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 SEPTEMBER 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: 000-25219

                                 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 September 30, 2001 was 5,310,360.






<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                             4

           Consolidated Condensed Statement of Income                       5

           Consolidated Condensed Statement of Comprehensive Income         6

           Consolidated Condensed Statement of Shareholders' Equity         7

           Consolidated Condensed Statement of Cash Flows                   8

           Notes to Unaudited Consolidated Condensed Financial Statements   9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.                                        10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk        14

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                 15
Item 2.  Changes in Securities and Use of Proceeds                         15
Item 3.  Defaults Upon Senior Securities                                   15
Item 4.  Submission of Matters to a Vote of Security Holders               15
Item 5.  Other Information                                                 15
Item 6.  Exhibits and Reports on Form 8-K                                  15

SIGNATURES                                                                 16




<PAGE>



                            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
<TABLE>
<CAPTION>

                         LINCOLN BANCORP AND SUBSIDIARY
                      Consolidated Condensed Balance Sheet
                                   (Unaudited)

                                                                           September 30,         December 31,
                                                                                2001                 2000
                                                                      ------------------------------------------
Assets
<S>                                                                   <C>                     <C>
     Cash and due from banks                                          $     2,000,970         $   1,998,763
     Short-term interest-bearing demand deposits in other banks            16,016,821             8,987,080
                                                                      ------------------------------------------
         Cash and cash equivalents                                         18,017,791            10,985,843
     Interest-bearing deposits                                              1,999,015               989,975
     Investment securities
         Available for sale                                               114,343,232           133,658,742
         Held to maturity                                                   1,800,000               500,000
                                                                      ------------------------------------------
              Total investment securities                                 116,143,232           134,158,742
     Loans                                                                339,259,602           328,557,520
         Allowance for loan losses                                          2,512,899             2,366,777
                                                                      ------------------------------------------
              Net Loans                                                   336,746,703           326,190,743
     Premises and equipment                                                 5,595,545             5,397,384
     Investments in limited partnerships                                    1,500,277             1,693,477
     Federal Home Loan Bank stock                                           7,734,400             7,734,400
     Interest receivable                                                    2,722,970             3,110,580
     Core deposit intangibles and goodwill                                  2,091,235             2,231,908
     Other assets                                                           6,685,857             7,578,324
                                                                      ------------------------------------------

         Total assets                                                 $   499,237,025         $ 500,071,376
                                                                      ==========================================

Liabilities
     Deposits
         Noninterest-bearing                                          $     7,554,574         $   4,143,904
         Interest-bearing                                                 253,567,912           247,714,971
                                                                      ------------------------------------------
              Total deposits                                              261,122,486           251,858,875
     Securities sold under repurchase agreements                           15,000,000            14,600,000
     Federal Home Loan Bank advances                                      126,448,164           138,422,524
     Note payable                                                             737,001             1,225,501
     Interest payable                                                       1,328,336             1,519,277
     Other liabilities                                                      6,810,975             3,856,545
                                                                      ------------------------------------------
         Total liabilities                                                411,446,962           411,482,722
                                                                      ------------------------------------------

Commitments and Contingencies

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 - 5,310,360 and 5,677,493 shares           51,810,133            55,496,031
     Retained earnings                                                     43,014,941            42,922,034
     Accumulated other comprehensive income (loss)                            (15,591)           (1,978,595)
     Unearned recognition and retention plan (RRP) shares                  (2,466,065)           (3,019,796)
     Unearned employee stock ownership plan (ESOP) shares                  (4,553,355)           (4,831,020)
                                                                      ------------------------------------------
         Total shareholders' equity                                        87,790,063            88,588,654
                                                                      ------------------------------------------

         Total liabilities and shareholders' equity                   $   499,237,025         $ 500,071,376
                                                                      ==========================================
</TABLE>

  See notes to consolidated condensed financial statements.




<PAGE>
<TABLE>
<CAPTION>


                         LINCOLN BANCORP AND SUBSIDIARY
                   Consolidated Condensed Statement of Income
                                   (Unaudited)


                                                                      Three Months Ended                 Nine Months Ended
                                                                         September 30,                     September 30,
                                                                   ----------------------------------------------------------------
                                                                      2001           2000             2001             2000
                                                                   ----------------------------------------------------------------
Interest Income
<S>                                                                <C>             <C>            <C>              <C>
     Loans, including fees                                         $ 6,595,556    $  5,164,054    $ 20,219,956     $ 14,688,338
     Investment securities                                           1,900,764       2,528,469       6,286,862        7,593,330
     Deposits with financial institutions                              225,902          50,594         473,187          267,895
     Dividend income                                                   141,338         121,903         443,351          338,586
                                                                   ----------------------------------------------------------------
         Total interest and dividend income                          8,863,560       7,865,020      27,423,356       22,888,149
                                                                   ----------------------------------------------------------------

Interest Expense
     Deposits                                                        2,944,015       2,794,393       9,590,131        7,907,055
     Repurchase agreements                                             491,338          74,507         654,871          210,266
     Federal Home Loan Bank advances                                 1,403,127       1,770,122       5,159,439        4,759,312
                                                                   ----------------------------------------------------------------
         Total interest expense                                      4,838,480       4,639,022      15,404,441       12,876,633
                                                                   ----------------------------------------------------------------

Net Interest Income                                                  4,025,080       3,225,998      12,018,915       10,011,516
     Provision for loan losses                                          88,900         119,316         227,478          168,467
                                                                   ----------------------------------------------------------------
Net Interest Income After Provision for Loan Losses                  3,936,180       3,106,682      11,791,437        9,843,049
                                                                   ----------------------------------------------------------------

Other Income
     Service  charges on deposit accounts                              173,753          83,147         486,209          234,119
     Net gains on sale of loans                                        116,862           1,488         416,388            1,488
     Equity in losses of limited partnerships                                         (102,630)       (193,200)        (307,890)
     Other income                                                      299,921         205,821         721,432          560,824
                                                                   ----------------------------------------------------------------
         Total other income                                            590,536         187,826       1,430,829          488,541
                                                                   ----------------------------------------------------------------

Other Expenses
     Salaries and employee benefits                                  1,623,792       1,398,689       4,710,200        3,769,056
     Net occupancy expenses                                            156,265         114,996         463,846          313,445
     Equipment expenses                                                144,134         133,950         467,828          405,569
     Advertising and business development                              115,105          91,873         343,469          263,048
     Data processing fees                                              262,169         207,696         770,364          614,444
     Professional fees                                                 102,011          64,333         304,176          243,773
     Director and committee fees                                        70,410          50,357         206,424          148,640
     Mortgage servicing rights amortization                             79,694          36,729         167,959          118,647
     Other expenses                                                    499,336         287,132       1,292,589          840,283
                                                                   ----------------------------------------------------------------
         Total other expenses                                        3,052,916       2,385,755       8,726,855        6,716,905
                                                                   ----------------------------------------------------------------

Income Before Income Tax                                             1,473,800         908,753       4,495,411        3,614,685
     Income tax expense                                                473,389         254,605       1,457,439          962,017
                                                                   ----------------------------------------------------------------

Net Income                                                         $ 1,000,411    $    654,148    $  3,037,972     $  2,652,668
                                                                   ================================================================



Basic earnings per share                                           $       .21    $        .13    $        .62     $        .52
                                                                   ================================================================
Diluted earnings per share                                                 .21             .13             .62              .52
                                                                   ================================================================

</TABLE>


See notes to consolidated condensed financial statements.


<PAGE>
<TABLE>
<CAPTION>


                         LINCOLN BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Comprehensive Income
                                   (Unaudited)



                                                                   Three Months Ended                 Nine Months Ended
                                                                      September 30,                     September 30,
                                                              -------------------------------------------------------------------
                                                                   2001             2000             2001              2000
                                                              -------------------------------------------------------------------

<S>                                                              <C>             <C>               <C>             <C>
  Net Income                                                     $ 1,000,411     $  654,148        $ 3,037,972     $ 2,652,668
  Other comprehensive income, net of tax
      Unrealized gains (losses) on securities available
      for sale

          Unrealized holding gains (losses) arising
          during the period, net of tax expense of
          $754,382, $1,093,472, 1,287,541 and $591,707.            1,150,142      1,667,124          1,963,004         902,125
                                                              -------------------------------------------------------------------
  Comprehensive income                                           $ 2,150,553     $2,321,272        $ 5,000,976     $ 3,554,793
                                                              ===================================================================

</TABLE>

See notes to consolidated condensed financial statements.


<PAGE>
<TABLE>
<CAPTION>


                         LINCOLN BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Shareholders' Equity
                  For the Nine Months Ended September 30, 2001
                                   (Unaudited)







                                     Common Stock                          Accumulated
                              ----------------------------                    Other                       Unearned
                                 Shares                       Retained    Comprehensive     Unearned        ESOP
                               Outstanding       Amount       Earnings    Income (Loss)   Compensation     Shares        Total
                              ----------------------------------------------------------------------------------------------------

<S>                              <C>           <C>          <C>            <C>            <C>           <C>            <C>
Balances, January 1, 2001        5,677,493     $55,496,031  $42,922,034    $(1,978,595)   $(3,019,796)  $(4,831,020)   $88,588,654

 Net income for the period                                    3,037,972                                                  3,037,972
 Unrealized gains on
   securities, net of
   reclassification adjustment                                               1,963,004                                   1,963,004
 Purchase of common stock         (385,817)     (3,893,283)   (1,671,987)                                               (5,565,270)
 Stock options exercised            18,684         207,385                                                                 207,385
 ESOP shares earned                                             100,329                                     277,665        377,994
 Amortization of unearned
 compensation expense                                           (24,576)                      553,731                      529,155
 Cash dividends ($.27 per
 share)                                                      (1,348,831)                                                (1,348,831)
                              ----------------------------------------------------------------------------------------------------

Balances, September 30, 2001     5,310,360     $51,810,133  $43,014,941       $(15,591)   $(2,466,065)  $(4,553,355)   $87,790,063
                              ====================================================================================================

</TABLE>



See notes to consolidated condensed financial statements.



<PAGE>
<TABLE>
<CAPTION>


                         LINCOLN BANCORP AND SUBSIDIARY
                 Consolidated Condensed Statement of Cash Flows
                                   (Unaudited)

                                                                                 Nine Months Ended
                                                                                   September 30,
                                                                        --------------------------------------
                                                                              2001                 2000
                                                                        --------------------------------------
Operating Activities
<S>                                                                      <C>                   <C>
    Net income                                                           $   3,037,972         $  2,652,668
    Adjustments to reconcile net income to net cash provided
     (used) by  operating activities
       Provision for loan losses                                               227,478              168,467
       (Gain) loss on sale of  foreclosed real estate                           14,034              (13,653)
       Loss on disposal of premises and equipment                                                     5,867
       Investment securities accretion, net                                   (324,845)            (290,230)
       Equity in losses of limited partnerships                                193,200              307,890
       Amortization of net loan origination fees                              (417,264)            (223,064)
       Depreciation and amortization                                           429,757              335,740
       Amortization of purchase accounting adjustments                          90,885
       Amortization of unearned compensation expense                           529,155              438,232
       ESOP shares earned                                                      377,994              337,911
       Net change in:
         Interest receivable                                                   387,610             (176,965)
         Interest payable                                                     (190,941)              87,284
       Other adjustments                                                       208,574            1,022,521
                                                                         -------------------------------------
             Net cash provided  by operating activities                      4,563,609            4,652,668
                                                                         -------------------------------------

Investing Activities
    Net change in interest-bearing deposits                                 (1,009,040)
    Purchases of securities available for sale                              (7,601,257)          (3,619,149)
    Purchases of securities held to maturity                                (1,800,000)
    Proceeds from maturities of securities available for sale               32,518,407            8,800,202
    Proceeds from maturities of securities held to maturity                    500,000
    Net change in loans                                                    (10,690,578)         (30,513,249)
    Purchase of FHLB of Indianapolis stock                                                         (500,200)
    Purchases of premises and equipment                                       (627,918)          (1,323,536)
    Net cash paid in acquisition                                                                 (7,695,505)
    Proceeds from sale of foreclosed  real estate                               78,864              191,434
    Other investing activities                                                                       (5,718)
                                                                         -------------------------------------
             Net cash used by investing activities                          11,368,478          (34,665,721)
                                                                         -------------------------------------

Financing Activities
    Net change in
       Noninterest-bearing, interest-bearing demand,
         money market and savings deposits                                   9,355,893            6,285,080
       Certificates of deposit                                                (112,458)           6,574,961
    Proceeds from repurchase agreements                                        400,000
    Proceeds from FHLB advances                                             20,000,000          123,000,000
    Repayment of FHLB advances                                             (32,000,000)        (103,000,000)
    Payment on note payable to limited partnership                            (488,500)            (488,500)
    Dividends paid                                                          (1,382,367)          (1,303,612)
    Purchase of common stock                                                (5,565,270)          (6,532,812)
    Stock options exercised                                                    207,385
    Net change in advances by borrowers for taxes and insurance                685,178              364,053
                                                                         -------------------------------------
             Net cash provided  by financing activities                     (8,900,139)          24,899,170
                                                                         -------------------------------------

Net Change in Cash and Cash Equivalents                                      7,031,948           (5,113,883)

Cash and Cash Equivalents, Beginning of Period                              10,985,843           10,818,632
                                                                         -------------------------------------

Cash and Cash Equivalents, End of Period                                 $  18,017,791         $  5,704,749
                                                                         =====================================

Additional Cash Flows and Supplementary Information
    Interest paid                                                        $  15,595,382         $ 12,789,349
    Income tax paid                                                          1,530,000            1,036,500
    Loan balances transferred to foreclosed real estate                        420,008              318,486
    Due to broker                                                            2,026,250

</TABLE>

See notes to consolidated condensed financial statements.

                         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 subsidiaries,  L-F Service Corporation ("L-F Service") and Citizens
Loan and  Service  Corporation  ("CLSC").  A summary of  significant  accounting
policies is set forth in Note 1 of Notes to Financial Statements included in the
December 31, 2000 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 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  condensed financial statements at September 30, 2001,
and for the three and nine months ended  September  30, 2001 and 2000,  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
shares outstanding.  Unearned Employee Stock Ownership Plan ("ESOP") shares have
been excluded from the computation of average common shares outstanding.

<TABLE>
<CAPTION>

                                               Three Months Ended                        Three Months Ended
                                               September 30, 2001                        September 30, 2000
                                               ------------------                        ------------------
                                                     Weighted            Per                       Weighted           Per
                                                      Average           Share                       Average          Share
                                         Income       Shares            Amount           Income     Shares           Amount
                                         ------       ------            ------           ------     ------           ------
<S>                                    <C>            <C>               <C>           <C>         <C>               <C>
   Basic earnings per share
     Income available to common
       shareholders                    $ 1,000,411    4,740,953         $ .21         $ 654,148   4,989,966         $ .13
                                                                      =========                                   =========

   Effect of dilutive RRP awards
   and stock options                                     95,368                                         702
                                     ---------------------------                    -------------------------

   Diluted earnings per  share
     Income available to  common
       shareholders and assumed
       conversions                     $ 1,000,411   4,836,321          $ .21         $ 654,148   4,990,668         $ .13
                                     ==========================================     ========================================
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                Nine Months Ended                         Nine Months Ended
                                               September 30, 2001                         September 30, 2000
                                               ------------------                         ------------------
                                                     Weighted                                   Weighted
                                                      Average         Per Share                  Average        Per Share
                                         Income       Shares            Amount        Income     Shares           Amount
                                         ------       ------            ------        ------     ------           ------
<S>                                    <C>           <C>                <C>          <C>          <C>               <C>
  Basic earnings per share
    Income available to common
      shareholders                     $ 3,037,972   4,864,383          $ .62       $ 2,652,668   5,064,971         $ .52
                                                                      =========                                   =========

  Effect of dilutive RRP awards
  and stock options                                     62,081                                          234
                                     ---------------------------                  ---------------------------

  Diluted earnings per  share
    Income available to  common
      shareholders and assumed
      conversions                      $ 3,037,972   4,926,464          $ .62       $ 2,652,668   5,065,205         $ .52
                                     ==========================================   =========================================

</TABLE>


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

General

The Company was  organized in September  1998. On December 30, 1998, it acquired
the common stock of 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.  On September 26, 2000,  the Company  acquired  Citizens
Bancorp ("Citizens"),  the holding company of Citizens Savings Bank of Frankfort
("Citizens  Savings"),  a federally  chartered savings bank. Citizens was merged
into the Company and Citizens Savings was merged into the Bank. CLSC, an Indiana
corporation and wholly-owned  subsidiary of Citizens Savings, will continue as a
subsidiary of the Bank.  Lincoln  Federal  currently  conducts its business from
eight full-service offices located in Hendricks,  Montgomery,  Clinton,  Johnson
and Morgan  Counties,  Indiana,  with its main  office  located  in  Plainfield.
Lincoln  Federal  opened its newest  office in  Greenwood,  Indiana in September
2000. The merger of Citizens  Savings into Lincoln Federal  resulted in a second
branch location in Frankfort, Indiana. 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;
(ix) savings  accounts;  (x) checking  accounts;  (xi) NOW  accounts;  and (xii)
certificates of deposit.

Lincoln  Federal  currently  owns two  subsidiaries,  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"), and CLSC, which
develops  land for  residential  housing.  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 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

Assets  totaled  $499.2  million at September  30, 2001, a slight  decrease from
December 31, 2000 of $.8 million.  Although  asset  totals  remained  relatively
constant  from the last  year-end,  a shift in the mix of  assets  has  occurred
primarily  in  net  loans,  up  $10.6  million  from  year-end  2000;  cash  and
interest-bearing  deposits  in other  banks,  up $8.0  million;  and  investment
securities available for sale, down $19.3 million. All major categories of loans
increased  with the exception of residential  real estate loans which  decreased
approximately  $15.7  million  from  December  31,  2000.  Most of the  increase
occurred in commercial loans which increased approximately $21.0 million.

Deposits  totaled  $261.1  million at September  30,  2001,  an increase of $9.3
million or an annualized  rate of 5% from  December 31, 2000.  The growth was in
checking  accounts up $1.9  million;  savings up $2.8  million and money  market
funds up $4.7 million. Federal Home Loan Bank advances and repurchase agreements
were reduced by $11.6 million to $141.4 million.

Shareholders'  equity decreased $799,000 from $88.6 million at December 31, 2000
to $87.8 million at September 30, 2001. The decrease in shareholders' equity was
primarily due to stock  repurchases  of $5.6 million and cash  dividends of $1.3
million.  These  decreases  were offset by net income for the nine months  ended
September  30, 2001 of $3.0  million,  Employee  Stock  Ownership  Plan ("ESOP")
shares earned of $378,000, unearned compensation amortization of $529,000, stock
options  exercised of $207,000 and a $2.0 million reduction in unrealized losses
on investment securities available for sale.

Comparison  of Operating  Results for the Three Months Ended  September 30, 2001
and 2000

Net income for the three months ended September 30, 2001 was $1,000,000, or $.21
for both basic and diluted  earnings per share.  This compared to net income for
the  comparable  period in 2000 of $654,000,  or $.13 for both basic and diluted
earnings per share. Return on assets was .78% and return on equity was 4.52% for
the third quarter of 2001 compared to .61% and 3.00%, respectively, for the same
period in 2000.

Net interest  income for the third  quarter of 2001 was  $4,025,000  compared to
$3,226,000  for the same period in 2000.  Net interest  margin was 3.26% for the
three-month  period  ended  September  30,  2001  compared to 3.06% for the same
period in 2000. The average yield on earning assets decreased .26% for the third
quarter  2001  compared  to the  same  period  in  2000.  The  average  cost  of
interest-bearing  liabilities  decreased  .84% from the third quarter of 2000 to
the third quarter of 2001.  This  increased  the Company's  spread from 1.87% to
2.45%, or .58%.

The provision for loan losses for the third quarter 2001 was $89,000 compared to
$119,000  for the same  period in 2000.  Nonperforming  loans to total  loans at
September  30,  2001 were .30%  compared  to .69% at December  31,  2000,  while
nonperforming  assets to total assets were .29% at September 30 compared to .47%
at December 31, 2000.  The allowance for loan losses as a percentage of loans at
September 30, 2001 was .74% compared to .72% at December 31, 2000.

Other income for the three months ended September 30, 2001 was $591,000 compared
to $188,000 for the same quarter of 2000.  Service  charges on deposit  accounts
were  $174,000 in the third  quarter of 2001,  an  increase of $91,000  from the
third  quarter of 2000.  Mortgage  loan sale  income was  $117,000  in the third
quarter  of 2001  compared  to $1,000  for the same  period  of 2000.  Due to an
improvement  in the operating  performance  of the limited  partnerships  during
2001, no losses on the  investments  were  recorded  during the third quarter of
2001 compared to $103,000 of losses for the same period in 2000.

Other  expenses were $3.1 million for the three months ended  September 30, 2001
compared to $2.4 million for the  comparable  three months of 2000. The increase
in expenses was  primarily the result of additional  costs  associated  with the
acquisition  of Citizens  Bancorp in September  2000, a new branch in Greenwood,
Indiana, and key management additions.

Income taxes were 32% of pretax income for the third quarter of 2001 compared to
28% for the same period in 2000.

Comparison of Operating Results for the Nine Months Ended September 30, 2001 and
2000

Net income for the nine months ended September 30, 2001 was $3,038,000,  or $.62
or both basic and diluted  earnings per share.  This  compared to net income for
the comparable period in 2000 of $2,653,000,  of $.52 for both basic and diluted
earnings per share. Return on assets was .79% and return on equity was 4.52% for
the  nine  months  ended   September  30,  2001  compared  to  .84%  and  4.05%,
respectively, for the same period in 2000.

Net interest income for the nine months ended September 30, 2001 was $12,019,000
compared to  $10,012,000  for the same period in 2000.  Net interest  margin was
3.24% for the nine-month  period ended  September 30, 2001 compared to 3.22% for
the same period in 2000. The average yield on earning assets  increased .02% for
the nine months ended  September  30, 2001  compared to the same period in 2000.
The average cost of  interest-bearing  liabilities  decreased  .30% for the nine
months  ended  September  30, 2001  compared  to the same  period in 2000.  This
increased spread from 2.06% to 2.38%, or .32%.

The provision  for loan losses for the nine months ended  September 30, 2001 was
$227,000 compared to $168,000 for the same period in 2000.

Other  income  for the nine  months  ended  September  30,  2001 was  $1,431,000
compared to $489,000  for the same quarter of 2000.  Service  charges on deposit
accounts were $486,000 for the nine months ended September 30, 2001, an increase
of $252,000 from the  comparable  period in 2000.  Mortgage loan sale income was
$416,000 for the nine months ended September 30, 2001 compared to $1,000 for the
same period of 2000. Due to an  improvement in the operating  performance of the
limited  partnerships  during 2001,  losses on the  investments of $193,000 were
recorded during the nine months ended September 30, 2001 compared to $308,000 of
losses for the same period in 2000.

Other  expenses  were  $8,727,000  for the nine months ended  September 30, 2001
compared to $6,717,000 for the  comparable  nine months of 2000. The increase in
expenses  was  primarily  the result of  additional  costs  associated  with the
acquisition  of Citizens  Bancorp in September  2000, a new branch in Greenwood,
Indiana, and key management additions.

Income taxes were 32% of pretax  income for the nine months ended  September 30,
2001 compared to 27% for the same period in 2000.  This  difference from year to
year was the result of a revision to the  Indiana  Code that  permits  financial
institutions  incorporated in Indiana to apportion  income in the same manner as
financial  institutions  incorporated  in other  states.  This  revision  to the
stature  was made  retroactive  to  January 1, 1999 and  recognized  as a single
adjustment in 2000.

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.  Special  mention  loans 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 are
characterized  by the distinct  possibility  that some loss will be sustained if
deficiencies are not corrected.  Doubtful loans possess the  characteristics  of
substandard loans, however,  their 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 $3.7 million and $2.6 million of
loans  classified  as special  mention as of September 30, 2001 and December 31,
2000,  respectively.  In  addition,  Lincoln  Federal had $1.5  million and $2.3
million of loans  classified as  substandard  at September 30, 2001 and December
31, 2000,  respectively.  At September  30, 2001 and December 31, 2000, no loans
were  classified as doubtful or loss.  At September  30, 2001,  and December 31,
2000,  respectively,  non-accrual  loans were $1.0 million and $1.4 million.  At
September 30, 2001 and December 31, 2000, the allowance for loan losses was $2.5
million and $2.4 million,  respectively or approximately .74% and .72% of loans,
respectively.

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  ("OTS") regulation at 4%. As
of September 30, 2001,  Lincoln  Federal had liquid assets of $8.8 million and a
liquidity ratio of 23.1%.

Impact of New Accounting Standards

Accounting  for  a  Business  Combination.  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 141 requires  that all business  combinations  should be
accounted for using the purchase method of accounting; use of the pooling method
is prohibited.  A business combination occurs when an enterprise acquires all or
a portion of the net assets that  constitutes a business or the equity interests
of one or more other  enterprises and that  enterprise  obtains control over the
other  enterprise  or  enterprises.   All  two-party  and  multi-party  business
combinations,  including "roll-up" and "put-together"  transactions are included
in the scope of this Statement.

This Statement requires that goodwill be initially recognized as an asset in the
financial statement and measured as the excess of the cost of an acquired entity
over the net of the amounts assigned to identifiable assets acquired and
liabilities assumed. In addition, SFAS No. 141 requires all other intangibles,
such as core deposit intangibles for a financial institution, to be identified.

The  provisions of Statement No. 141 are effective for any business  combination
that is initiated after June 30, 2001.

Accounting for Goodwill.  Under the provisions of SFAS No. 142,  goodwill should
not be amortized;  instead,  it should be tested for impairment at the reporting
unit level.  An  impairment  test of goodwill  should be done on an annual basis
unless events or circumstances  indicate  impairment has occurred in the interim
period.  The annual impairment test can be performed at any time during the year
as long as the measurement date is used consistently from year to year.

Impairment testing is a two step process.  The first step is a comparison of the
reporting unit's fair value to its carrying amount,  including its goodwill.  If
the reporting unit's fair value is greater than its carrying value, its goodwill
is not  impaired  and no further  comparisons  are  required.  Companies  should
perform the first step of the impairment  test on all goodwill within six months
of initially applying the Statement.  If the reporting unit's fair value is less
than its carrying amount,  the second step should be performed.  The second step
is to compare  the fair value of goodwill to the  carrying  amount.  If the fair
value of goodwill is less than the carrying  value,  then the goodwill is deemed
impaired and a loss  recognized.  Any impairment  loss recognized as a result of
completing  the  transitional  impairment  test should be treated as a change in
accounting  principle  and  recognized  in the first  interim  period  financial
statements.

The  provisions  of  Statement  No.  142 would be  effective  for  fiscal  years
beginning  after  December  15, 2001.  Early  adoption  would be  permitted  for
companies with a fiscal year beginning after March 15, 2001, provided,  that the
first quarter  financial  statements  have not been  previously  issued.  In all
cases,  the  Statement  must be adopted as of the  beginning  of a fiscal  year.
Goodwill and intangible  assets  acquired in a transaction  completed after June
30, 2001, but before this Statement as initially  applied would be accounted for
in  accordance  with the  amortization  and  nonamortization  provisions of this
Statement.  The useful economic life of previously  recognized intangible assets
should be reassessed upon adoption of this Statement, and remaining amortization
periods  should be adjusted  accordingly.  Intangible  assets  deemed to have an
indefinite life would no longer be amortized.


The  Company  will adopt  these new  accounting  rules on January 1, 2002.  As a
result,  the Company will no longer  amortize the goodwill that it recorded on a
certain  acquisition  prior to June 30, 2001, but will make an annual assessment
of any impairment in goodwill and, if necessary, recognize an impairment loss at
that time. The Company had goodwill  amortization of $17,000 and $49,000 for the
three and nine months ended September 30, 2001.

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.


Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Presented  below, as of June 30, 2001 and 2000, is an analysis  performed by the
OTS of Lincoln  Federal's  interest  rate risk as measured by changes in Lincoln
Federal's net portfolio value ("NPV") for instantaneous  and sustained  parallel
shifts in the yield curve, in 100 basis point increments,  up and down 300 basis
points.
<TABLE>
<CAPTION>

                                                June 30, 2001


                                 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                63,869          -31,492           -33%               13.16%           -495 bp
+200 bp                74,923          -20,438           -21%               15.00%           -310 bp
+100 bp                86,064           -9,297           -10%               16.75%           -135 bp
   0 bp                95,361                                               18.10%
-100 bp                99,305            3,944             4%               18.54%            +44 bp
-200 bp                98,537            3,176             3%               18.20%            +10 bp
-300 bp                95,448               86             0%               17.45%            -65 bp



                                                June 30, 2000


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

+300 bp                45,012          -32,138           -42%               11.87%           -661 bp
+200 bp                55,416          -21,733           -28%               14.15%           -433 bp
+100 bp                66,306          -10,844           -14%               16.39%           -209 bp
   0 bp                77,150                                               18.47%
-100 bp                86,656            9,506            12%               20.18%           +171 bp
-200 bp                92,067           14,917            19%               21.06%           +258 bp
-300 bp                94,630           17,480            23%               21.40%           +292 bp

</TABLE>

Management  believes  at June 30,  2001 and  September  30,  2001  there were no
material changes in Lincoln Federal's  interest rate sensitive  instruments that
would cause a material  change in the market risk  exposures,  which  affect the
quantitative  and  qualitative  risk  disclosures as presented in Item 7A of the
Company's Annual Report on Form 10-K for the period ended December 31, 2000.



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 a Vote of Security Holders

           None.

Item 5.    Other Information.

           None.

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

               (a)  No reports on Form 8-K were filed  during the quarter  ended
                    September 30, 2001.




<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: November 14, 2001            By:    /s/ T. Tim Unger
      -----------------                 ----------------------------------------

                                          T. Tim Unger
                                          President and Chief Executive Officer

Date: November 14, 2001            By:    /s/ John M. Baer
      -----------------                 ----------------------------------------

                                          John M. Baer
                                          Treasurer