U.S. SECURITIES AND EXCHANGE COMMISSION
                Washington, D.C. 20549
                           
                      Form 10-QSB
                           
(Mark one)
  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
 PERIOD ENDED September 30, 1997.

  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934 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,                              54217
  Luxemburg, Wisconsin
 (Address of principal                         (Zip Code)
   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 of the
issuer's classes of common equity, as of the latest
practicable date.   As of November 10, 1997 243,051
shares of Common Stock were outstanding.


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

                           
                           
              LUXEMBURG BANCSHARES, INC.
                           
                         INDEX



                                                   Page No.
PART I - FINANCIAL INFORMATION                    
                                                  
Consolidated Balance Sheets - September 30, 1997            
and December 31, 1996                                      2
                                                            
Consolidated Statements of Income- Nine and Three           
Months Ended September 30, 1997 and 1996                   3

                                                            
Consolidated Statements of Cash Flow -Nine Months           
Ended September 30, 1997 and 1996                          4

                                                            
Notes to Consolidated Financial Statements             5 - 7
                                                            
Management's Discussion and Analysis of Financial           
Condition and Results of Operations                    8 - 13
                                                            
PART II - OTHER INFORMATION                                 
                                                            
Item 6 - Exhibits and Reports on form 8-K                 14
                                                            
SIGNATURES                                                14

<PAGE>

            PART I - FINANCIAL INFORMATION
              LUXEMBURG BANCSHARES, INC.
                   AND SUBSIDIARIES
              CONSOLIDATED BALANCE SHEETS
                      (UNAUDITED)
       September 30, 1997 and December 31,  1996

                        ASSETS

                                                      
                                        1997        1996
Cash and due from banks               $2,665,360  $2,858,813
Interest-bearing deposits                160,733     407,688
Federal funds sold                     1,657,000     466,000
                                                            
     Cash and cash equivalents         4,483,093   3,732,501
                                                            
Investment securities available for   
  sale-Stated at fair value           14,508,203  14,064,569
                                                            
Total loans                           60,100,231  55,170,942
  Allowance for credit losses           (644,791)   (653,535)
                                                            
Net loans                             59,455,440  54,517,407
Premises and equipment                 1,775,908   1,380,788
Other investments at cost                253,050     251,650
Other assets                           2,179,930   1,953,724
                                                            
TOTAL ASSETS                         $82,655,624 $75,900,639
                                                            

         LIABILITIES AND STOCKHOLDERS' EQUITY

                                                      
                                        1997        1996
LIABILITIES:                                     
                                                 
Non-interest-bearing deposits         $7,679,391  $7,004,277
Interest-bearing deposits             63,300,217  59,153,184
                                                            
Total deposits                        70,979,608  66,157,461
                                                            
Short-term borrowings                  1,655,681     880,076
Borrowed funds                           709,467     185,558
Other liabilities                        987,444     997,528
                                                            
     Total liabilities                74,332,200  68,220,623
                                                            
STOCKHOLDERS' EQUITY:                                       
                                                            
Common stock- $.1667 par value:                             
  Authorized - 300,000 shares,     
  Issued - 270,500 shares                 45,083      45,083
Capital surplus                        3,422,141   3,416,080
Retained earnings                      5,147,480   4,579,875

<PAGE>

Unrealized gain (loss) on investment                        
  securities available for sale 
  - Net of tax                            58,810     (6,913)
Less - 27,449 shares and 27,764                             
  shares, respectively, of 
  treasury common stock, at cost        (350,090)   (354,109)
                                                            
     Total stockholders' equity        8,323,424   7,680,016
                                                            
TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY                             $82,655,624 $75,900,639

   See accompanying notes to consolidated financial
                     statements.

<PAGE>

              LUXEMBURG BANCSHARES, INC.
                   AND SUBSIDIARIES
                           
           CONSOLIDATED STATEMENTS OF INCOME
                      (UNAUDITED)
                           
                                Nine Months Ended      Three Months Ended
                                  September 30,           September 30,
                                                                

                                1997          1996         1997          1996
INTEREST INCOME:                                                             
                                                                             
Interest and fees on   
  loans                 $  3,912,117  $  3,451,015  $  1,372,085  $  1,189,046
Interest on investment                                                       
  securities:
     Taxable                 536,364       563,803      182,186       183,502
     Tax-Exempt               95,920        28,224       36,098        11,556
Other interest and        
  dividend income             34,379       121,146        9,816        21,713
                                                                             
     Total interest   
       income              4,578,780     4,164,188    1,600,185     1,405,817 

INTEREST EXPENSE:                                                            
                                                                             
Deposits                   2,122,710     2,028,526      737,913       662,800
Short-term borrowings         50,067         9,895       23,106         3,374
Borrowed funds                25,680        11,736       12,159         3,724
                                                                             
     Total interest  
     expense               2,198,457     2,050,157      773,178       669,898

Net interest income        2,380,323     2,114,031      827,007       735,919
Provision for credit     
  losses                      90,000        66,000       30,000        29,500
Net interest income                                                          
  after provision for     
  credit losses              2,290,323     2,048,031      797,007     706,419
                                                                             
OTHER INCOME:                                                                
                                                                             
Service charges on         
  deposit accounts           142,771       137,351       50,401        50,065
Mortgage underwriting       
  fees - Secondary market     91,296        79,975       50,724        51,305
Loan servicing fee          
  income                      36,544        34,204       15,271        12,582
Other operating income       375,969       352,979      113,782       120,529
                                                                             
     Total other income      646,580       604,509      230,178       234,481
                                                                             
OPERATING EXPENSES:                                                          
                                                                             
Salaries and related    
  benefits                 1,092,114       999,634      374,779       353,774
Net occupancy expense        122,651       125,530       38,040        42,162
Equipment rentals,        
  depreciation, and
  maintenance                157,403       126,207       60,922        38,028
Data processing              155,473       148,414       26,256        58,988
Other operating
  expenses                   464,805       396,239      172,726       127,687

<PAGE>
                                                                             
     Total operating 
       expenses            1,992,446     1,796,024      672,723       620,639
                                                                             
Income before provision
  for income taxes           944,457       856,516      354,462       320,261
Provision for income       
  taxes                      279,632       292,142      106,857       105,729
Net income              $    664,825  $    564,374 $    247,605  $    214,532
                                                                             
Earnings per common
share                          $2.74         $2.33        $1.02         $0.88

   See accompanying notes to consolidated financial
                     statements.

<PAGE>

              LUXEMBURG BANCSHARES, INC.
                   AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF CASH FLOW
                      (UNAUDITED)
     Nine Months Ended September 30, 1997 and 1996

                                                      
                                        1997        1996
CASH FLOWS FROM OPERATING                                   
ACTIVITIES:
                                                            
Net income                            $664,825      $564,374
Adjustments to reconcile net income                         
  to net cash provided by operating 
  activities:                         
    Depreciation                       138,584       114,605
    Accretion of discounts on     
      securities                      (28,935)      (51,653)
    Amortization of premiums on       
      securities                        22,038        47,727
    Provision for credit losses         90,000        66,000
    Employee stock bonus                10,080        10,730
    Gain on sale of premises and                       
      equipment                          (443)
    Provision for deferred taxes      (12,911)              
    Change in other operating assets (197,251)     (110,584)
    Change in other operating
      liabilities                     (10,084)     (256,513)
                                                            
      Total adjustments                 11,078     (179,688)
                                                            
Net cash provided by operating
  activities                            675,903       384,686

CASH FLOWS FROM INVESTING                                   
ACTIVITIES:
    Proceeds from sale of securities         
      available for sale                           1,730,000
    Proceeds from maturities of
      securities available for sale  5,070,306     4,087,018
    Purchase of securities     
      available for sale            (5,406,226)   (5,507,198)
    Net increase in loans           (5,061,871)   (3,852,500)
                                       
    Purchase of additional life 
      insurance                        (17,300)      (17,300)
    Proceeds from sale of premises                  
     and equipment                       1,584
    Capital expenditures              (460,914)     (229,225)
    Purchase of other investments       (1,400)      (46,400)
                                                            
Net cash used in investing
  activities                         (5,875,821)  (3,835,605)
                                                            
CASH FLOWS FROM FINANCING                                   
ACTIVITIES:
    Net increase (decrease) in 
      deposits                       4,822,147    (1,432,472)
    Net increase in short-term 
      borrowings                       775,605       392,508
    Loan from FHLMC                    500,000       500,000
    Principal payments on borrowed     
      funds                            (50,022)      (45,282)
    Dividends paid                     (97,220)      (87,384)
                                                            
Net cash provided by (used in)                              
  financing activities               5,950,510     (672,630)
                                                            
Net increase (decrease) in cash and  
  cash equivalents                     750,592    (4,123,549)
Cash and cash equivalents at    
  beginning                          3,732,501     9,054,643
Cash and cash equivalents at end    $4,483,093    $4,931,094

<PAGE>
                                                            
Supplemental information:                                   
                                                            
Cash paid during the period for:                            
    Interest                        $ 2,275,105   $ 2,227,057
    Income taxes                    $   276,545   $   328,741

The Bank purchased the assets of Total Financial
concepts, Inc. in 1996 for $135,800. In conjunction
with the acquisition, the Bank incurred debt of
$128,800.

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-SB 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-Q and, therefore, do not include all information and
footnotes necessary to be in conformity with generally
accepted accounting principles.

The Consolidated Statements of Cash Flows has been
presented utilizing the indirect method. 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
243,051 in 1997 and 242,736 in 1996.

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
                              September 30,   December 31,
                                   1997           1996
                                             
Commitments to extend credit $5,471,000        $4,676,000
Credit card arrangements        604,000           865,000
Standby letters of credit        90,000            84,000

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 

<PAGE>

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.

NOTE 3: ACCOUNTING CHANGES
The Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No.
122, "Accounting for Mortgage Servicing Rights," in May
1995.  As required under the statement, the Company
adopted the provisions of the new standard effective
September 1, 1996 by recording income of $36,700 in the
third quarter of 1996. During 1997 the company recorded
income of $2,490 in the first quarter, $11,330 in the
second quarter and $15,511 in the third quarter.  SFAS
No. 122 requires accounting recognition of the rights
to service mortgage loans for others.  In accordance
with SFAS No. 122, prior-period consolidated financial
statements have not been restated to reflect the change
in accounting principle.

The FASB issued SFAS No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments
of Liabilities," in June 1996.  SFAS No. 125 provides
accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of
liabilities.  The statement provides guidelines for
classification of a transfer as a sale.  The statement
also requires liabilities incurred or obtained by
transferors as part of a transfer of financial assets
be initially recorded at fair value.  Subsequent to
acquisition, the servicing assets and liabilities are
to be amortized over the estimated net servicing
period.  This statement is required to be adopted for
transfers and servicing of financial assets and
extinguishments of liabilities occurring after December
31, 1996.

In December 1996, the FASB issued SFAS No. 127,
"Deferral of the Effective Date of Certain Provisions
of FASB Statement No. 125."  This statement defers
implementation of certain provisions of SFAS No. 125
for one year.

In February 1997 the FASB issued SFAS No. 128,
"Earnings per Share," which is effective for financial
statements issued for periods ending after December 15,
1997. This statement simplifies the standards for
computing earnings per share ("EPS") previously found
in APB No. 15. It replaces the presentation of primary
EPS with a presentation of basic EPS. It also requires
dual presentation of basic and diluted EPS on the face
of the income statement for all entities with complex
capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation
to the numerator and denominator of the diluted EPS
computation. Earlier application of this statement is
not permitted. The Company does not have a complex
capital structure and has determined that the impact of
adoption will not have a material effect on the
consolidated financial statements of the Company.

The FASB issued SFAS No. 130, "Reporting Comprehensive
Income", in June 1997. This statement amends FASB No.
52, "Foreign Currency Translation", FASB No. 80,
"Accounting for Futures Contracts", FASB No. 87,
"Employers' Accounting for Pensions" and FASB No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities". This statement is effective for fiscal
years beginning after December 15, 1997. Restatement of
financial statements for earlier periods provided for
comparative purposes is required. Earlier application
is permitted. Under SFAS No. 130 the Company

<PAGE>

will be required to report unrealized gains (losses) on
investment securities available for sale as a component
of comprehensive income. Reported Comprehensive Income
would have been as follows for each reported period:

                                        Reported Net     Comprehensive
       Reporting Period                    Income           Income
                                              
Nine Months Ended September 30, 1997      $664,825          $730,548

Nine Months Ended September 30, 1996      $564,374          $504,834

                                              
Three Months Ended September 30, 1997     $247,605          $301,590

Three Months Ended September 30, 1996     $214,532          $236,112

                                                            

In June 1997 the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and related
Information," which is effective for financial
statements issued for periods beginning after December
15, 1997. This statement establishes standards for
reporting operating segments in financial statements
and interim financial reports issued to shareholders.
FASB No. 131 supersedes FASB No. 14, "Financial
Reporting for Segments of a Business Enterprise" and
amends FASB No. 94, "Consolidation of All Majority-
Owned Subsidiaries". This statement requires
restatement of comparative information for earlier
years presented. Also, this statement need not be
applied to interim financial statements in the initial
year of application, but comparative information for
interim periods in the initial year of application must
be reported in financial statements for interim periods
in succeeding years. The Company has determined that
the adoption of SFAS No. 131 will not have a material
impact on the consolidated financial statements of the
Company.

<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     Nine Months Ended 
                                September 30,          September 30,
                              1997       1996        1997       1996

Net Earnings            $    247,605 $  214,532 $   664,825    $564,374
Average Consolidated                                        
  Balance Sheet Items:
   Loans                  58,399,002  51,571,601  56,336,197  49,706,892
   Taxable Investment   
     Securities           11,385,419  13,200,137  11,605,020  13,449,236
   Municipal Loans &
     Investments           4,430,925   2,120,912   4,119,411   1,851,930
   Other Earning Assets      673,994   1,688,787     823,641   3,071,443
      Total Earning    
        Assets            74,889,340  68,581,437  72,884,269  68,079,501
   Total Assets           80,648,388  73,688,449  78,297,992  73,013,921
   Deposits               71,463,836  65,480,026  69,298,202  64,763,722
   Shareholders' Equity    8,198,693   7,376,127   8,025,696   7,262,917
                           
                                                            
Key Ratios:                                                 
   Average Equity to        
     Average Total Assets     10.17%      10.01%      10.25%       9.95%
   Return on Average
     Total Assets              1.23%       1.16%       1.13%       1.03%
   Return on Average        
     Equity                   12.08%      11.63%      11.04%      10.36%
   Net Interest Margin         4.38%       4.27%       4.37%       4.15%
                                                            

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 $91,088 or 12.38% to $827,007 for
the three months ended September 30, 1997, from
$735,919 for the three months ended September 30, 1996.
The increase in net interest income is primarily due to
a mix shift in earning assets to loans, which provide
the highest yield of all earning assets, and an
increase in the average yield on loans and taxable
investments.


                         Three Months Ended     Nine Months Ended 
                            September 30,         September 30,
                           1997       1996       1997        1996
Interest Income         1,600,185   1,405,817  4,578,780  4,164,188
Interest Expense          773,178     669,898  2,198,457  2,050,157
Net Interest Income       827,007     735,919  2,380,323  2,114,031
                                                           
Net Interest Margin          4.38%       4.27%      4.37%      4.15%

<PAGE>
                                                           
RATE/VOLUME ANALYSIS
The impact of changes in volume and interest rates on
net interest income for the three and nine months ended
September 30, 1997, and 1996 is illustrated in the
following tables :

Three Months Ended September 30, 1997 Compared to Three
Months Ended September 30, 1996.

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

Interest Income          $  194,366   $  46,171  $ 148,195
Interest Expense            103,278       5,930     97,348
Net Interest Income      $   91,088   $  40,241  $  50,847
                      

Nine Months Ended September 30, 1997 Compared to Nine
Months Ended September 30, 1996.

                     Increase (Decrease) in Net Interest Income
                         Net Change    Due To       Due To
                                        Rate        Volume
Interest Income          $  414,592   $51,326     $ 363,266
Interest Expense            148,300   (36,892)      185,192
Net Interest Income      $  266,292   $88,218     $ 178,074
                                   
                                                            

Generally higher rates on earning assets for the third
quarter of 1997, compared to the third quarter of 1996,
and additional loan volume raised the average yield on
all earning assets to 8.48% for the three months ended
September 30, 1997 from 8.15% for the three months
ended September 30, 1996. Except for certificates of
deposits and other borrowings rates paid on the bank's
deposits were generally lower for the three months
ended September 30, 1997, compared to the three months
ended September 30, 1996. Interest expense was $773,178
for the three months ended September 30, 1997 compared
to $669.898 for the three months ended September 30,
1996 and reflects the growth in interest bearing
deposits to $63,839,728 for the three months ended
September 30, 1997 from $57,872,446 for the three
months ended September 30, 1996.

OPERATING RESULTS
Net income for the three months ended September 30,
1997, increased $33,073 or 15.4% to $247,605 from
$214,532 for the three months ended September 30, 1996.
The increase in net interest income is $91,088 for the
three months ended September 30, 1997, compared to the
three months ended September 30, 1996, and is discussed
in "Net Interest Income" and "Rate/Volume Analysis"
elsewhere in this report.

Net income for the nine months ended September 30, 1997
increased $100,451 or 17.8% to $664,825 from $564,374
for the nine months ended September 30, 1996. The
increase in net interest income is $266,292 for the
nine months ended September 30, 1997 compared to the
nine months ended September 30, 1996 and is primarily
due to higher loan volume and a shift of earning assets
to loans from fed funds sold and investment securities.
Higher operating expenses for salaries and related
benefits, equipment rentals, depreciation and
maintenance and other operating expenses for the nine
months ended September 30, 1997 compared to the nine
months ended September 30, 1996 partially offset the
company's increase in net interest margin. The increase
in salaries and related benefits is due to inflationary
increases,  the opening of the company's IGA branch in
the second quarter of 1996 and higher employee costs
due to the implementation of an in-house computer
system in May, 1997 and the initial regulatory filing
in the 

<PAGE>

second quarter of 1997. Income tax benefit of
$9,593 for 1997 was recorded by Luxemburg Bancshares,
Inc. Previously the company's accountant recorded
income tax benefit only at December 31.

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.  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 September 30, 1997, loans past due 90 days or more
that were still accruing interest totaled $369,000. At
September 30, 1996 the Company did not have any loans
past due 90 days or more that were still accruing
interest. At September 30, 1997 and 1996 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 $246,000 of nonaccrual loans at
September 30, 1997 and $519,000 of nonaccrual loans at
September 30, 1996.

During the three months ended September 30, 1997,
$30,000 was charged to the provision for loan losses
compared to $29,500 for the three months ended
September 30, 1996. At September 30, 1997 the allowance
was $645,000 or 1.07% of total loans. This compares to
an allowance of $654,000 or 1.18% of total loans as of
September 30, 1996.  For the nine months ended
September 30, 1997 the Bank had net charge-offs of
$98,000 compared to net charge-offs of $9,000 for the
nine months ended September 30, 1996.

The following table summarizes loan charge-offs and
recoveries by type of loan for the nine months ended
September 30, 1997 and 1996:

    Loan Type      September 30, 1997    September 30, 1996

                   Charge-   Recovery    Charge-  Recovery
                     Off                   Off
                                                  
Real Estate       $   0      $ 2,000     $ 1,000   $ 1,000
Commercial and                                       5,000
Industrial        68,000       3,000
Agricultural                  20,000                10,000
Consumer          60,000       5,000      24,000  
                                                                  
TOTALS          $128,000     $30,000     $25,000   $16,000
                                                  
                                                           


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

<PAGE>

Balance at End of Period      September 30, 1997       September 30, 1996
    Applicable to:
                                       % of loans                 % of loans
                                        to total                   to total
                             Amount       Loans        Amount        Loans

Commercial and agricultural  $     0       47%       $ 31,000         46%   
Real Estate-construction           0        6%              0          4%
Real Estate-mortgage               0       35%              0         38%
Consumer                      38,000       12%         25,000         12%

Total Domestic                38,000      100%         56,000        100%

Unallocated                  607,000                  598,000       

TOTALS                      $645,000      100%       $654,000        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 due from banks, federal funds sold, investments 
held as "available for sale" and maturing loans.  Federal 
funds sold 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 $166,000 
and $973,000 for the three months ended September 30, 1997 
and 1996, 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 monitered 
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 Deposits 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 September 30, 1997, the 
Company's rate sensitive assets exceed rate sensitive 
liabilities due within one year by $5,837,000.

As part of managing liquidity, the Company monitors its loan
to deposit ratio on a daily basis.  At September 30, 1997 
the ratio was 84.7% which is within the Company's acceptable
range.

<PAGE>

The Company experienced an increase in cash and cash 
equivalents, its primary source of liquidity, of 
$750,592 for the nine months ended September 30, 1997.  The
primary source of cash flow for the nine months ended September
30, 1997 was cash provided by operating activities of $675,903,
an increase in deposits of $4,822,147 and an increase in net
borrowings of $1,225,583.  Cash flow from investing activities
used $5,061,871 to fund loan growth and $460,914 for capital
expenditures for the nine months ended September 30, 1997.  
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 liquidity position.

The following table illustrates the projected maturities and
the repricing mechanisms of the major asset/liability categories
of the Company as of September 30, 1997, based on certain 
assumptions.  No prepayment rate assumptions have been made for
the loan portfolio.  Maturities and repricing dates for investments
having been projected by applying the assumptions set forth below
to contractual maturities and repricing dates.

<PAGE>  
<TABLE>
<CAPTION>                     
                               1 Year or      1-5 Years     5-10 Years      After 10 
                                  Less                                        Years
<S>                                <C>            <C>           <C>            <C>     
Interest Earning Assets:
 Fed Funds Sold                $ 1,657,000      
 Investment Securities         $ 1,758,000     $ 2,947,000     $ 5,934,000     $ 3,869,000

Loans
 Variable Rate                 $ 9,217,000
 Real Estate-Construction      $ 3,696,000
 Real Estate-Other             $ 9,192,000     $ 5,557,000     $   501,000

 Commercial and Industrial     $11,386,000     $ 4,529,000     $   776,000

 Agricultural                  $ 4,497,000     $   594,000     $   281,000

 Consumer                      $ 2,416,000     $ 6,795,000     $   663,000

Other                          $   414,000

Total Interest Earning Assets  $44,233,000     $20,422,000     $ 8,155,000     $ 3,869,000 

Interest Bearing Liabilities:
 Interest Bearing Demand       $                                               $ 6,592,000
 Savings Deposits              $ 2,540,000                                     $10,249,000
 Money Market Accounts         $ 1,156,000                                     $ 2,695,000
 Certificates of Deposit       $23,654,000     $ 7,255,000  
 Jumbo CD's                    $ 3,092,000     $   201,000
 IRA's                         $ 5,660,000     $   206,000
 Other                         $ 2,294,000     $    71,000

Total Interest Bearing 
  Liabilities                  $38,396,000     $ 7,733,000                     $19,536,000

Interest Sensitivity Gap 
  per Period                   $ 5,837,000      $12,689,000     $ 8,155,000    ($15,667,000)

Cumulative Interest 
  Sensitivity Gap              $ 5,837,000      $18,526,000     $26,681,000     $11,014,000

Interest Sensitivity 
  Gap as a Percentage of 
  Earning Assets                     7.6%             16.6%           10.6%          (20.4%)

Cumulative Sensitivity 
  Gap as a Percentage of 
  Earning Assets                     7.6%             24.2%           34.8%           14.4%

</TABLE>
<PAGE>

                      PART II - OTHER INFORMATION

Item 6.  Exhibits and report on Form 8-K
         (a) Exhibits
             27  Financial Data Schedule

         (b) Reports on Form 8-K


         During the quarter ended September 30, 1997, 
         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, President          Thomas L. Lepinski, C.P.A.
and Chief Executive Officer        Treasurer (Principal Accounting
                                   Officer)

Date:  November 11, 1997           Date:  November 11, 1997