U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001.

[ ]  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 000-22469

                            LAFAYETTE BANCORPORATION
             (Exact name of registrant as specified in its charter)

         INDIANA                                 35-1605492
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                  Identification No.)

133 North 4th Street, Lafayette, Indiana         47902
(Address of principal executive offices)       (Zip Code)

                                 (765) 423-7100
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1994 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days: Yes (x) No ( )

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

Class                                        Outstanding at August 6, 2001
Common Stock, without par value                           3,961,589 shares
<PAGE>


                            LAFAYETTE BANCORPORATION

                                     INDEX


PART I. FINANCIAL INFORMATION

Item 1.

          Consolidated Balance Sheets -- June 30, 2001 and December 31, 2000

          Consolidated  Statements of Income and  Comprehensive  Income -- Three
          Months Ended June 30, 2001 and 2000

          Consolidated  Statements  of Income  and  Comprehensive  Income -- Six
          Months Ended June 30, 2001 and 2000

          Consolidated  Statements  of Cash Flows -- Six  Months  Ended June 30,
          2001 and 2000

          Notes to Consolidated Financial Statements -- June 30, 2001


Item 2.

          Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations


Item 3.

          Quantitative and Qualitative Disclosures About Market Risk




PART II. OTHER INFORMATION

Item 4.

          Submission of Matters to a Vote of Security Holders

Item 6.

          Exhibits and Reports on Form 8-K

               a) Exhibits


               b) Reports on Form 8-K



SIGNATURES





<PAGE>




ITEM 1.
                            LAFAYETTE BANCORPORATION
                           CONSOLIDATED BALANCE SHEETS
                          (Dollar amounts in thousands)


----------------------------------------------------------------------------

<TABLE>
<S>                                                                             <C>               <C>
                                                                                  (Unaudited)
                                                                                    June 30,         December 31,
                                                                                       2001                 2000
                                                                                     ----               ----
ASSETS
Cash and due from banks                                                       $       28,106      $      26,452
Interest-bearing balances with other financial institutions                           11,859             21,820
Federal funds sold                                                                    20,700             25,200
                                                                              --------------      -------------
    Total cash and cash equivalents                                                   60,665             73,472

Securities available-for-sale (at market)                                             88,343             78,857
Securities held-to-maturity (market value $4,272
  and $4,580)                                                                          4,134              4,484
Loans held for sale                                                                   11,854              5,949
Loans                                                                                542,620            537,725
    Less:  Allowance for loan losses                                                  (5,299)            (5,071)
                                                                              --------------      -------------
       Loans, net                                                                    537,321            532,654
Federal Home Loan Bank stock (at cost)                                                 2,344              2,200
Premises, furniture and equipment, net                                                10,934             11,353
Intangible assets                                                                     12,648             13,007
Accrued interest receivable and other assets                                          17,868             19,171
                                                                              --------------      -------------

          Total assets                                                        $      746,111      $     741,147
                                                                              ==============      =============




LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
    Noninterest-bearing deposits                                              $       68,990      $      70,866
    Interest-bearing demand and savings deposits                                     247,145            230,984
    Interest-bearing time deposits                                                   279,068            276,447
                                                                              --------------      -------------
       Total deposits                                                                595,203            578,297
    Short-term borrowings                                                             41,398             55,572
    FHLB advances                                                                     35,206             35,737
    Note payable                                                                      10,850             11,550
    Accrued interest payable and other liabilities                                     7,092              7,190
                                                                              --------------      -------------
       Total liabilities                                                             689,749            688,346


Shareholders' equity
    Common stock, no par value:  20,000,000 shares authorized;
    3,961,589 and 3,953,616 shares issued and outstanding                              3,962              3,954
    Additional paid-in capital                                                        38,119             38,024
    Retained earnings                                                                 13,877             11,086
    Accumulated other comprehensive income                                               404               (263)
                                                                              --------------      --------------
       Total shareholders' equity                                                     56,362             52,801
                                                                              --------------      -------------

          Total liabilities and shareholders' equity                          $      746,111      $     741,147
                                                                              ==============      =============

</TABLE>

-----------------------------------------------------------------------------
                     See accompanying notes to consolidated
                             financial statements.
<PAGE>

                            LAFAYETTE BANCORPORATION
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                       For the three months ended June 30,
                        2001 and 2000 (Dollar amounts in
                        thousands, except per share data)
                                   (Unaudited)

-----------------------------------------------------------------------------
<TABLE>

<S>                                                                                <C>                 <C>
                                                                                   2001                2000
                                                                                   ----                ----
Interest income
    Loans                                                                     $       11,992      $      11,496
Taxable securities                                                                       859                822
    Tax exempt securities                                                                429                414
    Other                                                                                465                146
                                                                              --------------      -------------
       Total interest income                                                          13,745             12,878
Interest expense
    Deposits                                                                           6,015              5,513
    Short-term borrowings                                                                428                486
    Other borrowings                                                                     701                582
                                                                              --------------      -------------
       Total interest expense                                                          7,144              6,581
                                                                              --------------      -------------
Net interest income                                                                    6,601              6,297
Provision for loan losses                                                                300                300
                                                                              --------------      -------------
Net interest income after provision for loan losses                                    6,301              5,997
Noninterest income
    Income from fiduciary activities                                                     297                317
    Service charges on deposit accounts                                                  522                461
    Net realized gain on securities                                                        -                  -
    Net gain on loan sales                                                               504                159
    Other service charges and fees                                                       267                272
    Investment product commissions                                                        98                349
    Other operating income                                                               128                 76
                                                                              --------------      -------------
       Total noninterest income                                                        1,816              1,634
                                                                              --------------      -------------
Noninterest expense
    Salaries and employee benefits                                                     3,112              2,712
    Occupancy expenses, net                                                              319                301
    Equipment expenses                                                                   460                444
    Intangible amortization                                                              179                185
    Other operating expenses                                                           1,258              1,203
                                                                              --------------      -------------
       Total noninterest expense                                                       5,328              4,845
                                                                              --------------      -------------
Income before income taxes                                                             2,789              2,786
Income taxes                                                                             883                979
                                                                              --------------      -------------
Net income                                                                             1,906              1,807
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                                  102                100
                                                                              --------------      -------------
Comprehensive income                                                          $        2,008      $       1,907
                                                                              ==============      =============

Basic earnings per share                                                      $          .48      $         .46
                                                                              ===============     =============
Diluted earnings per share                                                    $          .48      $         .46
                                                                              ===============     =============
Dividend per share                                                            $          .10      $         .09
                                                                              ===============     =============

</TABLE>
-----------------------------------------------------------------------------
                     See accompanying notes to consolidated
                             financial statements.
<PAGE>

                            LAFAYETTE BANCORPORATION
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                        For the six months ended June 30,
                        2001 and 2000 (Dollar amounts in
                        thousands, except per share data)
                                   (Unaudited)

-----------------------------------------------------------------------------
<TABLE>

<S>                                                                                <C>                 <C>
                                                                                   2001                2000
                                                                                   ----                ----
Interest income
    Loans                                                                     $       23,834      $      22,240
Taxable securities                                                                     1,635              1,682
    Tax exempt securities                                                                852                826
    Other                                                                              1,210                253
                                                                              --------------      -------------
       Total interest income                                                          27,531             25,001
Interest expense
    Deposits                                                                          12,408             10,627
    Short-term borrowings                                                                898                825
    Other borrowings                                                                   1,437              1,168
                                                                              --------------      -------------
       Total interest expense                                                         14,743             12,620
                                                                              --------------      -------------
Net interest income                                                                   12,788             12,381
Provision for loan losses                                                                600                600
                                                                              --------------      -------------
Net interest income after provision for loan losses                                   12,188             11,781
Noninterest income
    Income from fiduciary activities                                                     594                633
    Service charges on deposit accounts                                                1,010                866
    Net realized gain on securities                                                        -                  -
    Net gain on loan sales                                                               870                271
    Other service charges and fees                                                       526                525
    Investment product commissions                                                       215                438
    Other operating income                                                               250                153
                                                                              --------------      -------------
       Total noninterest income                                                        3,465              2,886
                                                                              --------------      -------------
Noninterest expense
    Salaries and employee benefits                                                     6,070              5,030
    Occupancy expenses, net                                                              645                582
    Equipment expenses                                                                   929                833
    Intangible amortization                                                              358                370
    Other operating expenses                                                           2,453              2,333
                                                                              --------------      -------------
       Total noninterest expense                                                      10,455              9,148
                                                                              --------------      -------------
Income before income taxes                                                             5,198              5,519
Income taxes                                                                           1,614              1,914
                                                                              --------------      -------------
Net income                                                                             3,584              3,605
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                                  667                 81
                                                                              --------------      -------------
Comprehensive income                                                          $        4,251      $       3,686
                                                                              ==============      =============

Basic earnings per share                                                      $          .91      $         .91
                                                                              ==============      =============
Diluted earnings per share                                                    $          .90      $         .90
                                                                              ==============      =============
Dividend per share                                                            $          .20      $         .18
                                                                              ==============      =============
</TABLE>
-----------------------------------------------------------------------------
                     See accompanying notes to consolidated
                             financial statements.


<PAGE>


                            LAFAYETTE BANCORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the six months ended June 30, 2001 and 2000
                          (Dollar amounts in thousands)
                                   (Unaudited)

-----------------------------------------------------------------------------
<TABLE>

<S>                                                                       <C>             <C>
                                                                          2001            2000
                                                                          ----            ----

Cash flows from operating activities
    Net income                                                         $     3,584    $     3,605
    Adjustments to reconcile net income to net cash
      from operating activities
       Depreciation                                                            719            634
       Net amortization                                                        373            366
       Provision for loan losses                                               600            600
       Net realized (gain) loss on sale of :
          Other real estate                                                      -            (11)
       Change in assets and liabilities:
          Loans originated for sale                                        (62,040)       (25,171)
          Loans sold                                                        56,135         22,930
          Accrued interest receivable and other assets                         943            412
          Accrued interest payable and other liabilities                       (98)          (218)
                                                                       ------------   ------------
              Net cash from operating activities                               216          3,147
Cash flows from investing activities
    Purchase of securities available-for-sale                              (76,877)       (46,790)
    Proceeds from sales of securities available-for-sale                         -              -
    Proceeds from maturities of securities available-for-sale               68,483         47,486
    Purchase of securities held-to-maturity                                      -              -
    Proceeds from maturities of securities held-to-maturity                    350            228
    Loans made to customers, net of payments collected                      (5,387)       (32,835)
    Purchase of Federal Home Loan Bank stock                                  (144)          (303)
    Property and equipment expenditures                                       (300)        (1,224)
    Proceeds from sales of other real estate                                    41            115
                                                                       -----------    -----------
              Net cash from investing activities                           (13,834)       (33,323)
Cash flows from financing activities
    Net change in deposit accounts                                          16,906         34,111
    Net change in short-term borrowings                                    (14,174)         8,446
    Proceeds from FHLB advances                                                  -         10,000
    Payments on FHLB advances                                                 (531)        (9,556)
    Payments on note payable                                                  (700)          (700)
    Common stock issued                                                        102             90
    Dividends paid                                                            (792)          (717)
                                                                       ------------   -----------
              Net cash from financing activities                               811         41,674
                                                                       ------------   -----------
Net change in cash and cash equivalents                                    (12,807)        11,498
Cash and cash equivalents at beginning of period                            73,472         30,570
                                                                       -----------    -----------
Cash and cash equivalents at end of period                             $    60,665    $    42,068
                                                                       ===========    ===========



Supplemental disclosures of cash flow information Cash paid during the period
    for:
       Interest                                                        $    14,795    $    12,378
       Income taxes                                                          1,690          1,525
Non-cash investing activity
     Loans transferred to other real estate                            $       143    $         -

</TABLE>

-----------------------------------------------------------------------------
                     See accompanying notes to consolidated
                             financial statements.

<PAGE>


                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

-----------------------------------------------------------------------------

NOTE 1 - BASIS OF PRESENTATION

The significant  accounting  policies followed by Lafayette  Bancorporation (the
"Corporation")   for  interim  financial   reporting  are  consistent  with  the
accounting  policies followed for annual financial  reporting.  The consolidated
interim  financial  statements  have been prepared in accordance  with Generally
Accepted Accounting  Principles and in accordance with instructions to Form 10-Q
and may not include all  information and footnotes  normally  disclosed for full
annual  financial  statements.  All  adjustments  which are,  in the  opinion of
management,  necessary  for a fair  presentation  of the results for the periods
reported have been included in the accompanying unaudited consolidated financial
statements and all such  adjustments are of a normal recurring  nature.  Certain
prior period  information  has been  reclassified  to  correspond  with the 2001
presentation.



NOTE 2 - PER SHARE DATA

The following  illustrates  the  computation  of basic and diluted  earnings per
share,  and includes the weighted  average  number of shares used in calculating
earnings and dividends per share amounts for the periods presented. The weighted
average number of shares has been retroactively restated for stock dividends and
splits.

<TABLE>
                                                                   Six Months Ended
                                                                   ----------------
<S>                                                               <C>                 <C>
                                                             June 30,            June 30,
                                                               2001                2000
                                                               ----                ----
Basic earnings per share
 Net income                                                $       3,584      $        3,605
Weighted average shares outstanding                            3,957,542           3,947,757
                                                           -------------      --------------

    Basic earnings per share                               $         .91      $          .91
                                                           =============      ==============


Diluted earnings per share
 Net income                                                $       3,584      $        3,605
Weighted average shares outstanding                            3,957,542           3,947,757
Dilutive effect of assumed exercise
  of Stock Options                                                34,081              48,253
                                                           -------------      --------------
    Diluted average shares outstanding                         3,991,623           3,996,010
                                                           -------------      --------------

    Diluted earnings per share                             $         .90      $          .90
                                                           =============      ==============


</TABLE>
<PAGE>


                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
------------------------------------------------------------------------------

<TABLE>
                                                                  Three Months Ended
                                                                  ------------------
<S>                                                               <C>                 <C>
                                                             June 30,            June 30,
                                                               2001                2000
                                                               ----                ----
Basic earnings per share
 Net income                                                $       1,906      $        1,807
Weighted average shares outstanding                            3,958,892           3,950,213
                                                           -------------      --------------

    Basic earnings per share                               $         .48      $          .46
                                                           =============      ==============


Diluted earnings per share
 Net income                                                $       1,906      $        1,807
Weighted average shares outstanding                            3,958,892           3,950,213
Dilutive effect of assumed exercise
  of Stock Options                                                33,212              25,252
                                                           -------------      --------------
    Diluted average shares outstanding                          3,992,104          3,975,465
                                                           --------------     --------------
         Diluted earnings per share                        $          .48     $          .46
                                                           ==============     ==============
</TABLE>


NOTE 3 - SECURITIES

The  amortized  cost and estimated  fair values of securities  are as follows at
June 30, 2001:

<TABLE>
<S>                                                     <C>                             <C>
                                                         Amortized                      Estimated
                                                           Cost                        Fair Value
Securities Available-for-Sale
U.S. Government and its agencies                       $     3,000                    $     3,010
Obligations of states and political subdivisions            31,379                         31,769
Corporate obligations                                       10,117                         10,330
Mortgage-backed and other asset-backed securities           40,623                         40,688
Other securities                                             2,556                          2,546
                                                       -----------                    -----------
                                                       $    87,675                    $    88,343
                                                       ===========                    ===========

Securities Held-to-Maturity
Obligations of states and political subdivisions       $     4,134                    $     4,272
                                                       ===========                    ===========
</TABLE>

The  amortized  cost and estimated  fair values of securities  are as follows at
December 31, 2000:

<TABLE>

<S>                                                     <C>                             <C>
                                                         Amortized                      Estimated
                                                           Cost                        Fair Value
Securities Available-for-Sale
U.S. Government and its agencies                       $     4,201                    $     4,193
Obligations of states and political subdivisions            30,880                         31,012
Corporate obligations                                        3,953                          4,001
Mortgage-backed and other asset-backed securities           37,699                         37,105
Other securities                                             2,560                          2,546
                                                       -----------                    -----------
                                                       $    79,293                    $    78,857
                                                       ===========                    ===========

Securities Held-to-Maturity
Obligations of states and political subdivisions       $     4,484                    $     4,580
                                                       ===========                    ===========
</TABLE>

<PAGE>


                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
------------------------------------------------------------------------------

NOTE 4 - LOANS

Loans are comprised of the following:
<TABLE>
<S>                                                                                   <C>                   <C>
                                                                                 June 30,          December 31,
                                                                                   2001                2000
                                                                                   ----                ----

         Commercial and agricultural loans                                   $        223,990    $       215,087
         Real estate construction loans                                                61,865             54,768
         Residential real estate loans                                                208,439            212,190
         Installment loans to individuals                                              48,326             50,696
         Commercial paper                                                                   -              4,984
                                                                             ----------------    ---------------

             Total loans                                                     $        542,620    $       537,725
                                                                             ================    ===============
</TABLE>


NOTE 5 - ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses is as follows:
<TABLE>

<S>                                                            <C>                 <C>
                                                               2001                2000
                                                               ----                ----

    Balance, January 1                                     $       5,071      $        4,618
    Provision charged to operations                                  600                 600
    Loans charged-off                                               (428)               (219)
    Recoveries on loans previously charged-off                        56                  46
                                                           -------------      --------------

    Balance, June 30                                       $       5,299      $        5,045
                                                           =============      ==============
</TABLE>


NOTE 6 - SHORT-TERM BORROWINGS

Short-term borrowings are comprised of the following:
<TABLE>
<S>                                                                                   <C>                   <C>
                                                                                 June 30,          December 31,
                                                                                   2001                2000
                                                                                   ----                ----

         Repurchase agreements                                               $         38,630    $        54,275
         Treasury tax and loan open-end note                                            2,768              1,297
                                                                             ----------------    ---------------

             Total short-term borrowings                                     $         41,398    $        55,572
                                                                             ================    ===============

</TABLE>
<PAGE>


                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
------------------------------------------------------------------------------

NOTE 7 - SEGMENT INFORMATION

The Corporation's operations include three primary segments:  banking,  mortgage
banking, and trust.  Through its banking  subsidiary's  locations in Tippecanoe,
White,  and Jasper  Counties,  the Corporation  provides  traditional  community
banking services, such as accepting deposits and making commercial,  residential
and consumer  loans.  Mortgage  banking  activities  include the  origination of
residential  mortgage  loans for sale on a servicing  released  basis to various
investors.  The  Corporation's  trust  department  provides  both  personal  and
corporate trust services.

The Corporation's  three reportable  segments are determined by the products and
services  offered.  Interest on loans,  investments  and  deposits  comprise the
primary revenues and expenses of the banking operation,  net gains on loans sold
account  for  the  revenues  in  the  mortgage   banking   segment,   and  trust
administration fees provide the primary revenues in the trust department.

The following segment  financial  information has been derived from the internal
profitability  reporting system utilized by management to monitor and manage the
financial  performance of the Corporation.  The accounting policies of the three
segments  are  the  same  as  those  described  in the  summary  of  significant
accounting  policies of the annual report.  The  Corporation  evaluates  segment
performance based on profit or loss before income taxes. The evaluation  process
for the mortgage banking and trust segments include only direct expenses,  while
certain  indirect  expenses,  including  goodwill,  are  absorbed by the banking
operation.  The difference  between segment totals and  consolidated  totals are
holding company amounts and income tax expense.

Quarter ended June 30:

<TABLE>

<S>                                             <C>             <C>                <C>                  <C>
 2001                                                              Mortgage                               Total
                                                Banking            Banking            Trust            Segments

     Net interest income                    $         6,672    $           89     $            -    $         6,761
     Net gain on loan sales                               -               504                  -                504
     Other revenue                                    1,014                 1                297              1,312
     Noncash items:
         Depreciation                                   334                15                 12                361
         Provision for loan loss                        300                 -                  -                300
     Segment profit                                   2,714               241                 47              3,002
     Segment assets                                 733,662            12,008                157            745,827

</TABLE>


<TABLE>

<S>                                             <C>             <C>                <C>                  <C>

2000                                                              Mortgage                               Total
                                                Banking           Banking            Trust              Segments

     Net interest income                    $         6,496    $           37     $            -    $         6,533
     Net gain on loan sales                               -               159                  -                159
     Other revenue                                    1,158                 -                317              1,475
     Noncash items:
         Depreciation                                   307                10                 12                329
         Provision for loan loss                        300                 -                  -                300
     Segment profit                                   2,400                66                113              2,579
     Segment assets                                 684,125             5,546                202            689,873

</TABLE>
<PAGE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
-----------------------------------------------------------------------------


Six months ended June 30:
<TABLE>
<S>                                             <C>             <C>                <C>                  <C>

2001                                                              Mortgage                               Total
                                                Banking           Banking             Trust            Segments

     Net interest income                    $        13,018    $          126     $            -    $        13,144
     Net gain on loan sales                               -               870                  -                870
     Other revenue                                    2,000                 1                594              2,595
     Noncash items:
         Depreciation                                   666                29                 24                719
         Provision for loan loss                        600                 -                  -                600
     Segment profit                                   5,154               405                138              5,697
     Segment assets                                 733,662            12,008                157            745,827

</TABLE>

<TABLE>
<S>                                             <C>             <C>                <C>                  <C>

2000                                                              Mortgage                               Total
                                                Banking           Banking             Trust            Segments

     Net interest income                    $        12,767    $           70     $            -    $        12,837
     Net gain on loan sales                               -               271                  -                271
     Other revenue                                    1,976                 6                633              2,615
     Noncash items:
         Depreciation                                   588                22                 24                634
         Provision for loan loss                        600                 -                  -                600
     Segment profit                                   5,347               106                250              5,703
     Segment assets                                 684,125             5,546                202            689,873

</TABLE>


NOTE 8 - NEW ACCOUNTING PRONOUNCEMENT

Beginning January 1, 2001, a new accounting standard requires all derivatives to
be recorded at fair value.  Unless  designated as hedges,  changes in these fair
values will be recorded in the income  statement.  Fair value changes  involving
hedges will  generally be recorded by  offsetting  gains and losses on the hedge
and on the  hedged  item,  even if the  fair  value  of the  hedged  item is not
otherwise  recorded.  Adoption of this standard on January 1, 2001 had no effect
on the financial statements, as no applicable derivatives were held.


<PAGE>

ITEM 2.
                            LAFAYETTE BANCORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND RESULTS OF
                          OPERATIONS (Dollar amounts in
                        thousands, except per share data)

Lafayette  Bancorporation  (the  "Corporation")  is a one-bank  holding  company
located  in  Lafayette,  Indiana.  The  Corporation's  wholly-owned  subsidiary,
Lafayette Bank and Trust Company ("Bank") conducts business from its main office
and seventeen offices in Tippecanoe,  White, and Jasper Counties,  Indiana.  The
Corporation provides a wide range of commercial and personal banking activities,
including accepting deposits;  making commercial and consumer loans; originating
mortgage  loans;  providing  personal and corporate  trust  services;  providing
investment advisory and brokerage services; and providing auto, homeowners,  and
other insurance products.

On March 14, 2001,  the  Corporation  established  a loan  production  office in
Flora,  Indiana. This Carroll County Loan Center, which provides a full-range of
lending products, is currently staffed by four individuals. In order to meet all
the banking needs of Carroll County  residents,  the Corporation plans to open a
full-service branch in Flora later this year.

On March 15, 2000, the Corporation  opened a full-service  branch located in the
Super  Wal-Mart  in  Monticello,  Indiana.  Also,  on July 19,  2000,  a similar
full-service branch was opened in the Super Wal-Mart in Lafayette, Indiana. Both
of  these  locations  are open  seven  days a week to  serve  the  Corporation's
customers.

The  Corporation  established a new mortgage line of business  during the second
quarter of 2000,  which will assist  customers in securing  financing who do not
meet the  qualifications of conventional or traditional  mortgage loan programs.
The newly created Mortgage Alternative Department only offers mortgage products,
such as first and second mortgages and lines of credit, that are secured by real
estate.  Loans  originated in this department are  pre-approved for sale and are
sold in the secondary mortgage market with no servicing retained.


RESULTS OF OPERATIONS

Net Income

The Corporation  earned $1,906, or $.48 per share for the second quarter of 2001
compared to $1,807, or $.46 per share for the second quarter of 2000. Net income
decreased  $21, or .6% to $3,584 for the six month  period  ending June 30, 2001
compared to the same 2000 time  period.  Basic  earnings per share were $.91 for
the six month periods ending June 30, 2001 and 2000. In general, the Corporation
experienced a decline in the net interest  margin,  primarily due to the Federal
Reserve's interest rate cuts. In all, the Federal Reserve cut interest rates six
times during the first six months of 2001,  resulting in a total  interest  rate
reduction of 275 basis points.  Contributing  to 2001 earnings were increases in
service  charges,  net gain on loan  sales,  and  other  operating  income.  The
increase in 2001  noninterest  income was partially  offset by lower  investment
product  commissions  and higher  noninterest  expenses.  Salaries  and employee
benefits and occupancy and equipment  expenses  increased,  predominately due to
the  full-year  effect  in  2001  of the  two  Wal-Mart  branches  and  Mortgage
Alternative Department, in addition to the newly established Carroll County Loan
Center in Flora, Indiana.

Return on average assets (ROA) and return on average equity (ROE) are summarized
below.

                   Three Months Ending                  Six Months Ending
                         June 30,                            June 30,
                     2001           2000                2001           2000
                     ----           ----                ----           ----

ROA                  1.03%          1.08%                .97%           1.10%

ROE                 13.75%         15.08%              13.12%          15.28%


The  decrease  in ROA and ROE for the three and six months  ending June 30, 2001
was due to the  combination  of the lower net interest  margin and the increased
costs of operating the new branches,  mortgage  department,  and loan production
office.
<PAGE>


Net Interest Income

Net  interest  income is the most  significant  component  of the  Corporation's
earnings.  Net  interest  income is the  difference  between  interest  and fees
realized on earning assets, primarily loans and securities, and interest paid on
deposits and other borrowed  funds.  The net interest  margin is this difference
expressed as a percentage  of average  earning  assets.  Net interest  income is
determined  by several  factors,  including  the  volume of  earning  assets and
liabilities,  the mix of earning assets and liabilities, and interest rates. For
the six months ended June 30, 2001 and 2000, net interest income was $12,788 and
$12,381,  respectively.  The 2001 amount was a $407,  or 3.3%  increase over the
prior  year and was  primarily  the  result  of the  volume  of  earning  assets
increasing at a faster pace than the interest-bearing  liabilities. Net interest
income for the second  quarter of 2001 was $304,  or 4.8%  higher than that same
three month period  ending June 30, 2000.  From June 2000 to June 2001,  average
loan  balances   increased   $33,449,   or  6.4%,   which   contributed  to  the
aforementioned increases.

Total  interest  income for the six month periods  ending June 30, 2001 and 2000
was $27,531 and $25,001,  respectively, an increase in 2001 of $2,530, or 10.1%.
Total  interest  income for the second quarter of 2001 was $867, or 6.7% greater
than that same 2000 quarter.  Interest and fees on loans  increased  $1,594,  or
7.2% to $23,834  for the first six months of 2001  compared  to $22,240  for the
first six months of 2000. For the second  quarter of 2001,  interest and fees on
loans  increased  $496,  or 4.3%  compared  to the second  quarter  of 2000.  As
previously mentioned, the Corporation's average loan balances increased $33,449,
or 6.4% from June 2000 to June  2001.  Approximately  86.7% of that loan  growth
occurred in the highest  yielding  loan  sector,  which is the  commercial  loan
portfolio. Other interest income increased $319 and $957, respectively,  for the
three and six month  periods  ending June 30,  2001.  The  Corporation's  excess
liquidity position appeared to be a result of customers exiting the stock market
in the fall of 2000 due to its declining performance.  Management believes these
funds  have been  placed in high  interest-bearing  money  market  accounts  and
short-term certificates of deposit until the stock market rebounds and customers
once again gain the  confidence  to re-enter  the  markets.  Because  management
believes these funds are short-term in nature,  the  Corporation's  strategy has
been  not  to  fund  longer-term  loans  or  investment  securities  with  these
particular deposits.

Total  interest  expense for the six month period  ending June 30, 2001 and 2000
was $14,743 and $12,620,  respectively.  For the second  quarter of 2001,  total
interest  expense  increased  $563, or 8.6%,  compared to the second  quarter of
2000. From June 2000 to June 2001, total average  interest-bearing  liabilities,
including short-term and long-term  borrowings,  increased $60,252, or 10.6%. In
general,  the increased volume of interest-bearing  liabilities coupled with the
higher rates paid one year ago on  certificates  of deposit,  which are still on
the books, led to the higher interest expense recorded during the year.

The following  table  summarizes  the  Corporation's  net interest  income (on a
tax-equivalent  basis) for each of the  periods  presented.  A marginal  federal
income tax rate of 34% for each period was used.

<TABLE>
                                       Six Months                          Change from
                                     Ended June 30,                       Prior Period
<S>                                <C>              <C>             <C>           <C>
                                   2001             2000             Amount        Percent
                                   ----             ----             ------        -------

Interest income                  $28,013           $25,433           $2,580          10.1%

Interest expense                  14,743            12,620            2,123          16.8%
                                  ------            ------           ------
     Net interest income         $13,270           $12,813         $   457            3.6%
                                 =======           =======         ========
</TABLE>

<PAGE>
<TABLE>
                                      Three Months                         Change from
                                     Ended June 30,                       Prior Period
<S>                                <C>              <C>             <C>           <C>
                                   2001             2000             Amount        Percent
                                   ----             ----             ------        -------


Interest income                  $13,986           $13,096           $  890           6.8%

Interest expense                   7,144             6,581              563           8.6%
                                   -----             -----            -----
     Net interest income          $6,842            $6,515           $  327           5.0%
                                  ======            ======           ======
</TABLE>


The net interest  margin,  on a tax  equivalent  basis for the six months ending
June 30, 2001 and 2000 was 3.86% and 4.32%, respectively.


Provision for Loan Losses and Asset Quality

The provision for loan losses represents charges made to earnings to maintain an
adequate  allowance  for loan losses.  The  allowance is maintained at an amount
believed by management to be sufficient to absorb losses  inherent in the credit
portfolio.  Management conducts,  on a quarterly basis, a detailed evaluation of
the adequacy of the allowance.

The  consolidated  provision  for loan losses was $600 for the six months ending
June 30, 2001 and 2000.  The  allowance for loan losses was $5,299 and $5,071 at
June 30, 2001 and December 31, 2000, respectively. The allowance as a percentage
of loans was .98% and .94% at June 30, 2001 and December 31, 2000, respectively.
Although net  charge-offs  increased  $199, or 115.0% in 2001, the provision for
loan losses remained unchanged from that of the prior year primarily due to only
a slight .91% increase in the outstanding loan balances during the current year.

Nonperforming  loans include  nonaccrual  loans,  restructured  loans, and loans
delinquent 90 days or more.  Loans are classified as nonaccrual  when management
believes that  collection of interest is doubtful,  typically  when payments are
past due 90 days,  unless  the  loans are well  secured  and in the  process  of
collection.

The following table indicated the composition of nonperforming loans:

<TABLE>
<S>                                                                                   <C>                   <C>
                                                                                 June 30,          December 31,
                                                                                   2001                2000
                                                                                   ----                ----

         Loans past due 90 days or more                                      $            786    $         1,052
         Nonaccrual loans                                                               1,803              2,718
         Restructured loans                                                                30                 55
                                                                             ----------------    ---------------

             Total nonperforming loans                                       $          2,619    $         3,825
                                                                             ================    ===============
</TABLE>


Management believes overall asset quality remains satisfactory, as nonperforming
loan totals have declined $1,206 since year-end.  Loans past due 90 days or more
have  declined  $266 since  December 31, 2000,  with  approximately  89% of that
balance change  related to two mortgage loans being place on nonaccrual  status.
Likewise,  nonaccrual loan balances have declined $915 since year-end,  with the
majority of the decrease related to one large commercial loan being removed from
nonaccrual  status and a portion  charged-off  to the allowance for loan losses.
Total nonperforming loans as a percentage of assets declined to .35% at June 30,
2001, compared to .52% at December 31, 2000.


<PAGE>


Noninterest Income and Expense

Noninterest  income  totaled $3,465 for the first six months of 2001 compared to
$2,886 for the same period in 2000, an increase of $579,  or 20.1%.  Noninterest
income  for the second  quarter  of 2001  increased  $182,  or 11.1%,  to $1,816
compared to the prior year.

Income from fiduciary activities decreased for the first six months and also for
the second  quarter of 2001 when  compared  to the same 2000 time  periods.  The
lower fees recorded were a direct  result of the decline in the  performance  of
the stock market, in that the market value of assets are used in determining the
amount of fee income derived by the Corporation.

Service  charges  on  deposit  accounts   comprise  the  largest   component  of
noninterest  income.  The $144,  or 16.6%  increase in revenue for the first six
months of 2001 was attributed to the  combination of a larger deposit base being
assessed  fees,  along with the full  period  effect of an  increase  in the fee
structure made in June 2000. For the second quarter of 2001,  service charges on
deposit accounts increased $61, or 13.2%, compared to the prior year.

Net gain on loans originated and sold in the secondary mortgage market were $870
and $271 for the six months  ending  June 30,  2001 and 2000,  respectively,  an
increase of $599, or 221.0%.  For the second  quarter of 2001, net gain on loans
sold in the secondary mortgage market was $345, or 217.0%,  higher than the 2000
time period. The continued lower interest rate environment led to additional new
home  purchases  and  refinancing  activities  of existing  homeowners,  and the
increase in market  activity has also  increased  profit  margins on loan sales.
Loan  fundings  for the six months  ended June 30, 2001  increased  $33,205,  or
144.8%  compared to the prior year,  while  fundings  for the three months ended
June 30, 2001 rose $20,782, or 159.5% when compared to that same time period one
year earlier.

For  customers of the  Investment  Center,  a full service  brokerage  operation
offered  exclusively  through Raymond James  Financial  Services,  Inc.,  member
NASD/SIPC,  the lackluster performance of the stock market resulted in a decline
in  investor  activity;  which,  in turn led to a 50.9%  and 71.9%  decrease  in
investment  product  commissions  recorded  for the six and three month  periods
ending June 30, 2001.

Other operating income increased $97, or 63.4%, to $250 for the first six months
of 2001, while also increasing $52, or 68.4% for the second quarter of 2001 when
compared to the  corresponding  prior year time  periods.  These  increases  are
attributed  to the  income  earned  on the  additional  $2,995  director's  life
insurance coverage purchased in November 2000.

Noninterest  expense totaled $10,455 for the first six months of 2001,  compared
to $9,148 for that same 2000  period,  an  increase of $1,307,  or 14.3%.  Total
noninterest  expense for the second  quarter of 2001 was $483,  or 10.0%  higher
than the prior year.

Salaries and employee benefits expense was $6,070 for the six months ending June
30, 2001, an increase of $1,040,  or 20.7% from the $5,030 recorded in the first
six months of 2000.  Total salaries and benefits  expense for the second quarter
of 2001 increased  $400, or 14.8%, to $3,112 compared to $2,712 recorded for the
three months  ending June 30,  2000.  The  valuation  of the stock  appreciation
rights granted to certain senior executives accounted for a large portion of the
increases reported in each of these periods, as an increase of $419 and $150 was
recorded for the six months and three months ending June 30, 2001, respectively.
The remaining  increases were  predominately  associated with staff additions in
the new Wal-Mart branches, the Mortgage Alternative Department,  and the Carroll
County Loan Center.

Occupancy  and  equipment  expenses  increased  $63, or 10.8% and $96, or 11.5%,
respectively  for the six months  ending  June 30,  2001.  For the three  months
ending June 30, 2001,  occupancy and equipment  expenses  increased $18, or 6.0%
and $16, or 3.6%, respectively.  Expenses associated with the Wal-Mart branches,
the Mortgage Alternative Department, and the Carroll County Loan Center, such as
rent,  depreciation,  and utilities,  accounted for the majority of the recorded
increases.

Other  operating  expenses  increased  $120, or 5.1% to $2,453 for the first six
months of 2001  compared to the same 2000 time period.  For the second  quarter,
other  operating  expenses  increased $55, or 4.6%, to $1,258 compared to $1,203
for the three months  ending June 30, 2000.  Accounting  for the majority of the
increases  in  both  periods  were  higher  advertising,  marketing,  and  legal
expenses,  along with increased operational costs of the new Carroll County Loan
Center,  such as telephone  and postage.  Mortality  costs  associated  with the
additional $2,995 of director's life insurance  coverage purchased and increased
fees associated with higher ATM volumes also led to higher costs incurred.
<PAGE>


Income Taxes

The Corporation's  effective tax rate for the six months ended June 30, 2001 and
2000 was 31.1% and 34.7%, respectively. For the three months ended June 30, 2001
and  2000,  the  effective  tax rate for the  Corporation  was  31.7%  and 35.1%
respectively.   The  current  year  lower   effective  tax  rate  was  primarily
attributable  to a change in state tax law,  which now  allows a portion  of the
Corporation's revenues to be apportioned outside the state of Indiana.


FINANCIAL CONDITION

Total assets were $746,111 at June 30, 2001 compared to $741,147 at December 31,
2000, an increase of $4,964. Investment securities, loans held for sale, and net
loans increased $9,136,  $5,905, and $4,667,  respectively,  while cash and cash
equivalents and accrued interest  receivable and other assets decreased  $12,807
and $1,303, respectively.

Total  deposits  increased  $16,906 to  $595,203  at June 30,  2001  compared to
$578,297 at December 31, 2000.  Short-term  borrowings,  consisting primarily of
repurchase   agreements,   and  FHLB  advances   decreased   $14,174  and  $531,
respectively,  while quarterly principal  repayments on the note payable totaled
$700, and accrued interest payable and other liabilities also declined $98.


Capital

The Corporation and Bank are subject to various regulatory capital guidelines as
required by federal and state  banking  agencies.  These  guidelines  define the
various components of core capital and assign risk weights to various categories
of assets.

Tier 1 capital consists of  shareholders'  equity less goodwill and core deposit
intangibles,  as defined by bank  regulators.  The  definition of Tier 2 capital
includes the amount of allowance  for loan losses which does not exceed 1.25% of
gross  risk  weighted  assets.  Total  capital  is the sum of Tier 1 and  Tier 2
capital.

The minimum requirements under the capital guidelines are a 4.00% leverage ratio
(Tier 1 capital divided by average assets less intangible  assets and unrealized
gains/losses),  a 4.00% Tier 1 risk-based  capital ratio (Tier 1 capital divided
by risk-weighted  assets), and an 8.00% total capital ratio (Tier 1 capital plus
Tier 2 capital divided by risk-weighted assets).

The Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991  (FDICIA)
requires  federal  regulatory  agencies  to define  capital  tiers.  These  are:
well-capitalized,   adequately  capitalized,   undercapitalized,   significantly
undercapitalized,  and critically  undercapitalized.  Under these regulations, a
"well-capitalized" institution must achieve a Tier 1 risk-based capital ratio of
at least 6.00%,  a total capital ratio of at least 10.00%,  and a leverage ratio
of at least 5.00% and not be under a capital  directive  order.  Failure to meet
capital  requirements can initiate  regulatory action. If an institution is only
adequately  capitalized,  regulatory  approval is  required  to accept  brokered
deposits.  If  undercapitalized,   capital  distributions,   asset  growth,  and
expansion  may be  limited,  and the  institution  may be  required  to submit a
capital restoration plan.

At June 30, 2001,  management  was not aware of any current  recommendations  by
banking  regulatory  authorities  which, if they were to be  implemented,  would
have, or are reasonably  likely to have, a material effect on the  Corporation's
consolidated  liquidity,  capital  resources or  operations.  The  Corporation's
actual consolidated capital amounts are presented in the following table.
<PAGE>

<TABLE>
<S>                                                                                   <C>                   <C>
                                                                                 June 30,          December 31,
                                                                                   2001                2000
                                                                                   ----                ----

       Tier 1 capital
         Shareholders' equity                                                $         56,362    $        52,801
         Less:  Intangibles                                                           (12,648)           (13,007)
                  Net unrealized losses on available-for-sale
                     equity securities                                                    (11)               (14)
         Add/less:  Unrealized loss/(gain) on securities                                 (404)               263
                                                                             -----------------   ---------------

             TOTAL TIER 1 CAPITAL                                            $         43,299    $        40,043
                                                                             ================    ===============

       Total capital
         Tier 1 capital                                                      $         43,299    $        40,043
         Allowable allowance for loan losses                                            5,299              5,071
                                                                             ----------------    ---------------

             TOTAL  CAPITAL                                                  $         48,598    $        45,114
                                                                             ================    ===============

       RISK WEIGHTED ASSETS                                                  $        548,207    $       541,362
                                                                             ================    ===============

       AVERAGE ASSETS                                                        $        730,655    $       692,178
                                                                             ================    ===============
</TABLE>


The Corporation and Bank's actual capital ratios and minimum required levels are
presented in the following table.

<TABLE>
<S>                                  <C>                <C>                           <C>                       <C>
                                   Actual ratios as of                       Minimum
                                June 30,       December 31,             Capital Adequacy          Well-Capitalized
                                  2001             2000                    Requirement               Requirement
                                  ----             ----                    -----------               -----------

Tier I Capital
 (to average assets)
    Consolidated                  5.93%              5.79%                    4.00%                     5.00%
    Lafayette Bank and Trust      7.29%              7.29%                    4.00%                     5.00%


Tier I Capital
 (to risk weighted assets)
    Consolidated                  7.90%             7.40%                     4.00%                     6.00%
    Lafayette Bank and Trust      9.71%             9.26%                     4.00%                     6.00%


Total Capital
 (to risk weighted assets)
    Consolidated                   8.86%              8.33%                   8.00%                    10.00%
    Lafayette Bank and Trust      10.67%             10.19%                   8.00%                    10.00%

</TABLE>
<PAGE>

Management  believes  the Bank met all the capital  requirements  as of June 30,
2000 and  December  31,  1999,  and was  well-capitalized  under the  regulatory
framework  for  prompt  corrective   action.   The  Corporation  was  adequately
capitalized as of June 30, 2001 and December 31, 2000.  While the  Corporation's
total capital status is below the  well-capitalized  category as a result of the
Jasper County branch  acquisitions  in 1999,  capital  ratios have improved each
quarter since the transaction occurred, and management  anticipates  maintaining
its  adequately  capitalized  status for the  foreseeable  future.  The  Federal
Reserve Bank considers the holding company  capital  adequacy in connection with
any  application  activity  which requires their  approval.  Further,  since the
Corporation's capital levels are below the well-capitalized category, the use of
expedited  Federal  Reserve Bank  procedures in any  application  activity which
requires their approval will not be available to the  Corporation  until it once
again becomes well-capitalized. Certain statements in this paragraph relating to
future capital levels of the Corporation and Bank are forward-looking  which may
or may not be accurate due to the  impossibility  of predicting  future economic
and  business  events,  including  the  ability  of  the  Corporation  to  raise
additional  capital,  if needed,  as well as other  factors  that are beyond the
control of the Corporation.


Liquidity

The  consolidated  statement of cash flows  illustrates  the elements which gave
rise to the change in the  Corporation's  cash and cash  equivalents for the six
months  ended June 30, 2001 and 2000.  Including  net income of $3,584,  the net
cash from  operating  activities for the first six months of 2001 generated $216
of  available  cash.  Net cash from  investing  activities  utilized  $13,834 of
available  cash  primarily as a result of $8,394 of net  purchases of investment
securities  and $5,387 of net loan  fundings by the  Corporation.  Net cash from
financing  activities generated $811 of available cash as a result of an $16,906
increase in deposits,  offset by a $14,174  decrease in  short-term  borrowings,
$700 of note payable principal repayments, and $792 in dividends paid.

Total cash  outflows for the  six-month  period in 2001 exceeded cash inflows by
$12,807  resulting in a cash and cash equivalent  balance of $60,665 at June 30,
2001.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market  risk of the  Corporation  encompasses  exposure  to both  liquidity  and
interest rate risk and is reviewed  quarterly by the Funds Management  Committee
and the  Board  of  Directors.  There  have  been  no  material  changes  in the
quantitative and qualitative  disclosures about market risks as of June 30, 2001
from the analysis and disclosures  provided in the  Corporation's  Form 10-K for
the year ended December 31, 2000.


<PAGE>


PART II. OTHER INFORMATION

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

     (a)  The  Corporation's  Annual  Meeting of  Shareholders  was held Monday,
          April 9, 2001.

     (b)  The  following  member  was  elected  to the  Corporation's  Board  of
          Directors to hold office as indicated by the term expiration, or until
          their successors are duly chosen and qualified.
<TABLE>

<S>                     <C>                   <C>         <C>    <C>          <C>               <C>
       Term                                                Against or                             Broker
     Expiration           Nominee               For         Withheld           Abstain           Non-Votes
     ----------           -------               ---         --------           -------           ---------

       2004         Joseph A. Bonner         3,182,213           60            18,830                0
       2004         Richard A. Boehning      3,167,568       14,704            18,830                0
</TABLE>



Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          No exhibits  were  filed  with the  submission  of Form  10-Q for the
          quarter ended June 30, 2001

     (b)  Reports on Form 8-K

          No Form 8-K was filed with the SEC during the  quarter  ended June 30,
          2001.


SIGNATURES

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


Date:  August 6, 2001                   By /s/ Robert J. Weeder
                                        ---------------------------------------
                                        Robert J. Weeder
                                        President and CEO


Date:  August 6, 2001                   By /s/ Marvin S. Veatch
                                        ---------------------------------------
                                        Marvin S. Veatch
                                        Vice President and Controller