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

                              FORM 10-Q

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

         For the quarterly period ended   June 30, 1998

                                   OR

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

        For the transition period from ______________ to _______________

                     Commission File Number  1-13842 


                  Texarkana First Financial Corporation               .
          (Exact name of registrant as specified in its charter)

               Texas             .                  71-0771419       . 
 (State or other jurisdiction of                (I.R.S. Employer
  incorporation or organization)                 Identification Number)

        3rd & Olive Streets
        Texarkana, Arkansas             .              71854         . 
(Address of principal executive office)                (Zip Code)


                            (870) 773-1103                            .
          (Registrant's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date:  As of June 
30, 1998, there were issued and outstanding 1,737,692 shares of the 
Registrant's Common Stock, par value $0.01 per share.


<PAGE>




                  TEXARKANA FIRST FINANCIAL CORPORATION





                             TABLE OF CONTENTS




                                                                    Page

Part I.   Financial Information

Item 1.   Consolidated Financial Statements:

          Consolidated Statements of Financial Condition
          as of June 30, 1998 (unaudited) and September 30, 1997       1

          Consolidated Statements of Income for the three and nine
          months ended June 30, 1998 and 1997 (unaudited)              2

          Consolidated Statements of Cash Flows for the nine months
          ended June 30, 1998 and 1997 (unaudited)                     3

          Notes to Unaudited Consolidated Financial Statements         5

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                    8



Part II.  Other Information

Item 1.   Legal Proceedings                                           12
Item 2.   Changes in Securities                                       12
Item 3.   Defaults Upon Senior Securities                             12
Item 4.   Submission of Matters to a Vote of Security Holders         12
Item 5.   Other Information                                           12
Item 6.   Exhibits and Reports on Form 8-K                            12
          Signatures                                                  13















<PAGE>
                  TEXARKANA FIRST FINANCIAL CORPORATION
                            AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                            (In Thousands)

                                                 Unaudited
                                                  June 30, September 30,
                                                    1998         1997
ASSETS
Cash and cash equivalents
  Cash & due from banks......................... $  1,413     $  1,147
  Interest bearing deposits in other banks......    3,146        3,331
  Federal funds sold............................    2,525        1,575
                                                 ________     ________
    Total cash and cash equivalents.............    7,084        6,053

Investment securities available-for-sale........   25,904       18,767
Mortgage-backed securities held-to-maturity.....    1,002        1,293
Federal Home Loan Bank stock....................    1,168        1,116
Loans receivable, net of unearned income........  151,020      148,471
Allowance for loan losses.......................   (1,007)      (1,124)
Accrued interest receivable.....................    1,396        1,176
Foreclosed real estate, net.....................      - -          127
Premises and equipment, net.....................    2,417        2,382
Other assets....................................      573          449
                                                 ________     ________
  Total assets.................................. $189,557     $178,710
                                                 ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits........................................ $151,449     $143,207
Advances from borrowers for taxes & insurance...    1,570        1,920
Borrowed funds..................................    7,100        4,989
Accrued federal income tax......................      361          302
Accrued state income tax........................      192          216
Accrued expenses and other liabilities..........      675          696
                                                 ________     ________
  Total liabilities.............................  161,347      151,330
                                                 ________     ________
Commitments and contingencies...................      - -          - -
                                                 ________     ________
Common stock, $0.01 par value; 
  15,000,000 shares authorized;
  1,983,750 shares issued.......................       20           20
Additional paid-in capital......................   13,662       13,485
Common stock acquired by stock benefit plans....   (1,889)      (2,208)
Treasury stock, at cost, 246,058 shares and
  196,745 shares September 30, 1997.............   (4,449)      (3,103)
Retained earnings-substantially restricted......   20,817       19,105
Net unrealized gain (loss) on investment
  securities available for sale, net of tax.....       49           81
                                                 ________     ________
    Total stockholders' equity..................   28,210       27,380
                                                 ________     ________
    Total liabilities and stockholders' equity.. $189,557     $178,710
                                                 ========     ========


The accompanying notes are an integral part of this statement.


                                 Page 1
<PAGE>
                  TEXARKANA FIRST FINANCIAL CORPORATION
                            AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF INCOME
                  (In Thousands, Except Per Share Data)
                             (Unaudited)

                                             Three Months    Nine Months
                                                 Ended          Ended
                                                June 30,       June 30, 
                                              1998   1997    1998   1997 
Interest Income
  Loans
    First mortgage loans................... $2,838 $2,758  $8,510 $8,008
    Consumer and other loans...............    342    310   1,007    888
  Investment securities....................    369    309     992    943
  Mortgage-backed and related securities...    137     38     412     92
                                            ______ ______  ______ ______
    Total Interest Income..................  3,686  3,415  10,921  9,931
                                            ______ ______  ______ ______
Interest Expense
  Deposits.................................  1,909  1,735   5,587  5,115
  Borrowed funds...........................     89      9     264     16
                                            ______ ______  ______ ______
    Total Interest Expense.................  1,998  1,744   5,851  5,131
                                            ______ ______  ______ ______
    Net Interest Income....................  1,688  1,671   5,070  4,800
  Provision for loan losses................   (100)   - -    (100)   - -
                                            ______ ______  ______ ______
    Net Interest Income After Provision....  1,788  1,671   5,170  4,800
                                            ______ ______  ______ ______
Noninterest Income
  Gain on sale of repossessed assets, net..     (1)     8       4      8
  Loan origination and commitment fees.....    104     79     296    207
  Investment securities gains (losses), net    - -    - -     - -    - -
  Other....................................    160    115     544    324
                                            ______ ______  ______ ______
    Total Noninterest Income...............    263    202     844    539
                                            ______ ______  ______ ______
Noninterest Expense
  Compensation and benefits................    519    421   1,565  1,329
  Occupancy and equipment..................     55     40     160    124
  SAIF deposit insurance premium...........     22     22      67    101
  Provision & loss on foreclosed real estate   - -    - -     - -    - -
  Other....................................    136    119     422    399
                                            ______ ______  ______ ______
    Total Noninterest Expense..............    732    602   2,214  1,953
                                            ______ ______  ______ ______
Income Before Income Taxes.................  1,319  1,271   3,800  3,386
Income tax expense.........................    477    474   1,394  1,258
                                            ______ ______  ______ ______
Net Income................................. $  842 $  797  $2,406 $2,128
                                            ====== ======  ====== ======
Earnings Per Share - basic................. $ 0.52 $ 0.48  $ 1.47 $ 1.25
Earnings Per Share - diluted............... $ 0.49 $ 0.46  $ 1.40 $ 1.22

Weighted average shares - basic............  1,629  1,676   1,636  1,697
Weighted average shares - diluted..........  1,716  1,723   1,724  1,745

Dividends per share........................ $ .140 $ .140  $ .420 $ .365

The accompanying notes are an integral part of this statement.

                                 Page 2
<PAGE>
                  TEXARKANA FIRST FINANCIAL CORPORATION
                            AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In Thousands)
                             (Unaudited)

                                                       Nine Months Ended
                                                            June 30,
                                                          1998     1997
Cash Flows From Operating Activities:
  Interest and dividends received..................... $10,636  $ 9,804
  Miscellaneous income received.......................     840      531
  Interest paid.......................................  (2,087)  (1,616)
  Cash paid to suppliers and employees................  (1,793)  (2,217)
  Cash from loans sold................................  10,651    1,488
  Cash paid for loans originated to sell..............  (7,713)  (1,051)
  Income taxes paid...................................  (1,346)    (854)
                                                       _______  _______
    Net Cash Provided By Operating Activities.........   9,188    6,085
                                                       _______  _______

Cash Flows From Investing Activities:
  Proceeds from call and maturity of securities.......   8,605    4,840
  Proceeds from sale of securities available for sale.     - -      - -
  Purchases of securities available for sale.......... (12,631)  (3,800)
  Purchases of mortgage-backed securities.............  (4,482)  (1,725)
  Principal collected on mortgage-backed securities...   1,628      207
  Purchase of fixed assets............................    (116)    (379)
  Net (increase) in loans.............................  (5,669)  (8,843)
  Cash paid for REO held for resale...................     (19)     (46)
  Proceeds from sale of REO and other REO recoveries..     390       77
                                                       _______  _______
    Net Cash (Used) By Investing Activities........... (12,294)  (9,669)
                                                       _______  _______

Cash Flows From Financing Activities:
  Net increase (decrease) in savings,
    demand deposits, and certificates of deposit......   4,459    3,673
  Net increase (decrease) in escrow funds.............    (350)    (467)
  Net increase (decrease) in funds borrowed...........   2,111   (1,306)
  Purchase of treasury stock..........................  (1,348)  (1,462)
  Stock options exercised.............................       8      - -
  Purchase of common stock for employee benefit plans.     - -       (9)
  Cash dividends paid on common stock.................    (743)    (624)
                                                       _______  _______
    Net Cash Provided(Used) By Financing Activities...   4,137     (195)
                                                       _______  _______

    Net increase(Decrease) In Cash & Cash Equivalents.   1,031   (3,779)
                                                       _______  _______

Cash and Cash Equivalents, beginning of period........   6,053    8,860
                                                       _______  _______

Cash and Cash Equivalents, end of period.............. $ 7,084  $ 5,081
                                                       =======  =======


The accompanying notes are an integral part of this statement.

                                 Page 3
<PAGE>

                  TEXARKANA FIRST FINANCIAL CORPORATION



SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS


                                                       Nine Months Ended
                                                            June 30,
                                                          1998     1997

Reconciliation of net income to cash provided
      by operating activities:
Net income............................................ $ 2,406  $ 2,128
                                                       _______  _______
Adjustments to reconcile net income to cash provided
      by operating activities:
  Depreciation........................................      81       48
  Amortization of discounts and premiums..............      33      (22)
  Amortization of deferred loan fees..................     (26)     (29)
  Amortization of stock acquired by benefit plans.....     458      365
  (Gain) loss on sales of real estate owned...........      (5)      (8)
  Provision for loan losses...........................    (100)     - -
  Interest expense credited to saving accounts........   3,784    3,387
  Dividend and interest income added to investments...     (88)     (80)
  Loan fees deferred..................................      30       36
Changes in assets and liabilities:
  (Increase) decrease in interest receivable..........    (220)     (32)
  Increase (decrease) in accrued interest payable.....     (20)     128
  Increase (decrease) in income tax payable...........      35      404
  Increase (decrease) in other receivables & payables.   2,820     (240)
                                                       _______  _______
    Total adjustments.................................   6,782    3,957
                                                       _______  _______

Net cash provided by operations....................... $ 9,188  $ 6,085
                                                       =======  =======







Supplemental schedule of noncash investing
  and financing activities:
    FHLB stock dividends not redeemed................. $    51  $    47
    Acquisition of real estate in settlement of loans.     254      157
    Loans made to finance sale of REO.................     126       52
    Net unrealized gain (loss) on investment securities
      available for sale..............................      19       58









                                 Page 4
<PAGE>


                  TEXARKANA FIRST FINANCIAL CORPORATION





           Notes to Unaudited Consolidated Financial Statements



Basis of Presentation

Texarkana First Financial Corporation (the "Company") was incorporated 
in March 1995 under Texas law for the purpose of acquiring all of the 
capital stock issued by First Federal Savings and Loan Association of 
Texarkana (the "Association") in connection with the Association's 
conversion from a federally chartered mutual savings and loan 
association to a stock savings and loan association (the "Conversion").  
The Conversion was consummated on July 7, 1995 and, as a result, the 
Company became a unitary savings and loan holding company for the 
Association.  Prior to the Conversion, the Company had no material 
assets or liabilities and engaged in no business activity.  Subsequent 
to the acquisition of the Association, the Company has engaged in no 
significant activity other than holding the stock of the Association and 
engaging in certain passive investment activities.

The accompanying unaudited consolidated financial statements of the 
Company have been prepared in accordance with instructions to Form 10-Q.  
Accordingly, they do not include all of the information and footnotes 
required by generally accepted accounting principles for complete 
financial statements.  However, such information reflects all 
adjustments (consisting solely of normal recurring adjustments) which 
are, in the opinion of management, necessary for a fair statement of 
results for the interim periods. 

The results of operations for the three and nine months ended June 30, 
1998 are not necessarily indicative of the results to be expected for 
the year ending September 30, 1998.  Although net income was consistent 
for the first three quarters, earnings for the full fiscal year will be 
impacted by the repurchase of Company stock and various economic 
conditions.  The unaudited consolidated financial statements and notes 
thereto should be read in conjunction with the audited financial 
statements and notes thereto for the year ended September 30, 1997, 
contained in the Company's annual report to stockholders.



Earnings Per Share

Basic earnings per share is computed on the basis of the weighted-
average number of shares of common stock outstanding.  Stock options 
outstanding are included in the calculation of fully diluted earnings 
per share.  Shares acquired by the ESOP are accounted for in accordance 
with Statement of Position 93-6 and are not included in the weighted-
average shares outstanding until the shares are committed to be released 
for allocation to ESOP participants.


                                 Page 5
<PAGE>
Borrowed Funds

Borrowed funds consist primarily of short-term, fixed rate advances from 
the Federal Home Loan Bank ("FHLB").  At June 30, 1998, the balance was 
$7.1 million, at 5.57% maturing July 29, 1998.  At September 30, 1997, 
the balance was $5.0 million, at 5.54% maturing October 24, 1997.


Recent Legislation

The deposits of the Association are currently insured by the Savings 
Association Insurance Fund ("SAIF").  The previously underfunded status 
of the SAIF resulted in the introduction of federal legislation intended 
to, among other things, recapitalize the SAIF and address the resulting 
premium disparity between the SAIF and the Bank Insurance Fund ("BIF"), 
the federal deposit insurance fund that covers commercial bank deposits.  
In September 1996, the Omnibus Appropriations Act was signed into law.  
This legislation authorized a one time charge of SAIF-insured 
institutions in the amount of .657 dollars for every one hundred dollars 
of assessable deposits.  Additional provisions of the Act include new 
BIF and SAIF premiums and the merger of BIF and SAIF.  The new BIF and 
SAIF premiums will include a premium for repayment of the Financing 
Corporation ("FICO") bonds plus any regular insurance assessment, 
currently nothing for the lowest risk category institutions.  The FICO 
authorized assessment stipulated that the BIF rate must equal one-fifth 
the SAIF rate through year-end 1999. or until the insurance funds are 
merged, whichever comes first.  Thereafter, BIF and SAIF payers will be 
assessed pro rata for FICO.  FICO rates are adjusted quarterly to 
reflect changes in the assessment bases of the insurance funds.  
Beginning January 1, 1997, the FICO premiums for BIF and SAIF were 1.3 
and 6.4 basis points, respectively.  For June 30, 1998, the FICO premium 
for BIF and SAIF were 1.22 and 6.10 basis points, respectively.


Recent Accounting Developments

In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage 
Servicing Rights", amending FASB Statement No. 65, "Accounting for 
Certain Mortgage Banking Activities", to require that a mortgage banking 
enterprise recognize as separate assets rights to service mortgage loans 
for others, however those servicing rights are acquired.  Mortgage 
servicing rights are to be amortized in proportion to and over the 
period of estimated net servicing income and are to be evaluated for 
impairment based on their fair value.  This Statement applies 
prospectively in fiscal years beginning after December 15, 1995, to 
transactions in which a mortgage banking enterprise sells or securitizes 
mortgage loans with servicing rights retained.  The Company adopted SFAS 
No. 122 effective October 1, 1996, with no material impact on the 
Company's financial condition or results of operations.

FASB has issued final standards on earnings per share ("EPS") under two 
new pronouncements, Statement of Financial Accounting Standards No. 128 
and SFAS 129 which include standards for computing and presenting EPS 
and for disclosing information about an entity's capital structure.  The 
standards for EPS apply to entities with publicly held common stock or 
potential common stock, while the standards for disclosure about capital 
structure apply to all entities.  The standards eliminate the 
presentation of primary EPS and require presentation of basic EPS, the 
principal difference being that common stock equivalents will not be 
considered in the computation of basic EPS.  The standards also require 
dual presentation of basic and diluted EPS on the face of the income 
statement for all entities with complex capital structures and require a 
reconciliation of the numerator and denominator of the basic EPS 
computation to the numerator and denominator of the diluted EPS 
computation.  Basic EPS would include no dilution and would be computed 
by dividing income available to common stockholders by the weighted-
average number of common shares outstanding for the period.  Diluted EPS 
would reflect the potential dilution that could occur if the potential 
common shares were exercised or converted into common stock or resulted 
in the issuance of common stock that then shared in the earnings of the 
entity.  SFAS 128 and SFAS 129 are effective for periods ending after 
December 15, 1997 and earlier application is not permitted.  The 
standards require restatement of all prior-period EPS data presented.

                                 Page 6
<PAGE>
Year 2000 - Millennium

Computer systems which are unable to recognize the year 2000 could fail 
or create erroneous results by or at the year 2000 if the problem is not 
corrected.  Many existing computer programs use only two digits to 
identify a year in the date field.  Such programs, designed and 
developed without considering the impact of a change in the century, are 
unable to distinguish the year 2000 from the year 1900.  Each company's 
potential costs and uncertainties depend on a number of factors, 
including its software and hardware and the nature of its industry.  
Like most financial service providers, the Company could be 
significantly affected by software and hardware both within the Company 
and with other companies with whom it electronically or operationally 
interfaces.

Management is aware of the potential problems and the costs required to 
prevent material adverse consequences.  Management has adopted a Year 
2000 Plan, approved by the Board of Directors, and has appointed a 
committee to implement the plan.  The committee has assessed the 
Company's exposure; scheduled necessary in-house hardware and software 
upgrades and replacements; initiated formal communications with all 
major outside vendors, suppliers, creditors and borrowers; scheduled 
testing of all operating systems; and provided for a contingency plan 
for all critical systems.  The Company believes that its Year 2000 Plan 
will prevent any material adverse impact on the operations of the 
Company and its subsidiary.

Implementation of the Year 2000 Plan involves direct and indirect costs 
to the Company.  Direct costs include hardware and software upgrades and 
replacements, potential charges by third party software vendors, and 
resulting costs if the contingency plan for critical systems must be 
implemented.  Indirect costs principally consist of existing employee 
time related to implementation of the Year 2000 Plan.  Both direct and 
indirect costs will be charged to earnings as incurred.  Such costs have 
not been material to date and based on estimated costs within the Year 
2000 Plan, management does not expect such costs to have a material 
impact on the Company's financial condition or results of operations.











                                 Page 7
<PAGE>
                  TEXARKANA FIRST FINANCIAL CORPORATION



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



Financial Condition 

At June 30, 1998, the Company's assets amounted to $189.6 million as 
compared to $178.7 million at September 30, 1997.  The $10.8 million 
(6.1%) increase was primarily due to increases of $6.9 million (32.6%) 
in investments, $2.5 million (1.7%) in loans, net of unearned income and 
$1.0 million (17.0%) in cash and cash equivalents.  Liabilities 
increased $10.0 million (6.6%) to $161.3 million at June 30, 1998 
compared to $151.3 million at September 30, 1997 primarily due to 
increases of $8.2 million (5.8%) in deposits and $2.1 million (42.3%) in 
borrowed funds, partially offset by a $.4 million (18.2%) decrease in 
borrowers' escrow balances (property tax payments are made in the first 
two quarters of the fiscal year).

The increase in loans was the net result after the sale of $10.7 million 
of loans during the nine-month period ended June 30, 1998.  The increase 
in deposits and borrowed funds along with the proceeds from the sale of 
loans provided funds for the additional loan demand and for additional 
investments.

Stockholders' equity amounted to $28.2 million (14.9% of total assets) 
at June 30, 1998 compared to $27.4 million (15.3% of total assets) at 
September 30, 1997.  The retained earnings balance reflects the 
$2,406,000 net income from operations, less dividends declared.  The 
treasury stock balance reflects the net increase of 49,313 shares of 
common stock.

Asset quality remains strong with a ratio of nonperforming assets to 
total assets of .12% and .23% as of June 30, 1998 and September 30, 
1997, respectively, and a ratio of nonperforming loans and debt 
restructurings to total loans of .15% and .19%, respectively.




















                                 Page 8
<PAGE>


Comparison of Results of Operations for the Three Month and Nine Month 
Periods Ended June 30, 1998 and 1997


General.
For the three months ended June 30, 1998, net income was $842,000 
compared to $797,000 for the same period ended June 30, 1997.  The 
increase of $45,000 (5.6%) in net income was due to an increase of 
$17,000 in net interest income, a $100,000 credit to provision for loan 
losses and an increase of $61,000 in noninterest income, all of which 
were partially offset by increases of $130,000 in noninterest expense 
and $3,000 in income tax expense.  The income tax expense includes a 
$15,000 credit from a refund for a prior year amended state return.

For the three months ended June 30, 1998 and June 30, 1997, return on 
average assets (ROA) was 1.80% and 1.87%, respectively, return on 
average equity (ROE) was 11.97% and 11.79%, respectively, and the 
operating efficiency ratio was 37.5% and 32.1%, respectively.

For the nine months ended June 30, 1998, net income was $2,406,000 
compared to $2,128,000 for the same period ended June 30, 1997.  The 
increase of $278,000 (13.1%) in net income was due to an increase of 
$270,000 in net interest income, a $100,000 credit to provision for loan 
losses and an increase of $305,000 in noninterest income, all of which 
were partially offset by increases of $261,000 in noninterest expense 
and $136,000 in income tax expense.

For the nine months ended June 30, 1998 and June 30, 1997, return on 
average assets (ROA) was 1.75% and 1.70%, respectively, return on 
average equity (ROE) was 11.54% and 10.64%, respectively, and the 
operating efficiency ratio was 37.4% and 36.6%, respectively.


Net Interest Income.
For the three months ended June 30, 1998, net interest income increased 
$17,000 (1.0%) compared to the same period in 1997.  The increase was 
due to an increase of $271,000 (7.9%) in interest income, partially 
offset by an increase of $254,000 (14.6%) in interest expense.  For the 
third quarter of fiscal 1998 compared to the third quarter of fiscal 
1997, the net interest margin was 3.69% and 4.03%, respectively, and the 
net interest spread was 2.90% and 3.25%, respectively.

For the nine months ended June 30, 1998, net interest income increased 
$270,000 (5.6%) compared to the same period in 1997.  The increase was 
due to an increase of $990,000 (10.0%) in interest income, partially 
offset by an increase of $720,000 (14.0%) in interest expense.  For the 
nine month period of fiscal 1998 compared to the same period of fiscal 
1997, the net interest margin was 3.78% and 3.93%, respectively, and the 
net interest spread was 2.98% and 3.15%, respectively.


                                 Page 9
<PAGE>

Interest Income.
For the three months ended June 30, 1998, interest income increased 
$271,000 (7.9%) compared to the same period in 1997.  The increase was 
the result of higher average balances partially offset by lower rates.  
Average earning assets increased to $183.3 million from $166.5 million 
and the average yield declined to 8.07% from 8.23%.

For the nine months ended June 30, 1998, interest income increased 
$990,000 (10.0%) compared to the same period in 1997.  The increase was 
the result of higher average balances.  Average earning assets increased 
to $179.4 million from $163.1 million and the average yield was 8.14% 
for both periods.


Interest Expense.
For the three months ended June 30, 1998, interest expense increased 
$254,000 (14.6%) compared to the same period in 1997.  The increase was 
the result of higher average balances and rates.  Average interest 
bearing liabilities increased to $155.1 million from $140.5 million and 
the average rate increased to 5.17% from 4.98%.

For the nine months ended June 30, 1998, interest expense increased 
$720,000 (14.0%) compared to the same period in 1997.  The increase was 
the result of higher average balances and rates.  Average interest 
bearing liabilities increased to $151.8 million from $137.3 million and 
the average rate increased to 5.15% from 5.00%.


Provision for Loan Losses.  During the three months ended June 30, 1998, 
the allowance for loan losses was reduced by $100,000 with a credit to 
the provision for loan losses.  The adjustment reduced the amount of the 
unallocated reserve allowance.  No provision for loan losses had been 
recorded for the previous twelve successive quarters due to the 
consistently favorable ratio of nonperforming loans to total loans.  
Asset quality remains excellent with a ratio of nonperforming loans to 
total loans of .15% at June 30, 1998 and .19% at September 30, 1997.

At June 30, 1998 and September 30, 1997, the balance of the allowance 
for loan losses was $1.0 million and $1.1 million, respectively, and the 
ratio of the allowance for loan losses to nonperforming loans was 
445.58% and 401.43%, respectively.  Management believes that the current 
allowance for loan losses is adequate based upon prior loss experience, 
the volume and type of lending conducted by the Association, industry 
standards, past due loans and the current economic conditions in the 
market area.


Noninterest Income.
For the three months ended June 30, 1998, noninterest income increased 
$61,000 (30.2%) compared to the same period in 1997.  The increase was 
primarily due to increases of $44,000 in net gain on sale of loans and 
$25,000 in loan origination fees.  The increases were the result of 
increases in the number and amount of mortgage loans originated and 
sold.

                                 Page 10
<PAGE>
For the nine months ended June 30, 1998, noninterest income increased 
$305,000 (56.6%) compared to the same period in 1997.  The increase was 
primarily due to increases of $192,000 in net gain on sale of loans and 
$89,000 in loan origination fees.  The increases were the result of 
increases in the number and amount of mortgage loans originated and 
sold.


Noninterest Expense.
For the three months ended June 30, 1998, noninterest expense increased 
$130,000 (21.6%) compared to the same period in 1997.  The increase was 
primarily due to increases of $98,000 in compensation and benefits, 
$15,000 in occupancy and equipment and $17,000 in other expense.

For the nine months ended June 30, 1998, noninterest expense increased 
$261,000 (13.4%) compared to the same period in 1997.  The increase was 
primarily due to increases of $236,000 in compensation and benefits, 
$36,000 in occupancy and equipment and $23,000 in other expense, all of 
which were partially offset by a decrease of $34,000 in SAIF deposit 
insurance premiums.  The increase in compensation and benefits expense 
was primarily due to the addition of four employees - one in the fourth 
quarter of fiscal 1997, one in the second quarter of fiscal 1998 and two 
in the third quarter of fiscal 1998.


Liquidity and Capital Resources

The Company's assets consist primarily of cash and cash equivalents and 
the shares of the Association's common stock.  The Company has no 
significant liabilities.  The Association's deposit retention and growth 
has remained steady.  The ratio of loans to deposits was 99.7% at June 
30, 1998 and 103.7% at September 30, 1997.  From September 30, 1997 to 
June 30, 1998, investments available for sale increased $7.1 million 
(38.0%) and cash and cash equivalents increased $1.0 million (17.0%).  
Liquidity remains adequate for current operating needs.  At June 30, 
1998, the Association's liquidity ratio was 13.27% compared to the 
required regulatory minimum of 4.0%.

The Company's and the Association's regulatory capital remains well in 
excess of all applicable regulatory requirements.  At June 30, 1998, the 
Company's tangible, core and risk-based capital ratios were 14.86%, 
14.86% and 25.64%, respectively, and the Association's tangible, core 
and risk-based capital ratios were 14.41%, 14.41% and 24.83%, 
respectively, compared to regulatory requirements of 1.5%, 3.0% and 
8.0%, respectively.



























                                 Page 11
<PAGE>

                  TEXARKANA FIRST FINANCIAL CORPORATION




Part II



Item 1.  Legal Proceedings
        Neither the Company nor the Association is involved in any 
        pending legal proceedings other than non-material legal 
        proceedings occurring in the ordinary course of business.



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
         On August 1, 1997, the Company announced a plan to repurchase 
         up to 89,515 shares (5%) of the Company's outstanding common 
         stock and 53,213 shares have been repurchased as of June 30, 
         1998.  The repurchased shares will be held as treasury stock 
         and will be available for general corporate purposes.

         On June 29, 1998, the Company declared a quarterly dividend in 
         the amount of $.14 per share, payable July 28, 1998 to 
         stockholders of record on July 14, 1998.



Item 6.  Exhibits and Reports on Form 8-K
         Exhibit 11 - Earnings Per Share Computation
         No reports on Form 8-K were filed during the period.












                                 Page 12
<PAGE>


                  TEXARKANA FIRST FINANCIAL CORPORATION






                               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 thereunto duly authorized. 





                                   TEXARKANA FIRST FINANCIAL CORPORATION






                                               /s/ James W. McKinney
Date:  August 3, 1998                     By:  _____________________
                                               James W. McKinney
                                               Chairman and CEO






                                               /s/ James L. Sangalli
Date:  August 3, 1998                     By:  _____________________
                                               James L. Sangalli
                                               Chief Financial Officer

















                                 Page 13
<PAGE>

Form 10-Q
Exhibit 11
EARNINGS PER SHARE COMPUTATION




                             Three Months Ended      Nine Months Ended  
                                   June 30,               June 30,      
                            _____________________  _____________________
                               1998       1997        1998       1997   
                            __________ __________  __________ __________

Net Income..................$  842,427 $  796,741  $2,406,310 $2,127,882
                             =========  =========   =========  =========



Weighted average shares:
 Common shares outstanding.  1,629,066  1,675,556   1,636,467  1,696,987
 Common stock equivalents 
  due to assumed exercise 
  of stock options..........    87,121     47,713      87,217     47,711
                             _________  _________   _________  _________
  Common and 
   common equivalent shares. 1,716,187  1,723,269   1,723,684  1,744,698
                             =========  =========   =========  =========



Earnings per common share:
 Basic......................    $ .517     $ .476      $1.470     $1.254
 Diluted....................    $ .491     $ .462      $1.396     $1.220






                                   E 1
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