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

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

                For the quarterly period ended September 30, 1997
                                       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                                               38-2869722
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification 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 Securities Exchange Act of 1934 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___

The number of shares outstanding of each of the issuers classes of common stock,
as of the latest  practicable  date:  1,575,000  shares of the Company's  Common
Stock (no par value) were outstanding as of September 30, 1997.

                                                               Page 1 of a Total
                                                                     of 19 Pages
<PAGE>
                                      INDEX

                                                                            Page
                                                                          Number
Part I. Financial Information (unaudited):

Item 1.
Interim Financial Statements:
Consolidated Balance Sheet as of Sept. 30, 1997 and Dec. 31, 1996..............4
Consolidated Statements of Income, three months ended
Sept. 30, 1997 and 1996, and nine months ended Sept. 30, 1997 and 1996.........5
Consolidated Statement of Shareholders' Equity for nine months
ended September 30, 1997.......................................................6
Consolidated Statements of Cash Flows for nine months ended
September 30, 1997 and 1996....................................................7
Notes to Interim Consolidated Financial Statements.............................8

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


Part II. Other Information

Item 6........................................................................19

Signatures....................................................................19
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.
Financial Statements
Unaudited interim consolidated financial statements follow.
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Balance Sheets                                               September 30    December 31
                                                                            1997           1996
                                                                           (unaudited)
<S>                                                                       <C>            <C>
Assets       
Cash and due from banks                                                   $  8,363,236   $  7,069,216
Federal funds sold                                                           2,900,000      6,500,000
                                                                          ------------   ------------            
   Total cash and cash equivalents                                          11,263,236     13,569,216

Investment securities held to maturity, net (fair value of $31,732,000
   at September 30, 1997 and $28,160,000 at Dec. 31, 1996)                  31,424,733     27,821,614
Investment securities available for sale, at fair value                     11,031,250     19,047,187
Mortgage-backed securities held to maturity, net (fair value of
   $636,000 at September 30, 1997 and $353,000 at Dec. 31, 1996)               636,875        351,930
Mortgage-backed securities available for sale, at fair value                    27,403         35,960
                                                                          ------------   ------------
      Total investment securities                                           43,120,261     47,256,691
Loans:
   Commercial                                                              108,231,084     91,015,036
   Consumer                                                                 25,889,782     22,122,885
   Real estate mortgages                                                    23,900,464     23,402,833
                                                                          ------------   ------------
      Total loans                                                          158,021,330    136,540,754
   Less unearned income                                                        595,569        473,311
   Less allowance for loan losses                                            3,539,911      3,335,044
                                                                          ------------   ------------
      Net loans                                                            153,885,850    132,732,399
Bank premises and equipment - net                                            4,757,360      4,818,603
Accrued interest and other assets                                            2,900,446      2,909,324
Other real estate owned                                                              0        723,011
                                                                          ------------   ------------
      Total assets                                                        $215,927,153   $202,009,244
                                                                          ============   ============
Liabilities and Stockholders' Equity
Liabilities
Deposits:
   Non-interest bearing demand                                            $ 40,947,578   $ 35,047,948
   NOW                                                                      22,007,967     25,145,241
   Savings and money market                                                 55,869,559     54,979,331
   Time                                                                     73,893,167     65,771,249
                                                                          ------------   ------------
      Total deposits                                                       192,718,271    180,943,769
Accrued interest, taxes, and other liabilities                               1,622,601      1,468,367
                                                                          ------------    -----------
      Total liabilities                                                    194,340,872    182,412,136

Shareholders' Equity*
Common stock, no par value.  Authorized 2,100,000 shares; 1,575,000
shares issued and outstanding at September 30, 1997 and Dec. 31, 1996 .      5,250,000      5,250,000
Retained earnings                                                           16,309,422     14,308,934
Net unrealized gain on debt securities, available for sale, net of  tax         26,859         38,174
                                                                          ------------   ------------
      Total stockholders' equity                                            21,586,281     19,597,108
      Total liabilities and stockholders' equity                          $215,927,153   $202,009,244
                                                                          ============   ============
   See notes to interim consolidated financial statements
</TABLE>
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY

<TABLE>
Consolidated Statements of Income 
Unaudited                                                    Three Months Ended Sept.     Nine Months Ended Sept.
                                                                   1997          1996          1997          1996
<S>                                                         <C>           <C>           <C>           <C>      
Interest income:
   Interest and fees on loans                               $ 3,759,274   $ 3,246,187   $10,569,360   $ 9,627,282
   Interest and dividends on investment securities:
      U.S. Treasury securities                                  426,306       474,635     1,355,955     1,160,480
      Obligations of other U.S. government agencies              26,216        59,806       104,002       210,618
      Obligations of state and political subdivisions           175,115       154,608       521,579       442,651
      Other securities                                                0             0         1,328         1,328
   Interest on federal funds sold                                19,603        82,248        77,248       213,222
                                                              ---------     ---------    ----------    ----------            
      Total interest income                                   4,406,514     4,017,484    12,629,472    11,655,581
                                                              =========     =========    ==========    ==========
Interest expense:
   Interest on deposits                                       1,602,965     1,437,865     4,589,221     4,193,924
   Other interest expense                                        13,417             0        34,909           168
                                                              ---------     ---------     ---------     ---------
      Total interest expense                                  1,616,382     1,437,865     4,624,130     4,194,092
                                                              =========     =========     =========     =========
      Net interest income                                     2,790,132     2,579,619     8,005,342     7,461,489
Provision for loan losses                                       112,125       112,125       336,375       336,375
                                                               ---------     ---------     ---------     ---------
      Net interest income after provision for loan losses     2,678,007     2,467,494     7,668,967     7,125,114
                                                              =========     =========     =========     =========
Non-interest income:
   Service charges                                              405,364       372,839     1,171,633     1,121,039
   Gain on sale of loans                                         40,912        36,096       113,067        64,501
   Other                                                         89,474        10,857       110,274        92,971
                                                                 ------        ------       -------        ------
      Total non-interest income                                 535,750       419,792     1,394,974     1,278,511
                                                                =======       =======     =========     =========
Non-interest expense:
   Salaries and employee benefits                             1,036,621       824,221     2,848,854     2,468,959
   Net occupancy                                                133,494       130,853       404,921       372,516
   Equipment expense                                            118,063       115,875       335,943       319,845
   Fees                                                          69,244        93,373       259,174       153,093
   Printing and supplies                                         53,662        52,483       175,376       167,357
   Michigan Single Business Tax                                  54,000        49,000       142,100       126,000
   Other                                                        376,363       333,650     1,041,335       852,566
                                                                -------       -------     ---------       -------
      Total non-interest expense                              1,841,447     1,599,455     5,207,703     4,460,336
                                                              =========     =========     =========     =========
Income before federal income taxes                            1,372,310     1,287,831     3,856,238     3,943,289

Federal income taxes                                            409,500       394,500     1,147,000     1,209,500
                                                              ---------     ---------    ----------    ----------
      Net income                                            $   962,810   $   893,331   $ 2,709,238   $ 2,733,789
                                                            ===========   ===========   ===========   ===========
Per share statistics*
   Net income                                               $       .61   $       .57   $      1.72   $      1.74
   Dividends                                                $       .15   $       .13   $       .45   $       .38

*Based on 1,575,000 shares outstanding in all time periods.
See notes to interim consolidated financial statements
</TABLE>
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Statements of Shareholders' Equity
Unaudited                           For the nine months ended September 30, 1997

                                                                             Net Unrealized
                                                                                Gain on
                                                                               Securities
                                                                             Available for
                                                  Common        Retained         Sale
                                                   Stock        Earnings       Net of tax        Total
<S>                                            <C>             <C>               <C>         <C>
Balances at December 31, 1996 ..............   $ 5,250,000     14,308,934         38,174     19,597,108
Net income .................................                    2,709,238                     2,709,238
Change in unrealized gain on debt securities
   available for sale, net of tax effect ...                                     (11,315)       (11,315)
Cash dividends (45 (cents) per share) ......                     (708,750)                     (708,750)
Balances at September 30, 1997 .............   $ 5,250,000     16,309,422         26,859     21,586,281
                                               ===========     ==========         ======     ==========
</TABLE>
See notes to interim consolidated financial statements
<PAGE>
                                   FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Statements of Cash Flows

Unaudited                                                                             Nine months ended Sept. 30
                                                                                         1997              1996
<S>                                                                                <C>             <C>
Cash flows from operating activities:
   Net income                                                                      $  2,709,238    $  2,733,789
   Adjustments  to  reconcile  net  income  to net cash  provided  by  operating
activities:
      Provision for loan losses                                                         336,375         336,375
      Depreciation and amortization                                                     322,468         287,938
      Net amortization on investment securities                                          27,113          40,261
      Loss on disposal of equipment                                                         718             130
      Gain on sale of loans                                                            (113,067)        (67,395)
      Gain on sale of securities                                                         (1,546)              0
      Proceeds from sale of loans                                                     7,490,568       7,857,402
      Origination of loans held for sale                                             (7,737,344)     (7,844,971)
      (Increase) decrease in accrued interest income and other assets                   731,888        (189,055)
      Increase (decrease) in accrued interest, taxes, and other liabilities             160,134         (69,261)
                                                                                                 
         Net cash provided by operating activities                                    3,926,545       3,085,213
                                                                                                
Cash flows from investing activities:
   Purchases of available for sale securities                                          (995,781)     (9,979,017)
   Proceeds from sales of available for sale securities                               4,001,562               0
   Proceeds  from maturities and calls of available for sale securities               5,000,000       1,000,000
   Proceeds from mortgage-backed securities paydowns-available for sale                   8,702          15,299
   Purchases of held to maturity securities                                          (4,661,189)    (14,728,606)
   Proceeds from maturities and calls of held to maturity securities                    500,000      10,120,000
   Proceeds from mortgage-backed securities paydowns-held to maturity                   240,355         103,561
   Net increase in loans                                                            (21,129,983)     (4,406,112)
   Capital expenditures                                                                (261,943)       (738,236)
                                                                                                 
         Net cash used in investing activities                                      (17,298,277)    (18,613,111)
                                                                                                 
Cash flows from financing activities:
   Net increase in deposits                                                          11,774,502      12,327,183
   Dividends paid                                                                      (708,750)       (603,750)
                                                                                                 
         Net cash provided by financing activities                                   11,065,752      11,723,433
                                                                                                 
Net decrease in cash and cash equivalents                                            (2,305,980)     (3,804,465)

Cash and cash equivalents at beginning of year                                       13,569,216      16,455,641
                                                                               
Cash and cash equivalents at end of period                                         $ 11,263,236    $ 12,651,176
                                                                                               
Supplemental disclosures:
   Interest paid                                                                   $  4,539,687    $  4,211,763
   Federal income taxes paid                                                          1,140,000       1,265,000
   Loans charged off                                                                    219,294         125,374
</TABLE>
See notes to interim consolidated financial statements
<PAGE>
Notes to Interim Consolidated Financial Statements(unaudited)

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  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 generally  accepted  accounting  principles  for complete
financial statements.

1. In the opinion of management of the  Registrant,  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 Registrant as of September 30, 1997, and
consolidated  results of  operations  for the three months and nine months ended
September  30,  1997 and 1996 and  consolidated  cash flows for the nine  months
ended September 30, 1997 and 1996.

2. The  results  of  operations  for the  three  months  and nine  months  ended
September 30, 1997 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 Notes to Consolidated  Financial  Statements in the 1996
Annual Report contained in the Registrant's report on Form 10-K filing.

4. The  provision  for  income  taxes  represents  Federal  income  tax  expense
calculated  using  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  $1,511,000  at  September  30, 1997 and
$557,000 at December  31, 1996.  (See  Management's  Discussion  and Analysis of
financial condition and results of operations).

6. On January 16, 1997,  the Board of  Directors  declared a three for one stock
split,  payable as a dividend of two shares for each one share of company  stock
held of record  January 16,  1997.  The  dividend  was paid  February  16, 1997.
References  to common  stock and per share data have been  restated  for 1996 to
reflect the effect of the split.
<PAGE>
Item 2.
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
                          Interim Financial Statements

FNBH Bancorp, Inc. (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).  The  following  is a  discussion  of the
Company's  results of  operations  for the three  months and nine  months  ended
September  30,  1997 and 1996,  and also  provides  information  relating to the
Company's financial condition, focusing on its liquidity and capital resources.
<TABLE>
Earnings  (in thousands                      Third Quarter                      Year-to-Date
except per share data)                     1997         1996                    1997      1996
<S>                                      <C>           <C>                  <C>          <C>
Net income                                $963          $893                $2,709       $2,734
Net Income per Share                     $ .61         $ .57                 $1.72        $1.74
</TABLE>
Net income for the three months ended September 30, 1997 increased approximately
$70,000 (8%) from the amount  reported for the third  quarter of the prior year.
For the quarter,  net interest income  increased  $210,000 (8%) and non-interest
income  increased  $116,000  (28%).  However,   non-interest  expense  increased
$242,000 (15%) and federal tax accruals  increased  $15,000 (4%). Net income for
the first nine months of the year  decreased  $25,000 (1%)  compared to the same
period last year. Contributing to thi decrease was an increase of $747,000 (17%)
in  non-interest  expense offset by an increase of $544,000 (7%) in net interest
income, an increase of $116,000 (9%) in non-interest  income,  and a decrease in
federal tax accruals of $63,000 (5%).
<TABLE>
Net Interest Income                                  Third Quarter                    Year-to-Date
-------------------
(in thousands)                                        1997         1996              1997        1996
<S>                                               <C>          <C>               <C>         <C>
Interest Income                                   $4,406       $4,018            $12,629     $11,656
Interest Expense                                   1,616        1,438              4,624       4,194
                                                 -------        -----              -----       -----
Net Interest Income                              $ 2,790       $2,580             $8,005      $7,462
</TABLE>
The Company's  1997 third quarter net interest  income  increased  $210,000 (8%)
when compared with the same period in the prior year,  while net interest income
for the year to date was $544,000  (7%) higher than that of 1996.  The following
table  illustrates  some of the  factors  contributing  to the  increase  in net
interest income for the period and for the year to date.
<PAGE>
                                     TABLE 1
                    INTEREST YIELDS AND COSTS (in thousands)
                           September 30, 1997 and 1996
<TABLE>                                                     
                                                     ---------------Third Quarter Averages----------------
                                                       1997                                    1996
                                                       ----                                    ----
                                          Average                                  Average
                                          Balance       Interest       Rate        Balance       Interest       Rate
<S>                                     <C>             <C>           <C>        <C>            <C>            <C>
Assets:
Fed funds sold                          $   1,450       $   19.6      5.29%      $   6,340      $    82.2      5.07%
Securities:  Taxable                       30,368          452.5      5.96%         35,454          534.4      6.03%
                   Tax-exempt(1)           13,289          243.3      7.32%         11,415          216.3      7.58%
Loans(2)(3)                               152,146        3,763.7      9.68%        129,975        3,250.8      9.79%
                                        ---------       --------                  --------       --------
Total earning assets/total
interest income                           197,253       $4,479.1      8.89%        183,184       $4,083.7      8.76%
                                                        --------                                 --------
Cash & due from banks                       7,776                                    7,165

All other assets                            7,747                                    7,391
Allowance for loan loss                    (3,585)                                  (3,342)
                                      -----------                              -----------
   Total assets                          $209,191                                 $194,398
                                         ========                                 ========
Liabilities and
  Shareholders' Equity
Interest bearing deposits:
Savings & NOW accounts                  $  77,202      $   550.4      2.83%      $  76,794      $   533.6      2.76%
Time                                       72,376        1,052.6      5.77%         64,249          904.3      5.60%
Fed funds purchased                           922           13.4      5.69%              0              0
                                      -----------  --------------            -------------   ------------
Total interest bearing
liabilities/total interest expense        150,500      $ 1,616.4      4.26%        141,043       $1,437.9      4.06%
                                                       ---------                                 --------
Non-interest bearing deposits              35,543                                   32,391
All other liabilities                       1,815                                    1,640
Shareholders' Equity                       21,333                                   19,324
                                       ----------                               ----------
Total liabilities and
   shareholders' equity                  $209,191                                 $194,398
                                         ========                                 --------
Interest spread                                                       4.63%                                    4.70%
                                                                      =====                                    =====
Net interest income-FTE                                $ 2,862.7                                $ 2,645.8
                                                       =========                                =========
Net interest margin                                                   5.67%                                    5.64%
                                                                      =====                                    =====
</TABLE>
    (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
          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 $106,500 in 1997
          and $124,000 in 1996.
<PAGE>
<TABLE>
                                                   ----------------Year to Date Averages-----------------
                                                         1997                                  1996
                                                         ----                                  ----
                                          Average                                  Average
                                          Balance       Interest       Rate        Balance      Interest        Rate
Assets:
<S>                                    <C>           <C>              <C>     <C>               <C>            <C>
Fed. funds sold                        $    1,944    $      77.2      5.24%   $      5,417   $     213.2       5.17%
Securities:  Taxable                       32,693        1,461.3      5.96%         30,918       1,372.4       5.92%
                   Tax-exempt(1)           13,124          727.2      7.39%         10,741         619.8       7.69%
Loans(2)(3)                               144,999       10,584.1      9.66%        129,459       9,639.3       9.78%
                                          -------   ------------               -----------   -----------
Total earning assets/total
interest income                           192,760      $12,849.8      8.84%        176,535     $11,844.7       8.86%
                                                       ---------                               ---------
Cash & due from banks                       7,437                                    7,132
All other assets                            8,187                                    7,253
Allowance for loan loss                    (3,475)                                  (3,248)
                                          -------                                  ------
   Total assets                          $204,909                               $  187,672
                                         ========                               ==========
Liabilities and
  Shareholders' Equity
Interest bearing deposits:
Savings & NOW accounts                   $ 78,703    $   1,620.9      2.75%     $   75,225     $ 1,572.1       2.79%
Time                                       69,844        2,968.3      5.68%         62,313       2,621.8       5.62%
Fed Funds Purchased                           809           34.9      5.69%              4            .2       5.50%
                              
Total interest bearing
liabilities/total interest expense        149,356    $   4,624.1      4.14%        137,542      $4,194.1       4.07%
                                                     -----------                                --------
Non-interest bearing deposits              33,226                                   29,907
All other liabilities                       1,670                                    1,616
Shareholders' Equity                       20,657                                   18,607
                                       ----------                              -----------
Total liabilities and
  shareholders' equity                   $204,909                                $ 187,672
                                         ========                                =========
Interest spread                                                       4.70%                                    4.79%
                                                                      =====                                    =====
Net interest income-FTE                               $  8,225.7                                $7,650.6
                                                      ==========                                ========
Net interest margin                                                   5.63%                                    5.68%
                                                                      =====                                    =====
</TABLE>
    (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
          Standards No. 115.
    (2)   For  purposes  of  the  computations  above,  non-accruing  loans  are
          included in the average daily loan balances.
    (3)   Interest on loans includes  origination fees totaling $254,000 in 1997
          and $362,000 in 1996


Interest Earning Assets/Interest Income
On a tax equivalent basis, interest income increased  approximately  $400,000 in
the third  quarter of 1997  compared  to that of 1996.  In the third  quarter of
1997,  income on Fed Funds was  $63,000  less than the same  period in 1996,  in
spite of an increase in rates of 22 basis points,  because average balances were
$4,900,000  lower. For the year, income on Fed Funds was $136,000 less than 1996
because average balances were  approximately  $3,500,000  lower,  although rates
were 7 basis points more in 1997 than th previous year.

In the third  quarter,  income on  taxable  securities  decreased  approximately
$82,000 both because the rate  decreased 7 basis points and the average  balance
decreased $5,100,000.
<PAGE>
Income from tax-exempt  securities  increased $27,000 even though the yield fell
26  basis  points  because  the  average  balance   increased  by  approximately
$1,900,000.  For the first nine months of the year, income on taxable securities
increased  $89,000  over the prior year both due to a 4 basis point  increase in
rates and a  $1,800,000  increase  in  average  balances.  Income on  tax-exempt
securities  was  $107,000  higher than the first three  quarters of 1996.  Rates
declined 30 basis points while average balances increased $2,400,000.

In the third  quarter of this year,  tax  equivalent  loan interest was $513,000
higher  than the same  period in 1996 due to an  increase  in  average  balances
exceeding  $22,000,000 while rates declined 11 basis points. The growth in loans
was  principally  in  the  commercial  sector  where  the  average  balance  was
$17,700,000  (21%)  more  than  the  previous  year.  Consumer  loans  increased
approximately   $4,000,000  on  average  (20%)  while  consumer  mortgage  loans
increased $300,000 (1%). The lack in growth of consumer mortgages is largely due
to the Bank's  policy of selling  fixed rate  mortgages  with  fifteen  year and
longer  maturities.  The Bank retains  variable rate mortgages but there has not
been  sufficient  demand  for  these  products  to  offset  the run off of older
mortgage loans paying down. For the first nine months of the year, loan interest
income increased  $945,000,  with average  balances up $15,500,000  while yields
declined 12 basis points.  The greater  growth in loans  compared to investments
was due to a  concerted  effort on the part of  management  to use the  deposits
available where they would produce the best return.

Interest Bearing Liabilities/Interest Expense
In the third quarter of 1997, interest expense increased $179,000 both due to an
increase  in rates of 20 basis  points and an  increase  in average  balances of
$9,500,000.  Savings and NOW interest expense increased $17,000 because balances
increased $400,000 and rates increased 7 basis points. Interest on time deposits
increased  $148,000 in the third  quarter of 1997 over the prior year.  Balances
increased  $8,100,000  and the rate  paid on time  deposits  increased  17 basis
points.  The deposit  growth was the result of the Bank's  marketing  efforts to
increase  its share of  Livingston  County  deposits.  The  increase in rates on
certificates reflects prevailing trends in the market. The average amount of Fed
Funds  Purchased in the third  quarter of 1997 was  $922,000  while no Fed Funds
were purchased in the same period of 1996.

In the first three  quarters  of the year,  interest  expense was  approximately
$430,000  higher  than  1996  due  to  average   balances  of  interest  bearing
liabilities  increasing $12,000,000 and the rate paid increasing 7 basis points.
Savings and NOW interest expense  increased  $49,000 because balances  increased
$3,500,000 although the interest rate declined 4 basis points.  Interest on time
deposits  increased  $346,000 because the balance  increased  $7,500,000 and the
rate increased 6 basis points.  Fed Fund Purchased  interest  increased  $35,000
because there was very little activity in Fed Funds Purchased in 1996.


Liquidity
Liquidity is monitored by the Bank's Asset/Liability Management Committee (ALCO)
which  meets  at least  monthly.  ALCO  developed,  and the  Board of  Directors
approved, a liquidity
<PAGE>
policy which  requires a minimum 15% liquidity  ratio.  Throughout  1996 and the
first nine months of 1997 the Company's liquidity ratio exceeded 20%.

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 Bank  does not deal in
brokered funds, and the makeup of its over $100,000 certificates, which amounted
to $12,700,000 at September 30, 1997,  consists of local depositors known to the
Bank.

It is the  intention of the Bank's  management  to handle  unexpected  liquidity
needs  through its Federal Funds  position.  The goal is to maintain a daily Fed
Funds  balance  sufficient  to cover  required  cash  draws.  The Bank's  policy
requires all purchases of Fed Funds to be approved by senior  management so that
liquidity  needs are known.  In the event the Bank must  borrow for an  extended
period, management may look to "available for sale" securities in the investment
portfolio  for  liquidity.  In April of this year,  the Bank sold  $4,000,000 in
Treasury  securities to meet  liquidity  needs.  The Bank has also had to borrow
more this year as loan demand has exceeded deposit growth. During the first nine
months of the year, Fed Funds  Purchased  balances  averaged  $800,000 while Fed
Funds Sold balances averaged $1,900,000.

In addition to liquidity issues, ALCO discusses 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 and liquidity. The rate sensitivity report is analyzed and strategies are
created to attempt to produce the desired results.  The rate sensitivity  report
describes the repricing schedule for various asset and liability categories.
<PAGE>
<TABLE>
Interest Rate Sensitivity
(dollars in thousands)                               0-3           4-12            1-5            5+
                                                  Months         Months          Years         Years          Total
Assets:
<S>                                              <C>            <C>            <C>           <C>           <C>
   Loans...................................      $59,879        $29,666        $60,344       $ 6,049       $155,938
   Securities..............................        2,320         20,427         11,115         9,094         42,956
   Fed funds...............................        2,900                                                      2,900
   Other assets............................                                                   14,133         14,133
                                                 -------        -------        -------        ------         ------
      Total assets.........................      $65,099        $50,093        $71,459       $29,276       $215,927

Liabilities & Shareholders' Equity:
   Demand, Savings & NOW...................      $31,512        $13,705        $46,077       $27,555       $118,849
   Time....................................       21,633         29,802         22,445            13         73,893
   Other liabilities and equity............       ______         ______         ______        23,185         23,185
                                                                                              ------         ------
      Total liabilities and equity.........      $53,145        $43,507        $68,522       $50,753       $215,927

Rate sensitivity gap and ratios:
   Gap for period..........................      $11,954         $6,586         $2,937     $(21,477)
   Cumulative gap..........................       11,954         18,540         21,477

Cumulative rate sensitive ratio............         1.22           1.19           1.13          1.00
Dec. 31, 1996 rate sensitive ratio.........         1.45           1.22           1.16          1.00
</TABLE>
Given the  asset  sensitive  position  of the Bank at  September  30,  1997,  if
interest  rates  decrease  200 basis  points  and  management  did not  respond,
management   estimates  that  annualized  net  interest  income  would  decrease
approximately  $300,000,  while a  similar  increase  in rates  would  cause net
interest income to increase by a like amount. In the preceding table, the entire
balance of savings,  MMDA, and NOW are not  categorized as 0-3 months,  although
they are variable rate products.  Some of these balances are core deposits which
are not considered rate sensitive based on the Bank's historical  experience and
industry practice.
<TABLE>
Provision for Loan Losses     Second Quarter       Year-to-Date
(in thousands)                1997      1996      1997      1996
                              ----      ----      ----      ----
<S>                           <C>       <C>       <C>       <C>
Total                         $112      $112      $336      $336
                              ====      ====      ====      ====
</TABLE>
The  provision  for loan  losses  of  $112,000  remained  the same for the third
quarter of 1997 as it was the prior year.  Year to date the  provision  has also
remained the same at $336,000. In September of 1997, the allowance for loan loss
as a percent of loans was 2.24%, compared to 2.55% a year earlier. For the first
nine months of 1997, the Bank had net charge offs of $131,500, compared with net
charge  offs  of  $68,600  last  year.  Non-accrual,   past  due  90  days,  and
renegotiated  loans were .95% and .91% of total loans  outstanding  at September
30, 1997 and 1996 respectively.

Impaired  loans, as defined by Statement of Financial  Accounting  Standards No.
114,  Accounting by Creditors for  Impairment of a Loan,  totaled  approximately
$3,400,000 at September 30, 1997,  compared to $820,000 at December 31, 1996 and
included non-accrual, and past due 90 days other than homogenous residential and
consumer  loans,  and, at  September  30,  1997,  an  additional  $2,000,000  of
commercial  loans  separately  identified as impaired.  The increase in impaired
loans is  primarily  due to  problem  loans wit two large  borrowers.  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 be uncollectible.
<PAGE>
Management  assessment  of  the  allowance  for  loan  losses  is  based  on the
composition of the loan portfolio, an evaluation of specific credits, historical
loss  experience,  the level of  nonperforming  loans  and loans  that have been
identified as impaired. Externally, the local economy and events or trends which
might negatively impact the loan portfolio are also considered. Certain impaired
loans  with  a  balance  of  $3,000,000  had  specific  reserves  calculated  in
accordance with SFAS No. 114 of $400,000 at September 30, 1997.

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. The following table describes nonperforming assets at September 30,
1997 compared to December 31, 1996.  The loans  categorized  as ninety days past
due are all well secured and in the process of collection.
<TABLE>
Nonperforming Assets
(in thousands)                                                   Sept. 30, 1997      December 31, 1996
                                                                 --------------      -----------------
<S>                                                              <C>                 <C>
Non-accrual loans .............................                  $1,421              $  109
90 days or more past due and still accruing ...                      90                 448
                                                                 ------              ------
         Total nonperforming loans ............                   1,511                 557
Other real estate .............................                       0                 723
                                                                 ------              ------
         Total nonperforming assets ...........                  $1,511              $1,280

Nonperforming loans as a percent of total loans                    .95%                .41%
Nonperforming assets as a percent of total loans                   .95%                .94%
Nonperforming loans as a percent of the loan loss reserve           43%                 17%
</TABLE>
<PAGE>
The following  table sets forth loan balances and  summarizes the changes in the
allowance for loan losses for the first nine months of 1997 and 1996.
<TABLE>
                                                           Year to date           Year to date
Loans:   (dollars in thousands)                           Sept. 30, 1997         Sept. 30, 1996
<S>                                                          <C>                     <C>
   Average daily balance of loans for the year to date...    144,999                 129,459
   Amount of loans (gross) outstanding at end of the
   Quarter ..............................................    158,021                 132,291
Allowance for loan losses:
   Balance at beginning of year .........................      3,335                   3,097
   Loans charged off:
      Real estate .......................................          0                      29
      Commercial ........................................        163                      47
                                                                  
      Consumer ..........................................         56                      49
                                                            --------                --------
         Total charge-offs ..............................        219                     125
                                                                 
   Recoveries of loans previously charged off:
      Real estate .......................................         33                       0
      Commercial ........................................         33                      19
      Consumer ..........................................         22                      38
                                                            --------                --------
         Total recoveries ...............................         88                      57

Net loans charged off ...................................        131                      68
Additions to allowance charged to operations ............        336                     336
                                                            --------                --------
         Balance at end of quarter ......................   $  3,540                $  3,365

Ratios:
    Net loans charged off (annualized) to average
    loans outstanding ...................................        .12%                    .07%
   Allowance for loan losses to loans outstanding .......       2.24%                   2.54%
</TABLE>
Although nonperforming and impaired loans have increased in 1997 compared to the
prior year,  management  believes it has been quite  aggressive  in  recognizing
problem loans.  Loans are generally  placed on a nonaccrual basis when principal
or interest is past due 90 days or more and when, in the opinion of  management,
full  collection of principal and interest is unlikely.  Any  identifiable  loss
related to  impaired  loans has  previously  been  charged  off.  Management  is
comfortable  with the overall  quality of th loan  portfolio  but  continues  to
monitor loan quality on an on-going basis. The above mentioned  problem credits,
making up the greater part of impaired loans,  are well  collateralized  and are
not expected to result in serious losses.
<TABLE>
Non-interest Income       Third Quarter        Year-to-Date
(in thousands)           1997      1996      1997       1996
                         ----      ----      ----       ----
<S>                      <C>       <C>       <C>        <C>
Total                    $536      $420      $1,395     $1,279
                         ====      ====      ======     ======
</TABLE>
Non-interest  income,  which includes service charges on deposit accounts,  loan
and customer  service fees,  other operating  income,  and gain(loss) on sale of
assets and  securities  transactions,  increased by $116,000  (28%) in the third
quarter of 1997 compared to the same period in the previous year.  Making up the
increase in non-interest  income is an increase in service fees of $32,500 (9%),
an  increase  in gain on loan sales of $5,000  (13%),  and an  increase in other
income of $78,500 (72%).  The increase i service fees is the result of increased
business  volume.  Included  in other  income is gain on the sale of other  real
estate of $86,000 that is not expected to recur.
<PAGE>
For the year,  non-interest  income increased  $116,000.  Service fees increased
approximately  $50,000 (5%), the gain from loan sales  increased  $48,500 (75%),
and other income increased  $17,000 (19%).  Other income in 1996 included a gain
on the sale of other real estate of $70,000.
<TABLE>
Non-interest Expense      Third Quarter       Year-to-Date
(in thousands)           1997      1996      1997       1996
                         ----      ----      ----       ----
<S>                      <C>       <C>       <C>       <C>
Total                    $1,841    $1,599    $5,208    $4,460
                         ======    =======   ======    ======
</TABLE>
Non-interest  expense  increased  $242,000  (15%) in the third  quarter  of 1997
compared to the same  period last year.  Contributing  to this  increase  was an
increase of $210,000 in salaries and benefits  expense and a $25,000 increase in
other  expense.  The increase in salaries and benefits was  primarily due to the
profit  sharing  accrual,  attributable  to the  Bank's  performance,  which was
$190,000 more in the third quarter of 1997 compared to the same period in 1996.

For the year  non-interest  expense was $747,000 (17%) higher than 1996. For the
year,  salaries  and  benefits  increased  $380,000.  In  addition to the profit
sharing accrual mentioned above,  salaries  increased in 1997 due to staffing of
the  Trust  Department  and as a  result  of an  analysis  of jobs  in the  Bank
completed  late in 1996 which  showed the need for  adjustments  to salaries for
certain positions.  Fees for services increased $100,000 principally because the
Bank has hired consultants for selected specia projects.  Other income increased
$190,000  due, in part, to legal fees and other real estate  expense  related to
the  disposal of other real estate,  and to charges  related to  technology.  In
spite of the increase in non-interest  expense,  the Bank was able to achieve an
efficiency ratio of 54%.

The Bank  anticipates  that operating  expenses will continue to grow this year,
and into 1998, as expenses  related to the Bank's  Strategic  Plan are incurred.
Management  drafted and the Board of Directors  approved a Strategic  Plan which
focuses on  increasing  market  penetration  in the eastern  part of the county,
developing the Bank's trust and investment  business,  and increasing the Bank's
leadership in small business lending.

The Bank  will also  focus  considerable  energy  on the Year 2000  issue in the
remainder  of 1997 and 1998.  The Bank is highly  dependent  on  technology  and
several  applications  are  dependent  on the  software's  ability  to make  the
transition to the year 2000. The Bank has hired a consultant who has recommended
actions  related  to year 2000  compliance.  A  committee  is in the  process of
implementing  these  steps  at this  time.  Management  does  not  believe  that
compliance  with Year 2000 will have a material  effect o the  Bank's  financial
condition.
<PAGE>
<TABLE>
Income Tax Expense        Third Quarter       Year-to-Date
(in thousands)           1997      1996      1997      1996
                         ----      ----      ----      ----
<S>                      <C>       <C>       <C>       <C>
Total                    $410      $395      $1,147    $1,210
                         ====      ====      ======    ======
</TABLE>
Fluctuations  in income taxes  resulted  primarily  from changes in the level of
profitability and in variations in the amount of tax-exempt income.
<TABLE>
Capital (in thousands)                        September 30, 1997             December 31, 1996
-------                                       ------------------             -----------------
<S>                                           <C>                             <C>
Shareholders' Equity*                                $21,559                       $19,559
Ratio of Equity to Total Assets                        9.98%                         9.68%
</TABLE>
*Amounts exclude securities  valuation  adjustments  recorded under Statement of
Financial  Accounting  Standards  No. 115  amounting to $27,000 at September 30,
1997 and $38,000 at December 31, 1996.

A financial institution's capital ratio is looked upon by the regulators and the
public as an indication of its soundness.  Shareholders'  equity,  excluding the
securities  valuation  adjustment,  increased  $2,000,000 (10%) during the first
nine months of the year.  This  increase was the result of net income  earned by
the company reduced by dividends paid of $708,750.

The Federal  Reserve Board provides  guidelines  for the  measurement of capital
adequacy. The Company's capital, as adjusted under these guidelines, is referred
to as  risk-based  capital.  The  Company's  Tier 1 risk-based  capital ratio at
September  30,  1997 was 14.32%,  and total  risk-based  capital was 15.57%.  At
September  30, 1996 these  ratios were 15.36% and 16.61%  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 Company's leverage ratio
was 10.30% at  September  30,  1997 and  10.06% in 1996.  The  minimum  standard
leverage  ratio is 3% but  financial  institutions  are  expected  to maintain a
leverage ratio 1 to 2 percentage points above the 3% minimum.

The Bank is committed to spending in excess of $1,000,000 on various  technology
improvements.  In  addition,  the  Bank  has  received  regulatory  approval  to
establish  a new  branch in the  northwest  part of  Brighton  and is  currently
looking  for a  site.  The  projects  mentioned  above  will  be  financed  from
internally generated funds.

<PAGE>
                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits
       There are none applicable.

(b)  Reports on Form 8-K:
       There were no reports on Form 8-K filed during the third quarter of 1997.
<PAGE>
                                   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, 1997 to be signed on its behalf by the undersigned  hereunto
duly authorized.


                  FNBH BANCORP, INC.



                  /s/ Barbara D. Martin
                  Barbara D. Martin
                  President and Chief Executive Officer




                  /s/ Barbara J. Nelson
                  Barbara J. Nelson
                  Treasurer