<PAGE>
FORM 8-K
Securities and Exchange Commission
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 19, 1998
Surety Capital Corporation
------------------------------------------------------
(exact name of registrant as specified in its charter)
Delaware 33-1983 75-2065607
- --------------- ------------------------ --------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1845 Precinct Line Road, Suite 100, Hurst, Texas 76054
-------------------------------------------------------
(address of principal executive offices)
Registrant's telephone number, including area code: (817) 498-2749
Not applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
PAGE
<PAGE>
Item 5. Other Events
On November 19, 1998, each member of the Board of Directors
of the Registrant's wholly owned subsidiary, Surety Bank, National
Association ("Surety Bank"), signed a formal written agreement
with the Office of the Comptroller of the Currency ("OCC") pursu-
ant to which Surety Bank is required to achieve certain capital
levels and adopt and implement certain plans, policies and strate-
gies (the "Formal Agreement"). In particular, Surety Bank is
required to achieve by March 31, 1999 Tier I and Tier II combined
capital at least equal to 12% of risk-weighted assets and Tier I
leverage capital at least equal to 7.5% of adjusted total assets,
and by December 31, 1999 Tier I and Tier II combined capital at
least equal to 14% of risk-weighted assets.
At October 16, 1998, following the consummation of the sale
of Surety Bank's four Lufkin-area branches to Commercial Bank of
Texas, National Association, Surety Bank had Tier I and Tier II
combined capital of 10.6% of risk-weighted assets and Tier I
leverage capital of 6.7% of adjusted total assets. Management
believes that it will be able to achieve the Tier I and Tier II
combined capital levels and the leverage ratio required by
March 31, 1999 and December 31, 1999, respectively, as well as
adopt and implement certain plans, policies and strategies, all as
more fully set forth in the Formal Agreement. However, no assur-
ance can be given that management will be successful in such
efforts.
Additionally, the Formal Agreement prohibits the Board of
Directors from declaring or paying any dividends unless Surety
Bank is in compliance with (1) certain statutory requirements, its
approved capital program, and the Tier I and Tier II capital
levels set forth in the Formal Agreement, and (2) has obtained the
prior written approval of the OCC. As a holding company without
significant assets other than its ownership of Surety Bank, the
Registrant's ability to meet its cash obligations, including its
debt service obligations on its outstanding subordinated debt, is
dependent upon the payment of dividends by Surety Bank.
Although the Registrant believes it has sufficient financing
for its working capital needs, including its debt service obliga-
tions, through the end of its 1999 fiscal year, there can be no
assurance that the Registrant's present capital and financing will
be sufficient to finance future operations. In such event the
Registrant, if it is unable to obtain additional financing from
external sources, could be required to restrict operations.
PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SURETY CAPITAL CORPORATION
DATE: November 30, 1998 /s/ Bobby W. Hackler
--------------------
Bobby W. Hackler
Chairman of the Board
-2-
