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 June 30, 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 August 10, 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 - June 30,                 3
  1998 and December 31, 1997                             
                                                      
  Consolidated Statements of Income -                    4                
  Three and Six Months Ended June 30, 
  1998 and 1997                                          
                                                      
  Consolidated Condensed Statements of                   5
  Changes in Stockholders' Equity - Six               
  Months Ended June 30, 1998 and 1997                    
                                                      
  Consolidated Statements of Cash Flow -                 6
  Six Months Ended June 30, 1998 and 1997                
                                                      
  Notes to Consolidated Financial                        7 - 8
  Statements
                                                      
  Management's Discussion and Analysis                   9 - 14
  of Financial Condition and Results of              
  Operations
                                                      
  PART II - OTHER INFORMATION                         
                                                      
  Item 4 - Submission of Matters to a                    15
  Vote of Security Holders
                                                      
  Item 6 - Exhibits and Reports on Form                  15
  8-K
                                                      
  SIGNATURES                                             15

<PAGE>
                                                      
            PART I - FINANCIAL INFORMATION
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
       CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
         June 30, 1998 and December 31,  1997

                        ASSETS

                                                      
                                          1998        1997

Cash and due from banks               $2,284,635  $3,326,444
Interest-bearing deposits                478,676     639,264
Federal funds sold                     5,001,000   1,167,000
                                                            
     Cash and cash equivalents         7,764,311   5,132,708
                                                            
Investment securities available for   14,308,339  14,113,429
  sale-Stated at fair value
                                                            
Total loans                           58,281,935  60,904,981
     Allowance for credit losses       (720,080)   (677,101)
Net loans                             57,561,855  60,227,880
Premises and equipment                 1,656,539   1,711,350
Other investments at cost                275,050     253,050
Other assets                           2,215,368   2,115,831
                                                            
TOTAL ASSETS                         $83,781,462 $83,554,248
                                                            

         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                      
                                        1998        1997
LIABILITIES:                                     
                                                 
Non-interest-bearing deposits        $ 8,333,370 $ 9,103,744
Interest-bearing deposits             64,239,484  63,542,623
Total deposits                        72,572,854  72,646,367
                                                            
Short-term borrowings                    371,407     640,002
Borrowed funds                           605,919     632,828
Other liabilities                                           
                                       1,273,065   1,106,175
                                                            
     Total liabilities                                      
                                      74,823,245  75,025,372
                                                            
STOCKHOLDERS' EQUITY:                                       
                                                            
Common stock- $1.00 par value:                              
     Authorized - 2,400,000 shares,      270,500            
     Issued - 270,500 shares
Common stock- $.1667 par value:                             
     Authorized - 300,000 shares,                     45,083
     Issued - 270,500 shares
Capital surplus                        3,206,508   3,431,925
Retained earnings                      5,723,087   5,293,023
Other comprehensive income -             102,472     103,195
  Unrealized gain on investment           
  securities available for sale -
  Net of tax
Less - 26,999 shares of treasury       (344,350)   (344,350)
  common stock, at cost              
                                                            
     Total stockholders' equity       8,958,217   8,528,876
                                                            
TOTAL LIABILITIES AND STOCKHOLDERS' $83,781,462 $83,554,248
EQUITY
                           
   See accompanying notes to consolidated financial statements.

<PAGE>

      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
                         
                                   Three Months          Six Months Ended
                                  Ended June 30,              June 30,
                                                                  
                                  1998       1997        1998        1997
INTEREST INCOME:                                                             
                                                                             
Interest and fees on loans     $1,329,945  $1,302,161  $2,677,644  $2,540,032
Interest on investment                                                       
  securities:
     Taxable                      163,892     182,773     338,273     354,178
     Tax-exempt                    50,706      30,292      95,789      59,822
Other interest and dividend        67,042      10,217     102,758      24,563
  income                                                 
     Total interest income      1,611,585   1,525,443   3,214,464   2,978,595
                                                                             
INTEREST EXPENSE:                                                            
                                                                             
Deposits                          783,214     706,327   1,538,739   1,384,797
Short-term borrowings               2,901      18,383       5,934      26,961
Borrowed funds                     10,936       8,395      22,137      13,521
                                                                             
     Total interest expense       797,051     733,105   1,566,810   1,425,279
                                                                             
Net interest income               814,534     792,338   1,647,654   1,553,316
Provision for credit losses        37,500      30,000      75,000      60,000
                                                                  
Net interest income after         777,034     762,338   1,572,654   1,493,316
provision for credit losses
                                                                             
OTHER INCOME:                                                                
                                                                             
Service charges on deposit         50,814      46,971      93,488      92,370
  accounts
Mortgage underwriting fees -       58,977      29,014     133,981      40,572
  Secondary market
Loan servicing fee income          22,671       7,348      39,693      21,273
Other operating income            164,946     131,836     336,428     262,187
                                                                             
     Total other income           297,408     215,169     603,590     416,402
                                                                             
OPERATING EXPENSES:                                                          
                                                                             
Salaries and related benefits     384,401     372,698     782,681     717,335
Net occupancy expense              38,930      41,071      83,339      84,611
Equipment rentals,                 74,684      53,196     150,477      96,481
  depreciation, and maintenance
Data processing                    30,085      84,096      57,367     129,217
Other operating expenses          170,445     164,476     321,391     292,079
                                                                             
     Total operating expenses     698,545     715,537   1,395,255   1,319,723
                                                                             
Income before provision for       375,897     261,970     780,989     589,995
  income taxes
Provision for income taxes        113,159      73,260     236,480     172,775
                                                                             
Net income                      $ 262,738   $ 188,710   $ 544,509   $ 417,220
                                                                             
Basic earnings per common           $1.08       $0.78       $2.24       $1.72
  share

   See accompanying notes to consolidated financial statements.

<PAGE>

      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
                           
         CONSOLIDATED CONDENSED STATEMENTS OF
     CHANGES IN STOCKHOLDERS' EQUITY - (UNAUDITED)
        Six Months Ended June 30, 1998 and 1997
                           
                           
                                Six Months Ended     Six Months Ended
                                 June 30, 1998         June 30, 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                              544,509            417,220
   Other comprehensive income                (723)             11,738
    - Change in net
    unrealized gain/loss on                                          
    securities available for sale   
                                                                     
Total comprehensive income                 543,786            428,958
                                                                     
Dividends paid                           (114,445)           (97,220)
                                                                     
Employee stock bonus                                   315     10,080
                                                                     
Balance - End of period       243,501   $8,958,217 243,051 $8,021,834
                                                                     
                                                                     
                                                                     
    See accompanying notes to consolidated financial statements.

<PAGE>
                                                                     
      LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOW - (UNAUDITED)
        Six Months Ended June 30, 1998 and 1997

                                                      
                                          1998        1997
CASH FLOWS FROM OPERATING                                   
ACTIVITIES:
                                                            
Net income                               544,509     417,220
Adjustments to reconcile net income                         
  to net cash provided by operating 
  activities:                         
    Depreciation and amortization        154,783      96,701
    Accretion of discounts on          ( 16,602)    (21,812)
      securities
    Amortization of premiums on            5,433      17,686
      securities
    Provision for credit losses           75,000      60,000
    Employee stock bonus                              10,080
    Gain on sale of other real             (164)            
      estate
    Credit for deferred taxes           (23,324)   ( 31,222)
    Change in other operating assets   (140,124)   (130,156)
    Change in other operating            220,433     170,272
      liabilities                            
                                                            
      Total adjustments                  275,435     171,549
                                                            
Net cash provided by operating           819,944     588,769
  activities                            
                                                            
CASH FLOWS FROM INVESTING                                   
ACTIVITIES:
    Proceeds from maturities of        1,505,929   3,800,164
      securities available for sale   
    Purchase of securities available (1,690,625) (4,117,287)
      for sale                           
    Net decrease (increase) in loans   2,591,025 (3,854,060)
    Purchase of additional life         (17,300)    (17,300)
      insurance
    Proceeds from sale of other real      15,164            
      estate
    Capital expenditures                (87,072)   (401,381)
    Purchase of other investments       (22,000)     (1,400)
                                                            
Net cash provided by (used in)         2,295,121 (4,591,264)
  investing activities                 
                                                            
CASH FLOWS FROM FINANCING                                   
ACTIVITIES:
    Net increase (decrease) in          (73,513)   2,962,977
      deposits
    Net increase (decrease) in short-  (268,595)     187,199 
      term borrowings
    Loan from FHLMC                          -0-     500,000
    Principal payments on borrowed      (26,909)    (31,277) 
      funds
    Dividends paid                     (114,445)    (97,220)
                                                            
Net cash provided by (used in)         (483,462)   3,521,679
  financing activities
                                                            
Net increase (decrease) in cash and    2,631,603   (480,816)
  cash equivalents
Cash and cash equivalents at           5,132,708   3,732,501
  beginning
                                                            
Cash and cash equivalents at end      $7,764,311  $3,251,685
                                                            
Supplemental information:                                   
                                                            
Cash paid during the period for:                            
    Interest                          $1,484,239  $1,259,676
    Income taxes                         254,015     187,968
The Company entered into capital leases 
of $73,931 in 1997 for the purchase of 
computer equipment.
                           
   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
                               June 30, 1998    December 31, 1997
                                             
Commitments to extend credit      $4,271,000      $3,457,000
Credit card arrangements             603,000         590,000
Standby letters of credit            205,000         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.

In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting
Standards ("FAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement
requires that all derivative financial instruments be
recognized as either assets or liabilities in the
consolidated balance sheet. Derivative financial
instruments not designated as hedges will be measured
at fair value with changes in fair value being
recognized in earnings in the period of change. If a
derivative is designated as a hedge, the accounting for
changes in fair value will depend on the specific
exposure being hedged. This statement is effective for
fiscal years beginning after June 15, 1999. Management,
at this time, cannot determine the effect the adoption
of this statement may have on the financial statements
of the Company, as the effect is dependent on the
amount and nature of derivatives and hedges held at the
time of adoption of the statement.

<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          Six Months Ended 
                                  June 30,                   June 30,
                            1998        1997            1998         1997
 
Net Earnings               262,738     188,710        544,509      417,220
Average Consolidated                                           
Balance Sheet Items:
   Loans                56,826,343  56,029,822     57,280,629   55,287,700
   Taxable Investment   10,043,996  11,754,898     10,338,974   11,716,639
     Securities                   
   Fed Funds Sold        4,242,374     149,590      3,152,346      281,617
   Municipal Loans &     5,328,887   4,038,993      5,295,503    3,961,071
     Investments              
   Other Earning Assets    687,294     580,812        616,805      618,087
      Total Earning     77,128,894  72,554,115     76,684,257   71,865,114
        Assets                     
   Total Assets         82,923,315  78,073,540     82,401,483   77,159,052
   Deposits             72,863,043  68,988,195     72,495,066   68,197,843
   Shareholders' Equity  8,898,929   8,036,694      8,814,622    7,938,566
                
                                                               
Key Ratios:                                                    
   Average Equity to        10.73%      10.29%         10.70%      10.29%
     Average Total Assets
   Return on Average         1.27%        .97%          1.32%       1.08%
     Total Assets
   Return on Average        11.81%       9.39%         12.35%      10.51%
     Equity
   Net Interest Margin       4.24%       4.38%          4.33%       4.38%
                                                               

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 $22,196 or  2.80% to $814,534 for
the three months ended June 30, 1998, from $792,338 for
the three months ended June 30, 1997. The increase in
net interest income reflects a narrowing of the
Company's net interest margin due to a slackening of
loan demand, the investment of excess funds in fed
funds sold (which carry a lower interest rate compared
to loans) and an increase in the rates paid on the
banks certificates of deposit.


                          Three Months Ended          Six Months Ended 
                              June 30,                     June 30,
                         1998            1997        1998          1997

Interest Income      $1,611,585      $1,525,443   $3,214,464    $2,978,595
Interest Expense        797,051         733,105    1,566,810     1,425,279
Net Interest Income  $  814,534      $  792,338   $1,647,654    $1,553,316
                             
                                                           
Net Interest Margin       4.24%           4.38%        4.33%         4.38%
                                                           

RATE/VOLUME ANALYSIS

The impact of changes in volume and interest rates on
net interest income for the three and six months ended
June 30, 1998 is illustrated in the following table:

Three Months Ended June 30, 1998 Compared to Three
Months Ended June 30, 1997.

                       Increase (Decrease) in Net Interest Income
                    Net Change      Due To Rate       Due To Volume

Interest Income     $  86,142        $  22,320          $  63,822
Interest Expense       63,946           18,801             45,145
Net Interest Income $  22,196        $   3,519          $  18,677

<PAGE>

Six Months Ended June 30, 1998 Compared to Six Months
Ended June 30, 1997.

                           Increase (Decrease) in Net Interest Income
                         Net Change      Due To Rate       Due To Volume

Interest Income          $  235,869       $  78,513           $ 157,356
Interest Expense            141,531          47,881              93,650
Net Interest Income      $   94,338       $  30,632           $  63,706

As previously discussed, for the three months ended
June 30, 1998 compared to the three months ended June
30, 1997, the Company invested additional funds
obtained from the issuance of certificates of deposit
in fed funds sold at a negative spread. This caused the
average rate on earning assets to decrease to 8.38 %
for the three months ended June 30, 1998 compared to
8.43 % for the three months ended June 30, 1997. The
average rate on earning assets for the six months ended
June 30, 1998 was 8.45 % compared to 8.36 % for the six
months ended June 30, 1997. Also, for the six months
ended June 30, 1998 average loans increased 3.6 % to
$57,280,629 compared to $55,287,700 for the six months
ended June 30, 1997. For the three months ended June
30, 1998 average loans only increased 1.4% compared to
the three months ended June 30, 1997. This larger
percentage growth in loans and an increase in the
average yield on taxable investments from 6.10 % for
the six months ended June 30, 1997 to 6.60% for the six
months ended June 30, 1998 partially offset the
increased interest cost due to the 10.7 % growth in
other time deposits for the same period. Those factors
also resulted in a larger percentage increase in net
interest margin (6.07%) for the six months ended June
30, 1998 compared to the increase for the three months
ended June 30, 1998 ( 2.80%).

OPERATING RESULTS

Net income for the three months ended June 30, 1998,
increased $74,028 or 39.2% to $262,738 from $188,710
for the three months ended June 30, 1997. The increase
in net interest income is $22,196 for the three months
ended June 30, 1998, compared to the three months ended
June 30, 1997, and is discussed in "Net Interest
Income" and "Rate/Volume Analysis" elsewhere in this
report. Mortgage underwriting fees - Secondary market
increased $29,963 or 103.27% to $58,977 for the three
months ended June 30, 1998, compared to $29,014 for the
three months ended June 30, 1997. This increase is
primarily due to increased volume as for the three
months ended June 30, 1998, the Company originated
$3,267,500 of loans for the secondary market compared
to $849,000 for the three months ended June 30, 1997.
Other operating income increased $33,110 or 25.11% for
the three months ended June 30, 1998 compared to the
three months ended June 30, 1997. The main reason for
this increase was increased sales of alternative
investment products by the Company's Financial Resource
Center (FRC). Commission income for the FRC increased
$37,498 or 60.61% to $99,363 for the three months ended
June 30, 1998 compared to $61,865 for the three months
ended June 30, 1997.

Operating expenses for the three months ended June 30,
1998 decreased $16,992 or 2.4% to $698,545 compared to
$715,537 for the three months ended June 30, 1997.
Equipment rentals, depreciation, and maintenance for
the three months ended June 30, 1998 increased $21,488
or 40.39% to $74,684 compared to $53,196 for the three
months ended June 30, 1997. Included in this total is
equipment depreciation which increased $21,988 or 59.7%
to 58,800 for the three months ended June 30, 1998
compared to $36,812 for the three months ended June 30,
1997; This increase is due primarily to the purchase of
the banks in-house computer system in May, 1997. Data
Processing expense decreased $54,011 or 64.2% from
$84,096 for the three months ended June 30, 1997 to
$30,085 for the three months ended June 30, 1998.
Expenses in 1997 included deconversion costs for
converting the bank's data to it's in-house computer
system and data processing costs paid to it's service
bureau which were partially replaced by additional
equipment depreciation in 1998.

Net income for the six months ended June 30, 1998,
increased $127,289 or 30.5% to $544,509 from $417,220
for the six months ended June 30, 1997. The increase in
net interest income is $94,338 for the six months ended
June 30, 1998, compared to the six months ended June
30, 1997, and is discussed in "Net Interest Income" and
"Rate/Volume Analysis" elsewhere in this report.
Mortgage underwriting fees - Secondary market increased
$93,409 or 230.23% to $133,981 for the six months ended
June 30, 1998, compared to $40,572 for the six months
ended June 30, 1997. This increase is primarily due to
increased volume as for the six months ended June 30,
1998, the Company originated $8,487,700 of loans for
the secondary market compared to $1,398,000 for the six
months ended June 30, 1997. Other operating income
increased $74,241 or 28.32% for the six months ended
June 30, 1998 compared to the six months ended June 30,
1997. The main reason for this increase was increased
sales of alternative investment products by the
Company's Financial Resource Center (FRC). Commission
income for the FRC increased $65,508 or 50.48% to
$195,271 for the six months ended June 30, 1998
compared to $129,763 for the six months ended June 30,
1997.

<PAGE>

Operating expenses for the six months ended June 30,
1998 increased $75,532 or 5.7% to $1,395,255 compared
to $1,319,723 for the six months ended June 30, 1997.
Salaries and related benefits increased $65,346 or 9.1%
to $782,681 for the six months ended June 30, 1998
compared to $717,335 for the six months ended June 30,
1997. The increase is due to inflationary increases and
higher costs for employee benefit programs. Equipment
rentals, depreciation, and maintenance for the six
months ended June 30, 1998 increased $53,996 or 55.97%
to $150,477 compared to $96,481 for the six months
ended June 30, 1997. Included in this total is
equipment depreciation which increased $54,235 or 85.9%
to $117,350 for the six months ended June 30, 1998
compared to $63,115 for the six months ended June 30,
1997; This increase is due primarily to the purchase of
the banks in-house computer system in May, 1997. Data
Processing expense decreased $71,850 or 55.6% from
$129,217 for the six months ended June 30, 1997 to
$57,367 for the six months ended June 30, 1998.
Expenses in 1997 included deconversion costs for
converting the bank's data to it's in-house computer
system and data processing costs paid to it's service
bureau which were partially replaced by additional
equipment depreciation in 1998.
     
     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. The technology
committee is reviewing both Information Technology
systems and non-Information Technology Systems
including the bank's telephone systems, HVAC systems
and Security equipment. In accordance with the
guidelines of the FDIC, the technology committee is
addressing the issue using the following phases :

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

     The Bank has established a Year 2000 plan which
established December 31, 1998 as the completion date
for all renovation and testing of the computer hardware
and software. The Company has contracted with Jack
Henry & Associates for proxy or group testing of it's
major computer system which is used to maintain
customer accounts and bank accounting records. In
accordance with the guidelines established by the FDIC
a written contingency plan has been approved by the
Board of Directors.
     
     The Bank has recently converted it's 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.  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.
     
The loan and deposit customers identified as having
potential Year 2000 risks have been surveyed by the
Bank officers to determine the effect the Year 2000
problems may affect their business and the preparedness
of the companies affected.   With most of the surveys
returned, the indication is  that the companies with
potential Year 2000 risk, have established procedures
to address and implement changes necessary to mitigate
the Year 2000 problems.

The Bank has substantially completed the assessment
phase and has tentatively estimated total costs of
dealing with the Year 2000 problem at $50,000. The
Company had not incurred any out of pocket costs for
Y2K renovation as of June 30, 1998. These costs, when
incurred, will be capitalized or expensed by the
Company, as appropriate. Costs expensed 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.

<PAGE>

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 June 30, 1998 the Company had $44,000 of loans past
due 90 days or more that were still accruing interest.
At June 30, 1997 the Company did not have any loans
past due 90 days or more that were still accruing
interest. At June 30, 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 $217,000 of nonaccrual loans at June 30,
1998 and $329,000 of nonaccrual loans at June 30, 1997.

During the three months ended June 30, 1998, $37,500
was charged to the provision for loan losses compared
to $30,000 for the three months ended June 30, 1997. At
June 30, 1998 the allowance was $720,000 or 1.24% of
total loans. This compares to an allowance of $702,000
or 1.19% of total loans as of June 30, 1997.  For the
three months ended June 30, 1998 the Bank had net
charge-offs of $21,000 compared to net charge-offs of
$13,000 for the three months ended June 30, 1997.

The following table summarizes loan charge-offs and
recoveries by type of loan for the three months ended
June 30, 1998 and 1997:

Loan Type              June 30, 1998           June 30, 1997
                                                      
                   Charge-Off   Recovery    Charge-Off  Recovery
                                                  
Real Estate         $      0    $     0      $     0    $      0
Commercial and        13,000      5,000            0       3,000 
  Industrial
Agricultural               0          0            0           0
Consumer              13,000          0       19,000       3,000
                                                           
TOTALS              $ 26,000    $ 5,000     $ 19,000     $ 6,000

The following table summarizes loan charge-offs and
recoveries by type of loan for the six months ended
June 30, 1998 and 1997:

Loan Type             June 30, 1998            June 30, 1997
                                                      
                   Charge-Off   Recovery    Charge-off  Recovery
                                                  
Real Estate         $      0  $      0       $      0  $      0
Commercial and        13,000     5,000              0     3,000
  Industrial
Agricultural               0         0              0    12,000
Consumer              31,000     7,000         31,000     5,000
                                                           
TOTALS              $ 44,000  $ 12,000       $ 31,000  $ 20,000

<PAGE>

The Bank has allocated its allowance for credit losses
at the end of each period presented as follows:

                          June 30, 1998      June 30, 1997

                                     % of              % of
                                     loans             loans
Balance at End of                     to                to
Period Applicable to:                total             total
                          Amount     Loans   Amount    Loans
                                                         
Commercial and           $ 3,000      49%   $ 32,000    46%
  agricultural                            
Real Estate-                           5%                5%
  construction
Real Estate-mortgage                  34%               37%
Consumer                  34,000      12%     15,000    12%
                                                            
Total Domestic            37,000     100%     47,000   100%
                                                            
Unallocated              683,000             655,000
                                                            
TOTALS                 $ 720,000     100%  $ 702,000   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 $4,242,000 and $150,000 for the three
months ended June 30, 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 June 30, 1998, the Company's rate sensitive assets
exceed rate sensitive liabilities due within one year
by $7,251,000.

As part of managing liquidity, the Company monitors its
loan to deposit ratio on a daily basis.  At June 30,
1998 the ratio was 80.3% which is within the Company's
acceptable range.

The Company experienced an increase in cash and cash
equivalents, its primary source of liquidity, of
$2,631,603 for the six months ended June 30, 1998. The
primary source of cash flow for the six months ended
June 30, 1998 was cash provided by operating activities
of $819,944 and a decrease in loans of $2,591,025. Cash
outflow for the six months ended June 30, 1998
primarily consisted of the following: Net security
purchases of $184,696, a decrease in deposits of
$73,513, a reduction in short-term borrowings of
$268,595, capital expenditures of $87,072 and dividends
paid of $114,445. Even though the Company experienced a
decrease in deposits for the first two quarters 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. In addition, at June
30, 1998, the company had Fed Funds Sold of $5,001,000
to meet the Company's short-term liquidity needs.

<PAGE>

The following table illustrates the projected
maturities and the repricing mechanisms of the major
asset/liability categories of the Company as of June
30, 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    $ 5,001,000
   Investment        $   951,000 $ 2,257,000  $5,728,000  $5,372,000
     Securities       
   Loans                                                    
      Variable Rate  $ 7,888,000
      Real Estate-   $ 2,486,000 $   576,000
        Construction
      Real Estate-   $ 8,661,000 $ 4,643,000  $  119,000  $  327,000
        Other
      Commercial and $12,836,000 $ 5,070,000  $  460,000  $  161,000
        Industrial            
      Agricultural   $ 4,901,000 $   590,000  $   11,000  $  212,000
      Consumer       $ 4,294,000 $ 5,037,000  $   10,000  
             
   Other             $   754,000         -0-         -0-         -0-
                                                            
Total Interest       $47,772,000 $ 18,173,000 $ 6,328,000 $6,072,000
  Earning Assets     
                                                            
Interest Bearing                                            
  Liabilities:
   Interest Bearing                                       $4,371,000
     Demand                                    
   Savings Deposits  $ 4,153,000                          $9,806,000
   Money Market      $ 1,154,000                          $2,692,000
     Accounts     
   Certificates of   $27,123,000 $ 6,883,000
     Deposit                   
   Jumbo CD's        $ 2,634,000 $   714,000
   IRA's             $ 4,529,000 $   181,000
   Other             $   928,000 $    49,000         -0-         -0-
                                                            
                                                            
Total Interest       $40,521,000 $ 7,827,000         -0-  $16,869,000
Bearing Liabilities      
                                                            
                                                            
Interest Sensitivity $ 7,251,000 $10,346,000 $ 6,328,000 ($10,797,000)
Gap per Period     
                                                            
Cumulative Interest  $ 7,251,000 $17,597,000 $23,925,000  $13,128,000
Sensitivity Gap      
                                                            
Interest Sensitivity        9.3%       13.2%        8.1%      (13.8%)
Gap as a Percentage    
of Earning Assets
                                                            
Cumulative                  9.3%       22.5%       30.6%       16.8% 
Sensitivity Gap as a     
Percentage of Earning
Assets

<PAGE>
                                                            
              PART II - OTHER INFORMATION
                           
Item 4.   Submission of Matters to a Vote of Security
Holders

      The annual meeting of Luxemburg Bancshares, Inc.
was held on May 15, 1998. The following eight directors
were elected: Richard Dougherty, James Jadin, Ronald Ledvina,
Willard Marchant, Donald Pritzl, Thomas Rueckl, John Slatky and
Irvin Vincent. Each director received 172,491 shares for, none 
against and 3070 shares abstained from voting. As detailed in the 
Company's Definitive Proxy Statement, a proposal to amend and 
restate the Company's Articles of Incorporation was voted on as
follows: 173,763 shares for, 344 shares against and 1,454 shares 
abstaining.

Item 6.     Exhibits and Reports on Form 8-K

    (a) Exhibits

        3  Amended and Restated Articles of
           Incorporation of the Company
       27  Financial Data Schedule

    (b) Reports on Form 8-K

        During the quarter ended June 30, 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               Treasurer 
Executive Officer                 (Principal Accounting Officer)

Date August 13, 1998              Date August 13, 1998