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

                                 Form 10-QSB

 X  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

             For the quarterly period ended June 30, 2000

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT

          For the transition period from       to

            Commission file number  33-40799

                 TIMBERLINE BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)

          California                        68-0269988
(State or other jurisdiction of    (IRS Employer Identification No.)
of incorporation or organization)

         123 N. Main Street   P. O. Box 1087, Yreka, Ca 96097
               Address of principal executive offices)

                          ( 530 )842-4200
                     (Issuer's telephone number)


         (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   .

        APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
           PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and report required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.  Yes    No

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
1,006,860







PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements
                      "TIMBERLINE BANCSHARES, INC."
                      CONSOLIDATED INCOME STATEMENT
                          Periods Indicated

                                       Quarter     YTD      Quarter      YTD
                                     06/30/00   06/30/00   06/30/99   06/30/99
INTEREST AND FEES ON LOANS             1,433      2,770      1,206      2,447
INTEREST AND DIVIDENDS ON
INVESTMENT SECURITIES
     HELD FOR SALE                       242        485        226        406
     HELD TO MATURITY                     40         80         56        122
TRADING ACCOUNT INTEREST                   -          -          -          -
OTHER INTEREST                            42        116        106        244
TOTAL INTEREST INCOME                  1,757      3,451      1,594      3,219
INTEREST ON DEPOSITS                     595      1,180        556      1,126
INTEREST ON SHORT TERM BORROWING           7          7          -          -
INTEREST ON LONG TERM DEBT                 -          -          -          -
TOTAL INTEREST EXPENSE                   602      1,187        556      1,126
NET INTEREST INCOME                    1,155      2,264      1,038      2,093
PROVISION FOR LOAN LOSSES                 14         35        (12)        18
NET INTEREST INCOME AFTER ALLOWANCE
FOR LOAN LOSSES                        1,141      2,229      1,050      2,075
OTHER INCOME                             103        203        103        208
OTHER EXPENSES                           893      1,815        903      1,826
INCOME BEFORE TAX                        351        617        250        457
INCOME TAX EXPENSE                       123        197         51        114
INCOME BEFORE EXTRAORDINARY ITEMS        228        420        199        343
EXTRAORDINARY ITEM NET OF TAX              -          -          -          -
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES                                    -          -          -          -
NET INCOME                               228        420        199        343
EARNINGS PER SHARE                       0.23       0.42       0.20       0.34


Note 1:  The financial statements in this report are un-audited but,
In The opinion of management of the Corporation reflect all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial position, results of operations, and changes
in financial position for the periods presented.






                             TIMBERLINE BANCSHARES, INC.
                             CONSOLIDATED BALANCE SHEET
                                       06/30/00


         ASSETS
CASH & DUE FROM BANKS                         $6,963
INTEREST BEARING DEPOSITS IN OTHER               100
FED FUNDS & RESALE SECURITY AGREE                  0
TRADING ACCOUNT ASSETS                             0
OTHER SHORT TERM                                   0
INVESTMENT SECURITIES
   HELD FOR SALE                              17,295
   MATURITY                                    2,900
LOANS TOTAL                                   60,359
   ALLOWANCE FOR LOAN LOSSES                    (400)
   UNEARNED INCOME                              (127)
PREMISES & EQUIPMENT                           1,796
DUE FROM CUSTOMERS, ACCEPTANCES                    0
OTHER ASSETS                                   3,536
     TOTAL                                   $92,422

            LIABILITIES
DEPOSITS, NON-INTREST BEARING                $18,743
          INTEREST BEARING                    64,984
SHORT TERM BORROWING                             200
BANK ACCEPTANCES                                   0
OTHER LIABILITIES                                529
LONG TERM DEBT                                     0
COMMITMENTS & CONTINGENT LIABILITY                 0
MINORITY INTERESTS                                 0

           SHAREHOLDER EQUITY
PERFERED STOCK                                     0
COMMON STOCK                                   2,993
OTHER S/H EQUITY                               4,973
    TOTAL                                    $92,422


Note: Held for Sell amount includes unrealized loss of $642







                     TIMBERLINE BANCSHARES, INC.
                      CONSOLIDATED CASH FLOWS


CASH FLOW FROM OPERATING ACT             YTD 6/30/00       YTD 6/30/99
   NET INCOME                                  420               343
   NON-CASH
     DEPRECIATION                              107               107
     NET CHANGE BAD DEBTS PROV                  28                18
     CUMU EFFECT ACCTG CH
   (INCREASE) DECREASE IN
     OTHER ASSETS                              498            (1,072)
   INCREASE (DECREASE) IN
     ACCRUED EXPENSES                         (237)               27

CASH PROVIDED BY OPS                           816              (577)


CASH FROM INVESTING
    INCREASE (DECREASE) IN
     DEPOSITS                                  576               297
    (INCREASE) DECREASE IN
     SHORT  TERM INVESTMENTS                     0              (669)
     SECURITIES: FOR SALE                      (65)           (4,468)
                          HOLD                 272             1,253
     FED FUNDS                                 800             8,200
     LOANS                                  (2,306)           (1,289)
     (PURCHASE) SALE OF F.A.                   (29)              (38)


CASH (USED) PROVIDED                          (752)            3,286


CASH FROM FINANCING
    DIVIDENDS PAID                            (252)             (252)
    SHORT TERM BORROWING                       200
    ADDITIONAL PD IN CAP                         0                 0


CASH(APPLIED) PROVIDED                         (52)             (252)

NET CHANGE                                      12             2,457

OPEN                                         6,951             4,886

CLOSE                                        6,963             7,343








            3-

Item 2.  Management's Discussion

(a) Plan of Operation

Timberline Bancshares management is an overlay of its wholly
owned subsidiary, Timberline Community Bank, and therefore shares
the same concepts regarding growth of the institution, protection
and preservation of assets, shareholder enhancement, and
fulfilling the joint mission statement to assist the communities
which we serve.

Timberline's plans are to increase it's market share in the areas
it serves, continue to upgrade services to it's customers,
continue to offer loans to the customers in it's service area, to
enhance earnings, to control costs, and to enhance the
shareholders' value.



(b) Management's Discussion and Analysis of Financial condition
and Results of Operations


Net interest income in the first six months of 2000 exceeds that of
the same period of 1999 as a result of the recent rises in prime
rate and an increase in loans outstanding coupled with a slower rise in
interest paid to depositors.

Siskiyou county has been in an economic downturn for years as it's main
economy was based on timber products and services. In view of
those economic conditions , the Bank has accelerated its program
of buying participations from other financial institutions outside
its normal lending area.  Through this program, the bank has
increased the loan to deposit ratio somewhat and expects an
increase in income from lending for the remainder of the year.

As a relatively small bank in a sparsely populated county, the
bank does not offer mutual funds or insurance as an avenue of
enhancing income.  Nor has the bank greatly increased service fees
to its customers, but has relied on the traditional banking
revenue sources; i.e. income from lending.  With a loan
delinquency of less than one per cent, the Bank has reduced the
amount set aside in loan loss reserves while still maintaining an
adequate reserve.  Other expenses have gone down slightly as the
Bank is no longer investing funds in last year's Y2K readiness.

In addition, the Bank has continued its dividend program and will
be paying a $.25 per share cash dividend to shareholders of record
in the fourth quarter of the year.




                  -4-

PART 11 - OTHER INFORMATION

Item 1. Legal Proceedings

There are no legal proceedings pending other than those in the
normal course of doing business that may have a material impact on
the bank.

Item 2.  Changes in Securities

None

Item 3.  Defaults Upon Senior Securities

None

Item 4.  Submission of Matters to a Vote of Security Holders

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

None






SIGNATURES

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


TIMBERLINE BANCSHARES, INC.




//ss John A. Linton                               Date   07/27/2000
     John A. Linton,  President




//ss Michael W. Jones                             Date   07/27/2000
     Michael W. Jones, Assistant Vice-President