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

                                  FORM 10-Q
   (Mark One)
   [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR
            15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

           For the quarterly period ended         June 30, 1999
                                         --------------------------------------
   [ ]     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                0-22767
                                 --------------------------------------

                            D&N Capital Corporation
      -----------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

               Delaware                             31-1517665
      -------------------------------    ------------------------------
      (State or other jurisdiction of          (I.R.S. Employer
       incorporation or organization)         Identification  Number)

               400 Quincy Street, Hancock, Michigan 49930
      -----------------------------------------------------------------
                (Address of principal executive offices)
                           (906) 482-2700
      -----------------------------------------------------------------
      (Registrant's telephone number, including area code)
      -----------------------------------------------------------------
      (Former name, former address and former fiscal year,
       if changed since last report)

   Indicate by check whether the registrant (1) has filed all reports 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 [  ]

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

   Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


          Common Stock, $300 par value                            31,781
- ---------------------------------------------    ------------------------------
Series A Preferred Shares, $25,00 par value                    1,210,000
- ---------------------------------------------    ------------------------------
               (Class)                                (Shares Outstanding as of
                                                           July 31, 1999)
================================================================================


                                 D&N CAPITAL CORPORATION


                                     INDEX
                                                                Page No.
                                                                --------

   PART I
           Statements of condition -
            June 30, 1999 and December 31, 1998                       3

           Statements of income -
            three months ended June 30, 1999 and 1998
            six months ended June 30, 1999 and 1998                   4

           Statement of changes in Stockholders' Equity -
            six months ended June 30, 1999                            5

           Statement of cash flows -
            six months ended June 30, 1999                            6

           Notes to financial statements                              7

           Management's discussion and analysis of financial
             condition and results of operations                      9

   PART II
           Other information                                         16




                                 - 2 -


                            D&N CAPITAL CORPORATION
                            STATEMENTS OF CONDITION
                       (In thousands, except share data)



                                               June 30         December 31
                                                 1999             1998
                                            -------------     ------------
                                              (Unaudited)


Assets:
Loans receivable:
  Residential mortgage loans                  $52,148            $52,858
  Commercial mortgage loans                     6,771              7,401
                                              -------            -------
       Net loans receivable                    58,919             60,259

Cash                                                2                  2
Due from Parent                                 1,781                 21
Other assets                                       15                  5
Accrued interest receivable                       356                358
                                              -------            -------
              Total assets                    $61,073            $60,645
                                              =======            =======

Liabilities:
Other liabilities                             $    24            $    70
                                              -------            -------
              Total Liabilities                    24                 70

Stockholders' Equity:
Preferred stock, par value $25.00;
  2,500,000 authorized, 1,210,000
  issued and outstanding                       30,250             30,250

Common stock, par value $300.00 per share;
  250,000 shares authorized, 31,781 shares
  issued and outstanding                        9,534              9,534

Additional paid-in capital                     20,716             20,716
                                              -------            -------
    Total paid-in capital                      60,500             60,500

Retained earnings                                 549                 75
                                              -------            -------
              Total stockholders' equity       61,049             60,575
                                              -------            -------

    Total liabilities and
    stockholders' equity                      $61,073            $60,645
                                              =======            =======


See Notes to Financial Statements.



                                 - 3 -


                            D&N CAPITAL CORPORATION
                       STATEMENTS OF INCOME (UNAUDITED)
                     (In thousands, except per share data)




                                   Three Months Ended        Six Months Ended
                                       June 30                     June 30
                                    1999       1998           1999       1998
                                   -----------------        ------------------
Interest income:
  Loans:
    Residential mortgage loans   $   828     $   906        $ 1,649    $ 1,790
    Commercial mortgage loans        142         155            282        311
                                 -------------------        ------------------
       Total loan interest
        income                       970       1,061          1,931      2,101

    Intercompany interest             20          10             27         12
                                 -------------------       -------------------
    Total interest income            990       1,071          1,958      2,113

Noninterest expense:
    Advisory fees                     32          32             63         63
    Other expenses                    26          16             59         24
                                 -------------------       -------------------
    Total noninterest expense         58          48            122         87

    Net income                   $   932     $ 1,023        $ 1,836    $ 2,026

    Preferred stock dividend
    requirements                     681         681          1,362      1,362
                                 -------------------       -------------------
    Net income applicable to
    common shares                    251         342            474        664

    Common stock dividends paid       --          --             --         --
                                 -------------------       -------------------
    Retained earnings increase   $   251     $   342        $   474    $   664
                                 ===================       ===================

    Net income per share         $  7.90     $ 10.77        $ 14.91    $ 20.90
                                 ===================       ===================

    Weighted average common
       shares outstanding         31,781      31,781         31,781     31,781
                                 ===================       ===================




See Notes to Financial Statements.



                                 - 4 -


                            D&N CAPITAL CORPORATION
           STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)
                                (In thousands)


                                            For the Six Months Ended
                                                     June 30,
                                              1999            1998
                                           --------------------------

PREFERRED STOCK:
Balance at beginning of period            $ 30,250       $ 30,250
                                          --------       --------
Balance at end of period                    30,250         30,250
                                          --------       --------

COMMON STOCK:

Balance at beginning of period               9,534          9,534
                                          --------       --------
Balance at end of period                     9,534          9,534
                                          --------       --------

ADDITIONAL PAID IN CAPITAL:

Balance at beginning of period              20,716         20,716
                                          --------       --------
Balance at end of period                    20,716         20,716
                                          --------       --------


RETAINED EARNINGS:

Balance at beginning of period                  75             34

Net Income                                   1,836          2,026

Common dividends                                --             --

Preferred dividends                         (1,362)        (1,362)
                                           -------       --------

Balance at end of period                       549            698
                                          --------       --------

TOTAL STOCKHOLDERS' EQUITY                $ 61,049       $ 61,198
                                          ========       ========


See Notes to Financial Statements.



                                 - 5 -


                            D&N CAPITAL CORPORATION
                     STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (In thousands)

                                               For the Six Months Ended
                                                      June 30,
                                                 1999           1998
                                               ------------------------
OPERATING ACTIVITIES

Net Income                                     $  1,836      $  2,026

Adjustments to reconcile net income to net
cash provided by operating activities:

  Net change in:
   Accrued interest receivable                        2           (8)
   Due from Parent                               (1,760)        (652)
   Other assets                                     (10)         (15)
   Accounts payable                                 (46)           1
                                                --------     --------
   Net cash provided by operating activities         22        1,352
                                                --------     --------


INVESTING ACTIVITIES:

Purchase of mortgage loans                      (12,164)     (14,624)
Principal payments received                      13,504       14,634
                                                -------      --------
Net cash provided (used) by investing
activities                                        1,340           10
                                                -------      --------

FINANCING ACTIVITIES:

Preferred stock dividends paid                   (1,362)      (1,362)
Common stock dividends paid                          --           --
                                                 -------     --------
Net cash used by financing activities            (1,362)      (1,362)
                                                 -------     --------


NET CHANGE IN CASH                                   --           --

CASH AT BEGINNING OF PERIOD                           2            2
                                                -------     --------
CASH AT JUNE 30, 1999 AND 1998                  $     2     $      2
                                                =======     ========

See Notes to Financial Statements.



                                 - 6 -


                            D&N CAPITAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:  ORGANIZATION AND BASIS OF PRESENTATION

   D&N Capital Corporation (the "Company"), is a Delaware corporation
incorporated on March 18, 1997 and was created for the purpose of acquiring,
holding and managing real estate assets. The Company is a wholly-owned
subsidiary of D&N Bank (the "Bank" or "D&N"), a state chartered savings bank,
which itself became wholly-owned by Republic Bancorp Incorporated, a Michigan
bank holding company, on May 17, 1999.

   All shares of common stock are held by the Bank.  The Series A Preferred
Shares are traded on NASDAQ under the symbol "DNFCP".

   The accompanying unaudited interim 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 Rule 10-01 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments (consisting
solely of normal recurring accruals) considered necessary for a fair
presentation have been included.  Operating results for the interim periods are
not necessarily indicative of the results that may be expected for the full
year.


NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Mortgage Loans:

   Mortgage loans are carried at the principal amount outstanding, plus premium
or discount, upon purchase from the Bank.  Interest income is recognized using
the interest method, which approximates a level rate of return over the term of
the loan.

Allowance for Loan Losses:

   The allowance for possible losses on loans is maintained at a level believed
adequate by management to absorb potential losses from impaired loans as well as
from the remainder of the portfolio.  Management's determination of the level of
the allowance is based upon evaluation of the portfolio, past experience,
current economic conditions, size and composition of the portfolio, collateral
location and values, cash flow positions, industry concentrations, delinquencies
and other relevant factors.  At June 30, 1999, and 1998, there was no allowance
for losses on loans.

                                 - 7 -


Dividends:

   Preferred Stock.  Dividends on the Series A Preferred Shares are
noncumulative from issuance (July 17, 1997) and are payable quarterly on the
last day of March, June, September and December at a rate of 9.00% per annum of
the liquidation preference ($25.00 per share).

   Common Stock.  The Bank, as shareholder, is entitled to receive dividends
when, as and if declared by the Board of Directors from funds legally available
after all preferred dividends have been paid.

Net Income Per Common Share:

   Net income per common share is computed by dividing net income after
preferred dividends by the weighted average number of common shares outstanding.
Diluted earnings per share is not presented, as there are no outstanding
dilutive securities.

   The Company has elected to be treated as a Real Estate Investment Trust
("REIT"), pursuant to provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). As a result, the Company will not be subject to federal
income tax on its taxable income to the extent it distributes at least 95% of
its taxable income to its shareholders and it meets certain other requirements
as defined in the Code.  The Company intends to maintain its qualification as a
REIT for federal income tax purposes.  The Company intends to make qualifying
dividends (for federal income tax purposes) of all of its taxable income to its
Common and Preferred Stock shareholders, a portion of which may be in the form
of "consent" dividends, as defined under the Code.  As a result, the Company has
made no provision for income taxes in the accompanying financial statements.


NOTE 3:  DIVIDENDS

   For each of the three and six month periods ended June 30, 1999 and 1998, the
Company paid dividends on Series A Preferred Shares in the amount of $680,625,
and $1,361,250, respectively.






                                 - 8 -


                            D&N CAPITAL CORPORATION


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

   The principal business of the Company is to acquire,  hold and manage
residential and commercial mortgage loans ("Mortgage Loans") that will generate
net income for distribution to stockholders.  The Company currently intends to
continue to acquire all its Mortgage Loans from the Bank, consisting of whole
loans secured by first mortgages or deeds of trust on single-family residential
real estate properties or on commercial real estate properties.

   The Bank administers the day-to-day activities of the Company in its role as
Advisor under the Advisory Agreement.  The Bank also services the Company's
Mortgage Loans under each of the Servicing Agreements.

   It is the intention of the Company and Bank that any agreements and
transactions between the Company and the Bank are consistent with market terms,
including the price paid and received for Mortgage Loans, upon their acquisition
or disposition by the Company, or in connection with the servicing of such
Mortgage Loans.  The requirement in the Certificate of Designation establishing
the Series A Preferred Shares that certain actions of  the Company be approved
by a majority of the Independent Directors is also intended to ensure fair
dealing between the Company and the Bank.


RESULTS OF OPERATIONS

   The Company reported total interest income for the quarter ended June 30,
1999 of approximately $990,000. Interest income from residential and commercial
mortgage loans were $828,000 and $142,000, respectively. After a deduction of
approximately $32,000 in advisory fees and $26,000 in other administrative
expenses, the Company reported net income of approximately $932,000 for the
quarter ended June 30, 1999.

   The Company reported total interest income for the six months ended June 30,
1999 of approximately $1,958,000.  Interest income from residential and
commercial mortgage loans were $1,649,000 and $282,000, respectively.  After a
deduction of approximately $63,000  in advisory fees and $59,000 in other
administrative expenses, the Company reported net income of approximately
$1,836,000 for the six months ended June 30, 1999.



                                 - 9 -


   For the three month and six  month periods ended June 30, 1999, the Company
reported net income per common share of $7.90 and $14.91, respectively.

   For the quarter ended June 30, 1999, the Company paid $680,625 in preferred
stock dividends.  Dividends on the common stock are paid to the Bank when, as
and if declared by the Board of Directors of the Company out of funds available.
The Company expects to pay common stock dividends at least annually in amounts
necessary to continue to preserve its status as  a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code").

MORTGAGE LOANS

   Residential mortgage loans consist of Adjustable Rate Mortgages ("ARMs") and
Fixed Rate Mortgages ("FRM's").   The commercial mortgage loans consist of fixed
and variable rate loans, a majority of which have balloon payments.
Reinvestments in mortgage loans have been and will continue to be consistent in
maintaining an approximate 90% and 10% ratio between residential and commercial
mortgage loans, respectively.   All mortgage loans are purchased from the Bank.

   For the three month and six month periods ended June 30, 1999, the Company
purchased replacement mortgage loans from the Bank of approximately $3,885,000
and $12,164,000.  In addition, the Company received approximately $4,900,000 and
$13,504,000, respectively, of principal payments on its portfolio from the
Servicer for the three and six month periods ended June 30, 1999.

INTEREST RATE RISK

   The Company's income consists primarily of interest payments on Mortgage
Loans.  If there is a decline in interest rates (as measured by the indices upon
which the interest rates of the residential ARM and variable rate commercial
mortgage loans are based), then the Company will experience a decrease in income
available to be distributed to its shareholders.  There can be no assurance
that an interest rate environment in which there is a significant decline in
interest rates over an extended period of time would not adversely affect the
Company's ability to pay dividends on the Series A Preferred Shares.


SIGNIFICANT CONCENTRATION OF CREDIT RISK

Concentration of credit risk arises when a number of customers engage  in
similar business activities, or activities in the same geographical region, or
have



                                 - 10 -


similar economic features that would cause their ability to meet  contractual
obligations to be similarly affected by changes in economic conditions.
Concentration of credit risk indicates the relative sensitivity of the Company's
performance to both positive and negative developments affecting a particular
industry.

   Approximately 90% of the Company's total Mortgage Loan portfolio are loans
secured by residential real estate properties located in Michigan.
Consequently, these residential mortgage loans may be subject to a greater risk
of default than other comparable, geographically diverse, residential mortgage
loans in the event of adverse economic, political or business developments and
natural hazards in Michigan.


   In addition, the majority of the commercial mortgage properties underlying
the Company's commercial mortgage loans are located in the Detroit metropolitan
area.  Consequently, these commercial mortgage loans may be subject to greater
risk of default in the event of adverse economic, political or business
developments in the Detroit metropolitan area.

LIQUIDITY RISK MANAGEMENT

   The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments and to
capitalize on opportunities for the Company's business expansion.  In managing
liquidity, the Company takes into account various legal limitations placed on a
REIT as discussed below in Other Matters.

   The Company's principal liquidity needs are to maintain the current portfolio
size through the acquisition of additional Mortgage Loans  as Mortgage Loans
currently  in the portfolio mature, or prepay, and to pay dividends on the
Series A Preferred Shares.  The acquisition of additional Mortgage Loans is
intended to be funded with the proceeds obtained from the repayment of principal
balances by individual borrowers.  The Company does not have and does not
anticipate having any material capital expenditures.


YEAR 2000 COMPLIANCE

   The Company relies on D&N Bank for data processing services, through its loan
servicing operations and for maintenance of financial and other records involved
in the management of D&N Capital Corporation.  The following disclosure
discusses D&N Bank's year 2000 project and its associated costs.

D&N utilizes various electronic computer systems for the delivery of its
financial services products such as deposit and loan accounts, for the
maintenance of its financial and other business records, and for general



                                 - 11 -


management purposes. Some of these systems include legacy procedures and
historic data that may have been stored in such a manner that inconsistencies or
failures could occur when dates from the new millennium are considered.
Commonly known as the Year 2000 problem, a myriad of related potential computing
difficulties face entities that rely extensively upon computer systems. D&N's
major computer systems include deposit accounts, commercial lending, consumer
lending, financial control, and sales platform support applications provided by
M&I Data Services, Inc.; mortgage lending applications provided by ALLTEL
Information Services, Inc. and FiTech, Inc.; and internally maintained
microcomputer and network systems which support management functions and
communications.

     D&N's Year 2000 project is progressing on schedule. The project is
addressing computer hardware, software, procedures, large borrowers and
facilities. This project began in October 1996.  To date all at-risk computer
hardware has been tested and confirmed Year 2000 compliant.

     The four primary business applications (deposit account processing,
installment loan account processing, general ledger and mortgage loan
processing) have been certified by the third party provider, as Year 2000
compliant. The remaining applications systems have been tested and contingency
plans have been developed to mitigate business operational risk.

    D&N's internally maintained systems, consisting primarily of a Lotus Notes
server and various workstation-based business suite software, are Year 2000
compliant as currently installed.

     All newly acquired software is being tested for Year 2000 compliance
before acceptance.  Software testing has been done to verify date changes for
1999 to 2000, the identification and correct processing of leap years, along
with numerous date projections from 1999 through the next millennium using day,
month and year increments.

     Manual procedures have been reviewed and changed where date specific
actions occur. Necessary changes to supporting forms to properly record dates in
the new millennium have been identified and are being made.

     Costs associated with addressing the Year 2000 issue as it affects D&N's
third party applications is implicitly included in the contractual arrangements
for those applications.  D&N's total Year 2000 estimated project cost, which is
based upon currently available information, included expenses for the review and
testing of third parties including governmental applications.  However, there
can be no guarantee that the hardware, software and systems of such third
parties will be without unfavorable Year 2000 issues and therefore not present a
material adverse impact upon the Bank.



                                 - 12 -


    Year 2000 compliance costs incurred during 1998 totaled approximately
$26,000.  This figure does not include the implicit costs associated with the
reallocation of internal staff hours to Year 2000 project related efforts.  At
this time, management currently estimated Year 2000 compliance costs will not
exceed $100,000.  This estimate does not include normal ongoing costs for
computer hardware, software, terminals and related devices that would be
replaced with the Bank's ongoing programs for updating its delivery
infrastructure without the presence of the Year 2000 issue.  At this time no
significant projects have been delayed  as a result of D&N's Year 2000 effort.
Management of the Bank believes it has an effective program in place to resolve
the Year 2000 issue without business interruption.  In the event of vendor
failures, under the most reasonable likely worst case scenario, the Bank would
be required to process certain transactions manually, which may effect customer
service.  In addition, disruptions in the economy generally resulting from Year
2000 issues could also materially effect the Bank.  The Bank could be subject to
litigation for equipment shutdown or failure to properly date customer records.
The amount of potential liability and lost revenue cannot be reasonably
estimated at this time.


OTHER MATTERS

   As of June 30,  1999, the Company believed that it was in full compliance
with the REIT tax rules and it will continue to quality as a REIT under the
provision of the Code.  The Company calculates that:

- -   its Qualified REIT Assets, as defined in the Code, are approximately 100%of
    its total assets, as compared to the federal tax requirements that at least
    75% of its total assets must be Qualified REIT assets.

- -   98% of its revenues qualify for the 75% source of income test and 100% of
    its revenues qualify for the 95% source of income test under the REIT rules.

The Company also met all REIT requirements regarding the ownership of its common
and preferred stocks and anticipates meeting the 1999 annual distribution and
administrative requirements.




                                 - 13 -


                            D&N CAPITAL CORPORATION

                          PART II - OTHER INFORMATION



   ITEM 1:    LEGAL PROCEEDINGS
               None

   ITEM 2:    CHANGES IN SECURITIES
               None

   ITEM 3:    DEFAULTS UPON SENIOR SECURITIES
               None

   ITEM 4:    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              (a) The annual meeting of stockholders was held on March 11,
                  1999.

              (b) The matters approved by the sole common shareholder, D&N
                  Bank, at the annual meeting, were as follows:

                  Election of Directors:
                  The following directors were elected for the ensuing year:

                        George J. Butvilas            Gail A. Morz
                        James S. Bogan                Kenneth R. Janson
                        William J. McGarry            Richard E. West

   ITEM 5:   OTHER INFORMATION

             At the June 1, 1999 meeting of the Board of Directors of D&N
             Capital Corporation, Mr. Kenneth R. Janson, President and Chief
             Executive Officer, tendered his resignation. He had previously left
             the employment of D&N Bank. Mr. Janson will remain on the Board of
             Directors of D&N Capital Corporation as an Independent Director.

             Mr. Richard E. West was subsequently elected to the position of
             President and Chief Executive Officer of D&N Capital Corporation.


                                 - 14 -


                            D&N CAPITAL CORPORATION

                    PART II - OTHER INFORMATION (CONTINUED)



ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

           (a)  The following exhibits is included herein:

                 12(a)  Computation of Ratio of Earnings to Fixed Charges

                 12(b)  Computation of Ratio of Earnings to Fixed Charges
                        and   Preferred Stock Dividend Requirements

                 (27)   Financial Data Schedule

           (b)   Reports to Form 8-K:


           No reports on Form 8-K have been filed during the quarter
           ended June 30, 1999.



                                 - 15 -


                                 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.



                                 D&N  CAPITAL CORPORATION



                                 /s/  Richard E. West
                                 -----------------------------------------------
                                      Richard E. West, President and
                                      Chief Executive Officer



                               /s/  Daniel D. Greenlee
                               -------------------------------------------------
                                    Daniel D. Greenlee
                                    Chief Financial Officer and Treasurer






Date:  August 12, 1999
     -------------------------


                                 INDEX TO EXHIBITS




       Exhibit No.    Exhibits
       ----------     --------


       12(a)          Computation of  ratio of earnings to fixed charges

       12(b)          Computation of ratio of earnings to fixed charges and
                      preferred stock dividend requirements

       27             Financial data schedule