U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form 10-QSB




QUARTERLY OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT





|(X) |  | Quarterly Report Pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934 
|--- |  | --------------------------------------------------------------------------------------------
|    |  | for the quarterly period
    endedJune 30, 2004                                             
|    |  |                                                                                             
|( ) |  | Transition Report Pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934
|    |  | for the transition period
    from_______________to _______________                         

Commission File Number 000-50267






GREAT LAKES BANCORP, INC.






DELAWARE
      
      13-4237490(State or other jurisdiction of
      
      (IRS Employerincorporation or organization)
      
      Identification Number)




2421 MAIN STREET, BUFFALO, NEW YORK 14214(Address of principal executive offices)




(716) 961-1900(Issuer's telephone number, including area code)









Check whether the issuer (1) filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]



| |                                                  |  |                                | 
| | ------------------------------------------------ |  | ------------------------------ | 
| | Common Stock - voting, par value $.001 per share |  | 3,952,616 shares               | 
| | (Title of Class)                                 |  | Outstanding at August 13, 2004 | 





GREAT LAKES BANCORP, INC.



INDEX

|Part I.  | FINANCIAL INFORMATION                                                    | PAGE                                                 
|-------- | ------------------------------------------------------------------------ | -----------------------------------------------------
|         |                                                                          |                                                      
|Item 1.  | Financial Statements                                                     |                                                      
|         |                                                                          |                                                      
|         | Consolidated Balance Sheets (Unaudited) -                                |                                                      
|         |                                                                          | at June 30, 2004
    and December 31, 2003           
|         |                                                                          |                                                      
|         | Consolidated Statements of Income (Unaudited) -                          |                                                      
|         |                                                                          | Three and six
    months ended June 30, 2004 and 2003
|         |                                                                          |                                                      
|         | Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - |                                                      
|         |                                                                          | Six months ended
    June 30, 2004 and 2003          
|         |                                                                          |                                                      
|         | Consolidated Statements of Cash Flows (Unaudited) -                      |                                                      
|         |                                                                          | Six months ended
    June 30, 2004 and 2003          
|         |                                                                          |                                                      
|         | Notes
    to Consolidated Financial Statements (Unaudited)               | 7                                                    
|         |                                                                          |                                                      
|Item 2.  | Management's Discussion and Analysis of Financial                        |                                                      
|         | Condition and Results of Operations                                      | 11                                                   
|         |                                                                          |                                                      
|Item 3.  | Quantitative and Qualitative Disclosures About Market Risk               | 18                                                   
|         |                                                                          |                                                      
|Item 4.  | Controls and Procedures                                                  | 18                                                   
|         |                                                                          |                                                      
|         |                                                                          |                                                      
|Part II. | OTHER INFORMATION                                                        |                                                      
|         |                                                                          |                                                      
|Item 1.  | Legal
    Proceedings                                                    | 19                                                   
|         |                                                                          |                                                      
|Item 2.  | Changes in Securities and Use of Proceeds                                | 19                                                   
|         |                                                                          |                                                      
|Item 3.  | Defaults Upon Senior Securities                                          | 19                                                   
|         |                                                                          |                                                      
|Item 4.  | Submission of Matters to a Vote of Security Holders                      | 19                                                   
|         |                                                                          |                                                      
|Item 5.  | Other
    Information                                                    | 19                                                   
|         |                                                                          |                                                      
|Item 6.  | Exhibits and Reports on Form 8-K                                         | 20                                                   
|         |                                                                          |                                                      
|         | Signatures                                                               | 20                                                   

2



GREAT LAKES BANCORP, INC.
Consolidated Balance Sheets (Unaudited)



|                                                                                              | June 30,                                                                                        |                                                                                          | December 31,                                  
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------------------------------
|                                                                                              | 2004                                                                                            |                                                                                          | 2003                                          
|                                                                                              |                                                                                                 |                                                                                          |                                               
|Assets                                                                                        |                                                                                                 |                                                                                          |                                               
|Cash
    and cash equivalents:                                                                |                                                                                                 |                                                                                          |                                               
|                                                                                              | Cash
    and due from banks                                                                     | $                                                                                        | 7,236,434                                     
|                                                                                              | Interest-bearing deposits in other financial institutions                                       | 4,725,836                                                                                |                                               
|                                                                                              |                                                                                                 | Total
    cash and cash equivalents                                                      | 11,962,270                                    
|Securities available for sale, at fair value                                                  | 194,292,758                                                                                     |                                                                                          | 137,232,916                                   
|Securities held to maturity, at amortized cost (fair value of $2,950,000 at
    June 30, 2004 |                                                                                                 |                                                                                          |                                               
|                                                                                              | and
    $1,987,500 at December 31, 2003)                                                        | 3,010,549                                                                                |                                               
|Federal Home Loan Bank stock, at cost                                                         | 2,396,200                                                                                       |                                                                                          | 1,580,800                                     
|Loans, net of allowance for loan losses                                                       | 269,031,400                                                                                     |                                                                                          | 225,951,599                                   
|Premises and equipment, net                                                                   | 9,449,259                                                                                       |                                                                                          | 7,765,696                                     
|Deferred tax asset, net                                                                       | 610,902                                                                                         |                                                                                          | 519,378                                       
|Other
    assets                                                                              | 3,154,440                                                                                       |                                                                                          | 1,888,878                                     
|                                                                                              |                                                                                                 |                                                                                          | Total assets                                  
|                                                                                              |                                                                                                 |                                                                                          |                                               
|Liabilities and Shareholders' Equity                                                          |                                                                                                 |                                                                                          |                                               
|Deposits:                                                                                     |                                                                                                 |                                                                                          |                                               
|                                                                                              | Noninterest-bearing                                                                             | $                                                                                        | 28,128,296                                    
|                                                                                              | Interest-bearing                                                                                | 366,461,704                                                                              |                                               
|                                                                                              |                                                                                                 | Total
    deposits                                                                       | 394,590,000                                   
|Short-term borrowings                                                                         | 243,586                                                                                         |                                                                                          | 1,358,549                                     
|Securities sold under agreement to repurchase                                                 | 50,000,000                                                                                      |                                                                                          | -                                             
|Long-term debt                                                                                | -                                                                                               |                                                                                          | 5,000,000                                     
|Accrued expenses and other liabilities                                                        | 2,080,962                                                                                       |                                                                                          | 1,081,051                                     
|Subordinated debentures                                                                       | 12,372,000                                                                                      |                                                                                          | -                                             
|                                                                                              |                                                                                                 |                                                                                          | Total liabilities                             
|                                                                                              |                                                                                                 |                                                                                          |                                               
|Shareholders' equity:                                                                         |                                                                                                 |                                                                                          |                                               
|                                                                                              | Preferred stock, $0.001 par value, 2,000,000 and 5,000,000 shares
    authorized, none issued   | -                                                                                        |                                               
|                                                                                              | Common stock - voting, $0.001 par value, 16,000,000 and 20,000,000 shares
    authorized,       |                                                                                          |                                               
|                                                                                              |                                                                                                 | 3,932,045 and 1,961,620 shares issued and outstanding, 13,125and 0 shares subscribed for |                                               
|                                                                                              |                                                                                                 | and
    unissued, respectively                                                           | 3,945                                         
|                                                                                              | Class
    B Common stock - non-voting, $0.001 par value, 0 and 5,000,000 shares
    authorized, |                                                                                          |                                               
|                                                                                              |                                                                                                 | 0 and
    115,750 shares issued and outstanding, respectively                            | -                                             
|                                                                                              | Additional paid-in capital                                                                      | 35,359,063                                                                               |                                               
|                                                                                              | Retained earnings (accumulated deficit)                                                         | 1,123,529                                                                                |                                               
|                                                                                              | Accumulated other comprehensive loss, net                                                       | (1,747,182)                                                                              |                                               
|                                                                                              |                                                                                                 | 34,739,355                                                                               |                                               
|                                                                                              | Less:
    Subscriptions receivable, 13,125and 0 shares Common stock - voting, respectively      | (118,125)                                                                                |                                               
|                                                                                              |                                                                                                 |                                                                                          | Total
    shareholders' equity                
|                                                                                              |                                                                                                 |                                                                                          | Total liabilities
    and shareholders' equity

The accompanying notes are an integral part of the consolidated financial
statements.



3



GREAT LAKES BANCORP, INC.
Consolidated Statements of Income (Unaudited)



|                                             | Three months                                     |                                | Six months                                             
|-------------------------------------------- | ------------------------------------------------ | ------------------------------ | -------------------------------------------------------
|                                             | ended June 30,                                   |                                | ended June 30,                                         
|                                             | 2004                                             |                                | 2003                                                   
|Interest income:                             |                                                  |                                |                                                        
|                                             | Loans                                            | $                              | 3,308,356                                              
|                                             | Securities                                       |                                | 1,636,317                                              
|                                             | Interest-bearing deposits and federal funds sold |                                | 33,873                                                 
|                                             |                                                  | Total
    interest income      |                                                        
|                                             |                                                  |                                |                                                        
|Interest expense:                            |                                                  |                                |                                                        
|                                             | Deposits                                         |                                | 1,552,886                                              
|                                             | Short-term borrowings                            |                                | 8,201                                                  
|                                             | Securities sold under agreement to repurchase    |                                | 172,147                                                
|                                             | Long-term debt                                   |                                | 50,834                                                 
|                                             | Subordinated debentures                          |                                | 20,093                                                 
|                                             |                                                  | Total
    interest expense     |                                                        
|                                             |                                                  |                                |                                                        
|                                             |                                                  |                                | Net interest
    income                                
|                                             |                                                  |                                |                                                        
|Provision for loan losses                    |                                                  | 163,212                        |                                                        
|                                             |                                                  |                                |                                                        
|                                             |                                                  |                                | Net interest
    income after provision for loan losses
|                                             |                                                  |                                |                                                        
|Noninterest income:                          |                                                  |                                |                                                        
|                                             | Gain
    (loss) on sale of securities, net       |                                | (14,098)                                               
|                                             | Gain
    on sale of loans                        |                                | -                                                      
|                                             | Loss
    on other real estate owned, net         |                                | -                                                      
|                                             | Other
    operating income                       |                                | 205,808                                                
|                                             |                                                  | Total
    noninterest income   |                                                        
|                                             |                                                  |                                |                                                        
|Noninterest expenses:                        |                                                  |                                |                                                        
|                                             | Salaries and employee benefits                   |                                | 1,164,137                                              
|                                             | Occupancy, equipment and furnishings             |                                | 310,828                                                
|                                             | Data
    processing and operations               |                                | 178,504                                                
|                                             | Advertising                                      |                                | 129,854                                                
|                                             | Printing, postage and supplies                   |                                | 95,023                                                 
|                                             | Professional services                            |                                | 81,234                                                 
|                                             | Other
    operating expenses                     |                                | 234,414                                                
|                                             |                                                  | Total
    noninterest expenses |                                                        
|                                             |                                                  |                                |                                                        
|                                             |                                                  |                                | Income before
    income taxes                         
|                                             |                                                  |                                |                                                        
|Income tax provision                         |                                                  | 383,378                        |                                                        
|                                             |                                                  |                                |                                                        
|                                             |                                                  |                                | Net income                                             
|Net
    income per share - basic and diluted | $                                                | 0.16                           |                                                        
|                                             |                                                  |                                |                                                        
|Weighted average number of common shares     |                                                  |                                |                                                        
|                                             | outstanding - basic and diluted                  |                                | 3,888,991                                              

The accompanying notes are an integral part of the consolidated financial
statements.

4

GREAT LAKES BANCORP, INC.
Consolidated Statements of Shareholders' Equity (Unaudited)
Six months ended June 30, 2004 and 2003



|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            | Retained     |            | Accumulated   |             |               |   |              
|----------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------ | ------- | ---------- | ---------- | ------------ | ---------- | ------------- | ----------- | ------------- | - | -------------
|                                                                                                                  |                                                                                                                        |                                                                         | Class B      |         | Additional |            | earnings     |            | other         |             |               |   | Total        
|                                                                                                                  | Common                                                                                                                 |                                                                         | Common stock |         | paid-in    |            | (accumulated |            | comprehensive |             | Subscriptions |   | shareholders'
|                                                                                                                  | stock - voting                                                                                                         |                                                                         | non-voting   |         | capital    |            | deficit)     |            | income (loss) |             | receivable    |   | equity       
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Balances at December 31, 2002                                                                                     | $                                                                                                                      | 9,808,100                                                               |              | $       | 578,750    |            | $            | 8,237,701  |               | $           | (1,487,356)   |   | $            
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Reorganization - Great Lakes Bancorp, Inc.                                                                        |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  | exchanges all outstanding GBSB shares,
    one-for-one; par value reduced from $5.00
    per share to $0.001 per share |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  | (9,806,138)                                                                                                            |                                                                         | (578,634)    |         | 10,384,772 |            | -            |            | -             |             | -             |   | -            
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Comprehensive income:                                                                                             |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  | Net
    income                                                                                                         | -                                                                       |              | -       |            | -          |              | 576,995    |               | -           |               | - |              
|                                                                                                                  | Other
    comprehensive income, net of tax:                                                                            |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        | Unrealized gains on securities, net of
    reclassification adjustment  |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        | -                                                                       |              | -       |            | -          |              | -          |               | 149,779     |               | - |              
|                                                                                                                  | Total
    comprehensive income                                                                                         |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Balances at June 30, 2003                                                                                         | $                                                                                                                      | 1,962                                                                   |              | $       | 116        |            | $            | 18,622,473 |               | $           | (910,361)     |   | $            
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Balances at December 31, 2003                                                                                     | $                                                                                                                      | 1,962                                                                   |              | $       | 116        |            | $            | 18,622,473 |               | $           | (161,479)     |   | $            
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Issuance of 1,854,675 shares                                                                                      |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  | of
    Common stock - voting                                                                                           | 1,854                                                                   |              | -       |            | 16,690,221 |              | -          |               | -           |               | - |              
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Payment of underwriting costs                                                                                     | -                                                                                                                      |                                                                         | -            |         | (71,743)   |            | -            |            | -             |             | -             |   | (71,743)     
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Issuance of 115,750 shares of Common
    stock in
    exchange for 115,750 shares
    of Class B
    Common stock |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |  
|116                                                                                                               |                                                                                                                        | (116)                                                                   |              | -       |            | -          |              | -          |               | -           |               | -
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Subscriptions receivable for 13,125 shares of
    Common stock - voting                                           |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|13                                                                                                                |                                                                                                                        | -                                                                       |              | 118,112 |            | -          |              | -          |               | (118,125)   |               | -
|                                                                                                                  |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Comprehensive income (loss):                                                                                      |                                                                                                                        |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  | Net
    income                                                                                                         | -                                                                       |              | -       |            | -          |              | 1,285,008  |               | -           |               | - |              
|                                                                                                                  | Other
    comprehensive income, net of tax:                                                                            |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        | Unrealized losses on securities, net of
    reclassification adjustment |              |         |            |            |              |            |               |             |               |   |              
|                                                                                                                  |                                                                                                                        | -                                                                       |              | -       |            | -          |              | -          |               | (1,347,212) |               | - |              
|                                                                                                                  | Total
    comprehensive loss                                                                                           |                                                                         |              |         |            |            |              |            |               |             |               |   |              
|Balances at June 30, 2004                                                                                         | $                                                                                                                      | 3,945                                                                   |              | $       | -          |            | $            | 35,359,063 |               | $           | 1,123,529     |   | $            



The accompanying notes are an integral part of the consolidated financial
statements.

5

GREAT LAKES BANCORP, INC.
Consolidated Statements of Cash Flows (Unaudited)

|                                                     | Six months ended June 30,                                                                  
|---------------------------------------------------- | -------------------------------------------------------------------------------------------
|                                                     | 2004                                                                                       
|Cash
    flows from operating activities:            |                                                                                            
|                                                     | Net
    income                                                                             
|                                                     | Adjustments to reconcile net income to net cash                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|Cash
    flows from investing activities:            |                                                                                            
|                                                     | Purchases of securities available for sale                                                 
|                                                     | Purchases of securities to be held to maturity                                             
|                                                     | Proceeds from sales of securities available for sale                                       
|                                                     | Proceeds from principal payments, maturities and calls on securities
    available for sale
|                                                     | Purchase of Federal Home Loan Bank stock                                                   
|                                                     | Net
    increase in loans receivable                                                       
|                                                     | Purchase of premises and equipment                                                         
|                                                     |                                                                                            
|Cash
    flows from financing activities:            |                                                                                            
|                                                     | Net
    increase in deposits                                                               
|                                                     | Net
    decrease in short-term borrowings                                                  
|                                                     | Proceeds from securities sold under agreement to repurchase                                
|                                                     | Proceeds from issuance of subordinated debentures, net of costs                            
|                                                     | Repayment of long-term debt                                                                
|                                                     | Proceeds from stock offering                                                               
|                                                     | Payment of stock offering costs                                                            
|                                                     |                                                                                            
|                                                     |                                                                                            
|Cash
    and cash equivalents at beginning of period | $                                                                                          
|Cash
    and cash equivalents at end of period       | $                                                                                          
|Supplemental disclosure of cash flow information:    |                                                                                            
|                                                     | Cash paid for interest                                                                     
|                                                     | Cash paid for income taxes                                                                 

The accompanying notes are an integral part of the consolidated financial
statements.

6

GREAT LAKES BANCORP, INC.
Notes to Consolidated Financial Statements (Unaudited)

(1.)     BASIS OF PRESENTATIONThe accompanying unaudited consolidated financial statements
include the accounts of Great Lakes Bancorp, Inc. (the "Company") and its wholly
owned subsidiary, Greater Buffalo Savings Bank (the "Bank"), after elimination
of all material intercompany accounts and transactions. These consolidated
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim consolidated financial
information and with the instructions for Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete consolidated
financial statements. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, considered
necessary for a fair presentation have been included.

Operating results for the three and six-month periods ended
June 30, 2004 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2004. Certain amounts in the consolidated
financial statements for the three and six-month periods ended June 30, 2003
have been reclassified to conform to the consolidated financial statement
presentation for the three and six-month periods ended June 30, 2004.The organization and business, accounting policies followed
by the Company and other information are contained in the notes to the
consolidated financial statements filed as part of the Company's 2003 annual
report on Form 10-KSB. This quarterly report should be read in conjunction with
such annual report.



Recent Accounting Pronouncements

On January 17, 2003, the Financial Accounting Standards Board
("FASB") issued FASB Interpretation No. 46, "Consolidation of Variable Interest
Entities" ("FIN 46"), which addresses consolidation by business enterprises of
variable interest entities. FIN 46 clarifies the application of Accounting
Research Bulletin ("ARB") No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after December 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company formed a statutory business trust
subsequent to January 31, 2003, for the sole purpose of issuing trust preferred
securities as further described in Note 6 to the accompanying consolidated
financial statements. FIN 46 was revised and reissued in December 2003 ("FIN
46R").



(2.)    EARNINGS PER SHARE



In accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share", the Company is required to report basic
and diluted earnings per share. Basic and diluted earnings per common share are
based upon the weighted average number of common shares outstanding during the
periods presented. As of June 30, 2004 and 2003, all outstanding stock options
have not been considered common stock equivalents because their assumed exercise
would be anti-dilutive due to the stock option price being equal to or greater
than the fair value of the Company stock.

7





(3.)    SECURITIES

Our investment policy is designed to ensure liquidity for
cash flow requirements, to help manage interest rate risk, to manage asset
quality diversification and to maximize yield. Ongoing review of the performance
of the investment portfolio, market values, market conditions, current economic
conditions, liquidity needs and other matters related to investing activities is
performed by the Asset Liability Committee of the bank and reviewed by the
Bank's board of directors. At the date of purchase, we are required to classify
debt and equity securities into one of three categories: held to maturity,
trading or available for sale. At each reporting date, the appropriateness of
this classification is reassessed.

The amortized cost and approximate fair value of securities at June 30, 2004
and December 31, 2003 are summarized as follows:

|                                          | June 30, 2004                 
|----------------------------------------- | ------------------------------
|                                          | Amortized                     
|                                          | cost                          
|Securities available for sale:            |                               
|                                          |                               
|U.S.
    government and federal agencies: |                               
|                                          | Due
    within one year       
|                                          | Due
    after ten years       
|Mortgage-backed securities                |                               
|Corporate:                                |                               
|                                          | Due
    within one year       
|                                          | Due
    from one to five years
|                                          |                               
|                                          |                               
|Securities to be held to maturity:        |                               
|                                          |                               
|Other
    debt securities:                |                               
|                                          | Due
    after ten years       
|                                          |                               

|                                          | December 31, 2003             
|----------------------------------------- | ------------------------------
|                                          | Amortized                     
|                                          | cost                          
|Securities available for sale:            |                               
|                                          |                               
|U.S.
    government and federal agencies: |                               
|                                          | Due
    within one year       
|                                          | Due
    after ten years       
|Mortgage-backed securities                |                               
|Corporate:                                |                               
|                                          | Due
    within one year       
|                                          | Due
    from one to five years
|                                          | Due
    from five to ten years
|                                          |                               
|                                          |                               
|Securities to be held to maturity:        |                               
|                                          |                               
|Other
    debt securities:                |                               
|                                          | Due
    after ten years       
|                                          |                               

8



(4.)    SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE

In May 2004, the Company

|Repurchase                                                                     |   |            |            |       |       | 
|------------------------------------------------------------------------------ | - | ---------- | ---------- | ----- | ----- | 
|Date                                                                           |   | Amount     |            | Rate  |      
|                                                                               |   |            |            |       |       | 
|                                                                               |   |            |            |       |       | 
|August 9, 2004                                                                 |   | $          | 10,000,000 |       | 1.43% | 
|May 11, 2005                                                                   |   |            | 5,500,000  |       | 2.02% | 
|May 11, 2005                                                                   |   |            | 9,500,000  |       | 2.12% | 
|May 11, 2006                                                                   |   |            | 9,480,000  |       | 3.02% | 
|May 11, 2006                                                                   |   |            | 15,520,000 |       | 3.05% | 
|Total
    securities sold under agreements to repurchase/weighted average rate | $ | 50,000,000 |            | 2.43% |      

Securities sold under agreement to repurchase are secured by
investment securities. The carrying value of the securities at June 30, 2004 was
$49.5 million.

(5.)     LONG-TERM DEBT



In June 2004, the Company utilized a portion of the proceeds
from the issuance of trust preferred securities (see Note 6) to retire a $5.0
million note payable to Fifth Third Bank. Interest expense on the note totaled
$50.8 thousand and $101.8 thousand for the three and six-month periods ended
June 30, 2004, respectively.

(6.)     SUBORDINATED DEBENTURES

In June 2004, the Company formed Great Lakes Bancorp
Statutory Trust I (the "Trust") for the sole purpose of issuing trust preferred
securities. The Company accounts for the Trust in accordance with FASB
Interpretation No. 46R, "Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51" and, as such, the Trust is not consolidated. The
Company's $372.0 thousand investment in the common equity of the Trust is
included in the consolidated balance sheets as other assets and $12.372 million
of subordinated debentures. Interest expense paid to the Trust is included in
the consolidated statements of income as expense. The Company incurred costs
relating to the issuance of the debentures totaling $130,000. These costs will
be deferred and amortized to interest expense using the straight-line method
over a twenty-five year period. Interest expense on the debentures was $20.1
thousand for the three and six months ended June 30, 2004.



On June 17, 2004, the Company, through the Trust, issued
12,000 floating rate pooled trust preferred securities with a liquidation
preference of $1,000 per security. The trust preferred securities represent an
interest in the related junior subordinated debentures of the Company, which
were purchased by the Trust and have substantially the same payment terms as
these trust preferred securities. The junior subordinated debentures are the
only assets of the Trust and interest payments from the debentures finance the
distributions paid on the trust preferred securities. Distributions on the
debentures are payable quarterly at a variable interest rate, reset quarterly,
equal to 3-month LIBOR plus 2.70% (4.1275% at June 30, 2004) and are included in
interest expense in the consolidated statements of income.



The trust preferred securities are subject to mandatory
redemption at the liquidation preference, in whole or in part, upon repayment of
the junior subordinated debentures at maturity or their earlier redemption. The
junior subordinated debentures are redeemable prior to the maturity date of June
17, 2034, at the option of the Company on or after June 17, 2009, in whole at
any time or in part from time to time. The junior subordinated debentures are
also redeemable at any time, in whole, but not in part, upon the occurrence of
specific events defined within the trust indenture. The

9



Company has the option to defer distributions on the junior
subordinated debentures from time to time for a period not to exceed 20
consecutive quarters.



A portion of the proceeds from the issuance of the trust
preferred securities were used by the Company to retire a note payable (see Note
5). The remaining proceeds were used to increase the capital of the Bank and for
general corporate purposes.



(7.)     STOCK OPTIONS



The Company maintains a stock benefit plan under which fixed
award stock options may be granted to employees, officers and directors.
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation, encourages all entities to adopt a fair value
based method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the award
and is recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, whereby compensation cost is the excess, if any, of the
quoted market price of the stock at the grant date (or other measurement date)
over the amount an employee must pay to acquire the stock. Stock options issued
under the Company's stock option plan have no intrinsic value at the grant date,
and under Opinion No. 25 no compensation cost is recognized for them.



Had the Company determined compensation expense related to
stock option grants based on the fair value method under SFAS No. 123, the
Company's net income would have been reduced to the pro forma amounts indicated
below. These amounts may not be representative of the effects on reported net
income for future years due to changes in market conditions and the number of
options outstanding:



|                                            | Three months ended |                                                    | Six months ended
|------------------------------------------- | ------------------ | -------------------------------------------------- | ----------------
|                                            | June 30,           |                                                    | June 30,        
|                                            | 2004               |                                                    | 2003            
|                                            |                    |                                                    |                 
|Net
    income:                             |                    |                                                    |                 
|                                            | As
    reported    | $                                                  | 625,511         
|                                            |                    | Total stock-based
    employee compensation        |                 
|                                            |                    | expense
    determined under the fair value method |                 
|                                            |                    | for all awards,
    net of related tax effects     |                 
|                                            | Proforma           | $                                                  | 611,412         
|                                            |                    |                                                    |                 
|Basic
    and diluted net income per share: |                    |                                                    |                 
|                                            | As
    reported    | $                                                  | 0.16            
|                                            | Proforma           | $                                                  | 0.16            



(8.)    SHAREHOLDERS' EQUITY

In March 2004, the Company completed a sale of common stock
to its existing shareholders of record as of January 14, 2004. A total of
1,814,291 shares of $.001 par value common stock were sold at $9.00 per share,
providing $16.3 million in additional capital, net of $71.5 thousand for stock
offering costs. In April 2004, the Company issued 115,750 shares of Common
stock, in exchange for 115,750 shares of Class B Common stock, to the sole
shareholder of the Class B Common Stock. This transaction had no effect on the
number of authorized shares of either class of stock. Subsequent to these two
capital transactions, there were 3,891,661 shares of Common stock issued and
outstanding and no shares of Class B Common stock issued or outstanding.



10



Amendment to Certificate of Incorporation

At the annual meeting of shareholders held in June 2004,
Great Lakes Bancorp, Inc. shareholders voted to adopt an amendment to the
certificate of incorporation of the Company. This amendment reduced the
Company's authorized capital stock from a total of 30,000,000 shares to a total
of 18,000,000 shares by reducing the authorized number of shares of our common
stock from 20,000,000 shares to 16,000,000 shares, the authorized number of
shares of our preferred stock from 5,000,000 shares to 2,000,000 shares and by
eliminating the 5,000,000 authorized shares of our Class B common stock.



The reduction in the number of shares of stock the Company is
authorized to issue is solely for the purpose of reducing the amount of
franchise taxes paid in Delaware, which is calculated based upon a number of
factors, most pertinent being the total number of authorized shares and our
total gross assets at year end.



Employee Stock Purchase Plan

In June 2004, the Company's Board of Directors approved the
adoption of an employee stock purchase plan. The plan was established to allow
the Company to offer shares to its employees and directors when shares are
offered to its existing shareholders, however, the board may elect not to make
the shares available, regardless of any stock offering made or scheduled to be
made to existing shareholders. As of June 30, 2004, a total of 53,509 shares of
$.001 par value common stock were sold on a subscription basis at $9.00 per
share. The Company received $363.5 thousand from the sale of shares. An
additional $118.1 thousand from the sale of 13,125 shares was recorded as
subscriptions receivable at June 30, 2004.





Item 2. - Management's Discussion and Analysis of Financial
Condition and Results of Operations



Forward-Looking Statements

When used or incorporated by reference, the words
"anticipate", "estimate", "expect", "believes", "project", "target", "goal", and
other similar expressions are intended to identify forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933. Such
forward-looking statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, expected or projected. Readers are
cautioned not to place undue reliance on these forward-looking statements, as
they reflect management's analysis only as of the date of this report. The
Company expressly disclaims any obligation or undertaking to publicly release
any updates or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectation with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.

Critical Accounting Policies

Our management is required to evaluate and disclose those
accounting policies that are judged to be critical, which are those most
important to the portrayal of our financial condition and results of operations,
and that require management's most subjective and complex judgments. Our
management considers the accounting policies relating to the provision for loan
losses and related allowance for loan losses and the determination of the
deferred tax asset to be critical accounting policies.



Discussion of Financial Condition Changes from December 31,
2003 to June 30, 2004



Total assets increased $107.8 million during the first six
months of 2004 to $493.9 million, due to increases of $43.0 million in loans
receivable and $58.1 million in securities available for sale and held to
maturity. Growth in total assets was funded by $33.9 million in new deposit
accounts, $50.0 million from securities sold under agreement to repurchase,
$12.0 million (net of the Company's investment in the subsidiary) from
subordinated debentures related to the issuance of trust preferred securities,
and net proceeds of $16.3 million from a stock offering to shareholders of
record as of January 14, 2004.

11





Cash and Cash Equivalents. Non-interest-bearing cash
and due from banks increased from $5.2 million at December 31, 2003 to $7.2
million at June 30, 2004. Interest-bearing deposits in other financial
institutions increased from $4.0 million at December 31, 2003 to $4.7 million at
June 30, 2004. The average yield earned on these deposits was 1.19% over the
six-month periods ended June 30, 2004 and 2003. Daily cash levels may show
significant fluctuations due to a variety of operating factors. Most
significantly, the timing of deposit inflows, normal inflows and outflows in
transaction accounts, short-term borrowings, loan closings and securities
purchases may cause short-term swings in cash balances, however management
attempts to invest all excess cash in longer lived assets as quickly as
possible.



Securities. Securities classified as available for
sale are investments that may be sold in response to changing market and
interest rate conditions or for other business purposes. Activity in this
portfolio is undertaken primarily to manage liquidity and interest rate risk and
to take advantage of market conditions that create economically more attractive
returns. Purchases and sales of available for sale securities totaled $95.9
million and $17.5 million, respectively during the first six months of 2004. The
portfolio increased by $57.1 million from the $137.2 million at December 31,
2003 to $194.3 million at June 30, 2004. The average yield on the securities
available for sale portfolio decreased slightly from 4.24% at December 31, 2003
to 4.22% at June 30, 2004, while the average estimated life, adjusted for
historical prepayment patterns on mortgage-backed securities, also decreased
from 4.9 years to 2.7 years during this same period. The available for sale
portfolio had net unrealized losses of $2.9 million at June 30, 2004, compared
to net unrealized losses of $655.2 thousand at December 31, 2003.



Securities classified as held to maturity are carried at
amortized cost when the Company has the positive intent and ability to hold such
securities to maturity. Purchases of held to maturity securities totaled $1.0
million during the first six months of 2004. There were no sales during this
period. The portfolio increased from $2.0 million to $3.0 million while the
average yield earned increased from 3.02% to 3.49% during this same period. The
average estimated life of the held to maturity securities portfolio was and 29.1
years at June 30, 2004 (29.5 years at December 31, 2003).



Loans. The loan portfolio inherently includes
interest rate and credit risk. The Bank attempts to control such risks through
analysis of credit applications and portfolio diversification. During the first
six months of 2004, total net loans receivable increased $43.0 million from
$226.0 million to $269.0 million. The portfolio consists of 71.6% residential
mortgages, 15.0% commercial loans and 13.4% consumer loans, with a weighted
average interest rate of 5.47%



Allowance for Loan Losses. The allowance for loan
losses is established through a provision for loan losses charged to earnings.
Loan losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed. Recoveries on loans previously
charged off are credited directly to the allowance for loan losses. The
allowance is an amount that our management believes is adequate to absorb
probable losses on existing loans.

Our loan loss methodology consists of several key components,
including a review of the two elements of the Bank's loan portfolio, performing
loans and classified loans. Performing loans are reviewed based upon the premise
that there are losses inherent within the loan portfolio that have been incurred
as of the balance sheet date, however, have not yet been identified. We utilize
a formula to determine our allowance relating to performing loans, reserving
various percentages for each loan category. In deriving these expected loss
percentages, our management considered the following criteria: the historical
loss experience of each loan category; an assessment of portfolio trends and
conditions; the level and composition of new loan activity; specific industry
conditions; and specific risk factors impacting the portfolios, such as the
interest rate environment and the current condition and recent history of the
overall local real estate market.

Classified loans are designated as substandard, doubtful or
loss. We consider a loan to be substandard if it is inadequately protected by
the current net worth and paying capacity of the borrower or of the collateral
pledged, if any. Substandard assets include those characterized by the distinct
possibility that Greater Buffalo Savings Bank will sustain some loss if the
deficiencies are not corrected. Loans classified as doubtful have all of the
weaknesses inherent in those classified substandard, with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions, and values, highly
questionable and improbable. Loans classified as loss are those considered
uncollectible and of such little value that their continuance as assets without
the

12



establishment of a specific loss reserve is not warranted.
When Greater Buffalo Savings Bank classifies problem loans as either substandard
or doubtful, it establishes allowances for loan losses in amounts deemed prudent
by management, generally at an additional 20% and 50%, respectively.

Additionally, the Bank's allowance for loan losses consists
of an unallocated component. This component addresses the margin of imprecision
in the underlying assumptions used in the methodologies for estimating losses in
the performing and classified elements of the loan portfolio.

The allowance for loan losses at June 30, 2004 of $1.9
million equaled .71% of total loans outstanding and 415.68% of non-performing
loans. The allowance for loan losses at December 31, 2003 of $1.8 million
equaled .81% of total loans outstanding and 539.82% of non-performing loans. The
decrease in the allowance for loan losses as a percentage of total loans is
attributable to the removal of a commercial loan from the substandard
classification and a change in our Bank's reserve methodology during the first
quarter of 2004. Approximately $100 thousand had been specifically reserved for
the loan of $498.3 thousand, which management removed from the classified loan
listing after a year of positive performance. In addition, the Bank lowered the
allocated loss percentages on its residential mortgage portfolio from .50% to
..40% and from 1.00% to .75% on its home equity products (loans and lines). The
impact of the decrease in the expected loss percentages was approximately $200
thousand. We believe that our allowance for loan losses is sufficient to cover
probable loan losses. Loans charged-off during the first six months of
2004 totaled



The following table summarizes activity in the allowance for
loan losses and other related data:

|                                                 | Six months ended June 30, |                  
|------------------------------------------------ | ------------------------- | -----------------
|                                                 | 2004                      |                  
|Average loans outstanding                        | $                         | 247,429,400      
|Loans
    outstanding at end of period           | 267,026,371               |                  
|Allowance for loan losses at beginning of period | 1,807,000                 |                  
|Charge-offs:                                     |                           |                  
|                                                 | Residential mortgage      | -                
|                                                 | Commercial loans          | -                
|                                                 | Consumer loans            | (498)            
|                                                 |                           | Total charge-offs
|Recoveries:                                      |                           |                  
|                                                 | Consumer loans            | 1,716            
|Net
    (charge-offs) recoveries                 | 1,218                     |                  
|Additions (subtractions) charged to operations   | 93,782                    |                  
|Allowance for loan losses at end of period       | $                         | 1,902,000        



Deposits. Deposits, which include non-interest
bearing demand deposits and interest-bearing savings and time deposits, are the
Bank's primary source of funding. Greater Buffalo Savings Bank seeks deposits
within the market area by paying competitive interest rates, offering high
quality customer service and using technology to deliver deposit services
effectively. We offer a variety of products designed to attract and retain
customers, with the primary focus on building and expanding relationships.
Deposits at June 30, 2004 totaled $394.6 million, a 9.4% increase over the
December 31, 2003 balance of $360.6 million. Our cost of funding deposits
decreased from 1.90% to 1.80% over this six-month period. As our Bank is less
than five years old, each of our existing seven branches is still relatively
new. We expect that branch deposit growth will begin to stabilize after several
years as these branches mature. In addition to ongoing, aggressive marketing, we
anticipate having one or more branches opened by the end of 2004 and anticipate
no decline in our overall rate of deposit growth.

Certificates of deposit were 32.4% and 23.4% of total
deposits at June 30, 2004 and December 31, 2003 respectively, with corresponding
costs to the Bank of 2.45% and 2.23%. Certificates of deposit increased $43.4

13



Certificate of Deposit
Account Registry Service®, or CDARS®. Through
participation in this program, the Bank can provide its customers with up to $5
million in Federal deposit insurance coverage. There were $4.1 million of
deposits issued through the CDARS® program at June 30, 2004 (zero at
December 31, 2003).



Short-term Borrowings. At June 30, 2004, short-term
borrowings consisted of $243.6 thousand of Treasury Tax and Loan deposits
through the Bank's Federal Reserve Bank account. At December 31, 2003,
short-term borrowings consisted of one three-day loan due the Federal Home Loan
Bank totaling $1.3 million and $107.5 thousand of Treasury Tax and Loan deposits
through the Bank's Federal Reserve Bank account. Short-term borrowings from the
Federal Home Loan Bank may occasionally be used to offset fluctuations in
deposit inflows and outflows and to manage liquidity needs at competitive rates.
Federal Home Loan Bank rates are presently well below the Bank's cost of funds
and are collateralized by certain qualifying securities. Treasury Tax and Loan
deposits can fluctuate daily and are generally short-term in nature.



Securities Sold Under Agreement to Repurchase. Total
securities sold under agreement to repurchase were $50.0 million at June 30,
2004 (none at December 31, 2003). The Bank borrowed $50.0 million, in increments
having various maturities of no longer than two years, and invested the proceeds
in mortgage-backed securities to take advantage of the spread between short and
long-term interest rates. These borrowings are secured by
specific investment securities of the Bank.

Long-term Debt. In June 2004, the Companyutilized a portion of the proceeds from the issuance of
trust preferred securities to retire a $5.0 million note payable to Fifth Third
Bank. Interest expense on the note totaled $50.8 thousand and $101.8 thousand
for the three and six-month periods ended June 30, 2004, respectively.



Deferred Tax Asset. The deferred tax asset at June
30, 2004 was $610.9 thousand compared to a deferred tax asset of $519.4 thousand
at December 31, 2003. The increase resulted primarily from a change in the
unrealized loss on securities available for sale from $655.2 thousand at
December 31, 2003 to $2.9 million at June 30, 2004, combined with a reduction of
the net operating loss carryforward of $778.3 thousand attributed to the current
year's earnings (see Provision for Income Taxes). Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amount of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized, in income, in the period that includes the
enactment date. Our bank has been profitable since February 2002 and our
management believes, but can offer no assurances, this trend will continue. We
have met or exceeded all growth projections defined in our original and
subsequent business plans. As such, no reserve has been established against this
asset.



Subordinated Debentures.

Shareholders' Equity. Total shareholders' equity
increased from $18.1 million to $34.6 million during the first six months of
2004. This increase resulted primarily from proceeds of a stock offering to all
shareholders of record as of January 14, 2004, which was completed in April
2004. A total of 1,814,291 shares of $.001 par value common stock were sold at
$9.00 per share, providing $16.3 million in additional capital, net of $71.5
thousand for stock offering costs.



In April 2004 the Company issued 115,750 shares of Common
stock, in exchange for 115,750 shares of Class B Common stock, to the sole
shareholder of the Class B Common Stock. Subsequent to the exchange, 3,891,661
shares of Common stock were issued and outstanding and no shares of Class B
Common stock were issued or outstanding. This transaction had no effect on the
number of authorized shares of either class of stock.

14





In June 2004, the Company's Board of Directors approved the
adoption of an employee stock purchase plan. The plan was established to allow
the Company to offer shares to its employees and directors when shares are
offered to its existing shareholders, however the board may elect not to make
the shares available, regardless of any stock offering made or scheduled to be
made to existing shareholders. As of June 30, 2004, a total of 53,509 shares of
$.001 par value common stock were sold on a subscription basis at $9.00 per
share. The Company received $363.5 thousand from the sale of shares. An
additional $118.1 thousand from the sale of 13,125 shares was recorded as
subscriptions receivable at June 30, 2004.



Discussion of Results of Operations for the Three and Six
Months Ended June 30, 2004 and 2003



General. Our results of operations depend primarily
on net interest income. Net interest income is the difference between the
interest income we earn on our interest-earning assets, primarily mortgage
loans, mortgage-backed securities and investment securities, and the interest we
pay on our interest-bearing liabilities, primarily time deposits, savings
deposits and borrowed funds. Our results of operations are also affected by our
provision for loan losses, non-interest income, and non-interest expense.
Non-interest expense consists primarily of salaries and employee benefits,
occupancy expenses and other general and administrative expenses. Non-interest
income consists mainly of service charges and fees and realized gains on
securities available for sale.



Our results of operations may also be affected significantly
by general and local economic and competitive conditions, particularly those
with respect to changes in the level of market interest rates, government
policies and actions of regulatory authorities. Future changes in applicable
law, regulations or government policies may materially impact us. Additionally,
our primary lending activity is concentrated in loans secured by real estate
mainly located in Western New York. Accordingly, our results of operations may
be affected by local market and economic conditions.



Net Income. Net income for the six months ended June
30, 2004 was $1.3 million, compared to $577.0 thousand for the six months ended
June 30, 2003. Total interest and noninterest income increased 50.0% from $6.8
million during the six months ended June 30, 2003 to $10.2 million during the
six months ended June 30, 2004. Interest expense, noninterest expense and the
provision for loan losses increased 39.7% from $5.8 million to $8.1 million
during the same periods as the Bank continues to benefit from the operating
efficiencies related to its growth.



Net income for the three months ended June 30, 2004was $625.5thousand, compared to $442.1thousand
for the three months ended June 30, 2003. Total interest and noninterest income
increased 40.5% from $3.7 million during the three months ended June 30, 2003 to
$5.2 million during the three months ended June 30, 2004. Interest expense,
noninterest expense and the provision for loan losses increased 40.0% from $3.0
million to $4.2 million during the same periods.



Interest Income. For the six months ended June 30,
2004, total interest income increased by $3.5 million or 57.4% to $9.6 million
compared to $6.1 million for the six months ended June 30, 2003. Similarly, for
the three months ended June 30, 2004, total interest income increased by $1.8
million or 56.3% to $5.0 million compared to $3.2 million for the three months
ended June 30, 2003. These increases resulted primarily from a $162.8 million,
or 67.1% increase in average interest-earning assets to $405.6



The significant increases in average interest-earning assets
were primarily due to rapid loan growth, which were funded by the deposit growth
referred to above. The decrease in the yield on average interest-earning assets
from period to period resulted primarily from a decrease in the yield on the
Bank's loans receivable, partially offset by an increase in the yield on
securities available for sale. The yields earned on interest-earning assets
generally declined throughout these periods as the Federal Reserve Bank
continued to maintain the historically low interest rate environment that now
exists.



Interest income on loans receivable increased by $1.7 million
to $6.4 million for the six months ended June 30, 2004 compared to $4.7 million
during the same period last year. This increase resulted primarily from a $84.4
million increase in average loans outstanding to $247.4 million for the six
months ended June 30, 2004 from $163.0 million

15



for the same period last year. The yield on average loans
decreased to 5.24% during the six months ended June 30, 2004 from 6.12% for the
comparable period last year.



Interest income on loans receivable increased by $831.1
thousand to $3.3 million for the three months ended June 30, 2004 compared to
$2.5 million during the same period last year. This increase resulted primarily
from a $84.2 million increase in average loans outstanding to $257.5 million for
the three months ended June 30, 2004 from $173.3 million for the same period
last year. The yield on average loans decreased to 5.17% during the three months
ended June 30, 2004 from 6.03% for the comparable period last year.



Interest income on securities increased $1.8 million, or
138.5% to $3.1 million for the six months ended June 30, 2004 from $1.3 million
for the six months ended June 30, 2003. This increase resulted primarily from a
$82.2 million increase in average securities to $150.2 million during the six
months ended June 30, 2004 from $68.0 million for the same period last year. The
yield on average investments increased to 4.17% during the six months ended June
30, 2004 compared to 4.14% during the six months ended June 30, 2003.



Interest income on securities increased $948.1 thousand, or
137.8% to $1.6 million for the three months ended June 30, 2004 from $688.2
thousand for the three months ended June 30, 2003. This increase resulted
primarily from a $83.0 million increase in average securities to $160.8 million
during the three months ended June 30, 2004 from $77.8 million for the same
period last year. The yield on average investments increased to 4.09% during the
three months ended June 30, 2004 compared to 4.02% during the three months ended
June 30, 2003.



Interest income on interest-bearing deposits decreased $33.8
thousand, or 41.7% to $47.3 thousand for the six months ended June 30, 2004 from
$81.1 thousand for the six months ended June 30, 2003. These decreases resulted
primarily from a $4.7 million decrease in average interest-bearing deposits to
$6.0 million during the six months ended June 30, 2004 from $10.7 million for
the same period last year. The yield on average interest-bearing deposits
remained constant at 1.19% for the six months ended June 30, 2003 and 2004.
Interest income on interest-bearing deposits decreased $4.4 thousand, or 11.5%
to $33.9 thousand for the three months ended June 30, 2004 from $38.3 thousand
for the three months ended June 30, 2003.



Interest Expense. Total interest expense increased
$661.8 thousand, or 22.3% to $3.6 million for the six months ended June 30, 2004
compared to $3.0 million for the six months ended June 30, 2003. Interest
expense increased $204.5 thousand, or 12.8% to $1.8 million for the three months
ended June 30, 2004 compared to $1.6 million for the three months ended June 30,
2003.



Interest expense from deposits increased $370.8 thousand, or
12.5% to $3.3 million for the six months ended June 30, 2004 from $3.0 million
for the six months ended June 30, 2003. The average balance of customer
deposits, the most significant portion of interest-bearing liabilities,
increased by $135.7 million, or 58.1% to $369.2 million for the six months ended
June 30, 2004 from $233.5 million for the comparable period last year. However,
the average cost of funds (customer deposits) decreased to 1.80% for the six
months ended June 30, 2004 from 2.56% for the six months ended June 30, 2003.
The decrease in the cost of funds during this period was primarily attributable
to the Bank's downward adjustment of passbook savings account rates during the
second quarter. The weighted average yield of these deposits, which represent
over 50% of the Bank's total deposits, decreased 46 basis points from 2.0% at
December 31, 2003 to 1.54% at June 30, 2004. Management prices its deposit
liabilities based on various factors, such as the interest rate environment,
market conditions and local competition. Interest expense from deposits for the
three months ended June 30, 2004 and 2003 was $1.6 million, while the average
balance of customer deposits increased by $117.1 million, or 46.1% to $371.1
million at June 30, 2004 from $254.0 million for the comparable period last
year. This was a result of a decrease in the average cost of funds (customer
deposits), for the reason explained above, from 2.52% for the three months ended
June 30, 2003 to 1.67% for the three months ended June 30, 2004.



Interest expense from securities sold under agreements to
repurchase and from subordinated debentures was $172.1 thousand and $20.1
thousand for the three and six months ended June 30, 2004, respectively.
Interest expense from long-term debt was $50.8 thousand and $101.8 thousand for
the three and six months ended June 30, 2004, respectively. There was no
interest expense incurred from these items for the three and six months ended
June 30, 2003.

16





Net Interest Income. Net interest income is the
difference between interest and fees earned on assets and the interest paid on
deposits and borrowings. Net interest income is one of the major determining
factors in the Bank's performance as it is the principal source of revenue and
earnings. For the six month period ended June 30, 2004, net interest income
increased $2.9 million, or 93.5% to $6.0 million compared to $3.1 million for
the six months ended June 30, 2003, primarily as a result of increases in the
volume of interest-earning assets. For the three-month period ended June 30,
2004, net interest income increased $1.6 million, or 100.0% to $3.2 million
compared to $1.6 million for the three months ended June 30, 2003.



Provision for Loan Losses. The provision for loan
losses was $93.8



Provisions for losses in the portfolio are charged to
earnings in an amount sufficient, in management's judgment, to cover probable
losses based upon the overall risk in the Bank's loan portfolio, current
economic conditions and historical trends. Loans totaling $689.2 thousand are
classified as substandard at June 30, 2004 compared to $1.3 million at December
31, 2003. See Allowance for Loan Losses for further discussion of
the Bank's policies and accounting treatment relating to loan losses.

Noninterest Income. Noninterest income decreased
$115.0 thousand to $554.7 thousand for the six-month period ended June 30, 2004
compared to $669.7 thousand for the same period last year. Other operating
income, which consists of service charges and other miscellaneous fees assessed
on deposit and loan accounts increased $140.1 thousand to $392.1 thousand or
55.6%. The net realized gain on the sale of securities decreased $183.5 thousand
from $353.8 thousand to $170.3 thousand over the same six-month period.



Noninterest income decreased $349.0 thousand to $191.7
thousand for the three-month period ended June 30, 2004



Noninterest Expense. Noninterest expense increased
$1.7 million, or 63.0% to $4.4 million for the six months ended June 30, 2004
compared to $2.7 million for the six months ended June 30, 2003. Similarly,
noninterest expense increased $854.4 thousand, or 63.8% to $2.2 million for the
three months ended June 30, 2004 compared to $1.3 million for the three months
ended June 30, 2003.



Salaries and employee benefits increased $1.0 million or
84.6% as the number of full-time equivalent employees increased from 77 to 114
at June 30, 2003 and 2004, respectively. Occupancy, equipment and furnishings
expense increased 33.4% from $459.5 thousand to $612.9 thousand between the six
months ended June 30, 2003 and 2004, respectively. This increase was primarily
the result of equipment costs associated with the increased number of full-time
equivalent employees and occupancy of the Bank's sixth branch office located in
Amherst, New York, which did not open until June 2003. Data processing expense
increased $69.0 thousand or 23.4% between the six months ended June 30, 2003 and
2004. The Bank had 21,655



Provision for Income Taxes. The Company's



17



Liquidity and Capital Resources



The Bank's primary sources of funds are customer deposits,
short-term borrowings and proceeds from principal and interest payments on
loans, mortgage-backed securities and investment securities. While maturities
and scheduled amortization of loans and mortgage-backed securities are a
predictable source of funds, deposit flows and mortgage prepayments are
influenced by the general level of interest rates, economic conditions and
competition. In general, as interest rates rise, we expect to realize a
reduction in cash flows from mortgage prepayments and principal paydowns on our
mortgage-backed securities.



The overall asset/liability strategy of our Bank takes into
account the need to maintain adequate liquidity to fund asset growth and deposit
runoff. Our management monitors our Bank's liquidity position daily in
conjunction with the Federal Reserve position monitoring. We may borrow funds
from the Federal Home Loan Bank of New York on a short or long-term basis. We
may sell or pledge investment securities to create additional liquidity for our
Bank. Since its inception in November 1999, our Bank's rapidly increasing core
deposit base has provided our most significant source of funds. During the first
six months of 2004, the Bank's deposits increased 9.4% from $360.6 million to
$394.6 million. However, short-term borrowings from the Federal Home Loan Bank
have been used occasionally to offset fluctuations in deposit inflows and
outflows and to manage liquidity needs at competitive rates. Federal Home Loan
Bank rates are presently well below the bank's cost of funds.



The Bank may also obtain capital through additional
investments by its parent company, Great Lakes Bancorp, Inc. During the six
month period ended June 30, 2004, the Company contributed $23.6 million in
additional capital to the Bank.



The Bank is required to maintain specific amounts of capital
pursuant to FDIC regulations. As of June 30, 2004, the Bank was in compliance
with all regulatory capital requirements that were effective as of such date,
with a total risk-based capital to risk-weighted assets ratio of 19.7% and a
Tier 1 risk-based capital to risk-weighted assets ratio of 19.0% and a Tier 1
leverage ratio of 10.7%. These ratios greatly exceed the minimum capital ratios
as required by federal and state regulations.



Item 3. - Quantitative and Qualitative Disclosures About Market Risk



There have been no material changes from the information
provided in the December 31, 2003 Form 10-KSB.



Item 4. - Controls and Procedures



Evaluation of disclosure controls and procedures. The
Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Chief Executive Officer
("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design
and operation our "disclosure controls and procedures" (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended). Based on that
evaluation, the CEO and CFO have concluded that, as of the date of this report,
the Company's disclosure controls and procedures are effective to ensure that
material information relating to us and our consolidated subsidiaries is
recorded, processed, summarized and reported in a timely manner. Management will
continue to review this matter with particular emphasis on the documentation of
the Company's disclosure controls and procedures.



Changes in internal control over financial reporting.
There has been no change in the Company's internal control over financial
reporting that occurred during the last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.



18



Part II. OTHER INFORMATION



Item 1. - Legal Proceedings



There are no material pending legal proceedings to which the
Bank or Company is a party, or to which any of their property is subject.



Item 2. - Changes in Securities and Use of Proceeds

Not applicable.

Item 3. - Defaults upon Senior Securities

Not applicable.



Item 4. - Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders was held on June 15, 2004. Of
3,891,661shares entitled to vote at the meeting, 2,553,699 voted. The following
matters were voted on at the meeting:

|Proposal 1: | To elect five Class B Directors
    for a term of three years. Votes for each nominee were as follows:
|----------- | ------------------------------------------------------------------------------------------------------

| | Nominee                 |  | Votes For |  | Votes Withheld | 
| | ----------------------- |  | --------- |  | -------------- | 
| | William A. Evans        |  | 2,553,399 |  | 300            | 
| | Acea M. Mosey-Pawlowski |  | 2,553,899 |  | 800            | 
| | Dennis M.Penman         |  | 2,552,199 |  | 1,500          | 
| | Louis J. Thomas         |  | 2,553,299 |  | 400            | 
| | Frederick A. Wolf       |  | 2,553,299 |  | 400            | 



|Proposal 2: | To ratify an amendment to the
    Company's certificate of incorporation which would decrease the authorized capital stock from a
    total of 30,000,000 shares to a total of 18,000,000 shares. Votes were as follows*:
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Votes For |  | Votes Against |  | Abstained | 
| | --------- |  | ------------- |  | --------- | 
| | 2,083,591 |  | 100           |  | 350       | 
| |           |  |               |  |           | 

| | * 469,658 broker non-votes are
    not included in these totals.
| | ----------------------------------------------------------------

Item 5. - Other Information

Not applicable.

19



Item 6. - Exhibits and Reports on Form 8-K

(a)    The following exhibits are filed as part of this report:



|Exhibit # |  | Description                                                                            
|--------- |  | ---------------------------------------------------------------------------------------
|3         |  | Amendment to the
    Certificate of Incorporation of Great Lakes Bancorp, Inc. Under   
|          |  | Section 242 of
    the General Corporation Law of the State of Delaware                
|          |  |                                                                                        
|31.1      |  | Certification of
    the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
|          |  | Adopted Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002                  
|          |  |                                                                                        
|31.2      |  | Certification of
    the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
|          |  | Adopted Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002                  
|          |  |                                                                                        
|32.1      |  | Certification of
    the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
|          |  | Adopted Pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002                  
|          |  |                                                                                        
|32.2      |  | Certification of
    the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
|          |  | Adopted Pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002                  



(b)    Reports on Form 8-K.



| | (1) | On April 2, 2004, the Company
    issued a press release announcing the results of a stock offering
| | --- | ---------------------------------------------------------------------------------------------------
| |     | to its existing shareholders of
    record as of January 14,2004                                   
| |     |                                                                                                    
| | (2) | On May 14, 2004, the Company
    issued a press release announcing its financial results for the   
| |     | first quarter ended March 31,
    2004.                                                            
| |     |                                                                                                    
| | (3) | On May 25, 2004, the Company
    filed an 8-K regarding a change in the independent registered     
| |     | public accounting firm engaged
    to audit the Company's financial statements.                    
| |     |                                                                                                    
| | (4) | On June 17, 2004, the Company
    issued a press release announcing the issuance of trust preferred
| |     | securities through its
    subsidiary, Great Lakes Bancorp Statutory Trust I.                      





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.



|                      |     | Great Lakes Bancorp, Inc.                 
|--------------------- | --- | ------------------------------------------
|                      |     |                                           
|Date: August 13, 2004 | By: | /s/ Andrew W.
    Dorn, Jr.               
|                      |     | Andrew W. Dorn, Jr.                       
|                      |     | President and Chief Executive Officer     
|                      |     |                                           
|                      |     |                                           
|Date: August 13, 2004 | By: | /s/ Kim S.
    Destro                     
|                      |     | Kim S. Destro                             
|                      |     | Vice President and Chief Financial Officer

20