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 MARCH 31, 1999 OR

[  ]       TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

                        Commission file number: 333-63373

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

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

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

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


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

The  number of shares of the  Registrant's  common  stock,  without  par  value,
outstanding as of March 31, 1999 was 7,009,250.






<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
                                    FORM 10-Q

                                      INDEX

                                                                       Page No.

FORWARD LOOKING STATEMENT                                                    3

PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

                  Consolidated Condensed Balance Sheet
                  as of March 31, 1999 and December 31, 1998
                  (Unaudited)                                                4

                  Consolidated Condensed Statement of Income for
                  the three months ended March 31, 1999 and 1998
                  (Unaudited)                                                5

                  Consolidated Condensed Statement of Comprehensive
                  Income for the three months ended March 31, 1999
                  and 1998 (Unaudited)                                       6

                  Consolidated Condensed Statement of Shareholders'
                  Equity for the three months ended March 31, 1999
                  (Unaudited)                                                7

                  Consolidated  Condensed  Statement of Cash Flows 
                  for the three months ended March 31, 1999 and 1998
                  (Unaudited)                                                8

                  Notes to Unaudited Consolidated Condensed
                  Financial Statements                                       9

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

Item 3.       Quantitative and Qualitative Disclosures about Market Risk    12

PART II.      OTHER INFORMATION

Item 1.       Legal Proceedings                                             14
Item 2.       Changes in Securities                                         14
Item 3.       Defaults Upon Senior Securities                               14
Item 4.       Submission of Matters to a Vote of Security Holders           14
Item 5.       Other Information                                             14
Item 6.       Exhibits and Reports on Form 8-K                              14

SIGNATURES                                                                  15




<PAGE>



                                    FORM 10-Q
                            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>


                                                                                     March 31,           December 31,
                                                                                        1999                 1998
                                                                                --------------------- --------------------
    Assets
<S>                                                                             <C>                    <C>           
         Cash and due from banks                                                $     1,892,231        $    4,245,128
         Interest-bearing demand deposits in other banks                              6,833,602            18,662,229
                                                                                --------------------- --------------------
             Cash and cash equivalents                                                8,725,833            22,907,357
         Investment securities
             Available for sale                                                     166,690,406           129,275,575
             Held to maturity                                                           750,000             1,250,000
                                                                                --------------------- --------------------
                  Total investment securities                                       167,440,406           130,525,575
         Loans                                                                      212,558,554           197,432,997
             Allowance for loan losses                                                1,542,204             1,512,205
                                                                                --------------------- --------------------
                  Net Loans                                                         211,016,350           195,920,792
         Premises and equipment                                                       3,667,993             3,379,460
         Investments in limited partnerships                                          2,304,523             2,386,994
         Federal Home Loan Bank stock                                                 5,446,700             5,446,700
         Interest receivable                                                          2,196,793             1,773,063
         Other assets                                                                 3,952,875             4,108,163
                                                                                --------------------- --------------------

             Total assets                                                        $  404,751,473       $   366,448,104
                                                                                ===================== ====================

    Liabilities
         Deposits
             Noninterest-bearing                                                $     2,872,950       $     2,484,444
                                                                                                            
             Interest-bearing                                                       203,610,461           209,525,347
                                                                                --------------------- --------------------
                  Total deposits                                                    206,483,411           212,009,791
         Short term borrowings                                                        4,600,000
         Federal Home Loan Bank advances                                             81,263,455            33,263,455
         Note payable                                                                 1,714,001             2,202,501
         Due to broker                                                                                     10,025,000
         Interest payable                                                             1,053,485             1,108,514
         Other liabilities                                                            3,119,803             1,731,061
                                                                                --------------------- --------------------
             Total liabilities                                                      298,234,155           260,340,322
                                                                                --------------------- --------------------

    Commitments and Contingent Liabilities


<PAGE>




    Shareholders' Equity
         Preferred stock,  without par value
             Authorized and unissued - 2,000,000 shares
         Common stock, without par value
             Authorized - 20,000,000 shares
             Issued and outstanding - 7,009,250 shares                               68,875,521            68,879,373
         Retained earnings                                                           43,371,973            42,548,260
         Accumulated other comprehensive income                                        (221,321)              287,549
         Unearned employee stock ownership plan ("ESOP") shares                      (5,508,855)          (5,607,400)
                                                                                --------------------- --------------------
             Total shareholders' equity                                             106,517,318           106,107,782
                                                                                --------------------- --------------------

             Total liabilities and shareholders' equity                          $  404,751,473        $  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
                                                                                                      March 31
                                                                                       ------------------- -------------------
                                                                                              1999                1998
                                                                                       ------------------- -------------------
Interest Income
<S>                                                                                    <C>                 <C>         
     Loans, including fees                                                             $  3,985,924        $  4,908,953
     Investment securities                                                                2,273,162             658,172
     Deposits with financial institutions                                                   107,206             113,508
     Dividend income                                                                        107,442             107,442
                                                                                       ------------------- -------------------
         Total interest and dividend income                                               6,473,734           5,788,075
                                                                                       ------------------- -------------------

Interest Expense
     Deposits                                                                             2,460,864           2,618,420
     Short term borrowings                                                                   11,056
     Federal Home Loan Bank advances                                                        655,802             830,136
                                                                                       ------------------- -------------------
         Total interest expense                                                           3,127,722           3,448,556
                                                                                       ------------------- -------------------

Net Interest Income                                                                       3,346,012           2,339,519
     Provision for loan losses                                                               31,050              45,369
                                                                                       ------------------- -------------------
Net Interest Income After Provision for Loan Losses                                       3,314,962           2,294,150
                                                                                       ------------------- -------------------

Other Income
     Net realized and unrealized gains on loans                                               2,835              32,360
     Net unrealized losses on sales of available-for-sale                                    (3,904)
        securities
     Equity in losses of limited partnerships                                               (82,471)           (115,000)
     Other income                                                                           232,923             177,144
                                                                                       ------------------- -------------------
         Total other income                                                                 149,383              94,504
                                                                                       ------------------- -------------------

Other Expenses
     Salaries and employee benefits                                                         803,358             663,384
     Net occupancy expenses                                                                  73,313              58,397
     Equipment expenses                                                                     143,783             149,907
     Deposit insurance expense                                                               47,671              46,314
     Data processing fees                                                                   164,277             151,258
     Professional fees                                                                       33,063              43,007
     Director and committee fees                                                             37,948              42,100
     Mortgage servicing rights amortization                                                 (17,084)             56,154
     Other expenses                                                                         233,289             157,851
                                                                                       ------------------- -------------------
         Total other expenses                                                             1,519,618           1,368,372
                                                                                       ------------------- -------------------

Income Before Income Tax                                                                  1,944,727           1,020,282
     Income tax expense                                                                     700,459             289,736
                                                                                       ------------------- -------------------

Net Income                                                                             $  1,244,268        $    730,546
                                                                                       =================== ===================

Basic earnings per share                                                               $        .19
                                                                                       ===================
Diluted earnings per share                                                                      .19
                                                                                       ===================
</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
                                                                                             March 31,
                                                                                -------------------------------------
                                                                                      1999               1998
                                                                                ------------------ ------------------
<S>                                                                               <C>                  <C>       
                                                                                  $  1,244,268         $  730,546
    Net Income
    Other comprehensive income, net of tax
          Unrealized losses on securities available for sale
              Unrealized holding losses arising during the period, net of
              tax benefit of $335,316 and $21,541                                    (511,228)           (32,842)
              Less: Reclassification adjustment for losses included in net             (2,358)
              income, net of tax benefit of $1,546
                                                                                ------------------ ------------------
                                                                                     (508,870)           (32,842)
                                                                                ------------------ ------------------
     Comprehensive income                                                         $    735,398         $  697,704
                                                                                ================== ==================
</TABLE>






<PAGE>



                         LINCOLN BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Shareholders' Equity
                    For the Three Months Ended March 31, 1999
                                   (Unaudited)
<TABLE>
<CAPTION>



                                                                     
                                                Common Stock                           Accumulated
                                         ----------------------------                     Other          Unearned
                                           Shares                       Retained      Comprehensive        ESOP
                                         Outstanding      Amount        Earnings          Income          Shares           Total
                                         ------------ --------------- -------------- ----------------- -------------- --------------

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

  Net income for the period                                               1,244,268                                       1,244,268
  Unrealized losses on securities,
    net of reclassification adjustment                                                   (508,870)                         (508,870)
  ESOP shares earned                                         9,854                                            98,545        108,399
  Additional conversion costs                              (13,706)                                                         (13,706)
  Cash dividends ($.06 per share)                                         (420,555)                                        (420,555)
                                         ------------ --------------- -------------- ----------------- -------------- --------------

Balances, March 31, 1999                   7,009,250  $ 68,875,521     $ 43,371,973   $  (221,321)     $ (5,508,855)  $ 106,517,318
                                         ============ =============== ============== ================= ============== ==============
</TABLE>



<PAGE>



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


                                                                                                 Three Months Ended
                                                                                                      March 31,
                                                                                         -------------------- -------------------
                                                                                               1999                1998
                                                                                         -------------------- -------------------
<S>                                                                                      <C>                  <C>            
    Operating Activities
         Net income                                                                      $   1,244,268        $       730,546
         Adjustments to reconcile net income to net 
          cash provided (used) by  operating activities
           Provision for loan losses                                                            31,050               45,369
           Gain on sale of  foreclosed real estate                                              (9,449)              (1,629)
           Loss on disposal of premises and equipment                                            4,219                6,856
           Investment securities accretion, net                                                (63,604)              (4,704)
           Investment securities (gains) losses                                                  3,904
           Equity in losses of limited partnerships                                             82,471              115,000
           Amortization of net loan origination fees                                           (97,066)            (113,297)
           Depreciation and amortization                                                       107,488              116,884
           Deferred income tax benefit                                                         461,773              (53,617)
           ESOP shares earned                                                                  108,399
           Net change in:
             Interest receivable                                                              (423,730)             138,161
             Interest payable                                                                  (55,029)             (24,661)
             Other assets                                                                     (221,183)            (169,273)
             Other liabilities                                                                  23,572               28,596
             Income taxes receivable/payable                                                   529,017              343,363
                                                                                         -------------------- -------------------
                  Net cash provided (used) by operating activities                           1,726,100            1,157,594
                                                                                         -------------------- -------------------

    Investing Activities
         Purchases of securities available for sale                                        (64,794,311)
         Proceeds from sales of securities available for sale                               10,259,375
         Proceeds from maturities of securities available for sale                           6,312,166            1,467,155
         Proceeds from maturities of securities held to maturity                               500,000            4,135,000
         Net change in loans                                                               (10,978,307)           4,669,881
         Purchases of loans                                                                 (3,993,635)
         Purchases of property and equipment                                                  (400,240)            (220,025)
         Proceeds from sale of foreclosed  real estate                                          54,907               33,600
         Contribution to limited partnership                                                                       (195,000)
                                                                                         -------------------- -------------------
                  Net cash provided (used) by investing activities                         (63,040,045)           9,890,611
                                                                                         -------------------- -------------------

    Financing Activities
         Net change in
            Noninterest-bearing, interest-bearing demand, 
               money market and savings deposits                                             3,511,779            2,187,032
    
            Certificates of deposit                                                         (9,038,159)           5,219,124
            Short-term borrowings                                                            4,600,000
         Proceeds from FHLB advances                                                        55,000,000
         Repayment of FHLB advances                                                         (7,000,000)         (18,000,000)
         Payment on note payable to limited partnership                                       (488,500)            (488,500)
         Additional conversion costs                                                           (13,706)
         Net change in advances by borrowers for taxes and insurance                           561,007              825,215
                                                                                         -------------------- -------------------
                  Net cash provided (used)  by financing activities                         47,132,421          (10,257,129)
                                                                                         -------------------- -------------------

    Net Change in Cash and Cash Equivalents                                                (14,181,524)             791,076

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

    Cash and Cash Equivalents, End of Period                                             $   8,725,833        $   19,748,757
                                                                                         ==================== ===================

    Additional Cash Flows and Supplementary Information
         Interest paid                                                                   $   3,182,751        $     3,473,217
         Income tax paid                                                                           ---                  ---
         Loan balances transferred to foreclosed real estate                                       ---                 63,480
</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 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 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 March 31, 1999,  and for the
three months ended March 31, 1999 and 1998, have not been audited by independent
accountants,  but reflect, in the opinion of management,  all adjustments (which
include  only normal  recurring  adjustments)  necessary  to present  fairly the
financial position, results of operations and cash flows for such periods.

Note 2: Earnings Per Share

Earnings per share have been computed based upon the weighted average common and
common  equivalent  shares  outstanding  during the period subsequent to Lincoln
Federal's  conversion  to a stock  savings bank on December  30, 1998.  Unearned
Employee Stock  Ownership Plan shares have been excluded from the computation of
average  common shares  outstanding.  For the three months ended March 31, 1999,
weighted  average shares  outstanding  for basic and diluted  earnings per share
were 6,453,437.


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 the 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 $38.3 million,  or 10.5% at March 31, 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 $37.4
million,  or 28.9%. Net loans increased $15.1 million,  or 7.6% due primarily 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.  These  increases  were  offset  by a  decrease  in cash  and  cash
equivalents.  Cash and cash  equivalents  decreased by $14.2 million,  or 61.9%.
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  $5.5 million to $206.5  million during the first quarter of
1999.  The decline in deposits was primarily a result of the run-off of maturing
certificates of deposit specials.

Total borrowed funds increased $52.1 million from December 31, 1998 to March 31,
1999.  The increase in total borrowed funds was comprised of an increase in FHLB
advances of $48.0 million, an increase in repurchase  agreements of $4.6 million
and a decrease in the note payable to a limited  partnership  of  $489,000.  The
increase in total  borrowings  reflects the  Company's  decision to leverage its
earning  assets  when  appropriate.  The  proceeds  from  borrowings  were  used
primarily to fund  investments in  mortgage-backed  and other  investment  grade
securities available for sale.

Stockholders' equity increased $410,000 from $106.1 million at December 31, 1998
to $106.5  million at March 31, 1999. The increase was due to net income for the
quarter ended March 31, 1999 of $1.2 million and Employee  Stock  Ownership Plan
("ESOP")  shares earned of $108,000.  A cash  dividend  declared of $421,000 and
additional  stock  conversion  costs  recorded  in the first  quarter of 1999 of
$14,000 offset these increases.


Comparison  of  Operating  Results for the Three Months Ended March 31, 1999 and
1998

Net income  increased  $514,000,  or 70.3%,  from  $731,000 for the three months
ended March 31, 1998 to $1.2  million for the three months ended March 31, 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 1.34% and .93 % for the three  months  ended March 31, 1999 and 1998,
respectively.

Interest income increased  $686,000,  or 11.8%,  from $5.8 million for the three
months  ended  March  31,  1998 to $6.5  million  for the same  period  in 1999.
Interest expense  decreased  $321,000,  or 9.3%, from $3.5 million for the three
months  ended March 31, 1998 to $3.1  million for the same period in 1999.  As a
result,  net interest income for the three months ended March 31, 1999 increased
$1.0 million or 43.0%,  compared to the same period in 1998. The increase in net
interest  income  was due  primarily  to an  increase  in the  volume of average
investment  securities  available for sale.  The increase in average  investment
securities  available  for  sale  was  primarily  attributable  to the  proceeds
received in conjunction  with the Company's stock issuance.  Net proceeds of the
Company's  stock  issuance,  after costs and excluding the shares issued for the
ESOP, were $61.3 million.

The  Company's  provision  for loan losses for the three  months ended March 31,
1999  was  $31,000  compared  to  $45,000  for the  same  period  in  1998.  Net
charge-offs were $1,000 and $14,000, respectively.

Noninterest income increased $55,000, or 58.1%, for the three months ended March
31, 1999  compared to the same  period in 1998  primarily  due to an increase in
other income of $56,000 and decreased losses of $33,000 from the investment in a
low-income housing limited partnership.  The increase in other income was due to
increases in a variety of other income  categories and was not  attributable  to
any one item. These increases were partially offset by a $30,000 decrease in net
realized and unrealized gains on loans.

Noninterest  expense  increased  $151,000,  or 11.1%, for the three months ended
March 31,  1999  compared  to the same  period in 1998.  Salaries  and  employee
benefits  were  $803,000 for the three  months ended March 31, 1999  compared to
$663,000 for the 1998 period,  an increase of $140,000,  or 21.1%. This increase
resulted  primarily from $108,000 of  compensation  expense related to the ESOP.
Also,  the Company's  compensation  expense  increased as a result of additional
staffing for the two branches  opened in 1999.  Other  expenses  also  increased
$75,000 for the three months ended March 31, 1999 compared to the same period in
1998.  The  increase in other  expenses  resulted  from  nominal  increases in a
variety of expense categories. These increases in salaries and employee benefits
and other  expenses  were  offset by a decrease  in  mortgage  servicing  rights
amortization of $73,000.  The decline in mortgage servicing rights  amortization
was primarily a result of a change in the  prepayment  speeds of loans  serviced
for others.

Income tax expense increased  $411,000 for the three months ended March 31, 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 March 31, 1999
and  December  31,  1998.  In  addition,  Lincoln  Federal had $1.2  million and
$905,000 of loans  classified as  substandard at March 31, 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 in  necessary.  At March 31, 1999 and  December 31,
1998,  no loans were  classified  as doubtful or loss.  At March 31,  1999,  and
December 31, 1998,  respectively,  non-accrual loans were $764,000 and $959,000.
The allowance for loan losses was $1.5 million or approximately .7% of net loans
at March 31, 1999 and 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 March
31, 1999,  Lincoln  Federal had liquid assets of $100.7  million and a liquidity
ratio of 53.8%.



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  they  systems  Year  2000  compliant.
Management currently expects to complete 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 the  approximately 23 commercial
borrowers  with  outstanding  loans in excess of $300,000  to request  that they
certify by the end of November,  1998 that their computer  systems were, or soon
would 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 March 31, 1999, the Company had spent approximately
$102,000 in connection with Year 2000 compliance.
Management  does  not  consider  the  additional  cost of  these  efforts  to be
significant.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Presented below, as of March 31, 1999 and 1998, 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>


                                 March 31, 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               53,590          -33,117           -38%              14.45%            -657 bp
+200 bp               64,978          -21,730           -25%              16.88%            -414 bp
+100 bp               76,289          -10,419           -12%              19.12%            -191 bp
  0 bp                86,707                                              21.02%
-100 bp               95,401            8,694            10%              22.48%            +146 bp
-200 bp              102,729           16,022            18%              23.62%            +260 bp
-300 bp              111,367           24,660            28%              24.91%            +389 bp
</TABLE>       



<TABLE>
<CAPTION>
                                 March 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               31,010          -18,128           -37%              10.57%            -485 bp
+200 bp               37,667          -11,470           -23%              12.46%            -296 bp
+100 bp               43,979           -5,159           -10%              14.14%            -128 bp
   0 bp               49,137                                              15.42%
-100 bp               51,925            2,788            +6%              16.02%             +60 bp
-200 bp               51,910            2,772            +6%              15.88%             +46 bp
-300 bp               51,788            2,650            +5%              15.71%             +29 bp
        
</TABLE>

The  analysis  at March 31,  1999  indicates  that there  have been no  material
changes in market interest rates or in Lincoln Federal's interest rate sensitive
instruments  which  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, 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.

              None.

Item 5.       Other Information.

              None.

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

                    (a) Exhibits 27.  Financial Data Schedule

                    (b) No  reports on Form 8-K were  filed  during the  quarter
                        ended March 31, 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:         May 14, 1999                      By: /s/ T. Tim Unger
              ------------                      --------------------
                                                T. Tim Unger
                                                President and Chief Executive 
                                                Officer



Date:         May 14, 1999                      By: /s/ John M. Baer
              ------------                      --------------------
                                                John M. Baer
                                                Treasurer