FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE TRANSITION PERIOD FROM ----- TO -----

                         COMMISSION FILE NUMBER 0-18599

                            BLACKHAWK BANCORP, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                WISCONSIN                              39-1659424
  (STATE OR OTHER JURISDICTION OF                 (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)
  400 BROAD STREET
  BELOIT, WISCONSIN 53511
  (ADDRESS OF PRINCIPLE EXECUTIVE OFFICES)

                                 (608) 364-8911
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
                                 NOT APPLICABLE
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months,  and (2) has been  subject to such filing  requirements
for the past 90 days.

                         YES  X            NO
                             ---               ---

Indicate the number  of shares outstanding  of each of  the issuer's classes  of
common stock, as of the latest practicable date.

                                                     OUTSTANDING AT
       CLASS OF COMMON STOCK                         JULY 31, 2001
       ---------------------                         -------------
       $.01 PAR VALUE                              2,361,727  SHARES

                                     INDEX

                         PART I - FINANCIAL INFORMATION

                                                                      PAGE
                                                                      ----

ITEM 1.   FINANCIAL STATEMENTS

          Consolidated Condensed Balance Sheets as of
            June 30, 2001 and December 31, 2000                           3

          Consolidated Condensed Statements of Income for the
            Three Months Ended June 30, 2001 and 2000                     4

          Consolidated Condensed Statements of Income for the
            Six Months Ended June 30, 2001 and 2000                       5

          Consolidated Condensed Statements of Shareholders'
            Equity for the Six Months Ended June 30, 2001 and 2000        6

          Consolidated Condensed Statements of Cash Flows for the
            Six Months Ended June 30, 2001 and 2000                     7-8

          Notes to Consolidated Condensed Financial Statements         9-11

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS                       12-17

                          PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS              18

ITEM 6.   A)  EXHIBITS                                                   18

          B)  REPORTS ON FORM 8-K                                        19

SIGNATURES                                                               20

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
                                                                                    JUNE 30, 2001     DECEMBER 31, 2000
                                                                                    -------------     -----------------
<S>                                                                                      <C>                 <C>
                                                                                          (Dollars in thousands)
ASSETS
------
Cash and cash equivalents                                                              $ 13,761            $ 13,336
Interest-bearing deposit accounts                                                           399                 780
Federal funds sold and other short-term investments                                         459               2,529
Securities available-for-sale                                                            45,079              54,068
Securities held-to-maturity, fair value of $21,799 and $18,530                           21,394              18,530
Loans held for sale                                                                       3,651                 739
Loans, net of allowance for loan losses of $2,057 and $3,894                            217,051             216,926
Federal Home Loan Bank of Chicago Stock                                                   2,281               2,200
Bank premises and equipment, net                                                          6,925               6,732
Intangible assets                                                                         5,361               5,671
Accrued interest receivable                                                               2,253               2,481
Other assets                                                                              2,724               3,179
                                                                                       --------            --------

     Total Assets                                                                      $321,338     $       327,171
                                                                                       --------            --------
                                                                                       --------            --------

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Deposits:
     Non-interest bearing                                                              $ 27,416            $ 28,875
     Interest bearing                                                                   208,861             232,068
                                                                                       --------            --------
     Total deposits                                                                     236,277             260,943
                                                                                       --------            --------
Borrowed funds:
     Short-term borrowings                                                               10,060               9,873
     Other borrowings                                                                    48,809              30,031
                                                                                       --------            --------
     Total borrowed funds                                                                58,869              39,904
                                                                                       --------            --------
Accrued interest payable                                                                  1,268               1,765
Other liabilities                                                                         1,318               1,564
                                                                                       --------            --------
     Total Liabilities                                                                  297,732             304,176
                                                                                       --------            --------

SHAREHOLDERS' EQUITY:
Preferred stock
  1,000,000 shares, $.01 par value per share authorized,
  none issued or outstanding                                                                 --                  --
Common stock
  10,000,000 shares, $.01 par value per shares authorized;
  2,367,248 and 2,347,598 shares issued and outstanding                                      24                  23
Additional paid-in capital                                                                7,535               7,417
Retained earnings                                                                        15,626              15,573
Treasury stock, 8,328 and 10,324 shares, at cost                                           (102)               (120)
Accumulated other comprehensive income                                                      523                 102
                                                                                       --------            --------
     Total Shareholders' Equity                                                          23,606              22,995
                                                                                       --------            --------
     Total Liabilities and Shareholder's Equity                                        $321,338            $327,171
                                                                                       --------            --------
                                                                                       --------            --------
</TABLE>

      See Notes to Unaudited Consolidated Condensed Financial Statements.

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
                                                                              Three Months Ended June 30,
                                                                               2001                2000
                                                                               ----                ----
<S>                                                                             <C>                 <C>
                                                                                (Dollars in Thousands)
INTEREST INCOME:
   Interest and fees on loans                                                  $4,806              $4,208
   Interest on securities:
       Taxable                                                                    741                 963
       Exempt from federal income taxes                                           192                 138
   Interest on federal funds sold and other short-term investments                 20                   7
   Interest on interest-bearing deposits                                           13                  43
                                                                               ------              ------
       Total Interest Income                                                    5,772               5,359
                                                                               ------              ------

INTEREST EXPENSE:
   Interest on deposits                                                         2,374               2,236
   Interest on short-term borrowings                                              114                 483
   Interest on other borrowings                                                   711                 255
                                                                               ------              ------
       Total Interest Expense                                                   3,199               2,974
                                                                               ------              ------
   Net Interest Income                                                          2,573               2,385
   Provision for loan losses (Note 3)                                             171                  90
                                                                               ------              ------
   Net Interest Income After Provision for Loan Losses                          2,402               2,295
                                                                               ------              ------

OTHER OPERATING INCOME:
   Service charges on deposit accounts                                            435                 398
   Gain on sale of mortgage loans                                                 142                  38
   Gain on sale of securities                                                      94                  24
   Brokerage and annuity commissions                                               65                  67
   Other income                                                                    89                 128
                                                                               ------              ------
       Total Other Operating Income                                               825                 655
                                                                               ------              ------

OTHER OPERATING EXPENSES:
   Salaries and employee benefits                                               1,330               1,212
   Occupancy expense, net                                                         182                 160
   Furniture and equipment                                                        195                 202
   Data processing                                                                177                 190
   Amortization of intangible assets                                              124                 139
   Legal and professional fees                                                    117                  76
   Office supplies                                                                 68                  58
   Telephone and telecommunications                                                71                  63
   Other operating expenses                                                       442                 466
                                                                               ------              ------
       Total Other Operating Expenses                                           2,706               2,566
                                                                               ------              ------

   Income Before Income Taxes                                                     521                 384
   Provision for Income Taxes                                                     169                 123
                                                                               ------              ------
   Net Income                                                                  $  352              $  261
                                                                               ------              ------
                                                                               ------              ------
   Basic Earnings Per Share                                                    $ 0.15              $ 0.11
                                                                               ------              ------
                                                                               ------              ------
   Diluted Earnings Per Share                                                  $ 0.15              $ 0.11
                                                                               ------              ------
                                                                               ------              ------
   Dividends Per Share                                                         $ 0.12              $ 0.12
                                                                               ------              ------
                                                                               ------              ------
</TABLE>

      See Notes to Unaudited Consolidated Condensed Financial Statements.

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
                                                                               Six Months Ended June 30,
                                                                               2001                2000
                                                                               ----                ----
<S>                                                                             <C>                 <C>
                                                                                (Dollars in Thousands)
INTEREST INCOME:
   Interest and fees on loans                                                 $ 9,534             $ 8,257
   Interest on securities:
       Taxable                                                                  1,629               1,831
       Exempt from federal income taxes                                           363                 271
   Interest on federal funds sold and other short-term investments                 38                  15
   Interest on interest-bearing deposits                                           26                  83
                                                                              -------             -------
       Total Interest Income                                                   11,590              10,457
                                                                              -------             -------

INTEREST EXPENSE:
   Interest on deposits                                                         4,886               4,456
   Interest on short-term borrowings                                              335                 774
   Interest on other borrowings                                                 1,370                 521
                                                                              -------             -------
       Total Interest Expense                                                   6,591               5,751
                                                                              -------             -------
   Net Interest Income                                                          4,999               4,706
   Provision for loan losses (Note 3)                                             275                 180
                                                                              -------             -------
   Net Interest Income After Provision for Loan Losses                          4,724               4,526
                                                                              -------             -------

OTHER OPERATING INCOME:
   Service charges on deposit accounts                                            824                 714
   Gain on sale of mortgage loans                                                 230                  53
   Gain on sale of securities                                                      94                  24
   Brokerage and annuity commissions                                               83                 141
   Other income                                                                   196                 272
                                                                              -------             -------
       Total Other Operating Income                                             1,427               1,204
                                                                              -------             -------

OTHER OPERATING EXPENSES:
   Salaries and employee benefits                                               2,597               2,409
   Occupancy expense, net                                                         388                 331
   Furniture and equipment                                                        389                 408
   Data processing                                                                330                 379
   Amortization of intangible assets                                              248                 279
   Legal and professional fees                                                    211                 133
   Office supplies                                                                150                 115
   Telephone and telecommunications                                               147                 122
   Other operating expenses                                                       795                 792
                                                                              -------             -------
       Total Other Operating Expenses                                           5,255               4,968
                                                                              -------             -------

   Income Before Income Taxes                                                     896                 762
   Provision for Income Taxes                                                     278                 249
                                                                              -------             -------
   Net Income                                                                 $   618             $   513
                                                                              -------             -------
                                                                              -------             -------
   Basic Earnings Per Share                                                   $  0.26             $  0.22
                                                                              -------             -------
                                                                              -------             -------
   Diluted Earnings Per Share                                                 $  0.26             $  0.21
                                                                              -------             -------
                                                                              -------             -------
   Dividends Per Share                                                        $  0.24             $  0.24
                                                                              -------             -------
                                                                              -------             -------
</TABLE>

      See Notes to Unaudited Consolidated Condensed Financial Statements.

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
           CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
                                  (UNAUDITED)

<TABLE>
                                                               Six Months Ended June 30,
                                                                2001                2000
                                                                ----                ----
<S>                                                             <C>                 <C>
                                                                 (Dollars in thousands)
Common Stock:
     Balance at beginning of period                            $    23             $    23
     Stock options exercised                                         1                  --
                                                               -------             -------
     Balance at end of period                                       24                  23
                                                               -------             -------

Additional Paid-in Capital:
     Balance at beginning of period                              7,417               7,307
     Stock options exercised                                       118                  53
                                                               -------             -------
     Balance at end of period                                    7,535               7,360
                                                               -------             -------

Retained Earnings:
     Balance at beginning of period                             15,573              16,973
     Net income                                                    618                 513
     Dividends declared on common stock                           (565)               (557)
                                                               -------             -------
     Balance at end of period                                   15,626              16,929
                                                               -------             -------

Treasury Stock, at cost:
     Balance at beginning of period                               (120)               (120)
     Sale of treasury stock                                         18                  --
                                                               -------             -------
     Balance at end of period                                     (102)               (120)
                                                               -------             -------

Accumulated other comprehensive income (loss):
     Balance at beginning of period                                102                (858)
     Other comprehensive income (loss), net of taxes               421                  (4)
                                                               -------             -------
     Balance at end of period                                      523                (862)
                                                               -------             -------

Total Shareholders' Equity                                     $23,606             $23,330
                                                               -------             -------
                                                               -------             -------
</TABLE>

       See Notes to Unaudited Consolidated Condensed Financial Statements.

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
                                                                          Six Months Ended June 30,
                                                                          2001                 2000
                                                                          ----                 ----
<S>                                                                       <C>                  <C>
                                                                           (Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                                           $    618            $    513
   Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
   Provision for loan losses                                                 275                 180
   Provision for depreciation and amortization                               698                 795
   Amortization of premiums and (accretion of
     discounts) on Investment securities, net                                 29                  24
   Gain on sale of loans held for sale                                      (230)                (53)
   FHLB stock dividends                                                      (75)                 --
   Gain on sale of property, equipment and OREO                               (5)                 (2)
   Gain on sale of securities                                                (94)                (24)
   Loans originated for sale                                             (16,316)             (3,372)
   Proceeds from sale of loans held for sale                              13,633               3,404
   Change in assets and liabilities:
        Decrease in other assets                                             458                 382
        (Increase) decrease in accrued interest receivable                   223                (159)
        Increase (decrease) in accrued interest payable                     (497)                169
        Increase (decrease) in other liabilities                            (183)                168
                                                                        --------            --------
   Net cash provided by (used in) operating activities                    (1,466)              2,025
                                                                        --------            --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Decrease in federal funds sold, interest-bearing deposits and
     other short-term investments, net                                     2,451               1,443
   Proceeds from maturities and calls of securities available-for-sale    23,608               1,789
   Purchase of securities available-for-sale                             (13,952)            (12,582)
   Proceeds from maturities and calls of securities held-to-maturity       1,629               3,389
   Purchase of securities held-to-maturity                                (4,528)             (1,624)
   Proceeds from sale of securities available-for-sale                        96               4,820
   Loans originated, net of principal collected                           (1,265)            (12,137)
   Proceeds from the sale of property, equipment and OREO                    641                 356
   Purchase of bank premises and equipment                                  (661)               (137)
                                                                        --------            --------
   Net cash provided by (used in) investing activities                     8,019             (14,683)
                                                                        --------            --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Stock options exercised                                                   119                  53
   Sale of treasury stock                                                     18                  --
   Net decrease in deposits                                              (24,665)             (6,989)
   Net increase in borrowings                                             18,965              20,465
   Dividends paid                                                           (565)               (557)
                                                                        --------            --------
   Net cash provided by (used in) financing activities                    (6,128)             12,972
                                                                        --------            --------
   Increase in cash and cash equivalents                                     425                 314

CASH AND CASH EQUIVALENTS:
   Beginning                                                              13,336              11,994
                                                                        --------            --------
   Ending                                                               $ 13,761            $ 12,308
                                                                        --------            --------
                                                                        --------            --------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash payments for:
        Interest                                                        $  7,088            $  5,582
        Income taxes                                                         108                 150

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
   Other assets acquired in settlement of loans                         $    741            $    379
</TABLE>

      See Notes to Unaudited Consolidated Condensed Financial Statements.

                     BLACKHAWK BANCORP, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 June 30, 2001

Note 1.   General

          The accompanying consolidated  condensed financial statements  conform
          to generally accepted accounting  principles and to general  practices
          within the banking industry.   The more  significant policies used  by
          the Company in preparing and  presenting its financial statements  are
          stated in the Company's Form 10-KSB.

          The effect of  timing differences in  the recognition  of revenue  and
          expense for tax  liability is  not determined  until the  end of  each
          fiscal year.

          In the opinion of Management, the accompanying unaudited  consolidated
          condensed financial statements contain all adjustments (consisting  of
          normal recurring accruals) necessary  to present fairly the  financial
          position of the Corporation  as of June 30,  2001, and the results  of
          operations for the three and six months ended June 30, 2001 and 2000.

          The results of operations for the three and six months ended June  30,
          2001 and 2000  are not  necessarily indicative  of the  results to  be
          expected for the full year.

          Certain reclassifications  have  been  made  to  the  2000  historical
          financial statements to conform to the 2001 presentation.

Note 2.   Non-Performing Loans

          Non-performing loans  includes loans  which have  been categorized  by
          management as  non-accruing  because  collection of  interest  is  not
          assured, and  loans which  are  past-due ninety  days  or more  as  to
          interest  and/or   principal   payments.  The   following   summarizes
          information concerning non-performing loans:

                                                             June 30,
                                                      ----------------------
                                                      (Dollars in Thousands)
                                                       2001             2000
                                                       ----             ----
Non-accruing loans                                    $1,407           $1,892
Past due 90 days or more and still accruing            1,048              693
                                                      ------           ------
Total non-performing loans                            $2,455           $2,585
                                                      ------           ------
                                                      ------           ------
Performing loans classified as impaired               $  420           $   --

Note 3.   Allowance For Loan Losses

          A summary  of transactions  in the  allowance for  loan losses  is  as
          follows:

                                           Three Months Ended June 30,
                                             (Dollars in Thousands)
                                             2001                2000
                                             ----                ----
Balance at beginning of period              $3,912              $2,015
Provision charged to expense                   171                  90
Loans charged off                            2,076                  53
Recoveries                                      50                  17
                                            ------              ------
Balance at end of period                    $2,057              $2,069
                                            ------              ------
                                            ------              ------

                                            Six Months Ended June 30,
                                             (Dollars in Thousands)
                                             2001                2000
                                             ----                ----
Balance at beginning of period              $3,894              $1,996
Provision charged to expense                   275                 180
Loans charged off                            2,168                 127
Recoveries                                      56                  20
                                            ------              ------
Balance at end of period                    $2,057              $2,069
                                            ------              ------
                                            ------              ------

Note 4.   Earnings Per Share

          Presented below are  the calculations for  basic and diluted  earnings
          per share:

<TABLE>
                                                        Three Months Ended                       Six Months Ended
                                                             June 30,                                June 30,
                                                    2001                2000                 2001                2000
                                                    ----                ----                 ----                ----
<S>                                                 <C>                 <C>                  <C>                 <C>
Basic:
Net income available to common stockholders       $  352,000          $  261,000          $  618,000          $  513,000
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------
Weighted average shares outstanding                2,348,125           2,323,384           2,343,687           2,320,317
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------
Basic earnings per share                          $     0.15          $     0.11          $     0.26          $     0.22
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------

Diluted:
Net income available to common stockholders       $  352,000          $  261,000          $  618,000          $  513,000
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------
Weighted average shares outstanding                2,348,125           2,323,384           2,343,687           2,320,317
Effect of dilutive stock options outstanding          42,685             138,156              42,685             138,156
                                                  ----------          ----------          ----------          ----------
Diluted weighted average shares outstanding        2,390,810           2,461,540           2,386,372           2,458,473
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------
Diluted earnings per share                        $     0.15          $     0.11          $     0.26          $     0.21
                                                  ----------          ----------          ----------          ----------
                                                  ----------          ----------          ----------          ----------
</TABLE>

Note 5.   Recent Accounting Developments

          Business Combinations

          In June 2001, the Financial  Accounting Standards Board (FASB)  issued
          Statement of Financial Accounting Standards (SFAS) No. 141,  "Business
          Combinations", and  SFAS  No.  142,  "Goodwill  and  Other  Intangible
          Assets." SFAS  No. 141  supersedes Accounting  Principles Board  (APB)
          Opinion No. 16, "Business Combinations", and SFAS No. 38,  "Accounting
          for Preacquisition Contingencies of  Purchased Enterprises." SFAS  No.
          141 requires the use of the purchase method of accounting for business
          combinations initiated after June 30, 2001.   SFAS No. 142  supersedes
          APB Opinion No. 17,  "Intangible Assets." SFAS  No. 142 addresses  how
          intangible assets acquired outside of a business combination should be
          accounted for upon acquisition and  how goodwill and other  intangible
          assets  should  be  accounted  for  after  they  have  been  initially
          recognized.  SFAS No. 142 eliminates the amortization for goodwill and
          other intangible  assets  with  indefinite lives.    Other  intangible
          assets with a finite  life will be amortized  over their useful  life.
          Goodwill and  other intangible  assets  with indefinite  useful  lives
          shall be tested for impairment annually  or more frequently if  events
          or changes in circumstances indicate that  the asset may be  impaired.
          SFAS No. 142 is  effective for fiscal  years beginning after  December
          15, 2001.

          The Company's  strategy  over  the past  several  years  has  included
          business combinations  accounted  for under  the  purchase  accounting
          method which created  goodwill upon the  transactions' closings.   The
          Company has goodwill of $3.2 million  on its balance sheet as of  June
          30, 2001 which is  being amortized over 20  years.  The  pronouncement
          will have the effect of eliminating the amortization of this asset and
          will subject it to periodic impairment analysis.

          Management, at this time, cannot determine the effect that adoption of
          SFAS No. 142 may  have on the financial  statements of the Company  as
          the statement requires a comprehensive review of previous combinations
          accounted for under the purchase accounting method and an analysis  of
          impairment as of the  date of adoption.   The impairment analysis  for
          goodwill and other  intangible assets with  an indefinite useful  life
          has not been  completed.  The  impairment analysis  will be  completed
          within the timelines outlined in SFAS No. 142 which include an initial
          transitional goodwill  impairment test  to be  completed by  June  30,
          2002.

            ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                       CONDITION AND RESULTS OF OPERATIONS

The purpose  of Management's  discussion and  analysis  is to  provide  relevant
information regarding the  Registrant's financial condition  and its results  of
operations.  The information included herein should be read in  conjunction with
the consolidated condensed balance sheets as  of June 30, 2001 and December  31,
2000 and the consolidated  condensed statements of income  for the three  months
and six months ended June 30, 2001 and  2000.  This information is not  meant to
be a  substitute  for  the  consolidated condensed  balance  sheets  and  income
statements.

                             RESULTS OF OPERATIONS

Net income for the  three and six months  ended June 30,  2001 was $352,000  and
$618,000, respectively,  compared  to  $261,000 and  $513,000  for  the  similar
periods in 2000.  The discussion that follows will provide information about the
various areas  of  income  and  expense  that  resulted  in  the  aforementioned
financial performance.

                           THREE MONTHS ENDED JUNE 30

For the  three  months ended  June  30,  2001, interest  income  was  $5,772,000
compared to $5,359,000 for the same period in 2000.  This increase  of $413,000,
or 7.7%, was the  result of increased  interest and fees  on loans of  $598,000.
Offsetting the increased loan income was a decrease in interest on securities of
$168,000 while  interest  on  short-term investments  and  deposits  with  banks
decreased $17,000 in aggregate.

Interest and fees on  loans increased 14.2% to  $4,806,000 for the three  months
ended June 30, 2001 compared to $4,208,000 in the same period of  2000.  Average
loans outstanding  during the  three  months ended  June  30, 2001  were  $226.9
million, representing a $29.3 million, or  14.8%, increase over 2000 levels  for
the similar period. Partially offsetting the increase in average balances  was a
decline in loan yields to 8.50%  for the three months  ended June 30, 2001  from
8.54% for the same period in 2000.  The decline in yields was held to four basis
points during  a  period  of  substantial  downward pressure  on  rates  as  the
portfolio mixture continues to shift from lower-yielding 1-4 family  real estate
loans.  Of the $20.4 million increase in loans outstanding from June 30, 2000 to
June 30, 2001, $16.5 million was generated in the categories of  commercial real
estate and  commercial  and industrial  loans.    The continued  growth  of  the
commercial loan  portfolio is  expected as  the  Company pursues  its  strategic
direction of diversifying the  former thrift balance  sheets acquired in  recent
years to the mix of a commercial bank.

Investment income on  taxable securities and  FHLB stock for  the quarter  ended
June 30, 2001 decreased $222,000 to $741,000, compared to $963,000 for  the same
period in 2000, a decrease of 23.1%.  The decrease was the result  of a decrease
in volume that  was partially offset  by a portfolio  yield increase during  the
2001 quarter as compared to the 2000 quarter.  Income from tax-exempt securities
increased to $192,000 for  the three months ended  June 30, 2001 from  $138,000.
This increase was due to increased volumes and improved yields.

Interest on interest-bearing deposits, federal  funds sold and other  short-term
investments decreased to $33,000  in aggregate for the  three months ended  June
30, 2001,  from  $50,000  for  the  2000  period.  Lower  yields  on  short-term
investments in the 2001 period more than offset an increase in average balances.

Interest paid on  deposits increased  6.2% to  $2,374,000 for  the three  months
ended June 30, 2001, from $2,236,000 for the three months ended June 30, 2000. A
3.5% increase in volume and an 11 basis point increase in funding costs produced
the increase. Costs on variable rate deposit accounts such as money  markets and
the Company's premium rate  checking product have  fallen with rates  throughout
the first part of 2001, however, higher cost, short-term time deposits  added in
the latter half of 2000 that  had yet to mature prior  to or during the  current
quarter generated the year over year cost increase.  As those  deposits continue
to renew at  current market rates,  the Company  expects its costs  of funds  on
deposits to follow accordingly.

Interest on short-term  borrowings decreased  to $114,000 for  the three  months
ended June 30, 2001 from $483,000 in 2000, a decrease of $189,000.   Interest on
long-term borrowings increased to $711,000 for  the three months ended June  30,
2001, from  $255,000  for the  same  period  in 2000.    Short-term  borrowings,
including repurchase agreements,  fed funds  purchased, an open  line of  credit
with the Federal Home Loan Bank of Chicago ("FHLB"), and a line of credit with a
third party commercial bank, decreased as the Company reduced reliance  on these
types of borrowings by converting portions to longer maturity term  debt earlier
in the year.   Costs  also declined with  these borrowings  as short-term  rates
continued to fall during the quarter.  The increase in long-term borrowing costs
was driven  by volume  as average  funding costs  declined from  the prior  year
period.

The provision for loan losses was  $171,000 for the quarter ended June  30, 2001
as compared to $90,000 for the  same period in 2000.   The increase occurred  as
the Company  continues  to  recognize  much  of  its  portfolio  growth  in  the
commercial and installment lending  areas.  Also influencing  the level of  loan
loss provision is the manufacturing economic slowdown, which has had  a negative
impact upon  the local  economies in  markets served  by the  Company.    It  is
management's opinion that this amount represents an adequate provision.

Total non-interest income  increased to  $825,000, from $655,000  for the  three
months ended June 30, 2001 and  2000, respectively.  The primary reason  for the
increase was the $104,000  increase in the  gain on the  sale of mortgage  loans
during the  second quarter  of 2001  as compared  to the  2000  quarter.   Lower
overall interest rates  in the mortgage  market contributed to  a shift  towards
fixed rate  loans  in the  purchase  money  mortgage market  and  a  significant
increase in refinancing activity.  With  the Company's policy of marketing  most
fixed rate mortgages to the secondary  market, gains on mortgage loans  intended
for the secondary market  increased as sales volumes  increased to $5.8  million
for the quarter ended  June 30, 2001 from  $2.5 million for  the same period  in
2000.  Gains on the  sales of investments increased  $70,000 to $94,000 for  the
three months ended  June 30, 2001  as the Company  sold certain equity  holdings
during the  period.   An  additional increase  in  deposit service  charges  was
substantially offset by a decline in mortgage servicing revenues  which resulted
from the sale of the majority  of the Company's mortgage servicing portfolio  in
the second half of 2000.

For the three months ended June  30, 2001, total non-interest expense  increased
slightly to $2,706,000 from $2,566,000 for  the same period in 2000.   Exclusive
of personnel costs,  other non-interest  expenses increased  $22,000, or  1.62%.
Salaries and  employee benefits  increased $118,000,  or 9.7%,  during the  2001
quarter as variable compensation  for mortgage production  increased and as  the
Company added  sales  staff  in the  brokerage  and  retail  banking  functions.
Increases in  other non-interest  expense were  generally in  line with  overall
asset growth with the  exception of legal and  professional fees as the  Company
continued to pursue its claim against a former data processing service provider.

Income taxes increased to  $169,000, from $123,000,  for the three-month  period
ending June 30, 2001. The  effective tax rates were  32.4% versus 32.0% for  the
2001 and  2000 second  quarters, respectively.  The increased  total income  tax
expense resulted primarily from the higher  level of pre-tax profit reported  in
the three months ended June 30, 2001 compared to the same period in 2000.

                            SIX MONTHS ENDED JUNE 30

For the  six months  ended June  30,  2001, interest  income was  $11.6  million
compared to $10.5 million for the  same period in 2000.   This increase of  $1.1
million was the result of increased interest and fees on loans of  $1.3 million.
Partially offsetting the loan  income was a slight  net decrease in interest  on
securities, short-term investments and interest on deposits with banks.

Interest and fees on loans  increased 14.5% to $9.5  million for the six  months
ended June  30, 2001,  compared to  $8.3 million  in the  same  period of  2000.
Similar to the  three-month period,  increased volume was  the most  significant
factor for the increase.  Complementing the increase in volume, yields were nine
basis points  ahead  of  2000  levels  for  the  sixth  months  ended  June  30.
Investment income on taxable securities for  the six months ended June 30,  2001
decreased $0.2 million to  $1.6 million, compared to  $1.8 million for the  same
period in 2000.  The decrease  was primarily the result of decreased  volumes as
the Company's investment cash  flows paid down  borrowings and partially  funded
loans.  Income  from tax-exempt  securities increased  to $363,000  for the  six
months ended June  30, 2001,  from $271,000  for the  prior year  period.   This
increase was due to both increased volumes and higher average yields.

Interest paid on deposits increased $0.4  million to $4.9 million, or 8.9%,  for
the six months ended June 30, 2001,  from $4.5 million for the six  months ended
June 30, 2000.  The increase  was the result of higher interest-bearing  deposit
balances and a higher average cost paid on interest bearing-deposits in the 2001
period.

Interest on short-term borrowings decreased to  $0.3 million for the six  months
June 30, 2001,  from $0.8  million in 2000.   Interest  on long-term  borrowings
increased to $1.4  million for the  six months ended  June 30,  2001, from  $0.5
million for the  six months ended  June 30, 2000.   Early in  2001, the  Company
restructured a  substantial portion  of its  short-term borrowings  into  termed
borrowings. As a  result, volumes have  increased in  the long-term  borrowings,
while they have decreased in the short-term borrowings.

The provision for loan  losses was $275,000  for the six  months ended June  30,
2001, as compared to $180,000 for the same period in 2000. The increase occurred
as the  Company continues  to recognize  much  of its  portfolio growth  in  the
commercial and installment lending  businesses.  Also  influencing the level  of
loan loss  provision is  the  manufacturing sector  slowdown,  which has  had  a
negative impact upon the local economies in markets served by the Company.    It
is management's opinion that this amount represents an adequate provision.

Total non-interest income increased 16.7% to $1.4 million, from $1.2 million for
the six months ended June 30, 2001  and 2000, respectively.  The primary  reason
for the increase was the $177,000 increase in  the gain on the sale of  mortgage
loans during the six months ended June 30, 2001, as compared to the same  period
in 2000.    The  increase  was  driven by  lower  mortgage  rates  as  discussed
previously.  Increase  in service charges  on deposit accounts  and the gain  on
sale of  securities were  nearly offset  by declines  in brokerage  and  annuity
commissions and  other income.   Deposit  service  charges have  benefited  from
pricing structure changes while brokerage fees have been negatively impacted  by
uncertainties that  have  developed in  the  financial markets.    Other  income
decreased primarily  as a  result of  the sale  of the  majority of  the  bank's
serviced loan portfolio in the second half of 2000.

Total non-interest expense increased  to $5.3 million for  the six months  ended
June 30,  2001,  from  $5.0 million  for  the  comparable period  in  2000.  The
$287,000, or 6.0%, increase was predominantly the result of a $188,000  increase
in personnel costs for  the same reasons as  the quarter-to-date increase  noted
previously.  Additional significant increases occurred in legal and professional
fees due to the Company's lawsuit against a former data processing provider.

Income taxes  increased to  $278,000, from  $249,000, for  the six-month  period
ending June 30, 2001.  The effective tax  rates were 31.0% versus 32.7% for  the
six months ended June 30, 2001 and 2000, respectively.

                        ANALYSIS OF FINANCIAL CONDITION

This analysis of the Company's financial condition compares June 30, 2001 to the
Company's prior fiscal year  end, December 31, 2000.   Total assets were  $321.3
million, as compared to $327.2 million as of December 31, 2000.  This represents
a decrease of 1.8%.

Total investments, including securities held-to-maturity, securities  available-
for-sale, Federal Home  Loan Bank  Stock, fed  funds sold  and other  short-term
investments, were  $69.2 million  as of  June  30, 2001,  as compared  to  $77.3
million as of December  31, 2000.   The portfolio decreased  as cash flows  have
generally  been  applied  toward  borrowings  while  other  portions  have  been
redirected towards the lending portfolio.

Net portfolio loans  totaled $217.1  million on June  30, 2001,  as compared  to
$216.9 million on December 31, 2000, an increase of $0.2 million. Commercial and
commercial real estate portfolios have increased  $10.0 million, or 13.5%,  from
December 31, 2000.   The commercial  growth was realized  as 1-4 family  secured
first and second mortgage balances declined  $9.4 million, or 8.6%, during  that
the same period.  With the Company's 1-4 family mortgage portfolio  concentrated
in adjustable rate loans, balances declined as rates dropped and borrowers opted
for long-term fixed rate loans that the Company generally sells to the secondary
market. The combination  of these  low mortgage  rates and  softness in  general
business borrowing  kept  overall  loan outstandings  near  the  prior  year-end
balances at June 30, 2001.

The allowance for loan losses decreased to $2.1 million as of June 30, 2001,  as
compared to $3.9  million as of  December 31, 2000.  As of June  30, 2001,  non-
performing loans were  $2.5 million  compared to  $4.2 million  at December  31,
2000.  During  the second  quarter, the Company  charged off  a commercial  real
estate loan with a balance of  $1.95 million due to the continued  deterioration
of the borrowers financial condition and the resulting decline in the realizable
value of the collateral.  Management believes that the allowance is adequate  at
this time.

Net bank premises and equipment totaled $6.9 million at June 30, 2001,  compared
to $6.7  million  at  December  31,  2000.  The  increase  occurred  as  capital
expenditures of $0.7 million, primarily related to the recent system conversion,
exceeded the period's depreciation provision of $0.4 million.

Total deposits as  of June  30, 2001  were $236.3  million, a  decline of  9.4%,
compared to $260.9 million as of December 31, 2000. Several commercial customers
have historically increased their deposit balances at year-end, which  accounted
for the majority of the total decline in deposits from December 31, 2000 levels.
Excluding short-term  deposits  held at  December  31, 2000  of  $25.3  million,
interest-bearing deposits increased $2.1 million  to $208.9 million.   Increased
balances in  interest bearing  transaction accounts  offset  a decline  in  time
deposits during  the  sixth month  period.  Non-interest bearing  deposits  also
decreased to $27.4 million, from $28.9 million as of December 31, 2000.

Short-term borrowings, fed funds  purchased and repurchase agreements  increased
to $10.1 million  at June 30,  2001, from $9.9  million as of  year-end.   Other
borrowings, consisting  of  debt  incurred,  in  part,  to  complete  the  First
Financial acquisition in 1998 and term advances from the FHLB were $48.8 million
at June 30,  2001, up from  $30.0 million at  year end.   These sources of  non-
deposit funding were utilized to replace the large year-end short-term  deposit.
The use of FHLB  advances in the future  will depend on  the Company's need  for
funds and the rates at which they may be obtained.

The company continues to maintain a well-capitalized position regardless of  the
measurement used. The following table shows  three different measurements as  of
June 30, 2001 and December 31, 2000, and the regulatory requirement, if any. The
increases in the Leverage Capital Ratio and Tier I Capital to Risk-Based  Assets
Ratio are generally attributable to declines  in asset levels from December  31,
2000.   The decline  in the  Total  Capital to  Risk-Weighted Assets  Ratio  was
predominantly due to  the decline  in Tier 2  capital resulting  from the  $1.95
million dollar charge-off, which reduced the allowance for loan loss  inculpable
in Tier 2 capital

                                    JUNE 30,     DECEMBER 31,    REGULATORY
                                      2001           2000       REQUIREMENTS
                                    --------     ------------   ------------
Leverage capital ratio               5.72%          5.60%          4.00%

Tier I capital as a percent
  of risk-based                      8.41%          8.30%          4.00%

Total capital as a percent
   of risk-based assets              9.37%          9.60%          8.00%

Liquidity, as it relates to the subsidiary bank, is a measure of its ability  to
fund loans and withdrawals of deposits  in a cost-effective manner.  The  Bank's
principal sources of funds are  deposits, scheduled amortization and  prepayment
of loan principal, maturities of investment securities, income from  operations,
and short-term borrowings.   Additional  sources include  purchasing fed  funds,
sale of securities, sale of loans, borrowing from both the Federal Reserve  Bank
and Federal Home Loan Bank,  and dividends paid by  Nevahawk to the Bank.  Under
present law, accumulated earnings could be paid as dividends without incurring a
tax liability.

The liquidity needs of the Company generally consists of payment of dividends to
its shareholders, payments of  principal and interest on  borrowed funds, and  a
limited amount of expenses. The sources  of funds to provide this liquidity  are
income from investments, maturities of  investments, cash balances, issuance  of
capital and  dividends  from its  subsidiary  bank.   Certain  restrictions  are
imposed upon the Bank, which could limit its ability to pay dividends if it  did
not have net earnings or adequate capital in the future.  The Company  maintains
adequate liquidity to pay its expenses.

Off-balance sheet  items  consist  of credit  card  lines  of  credit,  mortgage
commitments, letters  of credit  and  other commitments  totaling  approximately
$27.2 million as of June 30, 2001.   This compares to $34.0 million at  December
31, 2000.  The Bank has  historically funded off-balance sheet commitments  with
its primary  sources  of  funds,  and  management  anticipates  that  this  will
continue.

The Company's consolidated assets include a $271,000 receivable that relates to
an improper  charge  made  by  the  Company's  former data  processing  service
provider ("Provider") to the  Company's check clearing  account maintained with
the Federal Home Loan Bank  of Chicago. Upon discovery  of the Provider's error
and following the Provider's initial acknowledgement of that error, the Company
worked closely with  the Provider to  attempt to recover  the amount improperly
charged.  During the third  quarter of 2000, the  Provider notified the Company
that it was unable to pursue  the matter further and that  the Provider did not
intend to indemnify the Company on account of this error.

In response, the  Company filed a  complaint in  the Circuit Court  of Waukesha
County, Wisconsin on  August 18,  2000, seeking  to recover  the amount  of the
improper charge from the Provider.   While the Company  believes it is entitled
to recovery, it can provide no assurance that it will ultimately prevail in the
litigation. Moreover, the Company will incur costs and legal fees in connection
with its pursuit of  this matter, and it  may be unable to  recover those costs
and fees.   The potential amount  of those costs  and fees depends  on how this
litigation develops and ultimately is resolved,  and the Company cannot predict
that amount with certainty at this time.

Given the lack of  significant movement toward  a resolution of  this matter in
the final  quarter  of 2000,  and  pursuant to  the  application  of regulatory
guidelines and  principles under  these circumstances,  the Company  wrote this
contingent asset down approximately 50%  to the current level  of $271,000.  In
the unlikely event that  the Company is unsuccessful  in recovering any portion
of this  improper  charge, the  Company  would  be required  to  write  off the
remaining $271,000 balance  of this contingent  asset through a  further charge
against earnings in the period in which the receivable is deemed uncollectable.
Legal costs and  fees incurred in  connection with these  proceedings are being
charged against earnings as incurred.

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The matters discussed in this report, including expectations regarding  interest
income, interest expense,  and net interest  margin, operating  results and  net
income are forward-looking statements that involve risks and uncertainties.  The
assumptions and risk factors that may cause actual results to differ  materially
include but are not limited to,  changes in interest rates  or in the volume  of
earning assets and liabilities, increases in non-performing or delinquent loans,
increased competition,  changes  in  the volume  of  loans  originated  for  the
secondary market  and changes  in the  volume  sales of  non-deposit  investment
products by the Company's brokerage operation,  as well as those described  from
time to time in the Company's SEC filings.

                                    PART II

                               OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

On May 16,  2001, at  the annual  meeting of  shareholders of  the Company,  the
shareholders re-elected  Charles  J. Howard  and  Roger K.  Taylor  and  elected
Merritt J. Mott to three-year terms expiring in 2004.  The vote, with respect to
the election of each director was as follows:

     Charles J. Howard
          2,341,474 total votes eligible to be cast
          2,138,986 votes were represented at the Annual Meeting
          1,988,025 votes were cast "For" re-election
          No votes were cast "Against" re-election
          150,961 votes abstained

    Roger K. Taylor
          2,341,474 total votes eligible to be cast
          2,138,986 votes were represented at the Annual Meeting
          1,987,775 votes were cast "For" re-election
          No votes were cast "Against" re-election
          151,211 votes abstained

     Merritt J. Mott
          2,341,474 total votes eligible to be cast
          2,138,986 votes were represented at the Annual Meeting
          1,985,553 votes were cast "For" re-election
          No votes were cast "Against" re-election
          153,433 votes abstained

In addition, as detailed in the Company's Proxy Statement dated April 17,  2001,
the shareholders  defeated  a  shareholder  proposal  requesting  the  Board  of
Directors to explore options to maximize  shareholder value through sale of  the
Company. The result of the vote is as follows:
          2,341,474 total votes eligible to be cast
          2,138,986 votes were represented at the Annual Meeting
          357,328 votes were cast "For" the proposal
          1,388,583 votes were cast "Against" the proposal
          25,363 votes were withheld
          367,712 votes abstained

ITEM 6.   A)  EXHIBITS

          See Exhibit Index following the signature  page in this report,  which
          is incorporated herein by this reference.

          B)  REPORTS ON FORM 8-K

          There were two reports on Form 8-K filed during the three months ended
          June 30, 2001.

          The report dated  May 8,  2001 related to  the appointment  of Mr.  R.
          Richard Bastian,  III  as President  and  Chief Executive  Officer  of
          Blackhawk State Bank and as President  and Chief Operating Officer  of
          Blackhawk Bancorp, Inc.  Mr. Dennis M. Conerton, current President and
          Chief Executive  Officer,  will  remain  Chief  Executive  Officer  of
          Blackhawk Bancorp, Inc. and was appointed Chairman of Blackhawk  State
          Bank and of Blackhawk Bancorp, Inc.

          The report dated  May 21,  2001 announced  the appointment  of Mr.  R.
          Richard Bastian,  III  as  a director  of  Blackhawk  State  Bank  and
          Blackhawk  Bancorp,  Inc.  and  detailed  the  actions  taken  at  the
          Company's Annual Meeting of Shareholders.

                                   SIGNATURES

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

                                   Blackhawk Bancorp, Inc.
                                   -------------------------------------------
                                   (Registrant)

Date: August 7, 2001               /s/ Dennis M. Conerton
                                   -------------------------------------------
                                   Dennis M. Conerton
                                   Chairman and Chief Executive Officer

Date: August 7, 2001               /s/ Keith D. Hill
                                   -------------------------------------------
                                   Keith D. Hill
                                   Vice President
                                   (Chief Financial and Accounting Officer)

                            BLACKHAWK BANCORP, INC.

                               INDEX TO EXHIBITS

                                   Incorporated        Filed
Exhibit                            Herein By           Here-          Page
Number        Description          Reference To:        with           No.
------        -----------          -------------        ----           ---

4.1           Amended and          Exhibit 3.1 to
           restated Articles       Amendment No. 1 to
            of Incorporation       Registrant's
           of the Registrant       Registration
                                   Statement on Form
                                   S-1 (Reg. No.
                                   33-32351)

4.2        By-laws of Regis-       Exhibit 3.2 to
            trant as amended       Amendment No. 1 to
                                   Registrant's
                                   Registration
                                   Statement on Form
                                   S-1 (Reg. No.
                                   33-32351)

4.3        Plan of Conversion      Exhibit 1.2 to
             Beloit Savings        Amendment No. 1 to
            Bank as amended        Registrant's
                                   Registration
                                   Statement on Form
                                   S-1 (Reg. No.
                                   33-32351)