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

                                   Form 10-QSB

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

         For the quarterly period ended March 31, 1998
                                       or

(   )    TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from               to

                           Commission File No.0-22391

                                COMSTOCK BANCORP
             (Exact Name of Registrant as Specified in its Charter)

            Nevada                                         86-0856406
  (State or Other Jurisdiction                 (IRS Employer Identification No.)
of incorporation or organization)

                       6275 Neil Road, Reno, Nevada 89511
               (Address of Principal Executive Offices)(Zip Code)

       Registrant's Telephone Number, Including Area Code: (702) 824-7100

                                       NA
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

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

As of April 10, 1998:  Common Stock - Authorized  15,000,000 shares at $0.01 par
value; issued and outstanding - 4,451,668
--------------------------------------------------------------------------------
<PAGE>
                                TABLE OF CONTENTS

Item
Number                                                                      Page
                                                  PART I - FINANCIAL INFORMATION

1.   Financial Statements

     Consolidated Statements of Condition
       March 31, 1998 and December 31, 1997. ................................  4

     Consolidated Statements of Income
       Three months ended March 31, 1998 and 1997............................  5

     Consolidated Statements of Changes in Stockholders' Equity
       For the periods ended March 31, 1997, December 31, 1997,
       and March 31, 1998....................................................  6

     Consolidated Statements of Cash Flows
       Three months ended March 31, 1998 and 1997............................  7

     Notes to Consolidated Financial Statements..............................  8

2.   Management's Discussion and Analysis of Financial Condition and Results
     of Operations .......................................................... 11


                           PART II - OTHER INFORMATION

1.   Legal Proceedings ...................................................... 21

2.   Changes in Securities .................................................. 21

3.   Defaults Upon Senior Securities ........................................ 21

4.   Submission of Matters to a Vote of Securities' Holders.................. 21

5.   Other Information ...................................................... 21

6.   Exhibits and Reports on Form 8-K........................................ 21

Signatures .................................................................. 22
<PAGE>
Part I.           Financial Information

Item I.           Financial Statements
<PAGE>

                                COMSTOCK BANCORP
                      CONSOLIDATED STATEMENTS OF CONDITION
                   As of March 31, 1998 and December 31, 1997
                             (Dollars in Thousands)
                                                    (Unaudited)      (Audited)
                                                  March 31, 1998   Dec. 31, 1997
Assets:
Cash and Due from Banks (Non-Interest Bearing)          $13,428          $9,464
Fed Funds and Overnight Mutual Funds Sold                11,044           9,853
Interest-bearing Deposits in Domestic
  Financial Institutions                                  1,489           1,492
Trading Account Securities                                   11              12
Securities Available for Sale                            15,213          14,218
Securities Held to Maturity                              10,068          10,636
December 31, 1997)
Federal Home Loan Bank Stock                                795             788

Loans Held for Sale                                      19,574          13,946
Loans (Net of Deferred Fees)                            126,253         122,235
  Less:  Allowance for Credit Losses                      1,125           1,076
                                                        -------         ------- 
    Net Loans                                           144,702         135,105
                                                        -------         -------

Premises and Equipment                                    7,630           7,710
Other Real Estate Owned                                       8               8
Accrued Interest Receivable                               1,034             989
Other Assets                                              4,438           4,423
                                                          -----           -----
    TOTAL ASSETS                                       $209,860        $194,698
                                                       ========        ========

Liabilities and Stockholders' Equity:
Deposits:
  Demand Deposits (Non-Interest Bearing)                $36,235         $32,299
  Savings, Money Market and NOW Accounts                 69,407          60,917
  Time Deposits Under $100,000                           51,525          50,944
  Time Deposits $100,000 and Over                        29,307          27,642
                                                         ------          ------
    Total Deposits                                      186,474         171,802
                                                        -------         -------

Line of Credit Payable                                    6,000           6,000
Accrued Interest Payable                                    302             321
Accounts Payable and Accrued Expenses                       536             876
Income Taxes Payable                                        245             102
                                                            ---             ---
    TOTAL LIABILITIES                                   193,557         179,101
                                                        -------         -------

Stockholders' Equity:
Common Stock-$0.01 par value, 15,000,000 shares authorized;
  4,451,668 and 4,421,668 shares issued and outstanding on
  March 31, 1998 and December 31, 1997 (1)                   45              44
Paid-in Surplus (1)                                       9,016           8,908
Accumulated Other Comprehensive Income:
 'Unrealized Gain (Loss) on Securities Available for Sale,
  Net of Applicable Deferred Income Taxes                    13              17
Retained Earnings                                         7,229           6,628
                                                          -----           -----
    TOTAL STOCKHOLDERS' EQUITY                           16,303          15,597
                                                         ------          ------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $209,860        $194,698
                                                       ========        ========

         (1) Adjusted for two for one share  exchange and for change in par from
         $.50 to $.01 on June 16,  1997.  [See  accompanying  notes to financial
         statements.]
<PAGE>
                                COMSTOCK BANCORP
                        CONSOLIDATED STATEMENTS OF INCOME
               For the Three Months Ended March 31, 1998 and 1997
                 (Dollars in Thousands except per share amounts)
                                                  (Unaudited)      (Unaudited)
                                                 March 31, 1998   March 31, 1997
Interest Income:
  Interest and Fees on Loans                            $4,142           $2,851
  Interest on Investments and Trading Securities:
    Taxable                                                290              230
    Exempt from Federal Income Tax                          83               54
  Interest on Fed Funds Sold                               125              146
  Interest on Deposits with Banks                           24               25
                                                            --               --
    Total Interest Income                                4,664            3,306
                                                         -----            -----
Interest Expense:
  Interest on Deposits                                   1,645            1,210
  Interest on Line of Credit                                92                0
                                                            --                -
    Total Interest Expense                               1,737            1,210
                                                         -----            -----
Net Interest Income                                      2,927            2,096
Provision for Credit Losses                                110               60
                                                           ---               --
  Net Interest Income after Credit Loss Provision        2,817            2,036
                                                         -----            -----

Non-Interest Income:
  Service Charges on Deposit Accounts                       76               67
  Gain/(Loss) on Sale of Investment Securities              (8)              (3)
  Gain/(Loss) on Sale of Trading Securities                  1                1
  Other Income                                              56               15
                                                            --               --
    Total Non-Interest Income                              124               80
                                                           ---               --
Non-Interest Expense:
  Salaries and Employee Benefits                         1,278            1,063
  Occupancy Expense                                        222              151
  Furniture and Equipment Expense                          177              120
  Other Operating Expenses                                 469              427
                                                           ---              ---
    Total Non-Interest Expense                           2,146            1,761
                                                         -----            -----

Income before Taxes                                        795              356
Provision for Income Taxes                                 194               91
                                                           ---               --
  NET INCOME                                              $601             $265
                                                          ====             ====
  Basic Earnings per Share (1)                           $0.14            $0.06
                                                         =====            =====
  Diluted Earnings per Share (1)                         $0.12            $0.06
                                                         =====            =====

Other Comprehensive Income, Net of Tax:
  Unrealized Gains/(Losses) on Securities:
  Unrealized Holding Gains/(Losses) 
    Arising During Period                                  ($5)            ($37)
  Less: Reclassification for 
    Gains/(Losses) Included in Income                        1                2
                                                             -                -
Other Comprehensive Income                                 ($4)            ($35)

  Comprehensive Income                                    $597             $230
                                                          ====             ====
  Other Comprehensive Income Basic 
    Earnings per Share (1).                              $0.13            $0.05
                                                         =====            =====
  Other Comprehensive Income Diluted
    Earnings per Share (1).                              $0.12            $0.05
                                                         =====            =====

          (1) Adjusted for two for one share exchange on June 16, 1997.
               [See accompanying notes to financial statements and
                  Exhibit A-Computation of earnings per share.]
<PAGE>
                                COMSTOCK BANCORP
                           CONSOLIDATED STATEMENTS OF
                       CHANGES IN STOCKHOLDERS' EQUITY For
                     Periods Ended March 31, 1997, December
                          31, 1997, and March 31, 1998
<TABLE>
<S>                                         <C>         <C>             <C>           <C>             <C>             <C>

                                                                  (Dollars in Thousands)
                                                                         (Unaudited)
                                                                                        Accumulated
                                                                         Retained          Other           Total
                                              Common       Paid-in       Earnings      Comprehensive   Stockholders'   Comprehensive
                                             Stock (1)   Surplus (1)     (Deficit)        Income          Equity          Income

Balances, December 31, 1996                     $42         $8,184        $4,792           ($9)          $13,009
  Net Income                                                                 265                             265           $265
  Sale of Common Stock                                          50                                            50
Other Comprehensive Income, Net of Tax
  Unrealized Gains/(Losses) on Securities,
    Net of Reclassification Adjustment                                                     (35)              (35)           (35)
                                            ----------------------------------------------------------------------------------------
              See Disclosure (a) Below
Balances, March 31, 1997                        $42         $8,234        $5,057          ($44)          $13,289           $230
  Net Income                                                               1,571                           1,571          1,571
  Sale of Common Stock                            2            674                                           676
Other Comprehensive Income, Net of Tax
  Unrealized Gains/(Losses) on Securities,
    Net of Reclassification Adjustment                                                      61                61             61
                                            ----------------------------------------------------------------------------------------
              See Disclosure (b) Below
Balances, December 31, 1997                     $44         $8,908        $6,628           $17           $15,597         $1,862
  Net Income                                                                 601                             601            601
  Sale of Common Stock                            1            108                                           109
Other Comprehensive Income, Net of Tax
  Unrealized Gains/(Losses) on Securities,
    Net of Reclassification Adjustment                                                      (4)               (4)            (4)
                                            ----------------------------------------------------------------------------------------
              See Disclosure (c) Below
Balances, March 31, 1998                        $45         $9,016        $7,229           $13           $16,303           $597
                                                ===         ======        ======           ===            =======          ====
</TABLE>
(1) Adjusted for two for one stock  exchange and change in par from $.50 to $.01
on June 16, 1997.


(a) Disclosure of reclassification amount:
  Unrealized holding gains arising during period                           ($37)
  Less: reclassification adjustment for gains included in net income          2
Net unrealized gains on securities                                         ($35)

(b) Disclosure of reclassification amount:
   Unrealized holding gains arising during period                           $54
   Less: reclassification adjustment for gains included in net income         7
Net unrealized gains on securities                                          $61

(c) Disclosure of reclassification amount:
   Unrealized holding gains arising during period                           ($5)
   Less: reclassification adjustment for gains included in net income         1
Net unrealized gains on securities                                          ($4)

[See accompanying notes to financial statements.]
<PAGE>
<TABLE>
<S>                                                              <C>               <C> 
                                COMSTOCK BANCORP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 1998 and 1997
                             (Dollars in Thousands)
                                                                   (Unaudited)       (Unaudited)
                                                                  March 31, 1998    March 31, 1997
Cash Flows from Operating Activities:
 Net Income                                                           $601               $265
 Adjustments to Reconcile Net Income to Net Cash
 Provided by Operating Activities:
  Provision for Credit Losses                                          110                 60
  Depreciation and Amortization                                        155                141
  Net (Gain) Loss on Sale of Available For Sale Securities              (8)                 3
  Net (Gain) Loss on Sales of Trading Securities                         1                 (1)
  Purchases of Trading Securities                                        0                  0
  Proceeds from Sales of Trading Securities                              0                  0
  Amortization of Servicing Asset                                        0                  0
  Increase/(Decrease) in Deferred Taxes Due to Change in
   Unrealized Gain or Loss on Securities Available for Sale             (1)                18
 Net (Increase) Decrease in:
   Accrued Interest Receivable                                         (45)                63
   Other Assets                                                        (15)               (57)
   Loans Held For Sale                                              (5,628)             2,433
 Net Increase (Decrease) in:
   Accrued Interest Payable                                            (19)               (21)
   Accounts Payable and Accrued Expenses                              (341)              (336)
   Income Taxes Payable                                                143                110
                                                                       ---                ---

 Net Cash Provided/(Used) by Operating Activities                  ($5,047)            $2,678

Cash Flows from Investing Activities:
 Net Change in Interest-Bearing Deposits in Domestic
  Financial Institutions                                                 3                (98)
 Proceeds from Sales of Available for Sale Securities                1,583                163
 Proceeds from Maturities of Available for Sale Securities           2,645              1,065
 Purchases of Available for Sale Securities                         (5,227)            (2,116)
 Proceeds from Maturities of Held to Maturity Securities               567                  0
 Purchases of Held to Maturity Securities                                0             (4,140)
 Net Change in Loans Held to Maturity                               (4,018)            (9,997)
 Purchases of Premises and Equipment, Net                             (125)              (649)
 Purchase of FHLB Stock                                                 (7)                 0
                                                                        ---                --
 Net Cash Provided/(Used) by Investing Activities                  ($4,579)          ($15,772)

Cash Flows from Financing Activities:
 Net Change in Demand, Savings, NOW
  and Money Market Accounts                                         12,426              1,821
 Net Change in Time Deposits                                         2,246              9,643
 Proceeds on Line of Credit Payable                                      0                  0
 Payments on Line of Credit Payable                                      0                  0
 Proceeds from Sale of Common Stock, Net                               109                 50
 Cash Dividends Paid                                                     0                  0
                                                                         -                  -

 Net Cash Provided/(Used) by Financing Activities                  $14,781            $11,514

Increase (Decrease) in Cash and Equivalents                          5,155             (1,580)
Cash and Equivalents:
 Beginning of Period                                                19,317             20,331
                                                                    ------             ------
  End of Period                                                    $24,472            $18,751
                                                                   =======            =======
</TABLE>
                [See accompanying notes to financial statements.]
<PAGE>
Comstock Bancorp
Notes to Condensed Consolidated Financial Statements


1.    ACCOUNTING POLICIES

     Comstock  Bancorp (the  "Company") is a bank holding company formed in 1997
     which became the parent  company of Comstock  Bank (the "Bank") on June 16,
     1997  through a tax-free  exchange  of shares of the Bank for shares of the
     Company.  The Company's primary holding is Comstock Bank. The Bank provides
     its range of  services  primarily  to  businesses  and  individuals  in the
     northern Nevada area, with some commercial lending in the Las Vegas market.
     The Bank's principal  activities include residential lending and commercial
     and retail  banking.  References  to the  Company  include  the Bank unless
     otherwise noted.

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared  in  condensed  format and  therefore,  do not  include all of the
     information  and  footnotes  required  by  generally  accepted   accounting
     principles for complete financial  statements.  However,  in the opinion of
     management,   all   adjustments,   consisting  only  of  normal   recurring
     adjustments   considered  necessary  for  a  fair  presentation  have  been
     reflected in the financial statements. The Company believes the disclosures
     herein are adequate to make the information not misleading. These financial
     statements  should be read in conjunction with the  consolidated  financial
     statements and notes thereto  included in Comstock  Bancorp's Annual Report
     to  shareholders  for the fiscal  year  ended  December  31,  1997 which is
     included in the Company's  Registration  Statement on 10-KSB dated March 6,
     1998 (Commission File No. 0-22391). The results of operations for the three
     months ended March 31, 1998 are not  necessarily  indicative of the results
     to be expected for the full year. Certain  reclassifications have been made
     to  prior  period  amounts  to  present  them  on a basis  consistent  with
     classifications for the three months ended March 31, 1998. .


2.    COMMITMENTS & CONTINGENT LIABILITIES

     In the normal course of business, there are outstanding various commitments
     and  contingent  liabilities,  such as  commitments  to extend  credit  and
     letters of credit,  which are not  reflected in the  financial  statements.
     Management  does not  anticipate  any  material  loss as a result  of these
     transactions.

     The Company has in place a major Year 2000  Compliance  project , which has
     adopted the FFIEC's Year 2000 Readiness Date Guidelines,  has completed the
     assessment  phase and is now in the  renovation  and testing  phase.  It is
     anticipated  that  testing of all  critical  systems  will be  completed by
     December 31,  1998.  To date,  confirmations  have been  received  from the
     Company's  primary vendors that plans have been  implemented to address the
     Year 2000 issues. The Company has committed  significant human resources to
     the  project.   Since  the  major  mainframe  computer  assets  (Year  2000
     compliant)  were purchased in 1997, the ongoing labor costs for the project
     are estimated to be approximately  $321,000 for 1998 and 1999. However, the
     Company is committed to allocate  whatever  resources are deemed  necessary
     for  the  successful  and  timely  completion  of  the  project,  including
     consultant  fees where  necessary  and the  purchase  of new  hardware  and
     sofstware where existing systems are found to be non-compliant.

     Despite the Company's  efforts,  there can be no assurance  that  potential
     systems  interruptions  or the cost  necessary to update  software will not
     have a  material  adverse  impact  on  the  Company's  business,  financial
     condition,  results of operations and business prospects.  In addition, the
     Company has limited  information  concerning the  compliance  status of its
     suppliers and customers. In the event that any of the Company's significant
     suppliers do not successfully and timely achieve Year 2000 compliance,  the
     Company's business or operations could be adversely affected.
<PAGE>
     The Bank owns a parcel of land  adjacent  to the  headquarters  building at
     6275 Neil Road in Reno,  Nevada,  which was  purchased in  anticipation  of
     adding an additional  facility to support future growth. The Bank has since
     found other  space at a lower cost.  The parcel was offered for sale and is
     now  in  escrow.  The  Company  expects  to  realize  a  gain  on  sale  of
     approximately  $150,000  with such gain  expected to occur in the second or
     third quarter of 1998.


3.     EARNINGS PER SHARE

     In February 1997, the Financial  Accounting Standards Board ("FASB") issued
     Statement of Financial  Accounting  Standards No. 128, "Earnings Per Share"
     (SFAS 128). The Company  adopted SFAS 128 for financial  statements  issued
     for periods ending after  December 15, 1997. All prior period  earnings per
     share  figures are restated.  Basic and diluted  earnings per share figures
     are required on the face of the income statement.

     SFAS 128 replaces  prior EPS reporting  requirements  by replacing  primary
     earnings  per share  with  basic  earning  per share  and by  altering  the
     calculation  of diluted EPS,  which  replaces  fully diluted EPS. Basic EPS
     excludes  potential dilution and is calculated by dividing income available
     to Common Stockholders by the weighted average number of outstanding common
     shares.  Diluted  earnings per share  reflect the  potential  dilution that
     could  occur if option or  warrant  contracts  to issue  common  stock were
     exercised.


4.    CAPITAL STRUCTURE

     In  February  1997,  the FASB  issued  Statement  of  Financial  Accounting
     Standards No. 129,  "Disclosure  of  Information  about Capital  Structure"
     (SFAS 129).  The  statement is effective for  financial  statement  periods
     ending after  December 15, 1997.  The statement is intended to  consolidate
     disclosures about capital structure into a single standard.  The disclosure
     includes the rights and privileges of the various  securities  outstanding,
     the number of shares issued upon conversion,  exercise,  or satisfaction of
     required  conditions  during the most recent  annual  fiscal period and any
     subsequent interim period.

     The  company's  disclosures  will  not  be  significantly   different  than
previously reported.


5.    COMPRESHENSIVE INCOME

     In June 1997, the FASB issued Statement for Financial  Accounting Standards
     No. 130,  "Reporting  Comprehensive  Income"  (SFAS 130).  The  standard is
     effective for financial  statements  beginning  after December 15, 1997 and
     comparative   statements   of  prior   periods   will   include   estimated
     comprehensive income data.

     SFAS 130 requires the  presentation of the financial  statements to include
     the  change  in  net  income  of  the  Company  during  the  period,   from
     transactions  and other  events and  circumstances  derived  from  nonowner
     sources.  The  Company  will  be  required  to  report  all  components  of
     comprehensive  income,  together  with the total  amount,  in the financial
     statements in the period they are recognized.  As an example,  an item that
     would be included in other comprehensive income, not included in net income
     in the current period,  would be unrealized  gains and losses on securities
     held as available for sale.

     The Company does not  anticipate  that the adoption of SFAS 130 will have a
     material effect on the Company's financial statements.
<PAGE>
6.    SEGMENT REPORTING

     In  June of  1997,  the  FASB  issued  Statement  of  Financial  Accounting
     Standards No. 131, "Disclosures about Segments of an Enterprise and Related
     Information"(SFAS   131).  The  standard  is  effective  for  fiscal  years
     beginning after December 15, 1997.

     SFAS 131 requires public companies to report  financial  information by the
     segments of the business.  The Company will have no disclosure changes as a
     result of this  standard  as the only  business  segment of the  Company is
     banking.
<PAGE>
                         COMSTOCK BANCORP AND SUBSIDIARY

     Item 2.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

     The  following  financial  review  presents  an  analysis  of the asset and
     liability  structure  of the  Company  and a  discussion  of the results of
     operations  for each of the periods  presented in the quarterly  report and
     sources of liquidity and capital  resources.  Certain statements under this
     caption,  "Management's  Discussion and Analysis of Financial Condition and
     Results of Operations",  constitute `forward-looking  statements' under the
     Private Securities Litigation Reform Act of 1995.

     Discussion of Forward-looking Statements

     When used or incorporated by reference in disclosure  documents,  the words
     "anticipate",   "estimate",  "expect",  "project",  "target",  "goal",  and
     similar  expressions  are intended to identify  forward-looking  statements
     within the  meaning  of Section  27A of the  Securities  Act of 1933.  Such
     forward-looking  statements are subject to certain risks, uncertainties and
     assumptions,  including those set forth below.  Should one or more of these
     risks or uncertainties materialize,  or should underlying assumptions prove
     incorrect,  actual  results  may vary  materially  from those  anticipated,
     estimated,  expected or projected.  These forward-looking  statements speak
     only as of the date of the document.  The Company  expressly  disclaims any
     obligation or undertaking  to publicly  release any updates or revisions to
     any forward-looking statement contained herein to reflect any change in the
     Company's  expectation  with  regard  thereto  or  any  change  in  events,
     conditions or circumstances on which any such statement is based.

     Economic  Conditions and Real Estate Risk. The Company's lending operations
     are  concentrated  in  northern  and  southern  Nevada.  As a  result,  the
     financial  condition  and  results of  operations  of the  Company  will be
     subject to general  economic  conditions  prevailing in these  regions.  If
     economic  conditions in these regions  worsen,  the Company may  experience
     higher  default  rates in its existing  portfolio as well as a reduction in
     the  value  of  collateral  securing  individual  loans.  Separately,   the
     Company's  ability to originate the volume of loans or achieve the level of
     deposits  currently  anticipated  could  be  affected.  As  a  result,  the
     occurrence  of any of these events could affect the accuracy of  previously
     made forward-looking statements.

     Interest  Rate Risk.  The  Company  realizes  income  principally  from the
     differential  or spread between the interest  earned on loans,  investments
     and other  interest-earning  assets and the  interest  paid on deposits and
     borrowings.  Loan volumes and yields, as well as the volume of and rates on
     investments, deposits and borrowings are affected by market interest rates.
     Additionally,  because of the terms and conditions of many of the Company's
     loan documents and deposit accounts,  and the nature of its investments,  a
     change in  interest  rates  could  also  affect  the  duration  of the loan
     portfolio  and/or the deposit base and/or the investment  portfolio,  which
     could alter the Company's  sensitivity to future changes in interest rates.
     As a result, significant shifts in interest rates could affect the accuracy
     of any forward-looking statements.

     Expansion  Plans.  The  Company  has  made  a  substantial   investment  in
     facilities,  computer  hardware and computer  software in anticipation that
     demand for the resulting  products and services will materialize.  There is
     no guarantee that the new products and services offered will be accepted or
     that  the  technology  purchased  will  not  become  obsolete  prior to the
     Company's realization of a positive return on its investment.  As a result,
     unanticipated  changes in technology,  or a misreading of consumer  demands
     for  products  and  services,   could  affect  the  anticipated  return  on
     infrastructure investment.
<PAGE>
     Financial Condition

     As of March 31, 1998,  the Company's  assets had grown from $194.7  million
     (measured as of December 31, 1997) to $209.9 million,  an increase of $15.2
     million. Using average assets rather than end of period figures, growth was
     $9.5  million,  from an average of $190.2  million in December,  1997 to an
     average of $199.7  million in March,  1998.  Management  believes  that the
     average  asset  measures are more  indicative  of asset size because of the
     large  volume of mortgage  loan  closings,  which occur during the last few
     days of each month. In addition,  several title company  clients'  deposits
     swell  the  last  few  days  of the  month,  as  loan  closings  tend to be
     concentrated near month's end.

     Loan Volume
     The Company has two major lending departments,  real estate and commercial.
     The real estate  department  specializes  in single  family  home  mortgage
     lending  including  construction  loans for custom  homes.  The  commercial
     lending department makes short-term  commercial loans including real estate
     development loans,  primarily residential land development.  The loans made
     by the real estate  department are generally  fixed rate with 15 or 30 year
     maturities. Management does not believe such loans are an appropriate match
     for the generally short-term deposit liabilities the Company acquires,  due
     to interest rate risk considerations. These loans are sold in the secondary
     market.  But,  because the commercial loans generally carry a variable rate
     or, if fixed in rate, generally have short maturities, management considers
     such loans appropriate for the Company's loan portfolio.

     Overall, loan volume (both real estate and commercial) increased from $47.4
     million of loan  originations  representing  240 loans in the three  months
     ended  March  31,  1997  to  $75.8  million   representing   460  new  loan
     originations  in the three months ended March 31, 1998, a 59.9% increase in
     dollar volume and a 91.7% increase in number of loans.  Management believes
     that the higher number of loans and higher dollar volume of 1998 versus the
     same 1997 period is partly due to the severe  weather  conditions  in early
     1997  which  included  an  unusually  hard  winter  as well as  substantial
     flooding  , and  partly  due  to  the  heightened  liquidity  in the  local
     financial institutions. (The flooding was so severe in early January, 1997,
     that there was a federal disaster  declaration.  Such a declaration for the
     area had never happened in the Company's history.) Management also believes
     that the  increase  in the number  and dollar  volume of loans in the first
     quarter of 1998 is a result of three  factors:  1) lower  interest rates on
     mortgage loans, 2) an enhanced consumer interest in refinancing on mortgage
     loans and, 3) continued growth in the area's non-gaming economic activity.

      Throughout  1997 and the  first  three  months  of 1998,  northern  Nevada
     community  financial  institutions  experienced large liquidity  increases.
     Management   believes  that  recent   acquisitions   of  Nevada   financial
     institutions  by large  out-of-state  institutions  created  a  significant
     opportunity during 1997 for local  institutions,  including the Company, to
     lure deposit customers away from the acquired institutions.  As a result of
     the  large  liquidity   infusion  at  local  community  oriented  financial
     institutions,  there has been  downward  pressure  on the  Bank's  interest
     margins and fee  structures.  Furthermore,  management has refused to lower
     traditional  underwriting guidelines by reducing prices and terms to higher
     risk  credits,  a practice it sees at the other local  community  financial
     institutions with excess liquidity. Management believes that its posture on
     this issue will pay off in the long-term.

     The Northern Nevada Real Estate Division  originated 314 loans for a dollar
     volume of $45.4  million in the three months ended March 31, 1998  compared
     to 171 loans for a dollar  volume of $23.9  million  in the same  period of
     1997.  The  statistics  for the Southern  Nevada Real Estate  Division (Las
     Vegas)  were:  zero loan  originations  in the three months ended March 31,
     1998  versus 14 loans for $1.8  million for the same 1997 period . In April
     1997,  the  Company  closed  the Las Vegas real  estate  office due to high
     personnel  turnover and low lending  volumes.  
<PAGE>
     According to public records,  while more than doubling mortgage loan volume
     in Washoe  County  from  $10.5  million  in the first two months of 1997 to
     $21.2 million  through the first two months of 1998,  the Company's  market
     share  fell from 6.0% to 5.1% as it fell from third to fifth  position.  In
     Carson City,  over the same two months,  volume rose by 49% to $2.9 million
     from $1.9  million in the first two months of 1997.  The  Company's  market
     share decreased from 11.2% to 8.3% and its position in the market fell from
     second to third.


                      Total Residential Real Estate Lending

Three Months             ---Number---                  Volume (Mill $)
   Ended            1998     1997       1996      1998       1997      1996
   -----            ----     ----       ----      ----       ----      ----

March 31             314      185        349     $45.4    $  25.8   $  44.9
June 30              N/A      241        327       N/A    $  35.4   $  44.4
September 30         N/A      261        289       N/A    $  36.2   $  39.4
December 31          N/A      280        281       N/A     $ 42.8   $  41.5
                     ---      ---        ---     -----    -------  --------
Total                314      967      1,246    $ 45.4     $140.2    $170.2


     The Commercial Division originated 146 loans for $30.5 million in the three
     months ended March 31, 1998 versus 55 loans for $21.7  million in same 1997
     period.  Despite  the  closure of the Las Vegas  real  estate  office,  the
     commercial loan  department  continues to make commercial real estate loans
     in the Las  Vegas  market  as a result  of  continuing  relationships  with
     borrowers, referrals, and as an overline lender with small commercial banks
     in Las Vegas.

     For the month of March,  1998,  the average  balance of the Company's  loan
     portfolio was $142.2 million and represented an average  loan/deposit ratio
     in excess of 82.6%.  The average  balance for the same year earlier  period
     was $102.0 million representing an average loan/deposit ratio of 75.7%. The
     increase in the level of loans in the Company's loan portfolios caused loan
     interest  income to increase  $915,000  (39.9%) in the three  months  ended
     March 31, 1998 as compared to the same period of 1997,  despite falling net
     interest margins.

     Management  has noted that the larger banks in the state have begun intense
     lending  campaigns.  This was in  contrast to the  withdrawal  of the large
     banks from the lending  marketplace  in the  recession in the early part of
     the decade. In addition,  management notes that other smaller  institutions
     and some larger out of state  institutions have entered the northern Nevada
     mortgage market.  Norwest  Mortgage,  not a significant  player in northern
     Nevada in 1994, is now the dominant  mortgage lender with 13% of the Washoe
     County  market in the first two months of 1998,  more than twice the market
     share of the number two player.  In Carson  City,  Norwest was not a market
     share  leader as late as early 1997.  But, in the first two months of 1998,
     Norwest  controlled 12% of the Carson City market,  significantly  ahead of
     the 8.7% market  share of the number two  institution.  Such an increase in
     competition has had a negative impact on the mortgage lending growth rates,
     and also on the profit  margins for these  loans.  In the third  quarter of
     1997,   management   began  to  implement   technologies   such  as  online
     underwriting  and credit  scoring,  which will  significantly  speed up the
     application,  approval,  and funding  times in the real estate  department.
     Management  believes that the technologies will improve its competitiveness
     in the marketplace by allowing very rapid loan  approvals,  perhaps even in
     the  field  at time of first  contact  with the  client  and by  attracting
     realtor  business by reducing the waiting time for the realtor  commission.
     The new  technologies  will  also  allow  the  process  to be  less  people
     intensive, thereby reducing costs for the Company which will show up either
     directly to the bottom  line,  or in the form of higher  volume if the cost
     savings are passed on.  Nevertheless,  because  the  Company  must sell the
     mortgages in the secondary  market,  it generally cannot compete on a price
     basis with the large national  mortgage banking  enterprises who can charge
     lower prices and put the mortgages into their portfolios.
<PAGE>
     Late in the first quarter of 1996,  mortgage  interest  rates began to fall
     and continued  lower until  February,  1997.  This  stimulated  residential
     mortgage activity.  Loan origination volumes are dependent on interest rate
     levels and an escalation of rates could adversely  impact Company  profits.
     Rates began to increase in the first  quarter of 1997 as  speculation  that
     the Federal  Reserve would  increase the Federal Funds rate. In late March,
     1997,  the Federal  Reserve did increase the Federal Funds rate by 25 basis
     points, causing a similar rise in interest rates all along the yield curve.
     However,  because  inflation has remained  benign,  market  interest rates,
     especially  at the long end of the  maturity  spectrum of the yield  curve,
     fell throughout the summer months,  increasing demand for mortgage loans on
     the  national  level.  Since the "Asian  Crisis" last fall,  inflation  has
     remained  benign.  While  short-term  interest rates have remained  steady,
     long-term rates  continued to fall,  culminating in a refinance boom in the
     mortgage  markets  late last fall and  continuing  through  the first three
     months of 1998. The Company's  mortgage business  benefited from such lower
     rates as described above.

     In order to mitigate the  possibility of adverse impacts from interest rate
     movements,   management  has  significantly  expanded  the  Company's  loan
     portfolios with interest sensitive assets. This is an effort to provide the
     Company a more stable income base. When interest rates rise and loan volume
     declines in the mortgage  business,  income on the loan portfolio will rise
     to offset  the  mortgage  business  decline.  On the other  hand,  if rates
     continue to fall, the lower interest income from the loan portfolio will be
     offset by rising loan volume and fee income in the mortgage business.

     Asset Quality
     The Company's  asset  quality is often  measured by its  delinquencies  and
     non-performing  assets. As of March 31, 1998 the Company had non-performing
     (non-accruing) loans of approximately $2.6 million,  comprised of two fully
     secured  construction  and  development  loans totaling $2.5 million , four
     commercial loans totaling $123,000 and one second mortgage at $12,000.  One
     of the  fully  secured  construction  loans  had  been in the  hands of the
     bankruptcy  court. The court recently lifted a stay on the property and the
     Company  will be allowed to  complete  foreclosure  proceedings  and obtain
     title to the property,  at which time the  Company's  intent is to complete
     the  development  plan and sell the  individual  homes.  The Company had no
     loans  past due 90 days or more that were still  accruing.  As of March 31,
     1998,  the Company had an  interest in one  property,  with a book value of
     $8,000,  taken as repayment on a loan.  This asset is  designated as "Other
     Real Estate Owned" property. In the same period of 1997, the Company had no
     properties taken in foreclosure.

     As of March 31, 1997, the Company had non-performing  (non-accruing)  loans
     of  approximately  $2.8  million,  comprised of the same two fully  secured
     construction  and  development  loans.  At that time,  the Company also had
     $277,000 of loans past due 90 days or more that were still accruing.

     Deposit Volumes
     As of March 31,  1998,  the  Company's  deposit  base had grown from $171.8
     million  (measured as of December 31, 1997) to $186.5 million,  an increase
     of $14.7 million (8.6%).  Using average  balances rather than end of period
     figures,  deposits  grew $9.6  million  (5.7%),  from an  average of $167.0
     million in December, 1997 to $176.6 million in March, 1998. The increase is
     partially  attributed  to the  addition  of a fourth  full  service  branch
     location in February of 1997, a fifth full service branch  location in July
     of 1997, the continued influx of deposits  transferred from the branches of
     financial  institutions recently acquired by large out-of-state  companies,
     and non-gaming  economic growth.  Management believes the deposit base will
     continue to grow for two  reasons:  1) the  continued  non-gaming  economic
     growth in the northern Nevada region and 2) management's  strategic goal of
     marketing to small business clients.
<PAGE>
     Based on  information  available  from the  Nevada  State  Demographer  and
     internal Company population  forecasts,  the Company's Washoe County (Reno)
     deposit  service area is estimated to have grown by 2.2% in 1997 to 313,575
     persons and is expected to continue to grow at a compounded  annual rate of
     2.1% through the millenium to 333,895 people.  Growth rates are forecast at
     1.9% for the first five years of the next decade. The Company's Carson City
     deposit  service area is estimated to have grown by slightly more than 3.0%
     in 1997 to an estimated  population  of  50,387,and  is forecast to grow at
     just under 3% through the millenium and at a 2.3% compounded  annual growth
     rate for the first five years of the next decade.

     Meanwhile,  the state population is estimated to have grown by 3.6% in 1997
     to an estimated  1.749 million  people  spurred by 4.1% growth in Las Vegas
     (to 1.162 million).  The Company forecasts state growth at 3.4% through the
     millenium with Las Vegas as the catalyst with  compounded  annual growth of
     nearly 4%. Early in the next decade,  state growth is forecast to fall to a
     compounded  annual rate of 3% as Las Vegas'  growth cools to an annual rate
     of 3.4%.  Based on its  population  forecasts,  the Company  believes  that
     Nevada  will  continue  as one of the fastest  growing  states,  if not the
     fastest,  throughout  the  period  described  above.  As a locally  managed
     community  banking  organization,  the Company is well  positioned for such
     growth.


     Liquidity
     Liquidity  is the ability to meet  current and future  obligations  through
     liquidation or maturity of existing assets or the acquisition of additional
     liabilities.  Cash,  short-term  investments and lines of credit from other
     financial   institutions  are  the  Company's   primary  sources  of  asset
     liquidity.  As a result  of its  loan and  deposit  growth,  the  Company's
     liquidity,  as measured by the ratio of cash,  overnight  investments  less
     required  reserves  to total  liabilities,  stood at 24.1% as of March  31,
     1998, a decrease from 28.5% on March 31, 1997. The investment  portfolio is
     a principal source of secondary asset liquidity as is the ability to borrow
     from the Federal Home Loan Bank of San Francisco  (see  Borrowing  Capacity
     below).

     The FASB's  accounting  rules,  beginning in 1994,  required the Company to
     mark to  market  a  portfolio,  which  could  be sold  prior  to  maturity.
     Management  believes that this  accounting  policy,  known as SFAS 115, has
     skewed,  and will  continue to skew,  Company  investments  toward the very
     short end of the maturity  spectrum in order to prevent large  fluctuations
     in the  value  of the  "available-for-sale"  portfolio.  This  has and will
     continue to result in overall  investment  portfolio  yields that are lower
     than they  otherwise  would have been in the absence of the SFAS 115 rules.
     The Company's  "available-for-sale"  portfolio  consists of $4.6 million in
     U.S. Treasury and Agency  securities with various  maturities of nine years
     or less, $4.9 million in mortgage-backed securities (non-derivative types),
     $5.7  million in tax exempt  municipal  bonds and  $795,000 in Federal Home
     Loan  Bank  stock.   Management   estimates   that  the   duration  of  the
     "available-for-sale"  portfolio  was  approximately  2.5 years on March 31,
     1998.  Management  believes  the  investments  in the  "available-for-sale"
     portfolio  should be of short  duration so that "interest rate risk" is low
     and capital fluctuations, as a result of the mark to market requirements of
     SFAS 115, are manageable in the volatile interest rate environment in which
     the  Company  is  operating.  As of  December  31,  1997,  the value of the
     "available-for-sale"  portfolio  was $25,000  above its book  value.  As of
     March 31, 1998, the market value of the "available-for-sale"  portfolio was
     $20,000 above book value.

     The  Company   also  has  a  $10.1   million   book  value   portfolio   of
     "held-to-maturity"  securities  as  defined by SFAS 115.  These  securities
     cannot  be  sold in the  normal  course  of  business  and  must be held to
     maturity.  As of March 31, 1998,  management estimates that the duration of
     the portfolio  was  approximately  3.7 years.  The market value was $66,000
     above book value. In contrast, at December 31, 1997, the book value of this
     portfolio was $10.6 million with an unrealized loss of $4,000.
<PAGE>
     Borrowing Capacity
     The  Company  maintains a secured  line of credit at the Federal  Home Loan
     Bank  of San  Francisco  (FHLB)  which  is  available  for up to 30% of the
     Company's assets. As of March 31, 1998, the Company had collateralized this
     line with loans and securities giving the Bank approximately $13 million of
     borrowing  capacity.  The  Company has a $2.5  million  line of credit with
     Union Bank of California to meet short term funding requirements. This line
     has a $200,000  compensating  balance.  As of March 31, 1998,  there was an
     outstanding draw of $6 million on the FHLB line, $3 million with a maturity
     in September of 2000 and $3 million with a maturity in January of 2000. The
     Company also has a $30,000 line of credit with  InterWest Bank for the cash
     requirements of the holding  company.  As of March 31, 1998,  there were no
     outstanding  balances  on this  line.  Both  the  FHLB  and  Union  Bank of
     California are routinely used for the purchase or sale of overnight Federal
     funds.  Pacific  Coast  Bankers Bank has also been utilized for the sale of
     Federal funds since  December of 1997.  The Company also has the ability to
     borrow from the Federal  Reserve Bank of San Francisco for short periods of
     time.

     Individual  and  commercial  deposits are the Company's  primary  source of
     funds for credit activities.  The Company's end of period ratio of loans to
     deposits,  as of March 31, 1998,  was 82.6%.  Management  believes that the
     Company's  liquidity  sources are  adequate  to meet its current  operating
     needs and any additional needs that may be generated by lending activities.
     Because management believes that it has excellent sources of liquidity,  it
     has been able to  increase  the  Company's  loan to deposit  ratio and will
     continue  to try to push it  toward  the 85% or higher  level if  liquidity
     permits and sound loans at acceptable spreads are available.

     Capital Base
     The capital  base for the Company  increased  by $706,000  during the three
     months ended March 31, 1998 of which  $601,000 was generated  from profits,
     $109,000 was the result of exercised  employee stock options and $4,000 was
     lost on the SFAB 115 mark to market adjustment on the  "available-for-sale"
     portfolio.  In March 1997, in conjunction with the formation of the holding
     company  (Comstock  Bancorp),  the Company called  outstanding  warrants to
     purchase  103,400  shares of Common  Stock at $7.73 per share.  The warrant
     holders  were  given  the  option to accept  similar  but more  restrictive
     warrants in Comstock  Bancorp if approved by the  shareholders  of Comstock
     Bank at the annual  meeting held on May 28, 1997.  By the May 16, 1997 call
     date,  77,000 of the  103,400  shares  were  exercised.  As a result of the
     conversion of Bank stock to Company stock on a 1 for 2 basis, the remaining
     warrants to purchase 26,400 shares of Bank stock were converted to warrants
     to purchase 52,800 shares of Bancorp stock at $3.86 per share.  Such stock,
     when and if issued, will carry restrictions regarding its resalability.


     Capital Adequacy
     As of December 31, 1990, a regulatory  risk-based capital adequacy standard
     became effective. The risk-based capital requirements were phased in over a
     period of two years with the final implementation effective on December 31,
     1992. In addition,  the  regulatory  agencies have continued the process of
     fine tuning the capital standards to meet their current policy  objectives,
     and it is likely that the standards will undergo further change.  The table
     below  compares  the  risk-based  capital  ratios as of March 31,  1998 for
     Comstock  Bank  and  Comstock   Bancorp  with  December  31,  1992  minimum
     requirements:
                                      Comstock          Comstock    1992 Minimum
                                        Bank             Bancorp    Requirements
Tier I (core capital)                   10.72%            10.76%            4.0%
Total capital                           11.47%            11.50%            8.0%
Leverage ratio                           8.23%             8.34%            3.0%
<PAGE>
                         COMSTOCK BANCORP AND SUBSIDIARY


     RESULTS OF OPERATIONS (Three Months Ended March 31, 1998 and 1997)

     The company  earned  $601,000 in the three months ended March  31,1998,  an
     increase in  post-tax  earnings  of 127.0%  when  compared to the  $265,000
     earned for the three  months  ended March 31,  1997.  On a per share basis,
     earnings  were $.14 through  March 31, 1998 versus $.06 for the same period
     of 1997 (see exhibit (a) 11 for earnings per share computations). Return on
     average  assets for the three  months ended March 31, 1998 was 1.25% versus
     .73% for the same 1997 period.  Return on average  equity was 15.30% versus
     8.12% in the 1997 comparable period.

     Management  believes  that the following  items had the largest  impacts on
     income for the three month period ended March 31, 1998:

         1.   Lower  interest  rates on  mortgage  loans  spurred an increase in
              mortgage  refinancing as well as home buying. Real estate mortgage
              loan  originations  increased  90% to $45.4  million  in the three
              months ended March 31, 1998 versus $23.9  million in the same 1997
              period. In addition, the 1997 quarter was depressed by flooding in
              Reno.

         2.   The increase in loan  originations  contributed  to higher average
              loan balances  outstanding  providing an increase in both interest
              and loan fee income.  For the first three  months of 1998 the loan
              portfolio  balance  averaged $137.3 million  compared to $99.5 for
              the same period of 1997.

         3.   First  quarter   earnings   were   augmented  by  the  receipt  of
              `additional'  interest  from a  development  loan in the Company's
              portfolio.  Under  the  terms of the loan,  the  Company  collects
              normal  interest  payments plus an additional  $2,100 for each lot
              the  developer  sells.  In the first  quarter  59 lots were  sold,
              producing  "additional  interest" income of $123,900. In the first
              three  months  of 1997,  30 lots  were  sold,  adding  $63,000  in
              additional  pre-tax income.  As of March 31, 1998, 459 lots remain
              to be sold in the 811 lot project.

                           Loan Interest Income ($000)
                           Three months ended March 31
                                                                 1998       1997
                    Loan Interest Income                       $3,140     $2,287
                    Additional Interest Income                   $124        $63


         4.   Non-interest rate related events also had a significant  impact on
              net income. Non-interest income increased by $44,000 for the three
              months  ended March 31,  1998 over the same  period of 1997,  as a
              result of  increased  deposit  service  charges  generated  by the
              addition  of two  branch  locations  in 1997,  as a result of fees
              earned on a new accounts  receivable  servicing product and due to
              dividend income realized on various life insurance  policies owned
              by the Bank.

              The  Company  committed  a  significant  amount of  resources  for
              expansion  in  1997.  As a result  of the new  Galena  and  Sparks
              branches,  the lease and remodel of the new operations center, and
              a partial remodel of the headquarters building, occupancy expenses
              rose $71,000  (47.3%),  and furniture and equipment  expenses rose
              $57,000  (47.0%) when  comparing  the three months ended March 31,
              1998 to the same  1997  period.  The  deployment  of  capital  for
              additional  branches is a strategy  that  enhances  the  Company's
              deposit  acquisition  capability.  Management  believes  that  the
              Company needs a strong  presence in northern Nevada to continue on
              the growth path of the recent past.
<PAGE>
              As a precautionary  measure,  the Company provided $50,000 more to
              its loan loss reserve  (Provision  for Credit Losses) in the first
              three months of 1998 than it did in the same 1997 period,  largely
              due to the  increase  in  traditional  commercial  loans  held  in
              portfolio.

              Other  operating  expenses rose $42,000 (9.9%) in the three months
              ended March 31, 1998 over the same 1997  period.  The increase was
              the   result  of   amortization   costs  on   software   and  data
              communication charges, both associated with the development of the
              Bank's in-house data processing functions. The Company committed a
              significant amount of resources for technological modernization in
              1997. The Company successfully  migrated from its computer service
              bureau to an  in-house  system in  October,  1997.  Deployment  of
              electronic  products and services has been  scheduled for the next
              several  quarters.  An increase in legal costs also contributed to
              the increased expenses.

              Management  believes that, in order to effectively  compete in the
              rapidly changing  technological world, the Company must be able to
              deliver  its  products  and  services  in  an  electronic  format.
              Management  believes  that the  pace of  change  is so rapid  that
              delays in modernizing its systems could significantly threaten the
              Company's core deposits. Furthermore, it is management's view that
              many northern  Nevadans would prefer to bank with a community bank
              if it offered  products and services  similar to those  offered by
              large  financial  institutions.  The  Company has  targeted  small
              business and individual  relationship banking as a strategic goal.
              Thus,  management  considers  the rapid  deployment of capital for
              technological  modernization  as  both  a  defensive  move  and  a
              strategic opportunity.

              Capital  investments of nearly $2 million  (including  both branch
              expansion and technology) have an initial start-up period in which
              there are zero or negative returns.  Because of the volume of such
              investments in 1997,  management believes that the ROA and ROE are
              likely to be lower for the  immediate  future than they  otherwise
              would have been and  believes  that the period of  digestion is at
              least through the end of 1998.

     The following  Interest Rate Sensitivity  Analysis Table provides a picture
     of income and interest sensitivity for selected categories in a comparative
     format for the three  month  periods  ended  March 31,  1998 and 1997.  The
     tables show the interest  sensitive assets and  liabilities,  their yields,
     the  difference in income,  and the amount of the  difference due to volume
     change, rate change, and the combination of volume and rate change.
<PAGE>
<TABLE>
<S>                         <C>           <C>         <C>               <C>          <C>         <C>           <C>          <C>
                                                       COMSTOCK BANCORP
                             CONSOLIDATED INTEREST RATE SENSITIVITY ANALYSIS
                                               For the Three Months Ended March 31, 1998 and 1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             Rate/
                              (Unaudited)   Yield/      (Unaudited)      Yield/       Total         Volume       Rate        Volume
For Quarter Ended:           Mar. 31, 1998   Rate      Mar. 31, 1997      Rate        Change       Variance    Variance     Variance
------------------------------------------------------------------------------------------------------------------------------------
Loans:
Loan Income                     $3,199,626   9.42%        $2,287,005      9.29%     $912,621       $868,590     $31,911     $12,120
Loan Fees and
  Servicing Income                 941,998                   563,530                 378,467              -           -           -
                                   -------                   -------                 -------
  Total Loan, Servicing,
    And Fee Income               4,141,624  12.19%         2,850,535     11.58%    1,291,089              -           -           -
------------------------------------------------------------------------------------------------------------------------------------
Investments:
Fed Funds and Mutual
  Fund Income                      124,953   5.28%           146,562      5.38%      (21,609)       (19,268)     (2,695)        354
Income from
  Investment Securities            364,494   5.72%           283,429      5.99%       81,065         98,404     (12,870)     (4,468)
Interest-Bearing
  Deposit Income                    24,084   6.55%            25,097      6.64%       (1,013)          (704)       (318)          9
                                    ------                    ------                  -------          -----       -----          -

  Total Investment Income          513,531   5.64%           455,088      5.81%       58,443         74,008     (13,388)     (2,177)
Trading Account Assets
  And Other Investments              8,658   4.36%               805      0.81%        7,853            796       3,550       3,508
------------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS:
  Total Interest Income         $3,713,157   8.58%        $2,742,093      8.42%     $971,064       $942,599     $18,523      $9,942
  Total Interest, Servicing,
    Fee, and Trading
    Account Income              $4,663,813  10.78%        $3,306,428     10.16%   $1,357,385              -           -           -

------------------------------------------------------------------------------------------------------------------------------------
Deposits:
Interest on Deposits:
  Transaction Accounts            $457,002   3.35%          $342,484      3.28%     $114,518        105,325       7,030       2,162
  Time and Savings
    Deposits                     1,188,335   5.36%           867,467      5.16%      320,868        274,763      35,015      11,091
                                 ---------                   -------                 -------        -------      ------      ------
    Total Deposit
      Interest Expense           1,645,337   4.59%         1,209,951      4.44%      435,386        378,974      42,958      13,455
------------------------------------------------------------------------------------------------------------------------------------
BORROWED FUNDS:
  Other Borrowed Funds              91,949   6.22%                 0      0.00%      $91,949             $0          $0     $91,949
                                    ------                         -                 -------
    Total Interest Expense      $1,737,287   4.66%        $1,209,951      4.44%     $527,336       $444,615     $60,492     $22,229
------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST
-----------------------------
 DIFFERENTIAL                   $1,975,870   3.92%        $1,532,142      3.99%     $443,728       $497,983    ($41,969)   ($12,286)
  (Excludes fee income)
NET INTEREST
 DIFFERENTIAL                   $2,926,526   6.12%        $2,096,477      5.72%     $830,049              -           -           -
  (Includes fee income)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes to Interest Rate Sensitivity Analysis Table:
  [1] The variance  analysis above excludes  non-interest rate sensitive earning
  assets and borrowed funds.
  [2]  "Yield/Rate"  is the  interest  income or interest  expense,  annualized,
  divided by the average respective outstanding balance for the period.
  [3] "Total Change"  represents  the change in the interest  income or interest
  expense  between the  respective  periods.  
  [4] "Volume Variance" equals the change in average volumes  (balances) between
  the periods times the previous period interest rate.
  [5] "Rate  Variance"  equals the change in yields or rates between the periods
  times the previous period average balance.
  [6] "Rate/Volume  Variance" reflects the change in interest income or interest
  expense attributable to simultaneous changes in both rates and volumes between
  the respective time periods.
<PAGE>
     The comparison of interest sensitive assets between the three month periods
     ended  March 31,  1997 and 1998 shows  higher  yields in loan  income  both
     before fees and when fees are included.  The yields on fed funds and mutual
     funds,  on the investment  portfolio and on interest  bearing  deposits are
     lower in the three month  period  ended March 31, 1998 than the same period
     of 1997. The  comparison of interest  sensitive  liabilities  for the three
     month periods show an increase in rates in all deposit accounts.

     For loan income the increase in the level of both commercial  loans held in
     portfolio  and the real estate  loans held for sale  resulted in a positive
     volume variance.  For the three months ended March 31, 1998 compared to the
     same period of 1997, loan income  increased  $913,000 of which $869,000 was
     due to larger portfolio  balances and $32,000 to increased yields ($124,000
     of "additional  interest" income  discussed above  contributed to the yield
     increase,  the yield  without  the  "additional  interest"  would have been
     9.05%).  Again,  for this period,  when loan fees and servicing  income are
     factored  in,  the  result is an  increase  of  $1,291,000  in total  loan,
     servicing  and fee income.  Because the Company is a large  originator  and
     seller  of  mortgage  loans,  fee  income  plays  a major  role in  Company
     earnings,  because when the Company  sells  loans,  all of the deferred fee
     income on the sold loans is  immediately  recognized as income.  Total loan
     and fee income  yields  increased  from 11.58% to 12.19% in the three month
     period.

     Income from Fed Funds and Mutual Funds  decreased by ($22,000) in the three
     month period  ended March 31, 1998 over the same 1997 period.  The decrease
     is the largely the result of reduced invested balances.

     Lower  yields on  Investment  Securities  combined  with an increase in the
     invested  balances  netted the Company an increase of $81,000 for the three
     month period ending March 31, 1998 over the same 1997 period.

     Interest  bearing deposits with other financial  institutions  showed lower
     yields and lower invested balances, which netted to a decrease of $1,000 in
     income for three month period.

     Overall,  total  investment  income  increased  by 12.7% or $58,000 for the
     three month period as a result of increased invested balances in Investment
     Securities.

     The cost of  interest  sensitive  liabilities  was  higher  on all  deposit
     accounts  for the three  month  period  ended  March 31, 1998 over the same
     period  of 1997  and was the  result  of an  influx  of  deposits  from the
     institutions acquired by out-of-state  companies as well as the addition of
     two new branch offices.  Increased deposit balances contributed to $379,000
     of  increased  costs,  while  increased  rates  contributed  to  $43,000 of
     increased costs.

     In  summary,  on the asset  side,  larger  loan and  investment  securities
     portfolio  levels  increased  income by $967,000 in the three  months ended
     March 31, 1998 over the same period of 1997.  When fee income is  included,
     the increase in income for total earning assets,  in the three month period
     in 1998 over 1997 is $1,357,000.  When the increased  costs of deposits and
     other  borrowed  funds of $527,000 for the three month period is taken into
     account,  the  Company's  net  interest  income   differential,   excluding
     servicing and fee income, increased $444,000. With fee income included, the
     net interest  income  differential  increased  $830,000 for the three month
     period ending March 31, 1998.
<PAGE>
     Part II.

     Item 1.      Legal Proceedings.

                  The Company is subject to minor pending and  threatened  legal
                  actions  which arise out of the normal course of business and,
                  in the opinion of management and the Company's counsel, except
                  as discussed  below,  the disposition of these claims will not
                  have a material  adverse  affect on the financial  position of
                  the Company.

                  The Company has been in litigation with Raymond B. Graber,  II
                  ("Graber")  since 1991 as  discussed  in the  Company's  10KSB
                  filed March 20, 1998. In February,  1998,  the District  Court
                  entered an order confirming in part, and vacating in part, the
                  award  of  the  arbitrator.   The  Court  also  indicated  its
                  intention  of  awarding   Graber  his  attorneys'   fees,  and
                  established a briefing  schedule to address that issue.  As of
                  April 16, 1998,  no judgment had been entered by the Court and
                  no award of fees had been made. The Company has filed a notice
                  of appeal from the District  Court's order,  and the Company's
                  counsel   anticipates  that  Graber  will  cross-appeal.   Any
                  resolution  of the appeals  will likely take at least 2 years.
                  Although  the outcome of this  litigation  cannot be predicted
                  with  precision,  the  Company's  counsel  believes  that  the
                  Company's  maximum  exposure  in  the  case  is  approximately
                  $430,000,  even assuming all of Graber's requested damages and
                  attorneys' fees are awarded to him and that such a judgment is
                  upheld on appeal.

     Item 2.      Changes in Securities.  None.

     Item 3.      Defaults Upon Senior Securities.  Not Applicable.

     Item 4.      Submission of Matters to a Vote of  Securities Holders.  None.

     Item 5.      Other Information.  Not applicable.

     Item         6. (a)  Exhibits.  The  following  exhibits  are filed with or
                  incorporated  by  reference  into this Form 10-QSB  (numbering
                  corresponds to Exhibit Table in Item 601 of Regulation S-K):

               No.     Exhibit                                    Page
               ---     -------                                    ----
               11.     Computation of per share earnings           23
               27.     Financial Data Schedule                     24


                  (b) Form 8-K was  filed  on  January  14,  1998.  The  Company
                  announced  that it has been granted  authority by its Board of
                  Directors  to  acquire up to 5% of the  Company's  outstanding
                  common stock. The shares may be purchased at prevailing market
                  prices  from  time to time  during  the  twelve  month  period
                  beginning December 22, 1997. The purchases are at management's
                  discretion  and will  depend  upon  management's  judgment  of
                  market conditions.
<PAGE>
                                   SIGNATURES




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

COMSTOCK BANCORP



         Date: April 29, 1998       /s/ Robert N. Barone
               --------------       --------------------
                                    Robert N. Barone,
                                    Chairman, CEO and Treasurer
                                    (Principal Accounting and Financial Officer)


         Date: April 29, 1998       /s/ Larry A. Platz
               --------------       ------------------
                                    Larry A. Platz,
                                    President and Secretary
<PAGE>
                                COMSTOCK BANCORP
                                   EXHIBIT 11

                COMPUTATION OF CONSOLIDATED NET INCOME PER SHARE
                       FOR THE THREE MONTHS ENDED MARCH 31


                                                           1998            1997
Net Income:                                              $600,748       $264,616

Net Income per Common Share (assuming no dilution):
   Weighted Avg. Shares Outstd.:                        4,430,168      4,238,918
   Basic Earnings per Share:                                $0.14          $0.06

Net Income per Common and Common Equivalent
Shares:
  Adjusted Weighted Avg. Number of Shares               4,910,602      4,628,296
Outstd. After Giving Effect to the Conversion
of Options and Warrants:
Diluted Earnings per Share:                                 $0.12          $0.06

<PAGE>

                                COMSTOCK BANCORP
                                   EXHIBIT 27
                    FOR THE THREE MONTHS ENDED MARCH 31, 1998
                             FINANCIAL DATA SCHEDULE
                                                                  $ in Thousands

Cash and Due from Banks (Non-Interest Bearing)                          $13,428
Interest-bearing Deposits in Domestic Financial Institutions              1,489
Fed funds and Overnight Mutual Funds Sold                                11,044
Trading Account Securities                                                   11
Investment and Mortgage back Securities Held for Sale                    16,008
Investment and Mortgage back Securities Held to Maturity -
  Carrying Value                                                         10,068
Investment and Mortgage back Securities Held to Maturity - 
  Market Value                                                           10,104
Loans                                                                   145,827
Allowance for Credit Losses                                               1,125
Total Assets                                                            209,860
Deposits                                                                186,474
Short-term borrowings                                                         0
Other Liabilities                                                         1,082
Long-term debt                                                            6,000
Preferred stock - mandatory redemption                                        0
Preferred stock - no mandatory redemption                                     0
Common Stock                                                                 45
Other Stockholders Equity                                                16,258
Total Liabilities and Stockholders Equity                               209,860
Interest and Fees on Loans                                                4,142
Interest and Dividends on Investments                                       373 
Other Interest Income                                                       149
Total Interest Income                                                     4,664
Interest on Deposits                                                      1,645
Total Interest Expense                                                    1,737 
Net Interest Income                                                       2,927
Provision for Loan Losses                                                   110
Inestment Securities Gains/Losses                                            (8)
Other Expense                                                             2,146
Income/Loss Before Income Tax                                               795
Income/Loss Before Extraordinary Items                                      795
Extraordinary Items, Less Tax                                                 0
Cumulative Change in Accounting Principles                                    0
Net Income or Loss                                                          601
Earnings Per Share - Primary                                                .14
Earnings Per Share - Fully Diluted                                          .12
Net Yield - interest earning assets - actual                              8.60%
Loans on Non-accrual                                                      2,572 
Accruing Loans past due 90 Days or More                                       0
Troubled Debt Restructuring                                                  13 
Potential Loan Problems                                                       0
Allowance for Loan Losses - Beginning of Period                           1,076
Total Charge-Offs                                                            61
Total Recoveries                                                              0 
Allowance for Loan Losses - End of Period                                 1,125
Loan Loss Allowance allocated to Domestic Loans                           1,125
Loan Loss Allowance allocated to Foreign Loans                                0 
Loan Loss Allowance - Unallocated                                             0
<PAGE>