SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999 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: 333-63373

                                 LINCOLN BANCORP
               (Exact name of registrant specified in its charter)

              Indiana                                        35-2055553
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                         Identification Number)

                              1121 East Main Street
                         Plainfield, Indiana 46168-0510
          (Address of principal executive offices, including Zip Code)

                                 (317) 839-6539
              (Registrant's telephone number, including area code)


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 (or for such  shorter  period that the  Registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

The  number of shares of the  Registrant's  common  stock,  without  par  value,
outstanding as of June 30, 1999 was 7,009,250.






<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
                                    FORM 10-Q

                                      INDEX

                                                                        Page No.

FORWARD LOOKING STATEMENT                                                    3

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

            Consolidated Condensed Balance Sheet (Unaudited)                 4

            Consolidated Condensed Statement of Income (Unaudited)           5

            Consolidated Condensed Statement of Comprehensive
               Income (Unaudited)                                            6

            Consolidated Condensed Statement of
               Shareholders' Equity (Unaudited)                              7

            Consolidated Condensed Statement of Cash Flows (Unaudited)       8

            Notes to Unaudited Consolidated Condensed Financial Statements   9

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations.                                         9

Item 3.   Quantitative and Qualitative Disclosures about Market Risk        13

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                 16
Item 2.   Changes in Securities                                             16
Item 3.   Defaults Upon Senior Securities                                   16
Item 5.   Other Information                                                 16
Item 6.   Exhibits and Reports on Form 8-K                                  16

SIGNATURES                                                                  17




<PAGE>



                                    FORM 10Q
                            FORWARD LOOKING STATEMENT

This  Quarterly  Report on Form 10-Q ("Form  10-Q")  contains  statements  which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-Q and include  statements  regarding the intent,  belief,
outlook, estimate or expectations of the Company (as defined in the notes to the
consolidated  condensed  financial  statements),  its  directors or its officers
primarily with respect to future events and the future financial  performance of
the  Company.  Readers  of this Form 10-Q are  cautioned  that any such  forward
looking  statements  are not  guarantees  of future  events or  performance  and
involve risks and  uncertainties,  and that actual results may differ materially
from those in the forward looking statements as a result of various factors. The
accompanying  information  contained  in this  Form  10-Q  identifies  important
factors that could cause such  differences.  These  factors  include  changes in
interest   rates;   loss  of  deposits  and  loan  demand  to  other   financial
institutions;  substantial changes in financial markets;  changes in real estate
values and the real estate market; or regulatory changes.



<PAGE>



PART I  FINANCIAL INFORMATION
Item 1.  Financial Statements

                         LINCOLN BANCORP AND SUBSIDIARY
                      Consolidated Condensed Balance Sheet
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                     June 30,         December 31,
                                                                      1999                1998
                                                                 -------------       -------------
Assets
<S>                                                              <C>                 <C>
     Cash and due from banks                                     $   2,263,968       $   4,245,128
     Interest-bearing demand deposits in other banks                 3,763,207          18,662,229
                                                                 -------------       -------------
         Cash and cash equivalents                                   6,027,175          22,907,357
     Investment securities
         Available for sale                                        155,582,109         129,275,575
         Held to maturity                                              500,000           1,250,000
                                                                 -------------       -------------
              Total investment securities                          156,082,109         130,525,575
     Loans                                                         222,175,630         197,432,997
         Allowance for loan losses                                   1,665,624           1,512,205
                                                                 -------------       -------------
              Net loans                                            220,510,006         195,920,792
     Premises and equipment                                          3,785,264           3,379,460
     Investments in limited partnerships                             2,217,641           2,386,994
     Federal Home Loan Bank stock                                    5,446,700           5,446,700
     Interest receivable                                             2,295,999           1,773,063
     Other assets                                                    5,861,682           4,108,163
                                                                 -------------       -------------

         Total assets                                            $ 402,226,576       $ 366,448,104
                                                                 =============       =============

Liabilities
     Deposits
         Noninterest-bearing                                     $   2,295,999       $   2,484,444

         Interest-bearing                                          202,108,616         209,525,347
                                                                 -------------       -------------
              Total deposits                                       204,404,615         212,009,791
     Short term borrowings                                           4,600,000
     Federal Home Loan Bank advances                                84,263,455          33,263,455
     Note payable                                                    1,714,001           2,202,501
     Due to broker                                                  10,025,000
     Interest payable                                                  998,171           1,108,514
     Other liabilities                                               1,981,983           1,731,061
                                                                 -------------       -------------
         Total liabilities                                         297,962,225         260,340,322
                                                                 -------------       -------------

Commitments and Contingent Liabilities
Shareholders' Equity
     Preferred stock,  without par value
         Authorized and unissued - 2,000,000 shares
     Common stock, without par value
         Authorized - 20,000,000 shares
         Issued and outstanding - 7,009,250 shares                  68,883,405          68,879,373
     Retained earnings                                              43,963,770          42,548,260
     Accumulated other comprehensive income                         (3,172,514)            287,549
     Unearned employee stock ownership plan ("ESOP") shares         (5,410,310)         (5,607,400)
                                                                 -------------       -------------
         Total shareholders' equity                                104,264,351         106,107,782
                                                                 -------------       -------------

         Total liabilities and shareholders' equity              $ 402,226,576       $ 366,448,104
                                                                 =============       =============
</TABLE>


    See notes to consolidated condensed financial statements.




<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
                   Consolidated Condensed Statement of Income
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                           Three Months Ended             Six Months Ended
                                                                                June 30,                      June 30,
                                                                      -------------- -------------- --------------- --------------
                                                                          1999           1998            1999           1998
                                                                      -------------- -------------- --------------- --------------
<S>                                                                   <C>            <C>            <C>            <C>
Interest Income
     Loans, including fees                                            $  4,132,625   $  4,335,278   $  8,118,549   $  9,244,231
     Investment securities                                               2,679,409        809,441      4,952,571      1,467,613
     Deposits with financial institutions                                   59,549        371,536        166,755        485,044
     Dividend income                                                       108,635        108,635        216,077        216,077
                                                                      -------------- -------------- -------------- ---------------
         Total interest and dividend income                              6,980,218      5,624,890     13,453,952     11,412,965
                                                                      -------------- -------------- -------------- ---------------

Interest Expense
     Deposits                                                            2,356,412      2,717,470      4,817,276      5,335,890
     Short term borrowings                                                  59,186                        70,242
     Federal Home Loan Bank advances                                     1,072,735        689,336      1,728,537      1,519,472
                                                                      -------------- -------------- -------------- ---------------
         Total interest expense                                          3,488,333      3,406,806      6,616,055      6,855,362
                                                                      -------------- -------------- -------------- ---------------

Net Interest Income                                                      3,491,885      2,218,084      6,837,897      4,557,603
     Provision for loan losses                                             200,114        364,568        231,164        409,937
                                                                      -------------- -------------- -------------- ---------------
Net Interest Income After Provision for Loan Losses                      3,291,771      1,853,516      6,606,733      4,147,666
                                                                      -------------- -------------- -------------- ---------------

Other Income
     Net realized and unrealized gains (losses) on loans                     9,780       (146,682)        12,615       (114,322)
     Net realized gains on sales of available-for-sale securities                         104,980         (3,904)       104,980
     Equity in losses of limited partnerships                              (86,882)      (153,134)      (169,353)      (268,134)
     Other income                                                          210,204        201,519        443,127        378,663
                                                                      -------------- -------------- -------------- ---------------
         Total other income                                                133,102          6,683        282,485        101,187
                                                                      -------------- -------------- -------------- ---------------

Other Expenses
     Salaries and employee benefits                                        871,745        655,105      1,675,103      1,318,489
     Net occupancy expenses                                                 82,106         76,780        155,419        135,177
     Equipment expenses                                                    122,742        149,977        266,525        299,884
     Deposit insurance expense                                              34,635         53,200         82,306         99,514
     Data processing fees                                                  191,294        217,915        355,571        369,173
     Professional fees                                                      56,099        134,474         89,162        177,481
     Director and committee fees                                            36,149         40,837         74,097         82,937
     Mortgage servicing rights amortization                                 49,374         70,220         32,290        126,374
     Other expenses                                                        360,647        328,693        593,936        486,544
                                                                      -------------- -------------- -------------- ---------------
         Total other expenses                                            1,804,791      1,727,201      3,324,409      3,095,573
                                                                      -------------- -------------- -------------- ---------------

Income Before Income Tax                                                 1,620,082        132,998      3,564,809      1,153,280
     Income tax expense                                                    607,730       (103,348)     1,308,189        186,388
                                                                      -------------- -------------- -------------- ---------------
Income Before Extraordinary Item                                         1,012,352        236,346      2,256,620        966,892
     Early extinguishment of debt, net of income taxes                                   (150,303)                     (150,303)
                                                                      -------------- -------------- -------------- ---------------
Net Income                                                            $   1,012,352  $     86,043   $  2,256,620   $    816,589
                                                                      ============== ============== ============== ===============

Basic earnings per share                                              $          16                 $         .35
                                                                      ==============
                                                                                                    ==============
Diluted earnings per share                                                      .16                           .35
                                                                      ==============                ==============
</TABLE>




See notes to consolidated condensed financial statements.


<PAGE>


                         LINCOLN BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Comprehensive Income
                                   (Unaudited)
<TABLE>
<CAPTION>



                                                                    Three Months Ended                 Six Months Ended
                                                                         June 30,                          June 30,
                                                                   1999             1998            1999             1998
                                                              ---------------- -------------   ---------------- ----------------
<S>                                                                <C>                 <C>          <C>                    <C>
                                                                                                   $  2,256,620        $  816,589
    Net income                                                   $  1,012,352        $ 86,043
    Other comprehensive income, net of tax
          Unrealized losses on securities  available
              for sale Unrealized holding
              gains  (losses)  arising  during
              the  period,  net of tax  expense
              (benefit) of $(1,935,697), $63,812,
              $(2,271,013) and $42,271                             (2,951,193)         97,289       (3,462,421)            64,447

              Less: Reclassification adjustment for gains                                               (2,358)            63,397
              (losses) included in net income, net of tax
              expense (benefit) of  $41,582, $(1,546) and
              $41,582                                                                  63,397
                                                              ---------------- --------------- ---------------- ----------------
                                                                  (2,951,193)          33,892       (3,460,063)             1,050
                                                                                               ---------------- ----------------
                                                              ================ ===============
     Comprehensive income                                        $(1,938,841)      $  119,935      $(1,203,443)        $  817,639
                                                              ================ =============== ================   ===============
</TABLE>






See notes to consolidated condensed financial statements.





<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Shareholders' Equity
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                       Accumulated
                                                Common Stock                              Other        Unearned
                                         ----------------------------
                                           Shares                       Retained      Comprehensive      ESOP
                                         Outstanding      Amount        Earnings          Income        Shares          Total
                                         ------------ --------------- -------------- ----------------------------- -----------------

<S>                                      <C>           <C>            <C>             <C>             <C>             <C>
Balances, January 1, 1999                7,009,250    $ 68,879,373     $ 42,548,260       $287,549    $(5,607,400)    $ 106,107,782


  Net income for the period                                               2,256,620                                       2,256,620
  Unrealized losses on securities,
    net of reclassification adjustment                                                   (3,460,063)                     (3,460,063)
  ESOP shares earned                                        17,738                                        197,090           214,828
  Additional conversion costs                              (13,706)                                                         (13,706)
  Cash dividends ($.12 per share)                                         (841,110)                                        (841,110)
                                         ------------ --------------- -------------- ----------------------------- -----------------

Balances, June 30, 1999                  7,009,250     $ 68,883,405   $  43,963,770   $  (3,172,514)  $(5,410,310)    $ 104,264,351
                                         ============ =============== ============== =============== ==============  ===============

</TABLE>







See notes to consolidated condensed financial statements.





<PAGE>
                         LINCOLN BANCORP AND SUBSIDIARY
                 Consolidated Condensed Statement of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                  Six Months Ended
                                                                                                      June 30,
                                                                                         -------------------- -------------------
                                                                                               1999                1998
                                                                                         -------------------- -------------------
    Operating Activities
<S>                                                                                      <C>                  <C>
         Net income                                                                      $     2,256,620      $     816,589
         Adjustments to reconcile net income to net
          cash provided (used) by  operating activities
           Provision for loan losses                                                           231,164              409,937
           Gain on sale of  foreclosed real estate                                              (9,449)                (434)
           (Gain)  loss on disposal of premises and equipment                                    4,219                7,456
           Investment securities accretion, net                                               (176,495)                 (72)
           Investment securities (gains) losses                                                  3,904             (104,981)
           Equity in losses of limited partnerships                                            169,353              268,134
           Amortization of net loan origination fees                                          (174,123)            (216,970)
           Depreciation and amortization                                                       202,225              237,569
           Deferred income tax benefit                                                         275,315             (150,524)
           ESOP shares earned                                                                  214,828
           Net change in:
             Loans held for sale                                                                                    238,002
             Interest receivable                                                              (522,936)             105,097
             Interest payable                                                                 (110,343)             (15,352)
             Other assets                                                                       (7,834)             122,504
             Other liabilities                                                                (234,565)             (79,552)
             Income taxes receivable/payable                                                   261,625              126,829
                                                                                         -------------------- -------------------
                  Net cash provided by operating activities                                  2,383,508            1,764,232
                                                                                         -------------------- -------------------

    Investing Activities
         Purchases of securities available for sale                                        (64,794,311)         (14,924,502)
         Proceeds from sales of securities available for sale                               10,259,375           21,080,952
         Proceeds from maturities of securities available for sale                          12,646,463            4,137,734
         Proceeds from maturities of securities held to maturity                               750,000            6,135,000
         Net change in loans                                                               (19,827,014)           5,312,468
         Purchases of loans                                                                 (4,761,641)
         Purchases of property and equipment                                                  (612,248)            (257,928)
         Proceeds from sale of foreclosed  real estate                                          54,907              144,501
         Contribution to limited partnership                                                                       (195,000)
         Other investing activities                                                                                (650,000)
                                                                                         -------------------- -------------------
                  Net cash provided (used) by investing activities                         (66,284,469)          20,783,225
                                                                                         -------------------- -------------------

    Financing Activities
         Net change in
            Noninterest-bearing, interest-bearing demand,
               money market and savings deposits                                             6,850,440              266,372
            Certificates of deposit                                                        (14,455,616)           7,042,030
            Short-term borrowings                                                            4,600,000
         Proceeds from FHLB advances                                                        61,000,000           10,000,000
         Repayment of FHLB advances                                                        (10,000,000)         (34,450,000)
         Payment on note payable to limited partnership                                       (488,500)            (488,500)
         Cash dividends                                                                       (420,555)
         Additional conversion costs                                                           (13,706)
         Net change in advances by borrowers for taxes and insurance                           (51,284)            (110,498)
                                                                                         -------------------- -------------------
                  Net cash provided (used)  by financing activities                         47,020,779          (17,740,596)
                                                                                         -------------------- -------------------

    Net Change in Cash and Cash Equivalents                                                (16,880,182)           4,806,861

    Cash and Cash Equivalents, Beginning of Period                                          22,907,357           18,957,681
                                                                                         -------------------- -------------------

    Cash and Cash Equivalents, End of Period                                             $   6,027,175        $  23,764,542
                                                                                         ==================== ===================

    Additional Cash Flows and Supplementary Information
         Interest paid                                                                   $   6,726,398        $   6,897,070
         Income tax paid                                                                       771,250              111,500
         Loan balances transferred to foreclosed real estate                                                        196,872
         Securitization of loans and loans held for sale                                                         39,903,448
         Transfer of loans to loans held for sale                                                                19,611,239
</TABLE>


    See notes to consolidated condensed financial statements.

<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
         Notes to Unaudited Consolidated Condensed Financial Statements

Note 1: Basis of Presentation

The consolidated  financial  statements  include the accounts of Lincoln Bancorp
(the "Company"),  its wholly owned  subsidiary,  Lincoln Federal Savings Bank, a
federally  chartered  savings bank ("Lincoln  Federal"),  and Lincoln  Federal's
wholly owned subsidiary,  L-F Service Corporation ("L-F Service").  A summary of
significant accounting policies is set forth in Note 1 of the Notes to Financial
Statements included in the December 31, 1998 Annual Report to Shareholders.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

The interim  consolidated  financial statements have been prepared in accordance
with the instructions to Form 10-Q, and therefore do not include all information
and footnotes necessary for a fair presentation of financial  position,  results
of operations and cash flows in conformity  with generally  accepted  accounting
principles.

The interim consolidated  financial statements at June 30, 1999, and for the six
and  three  months  ended  June 30,  1999 and  1998,  have not been  audited  by
independent  accountants,  but  reflect,  in  the  opinion  of  management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial position,  results of operations and cash flows for
such periods.

Note 2: Earnings Per Share

Earnings per share have been computed based upon the weighted average common and
common  equivalent  shares  outstanding  during the period subsequent to Lincoln
Federal's  conversion  to a stock  savings bank on December  30, 1998.  Unearned
Employee Stock  Ownership Plan shares have been excluded from the computation of
average common shares  outstanding.  For the six and three months ended June 30,
1999,  weighted  average shares  outstanding for basic and diluted  earnings per
share were 6,458,365 and 6,463,292 respectively.


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

General

Lincoln  Bancorp,  an Indiana  corporation  (the  "Company"),  was  organized in
September, 1998. On December 30, 1998, it acquired all of the outstanding common
stock of Lincoln Federal Savings Bank ("Lincoln Federal") upon the conversion of
Lincoln  Federal from a federal  mutual  savings bank to a federal stock savings
bank.

Lincoln  Federal was originally  organized in 1884 as Ladoga Federal Savings and
Loan Association, located in Ladoga, Indiana. In 1979 Ladoga Federal merged with
Plainfield  First Federal  Savings and Loan  Association,  a federal savings and
loan association located in Plainfield,  Indiana which was originally  organized
in 1896.  Following  the merger,  the Bank  changed its name to Lincoln  Federal
Savings and Loan  Association  and, in 1984,  adopted its current name,  Lincoln
Federal Savings Bank.  Lincoln Federal currently  conducts its business from six
full-service  offices  located  in  Hendricks,  Montgomery,  Clinton  and Morgan
Counties,  Indiana, with its main office located in Plainfield.  Lincoln Federal
opened an office in Avon,  Indiana in  January,  1999 and its  newest  office in
Mooresville,  Indiana in April,  1999. The Bank's principal business consists of
attracting  deposits  from the general  public and  originating  fixed-rate  and
adjustable-rate  loans  secured  primarily  by first  mortgage  liens on one- to
four-family  residential  real estate.  Lincoln  Federal's  deposit accounts are
insured up to applicable limits by the SAIF of the FDIC.

Lincoln Federal offers a number of financial  services,  including:  (i) one- to
four-family  residential  real estate loans;  (ii) commercial real estate loans;
(iii)  real  estate  construction  loans;  (iv)  land  loans;  (v)  multi-family
residential  loans;  (vi)  consumer  loans,  including  home  equity  loans  and
automobile loans;  (vii) commercial  loans;  (viii) money market demand accounts
("MMDAs");  (ix) savings accounts; (x) checking accounts; (xi) NOW accounts; and
(xii) certificates of deposit.


Lincoln Federal  currently owns one subsidiary,  L-F Service  corporation  ("L-F
Service"),  whose  assets  consist of an  investment  in Family  Financial  Life
Insurance Company ("Family  Financial") and in Bloomington  Housing  Associates,
L.P.  ("BHA").  Family  Financial  is an Indiana  stock  insurance  company that
primarily  engages in retail sales of mortgage and credit insurance  products in
connection with loans originated by its shareholder financial institutions.  BHA
is an Indiana  limited  partnership  that was  organized to  construct,  own and
operate  a  130-unit  apartment  complex  in  Bloomington,   Indiana  (the  "BHA
project").  Development of the BHA Project has been completed and the project is
performing as planned.

Lincoln  Federal's  results of operations depend primarily upon the level of net
interest income,  which is the difference  between the interest income earned on
interest-earning assets, such as loans and investments,  and costs incurred with
respect to  interest-bearing  liabilities,  primarily  deposits and  borrowings.
Results  of  operations  also  depend  upon  the  level  of  Lincoln   Federal's
non-interest income,  including fee income and service charges, and the level of
its non-interest expenses, including general and administrative expenses.

Financial Condition

Total assets  increased  $35.8  million,  or 9.7% at June 30, 1999,  compared to
December 31, 1998. The increase was primarily in investment securities available
for sale and net loans. Investment securities available for sale increased $26.3
million,  or 20.3%.  Net loans increased $24.6 million,  or 12.6% due in part to
the  funding  of one- to  four-family  residential  mortgage  loans that were in
process at December 31, 1998 and the purchase of  approximately  $4.0 million of
one-  to  four-family   residential   mortgage  loans  from  another   financial
institution  during the first quarter of 1999. Loan growth  continued during the
second  quarter  of 1999 in  nearly  all loan  categories.  These  increases  in
investment  securities available for sale and loans were offset by a decrease in
cash and cash equivalents. Cash and cash equivalents decreased by $16.9 million,
or 73.7%.  These balance  sheet changes were a result of a leverage  strategy to
increase net interest income and improve the Company's  return on average assets
and equity.

Deposits  decreased  $7.6 million to $204.4  million during the six months ended
June 30, 1999.  The decline in deposits was primarily a result of the run-off of
maturing certificates of deposit specials.

Total borrowed funds  increased $55.1 million from December 31, 1998 to June 30,
1999.  The increase in total borrowed funds was comprised of an increase in FHLB
advances of $51.0 million, an increase in repurchase  agreements of $4.6 million
and a decrease in the note payable to a limited  partnership  of  $489,000.  The
increase in total  borrowings  reflects the  Company's  decision to leverage its
earning  assets  when  appropriate.  The  proceeds  from  borrowings  were  used
primarily to fund  investments in  mortgage-backed  and other  investment  grade
securities available for sale.

Stockholders'  equity decreased $1.8 million from $106.1 million at December 31,
1998 to $104.3  million at June 30, 1999.  The  decrease  was due to  unrealized
losses of $3.5  million  on  investment  securities  available  for  sale,  cash
dividends of $841,000 and  additional  stock  conversion  costs of $14,000.  Net
income for the six months ended June 30, 1999 of $2.3 million and Employee Stock
Ownership Plan ("ESOP") shares earned of $215,000 offset these decreases.

Comparison  of  Operating  Results for the Three  Months Ended June 30, 1999 and
1998

Net income  increased  $926,000 from $86,000 for the three months ended June 30,
1998 to $1.0 million for the three months ended June 30, 1999.  The increase was
primarily  due to an increase in net  interest  income  offset by  increases  in
noninterest expenses and income tax expense. In addition,  extraordinary expense
of $150,000  related to the prepayment of FHLB advances was recorded  during the
three months ended June 30, 1998. The return on average assets was 1.00% and .11
% for the three months ended June 30, 1999 and 1998, respectively.

Interest  income  increased  $1.4 million,  or 24.1%,  from $5.6 million for the
three  months  ended June 30, 1998 to $7.0  million for the same period in 1999.
Interest  expense  increased  $81,000,  or 2.4%, from $3.4 million for the three
months  ended June 30, 1998 to $3.5  million  for the same period in 1999.  As a
result,  net interest  income for the three months ended June 30, 1999 increased
$1.3  million or 57.4%,  compared to the same period in 1998.  The net  interest
margin was 3.55% for the second  quarter of 1999  compared to 3.01% for the same
period in 1998. The increase in net interest income and the improved margin were
primarily  the result of revenue from the proceeds of the stock  conversion  and
from balance sheet  leveraging.  Net proceeds of the Company's  stock  issuance,
after costs and excluding the shares issued for the ESOP, were $61.3 million.  A
$50.0 million leverage strategy was initiated during the first quarter of 1999.

The Company's provision for loan losses for the three months ended June 30, 1999
was $200,000  compared to $365,000 for the same period in 1998. Net  charge-offs
were  $76,000 and  $324,000  for the three  months ended June 30, 1999 and 1998,
respectively.

Other income for the second quarter of 1999 was $133,000  compared to $7,000 for
the second quarter of 1998. Equity in losses of limited  partnerships  decreased
$66,000 from the 1998 period to the 1999 period due to the operating  results of
the limited partnerships.  In addition,  other income increased primarily due to
$147,000 of losses on loans held for sale at June 30, 1998 offset by $105,000 of
gains on sales of investment  securities  available for sale recorded during the
three  months  ended June 30, 1998  compared to no gains  during the  comparable
period in 1999.

Other expense  increased  $78,000,  or 4.5%, for the three months ended June 30,
1999  compared to the same period in 1998.  Salaries and employee  benefits were
$872,000 for the three  months ended June 30, 1999  compared to $655,000 for the
1998 period, an increase of $217,000, or 33.2%. This increase resulted primarily
from  $107,000 of  compensation  expense  associated  with the ESOP.  Also,  the
Company's  compensation expense increased as a result of additional staffing for
the two branches opened in 1999. The increase in salaries and employee  benefits
was in part  offset  by a  decrease  in  professional  fees.  Professional  fees
decreased  $78,000 for the three  months  ended June 30, 1999 as compared to the
same period in 1998.  During 1998,  the Bank utilized third parties to assist in
loan packaging for sales and securitizations.

Income tax expense  increased  $711,000 for the three months ended June 30, 1999
compared to the same period in 1998. The increase was a result of an increase in
taxable  income  for  the  period  and a  decrease  in low  income  tax  credits
available.  The Company has two  low-income  housing  partnerships  of which the
final tax credits for one of the two partnerships were used in 1998.

Comparison of Operating Results for the Six Months Ended June 30, 1999 and 1998

Net income increased approximately $1.4 million from $817,000 for the six months
ended June 30, 1998 to $2.3 million for the six months ended June 30, 1999.  The
increase  was  primarily  due to an increase in net  interest  income  offset by
increases in other expenses and income tax expense.  In addition,  extraordinary
expense of $150,000  related to the  prepayment  of FHLB  advances  was recorded
during the six months ended June 30,1998. The return on average assets was 1.16%
and .53 % for the six months ended June 30, 1999 and 1998, respectively.

Interest  income  increased  approximately  $2.1 million,  or 17.9%,  from $11.4
million  for the six months  ended June 30,  1998 to $13.5  million for the same
period in 1999. Interest expense decreased $239,000, or 3.5%, from approximately
$6.9 million for the six months ended June 30, 1998 to $6.6 million for the same
period in 1999. As a result,  net interest  income for the six months ended June
30, 1999  increased  approximately  $2.3 million or 50.0%,  compared to the same
period in 1998. The net interest  margin was 3.64% for the six months ended June
30,  1999  compared to 3.06% for the same  period in 1998.  The  increase in net
interest  income and the improved  margin were  primarily  the result of revenue
from the proceeds of the stock conversion and from balance sheet leveraging.

The  Company's  provision for loan losses for the six months ended June 30, 1999
was $231,000  compared to $410,000 for the same period in 1998. Net  charge-offs
were  $77,000  and  $339,000  for the six months  ended June 30,  1999 and 1998,
respectively.

Other income for the six months ended June 30, 1999 was $282,000, an increase of
$181,000  from the $101,000  for the six months  ended June 30, 1998.  Equity in
losses of limited  partnerships  decreased  $99,000  from the 1998 period to the
1999  period  due to the  operating  results  of the  limited  partnerships.  In
addition, other income increased due in part to $114,000 of losses on loans held
for sale at June 30, 1998  offset by  $105,000  of gains on sales of  investment
securities available for sale recorded during the six months ended June 30, 1998
compared to losses of $4,000 during the comparable period in 1999.

Other expenses of $3.3 million increased  $229,000,  or 7.4%, for the six months
ended June 30, 1999  compared to the same period in 1998.  Salaries and employee
benefits  were $1.7 million for the six months  ended June 30, 1999  compared to
$1.3  million  for the 1998  period,  an increase of  $357,000,  or 27.0%.  This
increase  resulted  primarily from $215,000 of compensation  expense incurred by
the  Company in  connection  with the ESOP.  Also,  the  Company's  compensation
expense increased as a result of additional staffing for the two branches opened
in 1999.  Other expenses also  increased  $107,000 for the six months ended June
30, 1999  compared to the same period in 1998.  The  increase in other  expenses
resulted  from  nominal  increases  in a  variety  of  expense  categories.  The
increases  in salaries and employee  benefits  and other  expenses  were in part
offset by decreases in mortgage  servicing rights  amortization and professional
fees.  Mortgage  servicing  rights  amortization  was $32,000 for the six months
ended  June 30 1999  compared  to  $126,000  for the same  period in 1998 due to
slower prepayment speeds on serviced mortgages.  In addition,  professional fees
decreased $88,000 for the six months ended June 30, 1999 as compared to the same
period in 1998.  During 1998,  the Bank utilized third parties to assist in loan
packaging for sales and securitizations.

Income tax expense increased $1.1 million for the six months ended June 30, 1999
compared to the same period in 1998. The increase was a result of an increase in
taxable  income  for  the  period  and a  decrease  in low  income  tax  credits
available.  The Company has two  low-income  housing  partnerships  of which the
final tax credits for one of the two partnerships were used in 1998.

Asset Quality

Lincoln Federal  currently  classifies  loans as special  mention,  substandard,
doubtful  and loss to  assist  management  in  addressing  collection  risks and
pursuant to regulatory requirements,  which are not, necessarily consistent with
generally  accepted  accounting  principles.  Special  mention  loans  represent
credits  that  have  potential   weaknesses  that  deserve   management's  close
attention.  If left  uncorrected,  these  potential  weaknesses  may  result  in
deterioration of the repayment prospects or Lincoln Federal's credit position at
some future date.  Substandard  loans  represent  credits  characterized  by the
distinct  possibility  that some loss will be sustained if deficiencies  are not
corrected.  Doubtful loans possess the characteristics of substandard loans, but
collection  or  liquidation  in full is  doubtful  based  upon  existing  facts,
conditions and values. A loan classified as a loss is considered  uncollectible.
Lincoln  Federal had no loans  classified as special mention as of June 30, 1999
and  December  31,  1998.  In  addition,  Lincoln  Federal had $1.0  million and
$905,000 of loans  classified as  substandard  at June 30, 1999 and December 31,
1998,  respectively.  The  increase  in  loans  classified  as  substandard  was
primarily  attributable  to an increase in mortgage  loans past due greater than
ninety days but not on non-accrual status.  Lincoln Federal reviews all loans on
an  individual  basis when the loan  reaches  ninety days past due to  determine
whether non-accrual status is necessary. At June 30, 1999 and December 31, 1998,
no loans were classified as doubtful or loss. At June 30, 1999, and December 31,
1998, respectively,  non-accrual loans were $968,000 and $959,000. The allowance
for loan  losses  was $1.7  million  or .75% of loans at June 30,  1999 and $1.5
million or .77% of loans at December 31, 1998.

Liquidity and Capital Resources

The standard measure of liquidity for savings  associations is the ratio of cash
and eligible  investments to a certain  percentage of net  withdrawable  savings
accounts  and  borrowings  due within one year.  The minimum  required  ratio is
currently set by the Office of Thrift  Supervision  regulation at 4%. As of June
30, 1999,  Lincoln  Federal had liquid  assets of $93.5  million and a liquidity
ratio of 55.3%.


Other

The  Securities  and  Exchange  Commission  maintains  a Web site that  contains
reports,   proxy  information   statements,   and  other  information  regarding
registrants that file electronically with the Commission, including the Company.
The address is (http://www.sec.gov).


Year 2000 Compliance

The Company's lending and deposit activities depend  significantly upon computer
systems to process and record transactions. Management is aware of the potential
Year 2000 related  problems that may affect the  operating  systems that control
the  Company's  computers  as well as  those  of its  third-party  data  service
providers  that  maintain  many of its records.  In 1997,  management  began the
process  of  identifying  any Year 2000  related  problems  that may  affect the
Company's  computer  systems,  and  management  is closely  monitoring  the data
service  providers'  progress  in making  their  systems  Year  2000  compliant.
Management  completed  mission  critical testing for Year 2000 compliance in the
second quarter of 1999.

Management has contacted the  approximately  20 companies that supply or service
the Company's  material  operations  requesting that they certify that they have
plans to make their respective computer systems Year 2000 compliant.  Management
established  a December 31, 1998  deadline  for these  companies to provide this
certification  and, as of that date,  approximately  90% of these  companies had
responded  to this  inquiry.  The Company has  delivered a second  notice to the
service providers who did not respond to the first inquiry and has established a
deadline of June 30, 1999 for these  companies to respond.  Once a certification
is received from a service provider,  management intends to continuously monitor
the progress that the service  provider makes in meeting the Company's  targeted
schedule for becoming Year 2000 compliant. The Company's electronic data service
provider,   whose  services  are  integral  to  its  operations,   has  provided
certification  to management that its computer  systems are Year 2000 compliant.
The Company is currently  testing the data that is maintained on its  electronic
data service  provider's  system and will continue  testing  throughout  1999 to
ensure that the system is Year 2000 compliant.  The deadline that management has
established for the Company's  remaining service providers to certify that their
systems are Year 2000 compliant  should provide  management  sufficient  time to
identify and contract with alternative service providers to replace any provider
that cannot certify that it is, or soon will be, Year 2000 compliant. Management
does not expect the  expense of such  changes in  suppliers  or  services  to be
material to its operations,  financial condition or results. Notwithstanding the
efforts  management has made, no assurances can be given that the systems of its
service providers will be timely renovated to address the Year 2000 issue.

In addition to possible  expenses related to the Company's own systems and those
of its service  providers,  the Company could incur losses if Year 2000 problems
affect any of its  significant  borrowers or impair the payroll systems of large
employers in its market area,  either of which could delay loan  payments by the
Company's  borrowers.  Management  contacted,  and received  replies  from,  the
approximately  23  commercial  borrowers  with  outstanding  loans in  excess of
$300,000  certifying that their computer systems are, or soon will be, Year 2000
compliant.  In addition, the Company currently requires that borrowers under new
commercial  loans that it  originates to certify that they are aware of the Year
2000  issue  and  will  give  all  necessary  attention  to  insure  that  their
information  technology will be Year 2000 compliant.  Because the Company's loan
portfolio to individual  borrowers is  diversified  and its market area does not
depend significantly upon one employer or industry,  the Company does not expect
any significant or prolonged Year 2000 related difficulties that will affect net
earnings or cash flow.  Management  believes that the Company's expenses related
to upgrading its systems and software for Year 2000  compliance  will not exceed
$300,000.  At June 30,  1999,  the Company had spent  approximately  $102,000 in
connection  with  Year  2000  compliance.   Management  does  not  consider  the
additional cost of these efforts to be significant.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

An important  component of Lincoln Federal's  asset/liability  management policy
includes  examining the interest rate  sensitivity of its assets and liabilities
and  monitoring  the  expected  effects  of  interest  rate  changes  on its net
portfolio value.

An asset or liability is interest rate  sensitive  within a specific time period
if it will  mature or reprice  within  that time  period.  If Lincoln  Federal's
assets  mature  or  reprice  more  quickly  or  to a  greater  extent  than  its
liabilities, Lincoln Federal's net portfolio value and net interest income would
tend to increase  during periods of rising  interest  rates but decrease  during
periods of falling  interest  rates.  Conversely,  if Lincoln  Federal's  assets
mature or reprice more slowly or to a lesser  extent than its  liabilities,  its
net  portfolio  value and net  interest  income  would tend to  decrease  during
periods of rising interest rates but increase during periods of falling interest
rates.

Management  believes it is critical to manage the relationship  between interest
rates and the effect on Lincoln  Federal's net  portfolio  value  ("NPV").  This
approach  calculates the  difference  between the present value of expected cash
flows from assets and the present value of expected cash flows from liabilities,
as well as cash flows from off-balance sheet contracts.  Lincoln Federal manages
assets  and  liabilities  within  the  context  of the  marketplace,  regulatory
limitations  and within  limits  established  by its Board of  Directors  on the
amount of change in NPV which is acceptable given certain interest rate changes.

The OTS  issued a  regulation,  which  uses a net market  value  methodology  to
measure the interest rate risk exposure of savings associations.  Under this OTS
regulation,  an institution's  "normal" level of interest rate risk in the event
of an assumed change in interest rates is a decrease in the institution's NPV in
an  amount  not  exceeding  2% of  the  present  value  of its  assets.  Savings
associations  with over  $300  million  in assets or less than a 12%  risk-based
capital  ratio are required to file OTS Schedule  CMR. Data from Schedule CMR is
used by the OTS to calculate  changes in NPV (and the related  "normal" level of
interest rate risk) based upon certain interest rate changes  (discussed below).
Associations  which  do not  meet  either  of the  filing  requirements  are not
required to file OTS Schedule CMR, but may do so  voluntarily.  Because  Lincoln
Federal's assets exceed $300 million, it is required to file Schedule CMR. Under
the  regulation,  associations  which must file are required to take a deduction
(the interest rate risk capital component) from their total capital available to
calculate  their risk based capital  requirement if their interest rate exposure
is greater  than  "normal."  The amount of that  deduction  is  one-half  of the
difference  between (a) the institution's  actual  calculated  exposure to a 200
basis point interest rate increase or decrease (whichever results in the greater
pro forma decrease in NPV) and (b) its "normal" level of exposure which is 2% of
the present value of its assets.

Presented  below,  as of June 30,  1999 and  December  31,  1998,  are  analyses
performed  by the OTS of Lincoln  Federal's  interest  rate risk as  measured by
changes in NPV for  instantaneous  and  sustained  parallel  shifts in the yield
curve,  in 100  basis  point  increments,  up and down 300 basis  points  and in
accordance  with the proposed  regulations.  At June 30, 1999, 2% of the present
value of Lincoln  Federal's assets was approximately  $8.1 million.  Because the
interest  rate risk of a 200 basis  point  increase in market  rates  (which was
greater than the  interest  rate risk of a 200 basis point  decrease)  was $20.4
million at June 30, 1999,  Lincoln  Federal  would have been  required to deduct
$6.2  million  from its capital if the OTS NPV  methodology  had been in effect.
This  amount  represents  an  increase  of $2.6  million  over the $3.6  million
calculated  at December 31, 1998.  Lincoln  Federal's  exposure to interest rate
risk results from a concentration of fixed rate mortgage loans in its portfolio.

<TABLE>
<CAPTION>

                              June 30, 1999

                           Net Portfolio Value       NPV as % of PV of Assets
   Changes
  In Rates    $ Amount     $ Change       %Change     NPV Ratio     Change
  --------    --------     ---------      -------     ---------     ------

<S>            <C>          <C>              <C>        <C>          <C>
+300 bp        $51,476      $31,079          38%        14.03%      -629 bp
+200 bp         62,130       20,426          25%        16.34%      -398 bp
+100 bp         72,781        9,774          12%        18.49%      -183 bp
   0 bp         82,555                                  20.33%
-100 bp         89,561        7,006           8%        21.52%      +120 bp
-200 bp         92,508        9,952          12%        21.91%      +158 bp
-300 bp         94,590       12,035          15%        22.12%      +180 bp

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                            December 31, 1998

                           Net Portfolio Value        NPV as % of PV of Assets
   Changes
  In Rates    $ Amount     $ Change       %Change      NPV Ratio      Change
  --------    --------     ---------      -------      ---------      ------
<S>            <C>         <C>             <C>         <C>           <C>
+300 bp        $61,270     $-22,722       -27%         17.65%       -483 bp
+200 bp         69,565      -14,427       -17%         19.51%       -297 bp
+100 bp         77,499       -6,494        -8%         21.19%       -130 bp
   0 bp         83,993                                 22.48%
-100 bp         87,115        3,123        +4%         23.03%        +55 bp
-200 bp         89,343        5,350        +6%         23.38%        +90 bp
-300 bp         92,108        8,116       +10%         23.83%       +135 bp
</TABLE>


The chart at June 30, 1999 illustrates,  for example, that a 200 basis point (or
2%) increase in interest rates would result in a $20.4 million,  or 25% decrease
in the net  portfolio  value of Lincoln  Federal's  assets  compared  to a $14.4
million,  or 17% decrease,  at December 31, 1998. This hypothetical  increase in
interest rates at June 30,1999 would also result in a 398 basis point,  or 3.99%
decrease in the ratio of the net portfolio value to the present value of Lincoln
Federal's  assets compared to a 297 basis point, or 2.97%,  decrease at December
31, 1998.

As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent in the methods of  analysis  presented  above.  For  example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods to
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Also the interest rates on certain types of assets and  liabilities  may
fluctuate in advance of changes in market interest  rates,  while interest rates
on other types may lag behind  changes in market  rates.  Additionally,  certain
assets,  such as adjustable-rate  loans, have features which restrict changes in
interest rates on a short-term basis and over the life of the asset. Further, in
the event of a change in interest rates,  expected rates of prepayments on loans
and early withdrawals from certificates could likely deviate  significantly from
those assumed in calculating the table.






<PAGE>



PART II.   OTHER INFORMATION

Item 1.       Legal Proceedings

              None.

Item 2.       Changes in Securities and Use of Proceeds

              None.

Item 3.       Defaults Upon Senior Securities.

              None.

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

              None.

Item 5.       Other Information.

              None.

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

                    (a) Exhibits 27.  Financial Data Schedule

                    (b) No  reports on Form 8-K were  filed  during the  quarter
                        ended June 30, 1999.






<PAGE>

                                   Signatures

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


                                          LINCOLN BANCORP


Date:    August 12, 1999                  By: /s/ T. Tim Unger
         ---------------                  --------------------
                                          T. Tim Unger
                                          President and Chief Executive Officer



Date:    August 12, 1999                  By: /s/ John M. Baer
         ---------------                  --------------------
                                          John M. Baer
                                          Treasurer