UNITED STATES 
               SECURITIES AND EXCHANGE COMMISSION 
                     WASHINGTON, D.C.  20549 
                  -----------------------------
 
                            FORM 10-Q 
 
        Quarterly Report Pursuant to Section 13 or 15 (d) 
             of the Securities Exchange Act of 1934 
 
 
For the Quarterly Period Ended          Commission File Number 
      March 31, 1999                           0-20160 

                  -----------------------------
 
                    COVEST BANCSHARES, INC. 
     (Exact name of registrant as specified in its charter) 
 
 
          Delaware                           36-3820609 
(State or other jurisdiction       (I.R.S. Employer Identification 
     of incorporation or                      Number) 
        organization) 
 
749 Lee Street, Des Plaines, Illinois               60016 
(Address of Principal Executive Offices)          (Zip Code) 

Registrant's telephone number, including area code: (847) 294-6500 
 
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  ----- 
 
As of May 12, 1999, the Registrant had issued and outstanding 4,403,803 
shares of the Registrant's Common Stock.  In addition, it had also 
repurchased 246,106 shares which were being held as treasury stock.  
The aggregate market value of the voting stock held by non-affiliates 
of the Registrant as of May 12, 1999, was $47,950,000.


 

 
                  	  COVEST BANCSHARES, INC. 
 
                        Table of Contents 
 
PART I.   FINANCIAL INFORMATION (UNAUDITED)              PAGE NO. 

 
          Item 1.   Financial Statements....................3 
 
          Item 2.   Management's Discussion and 
                    Analysis of Financial Condition and
                    Results of Operations..................14
 
PART II.  OTHER INFORMATION 

          Item 1.   Legal Proceedings......................25
          Item 2.   Changes in Securities..................25 
          Item 3.   Defaults upon Senior Securities........25 
          Item 4.   Submission of Matters to a Vote
                      of Security Holders..................25
          Item 5.   Other Information......................25 
          Item 6.   Exhibits and Reports of Form 8-K.......25
 
 
          Form 10-Q Signatures.............................26
 




























PART 1.   FINANCIAL INFORMATION
Item 1.   Condensed Consolidated Financial Statements 
          see notes to condensed consolidated financial statements
          (unaudited)

COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)                                MAR. 31,     DEC. 31, 
(Dollars in thousands except                 1999         1998   
   per share amounts)                     ---------    --------- 
 
ASSETS 
------ 
CASH AND CASH EQUIVALENTS                 $   6,652   $   18,395   

INTEREST BEARING DEPOSITS AT BANKS           34,461       21,282
 
INVESTMENTS: 
  Securities Available-for-Sale              40,099       30,894
  Mortgage-Backed Securities and
    Related Securities Available-
    for-Sale                                 23,805       34,872
  Tax Exempt Securities Available-
    for-Sale                                 18,500       13,872
  Federal Home Loan Bank Stock and           
   FRB Stock                                  8,379        8,379
                                           ---------    ---------  
TOTAL INVESTMENTS                            90,783       88,017   
 
LOANS RECEIVABLE:    
  Commercial Real Estate Loans               67,627       66,699
  Multi-Family Loans                         65,859       55,661
  Construction Loans                         36,661       40,572
  Commercial Loans                           10,107        8,084
  Commercial/Municipal Leases                30,840       35,166
  Mortgage Loans                            135,199      150,185
  Consumer Loans                             43,857       45,980
  Mortgage Loans held for Sale                2,437        4,294
                                           ---------    ---------  
    TOTAL LOANS RECEIVABLE                  392,587      406,641   
  Allowance for Possible Loan Loss          ( 4,409)     ( 4,312)  
                                           ---------    ---------  
LOANS RECEIVABLE, NET                       388,178      402,329   

ACCRUED INTEREST RECEIVABLE                   2,985        3,280   
PREMISES AND EQUIPMENT                       11,144       11,372
OTHER ASSETS                                  4,241        4,022   
                                           ---------    ---------  
TOTAL ASSETS                               $538,444     $548,697   
                                           ========     ======== 


                                           MAR. 31,     DEC. 31, 
                                             1999         1998
                                          ---------    --------- 

LIABILITIES AND STOCKHOLDERS' EQUITY 
------------------------------------ 
LIABILITIES: 
  Deposits:
Non-Interest Bearing                      $  15,926    $  14,998
Interest Bearing Checking                    22,052       23,825
Money Market Accounts                        80,602       85,209
Savings Accounts                             52,551       52,990
Certificates of Deposit                     184,861      187,513
                                           --------     --------
                                            355,992      364,535
Short-Term Borrowings and Securities
Sold U/A to Repurchase                        6,015        6,755
Long-Term Advances from Federal 
  Home Loan Bank                            120,000      120,000   
Advances from Borrowers for  
  Taxes and Insurance                         2,658        3,637   
Accrued Expenses and Other Liabilities        7,693        6,819   
                                          ---------    ---------  
TOTAL LIABILITIES                           492,358      501,746   

STOCKHOLDERS' EQUITY:
  Common Stock, par value $.01 per share;
    7,500,000 authorized shares; 4,403,803
    shares issued at 3/31/99 and 12/31/98
    respectively                                 44           44   
  Additional Paid-in Capital                 18,282       18,967   
  Retained Earnings                          31,354       30,905   
  Treasury Stock, 243,188 shares and 
    193,188 shares, held at cost 3/31/99
    and 12/31/98 respectively                (3,376)      (3,017)        
  ESOP Loan                                    (130)        (161)  
  Unearned Stock Award                          (73)         (73)  
  Accumulated Other Comprehensive
    Income                                      (15)         286
                                          ---------     ---------  
TOTAL STOCKHOLDERS' EQUITY                   46,086       46,951   
                                          ---------     ---------  
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                    $   538,444     $548,697   
                                          =========     =========  




COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF INCOME            THREE MONTHS ENDED
(Unaudited)                                 MAR. 31,     MAR. 31,
(Dollars in thousands)                       1999         1998
                                          ---------    ---------
INTEREST INCOME
  Loans and Leases Receivable               $ 7,593      $ 7,566
  Interest Bearing Deposits at Banks            387          151
  Mortgage-Backed and Related Securities        508        1,924
  Taxable Securities                            477          664
  Tax Exempt Securities                         156           51
  Other Interest and Dividend Income            129           91
                                           ---------    ---------
  Total Interest Income                       9,250       10,447
INTEREST EXPENSE
  Deposits                                    3,676        4,144
  Advances from Federal Home Loan Bank        1,603        2,166
  Other Borrowed Money                           55           93
                                           ---------    ---------
  Total Interest Expense                      5,334        6,403
NET INTEREST INCOME                           3,916        4,044
  Provision for Possible Loan Losses             99          399
NET INTEREST INCOME AFTER PROVISION        ---------    ---------
  FOR POSSIBLE LOAN LOSSES                    3,817        3,645
NON-INTEREST INCOME
  Loan Servicing Fees                           202          321
  Mortgage Center Income                        536          210
  Deposit Related Charges and Fees              237          219
  Gain on Sale of Securities                      2          256
  Insurance and Annuity Commissions              39          141
  Other                                          30           39
                                           ---------    ---------
  Total Non-Interest Income                   1,046        1,186
NON-INTEREST EXPENSE
  Compensation and Benefits                   1,858        1,601
  Commissions and Incentives                    185           66
  Occupancy and Equipment                       527          500
  Federal Insurance Premium                      53           60
  Data Processing                               244          306
  Advertising                                    92           87
  Other Real estate Owned                         2            6
  Other                                         712          666
                                           ---------    ---------
TOTAL NON-INTEREST EXPENSE                    3,673        3,292
                                           ---------    ---------
INCOME BEFORE TAXES                           1,190        1,539
  Income Tax Provision                         (404)        (530)
                                           ---------    ---------
NET INCOME                                  $   786      $ 1,009
                                           =========    =========




COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS        THREE MONTHS ENDED
(Unaudited)                                 MAR. 31,     MAR. 31,
(Dollars in thousands)                        1999         1998
                                           ---------    ---------
OPERATING ACTIVITIES
  Net Income                                $   786      $ 1,009
  Adjustments to Reconcile Net Income to
   Cash Provided by Operating Activities
    Depreciation and Amortization of
       Premises and Equipment                   264          262
    Provision for Possible Loan Losses           99          399
    Net Gain on Sale of Securities               (2)        (256) 
    Change In:
      Prepaid Expenses and Other Assets         272          237
      Accrued Interest Receivable               295         (138)
      Accrued Expenses and Other Liabilities    755         (291)
                                           ---------    ---------
NET CASH FROM OPERATING ACTIVITIES            2,469        1,222

CASH FLOWS FROM INVESTING ACTIVITIES
  Loan Originations, Net of Principal
    Payments                                 14,052      (15,531)
  Principal Payments on Mortgage-Backed
    and Related Securities                    4,602        8,938
  Purchases of Mortgage-Backed and
    Related Securities                          -0-       (9,746)
  Purchases of Securities                   (14,320)     (21,175)
  Proceeds from Sales and Maturities
    of Securities                             6,461       25,831
  Purchase of Federal Home Loan Bank
    and Federal Reserve Bank Stock              -0-       (1,250)
  Purchase of Office Properties and 
    Equipment                                   (36)        (584)
                                           ---------    ---------
NET CASH FROM INVESTING ACTIVITIES           10,759      (13,517)



                                             THREE MONTHS ENDED
                                            MAR. 31,     MAR. 31,
                                              1999         1998
                                           ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net (Decrease) in Deposits                 (8,543)     (15,808)
  Net Borrowings of Federal
    Home Loan Bank Advances                      -0-      25,000
  Repayments of Other Borrowings               (740)     (11,403)
  Net (Decrease) in Mortgage Escrow Funds      (979)        (561)
  Purchase of Common Stock Net of 
    Proceeds from Exercise of Stock Options  (1,224)      (1,064)
  Payment Received on Loan to ESOP               31           35
  Dividend Paid                                (337)        (348)
                                           ---------    ---------
NET CASH FROM FINANCING ACTIVITIES          (11,792)      (4,149)
                                           ---------    ---------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                            1,436      (16,444)

CASH AND CASH EQUIVALENTS, BEGINNING         39,677       23,470
                                           ---------    ---------
CASH AND CASH EQUIVALENTS, ENDING           $41,113       $7,026 
                                           =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Interest Paid                              $5,194       $6,311
  Income Taxes Paid                             -0-          -0-


<TABLE>
<CAPTION>
COVEST BANCSHARES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(Dollars in thousands)
Three months ended March 31, 1998 and 1999

                                                                                                           
                                                                                                     ACCUMULATED           
                                            ADDITIONAL                                    UNEARNED   OTHER            
                                    COMMON   PAID-IN    RETAINED   TREASURY      ESOP       STOCK    COMPREHENSIVE         
                                     STOCK   CAPITAL    EARNINGS    STOCK        LOAN       AWARD    INCOME       TOTAL
------------------------------------------------------------------------------------------------------------------------
<S>
<C>                                   <C>    <C>        <C>           <C>        <C>          <C>     <C>        <C>    
Balance at December 31, 1997          $44   $19,365    $28,410         -0-       ($511)       ($73)   $1,059     $48,294
                                                                                                                       
Net Income                                               1,009                                                     1,009
 
Change in Unrealized Gain on Securities  
 Available-for-Sale, Net of Taxes                                                                       (236)       (236)
                                                                                                                --------
                                                                                                                      
Comprehensive Income                                                                                                 773
                                                                                                               
Cash Dividends ($.08 per share)                           (348)                                                     (348)
                                                                                                                       
Purchase of Treasury Stock                                          (1,447)                                       (1,447)
                                                                                                                       
Principal payment on ESOP Loan                                                      35                                35

Treasury Stock Reissued in Conjunction
 with Stock Option Exercises                   (159)                   542                                           383

Tax Benefits related to
 Employee Stock Option Plans                    314                                                                  314

-----------------------------------------------------------------------------------------------------------------------
                                                                      
Balance at March 31, 1998             $44   $19,520     $29,071      ($905)      ($476)        ($73)     $823    $48,004
========================================================================================================================
                                                                                                                       
Balance at December 31, 1998          $44   $18,967     $30,905    ($3,017)      ($161)        ($73)     $286    $46,951
                                                                                                              
Net Income                                                  786                                                      786
  
Change in Unrealized Gain on Securities
  Available-for-Sale, Net of Taxes                                                                       (301)      (301)
                                    									                                                                      ------
                                                                                                                       
Comprehensive Income                                                                                                 485
                                                                                                             
Cash Dividends ($.08 per share)                            (337)                                                    (337)
                                                                                                                      
Purchase of Treasury Stock                                          (2,150)                                       (2,150)
                                                                                                                        
Principal Payment on ESOP Loan                                                      31                                31
                                                                                                                       
Treasury Stock Reissued in Conjunction                                                                                 
  with Stock Option Exercises                  (865)                 1,791                                           926
                                                                                                                       
Tax Benefits related to 
  Employee Stock Option Plans                   180                                                                  180
                                                                                                                       
------------------------------------------------------------------------------------------------------------------------
                                                                                                                       
Balance at March 31, 1999             $44   $18,282     $31,354    ($3,376)      ($130)       ($73)      ($15)   $46,086
========================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
COVEST BANCSHARES INC.
AVERAGE BALANCE SHEET
(Unaudited)
(Dollars in thousands)
The following table sets forth certain information related to the Company's average balance sheet.  It reflects the
average yield on assets and average cost of liabilities for the periods indicated, as derived by dividing income or
expense by the average daily balance of assets or liabilities, respectively, for the periods indicated.

                                                                    THREE MONTHS ENDED
                                ----------------------------------------------------------------------------------------  
                                             MARCH 31, 1999                                   MARCH 31, 1998              
                                -----------------------------------------        ---------------------------------------  
                                                                AVERAGE                                          AVERAGE  
                                   AVERAGE                       YIELD/             AVERAGE                       YIELD/  
                                   BALANCE        INTEREST        COST              BALANCE        INTEREST        COST   
INTEREST-EARNING ASSETS:        -----------------------------------------        ---------------------------------------  
<S>
  <C>                             <C>              <C>            <C>              <C>             <C>            <C>    
Commercial Real Estate            $61,918          $1,324         8.55%            $58,664         $1,234         8.42%
  Multi-Family Loans               65,167           1,274         7.82               8,644            172         7.97
  Construction Loans               35,792             796         8.89              10,342            235         9.09  
  Commercial Loans (1)              9,334             136         5.83               5,867            136         9.41
  Commercial Leases                32,897             518         6.30              15,787            274         6.94   
  Mortgage Loans                  144,385           2,609         7.23             229,305          4,168         7.27   
  Consumer Loans                   44,953             936         8.32              58,469          1,347         9.19
  Securities                       57,213             845         5.91              39,446            613         6.22   
  Mortgage-Backed and                                                                                                    
    Related Securities             30,485             508         6.67             112,814          1,924         6.82   
  Other Investments                33,554             387         4.61              25,101            344         5.48   
                                -----------------------------------------        --------------------------------------- 
Total Interest-Earning Assets    $515,698          $9,333         7.24%           $564,439        $10,447         7.40%  
                                                                                                                          
Non-Interest Earning Assets        21,576                                           23,765                               
                                -----------------------------------------        ---------------------------------------  
                                                                                                                         
TOTAL ASSETS                     $537,274                                         $588,204                               
                                =========================================        =======================================  
                                                                                                                          
INTEREST-BEARING LIABILITIES:                                                                                             
  Interest-Bearing Checking       $22,607             $59         1.04%            $22,071            $75         1.36%
  Savings                          52,444             323         2.46              58,352            360         2.47          
  Money Market                     80,778             865         4.28              62,401            757         4.85
  Certificates of Deposit         174,454           2,291         5.25             200,489          2,819         5.62  
  Jumbo CD's                       10,670             138         5.21               9,335            133         5.69  
  FHLB Advances                   120,000           1,603         5.34             156,111          2,166         5.55  
  Other Borrowed Funds              4,997              55         4.38               7,532             93         4.99 
                                -----------------------------------------        ---------------------------------------  
                                                                                                                        
Total Interest-Bearing                                                                                                    
  Liabilities                    $465,950          $5,334         4.58%           $516,291          $6,403         4.96%
                                                                                                                       
Non-Interest Bearing                                                                                                      
  Deposits                         14,127                                           12,596                               
                                                                                                                          
Other Liabilities                  10,158                                           11,623      
                                -----------------------------------------        ---------------------------------------  
                                                                                                                          
TOTAL LIABILITIES                $490,235                                         $540,510
                                -----------------------------------------        ---------------------------------------  
                                                                                                                          
Stockholders' Equity               47,039                                           47,694
                                -----------------------------------------        ---------------------------------------  
TOTAL LIABILITIES AND                                                                                                     
  STOCKHOLDERS' EQUITY           $537,274                                         $588,204                               
                                =========================================        =======================================  
                                                                                                                          
NET INTEREST INCOME                               $3,999                                           $4,044
                                -----------------------------------------        ---------------------------------------  
NET INTEREST RATE SPREAD (2)                                      2.66%                                           2.44%
                                -----------------------------------------        ---------------------------------------  
NET INTEREST MARGIN (3)                                           3.10%                                           2.87%  
                                -----------------------------------------        ---------------------------------------  

</TABLE>

(1) Includes an $874,000 cash basis loan.
(2) Interest Rate Spread is calculated by subtracting the average cost of 
    interest-bearing liabilities from the average rate on interest-earning
    assets.
(3) Net Interest Margin is calculated by dividing net interest income by
    average interest-earning assets.



                       COVEST BANCSHARES INC.
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)

(1)          Basis of Presentation

The accompanying unaudited condensed consolidated financial statements 
have been prepared in accordance with generally accepted accounting 
principles for interim financial information and with the instructions 
to Form 10-Q and Regulation S-X.  Accordingly, they do not include all 
the information and footnotes required by generally accepted 
accounting principles for complete financial statements.

The results of operations and other data for the quarter ended March 
31, 1999 are not necessarily indicative of results that may be 
expected for the entire year ended December 31, 1999.

In the opinion of management, the unaudited condensed consolidated 
financial statements contain all adjustments (consisting only of 
normal recurring adjustments) necessary to present fairly the 
financial condition of CoVest Bancshares, Inc. (the "Company"), 
including its wholly owned subsidiary, CoVest Banc (the "Bank"), as of 
March 31, 1999 and December 31, 1998, the results of the Company's 
operations for the three months ended March 31, 1999 and 1998, its 
cash flows for the three months ended March 31, 1999 and 1998, its 
changes in stockholders' equity for the three months ended March 31, 
1999 and 1998, and its average balance sheet for the three months 
ended March 31, 1999 and 1998.

Certain amounts in prior condensed consolidated financial statements 
have been reclassified to conform with the March, 1999 presentation. 



(2)     Nature of Operations
 
The Company is a bank holding company organized under the laws of the 
state of Delaware.  It provides a full line of financial services to 
customers within nine counties in northeast Illinois from its three 
branch  locations.  The Company opened a mortgage center in McHenry, 
Illinois in February, 1998, and a second mortgage center in Aurora, 
Illinois in July, 1998.  These entities concentrate on mortgage loan 
origination and sales.  In December, 1998 the Company opened an 
investment center in Berwyn, Illinois, which concentrates on annuity 
sales, insurance sales and securities transactions.

The banking operations and mortgage center operations are considered 
to be reportable segments during 1999.  Loans, investments, and 
deposits provide the revenues in the banking operation, and servicing 
release fees and loan sales provide the revenues in mortgage banking.  
All operations are domestic.

The accounting policies used for mortgage banking operations are the 
same as those for banking operations except that income taxes are not 
allocated to the mortgage banking operations.  Information reported 
internally for performance assessment as of March 31, 1999 follows.


                                               Mortgage   Consolidated
                                   Banking      Banking       Total
                                  ---------   ---------- -------------
Net Interest Income                 $3,825         $91       $3,916
Other Revenue                          510         536        1,046
Other Expense                        2,967         540        3,507
Noncash Items:
  Depreciation                         159           7          166
  Provision for Loan Loss               99          -0-          99
Segment Profit, Before Income Taxes  1,110          80        1,190
Segment Assets                     534,943       3,501      538,444



A reconciliation of the numerators and denominators for earnings per 
common share dilution computations for the period ended March 31, 1999 
and 1998 are presented below: (dollars and shares in thousands)


                                     Period Ended March 31
                                     ---------------------
                                       1999          1998
                                       ----          ----
Earnings per share:
   Net Income                          $786        $1,009
   Weighted average common shares
     outstanding                      4,159         4,238
                                      -----         -----
   Earnings per share                  $.19          $.24
                                      =====         =====

Earnings per share assuming dilution:
   Net Income                          $786        $1,009
                                       ====        ======
   Weighted average common shares
     outstanding                      4,159         4,238


   Add: dilutive effect of assumed
        exercises, incentive stock
        options and management
        retention plan                  176           276
                                        ---           ---
   Weighted average common and
     dilutive potential common shares
     outstanding                      4,335         4,514
                                      =====         =====

   Diluted earnings per share          $.18          $.22
                                       ====          ====



(3)	   Stock Repurchase Program 
 
The Company completed its fifteenth stock repurchase program on 
March 25, 1999; a total of 100,250 shares were repurchased at an 
average price of $13.96.

On March 25, 1999 the Company's Board of Directors announced a 
new stock repurchase program, the Company's sixteenth, enabling 
the Company to repurchase up to 100,000 shares of its 
outstanding stock.  These purchases will be made in the open 
market and/or through privately negotiated transactions.  The 
stock will be used for the issuance of shares in connection with 
the exercises of previously granted stock options. 


(4)     Stock Dividend and Cash Dividend

The regular quarterly dividend for the first quarter of 1999 was 
paid at $.08 per share.


(5)     Regulatory Capital Requirements

Pursuant to the Financial Institutions Reform, Recovery and 
Enforcement Act of 1989 ("FIRREA"), as implemented by 
regulations promulgated by the Office of the Comptroller of the 
Currency (the "OCC"), national banks must meet three separate 
minimum capital requirements. The following table summarizes, as 
of March 31, 1999, the Bank's capital requirements under FIRREA 
and its actual capital ratios.  As of March 31, 1999, the Bank 
exceeded all current minimum regulatory capital requirements. 


                                     BANK ONLY
               ----------------------------------------------------
                 Actual         Regulatory         Excess Above 
                Capital        Capital Req.        Capital Req. 
                 Amount   %      Amount       %        Amount    %    
               -------  ------  -------     -----    -------   -----
                              (Dollars in Thousands)               
Total Capital to
  Risk Weighted
    Assets      $46,530   13.39%   $27,800    8.00%    $18,730   5.39%
Tier I Capital to
  Risk Weighted
    Assets       42,185   12.14     13,900    4.00      28,185   8.14
Tier I Capital to
  Average Assets 42,185    7.86     21,491    4.00      20,694   3.86


(6)          Safe Harbor Statement
                 
This report contains certain forward-looking statements within the 
meaning of Section 27A of the Securities Act of 1933, as amended, and 
Section 21E of the Securities Exchange Act of 1934, as amended.  The 
Company intends such forward-looking statements to be covered by the 
safe harbor provisions for forward-looking statements contained in the 
Private Securities Reform Act of 1995, and is included in this 
statement for purposes of these safe harbor provisions.  Forward-
looking statements, strategies and expectations of the Company, are 
generally identifiable by use of the words 'believe', 'expect', 
'intend', 'anticipate', 'estimate', 'project' or similar expressions.  
The company's ability to predict results or the actual effect of 
future plans or strategies is inherently uncertain.  Factors which 
could have a material adverse affect on the operations and future 
prospects of the Company and its subsidiaries include, but are not 
limited to, changes in: interest rates, general economic conditions, 
legislative/regulatory changes, monetary and fiscal policies of the 
U.S. Government, including policies of the U.S. Treasury and the 
Federal Reserve Board, the quality of composition of the loan or 
investment portfolios, demand for loan products, deposit flows, 
competition, demand for financial services in the Company's market 
area and accounting principles, policies and guidelines.    These 
risks and uncertainties should be considered in evaluating forward-
looking statements and undue reliance should not be placed on such 
statements.  Further information concerning the Company and its 
business, including additional factors that could materially affect 
the Company's financial results, is included in the Company's filings 
with the Securities and Exchange Commission.



ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
             CONDITION AND RESULTS OF OPERATIONS 

OVERVIEW 
-------- 
The Company's business activities currently consist of ownership of 
the Bank, and investments in other equity securities.  The Bank's 
principal business consists of attracting deposits from the public and 
investing these deposits, together with funds generated from 
operations, primarily in commercial loans, leases, commercial real 
estate loans, and consumer loans.  The Bank's mortgage centers 
concentrate on mortgage loan origination and sales. It is management's 
intention that commercial loans will become an increasingly larger 
portion of the total loan portfolio as the balance sheet is 
restructured to become more like that of a community bank.  The Bank's 
deposit accounts are insured to the maximum allowable by the Federal 
Deposit Insurance Corporation (the "FDIC"). 

The Bank's results of operations are dependent primarily on net 
interest income, which is the difference between the interest earned 
on its loans and securities portfolios, and the interest paid on 
deposits and borrowed funds.  The Bank's operating results are also 
affected by loan commitment and servicing fees, loan service release 
fees from its mortgage center operations, customer service charges, 
fees from annuity and insurance products, and other income.  Operating 
expenses of the Bank include employee compensation and benefits, 
equipment and occupancy costs, federal deposit insurance premiums and 
other administrative expenses. 

The Bank's results of operations are further affected by economic and 
competitive conditions, particularly changes in market interest rates.  
Results are also affected by monetary and fiscal policies of federal 
agencies, and actions of regulatory authorities. 


FINANCIAL CONDITION 
------------------- 
Total consolidated assets of the Company decreased by $10.3 million 
from $548.7 million at December 31, 1998, to $538.4 million at 
March 31, 1999. 

During the first quarter, the Company funded $19 million of 
commercial loans, commercial real estate loans, multi-family 
loans, construction loans, and commercial leases.  The 
composition of the loan portfolio continues to change as 
commercial real estate loans represented 17%, multi-family loans 
represented 17%, construction loans represented 9%, commercial 
loans represented 3%, and commercial leases represented 8% at 
March 31, 1999.  With $12.8 million of approved and accepted 
commitments outstanding as of March 31, 1999, which are anticipated
to be funded in the next 90 days, management expects the composition
of commercial real estate, multi-family loans, construction loans, 
and commercial loans to continue to grow and become a larger 
percentage of the overall loan portfolio and assets mix.

During the first quarter of 1999, residential mortgage loans decreased 
by $15 million as borrowers took advantage of lower rates and 
refinanced their mortgages.  The CoVest Banc mortgage centers in 
McHenry and Aurora, Illinois processed many of the refinanced 
mortgages that are then sold on a service released basis to the 
investor market.  The mortgage center had over $2.4 million of loans 
held for sale at March 31, 1999.

At March 31, 1999, the allowance for possible loan losses amounted to 
$4.4 million.  This represented coverage of 1.12% of total loans as of 
March 31, 1999, an increase from the 1.06% coverage which existed at 
year-end 1998.

Securities available-for-sale increased by $2.8 million as various 
municipal bonds and short-term governments were added to the 
portfolio.  Mortgage-backed and other mortgage-related securities 
decreased $11.1 million or 31.7% from December 31, 1998.  The proceeds 
from the sales of, and paydowns on, mortgage-backed securities were 
used to fund municipal and government bond purchases.

Deposits decreased to $356.0 million at March 31, 1999, from $364.5 
million at December 31, 1998.  This decrease was the result of a $2.6 
million reduction in certificates of deposit and a $4.6 million 
reduction in money market account balances.

Stockholders' equity totaled $46.1 million at March 31, 1999.  At 
quarter-end, the number of common shares outstanding was 4,109,295 and 
the book value per common share outstanding was $11.08.  This compares 
to December 31, 1998, when the number of common shares outstanding was 
4,159,295 and the book value per common share outstanding was $11.15.   
At May 12, 1999, approximately 47,000 shares remain to be repurchased 
under the current stock repurchase program.

At March 31, 1999, total non-performing assets amounted to $2.0 
million, or 0.38% of total assets compared to $1.0 million, or 0.19% 
of total assets at December 31, 1998.  Management believes the 
reserves for possible loan losses to be adequate. Non performing 
assets as of March 31, 1999 included one commercial loan with a 
balance of $874,000.  A specific reserve of $250,000 has been 
designated for that loan.

The following table sets forth the amounts and categories of non- 
performing loans and assets. 
                                     March 31, 1999    Dec. 31, 1998
                                      -------------    ------------- 
                                          (Dollars in Thousands)     
Non-performing loans:
  Mortgage Loans                           $1,123             $996
  Commercial Real Estate Loans                -0-              -0-
  Multi-family Loans                          -0-              -0-
  Construction Loans                          -0-              -0-
  Commercial Loans                            874              -0-
  Commercial Leases                           -0-              -0-
  Consumer                                     25               25     
                                     -------------    ------------- 
   Total non-performing loans              $2,022           $1,021    

Other real estate owned                       -0-              -0-
Other repossessed assets                      -0-              -0-
                                      -------------    -------------
   Total non-performing assets             $2,022           $1,021

Total non-performing loans as 
  a percentage of net loans                   .52%             .25% 
 
Total non-performing assets as 
  a percentage of total assets                .38%             .19% 



LIQUIDITY  
--------- 
The Company's primary sources of funds are deposits, principal and 
interest payments on loans and mortgage-backed securities, and funds 
provided by other operations.  While scheduled loan and mortgage-
backed securities repayments and maturities of short-term investments 
are a relatively predictable source of funds, deposit flows and loan 
prepayments are greatly influenced by general interest rates, economic 
conditions, competition and the restructuring occurring in the banking 
industry. 

The Company's cash flows are a result of three principal activities: 
operating activities, investing activities and financing activities.  
Net cash provided by operating activities was $2.5 million for the 
three months ended March 31, 1999.  Net cash provided by investing 
activities was $10.8 million for the quarter ended March 31, 1999.  
Net cash used in financing activities amounted to $11.8 million for 
the three months ended March 31, 1999.  

The Company uses its liquidity to meet its ongoing commitments to 
fund maturing certificates of deposit and deposit withdrawals, repay 
borrowings, fund existing and continuing loan commitments, and pay 
operating expenses.  At March 31, 1999, the Company had commitments to 
originate loans and undisbursed loan balances totaling $59 million, 
and its customers had approved but unused lines of credit totaling $31 
million. The Company considers its liquidity and capital resources to be 
adequate to meet its foreseeable short and long-term needs.  The Company 
expects to be able to fund or refinance, on a timely basis, its material 
commitments and long-term liabilities. 

SELECTED RATIOS 
--------------- 
(unaudited)                             THREE MONTHS ENDED  
                                       MARCH 31,   MARCH 31,  
                                          1999        1998
                                       --------------------
Annualized Return on Avg. Equity           6.68%       8.46% 
Annualized Return on Avg. Assets           0.59%       0.69% 
Book Value per Share                     $11.08      $11.03   
Closing Market Price per Share           $14.88      $17.25 

Earnings per Primary Share:
Basic                                      $.19        $.24
Diluted                                     .18         .22
  
Net Interest Margin                        3.10%       2.87%
 
Ratio of Operating Expense to
     Average Total Assets,
     Annualized                            2.73%       2.24%
Ratio of Net Interest Income to
     Non-Interest Expense,                      
     Annualized                            1.07x       1.23X 
 



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 
1998
----------------------------------------------------------------------

GENERAL. Net income for the three months ended March 31, 1999 totaled 
$786,000, or $0.19 (basic) and $0.18 (diluted) earnings per share, a 
decrease of 22% from the $1,009,000, or $0.24 (basic) and $0.22 
(diluted) earnings per share for the first quarter in 1998.  Excluding 
the effect of non recurring employee termination expense of $182,000 
($112,000 net of tax), net income for the quarter ended March 31, 1999 
would have been $898,000, or $0.22 (basic) and $0.21 (diluted) 
earnings per share.

NET INTEREST INCOME.  Net interest income decreased by $128,000, or 
3%, for the first quarter of 1999 compared to the first quarter of 
1998.  A $49 million decrease in average earning assets for the first 
quarter of 1999 versus the first quarter of 1998 accounted for part of 
this income reduction.  During the fourth quarter of 1997, the Company 
entered into an arbitrage transaction and purchased mortgage backed 
securities utilizing $50 million in FHLB borrowings.  The borrowings 
matured in November, 1998 and the securities were sold to repay the 
borrowings.  The Company's net interest margin increased 23 basis 
points, or 8%, to 3.10% for the first quarter of 1999 from 2.87% for 
the first quarter of 1998.  The interest rate spread averaged 2.66% 
for 1999 and 2.44% during the first quarter of 1998, a 22 basis point 
or 9% increase.  The net interest margin for the fourth quarter of 
1998 was 2.99% and the net interest spread was 2.71%. 

The cost of interest bearing liabilities declined from 4.96% for the 
first quarter of 1998 to 4.58% for the first quarter of 1999.  The 
composition of the liabilities changed as money market accounts 
continued to be a larger percentage of the Bank's deposit funding 
source, replacing the shrinking pool of certificates of deposit.  A 
$51 million reduction in interest bearing liabilities for the first 
quarter of 1999 versus the first quarter of 1998 was primarily due to 
the maturity of Federal Home Loan Bank borrowings used to fund 
mortgage-backed securities, as detailed above.

PROVISION FOR POSSIBLE LOAN LOSSES. The provision for possible loan losses 
was decreased by $300,000, or 75%, to $99,000 for the first quarter of 
1999. This reduction stemmed from the sale of the Company's credit card 
portfolio in November, 1998.  During the quarter ending March 31, 1998, 
the Company had provided $300,000 for possible losses on credit card 
loans. 

On a quarterly basis, management of the Bank meets to review the adequacy 
of the allowance for loan losses.  Each loan officer grades his or her 
individual commercial credits and the Company's outsourced loan review 
function validates the officers' grades.  In the event that loan review 
results in a downgrade of the loan, it is included in the allowance 
analysis at the lower grade.  The grading system is in compliance with the 
regulatory classifications and the allowance is allocated to the loans 
based on the regulatory grading, except in instances where there are known 
differences (i.e. collateral value is nominal, etc.).  Once the specific 
portion of the allowance is calculated, management then calculates a 
historical portion for each loan category based on loan loss history, 
current economic conditions and trends in the portfolio, including 
delinquencies and impairments, as well as changes in the composition of 
the portfolio.  Management believes the allowance as of March 31, 1999 to 
be adequate.

LOAN LOSS ALLOWANCE ANALYSIS.  The following table sets forth an 
analysis of the Company's allowance for possible loan losses for the 
periods indicated. 


                                           Three Months Ended 
                                          March 31,       March 31, 
                                            1999            1998 
                                         ---------        --------- 
                                            (Dollars in Thousands) 
 
Balance at beginning of period             $4,312           $3,977 
Charge-offs:
  Mortgage Loans                           $  -0-           $   38
  Commercial Real Estate Loans                -0-              -0-
  Multi-Family Loans                          -0-              -0-
  Construction Loans                          -0-              -0-
  Commercial Loans                            -0-              -0-
  Commercial Leases                           -0-              -0-
  Consumer                                     22              233     
                                         --------         -------- 
Total                                          22              271
                                         --------         --------

Recoveries:
  Mortgage Loans                           $  -0-           $  -0-
  Commercial Real Estate Loans                -0-              -0-
  Multi-Family Loans                          -0-              -0-
  Construction Loans                          -0-              -0-
  Commercial Loans                            -0-              -0-
  Commercial Leases                           -0-              -0-
  Consumer                                     20               56
                                         --------         -------- 
Total                                          20               56
                                         --------         --------
 Net charge-offs                                2              215

Additions charged to                                            
  operations                                   99              399
                                         --------        --------- 
Balance at end of period                   $4,409           $4,161
 
Ratio of net charge-offs during 
  the period to average loans 
  outstanding during the period              0.00%            0.06% 
 
Ratio of allowance for possible
  loan losses to non- performing loans       2.18x            3.62x 



NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE LOAN LOSSES.  Net 
interest income after provision for possible loan losses increased 
by $172,000, or 5% to $3,817,000 for the three month period ended 
March 31, 1999, as compared to $3,645,000 for the three month period 
ended March 31, 1998.

NON-INTEREST INCOME. Non-interest income excluding security gains 
increased $114,000, or 12%, from the comparable quarter last year.  
Mortgage Center income increased by $326,000 to $536,000 in the first 
quarter of 1999 compared to $210,000 in the similar quarter in 1998.  
The Mortgage Center commenced operations on February 12, 1998.  Loan 
charges and servicing fees decreased by $119,000 as the volume of 
mortgage loans decreased.  Deposit related charges and fees increased 
by $18,000 during the first quarter of 1999 as compared to the first 
quarter of 1998.  Realized gains of $2,000 on sales of securities were 
also recorded.  This was a decrease of $254,000 in net gains on 
securities sales from the comparable quarter in 1998.

NON-INTEREST EXPENSE.  Non-interest expense increased $381,000, or 12% 
for the first quarter of 1999 from the comparable quarter in 1998.  
Total compensation, commission, and benefit costs increased $376,000 
for the quarter ended March 31, 1999 versus March 31, 1998.  Of this 
total, $182,000, or 48%, represents non-recurring employee termination 
expenses, as certain positions were eliminated in the first quarter of 
1999 to bring operating costs more in line with the revenues of the 
Bank.  Commissions and employee sales incentives, mostly attributed to 
the Mortgage Center, which opened for business on February 12, 1998, 
increased $119,000 to $185,000 from $66,000 for the same period in 
1998.  The remaining $75,000 increase stems from the expansion of the 
commercial loan function, some fixed costs associated with the 
Mortgage Center operation, and increases in employee health insurance 
costs.  Increases in building occupancy expenses of $27,000 and 
miscellaneous expenses of $48,000 were partially offset by a $62,000 
decline in data processing expenses for the first quarter of 1999 
compared to the first quarter of 1998.  

INCOME TAX EXPENSE.  Income tax expense decreased $126,000 to $404,000    
for the quarter ended March 31, 1999, compared to $530,000 for the 
same period in 1998, due to the decrease in income.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.  In an 
attempt to manage the Bank's exposure to changes in interest rates,
management closely monitors the Bank's interest rate risk.  

Interest rate risk results when the maturity or repricing intervals 
and interest rate indices of the interest-earning assets, interest-
bearing liabilities, and off-balance sheet financial instruments are 
different, creating a risk that changes in the level of market 
interest rates will result in disproportionate changes in the value 
of, and the net earnings generated from, the Company's interest-
earning assets, interest-bearing liabilities, and off-balance sheet 
financial instruments. The Company's exposure to interest rate risk is 
managed primarily through the Company's strategy of selecting the 
types and terms of interest-earning assets and interest-bearing 
liabilities which generate favorable earnings, while limiting the 
potential negative effects of changes in market interest rates.  
Since the Company's primary source of interest-bearing liabilities is 
customer deposits, the Company's ability to manage the types and terms 
of such deposits may be somewhat limited by customer preferences in 
the market areas in which the Company operates. Borrowings, which 
include FHLB Advances, short-term borrowings, and long-term 
borrowings, are generally structured  with specific terms which in 
management's judgment, when aggregated with the terms for outstanding 
deposits and matched with interest-earning assets, mitigate the 
Company's exposure to interest rate risk. The rates, terms and 
interest rate indices of the Company's interest-earning assets result 
primarily from the Company's strategy of investing in loans and 
securities (a substantial portion of which have adjustable-rate 
terms) which permit the Company to limit its exposure to interest rate 
risk, together with credit risk, while at the same time achieving a 
positive interest rate spread from the difference between the income 
earned on interest-earning assets and the cost of interest-bearing 
liabilities.

In addition to periodic gap reports comparing the sensitivity of 
interest-earning assets and interest-bearing liabilities to changes in 
interest rates, management utilizes a monthly report ("model") 
prepared by the Bank which measures the Bank's exposure to interest 
rate risk.  The model calculates the present value of assets, 
liabilities, off-balance sheet financial instruments, and equity at 
current interest rates, and at hypothetical higher and lower interest 
rates at one percent intervals.  The present value of each major 
category of financial instrument is calculated by the model using 
estimated cash flows based on weighted average contractual rates and 
terms at discount rates representing the estimated current market 
interest rate for similar financial instruments.  The resulting 
present value of longer term fixed-rate financial instruments are more 
sensitive to change in a higher or lower market interest rate 
scenario, while adjustable-rate financial instruments largely reflect 
only a change in present value representing the difference between the 
contractual and discounted rates until the next interest rate 
repricing date.  



The following table presents the Bank's current exposure to 
hypothetical changes in interest rates.



                            March 31, 1999                   
 
            Change in       Percent Change   Percent Change      
            Interest Rates  in Net Interest  in MV of           
            (basis points)  Income           Portfolio Equity   
            --------------  ---------------  ----------------    
                +200              -6%            -9%        
   
                +100              -3             -3

                   0               0              0         

                -100              +2             +4        

                -200              +5             +9                  



Certain shortcomings are inherent in the method of analysis presented 
in the foregoing table.  For example, although certain assets and 
liabilities may have similar maturities or periods to repricing, they 
may react in different degrees to changes in market interest rates.  
Also, the interest rates on certain types of assets and liabilities 
may fluctuate in advance of changes in market interest rates, while 
interest rates on other types may lag behind changes in market rates. 
Additionally, certain assets, such as adjustable-rate mortgage loans, 
have features that restrict changes in interest rates on a short-term 
basis and over the life of the loan.  Further, in the event of a 
change in interest rates, prepayment and early withdrawal levels could 
deviate significantly from those assumed in calculating the tables.  
Finally, the ability of many borrowers to service their debt may 
decrease in the event of a significant interest rate increase.

In addition, the previous table does not necessarily indicate the 
impact of general interest rate movements on the Company's net 
interest income because the repricing of certain categories of assets 
and liabilities are subject to competitive and other pressures beyond 
the Company's control.  As a result, certain assets and liabilities 
indicated as maturing or otherwise repricing within a stated period 
may in fact mature or reprice at different times and at different 
volumes.


RECENT REGULATORY DEVELOPMENTS 
----------------------------------------------------------------------

Year 2000 Compliance

The Company is devoting significant resources to minimize the risk of 
potential disruption from the Y2K problem.  This problem is the result 
of computer programs having been written using two digits (rather than 
four) to define the year.  Any time-sensitive software may recognize a 
date using 00 as the year 1900 rather than the year 2000, which 
could result in miscalculations and system failures.  The problem 
could affect non-information technology systems such as operating and 
control systems that have embedded chip systems.  The Company is also 
at risk from Y2K failures on the part of business relationships with 
vendors, suppliers, and public utilities providers such as 
electricity, water, gas, and communications.  System failures 
resulting from the Y2K problem could adversely affect operations and 
financial results by incorrectly calculating accrued interest 
receivable and payable.  Failures could also affect the ability of 
customers to perform normal deposit and loan activities.

Addressing the Problem

The Company has developed, in accordance with the guidelines listed in 
the Federal Financial Institutions Examination Council (FFIEC) 
statement dated May 5, 1997, a six phase plan to resolving Y2K issues 
that are reasonably within its control.  The plan is implemented and 
coordinated through a senior level task force chaired by a Senior 
Vice President.  As of March 31, 1999, ten officer level staff members 
sit on the committee and devote a minimum of 25% of their time to the 
Y2K effort. The Y2K committee chairman reports at a minimum of quarterly 
to the Board of Directors.  The Company's Y2K efforts are also reviewed 
by internal audits and examined by the Office of the Comptroller of the 
Currency.  According to the FFIEC guidelines, Phase I - Awareness, 
Phase II - Assessment and Inventory, and Phase III - Renovation were 
completed as required.  A description and anticipated timing of the three 
remaining phases are described as follows:

Phase IV - Testing and Validation

This phase includes establishing a test environment, performing 
systems testing, and certifying and documenting the results.  The 
certification process requires having functional experts run system 
tests and review results against pre-established criteria to ensure 
compliance.  Documentation should be maintained in the form of data 
reports and computer print screens.  The "mission critical" systems, 
other than those associated with the Company's third party data 
processor (M&I Data) for which the Company will participate in proxy 
testing, were completed by December 31, 1998.  The Company expects the 
proxy tested system and the remainder of the initial 'mission 
necessary' and 'mission desirable' systems to be certified by June 30, 
1999.  Testing for non-information technology systems, such as 
utilities and other infrastructure systems, has been initiated; 
however, due to the Company's reliance on their system test schedule, 
it is not possible to estimate exactly when this phase will be 
completed.  Through communication relationships with these companies, 
it is anticipated that the majority of their testing will be completed 
in the third quarter of 1999.  

Phase V - Customer Awareness Program

In this phase, the Company will outline its strategy to develop a 
proactive customer awareness program.  The plan is to furnish 
customers and the community with enough Y2K related information for 
them to make intelligent, educated decisions regarding the Company's 
Y2K readiness and its ability to serve their banking needs in the next 
century.  Banking customers and members of the community, where 
applicable, will receive informational lobby brochures, statement 
stuffers, and have questions answered by personal banking 
representatives.  Other methods of disseminating Y2K information in 
1999 will be through seminars, news releases, web-site and direct mail 
letters.

Phase VI - Business Resumption Contingency Plans 

This phase involves addressing any remaining open issues and points of 
critical system failures at year end, 1999.  As a precautionary 
measure, the Company will develop detailed contingency plans for all 
systems that are not expected to be Y2K compliant or have a remote 
possibility for failure.  Contingency plans consist of alternative 
automated systems, internal stand alone computer spreadsheets, and 
various manual fallback procedures.

Costs

As of March 31, 1999, costs of $35,000 had been incurred related to 
the Y2K project, of which $24,000 had been capitalized.  The estimated 
additional costs to complete the project are expected to be 
approximately $110,000, of which $50,000 is expected to be 
capitalized.  The remaining costs are allocated to training, 
education, marketing, and contingency plans.  The Company is using 
current staff and other internal resources to manage the Y2K project.  
The Company does not expect these redeployments of resources to have a 
material adverse effect on other ongoing business operations.  All the 
costs of the Y2K project are incurred from operating cash flows.

At the present time, management believes that the majority of all 
mission critical and mission necessary date-related software and 
systems will remain operating properly after January 1, 2000.  The 
Company does not anticipate that internal systems failures will result 
in any material adverse effect to its operational or financial 
condition.  During 1999, the Company will continue its efforts to 
ensure that providers of infrastructure services, such as utilities 
and communication companies, will be compliant by the Year 2000.  At 
this time, management believes that the most likely 'worst-case' 
scenario involves potential disruption of service from third party 
vendors whose systems may not work after January 1, 2000, for which 
the Company must rely on their testing results.  While such failures 
could affect Bank operations in a significant manner, the Company 
cannot estimate the likelihood or the potential cost of the failures.

The Company's Year 2000 plan may be revised periodically as some goals 
are completed and new issues are identified.  It is important to note 
that the description of the plan involves estimates and projections 
with respect to some activities required in the future which are 
subject to possible substantial changes or corrections.


NEW ACCOUNTING STANDARDS

Statement of Financial Accounting Standards (Statement) No. 133 on 
derivatives will, in 2000, require all derivatives to be recorded at 
fair value in the balance sheet, with changes in fair value charged or 
credited to income.  If derivatives are documented and effective as 
hedges, the change in the derivative fair value will be offset by an 
equal change in the fair value of the hedged item.  Under the new 
standard, securities held-to-maturity can no longer be hedged, except 
for changes in the issuer's creditworthiness.  Therefore, upon 
adoption of Statement No. 133, companies will have another one-time 
window of opportunity to reclassify held-to-maturity securities to 
either trading or available-for-sale, provided certain criteria are 
met.  This Statement may be adopted early at the start of a calendar 
quarter.  Since the Company has no significant derivative instruments 
or hedging activities, adoption of Statement No. 133 is not expected 
to have a material impact on the Company's financial statements.  
Management has not decided whether to adopt Statement No. 133 early.

Statement No. 134 on mortgage banking will, in 1999, allow mortgage 
loans that are securitized to be classified as trading; available-for-
sale; or, in certain circumstances, held-to-maturity.  Currently, 
these must be classified as trading.  Since the Company does not 
intend to securitize mortgage loans, Statement No. 134 is not expected 
to affect the Company.

American Institute of Certified Public Accountants Statement of 
Position 98-1, effective in 1999, sets the accounting requirement to 
capitalize costs incurred to develop or obtain software that is to be 
used solely to meet internal needs.  Costs to capitalize are those 
direct costs incurred after the preliminary project stage, up to the 
date when all testing has been completed and the software is 
substantially ready for use.  All training costs, research and 
development costs, costs incurred to convert data, and all other 
general and administrative costs are to be expensed as incurred.  The 
capitalized cost of internal-use software is amortized over its useful 
life and reviewed for impairment using the criteria in Statement No. 
121.  Statement of Position 98-1 is not expected to have material 
impact on the Company.

American Institute of Certified Public Accountants Statement of 
Position 98-5, also effective in 1999, requires all start-up, pre-
opening, and organization costs to be expensed as incurred.  Any such 
costs previously capitalized for financial reporting purposes must be 
written off to income at the start of the year.  Statement of Position 
98-5 is not expected to have a material impact on the Company.

The Financial Accounting Standards Board continues to study several 
issues, including recording all financial instruments at fair value 
and abolishing pooling-of-interest accounting.  Also, it is likely 
that APB25's measurement for stock option plans will be limited to 
employees and not to non-employees such as directors, thereby causing 
compensation expense to be required for 1999 awards of stock options 
to outside directors.
                    
PART II - OTHER INFORMATION 
COVEST BANCSHARES, INC. 

ITEM 1.  LEGAL PROCEEDINGS 
         There are no material pending legal proceedings to which 
         the Company or any of its subsidiaries is a party other 
         than ordinary routine litigation incidental to their 
         respective businesses. 

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 
(a)  Exhibit
27.  Financial Data Schedule

(b)  Reports on Form 8-K
     A report on Form 8-K was filed on January 21, 1999 to report under 
     Item 5 the Company's earnings for the fourth quarter of 1998 and 
     calendar year 1998.

     A report on Form 8-K was filed on January 22, 1999 to report under 
     Item 5 the election of a President and Chief Executive Officer of 
     the Bank and Company.

     A report on Form 8-K was filed on January 26, 1999 to report under 
     Item 5 a new stock purchase program, the Company's 15th.


     A report on Form 8-K was filed on February 23, 1999 to report under 
     Item 5 a regular quarterly dividend.

     A report on Form 8-K was filed on March 25, 1999 to report completion 
     of the Company's 15th stock repurchase program and announcement of 
     the Company's 16th stock repurchase program.










                             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. 
 

                                          COVEST BANCSHARES, INC. 
 
 

Date:                               By: /s/
      -----------------                 --------------------------- 
                                         James L. Roberts 
                                         President and 
                                         Chief Executive Officer 
 
 



Date:                               By: /s/
      -----------------                 --------------------------- 
                                         Paul A. Larsen 
                                         Executive Vice President, 
                                         Treasurer and 
                                         Chief Financial Officer