10QSB

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)

     /X/    Quarterly  report  under  Section  13 or  15(d)  of  the  Securities
            Exchange Act of 1934

                  For the quarterly period ended June 30, 2005

     /_/    Transition report under Section 13 or 15(d) of the Exchange Act

          For the transition period from ____________ to _____________

                          Commission file number 0-631


                            WEBFINANCIAL CORPORATION
                            ------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


            DELAWARE                                            56-2043000
            --------                                            ----------
(State or Other Jurisdiction of                                (IRS Employer
Incorporation or Organization)                               Identification No.)


                         590 MADISON AVENUE, 32ND FLOOR
                               NEW YORK, NY 10022
                               ------------------
          (Address of Principal Executive Offices, Including Zip Code)

                                  212-520-2300
                                  ------------
                (Issuer's Telephone Number, Including Area Code)

            Check whether the issuer (1) filed all reports  required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 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 [ ]

            Shares of Issuer's  Common  Stock  Outstanding  at August 12,  2005:
2,183,366

            Transitional Small Business Disclosure Format:  Yes [ ]   No [X]








                                      INDEX


PART I - FINANCIAL INFORMATION                                               PAGE NUMBER
- ------------------------------                                               -----------

Item 1.     Condensed Consolidated Financial Statements:

            Condensed Consolidated Statements of Financial Condition as of
            June 30, 2005 (unaudited) and December 31, 2004.......................2

            Condensed Consolidated Statements of Operations and Comprehensive
            Income (Loss) for the Three Months Ended June 30, 2005 and 2004
            (unaudited)...........................................................4

            Condensed Consolidated Statements of Operations and Comprehensive
            Income (Loss) for the Six Months Ended June 30, 2005 and 2004
            (unaudited)...........................................................6

            Condensed Consolidated Statements of Cash Flows
            for the Six Months Ended June 30, 2005 and 2004 (unaudited)...........8

            Notes to Condensed Consolidated Financial Statements (unaudited).....10

Item 2.     Management's Discussion and Analysis or Plan of Operation............14

Item 3.     Controls and Procedures..............................................24


PART II - OTHER INFORMATION
- ---------------------------

Item 1.     Legal Proceedings....................................................25

Item 6.     Exhibits.............................................................25

            Signatures...........................................................26

                                       1





PART I.   FINANCIAL INFORMATION
ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                    (Amounts in thousands except share data)

                            ASSETS                              JUNE 30, 2005      DECEMBER 31,
                                                               --------------      ------------
                                                                 (unaudited)           2004
                                                                                       ----

Cash and due from banks                                           $      3         $      4
Interest bearing deposits in other banks                            15,227           22,177
                                                                  --------         --------
             Total cash and cash equivalents                        15,230           22,181

 Investment securities
       Held-to-maturity (estimated fair value $45 at June 30,
          2005 and $46 at December 31, 2004)                            45               46
       Available-for-sale                                            3,113            2,666
                                                                  --------         --------
             Total investment securities                             3,158            2,712

Loans, net                                                           5,577            5,950
       Allowance for credit losses                                    (477)            (321)
                                                                  --------         --------
            Total loans, net                                         5,100            5,629

Foreclosed assets                                                      100              100
Premises and equipment, net                                             16               21
Accrued interest receivable                                             49               40
Deferred tax assets                                                    361              303
Other assets                                                         2,010            2,024
                                                                  --------         --------
                                                                  $ 26,024         $ 33,010
                                                                  ========         ========

                                   (Continued)

                                       2





                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
                    (Amounts in thousands except share data)

                                                                            JUNE 30, 2005         DECEMBER 31,
                                                                            -------------         ------------
                                                                             (unaudited)              2004
                                                                                                      ----
        LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
       NOW/MMA accounts                                                      $    250               $      -
       Certificates of deposit                                                  2,013                  8,722
                                                                             --------               --------
             Total deposits                                                     2,263                  8,722

Other liabilities                                                                 234                    480
                                                                             --------               --------
       Total liabilities before minority interest                               2,497                  9,202

Minority interest                                                                 369                    399

Commitments and contingencies                                                       -                      -

Stockholders' Equity
       Preferred stock, 500,000 shares authorized, none issued
         at June 30, 2005 and 10,000,000 shares authorized,
         none issued at December 31, 2004                                           -                      -
       Common stock, 5,000,000 shares authorized, $.001 par
         value, 2,183,366 shares issued and outstanding at June
         30, 2005 and 50,000,000 shares authorized, $.001 par
         value,  2,183,433 shares issued and outstanding at
         December 31, 2004                                                          2                      2
       Paid-in-capital                                                         47,647                 47,648
       Accumulated  deficit                                                   (25,970)               (25,369)
       Accumulated other comprehensive income                                   1,479                  1,128
                                                                             --------               --------
             Total stockholders' equity                                        23,158                 23,409
                                                                             --------               --------
                                                                             $ 26,024               $ 33,010
                                                                             ========               ========

         THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                       3





                            WEBFINANCIAL CORPORATION AND SUBSIDIARIES
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
                         (Amounts in thousands except per share amounts)

                                                                    FOR THE THREE MONTHS
                                                                        ENDED JUNE 30,
                                                                     2005           2004
                                                                     ----           ----
Interest income
      Loans, including fees                                         $ 129           $ 195
      Purchased receivables
            Accounts receivable factoring                               -             677
            Other                                                       -               4
      Interest bearing deposits in other banks                        101               6
      Federal funds sold                                                -               3
      Investment securities                                            12              22
                                                                    ---------------------
            Total interest income                                     242             907

Interest expense                                                       23              61
                                                                    ---------------------

            Net interest income before credit for credit losses       219             846

Provision (credit) for credit losses                                  165            (123)
                                                                    ---------------------

            Net interest income after credit for credit losses         54             969

Noninterest income
      Gain on sale of assets                                            1               -
      Fee income                                                      103              63
      Accounts receivable factoring servicing revenue                   -             180
      Miscellaneous income, net                                        10              78
                                                                    ---------------------
            Total noninterest income                                  114             321

Noninterest expenses
      Salaries, wages, and benefits                                   122             220
      Professional and legal fees                                     142              36
      Accounts receivable factoring management and broker fees          -             422
      Other management fees - related party                            76              78
      Unrealized gain on trading liabilities                          (23)              -
      Realized loss on trading liabilities                             35               -
      Other general and administrative                                181             164
                                                                    ---------------------
            Total noninterest expenses                                533             920
                                                                    ---------------------
               Operating income (loss)                               (365)            370

Income tax provision (benefit)                                        (60)            115
                                                                    ---------------------

      Income (loss) before minority interest                         (305)            255

      (Income) loss attributable to minority interest                  19             (16)
                                                                    ---------------------

            Net income (loss)                                        (286)            239


                                           (Continued)

                                               4





                           WEBFINANCIAL CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
                             INCOME (LOSS) (UNAUDITED) (CONTINUED)
                         (Amounts in thousands except per share amounts)

                                                                                     FOR THE THREE MONTHS
                                                                                        ENDED JUNE 30,
                                                                                  2005                2004
                                                                                  ----                ----
Other comprehensive income (loss)
      Unrealized gains (losses) on available-for-sale securities                    (422)                  140
      Income tax expense on other comprehensive income                                 -                     -
                                                                             -----------           -----------
            Total other comprehensive income (loss), net of tax                     (422)                  140
                                                                             -----------           -----------

Comprehensive income (loss)                                                  $      (708)          $       379
                                                                             ===========           ===========


Net income (loss) per common share, basic and diluted                        $      (.13)          $       .22
Weighted average number of common shares:
      Basic                                                                    2,183,366             1,091,650
      Diluted                                                                  2,183,366             1,092,454

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                               5





                            WEBFINANCIAL CORPORATION AND SUBSIDIARIES
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
                         (Amounts in thousands except per share amounts)

                                                                            FOR THE SIX MONTHS
                                                                               ENDED JUNE 30,
                                                                            2005          2004
                                                                            ----          ----
Interest income
       Loans, including fees                                               $   258      $   388
       Purchased receivables
             Accounts receivable factoring                                       -        1,407
             Other                                                               -            9
       Interest bearing deposits in other banks                                197           15
       Federal funds sold                                                        -            7
       Investment securities                                                    35           49
                                                                           --------------------
             Total interest income                                             490        1,875

Interest expense                                                                65          134
                                                                           --------------------

                   Net interest income before credit for credit losses         425        1,741

Provision (credit) for credit losses                                           156         (148)
                                                                           --------------------

                   Net interest income after credit for credit losses          269        1,889

Noninterest income
       Gain on sale of assets                                                   42            1
       Fee income                                                              161          134
       Accounts receivable factoring servicing revenue                           -          261
       Miscellaneous income, net                                                29          140
                                                                           --------------------
             Total noninterest income                                          232          536

Noninterest expenses
       Salaries, wages, and benefits                                           200          489
       Professional and legal fees                                             384          330
       Accounts receivable factoring management and broker fees                  -          774
       Other management fees - related party                                   145          147
       Unrealized loss on trading liabilities                                   30            -
       Realized loss on trading liabilities                                     35            -
       Other general and administrative                                        393          393
                                                                           --------------------
             Total noninterest expenses                                      1,187        2,133
                                                                           --------------------
                   Operating income (loss)                                    (686)         292

Income tax provision (benefit)                                                 (55)         204
                                                                           --------------------

       Income (loss) before minority interest                                 (631)          88

(Income) loss attributable to minority interest                                 30          (24)
                                                                           --------------------

       Net income (loss)                                                      (601)          64

                                   (Continued)

                                               6





                            WEBFINANCIAL CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
                              INCOME (LOSS) (UNAUDITED) (CONTINUED)
                         (Amounts in thousands except per share amounts)

                                                                       FOR THE SIX MONTHS
                                                                          ENDED JUNE 30,
                                                                    2005                2004
                                                                    ----                ----
Other comprehensive income
      Unrealized gains on available-for-sale securities              351                 175
      Income tax expense on other comprehensive income                 -                   -
                                                             -------------------------------
            Total other comprehensive income, net of tax             351                 175
                                                             -------------------------------

Comprehensive income (loss)                                  $      (250)        $       239
                                                             ===============================


Net income (loss) per common share, basic and diluted        $      (.28)        $       .06
Weighted average number of common shares:
      Basic                                                    2,183,366           1,091,650
      Diluted                                                  2,183,366           1,092,426

                THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                               7





                            WEBFINANCIAL CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                     (Amounts in thousands)

                                                                              FOR THE SIX MONTHS
                                                                                 ENDED JUNE 30,
                                                                               2005        2004
                                                                               ----        ----
Cash flows from operating activities:
Net income (loss) from operations                                          $   (601)   $     64
Adjustments to reconcile net income to net cash used in operating
 activities:
            Minority interest                                                   (30)         24
            Depreciation                                                          6           8
            Provision (credit) for credit losses                                156        (148)
            Accretion of loan income and fees, net                               (2)        (40)
            Amortization of servicing assets                                      9           8
            Amortization of other assets                                          1           1
            Write down of foreclosed assets                                       -          25
            Unrealized loss on trading liabilities                               30           -
            Gain on sale of AFS securities                                      (40)         (1)
Changes in operating assets and liabilities:
            Accrued interest receivable                                          (9)        (40)
            Deferred tax assets                                                  22         182
            Other assets                                                          4      (1,162)
            Interest payable                                                     (9)         (7)
            Other liabilities                                                  (267)        132
                                                                           --------------------
                     Net cash used in operating activities                     (810)       (954)

Cash flows from investing activities:
            Principal payments received on investment securities held-
              to-maturity                                                         1           1
            Purchase of investment securities available-for-sale               (227)     (1,106)
            Sale of investment securities available-for-sale                    135           2
            Principal payments received on investment securities
              available-for-sale                                                 36          15
            Purchase of premises and equipment                                   (1)        (22)
            Loans originated, receivables purchased, and principal
              collections, net                                                  375        (879)
                                                                           --------------------
                     Net cash provided (used) in investing activities           319      (1,989)

Cash flows from financing activities:
            Increase in noninterest bearing deposits                              -         224
            Increase (decrease) in NOW/MMA deposits                             250         (18)
            Decrease  in certificates of deposit                             (6,709)     (1,272)
            Cash in lieu of fractional shares for reverse stock split            (1)          -
                                                                           --------------------
                     Net cash used in financing activities                   (6,460)     (1,066)

Net decrease in cash and cash equivalents                                    (6,951)     (4,009)

            Cash and cash equivalents at beginning of period                 22,181       7,245
                                                                           --------------------
            Cash and cash equivalents at end of period                     $ 15,230    $  3,236
                                                                           ====================

                                           (Continued)

                                               8





                            WEBFINANCIAL CORPORATION AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
                                     (Amounts in thousands)

                                                                         FOR THE SIX MONTHS
                                                                             ENDED JUNE 30,

                                                                       2005                2004
                                                                       ----                ----
 Supplemental disclosure of cash flow information:
             Cash paid for interest                                    $  50              $ 141
             Cash paid for income taxes                                $   3              $  21

Supplemental disclosure of additional non-cash activities:

At June 30,  2005,  the  Company  had a balance  of net  unrealized  gains  from
available-for-sale  securities  of $1,479.  The balance at December 31, 2004 was
$1,128.  Net unrealized  gains and losses on  available-for-sale  securities are
shown as "accumulated other comprehensive income" on the Condensed  Consolidated
Statements  of  Financial  Condition.  The  change  in net  unrealized  gains on
available-for-sale  securities  between  the  two  periods  resulted  in a  $351
increase in accumulated  other  comprehensive  income in the first six months of
2005.

                THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.

                                               9






                    WEBFINANCIAL CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
           (All numbers except shares and per share data in thousands)

1.          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Basis   of   Presentation--The    accompanying   interim   condensed
consolidated   financial   statements  of   WebFinancial   Corporation  and  its
subsidiaries  (the "Company") are unaudited and have been prepared in conformity
with the  requirements  of  Regulation  S-X  promulgated  under  the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  particularly  Rule 10-01
thereof,  which  governs  the  presentation  of  interim  financial  statements.
Accordingly,  they do not include all of the information and footnotes  required
by accounting principles generally accepted in the United States of America. The
accompanying interim condensed  consolidated financial statements should be read
in conjunction with the Company's  significant  accounting policies as set forth
in Note 1 to the  consolidated  financial  statements  in the  Company's  Annual
Report on Form 10-KSB for the year ended December 31, 2004 (the "2004  10-KSB").
The Condensed Consolidated Statement of Financial Condition at December 31, 2004
was  extracted  from the Company's  audited  consolidated  financial  statements
contained in the 2004 10-KSB,  and does not include all disclosures  required by
accounting  principles  generally  accepted in the United  States of America for
annual consolidated financial statements.

            In the opinion of  management,  all  adjustments  are  comprised  of
normal  recurring  accruals  necessary for the fair  presentation of the interim
financial  statements.  Operating  results  for the three  months and six months
ended June 30, 2005 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2005.

2.          ORGANIZATION AND RELATIONSHIPS

            The  consolidated   financial   statements   include  the  financial
statements  of  WebFinancial  Corporation  and  its  subsidiaries:  WebFinancial
Holding Corporation,  WebBank,  Praxis Investment Advisers,  Inc.,  WebFinancial
Government Lending, Inc., and Web Film Financial, Inc., collectively referred to
as the Company.  WebBank is a Utah-chartered  industrial bank, and is subject to
comprehensive  regulation,  examination,  and supervision by the Federal Deposit
Insurance  Corporation  ("FDIC"),  and the State of Utah Department of Financial
Institutions.   WebBank  provides  commercial  and  consumer  specialty  finance
services.  All intercompany  accounts and  transactions  have been eliminated in
consolidation.

3.          OTHER COMPREHENSIVE INCOME

            Other comprehensive income is defined as the change in equity during
a period  from  transactions  and  other  events  not  included  in net  income,
excluding changes  resulting from investments by owners (e.g.,  supplement stock
offerings) and distributions to owners (e.g., dividends).

            As  of  June  30,  2005,   accumulated  other  comprehensive  income
consisted of the following:

                   Balance at December 31, 2004                       $1,128
                   Net change during the period related
                      to unrealized holding gains on
                      available-for-sale securities arising
                      during the period.                                 351
                                                                     -------
                   Balance at June 30, 2005                           $1,479
                                                                     =======

4.          OPERATING SEGMENT INFORMATION

            Operating segments represent components of an enterprise about which
separate financial  information is available that is evaluated  regularly by the
chief  operating  decision  maker in deciding how to allocate  resources  and in
assessing  performance.  The Company  evaluates segment  performance  internally
based on lines of business and the operating segments are so defined.

            For the first six months of 2005,  the Company  recognized  only one
operating segment.  This segment included commercial lending,  fee for services,
and investment  activities and is labeled "other" in the table below. During the

                                       10





first six months of 2004,  the Company  recognized  two operating  segments.  In
addition to the "other" segment described above,  WebBank's accounts  receivable
program  constituted a second operating  segment,  termed  "accounts  receivable
factoring"  in the table below.  On December  30, 2004,  WebBank sold its entire
portfolio  of factored  accounts  receivable  and  discontinued  that  operating
segment.

The following is a summary of selected  operating  segment  information  for the
three  months  and six  months  ended June 30,  2005 and 2004.  The  information
represents  operating  results as if the segments were operated on a stand alone
basis.  However,  the results do not reflect a full allocation of costs based on
the  current  structure  of the  entities,  and thus the  results  might  not be
comparable to like information from other companies.

                                                                       Accounts
                                                                      Receivable                            Consolidated
                                                                       Factoring            Other              Company
                                                                       ---------            -----              -------
THREE MONTHS ENDED JUNE 30, 2005:
Statement of Operations Information (Quarter):
   Net interest income after provision for credit
          losses                                                    $     -            $      54              $     54
   Noninterest income                                                     -                  114                   114
   Noninterest expense                                                    -                  533                   533
                                                                   ------------------------------------------------------
   Operating loss                                                         -                (365)                  (365)
   Income taxes                                                           -                 (60)                   (60)
   Loss attributable to minority interest                                 -                  19                     19
                                                                   ------------------------------------------------------
      Net loss                                                      $     -            $   (286)              $   (286)
                                                                   ======================================================
Statement of Financial Condition Information
     (As of June 30, 2005):
   Total assets                                                     $     -            $ 26,024               $ 26,024
   Net loans and purchased receivables                              $     -            $  5,100               $  5,100
   Deposits                                                         $     -            $  2,263               $  2,263

THREE MONTHS ENDED JUNE 30, 2004:
Statement of Operations Information (Quarter):
   Net interest income after credit  for credit losses              $   612            $    357               $    969
   Noninterest income                                                   180                 141                    321
   Noninterest expense                                                  425                 495                    920
                                                                   ------------------------------------------------------
   Operating income                                                     367                   3                    370
   Income taxes                                                           -                 115                    115
   (Income) attributable to minority interest                             -                 (16)                   (16)
                                                                   ------------------------------------------------------
      Net income (loss)                                             $   367            $   (128)              $    239
                                                                   ======================================================
Statement of Financial Condition Information
     (As of June 30, 2004):
   Total assets                                                     $ 8,573            $ 17,198               $ 25,771
   Net loans and purchased receivables                              $ 6,943            $  9,261               $ 16,204
   Deposits                                                         $ 7,201            $  3,650               $ 10,851

                                       11






                                                           Accounts
                                                          Receivable                 Consolidated
                                                           Factoring     Other          Company
                                                           ---------     -----          -------
SIX MONTHS ENDED JUNE 30, 2005:
Statement of Operations Information (Period):
   Net interest income after credit for credit losses      $      -     $    269      $    269
   Noninterest income                                             -          232           232
   Noninterest expense                                            -        1,187         1,187
                                                           -----------------------------------
   Operating loss                                                 -         (686)         (686)
   Income taxes                                                   -          (55)          (55)
   Loss attributable to minority interest                         -           30            30
                                                           -----------------------------------
      Net loss                                             $      -     $   (601)     $   (601)
                                                           ===================================
Statement of Financial Condition Information
    (As of June 30, 2005):
   Total assets                                            $      -     $ 26,024      $ 26,024
   Net loans and purchased receivables                     $      -     $  5,100      $  5,100
   Deposits                                                $      -     $  2,263      $  2,263

SIX MONTHS ENDED JUNE 30, 2004:
Statement of Operations Information (Period):
   Net interest income after credit  for credit losses     $  1,283     $    606      $  1,889
   Noninterest income                                           261          275           536
   Noninterest expense                                          826        1,307         2,133
                                                           -----------------------------------
   Operating income (loss)                                      718         (426)          292
   Income taxes                                                   -          204           204
   (Income) attributable to minority interest                     -          (24)          (24)
                                                           -----------------------------------
      Net income (loss)                                    $    718     $   (654)     $     64
                                                           ===================================
Statement of Financial Condition Information
    (As of June 30, 2004):
   Total assets                                            $  8,573     $ 17,198      $ 25,771
   Net loans and purchased receivables                     $  6,943     $  9,261      $ 16,204
   Deposits                                                $  7,201     $  3,650      $ 10,851

5.          REGULATORY MATTERS

            On January 31,  2005,  the  Federal  Deposit  Insurance  Corporation
("FDIC")  and the  Department  of Financial  Institutions  for the State of Utah
issued to WebBank an Order to Cease and Desist (the "Order") in connection  with
alleged  violations of certain  banking  regulations.  WebBank  consented to the
issuance of the Order  without  admitting or denying the alleged  violations  of
those banking regulations.

            The Order required  WebBank to comply with a number of  requirements
which  included,  but were not limited to,  increasing  the number of directors,
increasing  board  involvement,   hiring  new  executive  officers,  creating  a
three-year  strategic plan, charging off or collecting certain classified loans,
revising and adopting  various  policies,  developing and adopting a budget plan
and a capital plan designed to maintain an adequate level of capital  protection
for the kind of and quality of assets  held by the bank,  and  establishing  and
implementing procedures for affiliate  transactions.  The Order also immediately
prohibited certain actions such as purchasing factored accounts receivable until
proper  procedures  and policies are in place,  extending  additional  credit to
substandard borrowers,  and paying cash dividends.  The Order further prohibited
WebBank from issuing  brokered  certificates  of deposit in an aggregate  amount
greater than the amount  outstanding on the effective  date of the Order,  which
was  $7,465,000.  The effective date of the Order was February 10, 2005, and the
due  dates  for the  requirements  ranged  from 10 days  to 360  days  from  the
effective date with the majority to be achieved within 120 days of the Order.

            WebBank  believes  that during the period  since the issuance of the
Order, it has provided all  information  required by the Order on a timely basis
with the requirements of the Order. However, WebBank's compliance with the Order
will not be fully  reviewed  by the FDIC and the Utah  Department  of  Financial
Institutions  until the next annual Safety and Soundness  examination  scheduled
for September  2005. It is possible that regulators  could  determine  WebBank's
submissions  to be  unacceptable.  The provisions of the Order will be in effect
and enforceable until such provisions have been modified, terminated, suspended,
or set aside by the FDIC and the  Department of Financial  Institutions  for the
State of Utah.  If WebBank does not comply with the terms of the Order,  WebBank

                                       12





and/or its Board of Directors could be subject to regulatory  fines,  additional
regulatory  restrictions  and the  Company  could  be  forced  to sell or  close
WebBank.  The consolidated  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

            On July 27,  2005,  the FDIC and the Utah  Department  of  Financial
Institutions  granted WebBank a waiver from restrictions imposed on the issuance
of brokered  certificates of deposit. The waiver allows WebBank to hold brokered
deposits up to an aggregate of $20,000,000 through January 1, 2007. At that time
the waiver will expire, and WebBank expects to submit a new request for approval
of the use of brokered deposits.

6.          REVERSE STOCK SPLIT

            On March 9,  2005,  the  Company's  Board of  Directors  approved  a
one-for-four reverse stock split, a reduction of the Company's authorized number
of shares of common stock from 50,000,000 to 5,000,000  shares,  and a reduction
of the Company's  authorized number of shares of preferred stock from 10,000,000
to  500,000  shares.  The  reverse  split was  effective  on April 5, 2005 as to
stockholders of record on April 4, 2005. The reductions of authorized  number of
shares of common and  preferred  stock were  effective  on April 5, 2005.  After
giving effect to the reverse split and cash issued in lieu of fractional shares,
there were 2,183,366 common shares issued and  outstanding.  The computations of
basic and diluted income/(loss) per common share were adjusted retroactively for
all periods presented to reflect the effect of the reverse split.

7.          EARNINGS (LOSS) PER SHARE

            Basic  earnings  (loss) per share are based on the weighted  average
number of shares outstanding for each period.  Diluted earnings per common share
are based on shares  outstanding  (computed  under  basic  EPS) and  potentially
dilutive  shares.  Shares included in dilutive  earnings per share  calculations
include  stock  options  granted  that  are in the  money  but have not yet been
exercised.  In the money stock  options are adjusted  using the  Treasury  Stock
method.  The Treasury Stock method assumes that proceeds from options  exercised
are used to purchase  Treasury Stock at market prices.  The net number of shares
(option shares issued less Treasury  Stock  purchased) is the number of dilutive
shares.

            The following tables show the computation of basic and fully diluted
earnings per share for the three months and six months ended June 30, 2005.  The
2005 earnings per share calculation includes the results of the Company's common
stock  subscription  rights offering concluded in August 2004, which doubled the
number of common  shares  outstanding  at that time.  The earnings per share for
both 2005 and 2004 reflect the effect of a one-for-four  reverse split effective
in April 2005.

                                                                            FOR THE THREE MONTHS
                                                                               ENDED JUNE 30,

                                                                            2005         2004
                                                                            ----         ----
Income (loss) available to common shareholders                          $    (286)    $      239

BASIC EARNINGS PER SHARE

Computation of EPS shares - basic:
   Common shares outstanding entire period                              2,183,366      1,091,650
   Weighted average common shares issued or cancelled during period             -              -
                                                                        ------------------------
         Weighted average common shares outstanding during period -
           basic                                                        2,183,366      1,091,650
                                                                        ========================

Net income (loss) per common share - basic                              $    (.13)    $      .22
                                                                        ========================

DILUTED EARNINGS PER SHARE

Computation of EPS shares - fully diluted:
   Weighted average common shares outstanding during period - basic     2,183,366      1,091,650
   Dilutive effect of stock options                                             -            804
                                                                        ------------------------
         Weighted average common shares outstanding during
           period - diluted                                             2,183,366      1,092,454
                                                                        ========================

                                       13





Net income (loss) per common share - diluted                            $    (.13)    $      .22
                                                                        ========================

Potentially dilutive shares not used in diluted EPS:
   Outstanding stock options not in the money                               2,462         69,106
   Outstanding stock options in the money but antidilutive
      because of a net loss for the period                                  3,282              -


                                                                            FOR THE SIX MONTHS
                                                                              ENDED JUNE 30,
                                                                           2005           2004
                                                                           ----           ----
Income (loss) available to common shareholders                         $    (601)     $       64

BASIC EARNINGS PER SHARE

Computation of EPS shares - basic:
   Common shares outstanding entire period                             2,183,366       1,091,650
   Weighted average common shares issued or cancelled during
     period                                                                    -               -
                                                                       -------------------------
        Weighted average common shares outstanding during
          period basic                                                 2,183,366       1,091,650
                                                                       =========================

Net income (loss) per common share - basic                            $    (.28)      $      .06
                                                                       =========================

DILUTED EARNINGS (LOSS) PER SHARE

Computation of EPS shares - fully diluted:
   Weighted average common shares outstanding during period -
     basic                                                             2,183,366       1,091,650
   Dilutive effect of stock options                                            -             776
                                                                       -------------------------
         Weighted average common shares outstanding during
          period - diluted                                             2,183,366       1,092,426
                                                                       =========================

Net income (loss) per common share - diluted                          $     (.28)     $      .06
                                                                      ==========================

Potentially dilutive shares not used in diluted EPS:
   Outstanding stock options not in the money                              2,462          69,106
   Outstanding stock options in the money but antidilutive
     because of a net loss for the period                                  3,282               -



ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

            THE FOLLOWING  IMPORTANT FACTORS,  AMONG OTHERS,  COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY FORWARD-LOOKING  STATEMENTS
MADE IN THIS  QUARTERLY  REPORT  ON  FORM  10-QSB  AND  PRESENTED  ELSEWHERE  BY
MANAGEMENT.  ALL FORWARD-LOOKING  STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED
ON  INFORMATION  AVAILABLE  TO THE COMPANY ON THE DATE  HEREOF,  AND THE COMPANY
ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. A NUMBER OF
UNCERTAINTIES  EXIST THAT COULD AFFECT THE COMPANY'S FUTURE  OPERATING  RESULTS,

                                       14





INCLUDING, WITHOUT LIMITATION,  GENERAL ECONOMIC CONDITIONS, CHANGES IN INTEREST
RATES, THE COMPANY'S ABILITY TO ATTRACT  DEPOSITS,  AND THE COMPANY'S ABILITY TO
CONTROL COSTS.  BECAUSE OF THESE AND OTHER FACTORS,  PAST FINANCIAL  PERFORMANCE
SHOULD NOT BE  CONSIDERED AN  INDICATION  OF FUTURE  PERFORMANCE.  THE COMPANY'S
FUTURE  OPERATING  RESULTS  MAY VARY  SIGNIFICANTLY.  INVESTORS  SHOULD  NOT USE
HISTORICAL  TRENDS TO  ANTICIPATE  FUTURE  RESULTS  AND SHOULD BE AWARE THAT THE
TRADING PRICE OF THE COMPANY'S COMMON STOCK MAY BE SUBJECT TO WIDE  FLUCTUATIONS
IN RESPONSE TO  QUARTERLY  VARIATIONS  IN OPERATING  RESULTS AND OTHER  FACTORS,
INCLUDING THOSE  DISCUSSED IN THIS QUARTERLY  REPORT ON FORM 10-QSB AND THE RISK
FACTORS IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB.

            The  following  discussion  should be read in  conjunction  with the
condensed  consolidated unaudited interim financial statements as of and for the
three  month and six month  periods  ended June 30,  2005 of the Company and the
notes thereto presented elsewhere herein.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THREE MONTHS ENDED JUNE 30, 2004

            The net loss for the quarter  ended June 30, 2005 was  $(286,000) or
$(.13) per share  compared  to net income of  $239,000 or $.22 per share for the
same  period in 2004,  a  decrease  of  $525,000.  The 2005  earnings  per share
calculation  includes the results of the  Company's  common  stock  subscription
rights  offering  concluded in August 2004,  which  doubled the number of common
shares  outstanding  at that time. The earnings per share for both 2005 and 2004
reflect the effect of a  one-for-four  reverse  split that became  effective  in
April 2005.

            The  Company's  net interest  income before credit for credit losses
decreased  by  $627,000.  Interest  income from  accounts  receivable  factoring
decreased  by  $677,000  due to the sale of the  accounts  receivable  factoring
portfolio in December 2004.  Interest income from interest  bearing  deposits in
other banks  increased  by $95,000  because the proceeds  from the  subscription
rights offering and the sale of the accounts receivable factoring portfolio were
invested primarily in these instruments. Interest income from loans decreased by
$66,000 due to reductions in commercial  loan balances.  The average  balance of
the commercial loan portfolio for the second quarter of 2005 was $4,065,000 less
than the average for the second  quarter of 2004. The Company  discontinued  new
originations of commercial loans in 2001, and the portfolio has been running off
since  that  time.  Interest  expense  decreased  by  $38,000  due  to a  nearly
$6,400,000 decrease in average certificates of deposit.

            The following  table shows an analysis of net interest income before
provision (credit) for credit losses for the three-month  periods ended June 30,
2005 and 2004 (amounts in thousands):

                                                      Average     Interest    Ave. Annual
                                                       Amount      Earned      Yield/Rate
                                                       ------      ------     -----------
        QUARTER ENDED JUNE 30, 2005

INTEREST EARNING ASSETS
Interest bearing deposits in other banks              $16,935      $   101        2.39%
Federal funds sold                                          -            -            -
Investment securities                                   3,159           12        1.52%
Loans, net                                              5,880          129        8.78%
Purchased receivables
   Accounts receivable factoring                            -            -            -
   Other                                                    -            -            -
                                                      --------------------
   TOTAL INTEREST EARNING ASSETS                      $25,974      $   242        3.73%
                                                      ====================

INTEREST BEARING LIABILITIES
NOW/MMA deposits                                      $    48      $     -        2.50%
Certificates of deposit                                 3,886           23        2.37%
                                                      --------------------
   TOTAL INTEREST BEARING LIABILITIES                 $ 3,934      $    23        2.37%
                                                      ====================

NET INTEREST INCOME                                                $   219
                                                                   =======
NET INTEREST MARGIN                                                               3.37%

                                       15



                                                      Average      Interest     Ave. Annual
                                                      Amount        Earned       Yield/Rate
                                                      ------        ------       ----------
        QUARTER ENDED JUNE 30, 2004

INTEREST EARNING ASSETS
Interest bearing deposits in other banks              $ 1,987      $     6         1.21%
Federal funds sold                                      1,008            3         1.19%
Investment securities                                   1,640           22         5.37%
Loans, net                                              9,945          195         7.84%
Purchased receivables
   Accounts receivable factoring                        7,325          677        36.97%
   Other                                                  179            4         8.94%
                                                      --------------------
   TOTAL INTEREST EARNING ASSETS                      $22,084      $   907        16.43%
                                                      ====================

INTEREST BEARING LIABILITIES
NOW/MMA deposits                                      $    82      $     3         4.26%
Certificates of deposit                                10,234           58         2.27%
                                                      --------------------
   TOTAL INTEREST BEARING LIABILITIES                 $10,516      $    61         2.31%
                                                      ====================

NET INTEREST INCOME                                                $   846
                                                                   =======
NET INTEREST MARGIN                                                               15.32%

            The  following  table  represents  the  effect of  changes in volume
(average  balances) and interest rates on interest income,  interest expense and
net  interest  income when  comparing  the second  quarter of 2005 to the second
quarter  of 2004.  The  effect  of a change  in volume  has been  determined  by
applying the highest average rate to the change in the average  balances between
the two periods.  The effect of a change in the average rate has been determined
by applying the highest  average  balance to the change in average rates between
the two periods.  Changes  resulting  from a mix of  volume/rate  variances were
distributed proportionately between volume and rate based on the relative values
of the volume and rate variances to the total mix variance.

                                           QUARTER ENDED JUNE 30, 2005 COMPARED TO 2004
                                           --------------------------------------------
                                                   (amounts in thousands)
                                             Due to
                                             Volume    Due to Rate    Total Change
                                             ------    -----------    ------------
INCREASE (DECREASE) IN INTEREST INCOME
Interest bearing deposits in other banks     $  84       $  11        $  95
Federal funds sold                              (3)          -           (3)
Investment securities                            6         (16)         (10)
Loans, net                                     (80)         14          (66)
Purchased receivables
   Accounts receivable factoring              (677)          -         (677)
   Other                                        (4)          -           (4)
                                             ------------------------------
   TOTAL INTEREST INCOME                     $(674)      $   9        $(665)
                                             ==============================

INCREASE (DECREASE) IN INTEREST EXPENSE
NOW/MMA deposits                             $  (2)      $   -         $ (2)
Certificates of deposit                        (37)          1          (36)
                                             -----------------------------
   TOTAL INTEREST EXPENSE                    $ (39)      $   1         $(38)
                                             =============================

                                       16





            The  provision  (credit) for credit  losses  changed by $288,000.  A
credit for credit  losses in 2004 rather than a provision  for credit losses was
the  result  of  principal   reductions   and  risk  grade  changes  within  the
discontinued  commercial  loan  portfolio at WebBank.  The  allowance for credit
losses is  established  as  losses  are  estimated  to have  occurred  through a
provision  for credit  losses  charged to  earnings.  Credit  losses are charged
against the allowance when management believes the uncollectibility of a loan or
receivable balance is confirmed.  Subsequent recoveries, if any, are credited to
the allowance.  The Company had no  charge-offs or recoveries  during the second
quarter of 2005,  however,  a potential  loss on a commercial  loan  resulted in
additional loan loss provision during that period.

            The  allowance  for credit losses is evaluated on a regular basis by
management and is based upon management's  periodic review of the collectibility
of the amounts due in light of historical  experience,  the nature and volume of
the loan portfolio, adverse situations that may affect the borrower's ability to
repay,  estimated  value of any underlying  collateral  and prevailing  economic
conditions.  This evaluation is inherently  subjective as it requires  estimates
that  are  susceptible  to  significant  revision  as more  information  becomes
available.

            The following table shows an analysis of the Company's allowance for
credit  losses  for the  quarters  ended  June 30,  2005 and  2004  (amounts  in
thousands):

                                                            QUARTER ENDED JUNE 30,
                                                              2005         2004
                                                              ----         ----

Balance at beginning of period                              $   312      $ 1,228

Charge-offs by category:
    Commercial, financial and agricultural                        -            -
    Installment loans to individuals                              -            3
    Purchased receivables
         Accounts receivable factoring                            -           32
         Other                                                    -            -
                                                            --------------------
             Total charge-offs                                    -           35

Recoveries by category:
    Commercial, financial and agricultural                        -            -
    Installment loans to individuals                              -            -
    Purchased receivables
         Accounts receivable factoring                            -            -
         Other                                                    -            -
                                                            --------------------
             Total recoveries                                     -            -
                                                            --------------------

Net charge-offs                                                   -           35

Provision (credit) for credit losses                            165         (123)
                                                            --------------------

Balance at end of period                                    $   477      $ 1,070
                                                            ====================

Ratio of net charge offs to average loans
  outstanding during the quarter                               0.00%        0.20%
                                                            ====================

            The following table shows the allocation between categories of loans
for the  allowance  for credit  losses as of June 30, 2005 and 2004  (amounts in
thousands):

                                       17



                                                               JUNE 30,
                                                   2005                         2004
                                                   ----                         ----

                                           Amount of   % of loans in   Amount of    % of loans in
                                          allowance     category to    allowance     category to
Balance at End of Quarter Applicable to:   category     total loans    by category   total loans
                                          ----------   ------------    -----------  -------------

Commercial, financial and agricultural     $  468        100.00%       $  929         57.72%
Installment loans to individuals                -          0.00%            1          0.36%
Purchased receivables
   Accounts receivable factoring                -          0.00%          135         41.02%
   Other                                        -          0.00%            5           .91%
Unallocated                                     9            N/A            -            N/A
                                           -------------------------------------------------
   Totals                                  $  477        100.00%       $1,070        100.00%
                                           =================================================

            Noninterest income for the Company decreased by $207,000. Fee income
increased   by  $40,000,   primarily   because  of   additional   revenue   from
fee-for-services  partners at WebBank.  Accounts receivable  factoring servicing
revenue  decreased by $180,000  because of the sale of the  accounts  receivable
factoring portfolio in December 2004.  Miscellaneous income decreased by $68,000
because  2004  included  servicing  fees  for  accounts   receivable   factoring
participations which were eliminated after the sale of the factoring portfolio.

            The   Company's   noninterest   expenses   decreased   by  $387,000,
comparatively, between the two quarters. The primary reason for the change was a
$422,000 decrease in accounts  receivable  factoring  management and broker fees
related to the discontinued  factoring  program.  Salaries,  wages, and benefits
expenses  decreased by $98,000 due to a reduction of staff and discontinuance of
a bonus accrual at WebBank.  Professional  and legal fees  increased by $106,000
due to compliance efforts related to the Order. The Company recognized a $35,000
realized loss on a short sale of  unregistered  securities in the second quarter
of 2005  which was  partially  offset by a $23,000  unrealized  gain on the same
short position.

            Income tax expense decreased by $175,000.  The Company established a
valuation reserve to cover its net operating loss at the end of 2004.

            Other  comprehensive  income decreased by $562,000 due to changes in
the market value of securities available-for-sale.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO SIX MONTHS ENDED JUNE 30, 2004

            The net loss for the six months  ended June 30, 2005 was  $(601,000)
or $(.28) per share  compared to net income of $64,000 or $.06 per share for the
same  period in 2004.  The 2005  earnings  per share  calculation  includes  the
results of the Company's common stock subscription  rights offering concluded in
August 2004 which doubled the number of common shares  outstanding at that time.
The  earnings  per  share  for both  2005  and  2004  reflect  the  effect  of a
one-for-four reverse split that became effective in April 2005.

            The Company's  net interest  income  before  provision  (credit) for
credit losses decreased by $1,316,000.  Interest income from accounts receivable
factoring  decreased by  $1,407,000  due to the sale of the accounts  receivable
factoring  portfolio in December  2004.  Interest  income from interest  bearing
deposits in other banks  increased  by $182,000  because the  proceeds  from the
subscription rights offering and the sale of the accounts  receivable  factoring
portfolio were invested  primarily in these  instruments.  Interest  income from
loans decreased by $130,000 due to reductions in commercial  loan balances.  The
average  balance of the  commercial  loan  portfolio for the first six months of
2005 was approximately $3,500,000 less than the average for the first six months
of 2004. The Company  discontinued new originations of commercial loans in 2001.
Interest  expense  decreased by $69,000 due to a nearly  $5,000,000  decrease in
average certificates of deposit.

            The following  table shows an analysis of net interest income before
credit for credit  losses for the six month periods ended June 30, 2005 and 2004
(amounts in thousands):

                                       18




                                                    Average    Interest       Ave. Annual
                                                     Amount     Earned        Yield/Rate
                                                    -------    -------        -----------

      SIX MONTHS ENDED JUNE 30, 2005

INTEREST EARNING ASSETS
Interest bearing deposits in other banks           $18,951      $   197        2.08%
Federal funds sold                                       -            -            -
Investment securities                                3,300           35        2.12%
Loans                                                5,839          258        8.84%
Purchased receivables
   Accounts receivable factoring                         -            -            -
   Other                                                 -            -            -
                                                   --------------------
  TOTAL INTEREST EARNING ASSETS                    $28,090      $   490        3.49%
                                                   ====================

INTEREST BEARING LIABILITIES
NOW/MMA deposits                                   $    25      $     -        2.40%
Certificates of deposit                              5,710           65        2.27%
                                                   --------------------
   TOTAL INTEREST BEARING LIABILITIES              $ 5,735      $    65        2.27%
                                                   ====================

NET INTEREST INCOME                                             $   425
                                                               ========
NET INTEREST MARGIN                                                            3.03%

                                                    Average    Interest       Ave. Annual
                                                     Amount     Earned        Yield/Rate
                                                    -------    -------        -----------

      SIX MONTHS ENDED JUNE 30, 2004

INTEREST EARNING ASSETS
Interest bearing deposits in other banks           $ 3,913      $    15         0.77%
Federal funds sold                                   1,224            7         1.14%
Investment securities                                1,021           49         9.60%
Loans                                                9,392          388         8.26%
Purchased receivables
   Accounts receivable factoring                     7,173        1,407        39.23%
   Other                                               208            9         8.65%
                                                   --------------------
  TOTAL INTEREST EARNING ASSETS                    $22,931      $ 1,875        16.35%
                                                   ====================

INTEREST BEARING LIABILITIES
NOW/MMA deposits                                   $   340      $     4         2.35%
Certificates of deposit                             10,705          130         2.45%
                                                   ---------------------
   TOTAL INTEREST BEARING LIABILITIES              $11,045      $   134         2.44%
                                                   =====================

NET INTEREST INCOME                                             $ 1,741
                                                                ========
NET INTEREST MARGIN                                                            15.18%

            The  following  table  represents  the  effect of  changes in volume
(average  balances) and interest rates on interest income,  interest expense and
net interest income when comparing the first six months of 2005 to the first six
months of 2004. The effect of a change in volume has been determined by applying
the highest average rate to the change in the average  balances  between the two
periods.  The  effect of a change in the  average  rate has been  determined  by
applying the highest  average balance to the change in average rates between the
two  periods.  Changes  resulting  from  a mix  of  volume/rate  variances  were
distributed proportionately between volume and rate based on the relative values
of the volume and rate variances to the total mix variance.

                                       19





                                          SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO 2004
                                          ----------------------------------------------
                                                   (amounts in thousands)
                                                Due         Due to       Total
                                             to Volume       Rate       Change

INCREASE (DECREASE) IN INTEREST INCOME
Interest bearing deposits in other banks     $   126      $    56      $   182
Federal funds sold                                (7)           -           (7)
Investment securities                             24          (38)         (14)
Loans                                           (147)          17         (130)
Purchased receivables
   Accounts receivable factoring              (1,407)           -       (1,407)
   Other                                          (9)           -           (9)
                                             ---------------------------------
   TOTAL INTEREST INCOME                     $(1,420)     $    35      $(1,385)
                                             =================================

INCREASE (DECREASE) IN INTEREST EXPENSE
NOW/MMA deposits                             $    (4)     $     -      $    (4)
Certificates of deposit                          (60)          (5)         (65)
                                             ----------------------------------
   TOTAL INTEREST EXPENSE                    $   (64)     $    (5)     $   (69)
                                             =================================

            The  provision  (credit) for credit  losses  changed by $304,000.  A
credit for credit  losses in 2004 rather than a provision  for credit losses was
the  result  of  principal   reductions   and  risk  grade  changes  within  the
discontinued  commercial  loan  portfolio at WebBank.  The  allowance for credit
losses is  established  as  losses  are  estimated  to have  occurred  through a
provision  for credit  losses  charged to  earnings.  Credit  losses are charged
against the allowance when management believes the uncollectibility of a loan or
receivable balance is confirmed.  Subsequent recoveries, if any, are credited to
the allowance. The Company had no charge-offs or recoveries during the first six
months of 2005,  however,  a potential  loss on a  commercial  loan  resulted in
additional loan loss provision during that period.

            The  allowance  for credit losses is evaluated on a regular basis by
management and is based upon management's  periodic review of the collectibility
of the amounts due in light of historical  experience,  the nature and volume of
the loan portfolio, adverse situations that may affect the borrower's ability to
repay,  estimated  value of any underlying  collateral  and prevailing  economic
conditions.  This evaluation is inherently  subjective as it requires  estimates
that  are  susceptible  to  significant  revision  as more  information  becomes
available.

            The following table shows an analysis of the Company's allowance for
credit  losses  for the six  months  ended June 30,  2005 and 2004  (amounts  in
thousands):

                                                         SIX MONTHS ENDED JUNE 30,
                                                         -------------------------
                                                            2005          2004
                                                            ----          ----

Balance at beginning of year                              $   321      $ 1,302

Charge-offs by category:
      Commercial, financial and agricultural                    -            -
      Installment loans to individuals                          -            6
      Purchased receivables
          Accounts receivable factoring                         -           78
          Other                                                 -            -
                                                          -------      -------
                Total charge-offs                               -           84

Recoveries by category:
      Commercial, financial and agricultural                    -            -
      Installment loans to individuals                          -            -
      Purchased receivables
          Accounts receivable factoring                         -            -

          Other                                                 -            -
                                                          -------      -------
                Total recoveries                                -            -
                                                          -------      -------

                                       20




Net charge-offs                                                 -           84

Provision (credit) for credit losses                          156         (148)
                                                          -------      -------

Balance at end of period                                  $   477      $ 1,070
                                                          =======      =======

Ratio of net charge-offs to average loans outstanding
during the period                                            0.00%        0.50%
                                                          =======      =======

            The following table shows the allocation between categories of loans
for the  allowance  for credit  losses as of June 30, 2005 and 2004  (amounts in
thousands):

                                                                         JUNE 30,
                                                          2005                             2004
                                                          ----                             ----

                                                Amount of      % of loans in    Amount of       % of loans in
                                               allowance by     category to     allowance        category to
Balance at End of Period Applicable to:         category        total loans    by category       total loans
                                               ------------    -------------   -----------      ------------

Commercial, financial and agricultural          $ 468             100.00%         $  929           57.72%
Installment loans to individuals                    -                   -              1            0.36%
Purchased receivables
   Accounts receivable factoring                    -                   -            135           41.02%
   Other                                            -                   -              5             .91%
Unallocated                                         9                 N/A              -              N/A
                                             -------------------------------------------------------------
   Totals                                       $ 477             100.00%         $1,070          100.00%
                                             =============================================================

            Noninterest  income  for the  Company  decreased  by  $304,000.  The
Company  recognized  gains of  $41,000  on the sale of  securities  in the first
quarter  of  2005.  Fee  income  increased  by  $27,000,  primarily  because  of
additional  revenue  from   fee-for-services   partners  at  WebBank.   Accounts
receivable factoring servicing revenue decreased by $261,000 because of the sale
of the accounts receivable  factoring portfolio in December 2004.  Miscellaneous
income decreased by $111,000  because 2004 included  servicing fees for accounts
receivable factoring  participations which were eliminated after the sale of the
factoring portfolio.

            The  Company's  noninterest  expenses  decreased  by  $946,000.  The
primary  reason for the change was a $774,000  decrease in  accounts  receivable
factoring  management  and broker  fees  related to the  discontinued  factoring
program.  Salaries,  wages, and benefits expenses decreased by $289,000 due to a
reduction of staff and discontinuance of a bonus accrual at WebBank. The Company
recognized a total of $65,000 of realized and unrealized loss on a short sale of
unregistered securities in 2005.

            Income tax expense  decreased  by  $259,000  between  quarters.  The
Company  established a valuation  reserve to cover its net operating loss at the
end of 2004.

            Other  comprehensive  income increased by $176,000 due to changes in
the market value of securities available- for-sale.

LIQUIDITY AND CAPITAL RESOURCES

            At June 30, 2005 and December 31, 2004,  the Company's cash and cash
equivalents totaled $15,230,000 and $22,181,000, respectively. The cash and cash
equivalent  balances at those dates included  proceeds from the Company's common
stock subscription rights offering in August 2004 and the December 30, 2004 sale
of the accounts receivable  factoring  portfolio.  The approximately  $7,000,000
decrease in cash and cash equivalent balances between December 31, 2004 and June
30, 2005 reflects the maturities of nearly  $6,700,000 of brokered  certificates

                                       21





of deposit.  Until the Company  establishes new lines of business to replace the
accounts  receivable  factoring  program,  the Company  anticipates that it will
continue  to use its cash and  cash  equivalent  balances  to  reduce  remaining
outstanding certificates of deposit as they mature.

            Funding for WebBank is obtained primarily from brokered certificates
of deposit  obtained  through  brokers and from a $1,000,000  unsecured  line of
credit with a local  correspondent  bank. The Order,  described in Note 5 of the
Notes to Condensed Consolidated  Financial Statements,  restricted the amount of
brokered  certificates  of  deposits  that  WebBank  was allowed to issue to the
amount  outstanding  on the effective date of the Order,  which was  $7,465,000.
Further,  because  WebBank is subject to the Order,  WebBank is considered  only
"adequately  capitalized"  and must  obtain a waiver to issue  any new  brokered
certificates  of deposit.  On July 27, 2005, the FDIC and the Utah Department of
Financial Institutions granted WebBank a waiver from restrictions imposed on the
issuance of brokered  certificates of deposit. The waiver allows WebBank to hold
brokered deposits up to an aggregate of $20,000,000  through January 1, 2007. At
that time the waiver will  expire,  and WebBank  expects to submit a new request
for approval of the use of brokered deposits

            Management  believes  that  the  Company's  current  cash  and  cash
equivalent  balances and expected  operating cash flows are adequate to meet the
Company's liquidity needs through at least the next 12 months.

            The Company and Steel  Partners,  Ltd., an entity  controlled by the
Company's  Chairman,   devote  significant  time  to  exploration  of  potential
acquisition and other business opportunities. There can be no assurance that the
Company will be able to acquire an  additional  business,  or that such business
will be  profitable.  In order to finance an  acquisition,  the  Company  may be
required to incur or assume indebtedness or issue securities.

OFF-BALANCE SHEET ARRANGEMENTS

            The Company is  periodically a party to financial  instruments  with
off-balance  sheet  risk.  In the normal  course of  business,  these  financial
instruments include commitments to extend credit in the form of loans or through
letters of credit.  Those  instruments  involve to varying degrees,  elements of
credit and interest rate risk in excess of the amount  recognized on the balance
sheet.  The  contract  amounts  of  those  instruments  reflect  the  extent  of
involvement the Company has in particular classes of financial instruments.

            The Company's exposure to credit loss in the event of nonperformance
by the other party to the financial  instrument for commitments to extend credit
is represented by the contractual amount of those instruments.  The Company uses
the same credit policy in making  commitments and conditional  obligations as it
does for on-balance sheet  instruments.  At June 30, 2005 and December 31, 2004,
the Company's had no undisbursed loan commitments.

            Commitments  to extend  credit are  agreements to lend to a customer
provided  there is no violation of any  condition  established  in the contract.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require  payment of a fee. Since certain of the commitments are expected
to expire  without  being  drawn  upon,  the  total  commitment  amounts  do not
necessarily   represent  future  cash   requirements.   WebBank  evaluates  each
customer's credit  worthiness on a case-by-case  basis. The amount of collateral
obtained if deemed  necessary  by WebBank  upon  extension of credit is based on
management's credit evaluation of the borrower.

CRITICAL ACCOUNTING ISSUES

ALLOWANCE FOR CREDIT LOSSES

            Management utilizes a comprehensive loan grading system to determine
risk  potential  in  its  loan  portfolio.  Determination  of the  allowance  is
inherently  subjective  as it  requires  significant  estimates,  including  the
amounts and timing of expected  future cash flows on impaired  loans,  estimated
losses on pools of homogeneous  loans based on historical loss  experience,  and
consideration  of current  economic  trends,  all of which may be susceptible to
significant change. The amount of allowance for credit losses assigned to a loan
or group of loans is determined by the category of loan as described below:

            o    The  allowance for credit  losses for  non-impaired  commercial
                 loans  is  calculated  on a loan by loan  basis.  Each  loan is
                 assigned a grade ranging from 1 (excellent) to 7 (substandard).
                 A two  dimensional  matrix is used to  determine  the amount of
                 allowance assigned.

                 One axis of the matrix consists of six risk factors which could
                 contribute to a potential  loss for that loan. The risk factors
                 cover both a) elements related specifically to the loan such as
                 financial condition of the borrower and value of collateral and

                                       22



                 b) elements  related to external  matters such as the condition
                 of the  local  economy  or  industry  trends.  Each of the risk
                 factors is assigned a  percentage  weight  which  reflects  the
                 potential  risk of loss  relative  to  each of the  other  five
                 factors.

                 The  second  axis of the  matrix  consists  of up to five  risk
                 levels.  Each of the risk levels is represented by a percentage
                 figure that equals the portion of the outstanding  loan balance
                 that is expected to be a loss. The risk level  percentage falls
                 within a range of  percentages  assigned to that grade based on
                 historical loss experience.

                 The  allowance  for  credit  losses  for a  particular  loan is
                 calculated  by matching  one of the five risk levels to each of
                 the six risk factors.  The product of the risk level percentage
                 and the risk factor weight is  calculated  for each risk factor
                 and all six are summed to produce the allowance for credit loss
                 percentage used for that loan.

                 The matrix  approach  allows  the  Company  to  quantify,  in a
                 logical  fashion  based  on  both  historical   experience  and
                 currently available information, whether or not a future credit
                 loss is probable and, if so,  approximately  how much that loss
                 will be. This methodology,  in the Company's opinion,  complies
                 with   the   guidelines   of  the  SFAS  5,   "Accounting   for
                 Contingencies"    and   related   accounting   and   regulatory
                 guidelines. The above calculation is performed for non-impaired
                 commercial  loans ranging from grade 1  (excellent)  to grade 7
                 (substandard). For loans graded 8 (doubtful) or 9 (loss), which
                 are considered impaired,  the matrix is not used. The allowance
                 for credit losses for impaired  loans is  calculated  using the
                 guidelines   of  SFAS  114,   "Accounting   for  Creditors  for
                 Impairment of a Loan." A loan is  considered  impaired if it is
                 probable  that the  Company  will not  collect  all amounts due
                 according  to  the  contractual  terms  of  the  original  loan
                 agreement. The preferred methodology for calculating impairment
                 under SFAS 114 is to  calculate  the present  value of expected
                 cash flows  from the loan and  subtract  that from the  current
                 book value of the loan. The difference,  if positive,  requires
                 additional   allowance  for  credit  losses.  If  the  loan  is
                 collateral dependent,  another methodology used is to determine
                 the market value of the collateral,  less selling expenses, and
                 subtract  that from the  current  book  value of the loan.  The
                 difference,  if positive,  requires  additional  allowance  for
                 credit losses.

            o    Prior  to  the  sale  of  the  accounts  receivable   factoring
                 portfolio,  the allowance  for credit  losses for  non-impaired
                 purchased  receivables  was  calculated  on a  pooled  or group
                 basis.  The  allowance  amount  was  based on a  percentage  of
                 outstanding   receivables  which  took  into   consideration  a
                 combination  of historical  loss  experience  and industry loss
                 experience.  The  allowance  for  credit  losses  for  impaired
                 purchased receivables was calculated on a loan by loan basis in
                 accordance with the guidelines of SFAS 114 as described above.

EQUITY SECURITIES AVAILABLE FOR SALE

            The Company,  both directly and through its WebBank subsidiary,  has
investments in equity securities.  Available-for-sale securities are recorded at
fair value. Unrealized holding gains or losses on available-for-sale  securities
are excluded from earnings and reported,  until realized,  in accumulated  other
comprehensive  income (loss) as a separate component of stockholders'  equity. A
decline  in the  market  value  of any  available-for-sale  or  held-to-maturity
security below cost that is deemed "other than temporary" is charged to earnings
resulting  in  the   establishment  of  a  new  cost  basis  for  the  security.
Determination  of whether a decline in market value is other than  temporary may
be  subjective  because  it  requires  significant  estimates  of the  projected
financial condition of the issuer, of the industry in which the issuer operates,
and of local, regional, and national economies.

DEFERRED INCOME TAXES

            The  Company  uses the  liability  method of  accounting  for income
taxes.  Under the  liability  method,  deferred  tax  assets  and  deferred  tax
liabilities  are  recognized  for the future tax  consequences  attributable  to
differences  between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carry  forwards.  Deferred tax assets and deferred tax  liabilities are measured
using  enacted  tax rates  expected  to apply to taxable  income in the years in
which those temporary  differences are expected to be recovered or settled.  The
effect on deferred tax assets and deferred  tax  liabilities  of a change in tax
rates is recognized in income in the period that includes the enactment date.

            From  its  inception  in  1998  through  the  end of  2001,  WebBank
experienced a history of  inconsistent  earnings which made it "more likely than
not" that some  portion or all of its deferred tax assets would not be realized.

                                       23





Therefore,  a valuation  allowance  for deferred tax assets was  established  in
accordance with SFAS 109. As of December 31, 2003, the Company  determined that,
based  on the  two  previous  year's  earnings  and  the  prospect  for  similar
performance in the foreseeable future, it was "more likely than not" that all of
WebBank's deferred tax assets would be realized.  As a result, the amount of the
valuation  allowance  remaining  at  WebBank  at that  time was  reversed  and a
deferred tax asset of $757,000 was recognized.

            As of December 31, 2004, the Company determined that the lack of new
lines of business to replace the accounts receivable  factoring line of business
made it "more  likely  than  not" that the net  operating  loss  portion  of the
deferred tax asset would not be realized.  Therefore,  a valuation allowance was
established to cover the portion of WebBank's deferred tax assets related to its
remaining net operating  loss portion,  leaving a net deferred tax asset balance
of $303,000. The deferred tax asset balance was $361,000 at June 30, 2005.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

            SFAS 123R is a revision  of SFAS 123,  "Accounting  for  Stock-Based
Compensation" and supersedes APB 25, "Accounting for Stock Issued to Employees."
This  Statement  will  require  the  Company to  recognize  the cost of employee
services received in share-based payment transactions based on the fair value of
the shares  awarded.  The  Company  currently  measures  compensation  costs for
stock-based payments as prescribed by APB 25. While APB 25 generally resulted in
recognition  of no  compensation  cost,  SFAS  123R  will  typically  result  in
recognition of compensation  cost. The Company is required to adopt SFAS 123R as
of the beginning of 2006.  The Company does not expect the adoption of SFAS 123R
to have a material  impact on its  financial  condition or results of operations
for the year ended December 31, 2006.

ITEM 3.  CONTROLS AND PROCEDURES

            Disclosure  controls  are  procedures  that  are  designed  with the
objective of ensuring that information required to be disclosed in the Company's
reports under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"), such as this Form 10-QSB, is reported in accordance with the rules of the
Securities  and  Exchange  Commission  ("SEC").  Disclosure  controls  are  also
designed with the objective of ensuring that such information is accumulated and
communicated  to  management,  including the Chief  Executive  Officer and Chief
Financial  Officer as appropriate to allow timely decisions  regarding  required
disclosure.


            In connection with the Company's  evaluation of the effectiveness of
the design and operation of the  Company's  disclosure  controls and  procedures
pursuant to  Securities  Exchange  Act Rules  13a-15(e)  and  15d-15(e)  for the
Company's  2004 Form 10-KSB,  the Company's  independent  auditors  discovered a
material  weakness in internal  controls.  A material  weakness is a significant
deficiency  that  results  in more  than a  remote  likelihood  that a  material
misstatement of the annual or interim financial statements will not be prevented
or detected.  The material weakness  discovered involved a segregation of duties
regarding the general ledger and financial  applications  data processing system
(the "System").  Shortly after the material weakness was discovered, the Company
conducted an  examination,  with the  assistance of another  outside  accounting
firm, of all System maintenance activities for each day of the year 2004 and for
the  year-to-date   2005.  Such   examination   indicated  no  inappropriate  or
unauthorized maintenance activity during the periods reviewed. Subsequent to the
examination, an independent staff member reviews system maintenance records on a
daily basis. During the second quarter of 2005, permanent arrangements were made
to  segregate  the system  administrator  from user  duties.  Based on the above
actions taken to date, the Company  believes that it has taken  sufficient steps
to address this weakness.

            As of the end of the period covered by this Form 10-QSB, the Company
carried out an evaluation  under the  supervision  of the Company's  management,
including the Company's Chief Executive Officer and Chief Financial Officer,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures  pursuant to Securities Exchange Act Rules 13a-15(e) and
15d-15(e).  Based upon that  evaluation,  prior  period  testing and  corrective
actions taken, the Chief Executive  Officer and Chief Financial  Officer believe
that  the  Company's  disclosure  controls  and  procedures  are  effective  and
sufficient  to insure that  information  required to be disclosed in the reports
that the Company files under the Exchange Act is recorded, processed, summarized
and  reported  within  the  time  periods  specified  by  the  SEC's  rules  and
regulations.  Other than the issue  discussed  above,  there were no significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly affect these controls subsequent to the date of their evaluation.

            A control  system,  no matter how well  conceived and operated,  can
provide only  reasonable,  not absolute,  assurance  that the  objectives of the
control  system are met.  Because of the  inherent  limitations  in all  control
systems,  no  evaluation  of controls can provide  absolute  assurance  that all
control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.

                                       24





            Certifications  of the Chief  Executive  Officer and Chief Financial
Officer  regarding,  among other items,  disclosure  controls and procedures are
included as exhibits to this Form 10-QSB.

PART II:  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

            As  discussed  in more  detail in Note 5 of the  Notes to  Condensed
Consolidated  Financial  Statements,  WebBank  was  issued an Order to Cease and
Desist (the "Order") on January 31, 2005 in connection  with alleged  violations
of certain banking  regulations.  WebBank consented to the issuance of the Order
without  admitting  or denying  the alleged  charges.  As a result of the Order,
WebBank is required by the FDIC and the State of Utah  Department  of  Financial
Institutions to complete a number of actions within  specified  periods of time.
For example, WebBank developed and submitted a written three-year strategic plan
within  120  days of the  effective  date of the  Order.  Although  the  Company
believes that WebBank will comply fully with the Order on a timely basis,  it is
possible that unforeseen  circumstances could cause responses to be unacceptable
to the regulators.

ITEM 6.     EXHIBITS

            Exhibits

                  *31.1     Certification of Chief Executive Officer pursuant to
                            Section 302 of The Sarbanes-Oxley Act of 2002.

                  *31.2     Certification of Chief Financial Officer pursuant to
                            Section 302 of The Sarbanes-Oxley Act of 2002.

                  *32.1     Certification of Chief Executive Officer pursuant to
                            Section 906 of The Sarbanes-Oxley Act of 2002.

                  *32.2     Certification of Chief Financial Officer pursuant to
                            Section 906 of The Sarbanes-Oxley Act of 2002.


                                       25





                                   SIGNATURES

            In  accordance  with  the  requirements  of the  Exchange  Act,  the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Date:  August 15, 2005                 WEBFINANCIAL CORPORATION





                                       By: /s/ James R. Henderson
                                       --------------------------
                                       James R. Henderson
                                       President and Chief Executive Officer



                                       By: /s/ Glen M. Kassan
                                       ----------------------
                                       Glen M. Kassan
                                       Vice President and Chief Financial Officer


                                       26

EX-31.1

EXHIBIT 31.1


                                  CERTIFICATION

                            Section 302 Certification

I, James R, Henderson, certify that:


1. I have  reviewed  this  quarterly  report  on  Form  10-QSB  of  WebFinancial
Corporation, a Delaware corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

4. The small business  issuer's other  certifying  officer and I are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and
have:

            (a) Designed such disclosure controls and procedures, or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

            (b)  Evaluated  the  effectiveness  of the small  business  issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

            (c)  Disclosed  in this  report  any  change in the  small  business
            issuer's  internal  control over  financial  reporting that occurred
            during the small  business  issuer's most recent fiscal quarter (the
            small  business  issuer's  fourth  fiscal  quarter in the case of an
            annual report) that has materially affected, or is reasonably likely
            to materially  affect,  the small business issuer's internal control
            over financial reporting; and

5. The small business  issuer's other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the small business  issuer's  auditors and the audit committee of
the small  business  issuer's  board of  directors  (or persons  performing  the
equivalent functions):

            (a) All  significant  deficiencies  and material  weaknesses  in the
            design or operation of internal  control  over  financial  reporting
            which are reasonably  likely to adversely  affect the small business
            issuer's ability to record, process,  summarize and report financial
            information; and

            (b) Any fraud, whether or not material,  that involves management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date: August 15, 2005


                                      By: /s/ James R. Henderson
                                          --------------------------
                                          James R. Henderson
                                          President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

                                  CERTIFICATION

                            Section 302 Certification

I, Glen M. Kassan, certify that:


1. I have  reviewed  this  quarterly  report  on  Form  10-QSB  of  WebFinancial
Corporation, a Delaware corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

4. The small business  issuer's other  certifying  officer and I are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and
have:

            (a) Designed such disclosure controls and procedures, or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

            (b)  Evaluated  the  effectiveness  of the small  business  issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

            (c)  Disclosed  in this  report  any  change in the  small  business
            issuer's  internal  control over  financial  reporting that occurred
            during the small  business  issuer's most recent fiscal quarter (the
            small  business  issuer's  fourth  fiscal  quarter in the case of an
            annual report) that has materially affected, or is reasonably likely
            to materially  affect,  the small business issuer's internal control
            over financial reporting; and

5. The small business  issuer's other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the small business  issuer's  auditors and the audit committee of
the small  business  issuer's  board of  directors  (or persons  performing  the
equivalent functions):

            (a) All  significant  deficiencies  and material  weaknesses  in the
            design or operation of internal  control  over  financial  reporting
            which are reasonably  likely to adversely  affect the small business
            issuer's ability to record, process,  summarize and report financial
            information; and

            (b) Any fraud, whether or not material,  that involves management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date: August 15, 2005


                                   By: /s/ Glen M. Kassan
                                       ----------------------
                                      Glen M. Kassan
                                      Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss.1350)


            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
ss.1350),  the  undersigned,  James R. Henderson,  President and Chief Executive
Officer of WebFinancial  Corporation,  a Delaware  corporation  (the "Company"),
does hereby certify, to his knowledge, that:

            The  Quarterly  Report on Form 10-QSB for the quarter ended June 30,
2005 of the Company (the  "Report")  fully  complies  with the  requirements  of
Section  13(a)  or  15(d)  of the  Securities  Exchange  Act of  1934,  and  the
information  contained in the Report fairly presents,  in all material respects,
the financial condition and results of operations of the Company.



                                        /s/ James R. Henderson
                                        ---------------------------------
                                        James R. Henderson
                                        President and Chief Executive Officer
                                        August 15, 2005

EX-32.2

EXHIBIT 32.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss.1350)


            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
ss.1350),  the undersigned,  Glen M. Kassan,  Vice President and Chief Financial
Officer of WebFinancial  Corporation,  a Delaware  corporation  (the "Company"),
does hereby certify, to his knowledge, that:

            The  Quarterly  Report on Form 10-QSB for the quarter ended June 30,
2005 of the Company (the  "Report")  fully  complies  with the  requirements  of
Section  13(a)  or  15(d)  of the  Securities  Exchange  Act of  1934,  and  the
information  contained in the Report fairly presents,  in all material respects,
the financial condition and results of operations of the Company.


                                        /S/ Glen M. Kassan
                                        ------------------
                                        Glen M. Kassan
                                        Vice President and Chief Financial Officer
                                        August 15, 2005