U.S. Securities and Exchange Commission Washington, D.C. 20549
FORM 10-Q
[ x ]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2001
[ ]	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 0-23235

Success Bancshares, Inc. (Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		36-3497644 (I.R.S. Employer Identification No.)
100 Tri-State International, Suite 300 P.O. Box 1499, Lincolnshire IL (Address of Principal Executive Offices)		60069 (Zip Code)
(847) 279-9000 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [ x ]		No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common stock: 2,439,180 shares, $0.001 par value, outstanding as of April 26, 2001.

Table of Contents

Part I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets		1
		Consolidated Statements of Income		2
		Consolidated Statements of Cash Flow		3
		Footnotes to Consolidated Financial Statements		4
	Item 2.	Mgmt's Discussion and Analysis of Financial Condition and Results of Operations.		5-11
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk.		12

Part II.	OTHER INFORMATION
	Item 1.	Legal Proceedings		13
	Item 6.	(a)	Exhibits.	13
		(b)	Reports on Form 8-K
	Form 10-Q Signature Page			14
	Exhibit Index			15




Success Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets March 31, 2001 and December 31, 2000 (Unaudited)
	March 31,		Dec. 31,
	2001		2000
-----------------------------------------------------------------------------------------------------------------------------------------------------------
	^{(In Thousands)}
ASSETS
Cash and cash equivalents	$	37,041	$	63,114
Securities available-for-sale		38,534		35,366
Real estate loans held-for-sale		2,118		493
Loans, less allowance for loan losses of $5,161 at March 31, 2001
and $4,861 at December 31, 2000		495,635		480,711
Premises and equipment, net		9,249		9,438
Interest receivable		3,570		3,736
Other real estate owned		203		1,100
Other assets		5,773		7,363
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Assets	$	592,123	$	601,321
=========================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits	$	61,063	$	65,075
Non-interest bearing deposits		424,066		425,643
Interest bearing deposits		485,129		490,718
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total deposits		2,500		2,500
Note Payable		53,918		53,987
Federal Home Loan Bank advances		-		1,717
Securities sold under repurchase agreements		389		1,475
Demand notes payable to U.S. Government		15,000		15,000
Trust preferred securities		4,846		6,546
Interest payable and other liabilities		561,782		571,943
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities

Shareholders' equity		-		-
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued
Common stock, $0.001 par value, 7,500,000 shares authorized,
At March 31, 2001: 3,074,326 shares issued and 2,439,180 shares outstanding		3		3
At December 31, 2000: 3,074,326 shares issued and 2,433,461 shares outstanding		25,399		25,399
Additional paid-in capital		11,123		10,467
Retained earnings		-6,617		-6,674
Treasury stock		-33		-33
Loans to Employee Stock Ownership Plan		466		216
Accumulated other comprehensive income		30,341		29,378
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity	$	592,123	$	601,321
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity
=========================================================================================
See accompanying notes to the Unaudited Consolidated Financial Statements




Success Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)

	Three Months Ended
	March 31,
	----------------------------------------------
	2001		2000
----------------------------------------------------------------------------------------------------------------------------------------------------------
	^{(In thousands, except per share data)}
Interest income
Loans (including fee income)	$	10,263	$	8,948
Investment securities
Taxable		426		383
Exempt from federal income tax		117		134
Other interest income		411		2
----------------------------------------------------------------------------------------------------------------------------------------------------------
		11,217		9,467
Interest expense
Deposits		5,420		4,099
Note Payable		51		-
Federal Home Loan Bank advances		821		570
Other borrowings		29		142
Trust preferred securities		336		336
----------------------------------------------------------------------------------------------------------------------------------------------------------
		6,657		5,147
----------------------------------------------------------------------------------------------------------------------------------------------------------

Net interest income		4,560		4,320
Provision for loan losses		300		100
----------------------------------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses		4,260		4,220

Other operating income
Service charges on deposit accounts		641		595
Gain on sale of loans		35		5
Gain on sale of fixed assets, net		-		53
Net credit card processing income		3		5
Other non-interest income		120		88
----------------------------------------------------------------------------------------------------------------------------------------------------------
		799		746

Other operating expense
Salaries and employee benefits		2,194		2,232
Occupancy and equipment expense		803		999
Data processing		201		210
Other non-interest expense		902		991
----------------------------------------------------------------------------------------------------------------------------------------------------------
		4,100		4,432
----------------------------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes		959		534

Income tax expense		301		139
----------------------------------------------------------------------------------------------------------------------------------------------------------
Net income	$	658	$	395
========================================================================================

Basic earnings per share		$0.27		$0.15
Diluted earnings per share		$0.27		$0.15



Success Bancshares, Inc. and Subsidiaries Consolidated Statements of Cash Flow Three Months Ended March 31, 2001 and 2000 (Unaudited)


	2001		2000
-------------------------------------------------------------------------------------------------------------------------------------------------------------
	^{(In thousands)}
Net cash provided by operating activities	$	47	$	295

Cash flows from investing activities:
Proceeds from maturities of available-for-sale securities		4,981		342
Purchases of available-for-sale securities		(8,194)		(96)
Net increase in loans		(15,434)		(22,923)
Proceeds from the sale of other real estate owned		1,100		-
Proceeds from sale of premises and equipment		-		482
Premises and equipment expenditures		(169)		(443)
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities		(17,716)		(22,638)
-------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
Decrease in non-interest bearing deposits		(4,012)		(3,923)
(Decrease) increase in interest bearing deposits		(1,557)		29,111
Decrease in demand notes payable to U.S. Government		(1,086)		(1,799)
Decrease in securities sold under agreements to repurchase		(1,717)		(1,041)
Net decrease in Federal Home Loan Bank advances		(69)		(10,563)
Increase in federal funds purchased		-		7,000
Purchase of common stock for treasury		-		(1,123)
Proceeds from issuance of treasury stock		57		56
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities		(8,404)		17,718
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents		(26,073)		(4,625)

Cash and cash equivalents at beginning of period		63,114		17,057
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period	$	37,041	$	12,432
=========================================================================================
See accompanying notes to the Unaudited Consolidated Financial Statements



NOTE 1:	Basis of Presentation
	The financial information of Success Bancshares, Inc. and subsidiaries (the Company) included herein is unaudited; however, such information reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The interim financial statements should be read in conjunction with the Company's Annual Report, Form 10-K and Form 10-K/A and Form 10-K/A for the period ended December 31, 2000. The results of the interim period ended March 31, 2001 are not necessarily indicative of the results expected for the year ending December 31, 2001.
NOTE 2:	Earnings Per Share
	Basic earnings per share (EPS) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.
	The following table summarizes the computation of earnings per share for the periods indicated:


	For the Three Months Ended March 31,
	-----------------------------------------------------------------------------------------------------------------------
	2001				2000
	--------------------------------------------------------				--------------------------------------------------------
	Income		Share	Per-Share	Income		Share	Per-Share
	(Numberator)		(Denominator)	Amount	(Numberator)		(Denominator)	Amount
	--------------------------------------------------------				--------------------------------------------------------
	^{(In thousands, except per share amounts)}
Basic EPS
Income available to common shareholders	$	658	2,439	$0.27	$	395	2,686	$0.15
Effect of Dilutive Securities
Options		-	26			-	-
Diluted EPS
Income available to common stockholders
and assumed conversions	$	658	2,465	$0.27	$	395	2,686	$0.15
	=============================================================


NOTE 3:	Comprehensive Income
	For the three month period ended March 31, 2001, accumulated other comprehensive income increased $250 thousand. For the comparable period in 2000, accumulated other comprehensive income decreased $107 thousand.
NOTE 4:	Trust Preferred Securities
	On May 19, 1998, the Company issued $15 million of Trust Preferred Securities ("Securities") through Success Capital Trust I ("Trust"), a statutory business trust and wholly owned subsidiary of the Company. The Securities pay cumulative cash distributions quarterly at an annual rate of 8.95%. Proceeds from the sale of the Securities were invested by the Trust in 8.95% Junior Subordinated Deferrable Interest Debentures issued by the Company which represents all of the assets of the Trust. The Securities are subject to mandatory redemption, in whole or in part, upon repayment of the Junior Subordinated Debentures at the stated maturity or their earlier redemption, in each case at a redemption price equal to the aggregate liquidation preference of the Securities plus any accumulated and unpaid distributions thereon to the date of redemption. Prior redemption is permitted under certain circumstances such as changes in tax and investment company regulations. The Company fully and unconditionally guarantees the Securities through the combined operation of the debentures and other related documents. The Company's obligations under the guarantee are unsecured and subordinate to senior and subordinated indebtedness of the Bank.

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
General
The Company's principal business is conducted by its wholly owned subsidiary, Success National Bank (the "Bank"), a full service community bank. The Bank is headquartered in Lincolnshire, Illinois located approximately 35 miles north of downtown Chicago, and, in addition to its headquarters, currently has seven branch offices. These banking facilities are located in Deerfield, Libertyville (2), Lincolnwood, Chicago/Lincoln Park, Lincolnshire and Northbrook.
The profitability of the Company's operations depends primarily on its net interest income, provision for loan losses, other operating income, and other operating expenses. Net interest income is the difference between the income the Company receives on its loan and investment portfolios and its cost of funds, which consists of interest paid on deposits and borrowings and distributions on trust preferred securities. The provision for loan losses reflects the cost associated with the level of credit risk in the Company's loan portfolio. Other operating income consists primarily of service charges on deposit accounts, securities gains, if any, gains on sale of loans, net credit card processing income and other fees and commissions. Other operating expenses include salaries and employee benefits, occupancy and equipment expenses, data processing and other non-interest expenses.
Net interest income is dependent on the amounts and yields of interest earning assets as compared to the amounts of and rates on interest bearing liabilities. Net interest income is sensitive to changes in market rates of interest and the Company's asset/liability management procedures in coping with such changes. The provision for loan losses is dependent on increases in the loan portfolio, management's assessment of the collectibility of loans in the portfolio, as well as economic and market factors. Other operating expenses are heavily influenced by the number of branches which impacts both salary and occupancy expenses. Growth in the number of account relationships directly affects such expenses as data processing costs, supplies, postage and other miscellaneous expenses.

Results of Operations
Net income for the quarter ended March 31, 2001 was $658 thousand, an increase of $263 thousand or 66.6% from the net income of $395 thousand for the comparable quarter in 2000. On a per share basis, earnings increased to $0.27 per diluted share for the first quarter of 2001, or 80.0%, from $0.15 per diluted share for the 2000 quarter.
Net Interest Income
The major source of earnings for the Company is net interest income. The related net interest margin represents the net interest income expressed as a percentage of average interest earning assets during the period. The following table sets forth information relating to the Company's consolidated average balance sheets, interest income and interest expense, and reflects the average yield on assets and cost of liabilities for the three-month periods ended March 31, 2001 and 2000. The yields and costs include adjustments for accretion and amortization of deferred fees and costs.

		Three Months Ended March 31,
		-----------------------------------------------------------------------------------------------
		2001					2000
		---------------------------------------------					-------------------------------------------
		Average		Interest		Average	Average		Interest		Average
Assets		Balance		Expense		Rate	Balance		Expense		Rage
--------------------------------------------------------------------------------------------------------------------------------------------------------------
		^{(Dollars in thousands)}
Loans (1) & (2)		$	492,048	$	10,314	8.38%	$	438,421	$	8,985	8.20%
Taxable investment securities			26,844		426	6.35%		24,887		383	6.16%
Investment securities exempt from
Federal income tax (1)			9,645		177	7.34%		11,138		203	7.29%
Interest bearing deposits with
financial institutions			1,544		21	5.44%		106		2	7.55%
Other interest earning assets			27,735		390	5.62%		-		-	-%
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Total interest earning assets		$	557,816	$	11,328	8.12%	$	474,552	$	9,573	8.07%
Non-interest earning assets			29,669					29,274
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Total assets		$	587,485				$	503,826
==========================================================================================

Liabilities & Shareholders' Equity
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Deposits:
NOW & money market accounts		$	225,131	$	2,506	4.45%	$	182,093	$	1,954	4.29%
Savings deposits			20,399		95	1.86%		22,266		105	1.89%
Time deposits			174,696		2,819	6.45%		142,735		2,040	5.72%
Note payable			2,500		51	8.16%		-		-	-%
Other borrowings			71,491		1,186	6.64%		66,313		1,048	6.32%
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities			494,217		6,657	5.39%		413,407		5,147	4.98%
Demand deposits - non-interest bearing			58,776					57,081
Other non-interest bearing liabilities			4,814					3,016
Shareholders' equity			29,678					30,322
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Total liabilities & shareholders' equity		$	587,485				$	503,826
==========================================================================================
Net Interest Income				$	4,671				$	4,426
==========================================================================================
Net Yield on Interest Earning Assets						3.35%					3.73%
==========================================================================================
------------------------------------------------------
⁽¹⁾	Tax-exempt income reflected on a fully tax equivalent basis utilizing a 34% rate for all years presented.
⁽²⁾	Non-accrual loans are included in average loans.

Net interest income for the quarter ended March 31, 2001 was $4.6 million, an increase of $240 thousand, or 5.6% over the $4.3 million recorded for the comparable period in 2000. The Company's net interest margin for the current quarter was 3.35% as compared to 3.73% for the quarter ended March 31, 2000 and 3.58% for the quarter ended December 31, 2000. The Company's net interest margin for 2000 was 3.70%. The deterioration in the Company's net interest margin during the past 12 to 18 months is largely due to the impact of increasing rates, as experienced in late 1999 and early 2000, in light of the Company's one-year negative gap. Management has reduced interest rate sensitivity by improving the Company's one-year gap position from negative 18.0% at December 31, 1999 to negative 5.7% at March 31, 2001. This was primarily accomplished through the use of indexed loan and deposit products. Management anticipates that the market interest rate decreases experienced during the quarter ended March 31, 2001 will have a positive impact on the Company's net interest margin during the third and fourth quarters of 2001.

The following table represents a reconciliation of the change in fully tax equivalent net interest income from the comparable period in 2000.

	(In thousands)
	--------------------
Fully tax equivalent net interest income for the three months ended March 31, 2000	$	4,426
Change due to fluctuations in volume of average interest earning assets		98
Change due to interest rate fluctuations		147
---------------------------------------------------------------------------------------------------------------------------------------------------------------
Fully tax equivalent net interest income for the three months ended March 31, 2001	$	4,761
============================================================================================

Other Operating Income

Total other operating income was $799 thousand for the quarter ended March 31, 2001 as compared to $746 thousand for the comparable quarter in 2000. Service charges on deposit accounts were $641 thousand, an increase of $46 thousand or 7.7% from $595 thousand reported for the comparable quarter in 2000. For the quarter, other noninterest income was $120 thousand, an increase of $32 thousand from the $88 thousand recorded during the comparable period in 2000.

Other Operating Expenses

Total other operating expenses were $4.1 million for the three months ended March 31, 2001 compared with $4.4 million for the first quarter of 2000. Salaries and benefits expense decreased $38 thousand, or 1.7%, to $2.2 million for the current quarter as compared to the same period in 2000. Occupancy expenses decreased $196 thousand, or 19.6%, to $803 thousand for the quarter ended March 31, 2001 versus the comparable period in 2000. The decrease in occupancy expense is due primarily to the closures of three branch offices in 2000 and the disposition of one unopened branch site under lease in 2000. Other noninterest expense decreased $89 thousand, or 9.0%, to $902 thousand from the $991 thousand reported for the comparable period in 2000.

Financial Condition

Loans

The loan portfolio is the largest category of the Company's interest earning assets. At March 31, 2001, total loans were $500.8 million, an increase of $15.2 million, or 3.1% from the $485.6 million at December 31, 2000. As the table below indicates, the growth in the loan portfolio is primarily attributable to growth in real estate mortgages, which increased $14.3 million, or 5.8%, compared to $247.8 million at December 31, 2000. Of the $262.2 million in real estate mortgages reported at March 31, 2001 approximately $183.5 million, or 70.0%, were classified as commercial real estate loans.

The following table sets forth the composition of the loan portfolio at the dates indicated:


	March 31, 2001			December 31, 2000
	------------------------------------------------------------
			% of			% of
	Amount		Portfolio	Amount		Portfolio
	------------------------------------------------------------
	^{(Dollars in thousands)}
Commercial	$	124,821	24.92%	$	123,422	25.42%
Real estate - construction		32,520	6.49%		30,843	6.35%
Real estate - mortgage		262,156	52.35%		247,840	51.04%
Home equity		78,819	15.74%		80,498	16.58%
Installment		2,138	0.43%		2,603	0.54%
Credit cards		334	0.07%		350	0.07%
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Total gross loans		500,788	100.00%		485,556	100.00%
			-----------			-----------
Net deferred loan fees		156			171
Unaccreted discount resulting from loss on transfer of loans
from held-for-sale to portfolio		(148)			(155)
---------------------------------------------------------------------------------------------------------------				-----------------
Loans net of unearned discount and net deferred loan fees		500,796			485,572
Allowance for loan losses		(5,161)			(4,861)
---------------------------------------------------------------------------------------------------------------				-----------------
Net loans	$	495,635		$	480,711
================================================================				==========
Allowance for loan losses to total loans		1.03%			1.00%

Non-Performing Assets

The following table summarizes the balances of non-performing assets which includes (a) non-performing loans and (b) other real estate owned. Non-performing loans include: (1) loans accounted for on a non-accrual basis; (2) accruing loans contractually past due 90 days or more as to interest or principal payment; and (3) loans whose terms have been renegotiated to provide a reduction or deferral of interest or principal because of a deterioration in the financial position of the borrower. The Company has a reporting and control system to monitor non-performing loans.

Loans with principal or interest payments contractually due but not yet paid are reviewed by senior management on a weekly basis and are placed on non-accrual status when scheduled payments remain unpaid for 90 days or more, unless the loan is both well-secured and in the process of collection. Interest income on non-accrual loans is recorded when actually received in contrast to the accrual basis, which records income over the period in which it is earned, regardless of when it is received.

	March 31, 2001		December 31, 2000
	-----------------------------------------------------------------
Non-performing loans:
Non-accrual	$	7,415	$	1,948
90 days or more past due, still accruing		-		-
Restructured		-		-
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Total non-performing loans		7,415		1,948
Other real estate owned		203		1,100
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Total non-performing assets	$	7,618	$	3,048
==========================================================================================
Non-performing loans to loans, net of unearned discount
and net deferred loan fees		1.48%		0.40%
==========================================================================================

Non-performing loans to allowance for loan losses		143.67%		40.07%
=========================================================================================

The net increase in non-accrual loans of $5.5 million from December 31, 2000 to March 31, 2001 resulted primarily from the classification of two additional loans with aggregate balances of $6.2 million. In late January 2001, the Company placed a $4.6 million loan on non-accrual status subsequent to receiving notification from the borrower that a material contract supporting the debt service payments had been cancelled. Management reviewed different strategies open to the Company and has entered into a forbearance agreement which provides for the payment of interest beginning in April 2001 and the resumption of principal and interest payments in October 2001. The second loan, with a balance of $1.6 million, was placed on non-accrual status during the quarter after having been classified as a potential problem loan at December 31, 2000. In addition, during the quarter ended March 31, 2001, non-accrual loans in the amount of $740 thousand were repaid.

Potential Problem Loans

In addition to those loans disclosed under "Non-performing Loans," there are certain loans in the portfolio which management has identified, through its problem loan identification system, which exhibit a higher than normal credit risk. Management's review of the total loan portfolio to identify loans where there is concern that the borrower will not be able to continue to satisfy present loan repayment terms includes considering factors such as the repayment history of individually significant loans, recent loss experience and current economic conditions. Loans in this category include those that have general risk characteristics that the loan officer believes might jeopardize the future timely collection of principal and interest payments, such as loans of borrowers that have had recent adverse operating cash flow or balance sheet trends. The principal amount of loans in this category as of March 31, 2001 and December 31, 2000 was approximately $6.6 million and $9.1 million, respectively. Of the eight loans classified as potential problem loans at December 31, 2000, one loan in the amount of $1.8 million was placed on non-accrual, one loan in the amount of $410 thousand was repaid and the remaining loans with a combined balance of $6.6 million are still considered potential problem loans. At March 31, 2001, there were no significant loans which were classified by any bank regulatory agency as either non-performing or potential problem loans that are not included above.

Allowance for Loan Losses

The allowance for loan losses is maintained at a level which management considers adequate to provide for potential future losses in the Company's loan portfolio. The level of the allowance is based upon management's periodic and comprehensive evaluation of the loan portfolio. Management also considers reports of examination furnished by Federal banking authorities in this regard. The evaluations by management in assessing the adequacy of the allowance include consideration of past loan loss experience, changes in the composition of the loan portfolio, the volume and condition of loans outstanding and current market and economic conditions. Loans are charged to the allowance for loan losses when deemed uncollectible by management, unless sufficient collateral exists to repay the loan.

The following table summarizes transactions in the allowance for loan losses for the periods indicated:

	Three Months Ended
	March 31,
	---------------------------------------------
	2001		2000
	---------------------------------------------
	^{(Dollars in Thousands)}
Balance at beginning of period	$	4,861	$	4,269
Provision for loan losses		300		100
Recoveries on loans previously charged-off		15		1
Loans charged-off		(15)		(12)
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period		5,161		4,358
==========================================================================================
Allowance as a % of total loans		1.03%		0.96%
==========================================================================================
Ratio of net charge-offs to average loans outstanding (annualized)		0.00%		0.01%
==========================================================================================

Control of the Company's loan quality is continually monitored by management and is reviewed by the Board of Directors and loan committee of the Bank on a monthly basis, subject to oversight by the Company's Board of Directors through its members who serve on the loan committee. Internal loan review is primarily the responsibility of the Loan Review Department. The Loan Review Department measures risk in the Company's loan portfolio through (i) an in-depth credit review which emphasizes larger and newer commercial and commercial real estate credits, (ii) a system of process reviews for all retail loan portfolios, (iii) attendance at loan committee meetings and (iv) the completion of monthly monitoring activities evaluating the classification of delinquent and non-accrual loans. The amount of additions to the allowance for loan losses, which is charged to earnings through the provision for loan losses, is determined based on a variety of factors, including actual charge-offs during the year, historical loss experience and delinquent loans. Although management believes the allowance for loan losses is adequate to cover any potential losses, there can be no assurance that the allowance will prove sufficient to cover actual loan losses in the future.

Deposits

The following table sets forth deposits at the periods indicated:

	March 31,		Percent of	December 31,		Percent of
	2001		Deposits	2000		Deposits
	--------------------------------------------------------------------------------------
	^{(Dollars in thousands)}
NOW and money market accounts	$	236,165	48.68%	$	226,086	46.07%
Savings		20,221	4.17%		20,927	4.26%
Time		167,680	34.56%		178,630	36.40%
Demand		61,063	12.59%		65,075	13.26%
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Total	$	485,129	100.00%	$	490,718	100.00%
=========================================================================================

Liquidity and Capital Resources

Shareholders' Equity and Capital Standards

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's growth and financial condition. The regulations require the Company and the Bank to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting principles. The capital classifications are also subject to qualitative judgments by the regulators about risk weightings and other factors.

Quantitative measures established by Federal regulations to ensure capital adequacy require the Company and the Bank to maintain minimum ratios (set forth in the table below) of Tier I capital (as defined in the regulations) to total average assets (as defined in the regulations). As of March 31, 2001, the Company's actual total capital to risk-weighted assets ratio was 10.80%. As of March 31, 2001, the ratio of the Bank's total capital to risk-weighted assets was 11.01% indicating that the Bank is considered "well capitalized."

The required ratios and the Company's and Bank's actual ratios at March 31, 2001, are presented below:

							To be Well
				For Capital			Capitalized Under
				Adequacy			Prompt Corrective
	Actual			Purposes			Action Provisions
	---------------------------			-------------------------			---------------------------
	Amounts		Ratio	Amounts		Ratio	Amounts		Ratio
	-------------		----------	-------------		--------	-------------		----------
	^{(Dollars in thousands)}
Total Capital (to Risk Weighted Assets):
Consolidated	$	50,036	10.80%	$	37,079	8.00%	Not Applicable
Bank		50,850	11.01%		36,937	8.00%	$	46,171	10.00%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated		39,833	8.59%		18,539	4.00%	Not Applicable
Bank		45,689	9.90%		18,468	4.00%		27,703	6.00%
Tier 1 Capital (to Average Assets):
Consolidated		39,833	6.78%		23,499	4.00%	Not Applicable
Bank	$	45,689	7.80%	$	23,441	4.00%	$	29,301	5.00%

Operating, Investing and Financing Activities

Liquidity management at the Bank involves planning to meet anticipated funding needs at a reasonable cost. Liquidity management is guided by policies formulated and monitored by the Company's senior management and the Bank's asset/liability committee, which take into account the marketability of assets, the sources and stability of funding and the level of unfunded commitments. The Bank's principal sources of funds are deposits, short-term borrowings and capital contributions by the Company. Borrowings by the Bank from the Federal Reserve Bank of Chicago and Federal Home Loan Bank of Chicago provide additional available sources of liquidity. The Company's primary source of liquidity is a line of credit secured by the common stock of the Bank.

The Bank's core deposits, the most stable source of liquidity for community banks due to the nature of long-term relationships generally established with depositors and the security of deposit insurance provided by the FDIC, are available to provide long-term liquidity. At March 31, 2001 and December 31, 2000, 30.82% and 30.49%, respectively, of the Company's total assets were funded by NOW accounts and demand deposits.

Liquid assets refer to the Company's money market assets such as cash and due from banks, federal funds sold and interest-bearing time deposits with financial institutions, as well as securities available for sale and securities held-to-maturity with a remaining maturity less than one year. Net liquid assets represent the sum of the liquid asset categories less the amount of assets pledged to secure public funds on deposit with the Bank. As of March 31, 2001 and December 31, 2000, net liquid assets totaled approximately $45.7 million and $68.7 million, respectively.

The Company's cash flows are composed of three classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Net cash provided by operating activities consists primarily of earnings. Net cash used in investing activities, consisting primarily of loan and investment funding, was $17.7 million at March 31, 2001 as compared to cash used of $22.6 million for the same period in 2000. Net cash used in financing activities was $8.4 million at March 31, 2001 as compared to cash provided of $17.7 million at March 31, 2000.

Forward Looking Statements

Statements made about the Company's future economic performance, strategic plans or objectives, revenues or earnings projections, or other financial predictions and similar statements are not guarantees of future performance, but are forward looking statements. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those predicted in the statements. Important factors that might cause the Company's actual results to differ materially include, but are not limited to, the following:

	Federal and state legislative and regulatory developments;
	The impact of continued loan and deposit promotions on the Company's net interest margin;
	Changes in management's estimate of the adequacy of the allowance for loan losses;
	Increases in loan delinquencies and write-offs;
	Interest rate movements and their impact on customer behavior and the Company's net interest margin;
	The impact of interest rate sensitivity restructuring activities;
	The impact of repricing and competitors' pricing initiatives on loan and deposit products;
	The Company's ability to adapt successfully to technological changes to meet customers' needs and developments in the marketplace;
	Changes in levels and direction of problem loans and writeoffs;
	The Company's ability to access cost effective funding; and
	Changes in financial markets and general economic conditions.

ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company's net income is dependent on its net interest income. Net interest income is susceptible to interest rate risk to the degree that interest bearing liabilities mature or reprice on a different basis than interest earning assets. When interest bearing liabilities mature or reprice more quickly than interest earning assets in a given period, a significant increase in market rates of interest could adversely affect net interest income. Similarly, when interest-earning assets mature or reprice more quickly than interest bearing liabilities, falling interest rates could result in a decrease in net income.
In order to evaluate its asset/liability sensitivity, management employs a measurement tool which determines exposure to changes in interest rates by measuring the percentage change in net interest income over a one-year time horizon due to changes in rates. Management measures such percentage change assuming an instantaneous permanent parallel shift in the yield curve of 100 and 200 basis points, both upward and downward. The model uses an option-based pricing approach to estimate the sensitivity of mortgage loans. The most significant embedded option in these types of assets is the prepayment option of the borrowers. The model uses various prepayment assumptions depending upon the type of mortgage instrument (residential mortgages, commercial mortgages, mortgage-backed securities, etc.). Prepayment rates for mortgage instruments ranged from 5 to 48 CPR (Constant Prepayment Rate) as of March 31, 2001 and December 31, 2000.
Utilizing this measurement concept, the interest rate risk of the Company, expressed as a percentage change in net interest income that would occur over a one-year time horizon due to certain assumed changes in interest rates, at March 31, 2001 and December 31, 2000, was as follows:

	Basis Point Change
	------------------------------------------------------------------------------
	+200	+100	-100	-200
	------------------------------------		------------------------------------
At March 31, 2001	(8.20%)	(4.10%)	2.70%	4.30%
At December 31, 2000	(4.60%)	(2.30%)	0.80%	0.70%

The Company does not currently engage in trading activities or use derivative instruments to control interest rate risk. Although such activities may be permitted with the approval of the Board of Directors of the Bank, the Company does not intend to engage in such activities in the immediate future.

Interest rate risk is the most significant market risk affecting the Company. Other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Company's business activities.

PART II:	OTHER INFORMATION
Item 1:	Legal Proceedings
	The Company and the Bank are from time to time parties in various routine legal actions arising in the normal course of business. Management believes that there is no proceeding threatened or pending against the Company or the Bank which, if determined adversely, would materially adversely affect the consolidated financial position or operations of the Company.
Item 6:	Exhibits and Reports on Form 8-K
	(a) Exhibits
	Exhibits Number	Exhibit Title
	3.1	Second Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company's Form S-1 Registration Statement (No. 333-32561) filed with the Securities and Exchange Commission (the "Commission") on July 31, 1997).
	3.1.1	Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1.1 of the Company's Form 10-Q filed with the Commission on November 13, 1998).
	3.2	By-laws of the Company (incorporated by reference to Exhibit 3.2 of the Company's Form S-1 Registration Statement (No. 333-32561) filed with the Commission on July 31, 1997).
	3.2.1	Amendment No. 1 to By-laws (incorporated by reference to Exhibit 3.2.1 of the Company's Form 10-Q filed with the Commission on May 13, 1999).
	4.1	Form of Subordinated Indenture relating to the Junior Subordinated Debentures (incorporated by reference to Exhibit 4.1 of the Form S-1 Registration Statement of the Company and Success Capital Trust I ("Success Capital") (No. 333-51271 and No. 333-51271-01) filed with the Commission on April 28, 1998).
	4.2	Form of Junior Subordinated Debenture Certificate (included as an exhibit to Exhibit 4.1).
	4.3	Certificate of Trust of Success Capital (incorporated by reference to Exhibit 4.3 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
	4.4	Form of Amended and Restated Trust Agreement of Success Capital (incorporated by reference to Exhibit 4.4 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
	4.5	Form of Trust Preferred Security Certificate of Success Capital (included as an exhibit to Exhibit 4.4).
	4.6	Form of Common Security Certificate of Success Capital (included as an exhibit to Exhibit 4.4).
	4.7	Form of Guarantee Agreement of the Company relating to the Trust Preferred Securities (incorporated by reference to Exhibit 4.7 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
	4.8	Form of Rights Agreement, dated as of August 1, 1998, between the Company and Harris Trust and Savings Bank, which includes as Exhibit B thereto the Form of Right Certificate (incorporated by reference to Exhibit 1 of the Company's Form 8-A Registration Statement (File No. 001-14381) filed with the Commission on August 6, 1998).
	(b) Reports on Form 8-K
		Current Report on Form 8-K dated January 5, 2001 filed with the SEC on January 12, 2001.

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.


		Success Bancshares, Inc.
		---------------------------------------------------------------
		(Registrant)


May 11, 2001		/s/ Wilbur G. Meinen, Jr.
--------------------------------------------------		---------------------------------------------------------------
Date		Wilbur G. Meinen, Jr. Chairman, President & Chief Executive Officer


May 11, 2001		/s/ Kurt C. Felde
--------------------------------------------------		---------------------------------------------------------------
Date		Kurt C. Felde Executive Vice President, Chief Financial Officer

EXHIBIT INDEX

Exhibits Number	Exhibit Title
3.1	Second Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company's Form S-1 Registration Statement (No. 333-32561) filed with the Securities and Exchange Commission (the "Commission") on July 31, 1997).
3.1.1	Certificate of Designations of Series B Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1.1 of the Company's Form 10-Q filed with the Commission on November 13, 1998).
3.2	By-laws of the Company (incorporated by reference to Exhibit 3.2 of the Company's Form S-1 Registration Statement (No. 333-32561) filed with the Commission on July 31, 1997).
3.2.1	Amendment No. 1 to By-laws (incorporated by reference to Exhibit 3.2.1 of the Company's Form 10-Q filed with the Commission on May 13, 1999).
4.1	Form of Subordinated Indenture relating to the Junior Subordinated Debentures (incorporated by reference to Exhibit 4.1 of the Form S-1 Registration Statement of the Company and Success Capital Trust I ("Success Capital") (No. 333-51271 and No. 333-51271-01) filed with the Commission on April 28, 1998).
4.2	Form of Junior Subordinated Debenture Certificate (included as an exhibit to Exhibit 4.1).
4.3	Certificate of Trust of Success Capital (incorporated by reference to Exhibit 4.3 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
4.4	Form of Amended and Restated Trust Agreement of Success Capital (incorporated by reference to Exhibit 4.4 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
4.5	Form of Trust Preferred Security Certificate of Success Capital (included as an exhibit to Exhibit 4.4).
4.6	Form of Common Security Certificate of Success Capital (included as an exhibit to Exhibit 4.4).
4.7	Form of Guarantee Agreement of the Company relating to the Trust Preferred Securities (incorporated by reference to Exhibit 4.7 of the Form S-1 Registration Statement of the Company and Success Capital (No. 333-51271 and 333-51271-01) filed with the Commission on April 28, 1998).
4.8	Form of Rights Agreement, dated as of August 1, 1998, between the Company and Harris Trust and Savings Bank, which includes as Exhibit B thereto the Form of Right Certificate (incorporated by reference to Exhibit 1 of the Company's Form 8-A Registration Statement (File No. 001-14381) filed with the Commission on August 6, 1998).

SUCCESS BANCSHARES INC 10-Q