 1996.  The decrease primarily reflects a decrease in
rent expense resulting from the renegotiation of the operating
lease for the Company's main office.

Provision (Benefit) for Income Taxes
------------------------------------

The Company's effective tax rate varies with changes primarily in
the derivation of pre-tax income by state, in the proportion of
tax-exempt income and in corporate tax rates.  The provision for
income taxes for the three months ended March 31, 1997 aggregated
38% of pre-tax income, after considering effect of minority
interest in net income of consolidated subsidiary, unchanged from
38% for the same period in 1996.  

Impact of Inflation and Changing Prices
---------------------------------------

The impact of inflation on the Company is reflected primarily in
the increased costs of operations.  These increased costs are
generally passed on to customers in the form of increased service
fees.  Because the primary assets and liabilities of the Company
are monetary in nature, the impact of inflation on interest rates
has, and is expected to continue to have, an effect on net income.

In structuring fees, negotiating loan margins and developing
customer relationships, management concentrates its efforts on
maximizing earnings capacity while attempting to contain increases
in operating expenses.  In addition, management continually reviews
the feasibility of new and additional fee-generating services to
offset the effects of inflation and changing prices with an
objective of increased earnings.






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ASSET QUALITY REVIEW
--------------------

The following table summarizes the Company's non-accrual loans and
advances, past due loans, other potential problem loans and
restructured loans and assets as of the dates indicated (in
thousands of dollars):

                           March 31,                   December 31,
                             1997                         1996
                          ---------                  ------------
Non-accrual 
 loans:
   Domestic                $  6,865                     $  5,301
   Foreign                       96                           96 

90 days past due 
 or more:
   Domestic                     233                          264
   Foreign                       --                           --
                           --------                     --------
     
     Sub total                7,194                        5,661

Non-accrual advances          1,287                          660
                           --------                     --------
     Total                 $  8,481                     $  6,321
                           ========                     ========

Other potential 
  problem loans            $  8,336                     $  5,532
                           ========                     ========

Restructured
 loans (1)                 $  8,271                     $  8,293
                           ========                     ========

Restructured 
 assets (2)                $  3,595                     $  3,593
                           ========                     ========

-------------------------

(1)  Represents troubled debt restructurings as defined by
     Statement of Financial Accounting Standards No. 15.  These
     loans were in compliance with terms at March 31, 1997.

(2)  Represents securities available for sale (at market value)
     received in connection with restructured foreign loans.  These
     bonds were in compliance with terms at March 31, 1997.  

Domestic non-accrual loans aggregated $6.9 million at March 31,
1997, compared to $5.3 million at year end 1996.  Domestic non-
accrual loans aggregated 1.0% and .9% of total domestic loans at
March 31, 1997 and December 31, 1996, respectively.  The increase
in domestic non-accrual loans resulted primarily from the transfer
of several commercial loans, which totaled $1.5 million, from
accrual status to non-accrual status. 

Foreign non-accrual loans aggregated $96,000 at March 31, 1997 and
December 31, 1996 and represented .1% of total foreign loans at
both dates.  See "Allowance for Loan Losses" below for additional
discussion.  

Impaired loans aggregated $5.9 million and $4.9 million at March
31, 1997 and December 31, 1996, respectively.  All impaired loans
at March 31, 1997 and December 31, 1996 were on non-accrual status. 
See "Allowance for Loan Losses" below for additional discussion.  

Advances made by Capital Factors are placed on non-accrual status
when the loan balance, including interest, is considered impaired
and exceeds the estimated value of the underlying receivables or
collateral.  Non-accrual advances amounted to $1,287,000 at March
31, 1997, compared to $660,000 at December 31, 1996.  The increase
in non-accrual advances is primarily the result of the transfer of
one advance to non-accrual status offset by the payoff of one
advance previously on non-accrual status.  See "RESULTS OF
OPERATIONS -- Provision for Doubtful Accounts - Capital Factors"
above and "Allowance for Doubtful Accounts - Capital Factors" below
for additional information.    

                           Page 19
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<PAGE>

Other potential problem loans are loans that management has
identified where known information about possible credit problems
causes management to have doubts as to the ability of borrowers to
comply with present loan repayment terms.  All such loans at March
31, 1997 and December 31, 1996 were with domestic borrowers.  Other
potential problem loans at March 31, 1997 totaled $8.3 million, and
primarily consisted of two real estate loans aggregating $6.9
million and several commercial loans aggregating $1.3 million.  At
December 31, 1996 other potential problem loans totaled $5.5
million, and primarily consisted of one real estate loan of $2.7
million and several commercial loans totaling $2.4 million.  During
1997 management identified one new real estate loan totaling $4.1
million as a potential problem loan and transferred two commercial
loans totaling $1.2 million that were identified as potential
problem loans at December 31, 1996 to non-accrual status.  See
"RESULTS OF OPERATIONS -- Provision for Loan Losses" above for
additional discussion.

Allowance for Loan Losses
-------------------------

The allowance for loan losses is maintained at a level deemed
adequate by management to absorb potential loan losses in the
portfolio after evaluating the loan portfolio, the financial
condition of borrowers, current economic conditions, changes in the
nature and volume of the portfolio, past loan loss experience and
other pertinent factors.  Many of these factors involve a
significant degree of estimation and are subject to rapid changes
which could be unforeseen by management.  As a consequence, the
possibility exists that management's evaluation of the adequacy of
the allowance could change, and such change could be material, as
additional information becomes known.  While the Company considers
the allowance for loan losses to be adequate at March 31, 1997,
management is unable to predict the amount, if any, of future
provisions to the allowance.  

The following table summarizes the activity in the allowance for
loan losses for the periods indicated (dollar amounts in
thousands):
                                           Three Months Ended
                                                March 31,
                                      ---------------------------
                                        1997               1996
                                      --------           --------
Allowance for loan
 losses at January 1                  $  9,333           $ 11,789

Loans charged off:
  Commercial and financial                (372)              (104)
  Foreign                                   --                 -- 
  Real estate - mortgage                   (33)                --
  Consumer                                (933)              (825)
                                      --------           --------
   Total loans charged off              (1,338)              (929)
                                      --------           --------
Recoveries on loans
 previously charged off:
  Commercial and financial                 37                 76
  Foreign                                  --                 --
  Real estate - mortgage                    5                 10
  Consumer                                156                 86
                                     --------           --------
    Total recoveries                      198                172
                                     --------           --------
    Net loans charged off              (1,140)              (757)
                                     --------           --------
Additions to allowance 
 charged to operating expense           1,525                600
                                     --------           --------
Allowance for loan 
 losses at March 31                  $  9,718           $ 11,632
                                     ========           ========
Average amount of 
 loans outstanding for the year      $841,491           $726,172
                                     ========           ========
Ratio of net loans 
 charged off to average
 loans outstanding for 
 the period (1) (2)                       .55%               .42%
                                     ========           ========
---------------------

(1)  Before deduction of allowance for loan losses.

(2)  Annualized.
                           Page 20
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The allowance for loan losses totaled $9.7 million and $9.3 million
at March 31, 1997 and December 31, 1996, respectively, representing
1.1% of outstanding loans at March 31, 1997 and December 31, 1996. 
The ratio of the allowance for loan losses to non-accrual loans was
140% at March 31, 1997 compared to 173% at December 31, 1996.  The
ratio of the allowance to total non-performing loans (non-accrual
loans and loans past due 90 days or more) was 135% and 165% at
March 31, 1997 and December 31, 1996, respectively.  The decrease
in these ratios primarily reflects the increase in non-accrual
commercial loans.  While the above mentioned ratios have declined,
the Company considers the allowance for loan losses to be adequate
to absorb potential losses in the portfolio.  At March 31, 1997 the
total allowance included $8.0 million allocated for domestic loans,
$1.2 million allocated for foreign exposure and $518,000
unallocated.  At December 31, 1996, the domestic allocation was
$7.4 million, foreign was $1.3 million and $633,000 was
unallocated.  

The allowance allocated for domestic loans increased as a result of
management's evaluation of potential problem loans in the
commercial and real estate mortgage portfolio at March 31, 1997. 
Management does not believe the composition of domestic potential
problem loans represents material deteriorating trends, but are
isolated to specific borrowers.  

The allowance allocated for foreign loans decreased as a result of
management's evaluation of the portfolio.  Based on an assessment
of the information currently available, management believes the
allowance allocated for foreign loans at March 31, 1997 to be
adequate.  It is possible, however, that future deterioration in
the repayment capacity of foreign borrowers could result in
additional non-performing loans and additions to the allowance for
loan losses in amounts not determinable at this time.

During the first three months of 1997, domestic loan charge offs
generally increased compared to the same period in 1996 primarily
as a result of increases in commercial loan charge offs.  

Allowance for Doubtful Accounts - Capital Factors
-------------------------------------------------

The allowance for credit losses at Capital Factors is maintained at
a level deemed adequate by management to absorb losses in the
portfolio after evaluating the portfolio, current economic
conditions, changes in the nature and volume of the portfolio, past
loss experience and other pertinent factors.  Many of these factors
involve a significant degree of estimation and are subject to rapid
change which may be unforeseen by management.  Changes in these
factors could result in material adjustments to the allowance in
the near term.  

The following table summarizes the activity in the allowance for
doubtful accounts for the periods indicated (in thousands of
dollars).
                                        Three Months Ended
                                           March 31,  
                                   ----------------------------
                                      1997               1996
                                   ---------          ---------
Allowance for doubtful accounts
  at January 1                     $   2,994           $  2,981
Provision for credit losses            1,400              1,100
Charge offs                           (1,176)            (1,488)
Recoveries                               176                 91
                                   ---------           --------

Allowance for doubtful accounts
  at March 31                      $   3,394           $  2,684
                                   =========           ========

The adequacy of the provision for credit losses recorded by Capital
Factors is assessed by management based in part on the level of net
charge offs relative to accounts receivable purchased.  These
statistics are believed to be significant indicators of inherent
losses because the receivables portfolio turns over approximately
seven times each year.  Accounts receivable which are past due are
charged off when, in the opinion of management, collection from the
customer, client or collateral realization, if any, is unlikely. 
In making this determination, management considers the quality of
the collateral, the creditworthiness of the customer and client,
economic conditions and other factors which may be relevant.  This
statistical assessment is supplemented by a review of the recorded
allowance for credit losses at each month end relative to total
accounts receivable at month end, taking into consideration
specific potential problem accounts, accounts purchased with
recourse where payment has not been made by Capital Factors to its
client, and other factors which may be relevant.  See "RESULTS OF
OPERATIONS -- Provision for Doubtful Accounts - Capital Factors"
above for additional discussion.


                           Page 21
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<PAGE>
                   PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

NATHAN J. ESFORMES, STANLEY I. WORTON, M.D., AND LEONARD WIEN, AS
INDIVIDUAL SHAREHOLDERS AND ON BEHALF OF ALL OTHER SHAREHOLDERS OF
CAPITAL BANCORP V. ABEL HOLTZ, FANA HOLTZ, DANIEL M. HOLTZ, JAVIER
J. HOLTZ, CAPITAL BANK AND CAPITAL BANCORP, CIRCUIT COURT FOR THE
11TH JUDICIAL DISTRICT IN AND FOR DADE COUNTY, FLORIDA CASE NO. 95-
02515.


A motion to dismiss this derivative action was filed by Bancorp in
January 1997.  A hearing on such motion commenced on May 9, 1997
and is currently ongoing.

Other Litigation
----------------

In addition to the matter set forth above, various legal actions
and proceedings are pending or are threatened against Bancorp, the
Bank and Capital Factors, some of which seek relief or damages in
amounts that are substantial.  Unlike the aforementioned matters,
however, these actions or proceedings arose in the ordinary course
of business.  Due to the complex nature of some of these matters,
it may be a number of years before they are ultimately resolved. 
After consultation with legal counsel, management believes the
aggregate liability, if any, to Bancorp, the Bank and/or Capital
Factors resulting from such pending or threatened actions and
proceedings will not have a material adverse effect on the
Company's consolidated financial condition, results of operations
or liquidity.  

Regulatory Matter
-----------------

The administrative hearing regarding the application by Daniel
Holtz, Chairman of the Board, Chief Executive Officer and President
of Bancorp, Fana Holtz, the Vice-Chairman of the Board, and Javier
Holtz, an executive officer of Bancorp, to acquire and/or maintain
a controlling interest in the Bank through their ownership and
control of Bancorp, commenced in August 1996 and ended in early
November.  An order has not yet been entered on the application but
is anticipated in the second or third quarter of 1997.  



                           Page 22
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Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

(a)
       Exhibit 10.1 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Charles Boyce.*

       Exhibit 10.2 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Daniel M. Holtz.*

       Exhibit 10.3 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       David Konfino.*

       Exhibit 10.4 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Javier J. Holtz.*

       Exhibit 10.5 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Thomas J. Flood.*

       Exhibit 10.6 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Lucious T. Harris.*

       Exhibit 10.7 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Bank and
       Timothy E. Kish.*

       Exhibit 10.8 -    Second Amendment to Employment Agreement
       dated as of January 1, 1996 by and between Capital Factors
       Holding, Inc., Capital Factors, Inc. and John W. Kiefer.*

       Exhibit 10.9 -    Form of Indemnification Agreement between
       Capital Bancorp or Capital Bank, and each of its directors
       and executive officers.

       Exhibit 10.10 -  Second Amendment to Lease Agreement.

       Exhibit 11   -    Calculation of Earnings Per Share 

       Exhibit 27   -    Financial Data Schedule - This exhibit is
       incorporated by reference to Exhibit 27 set forth in the
       March 31, 1997 Form 10-Q electronically filed on May 15,
       1997.

-------------------------

       *Exhibits 10.1 to 10.8 are management contracts or
        compensatory plans or arrangements.


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


                           Page 23
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                         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.






Date:   May 15, 1996                   By: /s/ Lucious T. Harris
                                       -------------------------
                                       LUCIOUS T. HARRIS
                                       Senior Vice President and
                                       Treasurer
                                       (Principal Financial and
                                        Accounting Officer)















                           Page 24
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