# SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549Form 10-Q



[X]        QUARTERLY
REPORT PURSUANT TO SECTION 13 or 15(d)  OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period
ended September 30, 2004

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
0-25752

FNBH BANCORP, INC.(Exact name of
registrant as specified in its charter)

|MICHIGAN
(State or other jurisdiction ofincorporation or
organization) | 38-2869722
(I.R.S. EmployerIdentification No.)
|---------------------------------------------------------------------- | ----------------------------------------------

101 East Grand River,
Howell, Michigan 48843 (Address of principal
executive offices) (Zip Code)

Registrants
telephone number, including area code: (517)546-3150

_________________

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act 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 by check mark
whether the  registrant  is an  accelerated  filer (as defined in Rule 12b-2 of the
Exchange Act).  Yes [X] No [__]

The number of shares outstanding of
each of the issuers classes of common stock, as of the latest practicable date:
3,178,294 shares of the Companys Common Stock (no par value) were outstanding as of
October 31, 2004.

---



INDEX

|Part I. 
Part II. | Financial Information (unaudited):
Item 1.
Interim Financial Statements:
Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003
Consolidated Statements of Income, three months ended September 30, 2004     
     and 2003 and nine months ended September 30, 2004 and 2003
Consolidated Statements of Stockholders' Equity and Comprehensive            
     Income for the three months ended September 30, 2004 and 2003
Consolidated Statements of Stockholders' Equity and Comprehensive            
     Income for nine months ended September 30, 2004 and 2003
Consolidated Statements of Cash Flows for nine months ended                  
     September 30, 2004 and 2003
Notes to Interim Consolidated Financial Statements
Item 2.                                                                      
Management's Discussion and Analysis of                                      
     Financial Condition and Results of Operations
Item 3.                                                                      
Quantitative and Qualitative Disclosures about Market Risk
Item 4.                                                                      
Controls and Procedures
Other Information                                                            
Item 2.                                                                      
Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.                                                                      
Exhibits 
Signatures | Page
 Number
   4
   5
   6
   7
   8
   9
  10
  23
  23
  24
  24
  25
|----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------

2

---



PART I  FINANCIAL
INFORMATION

Item 1.Financial StatementsUnaudited interim consolidated
financial statements follow.

3

---



# FNBH BANCORP, INC.
AND SUBSIDIARIES

|September 302004                                                       | December 312003
|---------------------------------------------------------------------- | ---------------
|                                                                       |                
|Assets                                                                 |                
|Cash and due from banks                                                |                
|Short term investments                                                 |                
|                                                                       |                
|Total cash and cash equivalents                                        |                
|                                                                       |                
|Certificates of deposit                                                |                
|Investment securities held to maturity, net (fair value of $17,704,653 |                
|at September 30, 2004 and $16,006,625 at December 31, 2003)            |                
|Investment securities available for sale, at fair value                |                
|Mortgage-backed securitities available for sale, at fair value         |                
|FHLBI and FRB stock, at cost                                           |                
|                                                                       |                
|Total investment securities                                            |                
|                                                                       |                
|Loans:                                                                 |                
|Commercial                                                             |                
|Consumer                                                               |                
|Real estate mortgage                                                   |                
|                                                                       |                
|Total loans                                                            |                
|Less allowance for loan losses                                         |                
|                                                                       |                
|Net loans                                                              |                
|                                                                       |                
|Premises and equipment, net                                            |                
|Land and facilities held for sale, net                                 |                
|Other real estate owned, held for sale                                 |                
|Accrued interest and other assets                                      |                
|                                                                       |                
|Total assets                                                           |                
|                                                                       |                
|                                                                       |                
|Liabilities and Stockholders' Equity                                   |                
|Liabilities                                                            |                
|Deposits:                                                              |                
|Demand (non-interest bearing)                                          |                
|NOW                                                                    |                
|Savings and money market                                               |                
|Time                                                                   |                
|Brokered certificates of deposit                                       |                
|                                                                       |                
|Total deposits                                                         |                
|Other borrowings                                                       |                
|Accrued interest, taxes, and other liabilities                         |                
|                                                                       |                
|Total liabilities                                                      |                
|Stockholders' Equity                                                   |                
|Common stock, no par value.  Authorized 4,200,000 shares; 3,178,294    |                
|shares issued and outstanding at September 30, 2004 and 3,168,931      |                
|shares issued and outstanding at December 31, 2003                     |                
|Retained earnings                                                      |                
|Deferred directors' compensation                                       |                
|Unearned long term incentive plan                                      |                
|Accumulated other comprehensive income, net                            |                
|                                                                       |                
|Total stockholders' equity                                             |                
|                                                                       |                
|Total liabilities and stockholders' equity                             |                
|                                                                       |                

See notes to interim consolidated
financial statements.

4

---



# FNBH BANCORP, INC. AND
SUBSIDIARIES

|Three months ended September 30                             | Nine months ended September 30
|----------------------------------------------------------- | ------------------------------
|
|                                                            |                               
|Interest and dividend income:                               |                               
|Interest and fees on loans                                  |                               
|Interest and dividends on investment securities:            |                               
|U.S. Treasury and agency securities                         |                               
|Obligations of states and political subdivisions            |                               
|Corporate bonds                                             |                               
|Other securities                                            |                               
|Interest on short-term investments                          |                               
|Interest on certificates of deposit and other bank deposits |                               
|                                                            |                               
|Total interest and dividend income                          |                               
|                                                            |                               
|                                                            |                               
|Interest expense:                                           |                               
|Interest on deposits                                        |                               
|Interest on other borrowings                                |                               
|                                                            |                               
|Total interest expense                                      |                               
|                                                            |                               
|                                                            |                               
|Net interest income                                         |                               
|                                                            |                               
|Provision for loan losses                                   |                               
|                                                            |                               
|Net interest income after provision for loan losses         |                               
|                                                            |                               
|                                                            |                               
|Noninterest income:                                         |                               
|Service charges and other fee income                        |                               
|Trust income                                                |                               
|Gain on sale of loans                                       |                               
|Gain on sale/call of investments                            |                               
|Other                                                       |                               
|                                                            |                               
|Total noninterest income                                    |                               
|                                                            |                               
|                                                            |                               
|Noninterest expense:                                        |                               
|Salaries and employee benefits                              |                               
|Net occupancy expense                                       |                               
|Equipment expense                                           |                               
|Professional and service fees                               |                               
|Printing and supplies                                       |                               
|Advertising                                                 |                               
|Other                                                       |                               
|                                                            |                               
|Total noninterest expense                                   |                               
|                                                            |                               
|                                                            |                               
|Income before federal income taxes                          |                               
|                                                            |                               
|Federal income taxes                                        |                               
|                                                            |                               
|Net income                                                  |                               
|                                                            |                               
|                                                            |                               
|Per share statistics                                        |                               
|Basic EPS                                                   |                               
|Diluted EPS                                                 |                               
|Dividends                                                   |                               
|Basic average shares outstanding                            |                               
|Dilutive average shares outstanding                         |                               

See notes to interim
consolidated financial statements.

5

---



FNBH BANCORP, INC. AND
SUBSIDIARY                    Consolidated Statement of Stockholders' Equity and
Comprehensive Income     For the Three Months Ended September 30, 2004 and 2003
(Unaudited)

|                                                | Common Stock | Retained Earnings | Unearned Long Term Incentive Plan | Accumulated Other Comprehensive Income (loss) | Total |  
|----------------------------------------------- | ------------ | ----------------- | --------------------------------- | --------------------------------------------- | ----- | -
|                                                |              |                   |                                   |                                               |       |  
|Balances at June 30, 2003                       |              |                   | $                                 | 5,622,202                                     |       | $
|Amortization of long term incentive plan        |              |                   |                                   |                                               |       |  
|Issued 636 shares for employee purchase plan    |              |                   |                                   | 13,642                                        |       |  
|Issued 241 shares for current directors' fees   |              |                   |                                   | 5,811                                         |       |  
|Comprehensive income:                           |              |                  
|Net income                                      |              |                   |                                   |                                               |       |  
|Change in unrealized loss    on debt securities |              |                  
|available for sale, net of    tax effect        |              |                   |                                   |                                               |       |  
|                                                |              |                   |                                   |                                               |       |  
|Total comprehensive income                      |              |                   |                                   |                                               |       |  
|Cash dividends (17¢ per share)                  |              |                   |                                   |                                               |       |  
|                                                |              |                   |                                   |                                               |       |  
|Balances at September 30, 2003                  |              |                   | $                                 | 5,641,655                                     |       | $
|                                                |              |                   |                                   |                                               |       |  
|                                                |              |                   |                                   |                                               |      
|                                                |              |                   |                                   |                                              
|                                                |              |                   |                                   |                                               |       |  
|Balances at June 30, 2004                       |              |                   | $                                 | 5,953,028                                     |       | $
|Amortization of long term incentive plan        |              |                   |                                   |                                               |       |  
|Issued 569 shares for employee purchase plan    |              |                   |                                   | 14,800                                        |       |  
|Issued 142 shares for current directors' fees   |              |                   |                                   | 4,345                                         |       |  
|Reclassification of directors' deferred         |              |                  
|compensation (19,321 stock units)               |              |                   |                                   |                                               |       |  
|Comprehensive income:                           |              |                  
|Net income                                      |              |                   |                                   |                                               |       |  
|Change in unrealized gain    on debt securities |              |                  
|available for sale, net of    tax effect        |              |                   |                                   |                                               |       |  
|                                                |              |                   |                                   |                                               |       |  
|Total comprehensive income                      |              |                   |                                   |                                               |       |  
|Cash dividends (19¢ per share)                  |              |                   |                                   |                                               |       |  
|                                                |              |                   |                                   |                                               |       |  
|Balances at September 30, 2004                  |              |                   | $                                 | 5,972,173                                     |       | $
|                                                |              |                   |                                   |                                               |       |  

See notes to interim consolidated financial statements

6

---



FNBH BANCORP, INC. AND
SUBSIDIARY               Consolidated Statement of Stockholders' Equity and Comprehensive
Income     For the Nine Months Ended September 30, 2004 and 2003 (Unaudited)

|                                                      | Common Stock | Retained Earnings | Unearned Long Term Incentive Plan | Accumulated Other Comprehensive Income (loss) | Total
|----------------------------------------------------- | ------------ | ----------------- | --------------------------------- | --------------------------------------------- | -----
|                                                      |              |                   |                                   |                                               |      
|Balances at December 31, 2002                         |              |                   | $                                 | 5,465,089                                     |      
|Issued 3,036 shares for long term incentive plan      |              |                   |                                   | 72,454                                        |      
|Amortization of long term incentive plan              |              |                   |                                   |                                               |      
|Issued 2,310 shares for employee stock purchase plan  |              |                   |                                   | 47,612                                        |      
|Issued 691 shares for current stock directors' fees   |              |                   |                                   | 16,504                                        |      
|Issued 1,689 shares for directors' variable fee plan  |              |                   |                                   | 39,996                                        |      
|Comprehensive income:                                 |              |                  
|Net income                                            |              |                   |                                   |                                               |      
|Change in unrealized loss on    debt securities       |              |                  
|available for sale, net of tax effect                 |              |                   |                                   |                                               |      
|                                                      |              |                   |                                   |                                               |      
|Total comprehensive income                            |              |                   |                                   |                                               |      
|Cash dividends (51¢ per share)                        |              |                   |                                   |                                               |      
|                                                      |              |                   |                                   |                                               |      
|Balances at September 30, 2003                        |              |                   | $                                 | 5,641,655                                     |      
|                                                      |              |                   |                                   |                                               |      
|                                                      |              |                  
|                                                      |              |                   |                                   |                                              
|                                                      |              |                   |                                   |                                               |      
|Balances at December 31, 2003                         |              |                   | $                                 | 5,725,898                                     |      
|Issued 4,261 shares for long term incentive plan      |              |                   |                                   | 115,985                                       |      
|Amortization of long term incentive plan              |              |                   |                                   |                                               |      
|Retired 146 shares from long term incentive plan      |              |                   |                                   | (3,059                                        | )    
|Issued  3,145 shares for employee stock purchase plan |              |                   |                                   | 77,253                                        |      
|Issued  641 shares for current directors' fees        |              |                   |                                   | 18,051                                        |      
|Issued 1,179 shares for directors' variable fee plan  |              |                   |                                   | 32,092                                        |      
|Issued 283 shares for deferred directors' fees        |              |                   |                                   | 5,953                                         |      
|Reclassification of directors' deferred compensation  |              |                  
|(19,321 stock units)                                  |              |                   |                                   |                                               |      
|Comprehensive income:                                 |              |                  
|Net income                                            |              |                   |                                   |                                               |      
|Change in unrealized loss on debt securities          |              |                  
|available for sale, net of tax effect                 |              |                   |                                   |                                               |      
|                                                      |              |                   |                                   |                                               |      
|Total comprehensive income                            |              |                   |                                   |                                               |      
|Cash dividends (53¢per share)                         |              |                   |                                   |                                               |      
|                                                      |              |                   |                                   |                                               |      
|Balances at September 30, 2004                        |              |                   | $                                 | 5,972,173                                     |      
|                                                      |              |                   |                                   |                                               |      

See notes to interim
consolidated financial statements

7

---



# FNBH BANCORP, INC. AND
SUBSIDIARIES

|Nine months ended September 30                                                   
|---------------------------------------------------------------------------------
|                                                                                 
|                                                                                 
|                                                                                 
|Cash flows from operating activities:                                            
|Net income                                                                       
|Adjustments to reconcile net income to net cash provided by operating activities:
|Provision for loan losses                                                        
|Depreciation and amortization                                                    
|Deferred income taxes                                                            
|Net amortization on investment securities                                        
|Earned portion of long term incentive plan                                       
|Shares issued for directors' compensation                                        
|Gain on sale/call of investments                                                 
|Gain on sale of loans                                                            
|Proceeds from sale of loans                                                      
|Origination of loans held for sale                                               
|Gain on the sale of other real estate owned, held for sale                       
|Proceeds from sale of other real estate owned, held for sale                     
|Proceeds from sale of land and facilities held for sale                          
|Loss on disposal of equipment                                                    
|Increase in accrued interest income and other assets                             
|Increase (decrease) in accrued interest, taxes, and other liabilities            
|                                                                                 
|Net cash provided by operating activities                                        
|                                                                                 
|Cash flows from investing activities:                                            
|Purchases of available for sale securities                                       
|Purchases of held to maturity securities                                         
|Purchases/Stock dividend FHLBI stock                                             
|Proceeds from maturities and calls of available for sale securities              
|Proceeds from mortgage-backed securities paydowns-available for sale             
|Proceeds from maturities and calls of held to maturity securities                
|Proceeds from mortgage-backed securities paydowns-held to maturity               
|Purchases of brokered certificates of deposit                                    
|Maturity of brokered certificates of deposit                                     
|Net (increase) decrease in loans                                                 
|Capital expenditures                                                             
|                                                                                 
|Net cash used in investing actitities                                            
|                                                                                 
|Cash flows from financing activities:                                            
|Net increase in deposits                                                         
|Increase (decrease) in brokered certificates of deposit                          
|Payments on FHLB note                                                            
|Dividends paid                                                                   
|Shares issued for employee stock purchase                                        
|                                                                                 
|Net cash provided by financing activities                                        
|                                                                                 
|Net decrease in cash and cash equivalents                                        
|                                                                                 
|Cash and cash equivalents at beginning of year                                   
|                                                                                 
|Cash and cash equivalents at end of period                                       
|                                                                                 
|Supplemental disclosures:                                                        
|Interest paid                                                                    
|Federal income taxes paid                                                        
|Loans transferred to other real estate                                           
|Loans transferred to land and facilities, held for sale                          
|Loans charged off                                                                

See notes to interim
consolidated financial statements.

8

---



Notes to Interim
Consolidated Financial Statements (unaudited)

The accompanying unaudited
consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP) for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP for
complete financial statements.

1.    
          In the opinion of management of FNBH Bancorp, Inc. (the Company), the unaudited
          consolidated financial statements filed with this Form 10-Q contain all
          adjustments (consisting of only normal recurring accruals) necessary to present
          fairly the consolidated financial position of the Company as of September 30,
          2004, and consolidated results of operations for the three months and nine
          months ended September 30, 2004 and 2003 and consolidated cash flows for the
          nine months ended September 30, 2004 and 2003.

2.    
          The results of operations for the three months and nine months ended September
          30, 2004 and 2003 are not necessarily indicative of the results to be expected
          for the full year.

3.    
          The accompanying unaudited consolidated financial statements should be read in
          conjunction with the Consolidated Financial Statements in the 2003 Annual Report
          contained in the Companys report on Form 10-K filing.

4.    
          The provision for income taxes represents federal income tax expense calculated
          using estimated annualized rates on taxable income generated during the
          respective periods.

5.    
          Managements assessment of the allowance for loan losses is based on an
          evaluation of the loan portfolio, recent loss experience, current economic
          conditions, and other pertinent factors. Loans on non-accrual status and those
          past due more than 90 days amounted to $1,968,000 at September 30, 2004,
          $5,830,000 at September 30, 2003, and $4,293,000 at December 31, 2003. (See
          Managements Discussion and Analysis of Financial Condition and Results of
          Operations).

6.    
          Basic and diluted earnings per share (EPS) are computed by dividing net income
          by the respective number of common shares outstanding.

|                             | Third Quarter | Year-to-Date
|---------------------------- | ------------- | ------------
|                             |               |             
|                             |               |             
|                             |               |             
|Net income                   |               |             
|                             |               |             
|Weighted average             |               |             
|shares outstanding (basic)   |               |             
|Dilutive shares              |               |             
|                             |               |             
|Weighted average             |               |             
|shares outstanding (diluted) |               |             
|                             |               |             
|Earnings per share:          |               |             
|Basic EPS                    |               |             
|Diluted EPS                  |               |             

9

---



Dilutive shares outstanding includes
potential common shares awarded under restricted stock awards determined using the
treasury stock method.

7.    
          In September 2004, the Company reclassified Deferred Directors
          Compensation (See Note 17 of the Consolidated Financial Statements in the 2003
          Annual Report) from a liability to equity. Prior periods were not reclassified
          as the impact of this change was determined not to be significant.

Item 2.

Managements
Discussion and Analysisof Financial
Condition and Results of OperationsInterim Financial
Statements

This report includes certain
forward-looking statements, within the meaning of the Private Securities Litigation Reform
Act of 1995, that involve inherent risks and uncertainties. A number of important factors
could cause actual results to differ materially from those in the forward-looking
statements. Those factors include the economic environment, competition, products and
pricing in business areas in which the Company operates, prevailing interest rates,
changes in government regulations and policies affecting financial service companies,
credit quality and credit risk management, acquisitions and integration of acquired
businesses.

The Company, a Michigan business
corporation, is a one bank holding company, which owns all of the outstanding capital
stock of First National Bank in Howell (the Bank) and all of the outstanding stock of HB
Realty Co., a subsidiary which owns real estate. The following is a discussion of the
Companys results of operations for the three months and nine months ended September
30, 2004 and 2003, and also provides information relating to the Companys financial
condition, focusing on its liquidity and capital resources.

|                                              | Third Quarter | Year-to-Date
|--------------------------------------------- | ------------- | ------------
|                                              |               |             
|Earnings
(in thousands except per share data) |               |             
|                                              |               |             
|Net income                                    |               |             
|                                              |               |             
|Basic and diluted earnings per share          |               |             

Net income for the three months ended
September 30, 2004 decreased approximately $225,000 (12.0%) compared to the same period
last year. In the third quarter of the current year, the provision for loan losses
increased $100,000 (50.0%), noninterest income decreased $260,000 (23.5%) and noninterest
expenses increased $98,000 (3.3%). Partially offsetting these unfavorable occurrences was
an increase in net interest income of $116,000 (2.4%) and a decrease in federal income
taxes of $118,000 (14.0%).

10

---



Net income for the nine months ended
September 30, 2004 decreased approximately $99,000 (2.2%) compared to the same period last
year. Contributing to the decrease was a higher provision for loan losses of $195,000
(24.4%) and increases in noninterest expenses of $365,000 (3.8%). Partially offsetting
these unfavorable variances were an increase in net interest income of $292,000 (2.1%),
higher noninterest income of $70,000 (2.4%) and lower federal income taxes of $100,000
(5.0%).

|                                   | Third Quarter | Year-to-Date
|---------------------------------- | ------------- | ------------
|                                   |               |             
|Net Interest Income
(in thousands) |               |             
|                                   |               |             
|Interest Income                    |               |             
|                                   |               |             
|Interest Expense                   |               |             
|                                   |               |             
|Net Interest Income                |               |             

The following tables illustrate some
of the significant factors contributing to the increase in net interest income for the
period and year to date.

11

---



TABLE 1      INTEREST
YIELDS AND COSTS (in thousands)             September 30, 2004 and 2003

|                                                   | ----------Third Quarter Averages----------
|-------------------------------------------------- | ------------------------------------------
|                                                  
|                                                   |                                           
|                                                   |                                           
|Assets:                                            |                                           
|Short term investments and certificates of deposit |                                           
|Securities:   Taxable                              |                                           
|Tax-exempt (1)                                     |                                           
|Loans (2)(3)                                       |                                           
|                                                   |                                           
|Total earning assets/total                         |                                           
|interest income                                    |                                           
|                                                   |                                           
|Cash and due from banks                            |                                           
|All other assets                                   |                                           
|Allowance for loan losses                          |                                           
|                                                   |                                           
|Total Assets                                       |                                           
|                                                   |                                           
|Liabilities and                                    |                                           
|Stockholders' Equity:                              |                                           
|Interest bearing deposits:                         |                                           
|Savings and NOW accounts                           |                                           
|Time                                               |                                           
|Short term borrowings                              |                                           
|FHLB advances                                      |                                           
|                                                   |                                           
|Total interest bearing                             |                                           
|liabilities/total interest expense                 |                                           
|                                                   |                                           
|Non-interest bearing deposits                      |                                           
|All other liabilities                              |                                           
|Stockholders' Equity                               |                                           
|                                                   |                                           
|Total Liabilities and                              |                                           
|Shareholders' Equity                               |                                           
|                                                   |                                           
|Interest spread                                    |                                           
|                                                   |                                           
|Net interest income-FTE                            |                                           
|                                                   |                                           
|Net interest margin                                |                                           
|                                                   |                                           

(1)    
          Average yields in the above table have been adjusted to a tax-equivalent basis
          using a 34% tax rate and exclude the effect of any market value adjustments
          recorded under Statement of Financial Accounting Standards No. 115. (2) For
          purposes of the computation above, non-accruing loans are included in the
          average daily loan balances. (3) Interest on loans includes origination fees
          totaling $199,000 in 2004 and $212,000 in 2003.

12

---



INTEREST YIELDS AND
COSTS (in thousands)              September 30, 2004 and 2003

|                                                   | ----------Year to Date Averages----------
|-------------------------------------------------- | -----------------------------------------
|                                                  
|                                                   |                                          
|                                                   |                                          
|Assets:                                            |                                          
|Short term investments and certificates of deposit |                                          
|Securities: Taxable                                |                                          
|Tax -exempt (1)                                    |                                          
|Loans (2)(3)                                       |                                          
|                                                   |                                          
|Total earnings assets/total                        |                                          
|interest income                                    |                                          
|                                                   |                                          
|Cash & due from banks                              |                                          
|All other assets                                   |                                          
|Allowance for loan loss                            |                                          
|                                                   |                                          
|Total Assets                                       |                                          
|                                                   |                                          
|Liabilities and                                    |                                          
|Stockholders' Equity:                              |                                          
|Interest bearing deposits:                         |                                          
|Savings & NOW accounts                             |                                          
|Time                                               |                                          
|Short term borrowings                              |                                          
|FHLB Advances                                      |                                          
|                                                   |                                          
|Total interest bearing                             |                                          
|liabilities/total interest expense                 |                                          
|                                                   |                                          
|Non-interest bearing deposits                      |                                          
|All other liabilities                              |                                          
|Stockholders' Equity                               |                                          
|                                                   |                                          
|Total liabilities and                              |                                          
|shareholders' equity                               |                                          
|                                                   |                                          
|Interest spread                                    |                                          
|                                                   |                                          
|Net interest income-FTE                            |                                          
|                                                   |                                          
|Net interest margin                                |                                          
|                                                   |                                          

(1)    
          Average yield in the above table have been adjusted to a tax-equivalent basis
          using a 34% tax rate and exclude the effect of any market value adjustments
          recorded under Statement of Financial Accounting Standards No. 115. (2) For
          purposes of the computation above, non-accruing loans are included in the
          average daily loan balances. (3) Interest on loans includes origination fees
          totaling $541,000 in 2004 and $542,000 in 2003.

13

---



Interest Earning
Assets/Interest Income On a tax equivalent basis, interest
income increased approximately $5,600 (0.1%) in the third quarter of 2004 compared to the
third quarter of 2003. The increase was the result of higher average earning assets of
$24,600,000 (6.1%) almost completely offset by a reduction in the yield on earning assets
of 34 basis points. The reduction in yield is the result of a change in the mix of earning
assets in 2004 as well as the continued low rate environment.

The quarterly average balance of
short term investments and securities was $36,000,000 (61.2%) higher in the third quarter
of 2004 as compared with the same period in 2003. Offsetting the increase in average
balances was a decrease in the yield on these investments of 30 basis points due to higher
balances held in short term funds which had a lower yield because of lower market interest
rates. Loans, which earn a higher yield than investments, had a decrease in average
balances of $11,600,000 (3.4%) in the third quarter of 2004 compared to the same period
last year as well as an 11 basis point reduction in yield. Soft loan demand in local
markets has been pressuring loan pricing downwards resulting in lower yields. Loan
balances at September 30, 2004 have decreased $8,900,000 from December 31, 2003, but have
increased $5,000,000 from June 30, 2004. The decrease from the prior year end is due to
soft loan demand during the first half of this year and competitive pressures within our
markets. We have recently begun to see some improvement in loan demand but remain cautious
for the remainder of 2004.

Through the first nine months of
2004, tax equivalent interest income decreased $315,000 (1.7%). Loan interest income
decreased $806,000 (4.7%). The average rate earned on loans decreased 34 basis points
while average balances increased by $400,000 (.1%). The slight increase in loan growth
occurred in average consumer loans, $3,000,000 (8.9%) and average mortgage loans
$1,700,000 (5.4%) while average commercial loans experienced a decrease of $4,300,000
(1.6%). The decline in rates is due to lower rates in the first half of 2004 as well as
competitive pressures discussed above. In addition to the mortgage loans held in the
Banks loan portfolio, the Bank also originates mortgage loans held for sale in the
secondary market. Loans originated for sale in 2004 were $3,087,000 compared to
$22,102,000 through September 30, 2003. The decline was the result of increases in
mortgage rates and lower refinancing activity in 2004. Positively affecting interest
income was an increase in short term investments and securities income of $491,000
(26.6%), the result of higher average balances of $24,100,00 (41.2%).

Interest Bearing
Liabilities/Interest Expense Interest expense on deposits for the
third quarter of 2004 decreased $93,000 (6.8%) from the third quarter 2003. The positive
change in interest expense is the result of lower rates paid on deposits of 22 basis
points partially offset by higher average balances of $20,900,000 (6.8%).

Interest expense on deposits declined
during the first nine months of 2004 compared to the same period in the prior year by
$567,000 (12.8%) due to a decrease in the average rate paid on deposits of 34 basis points
partially offset by an increase in interest bearing deposit balances of $18,700,000
(6.1%).

Included in the average balance for
short term borrowings during 2003 were federal funds purchased. Due to the increased
liquidity through September 2004 it has not been necessary to borrow federal funds or
other short term borrowings. FHLB advances include two loans entered into in 2000 from the
Federal Home Loan Bank of Indianapolis (FHLBI). One borrowing originally for $3,000,000
was initiated to match the maturity of a fixed rate loan made to a local township. The
other borrowing was intended to help with the Banks rate sensitivity. FHLB
borrowings are available to fund future loan growth if needed.

14

---



Liquidity Liquidity is monitored by the
Banks Asset/Liability Management Committee (ALCO) which meets at least monthly. The
Board of Directors has approved a liquidity policy which requires the Bank, while it is
well capitalized as defined by the Federal Financial Institutions Examination Council
(FFIEC), to maintain a current ratio of no less than 1:1 (core basic surplus liquidity
equal to 0), representing that the Banks contingency for unexpected funding outflows
is being primarily met by short-term investments and unencumbered treasury and agency
securities. Additional requirements of the policy are that when FHLBI available credit is
added to core basic surplus liquidity, the Bank must have liquidity totaling 5% of assets
and when brokered CDs and Fed Funds lines are added, the Bank must have liquidity totaling
8% of assets. Should the Banks capital ratios fall below the well
capitalized level, additional liquidity totaling 5% of assets will be required.

Deposits are the principal source of
funds for the Bank. Management monitors rates at other financial institutions in the area
to ascertain that its rates are competitive in the market. Management also attempts to
offer a wide variety of products to meet the needs of its customers. The makeup of the
Banks Large Certificates, which are generally considered to be more
volatile and sensitive to changes in rates, consists principally of local depositors known
to the Bank. As of September 30, 2004, the Bank had Large Certificates totaling
approximately $58,000,000 compared to $54,000,000 at December 31, 2003. At September 30,
2004, the Bank had $2,400,000 in brokered certificates which were issued through a dealer
in September 2003 to help fund loan growth. The certificates mature in September 2005.

It is the intention of the
Banks management to handle unexpected liquidity needs through its Federal Funds
position with a correspondent bank and by Federal Home Loan Bank borrowings. The Bank has
a line of credit of approximately $40,000,000 available at the FHLBI. As of September 30,
2004 approximately $5,100,000 of the line had been used for long term advances, previously
described. The Bank has pledged certain mortgage loans as collateral for this borrowing.
The Bank also has a repurchase agreement in place where it can borrow from a broker who
will lend money against certain securities of the Bank. Finally, management may look to
available for sale securities in the investment portfolio to meet additional
liquidity needs.

Interest Rate Risk Interest rate risk is also addressed
by ALCO. Interest rate risk is the potential for economic losses due to future rate
changes and can be reflected as a loss of future net interest income and/or loss of
current market values. The objective is to measure the effect on net interest income and
to adjust the balance sheet to minimize the inherent risk while, at the same time,
maximizing income. Tools used by management include the standard GAP report which lays out
the repricing schedule for various asset and liability categories and an interest rate
simulation report. The Bank has no market risk sensitive instruments held for trading
purposes. The Bank has not entered into futures, forwards, swaps, or options to manage
interest rate risk. However, the Bank is party to financial instruments with
off-balance-sheet risk in the normal course of business to meet the financing needs of its
customers including commitments to extend credit and letters of credit. A commitment or
letter of credit is not recorded as an asset until the instrument is exercised.

15

---



In addition to liquidity and interest
rate risk management issues, ALCO discusses the Banks performance and the current
economic outlook and its impact on the Bank and current interest rate forecasts. Actual
results are compared to budget in terms of growth and income. A yield and cost analysis is
done to monitor interest margin. Various ratios are discussed including capital ratios,
other balance sheet ratios, and profitability ratios.

Interest Rate Sensitivity
as of September 30, 2004 (dollars in thousands)

|                                 | 0-3Months | 4-12Months | 1-5Years | 5+Years | Total
|-------------------------------- | --------- | ---------- | -------- | ------- | -----
|                                 |           |            |          |         |      
|Assets:                          |           |            |          |         |      
|Loans                            |           |            | $        | 170,965 |      
|Securities                       |           |            |          | 13,693  |      
|Brokered CD's                    |           |            |          | 970     |      
|Short term investments           |           |            |          | 17,776  |      
|                                 |           |            |          |         |      
|Total rate sensitive assets      |           |            | $        | 203,404 |      
|                                 |           |           
|Liabilities:                     |           |           
|Savings & NOW                    |           |            | $        | 93,367  |      
|Time                             |           |            |          | 36,888  |      
|Other borrowings                 |           |            |          | -       |      
|                                 |           |            |          |         |      
|Total rate sensitive liabilities |           |            | $        | 130,255 |      
|                                 |           |           
|Rate sensitivity gap and ratios: |           |           
|Gap for period                   |           |            | $        | 73,149  |      
|Cumulative gap                   |           |            |          | 73,149  |      
|                                 |           |           
|Cumulative rate sensitive ratio  |           |            |          | 1.56    |      

The preceding table sets forth the
time periods in which earning assets and interest bearing liabilities will mature or may
re-price in accordance with their contractual terms. The entire balance of savings
including MMDA and NOW are not categorized as 0-3 months, although they are variable rate
products. Some of these balances are core deposits and are not considered rate sensitive.
Allocations are made to time periods based on the Banks historical experience and
managements analysis of industry trends.

In the gap table above, the short
term (one year and less) cumulative interest rate sensitivity is asset sensitive as of
September 30, 2004. An asset sensitive position would normally indicate increased net
interest income in a rising rate environment. Gap analysis is limited and may not provide
an accurate indication of the impact of general interest rate movements on the net
interest margin since repricing of various categories of assets and liabilities is subject
to the Banks needs, competitive pressures, and the needs of the Banks
customers. In addition, various assets and liabilities indicated as repricing within the
same period may in fact reprice at different times within the period and at different rate
indices. Additionally, simulation modeling, which measures the impact of upward and
downward movements of interest rates on interest margin, provides meaningful insight into
strategies management can take to help mitigate the movement of interest rates.

16

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|                                         | Third Quarter | Year-to-Date
|---------------------------------------- | ------------- | ------------
|                                         |               |             
|Provision for Loan Losses
(in thousands) |               |             
|                                         |               |             
|Total                                    |               |             

The Company provided a loan loss
provision of $300,000 in the third quarter of 2004 having provided a provision of $200,000
in the same period last year. The provision is based upon an analysis of estimated losses
inherent in the portfolio and other economic factors. In the third quarter of 2004 the
provision was higher due to increased consumer loan charge-offs and other performing loans
of concern in 2004. Non-performing loans at September 30, 2004 are down $2,325,000 from
December 31, 2003, and have decreased $3,862,000 from the balance at September 30, 2003.
Net charge offs for the third quarter of 2004 were $197,000 compared to $67,000 in the
same period in 2003.

Year to date the provision is
$995,000 compared to $800,000 in the prior year. Management has determined that the
allowance is adequate based on potential losses inherent in the portfolio. At September
30, 2004 the allowance for loan loss as a percent of loans was 1.85%, compared to 1.73% a
year earlier and 1.72% at December 31, 2003. For the first nine months of 2004, the Bank
had net charge offs of $685,000 compared to $579,000 for the same period in 2003.
Non-accrual, past due 90 days, and renegotiated loans were .58% and 1.68% of total loans
outstanding at September 30, 2004 and 2003, respectively, and 1.24% of total loans at
December 31, 2003.

Impaired loans, as defined by
Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan, totaled approximately $6,800,000 at September 30, 2004, and
included non-accrual and past due 90 days other than homogenous residential and consumer
loans, and $5,100,000 of commercial loans separately identified as impaired. Impaired
loans totaled $9,600,000 at December 31, 2003 and $9,200,000 at September 30, 2003. A loan
is considered impaired when it is probable that all or part of amounts due according to
the contractual terms of the loan agreement will not be collectable on a timely basis.
Nonperforming loans are reviewed regularly for collectability. Any uncollectable balances
are promptly charged off.

The adequacy of the allowance for
loan losses is determined by managements assessment of the composition of the loan
portfolio, an evaluation of specific credits, an analysis of the value of the underlying
collateral for those loans, historical loss experience, relevant economic factors, the
level of nonperforming loans, loans that have been identified as impaired, and the overall
credit quality of the portfolio. Management continues to refine its techniques in this
analysis. Impaired commercial loans had specific reserves calculated in accordance with
SFAS No. 114 of $1,700,000 at September 30, 2004, $1,600,000 at December 31, 2003, and
$1,650,000 at September 30, 2003.

17

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Nonperforming assets are loans for
which the accrual of interest has been discontinued, accruing loans 90 days or more past
due in payments, and other real estate which has been acquired primarily through
foreclosure and is waiting disposition.

Loans are generally placed on a
nonaccrual basis when principal or interest is past due ninety days or more and when, in
the opinion of management, full collection of principal and interest is unlikely. Loans
categorized as ninety days past due and still accruing are well secured and in the process
of collection. The following table reflects nonperforming assets at September 30, 2004
compared to December 31, 2003.

|September 30, 2004                                    | December 31, 2003
|----------------------------------------------------- | -----------------
|                                                      |                  
|Nonaccrual loans                                      |                  
|90 days or more past due and still accruing           |                  
|                                                      |                  
|Total nonperforming loans                             |                  
|Other real estate                                     |                  
|                                                      |                  
|Total nonperforming assets                            |                  
|                                                      |                  
|Nonperforming loans as a percent of total loans       |                  
|Loan loss reserve as a percent of nonperforming loans |                  
|Nonperforming assets as a percent of total loans and  |                  
|other real estate owned                               |                  

18

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The following table sets forth loan
balances and summarizes the changes in the allowance for loan losses for the first nine
months of 2004 and 2003.

|                                                    | Year to dateSeptember 30, 2004 | Year to dateSeptember 30, 2003
|--------------------------------------------------- | ------------------------------ | ------------------------------
|                                                    |                                |                               
|Loans: (dollars in thousands)                       |                                |                               
|Average daily balance of loans for the year to date |                                |                               
|Amount of loans, outstanding at end of the quarter  |                                |                               
|                                                    |                                |                               
|Allowance for loan losses:                          |                                |                               
|Balance at beginning of year                        |                                |                               
|Loans charged off:                                  |                                |                               
|Real estate                                         |                                |                               
|Commercial                                          |                                |                               
|Consumer                                            |                                |                               
|                                                    |                                |                               
|Total charge-offs                                   |                                |                               
|Recoveries of loans previously charged off:         |                                |                               
|Real estate                                         |                                |                               
|Commercial                                          |                                |                               
|Consumer                                            |                                |                               
|                                                    |                                |                               
|Total recoveries                                    |                                |                               
|                                                    |                                |                               
|                                                    |                                |                               
|Net loans charged off                               |                                |                               
|Additions to allowance charged to operations        |                                |                               
|                                                    |                                |                               
|Balance at end of quarter                           |                                |                               
|                                                    |                                |                               
|Ratios:                                             |                                |                               
|Net loans charged off (annualized) to average       |                                |                               
|loans outstanding                                   |                                |                               
|Allowance for loan losses to loans outstanding      |                                |                               

19

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|                                  | Third Quarter | Year-to-Date
|--------------------------------- | ------------- | ------------
|                                  |               |             
|Noninterest Income
(in thousands) |               |             
|                                  |               |             
|Total                             |               |             

Noninterest income which includes
service charges and other fee income, trust income, gain on sale of loans and other
miscellaneous income decreased by $260,000 (23.5%) during the third quarter of 2004 from
the comparable quarter in 2003. Service charges and other fee income decreased $136,000
(15.3%) during the third quarter of 2004 from the third quarter of 2003 due to lower
income from commercial loan fees and commercial deposit service charges. Trust income
decreased $43,000 (42.5%) due to nonrecurring fees collected in 2003. Gain on the sale of
loans decreased $104,000 (85.8%) due to lower volume of mortgage loans originated for sale
in 2004. During the third quarter of 2004, $813,000 of loans were sold compared to
$8,081,000 in the same quarter of 2003. Other income increased $21,000 during the third
quarter of 2004 primarily due to $15,000 of property easements on a branch facility to
accommodate road construction.

For the year, noninterest income
increased $70,000 (2.4%). Contributing to the favorable variance was an increase in
service charges and other fee income because of a $159,000 change in the mortgage
servicing rights impairment reserve in 2004 due to the recognition of impairment in 2003
of $130,000, while 2004 has had a recovery of this impairment of $29,000. Other income
also increased $304,000 in 2004 due to the recognition of a $299,000 nonrecurring gain on
the sale of other real estate held for sale in 2004. Offsetting this is a reduction in the
gain on loans sold of $302,000 due to lower volume of loans sold in 2004.

|                                   | Third Quarter | Year-to-Date
|---------------------------------- | ------------- | ------------
|                                   |               |             
|Noninterest Expense
(in thousands) |               |             
|                                   |               |             
|Total                              |               |             

Noninterest expense increased $98,000
(3.3%) in the third quarter of 2004 compared to the same period in 2003. Salaries and
benefits increased $22,000 (1.3%) in the third quarter of 2004 compared to the third
quarter of 2003 due to increased benefit costs offset by lower salaries due to open
positions during the third quarter of 2004. Occupancy cost increased $18,000 (7.5%) in
2004 due to the costs associated with a branch opened in December 2003. Professional and
service fees increased $97,000 (35.3%) in the third quarter of 2004 compared with the same
quarter in the previous year due to costs related to various training initiatives,
increase audit fees for compliance with the Sarbanes-Oxley Act, and consultant fees for
sales training, leadership training, and employment recruitment. In contrast, other
expenses decreased $44,000 (9.2%) due to the recovery of a $41,000 NSF loss in the third
quarter of 2004.

20

---



For the first nine months of the
year, noninterest expense increased $365,000 (3.8%) compared to the prior year. Salaries
and benefits increased $236,000 (4.5%) in 2004 over 2003 due to new positions added in the
first two quarters of 2004, retirement expenses for the former chief executive officer and
higher benefit costs and normal merit increases. Occupancy costs increased $96,000 (13.3%)
due to higher building services expenses, property taxes and depreciation on facilities
added in 2003. Professional and service fees increased $272,000 (32.1%) for the reasons
discussed above. Offsetting these increases were decreases in equipment expense of
$133,000 (16.9%) due to lower equipment maintenance costs including software amortization,
decreased advertising expense of $20,000 (8.3%) and a decrease in other expenses of
$84,000 (5.6%).

|                                  | Third Quarter | Year-to-Date
|--------------------------------- | ------------- | ------------
|                                  |               |             
|Income Tax Expense
(in thousands) |               |             
|                                  |               |             
|Total                             |               |             

Fluctuations in income taxes resulted
primarily from changes in the level of profitability and in variations in the amount of
tax-exempt income.

|September 30, 2004              | December 31, 2003
|------------------------------- | -----------------
|                                |                  
|Stockholders' Equity*           |                  
|Ratio of Equity to Total Assets |                  

*Amounts include securities valuation
adjustments recorded under SFAS No. 115 amounting to $207,000 at September 30, 2004 and
$307,000 at December 31, 2003.

The Federal Reserve Board provides
guidelines for the measurement of capital adequacy. The Banks capital, as adjusted
under these guidelines, is referred to as risk-based capital. The Banks Tier 1
risk-based capital ratio at September 30, 2004 was 12.00%, and total risk-based capital
was 13.26%. At September 30, 2003, these ratios were 10.27% and 11.52%, respectively.
Minimum regulatory Tier 1 risk-based and total risk-based capital ratios under the Federal
Reserve Board guidelines are 4% and 8%, respectively.

The capital guidelines also provide
for a standard to measure risk-based capital to total assets which is called the leverage
ratio. The Banks leverage ratio was 9.59% at September 30, 2004, and 8.76% in 2003.
The minimum standard leverage ratio is 3% but financial institutions are expected to
maintain a leverage ratio of 1 to 2 percentage points above the 3% minimum.

In 1998 the Company exercised an
option to purchase an 18 acre tract of land in northwest Brighton, primarily to acquire a
prime site for a new branch. The cost of the property was approximately $4,000,000. In
1999, a new branch of the Bank was built on a portion of the land valued at approximately
$800,000. During 2000 one parcel of the property was sold, and the remaining property was
sold in the first quarter 2004, at book value. During the first quarter of 2004, the Bank
also transferred two pieces of property originally acquired for future expansion to HB
Realty. Their carrying amounts are included in Land and facilities held for sale,
net at September 30, 2004.

21

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Critical Accounting
PoliciesThe Company maintains critical
accounting policies for the allowance for loan losses. Refer to notes 1c and 1d of the
Notes to Consolidated Financial Statements for additional information incorporated by
reference to the Annual Report to Shareholders for the year ended December 31, 2003.

Contractual ObligationsAs of September 30, 2004, December
31, 2003, and September 30, 2003, the Bank had outstanding irrevocable standby letters of
credit, which carry a maximum potential commitment of approximately $3,500,000, $2,600,000
and $3,300,000, respectively. These letters of credit are conditional commitments issued
by the Bank to guarantee the performance of a customer to a third party. The majority of
these letters of credit are short-term guarantees of one year or less, although some have
maturities which extend as long as two years. The credit risk involved in issuing letters
of credit is essentially the same as that involved in extending loans to customers. The
Bank primarily holds real estate as collateral supporting those commitments for which
collateral is deemed necessary. The extent of collateral held on those commitments at
September 30, 2004, December 31, 2003 and September 30, 2003, where there is collateral,
is in excess of the committed amount. A letter of credit is not recorded on the balance
sheet until a customer fails to perform.

Impact of New Accounting
Standards  Financial Accounting Standards Board
Interpretation No. 46, Consolidation of Variable Interest Entities, (revised
December 2003) (FIN46(R)), clarifies when some entities previously not consolidated under
prior accounting guidance, should be. In some instances, it also requires certain
previously consolidated entities to be de-consolidated. FIN 46(R) is effective for periods
ended after December 15, 2003 for special purpose entities and for periods ended after
March 15, 2004 for other types of variable interest entities (VIEs) that are not defined
as special purpose entities. This interpretation did not have an impact on the
Companys consolidated financial statements as the Company does not currently have an
interest in any VIEs.

AICPA Statement of Position 03-3,
Accounting for Certain Loans or Debt Securities Acquired in a Transfer(SOP 03-3),
addresses the accounting for differences between contractual cash flows and cash flows
expected to be collected from the initial investment in loans acquired in a transfer if
those differences are attributable, at least in part, to credit quality. It includes such
loans acquired in purchase business combinations and does not apply to loans originated by
the entity. The SOP prohibits carrying over or creation of valuation allowances in the
initial accounting for loans acquired in a transfer. It is effective for loans acquired in
fiscal years beginning after December 15, 2004. The effects of this new guidance on the
Companys financial statements will depend on future loan acquisition activity, thus
is not determinable at this time.

22

---



Item 3. Quantitative and
Qualitative Disclosures About Market Risk There has been no material change in
the market risk faced by the Company since December 31, 2003 other than previously
discussed.

Item 4. Controls and
Procedures

| | (a) | Evaluation
of Disclosure Controls and Procedures. 
With
the participation of management, the Companys chief executive officer and chief
financial officer, after evaluating the effectiveness of the Companys disclosure
controls and procedures (as defined in Exchange Act Rules 13  15(e) and 15d 
15(e)) for the period ended September 30, 2004, have concluded that the Companys
disclosure controls and procedures were adequate and effective to ensure that material
information relating to the Company and its consolidated subsidiaries would be made known
to them by others in connection with the Companys filing of its third quarter report
on Form 10-Q for the period ended September 30, 2004.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Changes
in Internal Controls.
During
the fiscal quarter covered by this Report, there have not been any changes in our internal
control over financial reporting that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---



PART II  OTHER
INFORMATION

Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds

All
securities sold by the Company were registered under the Securities Act.

The Company
did not repurchase any of its stock during the current quarter, nor has the Companys
Board adopted or approved a stock repurchase program.

Item 6. Exhibits

| | The
following exhibits (listed by number corresponding to the Exhibit Table as Item 601 in
Regulation S-K) are filed with this report:
| | --------------------------------------------------------------------------------------------------------------------------------------

| | 31.1 | Certificate
of the Chief Executive Officer of FNBH Bancorp, Inc. pursuant to Section 302 of the
 Sarbanes-Oxley Act of 2002.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------

| | 31.2 | Certificate
of the Chief Financial Officer of FNBH Bancorp, Inc. pursuant to Section 302 of the
 Sarbanes-Oxley Act of 2002.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------

| | 32.1 | Certificate
of the Chief Executive Officer of FNBH Bancorp, Inc. pursuant to Section 906 of the
 Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 32.2 | Certificate
of the Chief Financial Officer of FNBH Bancorp, Inc. pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------

24

---



SIGNATURES

Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on
Form 10-Q for the quarter ended September 30, 2004 to be signed on its behalf by the
undersigned hereunto duly authorized.

| |  | FNBH BANCORP, INC./s/ Herbert W. Bursch
Herbert W. BurschPresident and Chief Executive Officer/s/ Janice B. Trouba
Janice B. TroubaChief Financial Officer
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

DATE: November 4, 2004

25

---



EXHIBIT 31.1

CERTIFICATE OF THECHIEF EXECUTIVE OFFICER
OF FNBH BANCORP, INC.

Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002:

I, Herbert W. Bursch, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of FNBH Bancorp, Inc.;
|-- | -------------------------------------------------------------------------

|2. | Based on my knowledge, this report does not contain any untrue statement of a
          material fact or omit to state a material fact necessary to make the statements
          made, in light of the circumstances under which such statements were made, not
          misleading with respect to the period covered by this report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this report, fairly present in all material respects the financial
          condition, results of operations and cash flows of the registrant as of, and
          for, the periods presented in this report;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | disclosed in this report any change in the registrants internal control
               over financial reporting that occurred during the registrants most recent
               fiscal quarter (the registrants fourth fiscal quarter in the case of an
               annual report) that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The registrants other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of (or persons performing the equivalent functions):
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the registrants ability to record, process, summarize and
               report financial information; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal controls over
               financial reporting.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 4, 2004

/s/ Herbert W. Bursch
Herbert
W. Bursch Chief Executive Officer

26

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EXHIBIT 31.2

CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF FNBH BANCORP, INC.

Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002:

I, Janice B. Trouba, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of FNBH Bancorp, Inc.;
|-- | -------------------------------------------------------------------------

|2. | Based on my knowledge, this report does not contain any untrue statement of a
          material fact or omit to state a material fact necessary to make the statements
          made, in light of the circumstances under which such statements were made, not
          misleading with respect to the period covered by this report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this report, fairly present in all material respects the financial
          condition, results of operations and cash flows of the registrant as of, and
          for, the periods presented in this report;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the registrant, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the registrants disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | disclosed in this report any change in the registrants internal control
               over financial reporting that occurred during the registrants most recent
               fiscal quarter (the registrants fourth fiscal quarter in the case of an
               annual report) that has materially affected, or is reasonably likely to
               materially affect, the registrants internal control over financial
               reporting; and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The registrants other certifying officer and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of (or persons performing the equivalent functions):
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant deficiencies and material weaknesses in the design or operation
               of internal control over financial reporting which are reasonably likely to
               adversely affect the registrants ability to record, process, summarize and
               report financial information; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal controls over
               financial reporting
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 4, 2004

/s/ Janice B. Trouba
Janice B. Trouba
Chief Financial Officer

27

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EXHIBIT 32.1

CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER
OF FNBH BANCORP, INC.

Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I,
Herbert W. Bursch, Chief Executive Officer of FNBH Bancorp, Inc., certify, to the best of
my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350) that:

(1)       
          The quarterly report on Form 10-Q for the quarterly period ended September 30,
          2004, which this statement accompanies, fully complies with requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and;

(2)       
          The information contained in this quarterly report on Form 10-Q for the
          quarterly period ended September 30, 2004, fairly presents, in all material
          respects, the financial condition and results of operations of FNBH Bancorp,
          Inc.

|Date:  November 4, 2004 |  | FNBH BANCORP, INC.By: /s/ Herbert W. Bursch      
      Herbert W. BurschIts: Chief Executive Officer
|----------------------- |  | -------------------------------------------------------------------------------------------------------------------

The signed original of this written
statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version
of this written statement required by Section 906, has been provided to FNBH Bancorp, Inc.
and will be retained by FNBH Bancorp, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.

28

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EXHIBIT 32.2

CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF FNBH BANCORP, INC.

Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I,
Janice B. Trouba, Chief Financial Officer of FNBH Bancorp, Inc., certify, to the best of
my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350) that:

(1)       
          The quarterly report on Form 10-Q for the quarterly period ended September 30,
          2004, which this statement accompanies, fully complies with requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and;

(2)       
          The information contained in this quarterly report on Form 10-Q for the
          quarterly period ended September 30, 2004, fairly presents, in all material
          respects, the financial condition and results of operations of FNBH Bancorp,
          Inc.

|Date:  November 4, 2004 |  | FNBH BANCORP, INC.By: /s/ Janice B. Trouba      
      Janice B. TroubaIts: Chief Financial Officer
|----------------------- |  | -----------------------------------------------------------------------------------------------------------------

The signed original of this written
statement required by Section 906, or other document authenticating, acknowledging, or
otherwise adopting the signature that appears in typed form within the electronic version
of this written statement required by Section 906, has been provided to FNBH Bancorp, Inc.
and will be retained by FNBH Bancorp, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request

29