U.S. SECURITIES AND EXCHANGE COMMISSION
                Washington. D. C. 20549
                           
                      Form 10-QSB

(Mark One)

[ X ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
       THE SECURITIES EXCHANGE ACT OF 1934
       For the quarterly period ended March 31, 1998.

[   ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
       THE EXCHANGE ACT
       For the transition period from ____ to ____.

            Commission file number 0-22471
                           
              Luxemburg Bancshares, Inc.
 (Exact name of small business issuer as specified in
                     its charter)

        Wisconsin                   39-1457904
     (State or other             (I.R.S. Employer 
     jurisdiction of            Identification No.)
     incorporation or
      organization)
            
      630 Main Street, Luxemburg, Wisconsin 54217
       (Address of principal executive offices)
                           
                    (920)  845-2345
              (Issuer's telephone number)
                           
                          N/A
(Former name, former address and former fiscal year, if
              changed since last report)

Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act
during the past 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  [   ]

State the number of shares outstanding of each issuer's
classes of common equity, as of May 11, 1998:

           243,501 shares were outstanding.

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

<PAGE>

              LUXEMBURG BANCSHARES, INC.
                           
                         INDEX

                                                      Page No.
  PART I - FINANCIAL INFORMATION                      
                                                      
  Consolidated Balance Sheets - March                         
  31, 1998 and December 31, 1997                         3
                                                              
  Consolidated Statements of Income -                         
  Three Months Ended March 31, 1998 and 1997             4
                                                              
  Consolidated Condensed Statements of                        
  Changes in Stockholders' Equity - Three Months                      
  Ended March 31, 1998 and 1997                          5
                                                              
  Consolidated Statements of Cash Flow -                      
  Three Months Ended March 31, 1998 and 1997             6
                                                              
  Notes to Consolidated Financial                       
  Statements                                             7 - 8
                                                              
  Management's Discussion and Analysis                        
  of Financial Condition and Results of                  
  Operations                                             9 - 13
                                                              
  PART II - OTHER INFORMATION                               

  Item 2 - Changes in Securities and Use of               
  Proceeds                                                14
                                                              
  Item 6 - Exhibits and Reports on Form 8-K               14
                                                              
  SIGNATURES                                              15

<PAGE>
                                                          
            PART I - FINANCIAL INFORMATION
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
       CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
         March 31, 1998 and December 31,  1997

                        ASSETS

                                                      
                                          1998        1997

Cash and due from banks              $ 2,882,915 $ 3,326,444
Interest-bearing deposits                130,122     639,264
Federal funds sold                     3,417,000   1,167,000
                                                            
     Cash and cash equivalents         6,430,037   5,132,708
                                                            
Investment securities available for   14,670,990  14,113,429
sale-Stated at fair value
                                                            
Total loans                           57,645,216  60,904,981
     Allowance for credit losses       (703,775)   (677,101)
                                                            
Net loans                             56,941,441  60,227,880
Premises and equipment                 1,708,067   1,711,350
Other investments at cost                253,050     253,050
Other assets                           2,231,046   2,115,831
                                                            
TOTAL ASSETS                         $82,234,631 $83,554,248
                                                            

         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                       
                                          1998        1997
LIABILITIES:                                     
                                                 
Non-interest-bearing deposits        $ 7,394,724 $ 9,103,744
Interest-bearing deposits             63,861,546  63,542,623
                                                            
Total deposits                        71,256,270  72,646,367
                                                            
Short-term borrowings                    255,815     640,002
Borrowed funds                           619,486     632,828
Other liabilities                      1,280,210   1,106,175
                                                            
     Total liabilities                73,411,781  75,025,372
                                                            
STOCKHOLDERS' EQUITY:                                       
                                                            
Common stock- $.1667 par value:                             
  Authorized - 300,000 shares,            45,083      45,083
  Issued - 270,500 shares
Capital surplus                        3,431,925   3,431,925
Retained earnings                      5,574,795   5,293,023
Unrealized gain on investment            115,397     103,195
  securities available for sale - 
  Net of tax
Less - 26,999 shares of treasury       (344,350)   (344,350)
  common stock, at cost            
                                                            
     Total stockholders' equity        8,822,850   8,528,876
                                                            
TOTAL LIABILITIES AND STOCKHOLDERS'  $82,234,631  $83,554,248
EQUITY

   See accompanying notes to consolidated financial
                      statements.

<PAGE>
      
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME
                      (UNAUDITED)
                           
                                   Three Months Ended
                                        March 31,
                                               
                                    1998       1997
INTEREST INCOME:                                     
                                                     
Interest and fees on loans    $ 1,347,699 $ 1,237,871
Interest on investment
  securities:
     Taxable                      174,381     171,405
     Tax-Exempt                    45,083      29,530
Other interest and dividend        35,716      14,346
  income                                                      
     Total interest income      1,602,879   1,453,152
                                                     
INTEREST EXPENSE:                                    
                                                     
Deposits                          755,525     678,470
Short-term borrowings               3,033       8,578
Borrowed funds                     11,201       5,126
                                                     
     Total interest expense       769,759     692,174
                                                     
Net interest income               833,120     760,978
Provision for credit losses        37,500      30,000
                                          
Net interest income after         795,620     730,978
  provision for credit losses     
                                                     
OTHER INCOME:                                        
                                                     
Service charges on deposit         42,674      45,399
  accounts
Mortgage underwriting fees -       75,004      11,560
  Secondary market
Loan servicing fee income          17,022      13,923
Other operating income            171,483     130,351
                                                     
     Total other income           306,183     201,233
                                                     
OPERATING EXPENSES:                                  
                                                     
Salaries and related benefits     398,280     344,637
Net occupancy expense              44,409      43,540
Equipment rentals,                 75,793      43,285
  depreciation, and maintenance
Data processing                    27,282      45,121
Other operating expenses          150,946     127,603
                                                     
     Total operating expenses     696,710     604,186
                                                     
Income before provision for       405,093     328,025
  income taxes
Provision for income taxes        123,321      99,515
                                                     
Net income                     $  281,772  $  228,510
                                                     
Basic earnings per common           $1.16       $0.94
  share

   See accompanying notes to consolidated financial
                      statements.

<PAGE>

      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF
            CHANGES IN STOCKHOLDERS' EQUITY
                      (UNAUDITED)
      Three Months Ended March 31, 1998 and 1997
                           
                           
                               Three Months Ended    Three Months Ended
                                 March 31, 1998       March 31, 1997
                                Shares   Equity     Shares    Equity
                                         Total                Total
                                                                     
Balance - Beginning of period   243,501 $8,528,876 242,736  $7,680,016
                                                                     
Comprehensive income:              
   Net Income                              281,772             228,510
   Other comprehensive income               12,202            (39,316)
     - Change in net unrealized 
     gain (loss) on securities 
     available for sale          
                                                                     
Total comprehensive income                 293,974              189,194
                                                                     
Sale of Treasury Stock                                 315       10,080
                                                                     
Balance - End of period         243,501 $8,822,850 243,051   $7,879,290
                                
                                                                     
    See accompanying notes to consolidated financial statements.

<PAGE>
                                                                     
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF CASH FLOW
                      (UNAUDITED)
      Three Months Ended March 31, 1998 and 1997

                                          1998       1997
CASH FLOWS FROM OPERATING                                   
ACTIVITIES:
                                                            
Net income                            $  281,772  $  228,510
Adjustments to reconcile net income                         
  to net cash provided by operating 
  activities:
    Depreciation and amortization         77,267      36,646
    Accretion of discounts on            (8,624)    (13,245)
      securities
    Amortization of premiums on            2,900      10,991
      securities
    Provision for credit losses           37,500      30,000
    Employee stock bonus                              10,080
    Gain on sale of other real             (164)            
      estate
    Provision for deferred taxes        (12,054)            
    Change in other operating assets   (107,311)   ( 91,033)
    Change in other operating            167,492      85,670
      liabilities                                                
      Total adjustments                  157,006      69,109
                                                            
Net cash provided by operating           438,778     297,619
  activities
                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from maturities of          742,533   2,092,878
      securities available for sale
    Purchase of securities available (1,275,625) (2,432,677)
      for sale                             
    Net decrease (increase) in loans   3,248,939 (1,237,898)
    Purchase of additional life         (17,300)    (17,300)
      insurance
    Proceeds from sale of other real      15,164            
      estate
    Capital expenditures                (67,534)   (158,676)
    Purchase of other investments            -0-         -0-
                                                            
Net cash provided by (used in)         2,646,177 (1,753,673)
  investing activities                                       
                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase (decrease) in       (1,390,097)     664,513
      deposits                                    
    Net increase (decrease) in short-  (384,187)     150,474
      term borrowings
    Loan from FHLMC                          -0-     500,000
    Principal payments on borrowed      (13,342)    (14,162)
      funds
    Dividends paid                           -0-         -0-
                                                            
Net cash provided by (used in)       (1,787,626)   1,300,825
  financing activities    
                                                            
Net increase (decrease) in cash and    1,297,329   (155,229)
  cash equivalents
Cash and cash equivalents at           5,132,708   3,732,501
  beginning                                                            
Cash and cash equivalents at end     $ 6,430,037 $ 3,577,272
                                                            
Supplemental information:                                   
                                                            
Cash paid during the period for:                            
    Interest                         $  788,128  $  653,890
    Income taxes                     $   25,115  $  104,536


   See accompanying notes to consolidated financial
                      statements

<PAGE>
      
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (UNAUDITED)
                           
The consolidated financial statements for interim
periods are unaudited; however, in the opinion of the
management of Luxemburg Bancshares, Inc. ("Company"),
all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation have
been included. Refer to the Notes to Consolidated
Financial Statements which appear in the Company's Form
10-KSB for the Fiscal Year ended December 31, 1997 for
the Company's accounting policies which are pertinent
to these financial statements.

NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements of Company, a
bank holding company, include the accounts of Company
and Subsidiaries - Bank of Luxemburg, Luxemburg
Investment Corporation, and Area Development
Corporation. All significant intercompany balances and
transactions have been eliminated in consolidation.
Goodwill acquired in a business acquisition is being
amortized on a straight-line basis over five years.

The accompanying financial statements have been
prepared in accordance with the instructions for Form
10-QSB and, therefore, do not include all information
and footnotes necessary to be in conformity with
generally accepted accounting principles.

For purposes of reporting cash flows, the Company
considers cash on hand, interest-bearing and non-
interest bearing deposits in banks and federal funds
sold as cash and cash equivalents.

Earnings per common share are based upon the weighted
average number of common shares outstanding.  The
weighted average number of shares outstanding was
243,501 in 1998 and 243,051 in 1997. The basic and
diluted earnings per share are the same for 1998 and
1997.

NOTE 2: FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Bank of Luxemburg's ("Bank's") financial statements
do not reflect various commitments and contingent
liabilities which arise in the normal course of
business and which involve elements of credit risk,
interest rate risk, and liquidity risk.  These
commitments and contingent liabilities are commitments
to extend credit and standby letters of credit.  A
summary of the Bank's commitments and contingent
liabilities at each balance sheet date is as follows:

Notional Amount
                               March 31, 1998  December 31, 1997
                                             
Commitments to extend credit      $2,768,000      $3,457,000
Credit card arrangements             700,000         590,000
Standby letters of credit             34,000         100,000

Commitments to extend credit and credit card
arrangements are agreements to lend to a customer as
long as there is no violation of any condition
established in the contract.  Commitments generally
have fixed expiration dates or other termination
clauses and may require payment of a fee. A portion of
the commitments are expected to be drawn upon, thus
representing future cash requirements. The Bank
evaluates each customer's creditworthiness on a case-by-
case basis.  The amount of collateral obtained upon
extension of credit is based on management's credit
evaluation of the counterparty.  Collateral held varies
but may include accounts receivable; inventory;
property, plant, and equipment; real estate; and stocks
and bonds. Management does not anticipate any material
losses as a result of these commitments.

Standby letters of credit are conditional commitments
issued by the Bank to guarantee the performance of a
customer to a third party.  The credit risk involved in
issuing letters of credit is essentially the same as
that involved in extending loan facilities to
customers.  The Bank holds collateral supporting those
commitments for which collateral is deemed necessary.
Because these instruments have fixed maturity dates and
because many of them expire without being drawn upon,
they do not generally present any significant liquidity
risk to the Bank. Management does not anticipate any
material losses as a result of these letters of credit.

<PAGE>
                           
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (UNAUDITED)

NOTE 3: ACCOUNTING CHANGES

In June 1997, the FASB issued SFAS No. 131,
"Disclosures About Segments of an Enterprises and
Related Information." This statement establishes
standards for the way that public business enterprises
report information about operating segments in annual
financial statements and requires that those
enterprises report selected information about operating
segments in interim financial reports issued to
stockholders. This statement supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business
enterprise," but retains the requirement to report
information about major customers. It also amends SFAS
No. 94, "Consolidation of All Majority-Owned
Subsidiaries," to remove the special disclosure
requirements for previously unconsolidated
subsidiaries. The statement is effective for fiscal
years beginning after December 15, 1997. In the initial
year of application, comparative information for
earlier years is to be restated. This statement need
not be applied to interim financial statements in the
initial year of application. The statement is not
expected to have an effect on the financial position or
operating results of the Company, but may require
additional disclosures in the consolidated financial
statements.

<PAGE>
                           
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
                           

SELECTED QUARTERLY FINANCIAL DATA

                    Three Months Ended March 31,
                           1998       1997

Net Earnings             281,772     228,510
Average Consolidated                      
Balance Sheet Items:
   Loans              57,750,541  54,539,288
   Taxable Investment 10,640,118  11,677,954
     Securities               
   Fed Funds Sold      2,011,958     394,633
   Municipal Loans &   5,264,214   3,882,284
     Investments         
   Other Earning Assets  545,337     627,656
      Total Earning   76,212,168  71,121,815
        Assets                        
   Total Assets       81,840,730  76,167,073
   Deposits           72,097,514  67,377,847
   Shareholders'       8,729,091   7,840,381
     Equity                            
                                          
Key Ratios:                               
   Average Equity to      10.67%      10.29%
     Average Total Assets
   Return on Average       1.38%       1.20%
     Total Assets
   Return on Average      12.91%      11.66%
     Equity
   Net Interest Margin     4.43%       4.34%
                                          

NET INTEREST INCOME

Net interest income, the principle source of earnings,
is the amount by which interest generated by earning
assets exceeds the interest costs of liabilities
obtained to fund them. As shown below, net interest
income has increased $72,142 or  9.48% to $833,120 for
the three months ended March 31, 1998, from $760,978
for the three months ended March 31, 1997. The increase
in net interest income is primarily due to bank growth.
As noted above, average assets for the three months
ended March 31, 1998 were $81,840,730 compared to
average assets for the three months ended March 31,
1997 of $76,167,073


                       Three Months Ended March 31,
                             1998        1997

Interest Income          $1,602,879   $1,453,152
Interest Expense            769,759      692,174
Net Interest Income      $  833,120   $  760,978
                                          
Net Interest Margin           4.43%        4.34%
                                          

RATE/VOLUME ANALYSIS

The impact of changes in volume and interest rates on
net interest income for the three months ended March
31, 1998 is illustrated in the following table:

Three Months Ended March 31, 1998 Compared to Three
Months Ended March 31, 1997.

                   Increase (Decrease) in Net Interest Income
                         Net Change    Due To        Due To
                                        Rate         Volume
Interest Income          $  149,727  $  55,415     $  94,312
Interest Expense             77,585     28,526        49,059
Net Interest Income      $   72,142  $  26,889     $  45,253

<PAGE>

Interest rates on the Bank's earning assets and
interest bearing liabilities were generally higher for
the three months ended March 31, 1998 compared to the
three months ended March 31, 1997. In addition, earning
assets increased to $76,212,168 for the three months
ended March 31, 1998 from $71,121,815 for the three
months ended March 31, 1997. Interest bearing
liabilities increased $3,988,641 or 6.58% to
$64,569,501 for the three months ended March 31, 1998
compared to $60,580,860 for the three months ended
March 31, 1997.

OPERATING RESULTS

Net income for the three months ended March 31, 1998,
increased $53,262 or 23.3% to $281,772 from $228,510
for the three months ended March 31, 1997. The increase
in net interest income is $72,142 for the three months
ended March 31, 1998, compared to the three months
ended March 31, 1997, and is discussed in "Net Interest
Income" and "Rate/Volume Analysis" elsewhere in this
report. Mortgage underwriting fees - Secondary market
increased $63,444 or 548.82% to $75,004 for the three
months ended March 31, 1998, compared to $11,560 for
the three months ended March 31, 1997. This increase is
primarily due to increased volume as for the three
months ended March 31, 1998, the Company originated
$5,220,200 of loans for the secondary market compared
to $549,000 for the three months ended March 31, 1997.
Other operating income increased $41,132 or 31.55% for
the three months ended March 31, 1998 compared to the
three months ended March 31, 1997. The main drivers of
this increase are increased sales of alternative
investment products by the Company's Financial Resource
Center and the sale of a loan in 1998 at a gain.

Operating expenses for the three months ended March 31,
1998 increased $92,524 or 15.3% to $696,710 compared to
$604,186 for the three months ended March 31, 1997.
Salaries and related benefits increased $53,643 or
15.57% to $398,280 for the three months ended March 31,
1998 compared to $344,637 for the three months ended
March 31, 1997. The increase is primarily due to
inflationary increases and a higher level of employee
incentive compensation in 1998 compared to 1997.
Equipment rentals, depreciation, and maintenance for
the three months ended March 31, 1998 increased $32,508
or 75.10% to $75,793 compared to $43,285 for the three
months ended March 31, 1997. Included in this total is
equipment depreciation which increased $32,247 or
122.6% to 58,550 for the three months ended March 31,
1998 compared to $26,303 for the three months ended
March 31, 1997; this increase is due primarily to the
purchase of the banks in-house computer system in May,
1997. The increase in equipment depreciation is
partially offset by a decrease in purchased data
processing for 1998 compared to 1997.  Finally, other
operating expenses for the three months ended March 31,
1998 increased $23,343 or 18.29% to $150,946 from
$127,603 for the three months ended March 31, 1997.
This increase is primarily due to inflationary
increases, the bank's in-house computer system,
additional costs at the Financial Resource Center and
new product introductions.

     Year 2000 Risks.   The Company is exposed to
future uncertainty, potential future reduction in
earnings, and future losses, including litigation, due
to business interruption or errors, if its computer
systems are not modified to ensure that dates after
December 31, 1999 are not misrepresented by those
systems. This eventuality is commonly referred to as
the Year 2000 problem.
     
     The Bank uses computer-related technologies and
software throughout its business that will be affected
by the date change in the year 2000.  The Bank's
directors, senior management and staff are aware of
these Year 2000 issues and have appointed a technology
committee to study and direct the project to bring all
of the computer-related systems into Year 2000
compliance during 1998 and 1999. In accordance with the
guidelines of the FDIC, the technology committee will
be addressing the issue using the following phases

                    1) Awareness
                    2) Assessment
                    3) Renovation
                    4) Validation
                    5) Implementation

     The Bank has recently converted its main data
processing system.  The vendor has provided the Bank
with a copy of its Year 2000 project plan and stated
that the software is Year 2000 compliant.  The Bank is
in the process of obtaining similar information and
commitments from the Bank's other vendors.  

<PAGE>

The Bank is
acting upon the belief and understanding that  all
federal agencies are actively managing the Year 2000
problems which are inherent in the global banking and
payments system.
     
Since the Bank is in the Assessment phase, it is not
practicable to estimate the total costs of dealing with
the Year 2000 problem. These costs, when incurred, will
be expensed by the Company and will reduce the
Company's future reported earnings.

ALLOWANCE FOR LOAN LOSSES

The amount charged to the provision for loan losses by
the Bank is based on management's evaluation as to the
amounts required to maintain an allowance adequate to
provide for potential losses inherent in the loan
portfolio. The level of this allowance is dependent
upon the total amount of past due and non-performing
loans, general economic conditions and management's
assessment of potential losses based upon internal
credit evaluations of the loan portfolio and particular
loans. The Bank's credit customers are subject to
potential losses as a result of Year 2000 exposure in
their own computer systems as well as the computer
systems of their suppliers and customers.  The Bank is
working with those customers that may be significantly
affected by the Year 2000 exposure.  The exposure, if
not adequately addressed, will be taken into account in
assessing the loss potential, if any, associated with
each credit relationship.  Loans are entirely to
borrowers in Northeast Wisconsin.

The Bank generally places loans on non-accrual status
when the loan is past due as to the payment of interest
and/or principal in excess of 90 days. The Bank also
places loans on a non-accrual status when it deems the
collection of such interest unlikely. Loans are
returned to full accrual status when the loan is
brought current according to all terms of the loan
agreement, all past due principal and interest is paid
and the Bank deems its collateral position adequate to
warrant a return to accrual status.

At March 31, 1998 and 1997 the Company did not have any
loans past due 90 days or more that were still accruing
interest. At March 31, 1998 and 1997 the Company did
not have any loans that meet the definition of
"Troubled Debt Restructuring" contained in SFAS No. 15.
In addition, there were no loans considered to be
impaired in accordance with the requirements of SFAS
No. 114.  The Bank had $238,000 of nonaccrual loans at
March 31, 1998 and $410,000 of nonaccrual loans at
March 31, 1997.

During the three months ended March 31, 1998, $37,500
was charged to the provision for loan losses compared
to $30,000 for the three months ended March 31, 1997.
At March 31, 1998 the allowance was $704,000 or 1.22%
of total loans. This compares to an allowance of
$686,000 or 1.22% of total loans as of March 31, 1997.
For the three months ended March 31, 1998 the Bank had
net charge-offs of $11,000 compared to net recoveries
of $2,000 for the three months ended March 31, 1997.

The following table summarizes loan charge-offs and
recoveries by type of loan for the three months ended
March 31, 1998 and 1997:

    Loan Type        March 31, 1998        March 31, 1997
                   Charge-   Recovery    Charge-  Recovery
                     Off                   Off
                                                  
Real Estate         $   0    $    0       $  0     $   0
Commercial and          0         0          0         0
  Industrial
Agricultural            0         0          0    12,000
Consumer           18,000     7,000     12,000     2,000
                                                           
TOTALS           $ 18,000   $ 7,000    $12,000   $14,000

<PAGE>

The Bank has allocated its allowance for credit losses
at the end of each period presented as follows:
                           March 31, 1998     March 31, 1997

                                     % of              % of
                                     loans             loans
Balance at End of                     to                to
Period Applicable to:                total             total
                          Amount     Loans   Amount    Loans

Commercial and          $ 10,000      50%   $ 40,000    48%
  agricultural                 
Real Estate-                           5%                4%
  construction
Real Estate-mortgage       5,000      34%      5,000    37%
Consumer                  38,500      11%     51,000    11%
                                       
Total Domestic            53,500     100%     96,000   100%
                                                            
Unallocated              650,500             590,000
                                                            
TOTALS                 $ 704,000     100%  $ 686,000   100%


LIQUIDITY AND INTEREST RATE SENSITIVITY

The Company must maintain an adequate liquidity
position in order to respond to the short-term demand
for funds caused by withdrawals from deposit accounts,
extensions of credit and for the payment of operating
expenses.  Maintaining this position of adequate
liquidity is accomplished through the management of a
combination of liquid assets; those which can be
converted into cash and access to additional sources of
funds.  Primary liquid assets of the Company are cash
and due from banks, federal funds sold, investments
held as "available for sale" and maturing loans.
Federal funds purchased and loans from the Federal Home
Loan Bank system represent the Company's primary source
of immediate liquidity and were maintained at a level
to meet immediate needs.  Federal Funds Sold averaged
approximately $2,012,000 and $395,000 for the three
months ended March 31, 1998 and 1997, respectively.
Maturities in the Company's loan and investment
portfolios are monitored regularly to avoid matching
short-term deposits with long-term loans and
investments. Other assets and liabilities are also
monitored to provide the proper balance between
liquidity, safety, and profitability.  This monitoring
process must be continuous due to the constant flow of
cash that is inherent in a financial institution.

The Company actively manages its interest rate
sensitive assets and liabilities to reduce the impact
of interest rate fluctuations. In addition, the Bank
monitors the interest rates paid on Certificates of
Deposit as advertised by its competitors and strives to
pay competitive interest rates to retain and attract
Certificates of Deposit. Should competitive pressures
dictate, the Bank may have to increase rates paid to
retain the Certificates of the Deposit that mature in
the next year and any increase in interest rates paid
on Certificates of Deposit may reduce future Company
Earnings. The Bank also monitors the assets and
liabilities that reprice each month to determine the
impact on future earnings from anticipated repricings.
At March 31, 1998, the Company's rate sensitive assets
exceed rate sensitive liabilities due within one year
by $6,449,000.

As part of managing liquidity, the Company monitors its
loan to deposit ratio on a daily basis.  At March 31,
1998 the ratio was 80.9% which is within the Company's
acceptable range.

The Company experienced an increase in cash and cash
equivalents, its primary source of liquidity, of
$1,297,329 for the three months ended March 31, 1998.
The primary source of cash flow for the three months
ended March 31, 1998 was cash provided by operating
activities of $438,778 and a decrease in loans of
$3,248,933. Cash outflow for the three months ended
March 31, 1998 primarily consisted of the following:
Net security purchases of $533,092, a decrease in
deposits of $1,390,097 and a reduction in short-term
borrowings of $384,187. Even though the Company
experienced a decrease in loans and deposits in the
first quarter of 1998, the Company's management
believes its liquidity sources are adequate to meet its
operating needs and does not know of any trends, events
or uncertainties that may result in a significant
adverse effect on the Company's operations or liquidity
position.

<PAGE>

The following table illustrates the projected
maturities and the repricing mechanisms of the major
asset/liability categories of the Company as of March
31, 1998, based on certain assumptions. No prepayment
rate assumptions have been made for the loan portfolio.
Maturities and repricing dates for investments have
been projected by applying the assumptions set forth
below to contractual maturities and repricing dates.

                       1 Year     1 - 5       5 - 10      After 10
                      or Less     Years        Years        Years
Interest Earning                                   
  Assets:
   Fed Funds Sold   $ 3,417,000
   Investment       $ 1,452,000  $2,160,000  $5,732,000   $5,327,000
     Securities
   Loans                                                    
      Variable Rate $ 8,812,000
      Real Estate-  $ 2,309,000 $   535,000
        Construction
      Real Estate-  $ 9,168,000 $ 5,148,000  $  553,000
        Other
      Commercial    $11,159,000 $ 4,961,000  $  541,000
        and 
        Industrial
      Agricultural  $ 4,887,000 $   460,000  $  212,000
      Consumer      $ 3,763,000 $ 4,857,000  $  280,000
   Other            $   383,000 $       -0-  $      -0-   $      -0-
                                                            
Total Interest      $45,350,000 $18,121,000  $7,318,000   $5,327,000
  Earning Assets          
                                                            
Interest Bearing                                            
  Liabilities:
   Interest Bearing                                      $ 5,580,000
     Demand
   Savings Deposits $ 4,029,000                          $10,021,000
   Money Market     $ 1,230,000                          $ 2,867,000
     Accounts
   Certificates of  $24,334,000 $ 6,228,000
     Deposit              
   Jumbo CD's       $ 3,097,000 $   915,000
   IRA's            $ 5,399,000 $   162,000
   Other            $   812,000 $    63,000  $      -0-   $      -0-
                                                            
                                                            
Total Interest      $38,901,000 $ 7,368,000  $      -0-   $18,468,000
  Bearing 
  Liabilities     
                                                            
Interest            $ 6,449,000 $10,753,000  $7,318,000 ($13,141,000)
  Sensitivity 
  Gap per Period      
                                                            
Cumulative Interest $ 6,449,000 $17,202,000 $24,520,000  $11,379,000  
Sensitivity Gap
                                                            
Interest Sensitivity       8.5%       14.1%        9.6%      (17.3%)
Gap as a Percentage    
of Earning Assets
                                                            
Cumulative                 8.5%       22.6%       32.2%        14.9%
Sensitivity Gap as a     
Percentage of Earning
Assets

<PAGE>
                                                            
              PART II - OTHER INFORMATION

Item 2.     Changes in Securities and Use of Proceeds

        On May 2, 1998, shareholders approved amended and restated
        Articles of Incorporation.  Among the changes approved by 
        shareholders were amendments to the Company's articles of
        incorporation (a) increasing the number of authorized shares 
        of Common Stock from 300,000 to 2,400,000, (b) authorizing
        400,000 shares of "blank check" preferred stock, (c) requiring
        a supermajority vote of shareholders (80%) in order to amend
        the Company's Bylaws relating to shareholder nominations and
        proposals and indemnification of directors and officers and (d)
        deleting provisions relating to the required shareholder vote
        to approve mergers and consolidations and to amend the Company's
        articles of incorporation (as these matters are governed by the
        Wisconsin Business Corporation Law).
                           
Item 6.     Exhibits and reports on Form 8-K

        (a) Exhibits

        3.1 Articles of Incorporation.
        27  Financial Data Schedule

      (b) Reports on Form 8-K

        During the quarter ended March 31, 1998, the
        registrant did not file any reports on Form 8-K.


                      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 hereunto
duly authorized.

                                                       
                              LUXEMBURG BANCSHARES, INC.
                                      (Registrant)
                          
                           
/s/ John A. Slatky                 /s/ Thomas L. Lepinski
------------------------------     ------------------------------
John A. Slatky,                    Thomas L. Lepinski, C. P. A.
President and Chief Executive      Treasurer
Officer                            (Principal Accounting Officer)

Date May 12, 1998                 Date May 12, 1998