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, 2000
                                       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:  1,567,411  shares of the Company's  Common
Stock (no par value) were outstanding as of September 30, 2000.

                                       1
<PAGE>
                                      INDEX


                                                                           Page
                                                                          Number
                                                                          ------
Part I.  Financial Information (unaudited):

         Item 1.
         Interim Financial Statements:
         Consolidated Balance Sheet as of Sept. 30, 2000 and Dec. 31, 1999.....4
         Consolidated Statements of Income, three months ended Sept. 30,
         2000 and 1999, and nine months ended Sept. 30, 2000 and 1999..........5
         Consolidated Statement of Stockholders' Equity and Comprehensive
         Income for three months ended September 30, 2000 and 1999.............6
         Consolidated Statement of Stockholders' Equity and Comprehensive
         Income for nine months ended September 30, 2000 and 1999..............7
         Consolidated Statements of Cash Flows for six months ended
         September 30, 2000 and 1999...........................................8
         Notes to Interim Consolidated Financial Statements....................9

         Item 2.
         Management's Discussion and Analysis of
         Financial Condition and Results of Operations........................10

         Item 3.
         Quantitative and Qualitative Disclosures about Market Risk...........21

Part II. Other Information

         Item 6...............................................................21

         Signatures...........................................................21

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.
Financial Statements
Unaudited interim consolidated financial statements follow.








                                       3
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Balance Sheets (unaudited)                                         September 30     December 31
---------------------------                                                             2000            1999
Assets                                                                                  ----            ----
<S>                                                                             <C>             <C>
Cash and due from banks                                                          $16,261,170    $ 12,113,652
Short term investments                                                               589,673      12,300,630
                                                                                     -------      ----------
   Total cash and cash equivalents                                                16,850,843      24,414,282

Investment securities held to maturity, net (fair value of $18,960,000
   at September 30, 2000 and $17,650,000 at Dec. 31, 1999)                        18,891,963      17,709,401
Investment securities available for sale, at fair value                           24,720,563      32,554,004
Mortgage-backed securities held to maturity, net (fair value of
   $725,000 at September 30, 2000 and $330,000 at Dec. 31, 1999)                     724,232         334,451
                                                                                     -------         -------
      Total investment securities                                                 44,336,758      50,597,856

Loans:
   Commercial                                                                    196,178,172     163,469,045
   Consumer                                                                       30,100,060      24,826,156
   Real estate mortgages                                                          26,475,315      22,360,282
                                                                                  ----------      ----------
      Total loans                                                                252,753,547     210,655,483
   Less unearned income                                                              814,960         703,849
   Less allowance for loan losses                                                  5,164,039       4,483,283
                                                                                   ---------       ---------
      Net loans                                                                  246,774,548     205,468,351

Premises and equipment - net                                                       8,406,257       9,009,661
Land available for sale - net                                                      2,680,290       2,835,290
Accrued interest and other assets                                                  4,672,116       4,093,780
                                                                                   ---------       ---------
      Total assets                                                              $323,720,812    $296,419,220
                                                                                ============    ============
Liabilities and Stockholders' Equity
Liabilities
Deposits:
   Non-interest bearing demand                                                  $ 55,510,922    $ 47,980,695
   NOW                                                                            33,365,693      34,645,921
   Savings and money market                                                       90,107,861      89,862,739
   Time                                                                          107,877,706      96,701,098
                                                                                 -----------      ----------
      Total deposits                                                             286,862,182     269,190,453

FHLB advances                                                                      6,000,000               0
Accrued interest, taxes, and other liabilities                                     2,729,862       1,917,121
                                                                                   ---------       ---------
      Total liabilities                                                          295,592,044     271,107,574

Stockholders' Equity
Common stock, no par value.  Authorized 4,200,000 shares; 1,567,411
shares issued and outstanding at September 30, 2000 and 1,565,203
shares issued and outstanding at December 31, 1999                                 5,013,445       4,919,280
Retained earnings                                                                 23,367,419      20,723,357
Unearned management retention plan                                                  (196,606)       (139,597)
 Accumulated other comprehensive loss, net                                           (55,490)       (191,394)
                                                                                     -------        --------
      Total stockholders' equity                                                  28,128,768      25,311,646
      Total liabilities and stockholders' equity                                $323,720,812    $296,419,220
                                                                                ============    ============
   See notes to interim consolidated financial statements
</TABLE>
                                       4
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Statements of Income
Unaudited                                                    Three Months Ended Sept.        Nine Months Ended Sept.
                                                                   2000          1999            2000           1999
                                                                   ----          ----            ----           ----
<S>                                                          <C>           <C>            <C>            <C>
Interest income:
   Interest and fees on loans                                $6,174,610    $4,921,956     $16,917,505    $13,692,001
   Interest and dividends on investment securities:
      U.S. Treasury and agency securities                       362,583       387,874       1,206,795      1,073,894
      Obligations of state and political subdivisions           231,629       211,479         681,063        623,979
      Other securities                                           15,231        15,890          49,542         45,661
   Interest on short term investments                            13,088        93,858          98,315        414,249
                                                                 ------        ------          ------        -------
      Total interest income                                   6,797,141     5,631,057      18,953,220     15,849,784
                                                              ---------     ---------      ----------     ----------
Interest expense:
   Interest on deposits                                       2,428,940     1,964,996       6,898,156      5,853,169
   Other interest expense                                       178,339         1,128         336,046          2,032
                                                                -------         -----         -------          -----
      Total interest expense                                  2,607,279     1,966,124       7,234,202      5,855,201
                                                              ---------     ---------       ---------      ---------

      Net interest income                                     4,189,862     3,664,933      11,719,018      9,994,583

Provision for loan losses                                       300,000       210,000         900,000        630,000
                                                                -------       -------         -------        -------
      Net interest income after provision for loan losses     3,889,862     3,454,933      10,819,018      9,364,583
                                                              ---------     ---------      ----------      ---------
Non-interest income:
   Service charges                                              666,216       491,523       1,661,064      1,286,215
   Gain on sale of loans                                         20,695        26,479          54,689         36,541
   Trust income                                                  51,232        35,088         142,891        103,042
   Other                                                         (5,479)        2,652           5,582         29,295
                                                                -------         -----           -----         ------
      Total non-interest income                                 732,664       555,742       1,864,226      1,455,093
                                                                -------       -------       ---------      ---------
Non-interest expense:
   Salaries and employee benefits                             1,395,905     1,226,947       4,067,021      3,548,369
   Net occupancy                                                217,667       172,331         581,877        519,700
   Equipment expense                                            207,350       200,236         669,310        501,010
   Outside service fees                                         354,698       219,276         649,380        710,905
   Printing and supplies                                         47,843        92,123         176,239        235,798
   Michigan Single Business Tax                                  70,100        22,100         190,600        121,000
   Provision for real estate losses                             100,000       160,000         155,000        240,000
   Other                                                        323,631       356,261       1,092,625      1,071,044
                                                                -------       -------       ---------      ---------
      Total non-interest expense                              2,717,194     2,449,274       7,582,052      6,947,826
                                                              ---------     ---------       ---------      ---------

Income before federal income taxes                            1,905,332     1,561,401       5,101,192      3,871,850

Federal income taxes                                            591,700       469,300       1,517,500      1,130,200
                                                                -------       -------       ---------      ---------

      Net income                                             $1,313,632    $1,092,101      $3,583,692     $2,741,650
                                                             ==========    ==========      ==========     ==========
Per share statistics*
   Basic EPS                                                       $.84          $.70           $2.29          $1.74
   Diluted EPS                                                     $.84          $.70           $2.29          $1.74
   Dividends                                                       $.20          $.20            $.60           $.60
</TABLE>
*Based on 1,566,046 average shares outstanding during the period ended September
30,  2000 and  1,563,589  average  shares  outstanding  during the period  ended
September 30, 1999.
See notes to interim consolidated financial statements.

                                       5
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
     Consolidated Statement of Stockholders' Equity and Comprehensive Income
             For the Three Months Ended September 30, 2000 and 1999
                                   (Unaudited)
<TABLE>
                                                                                      Unearned        Accumulated
                                                                                     Management          Other
                                                         Common        Retained      Retention       Comprehensive
                                                          Stock        Earnings         Plan         Income (loss)         Total
                                                          -----        --------         ----         -------------         -----
<S>                                                    <C>            <C>             <C>              <C>               <C>
Balances at June 30, 1999                              $4,821,880     19,753,231      (66,220)         (169,962)         24,338,929
Net income                                                             1,092,101                                          1,092,101
Change in unrealized loss on debt securities
   available for sale, net of tax effect                                                                  7,756               7,756
                                                                                                                              -----
Total comprehensive income                                                                                                1,099,857
Shares issued for management retention plan                97,400                     (97,400)
Amortization of management retention plan                                              12,012                                12,012
Cash dividends (20(cent)per share)                                      (313,341)                                          (313,341)
                                                        ---------       --------     ---------          --------          ---------
Balances at September 30, 1999                         $4,919,280     20,531,991     (151,608)         (162,206)         25,137,457
                                                       ==========     ==========     =========         =========         ==========
</TABLE>
See notes to interim consolidated financial statements

<TABLE>
                                                                                      Unearned        Accumulated
                                                                                     Management          Other
                                                         Common        Retained      Retention       Comprehensive
                                                          Stock        Earnings         Plan         Income (loss)         Total
                                                          -----        --------         ----         -------------         -----
<S>                                                    <C>            <C>            <C>               <C>               <C>
Balances at June 30, 2000                              $4,919,280     22,367,336     (118,576)         (201,355)         26,966,685
Net income                                                             1,313,632                                          1,313,632
Change in unrealized loss on debt
securities                                                                                              145,865             145,865
                                                                                                                            -------
available for sale, net of tax effect
Total comprehensive income                                                                                                1,459,497
Shares issued for management retention plan               106,890                    (106,890)
Amortization of management retention plan                                              16,135                                16,135
Forfeitures management retention plan                     (12,725)                     12,725
Cash dividends (20(cent)per share)                                      (313,549)                                          (313,549)
                                                       ----------       --------      -------           --------          ---------
Balances at September 30, 2000                         $5,013,445     23,367,419     (196,606)          (55,490)         28,128,768
                                                       ==========     ==========     =========          ========         ==========
</TABLE>
                                       6
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
     Consolidated Statement of Stockholders' Equity and Comprehensive Income
              For the Nine Months Ended September 30, 2000 and 1999
                                   (Unaudited)
<TABLE>
                                                                                      Unearned        Accumulated
                                                                                     Management          Other
                                                         Common        Retained      Retention       Comprehensive
                                                          Stock        Earnings         Plan         Income (loss)        Total
                                                          -----        --------         ----         -------------        -----
<S>                                                    <C>            <C>            <C>               <C>              <C>
Balances at December 31, 1998                          $4,821,775     18,728,787       (66,220)          12,191          23,496,533
Net income                                                             2,741,650                                          2,741,650
Change in unrealized gain (loss) on debt securities
   available for sale, net of tax effect                                                               (174,397)           (174,397)
                                                                                                                          ---------
Total comprehensive income                                                                                                2,567,253
Shares issued for management retention plan                97,400                      (97,400)
Amortization of management retention plan                                               12,012                               12,012
Shares issued for employee awards                             105                                                               105
Cash dividends (60(cent)per share)                                      (938,446)                                          (938,446)
                                                        ---------     ----------       -------          -------           ---------
Balances at September 30, 1999                         $4,919,280     20,531,991      (151,608)        (162,206)         25,137,457
                                                       ==========     ==========      =========        =========         ==========
</TABLE>
See notes to interim consolidated financial statements

<TABLE>
                                                                                      Unearned        Accumulated
                                                                                     Management          Other
                                                         Common        Retained      Retention       Comprehensive
                                                          Stock        Earnings         Plan         Income (loss)        Total
                                                          -----        --------         ----         -------------        -----
<S>                                                    <C>            <C>             <C>              <C>               <C>
Balances at December 31, 1999                          $4,919,280     20,723,357      (139,597)        (191,394)         25,311,646
Net income                                                             3,583,692                                          3,583,692
Change in unrealized loss on debt
securities                                                                                              135,904             135,904
                                                                                                                            -------
available for sale, net of tax effect
Total comprehensive income                                                                                                3,719,596
Shares issued for management retention plan               106,890                     (106,890)
Amortization of management retention plan                                               37,156                               37,156
Forfeitures management retention plan                     (12,725)                      12,725
Cash dividends (60(cent)per share)                                      (939,630)                                          (939,630)
                                                       ----------      ---------       -------          --------          ---------
Balances at September 30, 2000                         $5,013,445     23,367,419      (196,606)         (55,490)         28,128,768
                                                       ==========     ==========      =========         ========         ==========
</TABLE>

                                       7
<PAGE>
                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>
Consolidated Statements of Cash Flows
Unaudited                                                                         Nine months ended Sept. 30
                                                                                        2000            1999
                                                                                        ----            ----
<S>                                                                              <C>             <C>
 Cash flows from operating activities:
   Net income                                                                     $3,583,692     $ 2,741,650
   Adjustments to reconcile net income to net cash provided by
    operating activities:
      Provision for loan losses                                                      900,000         630,000
      Depreciation and amortization                                                  690,650         519,707
      Net amortization on investment securities                                       25,735          65,407
      Earned portion of management retention plan                                     37,156          12,012
      Loss on disposal of equipment                                                   79,866          18,360
      Gain on sale of loans                                                          (54,689)        (27,941)
      Proceeds from sale of loans                                                  2,864,415      12,461,368
      Origination of loans held for sale                                          (2,873,815)    (12,675,563)
      Increase in accrued interest income and other assets                          (423,336)        (86,667)
      Increase (decrease) in accrued interest, taxes, and other liabilities          742,741        (246,349)
                                                                                     -------       ---------
         Net cash provided by operating activities                                 5,572,415       3,411,984
                                                                                   ---------       ---------
Cash flows from investing activities:
   Purchases of available for sale securities                                     (7,973,357)    (15,164,836)
   Proceeds  from maturities and calls of available for sale securities           16,000,000       2,000,000
   Purchases of held to maturity securities                                       (2,496,205)     (2,481,596)
   Proceeds from maturities and calls of held to maturity securities                 605,000       3,968,000
   Proceeds from mortgage-backed securities paydowns-held to maturity                305,829         335,970
   Net increase in loans                                                         (42,142,108)    (21,086,992)
   Capital expenditures                                                             (167,112)     (2,132,724)
                                                                                   ---------     -----------
         Net cash used in investing activities                                   (35,867,953)    (34,562,178)
                                                                                ------------    ------------
Cash flows from financing activities:
   Net increase in deposits                                                       17,671,729      13,582,348
   Net increase in borrowings                                                      6,000,000       1,400,000
   Dividends paid                                                                   (939,630)       (938,446)
                                                                                   ---------       ---------
         Net cash provided by financing activities                                22,732,099      14,043,902
                                                                                  -----------     ----------

Net decrease in cash and cash equivalents                                         (7,563,439)    (17,106,292)

Cash and cash equivalents at beginning of year                                    24,414,282      31,238,662
                                                                                  ----------      ----------

Cash and cash equivalents at end of period                                       $16,850,843     $14,132,370
                                                                                 ===========     ===========
Supplemental disclosures:
   Interest paid                                                                 $ 6,773,553     $ 5,631,952
   Federal income taxes paid                                                       1,482,000       1,192,000
   Loans charged off                                                                 282,368         415,960
</TABLE>
See notes to interim consolidated financial statements

                                       8
<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, 2000, and
consolidated  results of  operations  for the three months and nine months ended
September  30,  2000 and 1999 and  consolidated  cash flows for the nine  months
ended September 30, 2000 and 1999.

2. The  results  of  operations  for the  three  months  and nine  months  ended
September 30, 2000 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 1999 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  $1,978,000  at  September  30,  2000,
$1,947,000  at  September  30, 1999,  and  $177,000 at December  31, 1999.  (See
Management's  Discussion  and  Analysis of  financial  condition  and results of
operations).

6.  Basic and dilutive  earnings per share (EPS) are computed  by  dividing  net
income by the respective weighted average common shares outstanding.
<TABLE>
                                                       Third Quarter                     Year to Date
                                                       2000            1999             2000            1999
                                                       ----            ----             ----            ----
<S>                                              <C>             <C>              <C>             <C>
Net income                                       $1,313,632      $1,092,101       $3,583,692      $2,741,650
Shares outstanding (basic)                        1,567,715       1,565,203        1,566,046       1,563,589
Dilutive shares                                           0               0                0               0
                                                  ---------       ---------        ---------       ---------
   Shares outstanding (diluted)                   1,567,715       1,565,203        1,566,046       1,563,589
Earnings per share:
   Basic EPS                                           $.84            $.70            $2.29           $1.74
   Diluted EPS                                         $.84            $.70            $2.29           $1.74
</TABLE>
                                       9
<PAGE>
Item 2.


                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
                          Interim 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 FNBH Bancorp,  Inc. (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, 2000 and
1999,  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)                      2000         1999                       2000      1999
                                            ----         ----                       ----      ----
<S>                                        <C>           <C>                      <C>        <C>
Net income                                 $1,314        $1,092                   $3,584     $2,742
Net Income per Share                        $ .84         $ .70                    $2.29      $1.74
</TABLE>
Net income for the three months ended September 30, 2000 increased approximately
$222,000 (20%) from that reported for the same period last year. Contributing to
the increased  earnings in the third quarter of 2000 were  increases of $525,000
(14%) in net interest  income and $177,000  (32%) in  non-interest  income.  The
increase in net interest  income was the result of overall  growth in the Bank's
net interest earning assets.  Partially  offsetting these favorable  occurrences
were increases in the loan loss provision of $90,000 (43%), non-interest expense
of $268,000 (11%), and the federal tax provision of $122,000 (26%).

Net  income  for the first  nine  months of the year  increased  $842,000  (31%)
compared to the same period  last year.  Earnings in the three  quarters of 1999
were hindered by computer conversion costs as well as those related to Year 2000
testing  which  were  primarily  incurred  in the first  quarter  of that  year.
Contributing  to 2000  earnings  were an  increase  of  $1,724,000  (17%) in net
interest income and $409,000 (28%) in non-interest income.  Partially offsetting
these increases were increases in expenses of $634,000 (9%)

                                       10
<PAGE>
in non-interest expense, $270,000 (43%) in the loan loss provision, and $388,000
(34%) in federal tax accruals.
<TABLE>
Net Interest Income                               Third Quarter                    Year-to-Date
(in thousands)                                  2000         1999                2000         1999
                                                ----         ----                ----         ----
<S>                                            <C>          <C>                 <C>          <C>
Interest Income                                $6,797       $5,631              $18,953      $15,850
Interest Expense                                2,607        1,966                7,234        5,855
                                               ------        -----                -----        -----
Net Interest Income                            $4,190       $3,665              $11,719       $9,995
</TABLE>

The following table illustrates some of the significant factors  contributing to
the increase in net interest income for the period and for the year to date.
<TABLE>
                                                                   TABLE 1
                                                   INTEREST YIELDS AND COSTS (in thousands)
                                                          September 30, 2000 and 1999
                                              ---------------Third Quarter Averages----------------
                                                    2000                                  1999
                                                    ----                                  ----
                                         Average                              Average
                                         Balance     Interest      Rate       Balance     Interest       Rate
                                         -------     --------      ----       -------     --------       ----
<S>                                      <C>          <C>         <C>         <C>          <C>          <C>
Assets:
Short term investments                    $  633       $ 13.1     8.09%       $ 7,282       $ 93.8      5.04%
Securities:  Taxable                      27,505        377.8     5.49%        30,999        403.8      5.21%
             Tax-exempt(1)                18,895        317.5     6.72%        17,147        294.6      6.87%
Loans(2)(3)                              249,341      6,190.4     9.71%       203,532      4,927.1      9.47%
                                        --------      -------                --------      -------
Total earning assets/total
interest income                          296,374     $6,898.8     9.13%       258,960     $5,719.3      8.67%
                                                     --------                             --------
Cash & due from banks                     11,720                               11,438
All other assets                          15,940                               16,461
Allowance for loan loss                   (4,976)                              (4,332)
                                        --------                              -------
   Total assets                         $319,058                             $282,527
                                        ========                             ========
Liabilities and
  Stockholders' Equity
Interest bearing deposits:
Savings & NOW accounts                  $120,243      $ 856.5     2.83%     $ 115,432      $ 770.2      2.65%
Time                                     104,787      1,572.5     5.95%        90,562      1,194.8      5.23%
Overnight borrowing                        3,880         67.5     6.81%            98          1.1      4.49%
FHLB advances                              6,000        110.8     7.23%             0            0
                                           -----        -----                    ----        -----
Total interest bearing
liabilities/total interest expense       234,910    $ 2,607.3     4.40%       206,092     $1,966.1      3.78%
                                                    ---------                             --------
Non-interest bearing deposits             53,401                               49,614
All other liabilities                      2,899                                1,945
Stockholders' Equity                      27,848                               24,876
                                        --------                               ------
Total liabilities and
   shareholders' equity                 $319,058                             $282,527
                                        ========                             ========
Interest spread                                                   4.73%                                 4.89%
                                                                  =====                                 =====
Net interest income-FTE                             $ 4,291.5                            $ 3,753.2
                                                    =========                            =========
Net interest margin                                               5.64%                                 5.65%
                                                                  =====                                 =====
</TABLE>
                                       11
<PAGE>
(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  $177,000 in 2000 and
     $179,000 in 1999.


<TABLE>
                                                ----------------Year to Date Averages-----------------
                                                      2000                              1999
                                                      ----                              ----
                                        Average                              Average
                                        Balance      Interest     Rate       Balance     Interest      Rate
<S>                                     <C>          <C>          <C>        <C>         <C>           <C>
Assets:
Short term investments                  $ 2,146        $  95.7    5.86%      $ 11,535    $   412.9     4.72%
Securities:  Taxable                     31,155        1,258.9    5.38%        28,971      1,119.5     5.17%
             Tax-exempt(1)               18,476          936.9    6.76%        16,700        875.0     6.99%
Loans(2)(3)                             233,359       17,012.0    9.61%       195,186     13,742.8     9.31%
                                        -------      ---------              ---------    ---------
Total earning assets/total
interest income                         285,136     $ 19,303.5    8.93%       253,392    $16,150.2     8.47%
                                                    ----------                           ---------
Cash & due from banks                    11,280                                11,640
All other assets                         16,198                                16,198
Allowance for loan loss                  (4,811)                               (4,192)
                                        -------                               -------
   Total assets                        $307,803                              $276,038
                                       ========                              ========
Liabilities and
  Stockholders' Equity
Interest bearing deposits:
Savings & NOW accounts                 $120,784      $ 2,571.4    2.84%      $109,017    $ 2,176.3     2.67%
Time                                    100,888        4,326.8    5.71%        92,002      3,676.9     5.34%
Overnight borrowing                                       87.6    6.59%            57          2.0     4.66%
FHLB advances                             4,522          248.4    7.25%             0            0
                                          -----          -----                   ----         ----
Total interest bearing
liabilities/total interest expense      227,948      $ 7,234.2    4.23%       201,076     $5,855.2     3.89%
                                                     ---------                            --------
Non-interest bearing deposits            50,110                                48,298
All other liabilities                     2,996                                 2,240
Stockholders' Equity                     26,749                                24,424
                                         ------                                ------
Total liabilities and
  shareholders' equity                 $307,803                             $ 276,038
                                       ========                             =========
Interest spread                                                   4.70%                                4.58%
                                                                  =====                                =====
Net interest income-FTE                              $12,069.3                           $10,295.0
                                                     =========                           =========
Net interest margin                                               5.56%                                5.37%
                                                                  =====                                =====
</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  $502,000 in 2000 and
     $447,000 in 1999.

                                       12
<PAGE>
Interest Earning Assets/Interest Income
On a tax equivalent basis, interest income increased approximately $1,180,000 in
the third quarter of 2000  compared to that of 1999. A $46,000,000  (23%) growth
in average loan balances  accompanied  by a 24 basis point  increase in interest
yields on those loans generated the net interest income growth.

In the third quarter,  tax equivalent  income on short and long term investments
decreased   approximately   $84,000  because  the  average  balances   decreased
$8,400,000 although the rate earned increased 30 basis points.

For the nine  months of the  year,  tax  equivalent  interest  income  increased
$3,150,000.  Loan interest income increased $3,270,000, with average balances up
$38,000,000  (20%)  and  yields  up 30  basis  points.  The  growth  in the loan
portfolio was primarily in commercial loans which increased $33,700,000 (23%) on
average,  while consumer  loans  increased  $4,100,000  (17%) and mortgage loans
increased  $373,000  (2%).  The  Bank's  resources  in the loan  department  are
primarily  deployed making commercial  loans.  Contributing to the low growth in
the mortgage loan  portfolio is the Bank's policy of selling fixed rate mortgage
loans.  Additionally,  higher interest rates have dampened demand. The Bank sold
approximately $3,300,000 mortgage loans to the secondary market during the three
quarters of 2000, compared to $10,600,000 in the first nine months of 1999.

For the  first  three  quarters  of the  year,  income  on short  and long  term
investments  decreased  $116,000  from  that  earned  the  prior  year  due to a
$5,400,000  decrease in average  balances  although  the yields  increased by 29
basis points.

Interest Bearing Liabilities/Interest Expense
In the third  quarter of 2000,  interest  expense  increased  $641,000 due to an
increase in average  balances of $28,800,000 and in the interest rate paid by 62
basis  points.  Savings  and NOW  interest  expense  increased  $86,000  because
balances increased  $5,000,000 and rates increased 18 basis points.  Interest on
time  deposits  increased  $378,000 in the third  quarter of 2000 over the prior
year. Balances increased $14,200,000 and the rate paid increased 72 basis points
compared  to that of 1999.  The  deposit  growth  was the  result of the  Bank's
marketing efforts to increase its share of Livingston County deposits.

In the first three quarters of the year,  interest expense was $1,379,000 higher
than the previous year due to average balances of interest  bearing  liabilities
increasing  $26,900,000 and the average rate increased 34 basis points.  Savings
and  NOW  interest  expense  increased   $395,000  because  balances   increased
$11,800,000  and the interest rate  increased 17 basis points.  Interest on time
deposits  increased  $650,000 because the balance  increased  $8,900,000 and the
rate increased 37 basis points.

Additionally  the Bank's  interest  costs  increased due to borrowings  from the
Federal  Home  Loan  Bank.  The Bank has two  loans,  each for  $3,000,000.  One
borrowing  was  initiated  to match the  maturity of a fixed rate loan made to a
local township.  The other

                                       13
<PAGE>
borrowing  was  intended  to help with the  Bank's  rate  sensitivity  position.
Interest  expense related to these loans amounted to $248,000 in the first three
quarters of the year. It is reasonable to expect that part of future loan growth
will continue to be funded with FHLB borrowings.

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 policy which targets a 15% liquidity ratio. For the first
nine months of the year, the Bank's  liquidity ratio averaged 15.43% although it
was 13.66% at September 30. ALCO will continue to monitor this ratio as the year
progresses.

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  $26,480,000  at September 30, 2000 compared to  $22,400,000  at December 31,
1999, 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.  During the first three
quarters of the year, short term investments averaged approximately  $2,146,000.
From time to time the Bank will borrow Fed Funds from a  correspondent  bank. In
addition,  the Bank  has a  $16,000,000  line of  credit  available  at the FHLB
($6,000,000  of which has been used, as mentioned  previously)  and the Bank has
pledged certain mortgage loans and investment  securities as collateral for this
borrowing. 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 addition to liquidity 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 and liquidity.

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 shock  simulation  report.  The Bank has no market risk  sensitive
instruments  held for trading  purposes.  The Bank does not enter into  futures,
forwards, swaps, or options to manage interest rate risk. However, the Bank is a
party to

                                       14
<PAGE>
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.
<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                                          $87,068      $39,883      $112,258      $12,730      $251,939
 Securities                                       8,818        8,258        16,003       11,258        44,337
 Short term investments....                         590                                                   590
 Other assets                                                                            26,855        26,855
                                                -------      -------      --------      -------      --------
      Total assets                              $96,476      $48,141      $128,261      $50,843      $323,721

Liabilities & Stockholders' Equity:
 Demand, Savings & NOW..............            $56,348      $18,182       $69,095      $35,359      $178,984
 Time                                            48,436       32,924        25,961          557       107,878
 Other borrowings......................                          207         4,008        1,785         6,000
 Other liabilities and equity                                                            30,859        30,859
                                               --------      -------       -------       ------        ------
      Total liabilities and equity             $104,784      $51,313       $99,064      $68,560      $323,721

Rate sensitivity gap and ratios:
 Gap for period                                 $(8,308)     ($3,172)      $29,197     $(17,717)
 Cumulative gap                                  (8,308)     (11,480)       17,717

Cumulative rate sensitive ratio..........           .92          .93          1.07         1.00
Dec. 31, 1999 rate sensitive ratio.......          1.06          .94          1.08         1.00
</TABLE>

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,  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 negative.  Accordingly,  if market interest rates increase,
this  negative  gap  position  indicates  that  the  interest  margin  would  be
negatively  affected.  However,  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,  indicates that an upward movement of interest rates would not
significantly reduce net interest income.

                                       15
<PAGE>
<TABLE>
Provision for Loan Losses                       Third Quarter                     Year-to-Date
-------------------------
(in thousands)                               2000         1999                  2000       1999
                                             ----         ----                  ----       ----
<S>                                          <C>          <C>                   <C>        <C>
         Total                               $300         $210                  $900       $630
                                             ====         ====                  ====       ====
</TABLE>
The  provision  for loan losses  increased  $90,000 in the third quarter of 2000
compared to the prior year.  Year to date the provision has increased  $270,000.
The increase in the loan loss provision was deemed  appropriate  principally due
to an  increase  in  impaired  loans and related  allocations  of  reserves.  In
September of 2000,  the allowance for loan loss as a percent of loans was 2.05%,
compared to 2.10% a year earlier and 2.13% at December  31, 1999.  For the first
nine  months of 2000,  the Bank had net charge  offs of  $219,000,  compared  to
$251,000 in the first nine months of 1999.  Non-accrual,  past due 90 days,  and
renegotiated  loans were .79% and .94% of total loans  outstanding  at September
30, 2000 and 1999, respectively, and .08% of total loans at December 31, 1999.

Impaired loans, as defined by Statement of Financial Accounting Standards (SFAS)
No. 114, Accounting by Creditors for Impairment of a Loan, totaled approximately
$6,100,000 at September 30, 2000, and included non-accrual, and past due 90 days
other  than  homogenous  residential  and  consumer  loans,  and  $4,600,000  of
commercial  loans  separately  identified  as impaired.  Impaired  loans totaled
$3,400,000  at December  31,  1999.  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  uncollectable  on a timely basis.  One of the loans,
for $2,400,000 is making payments with occasional  lateness.  The cash generated
solely by the business is currently not adequate to cover debt service.  Another
loan, for  $1,700,000,  is current but the borrower's  financial  statements are
weak. Both loans are secured with first mortgages on commercial real estate.

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.  Impaired loans
had specific  reserves  calculated in accordance with SFAS No. 114 of $1,700,000
at September 30, 2000.

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,
2000 compared to December 31, 1999.

                                       16
<PAGE>
<TABLE>
Nonperforming Assets
(in thousands)                                                September 30,2000        December 31, 1999
                                                              -----------------        -----------------
<S>                                                               <C>                       <C>
Non-accrual loans                                                 $1,579                    $  173
90 days or more past due and still accruing                          399                         4
                                                                  ------                    ------
         Total nonperforming loans                                 1,978                       177
Other real estate                                                      0                         0
                                                                  ------                    ------
         Total nonperforming assets                               $1,978                    $  177

Nonperforming loans as a percent of total loans                     .79%                      .08%
Nonperforming assets as a percent of total loans                    .79%                      .08%
Loan loss reserve as a percent of nonperforming loans               261%                     2533%
</TABLE>

The following  table sets forth loan balances and  summarizes the changes in the
allowance for loan losses for the first nine months of 2000 and 1999.
<TABLE>
                                                                       Year to date         Year to date
Loans:   (dollars in thousands)                                       Sept. 30, 2000       Sept. 30, 1999
                                                                      --------------       --------------
<S>                                                                     <C>                    <C>
   Average daily balance of loans for the year to date                   233,359               195,186
   Amount of loans, net of unearned  income, outstanding at
     end of the quarter                                                  251,939               206,083
Allowance for loan losses:
   Balance at beginning of year                                            4,483                 3,958
   Loans charged off:
      Real estate                                                              0                     0
      Commercial                                                             239                   268
      Consumer                                                                43                   148
                                                                              --                   ---
         Total charge-offs                                                   282                   416

   Recoveries of loans previously charged off:
      Real estate                                                              0                    35
      Commercial                                                              25                    78
      Consumer                                                                38                    52
                                                                              --                    --
         Total recoveries                                                     63                   165

Net loans charged off                                                        219                   251
Additions to allowance charged to operations                                 900                   630
                                                                            ----                   ---
         Balance at end of quarter                                        $5,164                $4,337

Ratios:
    Net loans charged off (annualized) to average
    loans outstanding                                                       .13%                  .17%
   Allowance for loan losses to loans outstanding                          2.05%                 2.10%
</TABLE>
                                       17
<PAGE>
<TABLE>
Non-interest Income                                  Third Quarter                      Year-to-Date
-------------------
(in thousands)                                    2000          1999                 2000          1999
                                                  ----          ----                 ----          ----
<S>                                               <C>           <C>                 <C>          <C>
Total                                             $733          $556                $1,864       $1,455
                                                  ====          ====                ======       ======
</TABLE>
Non-interest  income,  which includes service charges on deposit accounts,  loan
fees, customer service fees, trust fees, other operating income, and gain (loss)
on sale of assets,  increased  by  $177,000  (32%) in the third  quarter of 2000
compared to the same period in the previous year. Most of the increase came from
service charges which increased  $175,000 (36%). A thorough review of the bank's
service charges  completed last spring resulted in a new service charge schedule
which went into effect in May accounting for the increased income. Additionally,
trust  income  increased  $16,000  due to  growth  in  trust  assets.  Partially
offsetting  these  increases was a $6,000  decrease in gain on loan sales and an
$8,000 decrease in "other" income.  For the year,  non-interest income increased
$409,000  (28%).  The increase was primarily due to a $375,000 (29%) increase in
service  charge  income.  In addition to the  increases  that  resulted from the
changes in service charges assessed in 2000,  service charge income in the first
quarter of 1999 was  uncharacteristically low due to computer conversion related
problems.  Additionally trust income was $40,000 higher for the year and gain on
the sale of loans increased  $18,000.  Other income decreased  $24,000 primarily
due to the  write  off of some  computer  equipment  in 2000  and  because  some
repossessed property was sold at a gain in 1999.
<TABLE>
Non-interest Expense                                Third Quarter                     Year-to-Date
--------------------
(in thousands)                                    2000         1999                 2000          1999
                                                  ----         ----                 ----          ----
<S>                                               <C>          <C>                 <C>           <C>
Total                                             $2,717       $2,449              $7,582        $6,948
                                                  ======       ======              ======        ======
</TABLE>
Non-interest  expense  increased  $268,000  (11%) in the third  quarter  of 2000
compared to the same  period last year.  There were  increases  in salaries  and
benefits expense of $169,000 (14%)  principally due to an increase in the profit
sharing accrual, a result of the company's improved earnings in 2000.  Occupancy
expense increased $45,000 (26%) primarily due to the costs associated with a new
branch which opened in August of last year.  Professional fees increased $38,000
(30%)  primarily  due to  the  write  off of  architectural  fees  amounting  to
approximately  $70,000  related to a branch  project  which has been  abandoned.
Michigan Single  Business Tax increased  $48,000 this year compared to the third
quarter of last year. In 1999 the company  benefited from tax credits due to the
investment  in fixed assets that  resulted from the opening of the new branch in
the third quarter.  Other  non-interest  expense  increased $65,000 (14%) in the
current year.

For the  first  three  quarters  of the  year,  non-interest  expense  increased
$634,000 (9%) compared to the prior year. There was a $519,000 (15%) increase in
salaries and

                                       18
<PAGE>
benefits, made up of a $135,000 (5%) increase in salary expense, a $55,000 (48%)
increase in health  insurance  costs,  and a $320,000  (109%) increase in profit
sharing  accruals.  The  increase in salary  expense was the result of increased
staff due to the new branch and normal salary increases.  The increase in health
insurance  cost is partly  because last year the Company had some credits in the
plan which kept 1999 costs low. The increase in profit  sharing  accruals is the
result of increased  earnings in the current year.  Occupancy expense is $62,000
(12%) higher due to the new branch which was opened in the third quarter of last
year.  Equipment  expense is $168,000 (34%) higher due to increased  maintenance
and  depreciation  costs related to the purchase of enhanced  technology used at
the new  branch as well as normal  computer  equipment  and  software  upgrades.
Michigan  taxes are $70,000  (57%) higher due to improved  earnings and the 1999
tax credit mentioned  above. The provision for real estate losses  represents an
accrual  for  possible  losses  related to a piece of  property  the  Company is
attempting  to sell.  Management  analyzes the value of the  property  quarterly
based on information available to management regarding the property's salabilty.
<TABLE>
Income Tax Expense                                  Third Quarter                   Year-to-Date
------------------
(in thousands)                                    2000         1999                2000        1999
                                                  ----         ----                ----        ----
<S>                                               <C>          <C>                <C>         <C>
         Total                                    $592         $469               $1,518      $1,130
                                                  ====         ====               ======      ======
</TABLE>
Fluctuations  in income taxes  resulted  primarily  from changes in the level of
profitability.
<TABLE>
Capital (in thousands)                      September 30, 2000                  December 31, 1999
-------                                     ------------------                  -----------------
<S>                                             <C>                                 <C>
Stockholders' Equity*                           $28,184                              $25,503
Ratio of Equity to Total Assets                   8.71%                                8.60%
</TABLE>
*Amounts exclude securities  valuation  adjustments  recorded under Statement of
Financial  Accounting  Standards No. 115 amounting to ($55,000) at September 30,
2000 and ($191,000) at December 31, 1999.

A financial institution's capital ratio is looked upon by the regulators and the
public as an indication of its soundness.  Stockholders'  equity,  excluding the
securities  valuation  adjustment,  increased  $2,700,000 (11%) during the first
nine months of the year.  This increase was principally the result of net income
earned by the company reduced by dividends paid of $940,000.

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, 2000 was 9.51%,  and total risk-based  capital was 10.76%.  At September 30,
1999 these ratios were 10.05% and 11.30% respectively. Minimum regulatory Tier 1
risk-based and total  risk-based  capital ratios under the Federal Reserve Board
guidelines are 4% and 8% respectively.

                                       19
<PAGE>
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 8.16% at September 30, 2000 and 7.72% in 1999. The minimum standard leverage
ratio is 3% but financial institutions are expected to maintain a leverage ratio
2 percentage  points above the 3% minimum to be classified as a well capitalized
institution.

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 land valued at  approximately  $800,000.  The Company is  currently
attempting to sell the remaining acreage which is not needed for the branch. The
current book value of the land is $2,700,000. Improvements needed to enhance the
salability of the property are not expected to exceed $200,000.

The  Company  also  owns two  other  branch  sites,  one in  Howell  which  cost
approximately $250,000 and one in Hamburg which cost approximately $330,000. The
Company expects to commence  building the two new branches in 2001 with at least
one completed in that year.  Additionally,  the Company will expand its computer
facility in 2001 to provide  additional space for back office functions.  All of
the  building  projects are expected to be financed  from  internally  generated
funds.

Accounting Standards
In June 1998, the FASB issued  Statement of Financial  Accounting  Standards No.
133,  Accounting for Derivative  Instruments and Hedging  Activities (SFAS 133).
SFAS  133  establishes   accounting  and  reporting   standards  for  derivative
instruments and hedging activities.  It requires  recognition of all derivatives
as either  assets or  liabilities  in the  statement of financial  condition and
measurement  of those  instruments  at fair value.  The accounting for gains and
losses on  derivatives  depends  on the  intended  use of the  derivative.  This
Statement is effective for all fiscal  quarters of fiscal years  beginning after
June 15, 1999, with earlier application  encouraged.  Retroactive application is
not permitted.

In  June  1999,  the  FASB  issued  SFAS  No.  137,  Accounting  for  Derivative
Instruments and Hedging  Activities - Deferral of the Effective Date of FASB No.
133.  Statement  No. 137 extends the  effective  date to fiscal years  beginning
after June 15, 2000.

In  June  2000,  the  FASB  issued  SFAS  No.  138,  Accounting  for  Derivative
Instruments and Hedging Activities - An Amendment of FASB No. 133. Statement No.
138 amends certain provisions of SFAS No. 133.

Since the Company  does not hold  derivatives,  SFAS 133, as amended by SFAS 137
and SFAS  138,  is not  expected  to have a  material  impact  on the  Company's
financial condition or operations.

                                       20
<PAGE>
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, 1999 other than previously discussed.

                           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 2000.


                                   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, 2000 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



DATE:  October 9, 2000


                                       21