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, 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: 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, 1999 was 6,308,325.






<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.                                     10

Item 3.       Quantitative and Qualitative Disclosures about Market Risk     14

PART II.      OTHER INFORMATION

Item 1.       Legal Proceedings                                              16
Item 2.       Changes in Securities                                          16
Item 3.       Defaults Upon Senior Securities                                16
Item 4.       Submission of Matters to a Vote of Security Holders            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>
                                                                                   September 30,         December 31,
                                                                                        1999                 1998
                                                                                --------------------- --------------------
<S>                                                                             <C>                   <C>
    Assets
         Cash and due from banks                                                $     1,745,466       $     4,245,128
         Interest-bearing demand deposits in other banks                              4,238,451            18,662,229
                                                                                --------------------- --------------------
             Cash and cash equivalents                                                5,983,917            22,907,357
         Investment securities
             Available for sale                                                     150,114,020           129,275,575
             Held to maturity                                                           500,000             1,250,000
                                                                                --------------------- --------------------
                  Total investment securities                                       150,614,020           130,525,575
         Loans                                                                      229,052,575           197,432,997
             Allowance for loan losses                                                1,717,698             1,512,205
                                                                                --------------------- --------------------
                  Net Loans                                                         227,334,877           195,920,792
         Premises and equipment                                                       3,802,025             3,379,460
         Investments in limited partnerships                                          2,146,100             2,386,994
         Federal Home Loan Bank stock                                                 5,446,700             5,446,700
         Interest receivable                                                          2,385,854             1,773,063
         Other assets                                                                 6,581,075             4,108,163
                                                                                --------------------- --------------------

             Total assets                                                       $   404,294,568       $   366,448,104
                                                                                ===================== ====================

    Liabilities
         Deposits
             Noninterest-bearing                                                $       3,314,894     $     2,484,444
             Interest-bearing                                                       204,282,239           209,525,347
                                                                                --------------------- --------------------
                  Total deposits                                                    207,597,133           212,009,791
         Short term borrowings                                                        4,600,000
         Federal Home Loan Bank advances                                             94,263,455            33,263,455
         Note payable                                                                 1,714,001             2,202,501
         Due to broker                                                                                     10,025,000
         Interest payable                                                             1,071,903             1,108,514
         Other liabilities                                                            3,346,401             1,731,061
                                                                                --------------------- --------------------
             Total liabilities                                                      312,592,893           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 - 6,308,325  shares and 7,009,250 shares         61,889,841            68,879,373
         Retained earnings                                                           42,940,983            42,548,260
         Accumulated other comprehensive income (loss)                               (4,255,336)              287,549
         Unearned employee stock ownership plan ("ESOP") shares                      (5,311,765)          (5,607,400)
         Unearned recognition and retention plan  ("RRP") shares                     (3,562,048)
                                                                                --------------------- --------------------
             Total shareholders' equity                                              91,701,675           106,107,782
                                                                                --------------------- --------------------

             Total liabilities and shareholders' equity                         $   404,294,568        $  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            Nine Months Ended
                                                                             September 30,                 September 30,
                                                                      -------------- -------------- -------------- --------------
                                                                          1999           1998           1999           1998
                                                                      -------------- -------------- -------------- --------------
<S>                                                                   <C>            <C>            <C>            <C>
Interest Income
     Loans, including fees                                            $  4,294,314   $  3,883,605   $ 12,412,863   $ 13,127,836
     Investment securities                                               2,627,842      1,094,946      7,580,413      2,562,559
     Deposits with financial institutions                                   40,403        475,476        207,158        960,520
     Dividend income                                                       109,830        110,242        325,907        326,319
                                                                      -------------- -------------- -------------- ---------------
         Total interest and dividend income                              7,072,389      5,564,269     20,526,341     16,977,234
                                                                      -------------- -------------- -------------- ---------------

Interest Expense
     Deposits                                                            2,353,282      2,720,808      7,170,558      8,056,698
     Short term borrowings                                                  59,835                       130,077
     Federal Home Loan Bank advances                                     1,157,295        662,766      2,885,832      2,182,238
                                                                      -------------- -------------- -------------- ---------------
         Total interest expense                                          3,570,412      3,383,574     10,186,467     10,238,936
                                                                      -------------- -------------- -------------- ---------------

Net Interest Income                                                      3,501,977      2,180,695     10,339,874      6,738,298
     Provision for loan losses                                              58,851         40,648        290,015        450,585
                                                                      -------------- -------------- -------------- ---------------
Net Interest Income After Provision for Loan Losses                      3,443,126      2,140,047     10,049,859      6,287,713
                                                                      -------------- -------------- -------------- ---------------

Other Income
     Net realized and unrealized gains (losses) on loans                    (9,705)        49,337          2,910        (64,985)
     Net realized gains (losses) on sales of available-for-sale                                           (3,904)       104,980
          securities
     Equity in losses of limited partnerships                              (71,541)      (178,870)      (240,894)      (447,004)
     Other income                                                          244,583        228,235        687,710        606,898
                                                                      -------------- -------------- -------------- ---------------
         Total other income                                                163,337         98,702        445,822        199,889
                                                                      -------------- -------------- -------------- ---------------

Other Expenses
     Salaries and employee benefits                                      1,099,021        683,162      2,774,124      2,001,651
     Net occupancy expenses                                                 96,504         54,750        251,923        189,927
     Equipment expenses                                                     88,008        154,679        354,533        454,563
     Deposit insurance expense                                              33,983         52,820        116,289        152,334
     Data processing fees                                                  117,169        124,273        472,740        493,446
     Professional fees                                                      52,010          7,888        141,172        185,369
     Director and committee fees                                            75,516         43,352        149,613        126,289
     Mortgage servicing rights amortization                                 44,116         37,688         76,406        164,062
     Other expenses                                                        308,175        184,254        902,111        670,798
                                                                      -------------- -------------- -------------- ---------------
         Total other expenses                                            1,914,502      1,342,866      5,238,911      4,438,439
                                                                      -------------- -------------- -------------- ---------------

Income Before Income Tax                                                 1,691,961        895,883      5,256,770      2,049,163
     Income tax expense                                                    546,740        214,209      1,854,929        400,597
                                                                      -------------- -------------- -------------- ---------------
Income Before Extraordinary Item                                         1,145,221        681,674      3,401,841      1,648,566
     Early extinguishment of debt, net of income taxes                                                                 (150,303)
                                                                      -------------- -------------- -------------- ---------------
Net Income                                                            $  1,145,221     $  681,674   $  3,401,841   $  1,498,263

                                                                      ============== ============== ============== ===============

Basic earnings per share                                                    $   .19                       $   .54
                                                                      ==============                ==============
Diluted earnings per share
                                                                                .19                           .54
                                                                      ==============                ==============
</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                  Nine Months Ended
                                                                     September 30,                      September 30
                                                                1999             1998              1999             1998
                                                           ---------------- ---------------- ----------------- ----------------

<S>                                                           <C>              <C>              <C>              <C>
    Net income                                                $  1,145,221     $    681,674     $  3,401,841     $  1,498,263
    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 $(710,227), $(114,555),
              $(3,637,143) and $(113,866)                       (1,082,822)        (174,652)      (4,545,243)         (173,602)
            Less: Reclassification adjustment for gains
              (losses) included in net income, net of tax
              expense (benefit) of $41,582, $(1,546) and
              $41,582                                                                63,397           (2,358)           63,397
                                                           ---------------- ---------------- ----------------- ----------------
                                                               (1,082,822)         (238,049)      (4,542,885)         (236,999)
                                                           ---------------- ---------------- ----------------- ----------------
     Comprehensive income                                    $     62,399      $    443,625      $(2,141,044)     $  1,261,264
                                                           ================ ================ ================= ================
</TABLE>




See notes to consolidated condensed financial statements.






<PAGE>



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

<TABLE>
<CAPTION>


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

<S>                              <C>         <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                                    3,401,841                                                  3,401,841
  Unrealized losses on
    securities, net of
    reclassification adjustment                                             (4,542,885)                                  (4,542,885)
  Purchase of common stock        (700,925)    (7,009,250)    (1,663,342)                                                (8,672,592)
  ESOP shares earned                               35,889                                    295,635                        331,524
  Contribution for unearned
    RRP shares                                     (8,851)                                             $ (3,716,977)     (3,725,828)
  Amortization of unearned
    compensation expense                                                                                    154,929         154,929
  Additional conversion costs                      (7,320)                                                                   (7,320)
  Cash dividends $.20 per share)                              (1,345,776)                                                (1,345,776)
                                 --------- -------------- -------------- --------------    -----------   ------------  -------------

Balances, September 30, 1999     6,308,325   $ 61,889,841  $  42,940,983   $(4,255,336)    $(5,311,765)  $ (3,562,048) $ 91,701,675
                                 =========   ============  ============= ==============    ===========   ============  =============
</TABLE>

See notes to consolidated condensed financial statements.



<PAGE>



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

                                                                                            Nine Months Ended
                                                                                              September 30,
                                                                                     --------------------------------
                                                                                         1999                1998
                                                                                     ------------        ------------
Operating Activities
<S>                                                                                  <C>                 <C>
     Net income                                                                      $  3,401,841        $  1,498,263
     Adjustments to reconcile net income to net
      cash provided (used) by  operating activities
       Provision for loan losses                                                          290,015             450,585
       Gain on sale of  foreclosed real estate                                             (9,449)             (4,640)
       (Gain)  loss on disposal of premises and equipment                                   4,219              11,761
       Investment securities accretion, net                                              (288,495)             (8,884)
       Investment securities (gains) losses                                                 3,904            (104,981)
       Equity in losses of limited partnerships                                           240,894             447,004
       Amortization of net loan origination fees                                         (250,487)           (299,015)
       Depreciation and amortization                                                      301,637             359,808
       Deferred income tax benefit                                                        331,178            (211,480)
       ESOP shares earned                                                                 331,524
       Amortization of unearned compensation expense                                      154,929
       Net change in:
         Loans held for sale                                                                               19,502,357
         Interest receivable                                                             (612,791)              8,760
         Interest payable                                                                 (36,611)            (35,739)
         Other assets                                                                      91,175            (207,949)
         Other liabilities                                                                188,327              78,145
         Income taxes receivable/payable                                                  552,501             251,993
                                                                                     ------------        ------------
              Net cash provided by operating activities                                 4,694,311          21,735,988
                                                                                     ------------        ------------

Investing Activities
     Purchases of securities available for sale                                       (64,794,311)        (23,616,302)
     Proceeds from sales of securities available for sale                              10,259,375          21,080,952
     Proceeds from maturities of securities available for sale                         16,433,504           6,574,078
     Proceeds from maturities of securities held to maturity                              750,000           7,385,000
     Net change in loans                                                              (25,386,504)          2,710,222
     Purchases of loans                                                                (6,173,548)
     Purchases of property and equipment                                                 (728,421)           (508,966)
     Proceeds from sale of foreclosed  real estate                                         54,907             252,383
     Contribution to limited partnership                                                                     (195,000)
     Other investing activities                                                                              (650,000)
                                                                                     ------------        ------------
              Net cash provided (used) by investing activities                        (69,584,998)         13,032,367
                                                                                     ------------        ------------

Financing Activities
     Net change in
        Noninterest-bearing, interest-bearing demand, money market and savings          8,554,082           3,386,023
          deposits
        Certificates of deposit                                                       (12,966,740)          5,385,093
        Short-term borrowings                                                           4,600,000
     Proceeds from FHLB advances                                                       71,000,000          15,000,000
     Repayment of FHLB advances                                                       (10,000,000)        (34,450,000)
     Payment on note payable to limited partnership                                      (488,500)           (488,500)
     Contribution of unearned compensation                                             (3,725,828)
     Purchase of common stock                                                          (8,672,592)
     Cash dividends                                                                      (841,110)
     Additional conversion costs                                                           (7,320)
     Net change in advances by borrowers for taxes and insurance                          515,255             206,818
                                                                                     ------------        ------------
              Net cash provided (used)  by financing activities                        47,967,247         (10,960,566)
                                                                                     ------------        ------------

Net Change in Cash and Cash Equivalents                                               (16,923,440)         23,807,789

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

Cash and Cash Equivalents, End of Period                                             $  5,983,917        $ 42,765,470
                                                                                     ============        ============

Additional Cash Flows and Supplementary Information
     Interest paid                                                                   $ 10,223,078        $ 10,274,675
     Income tax paid                                                                      971,250             261,500
     Loan balances transferred to foreclosed real estate                                  164,039             285,508
     Securitization of loans and loans held for sale                                                       39,903,448
     Transfer of loans to loans held for sale                                                              19,611,239
     Due to broker                                                                                         10,082,292
</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 September 30, 1999, and for the
nine and three months ended  September 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.

<TABLE>
<CAPTION>

                                             Three Months Ended                            Nine Months Ended
                                             September 30, 1999                            September 30, 1999
                                             ------------------                            ------------------
                                                   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                   $  1,145,221    6,053,751      $   .19       $  3,401,841   6,322,917     $    .54
                                                                  ==========                                  ==========

    Effect of dilutive RRP
    awards and stock options
                                   ------------------------------               -----------------------------
    Diluted earnings per share
    Income available to  common
    shareholders and assumed
    conversions                      $  1,145,221    6,053,751      $   .19       $ 3,401,841      6,322,917   $    .54
                                   =========================================    ========================================
</TABLE>



Note 3: Benefit Plans

On July 6, 1999, the  stockholders  of the Company  approved a Stock Option Plan
and a Recognition and Retention Plan and Trust (RRP).  These plans allow for the
purchase in the open market or through the issuance of  authorized  and unissued
shares of up to 700,925  shares of common  stock for the Stock  Option  Plan and
280,370 shares of common stock for the RRP.  Under the Stock Option Plan,  stock
option rights covering  700,925 shares of stock may be granted to officers,  key
employees,  and  directors  of the  Company  and its  subsidiaries.  Options for
577,095 of such shares were granted  effective July 6, 1999. The options have an
option price per share equal to the market value at date of grant, have ten year
terms,  and become  exercisable at the rate of 20% per year. Under the RRP plan,
stock  awards  covering  280,370  shares of common  stock may be  awarded to the
directors  and key employees of the Company and its  subsidiaries  and awards of
233,724 of such shares have been awarded  effective  July 6, 1999.  These awards
vest at the rate of 20% per year.

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 $37.8 million,  or 10.3% at September 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 $20.8 million,  or 16.1%. Net loans increased $31.4 million,  or 16.0%
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
third  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 73.9%.  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  $4.4 million to $207.6 million during the nine months ended
September  30,  1999.  The  decline in  deposits  was  primarily a result of the
run-off of maturing certificates of deposit specials.

Total borrowed funds increased $65.1 million from December 31, 1998 to September
30, 1999.  The increase in total  borrowed funds was comprised of an increase in
FHLB advances of $61.0  million,  an increase in  repurchase  agreements of $4.6
million and a decrease in the note payable to BHA 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,  purchase common stock for the Company's buy-back program and fund the
Recognition and Retention Plan ("RRP").

Stockholders' equity decreased $14.4 million from $106.1 million at December 31,
1998 to $91.7 million at September 30, 1999.  The decrease was due to unrealized
losses  of  $4.5  million  on  investment   securities  available  for  sale,  a
contribution of $3.7 million to fund the RRP, stock repurchases of $8.7 million,
cash dividends of $1.3 million and additional  stock conversion costs of $7,000.
Net  income  for the nine  months  ended  September  30,  1999 of $3.4  million,
Employee Stock  Ownership  Plan ("ESOP")  shares earned of $332,000 and unearned
compensation amortization of $155,000 offset these decreases.

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

Net income increased $464,000 from $682,000 for the three months ended September
30, 1998 to $1.1  million for the three  months ended  September  30, 1999.  The
increase  was  primarily  due to an increase in net  interest  income  offset by
increases in noninterest  expenses and income tax expense. The return on average
assets was 1.16% and .89 % for the three  months  ended  September  30, 1999 and
1998, respectively.

Interest  income  increased  $1.5 million,  or 27.1%,  from $5.6 million for the
three  months  ended  September  30, 1998 to $7.1 million for the same period in
1999.  Interest expense increased  $187,000,  or 5.5%, from $3.4 million for the
three  months  ended  September  30, 1998 to $3.6 million for the same period in
1999. As a result,  net interest income for the three months ended September 30,
1999 increased  $1.3 million or 60.6%,  compared to the same period in 1998. The
net interest  margin was 3.55% for the third  quarter of 1999  compared to 2.97%
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 September 30,
1999 was $59,000 compared to $41,000 for the same period in 1998.

Other income for the third quarter of 1999 was $163,000  compared to $99,000 for
the third quarter of 1998.  Equity in losses of limited  partnerships  decreased
$107,000 from the 1998 period to the 1999 period due to the operating results of
the limited partnerships.

Other expense increased $572,000, or 42.6%, for the three months ended September
30, 1999  compared to the same period in 1998.  Salaries and  employee  benefits
were $1.1  million for the three  months ended  September  30, 1999  compared to
$683,000 for the 1998 period,  an increase of $416,000,  or 60.9%. This increase
resulted  primarily from compensation  expense  associated with the ESOP and the
RRP. In addition,  the Company's  compensation  expense increased as a result of
additional staffing for the two branches opened in 1999.

Income tax expense  increased  $333,000 for the three months ended September 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 Nine Months Ended September 30, 1999 and
1998

Net income  increased  $1.9  million from $1.5 million for the nine months ended
September 30, 1998 to $3.4 million for the nine months ended September 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 nine months ended September 30, 1998. The return on average
assets was 1.15% and .65 % for the nine  months  ended  September  30,  1999 and
1998, respectively.

Interest  income  increased  approximately  $3.5 million,  or 20.9%,  from $17.0
million for the nine months ended  September  30, 1998 to $20.5  million for the
same period in 1999.  Interest expense decreased  $52,000,  or .5%, for the nine
months  ended  September  30, 1999 as compared to the same period in 1999.  As a
result,  net  interest  income for the nine  months  ended  September  30,  1999
increased  approximately  $3.6 million or 53.4%,  compared to the same period in
1998. The net interest  margin was 3.61% for the nine months ended September 30,
1999 compared to 3.03% 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 nine months ended September 30,
1999 was  $290,000  compared  to  $451,000  for the  same  period  in 1998.  Net
charge-offs  were $85,000 and $329,000 for the nine months ended  September  30,
1999 and 1998, respectively.

Other  income for the nine months  ended  September  30, 1999 was  $446,000;  an
increase of $246,000  from the $200,000 for the nine months ended  September 30,
1998. Equity in losses of limited partnerships  decreased $206,000 from the 1998
period  to the  1999  period  due  to  the  operating  results  of  the  limited
partnerships.  In addition,  net realized and unrealized gains (losses) on loans
increased from losses of $65,000 for the nine months ended September 30, 1998 to
gains of 3,000 for the comparable period in 1999. These increases were offset by
$105,000 of gains on sales of investment  securities available for sale recorded
during the nine months  ended  September  30, 1998  compared to losses of $4,000
during the comparable  period in 1999.  Other increases in other income were due
to nominal increases in a variety of income categories.

Other expenses of $5.2 million increased $800,000, or 18.0%, for the nine months
ended  September  30, 1999  compared to the same  period in 1998.  Salaries  and
employee benefits were $2.8 million for the nine months ended September 30, 1999
compared to $2.0 million for the 1998 period, an increase of $772,000, or 38.6%.
This increase  resulted  primarily  from  compensation  expense  incurred by the
Company  in  connection   with  the  ESOP  and  the  RRP.  Also,  the  Company's
compensation  expense  increased as a result of additional  staffing for the two
branches opened in 1999.

Income tax expense  increased  $1.5 million for the nine months ended  September
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 September 30,
1999 and December 31, 1998.  In addition,  Lincoln  Federal had $1.4 million and
$905,000 of loans  classified as  substandard at September 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 September 30, 1999 and December 31,
1998, no loans were  classified as doubtful or loss. At September 30, 1999,  and
December 31, 1998,  respectively,  non-accrual loans were $1.0 and $959,000. The
allowance  for loan losses was $1.7  million or .75% of loans at  September  30,
1999 and $1.5 million or .77% of loans 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
September  30, 1999,  Lincoln  Federal had liquid  assets of $91.4 million and a
liquidity ratio of 55.2%.

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 by 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  it is market area,  either of which could delay loan  payments by the
Company's  borrowers.  Management has 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 September 30, 1999, the Company had spent approximately $103,000 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 September 30, 1999 and December 31, 1998,  are analysis
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 September  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 $21.1  million  at  September  30,  1999,  Lincoln  Federal  would have been
required to deduct $6.5 million from its capital if the OTS NPV  methodology had
been in effect. This amount represents an increase of $2.9 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>
                                             September 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         46,296          -31,634             -41 %             12.61 %             -655 bp
+200 bp         56,837          -21,094             -27 %             14.95 %             -421 bp
+100 bp         67,707          -10,224             -13 %             17.19 %             -195 bp
   0 bp         77,930                                                19.16 %
-100 bp         85,837          - 7,906              10 %             20.55 %             +140 bp
-200 bp         89,753           11,823              15 %             21.14 %             +198 bp
-300 bp         91,601           13,671              18 %             21.32 %             +216 bp
</TABLE>


<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 September 30, 1999 illustrates, for example, that a 200 basis point
(or 2%)  increase in interest  rates would  result in as $21.1  million,  or 27%
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 September 30, 1999 would also result in a 421 basis point,
or 4.21%,  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.







<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.

               On July 6,  1999,  the  Company  held its  annual  meeting of the
               shareholders.  A total of 6,084,378  shares were  represented  in
               person or by proxy at the  meeting.  Lester N.  Bergum,  Jr.  was
               elected to the Board of Directors for a one-year term expiring in
               2000. 5,947,558 shares were voted in favor of the election of the
               nominee and there were 136,820  votes  withheld.  Dennis W. Dawes
               was  elected  to the  Board  of  Directors  for a  one-year  term
               expiring  in 2000.  5,936,885  shares  were voted in favor of the
               election of the nominee and there were 147,493 votes withheld. W.
               Thomas  Harmon  was  elected  to the  Board  of  Directors  for a
               two-year  term expiring in 2001.  5,955,212  shares were voted in
               favor of the election of the nominee and there were 129,166 votes
               withheld.  Jerry  R.  Holifield  was  elected  to  the  Board  of
               Directors for a two-year term expiring in 2001.  5,936,558 shares
               were voted in favor of the election of the nominee and there were
               147,820 votes withheld. Wayne E. Kessler was elected to the Board
               of  Directors  for a one-year  term  expiring in 2000.  5,948,766
               shares  were voted in favor of the  election  of the  nominee and
               there were 135,612 votes withheld. David E. Mansfield was elected
               to the Board of Directors for a three-year term expiring in 2002.
               5,945,859  shares  were  voted in favor  of the  election  of the
               nominee and there were 138,519 votes withheld. John C. Milholland
               was  elected  to the  Board  of  Directors  for a  two-year  term
               expiring  in 2001.  5,922,191  shares  were voted in favor of the
               election of the nominee and there were 162,187 votes withheld. T.
               Tim Unger was elected to the Board of Directors  for a three-year
               term  expiring in 2002.  5,946,465  shares were voted in favor of
               the  election  of  the  nominee  and  there  were  137,913  votes
               withheld. John L. Wyatt was elected to the Board of Directors for
               a three-year term expiring in 2002.  5,951,103  shares were voted
               in favor of the  election of the  nominee and there were  133,275
               votes  withheld.  The  shareholders  approved  and  ratified  the
               Lincoln Bancorp Stock Option Plan (Plan).  3,780,109  shares were
               voted in favor of the Plan,  439,666 were voted  against the Plan
               and there were 57,832 abstentions.  The shareholders approved and
               ratified  the  Lincoln  Federal  Savings  Bank   Recognition  and
               Retention Plan and Trust (Trust).  3,658,550 shares were voted in
               favor of the  Trust,  560,102  were voted  against  the Trust and
               there were 58,955 abstentions.

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

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