8-K

                           Washington, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT

                    Pursuant to Section 13 or 15 (d) of
                    The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): March 4, 1996



                             SDN BANCORP, INC.
          (Exact name of registrant as specified in its charter)



 (Delaware)              (2-76555)                     (95-3683748)
- ---------------    ------------------------   ------------------------------
(State of other    (Commission File Number)     (I.R.S. Employer
jurisdiction of                                  Number) 
incorporation)  

   135 Saxony Road, Encinitas, CA               92024-0905       
- ---------------------------------------         ----------       
(Address of Principal Executive Offices)        (Zip Code)

Registrant's telephone number, including area code:  (619) 436-6888

Item 5. Other Events


On March 4, 1996, SDN Bancorp, Inc., ("SDN") announced net income of $62,000 
for the quarter ended December 31, 1995 compared to a net loss of $235,000 for 
the quarter ended December 31, 1994. While SDN's earnings since September 30, 
1995 (the date SDN was recapitalized by selling $4.9 million of common stock) 
have been positive, they were not enough to offset the losses reported during
the first nine months of the year.  For the twelve month period ended 
December 31, 1995, the net loss was $5,000 compared to a net loss of $989,000
for the year ended December 31, 1994.  Included in the $5,000 net loss for 
1995 is an extraordinary gain from extinguishment of debt of $625,000 net of
income taxes.  SDN's loss before extraordinary items net of a tax benefit was
$630,000 compared to a net loss of $989,000 for 1994.  Total deposits 
aggregated $51.4 million as of December 31, 1995, and loans equaled $39.0
million on the same date.

Item 7.  FINANCIAL STATEMENTS AND EXHIBITS

           a)    Financial Statements               N/A
           b)    Pro Forma financials               N/A
           c)    Exhibits:
                 1.  Form of Press Release of SDN Bancorp, Inc                  
                     Dated  March 4, 1996.
                          
                Signature

         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 hereunto duly authorized.


                             SDN Bancorp, Inc                                   
Date:    March 8, 1996       Robert P. Keller  /s/                              
                             ---------------------
                             Robert P. Keller
                             President and                                      
                             Chief Executive Officer

EX-99

FOR IMMEDIATE RELEASE
March 4, 1996
Contact:         Robert P. Keller, President
                 (619) 436-6888 or 1-800-736-7362



SDN BANCORP, INC.  ANNOUNCES EARNINGS FOR THE FOURTH QUARTER 


        SDN Bancorp, Inc., parent of San Dieguito National Bank, today announced
Net Income of $62,000 for the quarter ended December 31, 1995.  While the 
Company's earnings since September 30, 1995 (the date SDN was recapitalized by 
selling $4.9 million of common stock) have been positive, they were not enough 
to offset the losses reported during the first nine months of the year.  For the
twelve month period ended December 31, 1995, the Net Loss was $5,000 as compared
with a Net Loss of $989,000 for the year ended December 31, 1994.  Total 
deposits aggregated $51.4 million as of December 31, 1995, and loans equaled 
$39.0 million on the same date.

         The improvement in earnings during the fourth quarter was due to, among
other things, reduction in San Dieguito National Bank's non-performing assets, a
reduction in the provision for possible loan losses made possible by improved 
asset quality, and increased control over non-interest expenses.  Robert P. 
Keller, the Company's President and Chief Executive Officer, stated that "as a 
result of the Company's improved financial condition we have initiated a number 
of positive business development efforts.  We are actively soliciting new loan
and deposit relationships.  The delivery of quality banking services to our 
Encinitas and Carlsbad customers is our number one priority."  Keller went 
on to say that the Bank is well capitalized, profitable and positioned to meet 
the needs of the communities they serve.
         
       SDN announced in October, 1995 its agreement to acquire Liberty National 
Bank of Huntington Beach, with an office in Dana Point. That transaction will 
close on or about March 15, 1996. Also, as was announced last week, SDN has 
entered into a Letter of Intent with Commerce Security Bank with its main office
in Sacramento and seven loan production offices throughout California,and one 
each in Arizona, Colorado, Nevada, Oregon, and Washington. These transactions 
Keller stated, "demonstrate our commitment and ability to effectively compete in
this market.  Liberty is particularly strong in business lending and is a 
leading SBA lender in the State.  Commerce Security, on the other hand, is 
particularly strong in Equipment Finance, Residential Mortgage lending and 
Commercial lending".