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, 1996
                              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: 525,000 shares of the Company's Common Stock
(no par value) were outstanding as of September 30, 1996.


                                          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, 1996 and Dec. 31, 1995........4
     Consolidated Statements of Income, three months ended
     Sept. 30, 1996 and 1995, and nine months ended Sept. 30, 1996 and  1995..5
     Consolidated Statements of Stockholders' Equity for nine months
     ended September 30, 1996.................................................6
     Consolidated Statements of Cash Flows for nine months ended
     September 30, 1996 and 1995..............................................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>
<TABLE>
<CAPTION>
                       FNBH Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets

                                                       Sep-30            Dec-31
                                                       1996               1995
                                                    (Unaudited)

<S>                                                <C>             <C>
ASSETS
  Cash and due from banks .....................   $   9,351,176    $   8,055,641
  Federal funds sold ..........................       3,300,000        8,400,000
     Total cash and cash equivalents ..........      12,651,176       16,455,641

  Investment securities held to maturity, net
    (fair value of $26,104,000 at September 30,
    1996 and $21,897,000 at Dec. 31, 1995) ....      26,029,415       21,465,669
  Investment securities available for sale,
    at fair value .............................      21,977,187       13,115,000
  Mortgage-backed securities held to maturity,
    net(fair value of $506,000 at September 30,
    1996 and $620,000 at Dec. 31, 1995) .......         510,609          614,118
  Mortgage-backed securities available for
    sale, at fair value .......................          39,832           56,483
       Total investment securities ............      48,557,043       35,251,270

  Loans:
   Commercial .................................      87,631,988       82,793,050
   Consumer ...................................      21,815,978       20,164,158
   Real estate mortgages ......................      22,842,746       25,001,209
      Total loans .............................     132,290,712      127,958,417
   Less unearned income .......................         435,023          495,463
   Less allowance for loan losses .............       3,364,724        3,096,690
       Net loans ..............................     128,490,965      124,366,264

  Bank premises and equipment - net ...........       4,737,468        4,287,299
  Accrued interest and other assets ...........       2,786,086        2,551,343
  Other real estate owned .....................            --             45,688
       Total assets ...........................   $ 197,222,738    $ 182,957,505

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Liabilities
  Deposits:
   Non-interest bearing demand ................   $  32,778,932    $  30,815,052
   NOW ........................................      22,887,088       22,318,050
   Savings and money market....................      56,198,482       51,564,415
   Time .......................................      64,337,313       59,177,115
       Total deposits .........................     176,201,815      163,874,632

  Accrued interest, taxes, and other
     liabilities ..............................       1,442,094        1,553,105
        Total liabilities .....................     177,643,909      165,427,737

  Stockholders' Equity
   Common stock, no par value.  Authorized
   2,100,000 shares; 525,000 shares issued
   and outstanding at Sept. 30, 1996 and
   Dec. 31, 1995 ..............................       5,250,000        5,250,000
  Retained earnings ...........................      14,335,282       12,205,242
  Net unrealized gain (loss) on debt
   securities, net of related tax effect ......          (6,453)          74,526
     Total stockholders' equity ...............      19,578,829       17,529,768
     Total liabilities and stockholders'
         equity ...............................   $ 197,222,738    $ 182,957,505

  See notes to interim consolidated financial statements

</TABLE>
<PAGE>
<TABLE>
                       FNBH Bancorp, Inc. and Subsidiary

Consolidated Statements of Income
  Unaudited
                               Three Months Ended       Nine Months Ended
                                     September              September 30
                                  1996        1995        1996        1995
<S>                               <C>         <C>         <C>         <C>  
 Interest income:
 Interest and fees on loans ....  $3,246,187  $3,119,483  $9,627,282  $9,044,921
 Interest and dividends on investment securities:
 U.S. Treasury securities ......     474,635     301,064   1,160,480     853,605
 Obligations of other
        U.S. government agencies      59,806      70,175     210,618     197,630
 Obligations of state and
        political subdivisions .     154,608     140,516     442,651     414,484
 Other securities ..............       --        --            1,328       1,328
 Federal funds sold ............      82,248      45,136     213,222     133,360
  Total interest income ........   4,017,484   3,676,374  11,655,581  10,645,328

 Interest expense:
 Interest on deposits ..........   1,437,865   1,260,772   4,193,924   3,566,924
 Other interest expense ........       --            615         168       6,766
 Total interest expense ........   1,437,865   1,261,387   4,194,092   3,573,690

 Net interest income ...........   2,579,619   2,414,987   7,461,489   7,071,638
 Provision for loan losses .....     112,125     112,125     336,375     336,375
Net interest income after
   provision for loan losses ...   2,467,494   2,302,862   7,125,114   6,735,263


 Non-interest income:
 Service charges ...............     372,839     323,152   1,121,039     946,460
 Gain on sale of loans .........      36,096       6,762      64,501      36,464
 Other .........................      10,857      21,412      92,971      56,343
  Total non-interest income ....     419,792     351,326   1,278,511   1,039,267

 Non-interest expenses:
  Salaries and employee benefits     824,221     838,713   2,468,959   2,425,546
  Net occupancy ................     130,853     117,184     372,516     359,608
 Equipment expense .............     115,875     116,303     319,845     322,738
 Printing & supplies ...........      52,483      58,241     167,357     165,451
 Michigan Single Business Tax ..      49,000      28,500     126,000     110,300
 Other .........................     427,023     305,850   1,005,659   1,038,388
   Total non-interest expenses .   1,599,455   1,464,791   4,460,336   4,422,031

 Income before federal
        income taxes ...........   1,287,831   1,189,397   3,943,289   3,352,499

 Federal income taxes ..........     394,500     367,500   1,209,500   1,024,000

 Net income ....................    $893,331    $821,897  $2,733,789  $2,328,499

 Per share statistics*
 Net income ....................      $ 1.70      $ 1.57     $  5.21      $ 4.44
 Dividends .....................      $ 0.40      $ 0.35     $  1.15      $ 1.00

 *Based on 525,000 shares outstanding in all time periods 

  See notes to interim consolidated financial statements

</TABLE>
<PAGE>
<TABLE>
                       FNBH Bancorp, Inc. and Subsidiary

Consolidated Statements of Stockholders' Equity
Unaudited
                            For the nine months ended September 30, 1996
                                                        Net Unrealized
                                                         Gain (Loss) on
                                                          Securities
                                                          Available for
                                     Common     Retained   Sale
                                     Stock      Earnings   Net of tax     Total
<S>                                 <C>         <C>          <C>      <C> 
Balances at December 31, 1995 ..... $5,250,000  12,205,242   74,526   17,529,768

Net income ........................       --     2,733,789     --      2,733,789
Change in unrealized gain (loss)
    on debt securities available
    for sale, net of tax effect ...       --          --    (80,979)     (80,979)
Cash dividends ($1.15 per share) ..       --      (603,749)    --       (603,749)

Balances at September 30, 1996 .... $5,250,000  14,335,282   (6,453)  19,578,829

See notes to interim consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
                       FNBH Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows
Unaudited
                                              Nine months ended September 30
                                               1996          1995
<S>                                            <C>           <C> 
Cash flows from operating activities:
Net income ................................... $  2,733,789  $  2,328,499
Adjustments to reconcile net income to net
     cash provided by operating activities:
Provision for loan losses ....................      336,375       336,375
Depreciation and amortization ................      287,938       279,446
Net amortization on investment
                  securities .................       40,261        63,986
Loss on disposal of equipment ................          130         3,709
Gain on sale of loans ........................      (67,395)      (36,464)
Proceeds from sale of loans ..................    7,857,402     2,641,923
Origination of loans held for sale ...........   (7,844,971)   (3,013,081)
(Increase) decrease in accrued
       interest income and other assets ......     (189,055)       56,079
Increase in accrued interest, taxes,
   and other liabilities .....................      (69,261)      (16,846)
        Net cash provided by
            operating activities..............    3,085,213     2,643,626

Cash flows from investing activities:
Purchases of available for sale securities ...   (9,979,017)   (5,006,993)
Proceeds from maturities and calls
    of available for sale securities .........    1,000,000          --
Proceeds from mortgage-backed securities
     paydowns-available for sale..............       15,299        11,179
Purchases of held to maturity securities .....  (14,728,606)   (2,729,702)
Proceeds from maturities and calls of held
     to maturity securities ..................   10,120,000     4,615,000
Proceeds from mortgage-backed securities
     paydowns-held to maturity ...............      103,561        94,370
Net increase in loans ........................   (4,406,112)   (7,295,382)
Capital expenditures .........................     (738,236)     (881,458)
          Net cash used in investing
             activities ......................  (18,613,111)  (11,192,986)

Cash flows from financing activities:
Net increase in deposits .....................   12,327,183     5,788,530
Dividends paid ...............................     (603,750)     (525,000)
   Net cash provided by financing
       activities ............................   11,723,433     5,263,530

Net decrease in cash and cash equivalents ....   (3,804,465)   (3,285,830)

Cash and cash equivalents at beginning of year   16,455,641    14,139,692

Cash and cash equivalents at end of period ... $ 12,651,176  $ 10,853,862

Supplemental disclosures:
Interest paid ................................ $  4,211,763  $  3,462,441
Federal income taxes paid ....................    1,265,000     1,011,000
Loans charged off ............................      125,374        41,162

See notes to interim consolidated financial statements

</TABLE>
<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, 1996, and
consolidated  results of  operations  for the three months and nine months ended
September  30,  1996 and 1995 and  consolidated  cash flows for the nine  months
ended September 30, 1996 and 1995.

2. The  results  of  operations  for the  three  months  and nine  months  ended
September 30, 1996 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 1995
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  $1,203,000  at  September  30, 1996 and
$992,000 at December  31, 1995.  (See  Management's  Discussion  and Analysis of
financial condition and results of operations).


<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,  1996 and 1995,  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)   1996        1995              1996           1995
<S>                        <C>         <C>               <C>            <C> 
Net income                  $893        $822             $2,734         $2,328

Net Income per Share       $1.70       $1.57              $5.21          $4.44
</TABLE>

Net income for the three months ended  September 30, 1996  increased 9% from the
amount  reported  for the third  quarter of the prior year.  This  increase  was
attributable  to an increase in net interest  income of  approximately  $165,000
(7%),  and an  increase  in  non-interest  income of  $69,000  (19%).  Partially
offsetting  the increase in income were an increase of $134,000 in  non-interest
expense  and an increase in tax  accruals  of $27,000  (7%).  Net income for the
first three  quarters of the year increased 17% compared to the same period last
year.  Contributing  to this increase was a $390,000 (6%) growth in net interest
income and a $240,000 (23%) increase in non-interest income, partially offset by
an  increase  of $38,000  (1%) in  non-interest  expense  and an increase in tax
accruals of $186,000 (18%).

<TABLE>

  Net Interest Income         Third Quarter       Year-to-Date
  (in thousands)             1996      1995      1996      1995
<S>                          <C>       <C>       <C>       <C> 
Interest Income ...          $4,018    $3,676    $11,655   $10,645
Interest Expense ..           1,438     1,261      4,194     3,574
Net Interest Income          $2,580    $2,415    $ 7,461   $ 7,071

</TABLE>


The Company's  1996 third quarter net interest  income  increased  $165,000 (7%)
when compared with the same period in the prior year,  while net interest income
for the year to date was $390,000  (6%) higher than that of 1995.  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>
<CAPTION>

                                     TABLE 1
                    INTEREST YIELDS AND COSTS (in thousands)
                           September 30, 1996 and 1995

                          ---------------Third Quarter Averages----------------
                                     1996                          1995
                            Average                     Average
                            Balance    Interest Rate    Balance  Interest  Rate
  Assets:
<S>                         <C>          <C>    <C>      <C>       <C>    <C>  
Fed funds sold ........     6,340        82.2   5.07%    3,100     45.1   5.70%
Securities:
   Taxable ............    35,454       534.4   6.03%   26,060    371.2   5.70%
   Tax-exempt(1) ......    11,415       216.3   7.58%    9,674    198.0   8.19%
Loans(2)(3) ...........   129,975     3,250.8   9.79%  123,828  3,123.8   9.87%
Total earning
  assets/total
  interest income .....   183,184  $  4,083.7   8.76%  162,662 $3,738.1   9.02%
Cash & due from
  banks ...............     7,165      --       --     6,830      --        --
All other assets ......     7,391      --       --     6,529      --        --

Allowance for
  loan loss ...........    (3,342)     --       --    (2,994)     --        --
   Total assets ....... $ 194,398      --       -- $ 173,027      --        --


Liabilities and
  Shareholders'
  Equity

Interest bearing
  deposits:
Savings & NOW
 accounts .............    76,794       533.6   2.76%   69,868    460.4   2.61%
Time ..................    64,249       904.3   5.60%   55,774    800.4   5.69%
Fed funds
  purchased ...........         0         0     --        40         .6   5.98%

Total interest
  bearing
  liabilities/total
  interest expense ....   141,043     1,437.9   4.06%  125,682  1,261.4   3.98%

Non-interest
  bearing deposits ....    32,391      --       --    28,959      --        --
All other liabilities .     1,640      --       --     1,495      --        --
Shareholders' Equity ..    19,324      --       --    16,891      --        --

Total liabilities and
   shareholders' equity   194,398      --       --   173,027      --        --

Interest spread .......      --        --      4.70%   --         --      5.04%

Net interest
   income-FTE .........      --       2,645.8    --    --       2,476.7     --

Net interest margin ...      --        --      5.64%   --         --      5.95%

</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)  Non-accruing loans are not significant during the periods reported and, for
     purposes of the computation  above,  are included in the average daily loan
     balances. 

(3)  Interest on loans includes  origination fees totaling  $124,000 in 1996 and
     $112,000 in 1995.

<PAGE>
<TABLE>
                          ----------------Year to Date Averages-----------------
                                  1996                         1995
                          Average                     Average
                         Balance    Interest   Rate   Balance  Interest  Rate
<S>                      <C>        <C>        <C>    <C>       <C>      <C>
  Assets:
  Fed. funds sold ....     5,417       213.2   5.17%     3,070     133.4   5.73%
  Securities:
    Taxable ..........    30,918     1,372.4   5.92%    25,002   1,052.5   5.61%
    Tax-exempt(1) ....    10,741       619.8   7.69%     9,310     585.7   8.39%
 Loans(2)(3) .........   129,459     9,639.3   9.78%   121,310   9,058.5   9.87%
  Total earning
   assets/total
  interest income ....   176,535    11,844.7   8.86%   158,692  10,830.1   9.03%

  Cash & due from
 banks ...............     7,132      --        --       6,203     --       --

  All other assets ...     7,253      --        --       6,339     --       --
  Allowance for
     loan loss ......    (3,248)      --        --      (2,871)    --       --
 
    Total assets ..... $ 187,672      --        --     168,363     --       --

  Liabilities and
    Shareholders'
      Equity

Interest bearing
 deposits:

Savings & NOW accounts    75,225     1,572.1   2.79%    70,035   1,350.9   2.58%
  Time ...............    62,313     2,621.8   5.62%    54,002   2,216.0   5.49%
  Fed Funds
     Purchased .......         4          .2   5.50%       141       6.8   6.34%
  Total interest
      bearing
  liabilities/total
     interest expense    137,542     4,194.1   4.07%   124,178   3,573.7   3.85%

  Non-interest
bearing deposits .....    29,907      --        --      26,456      --      --
  All other
 liabilities .........     1,616      --        --       1,451      --      --

  Shareholders'
   Equity ............    18,607      --        --      16,278      --      --

  Total liabilities
   and shareholders'
     equity ..........   187,672      --        --     168,363      --      --
  Interest spread ....      --        --      4.79%      --         --     5.18%
  Net interest
     income-FTE ......      --       7,650.6    --       --      7,256.4    --

  Net interest
margin ...............      --        --      5.68%      --         --     6.02%

</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)  Non-accruing loans are not significant during the periods reported and, for
     purposes of the computations  above, are included in the average daily loan
     balances. 

(3)  Interest on loans includes  origination fees totaling  $362,000 in 1996 and
     $323,000 in 1995


INTEREST  EARNING  ASSETS/INTEREST
Income  On a tax  equivalent  basis,  interest  income  increased  approximately
$346,000 in the third  quarter of 1996  compared  to that of 1995.  In the third
quarter of the year,  income on Fed Funds was $37,000  more than the same period
in 1995 in spite of a  decline  of 63 basis  points in  rates,  because  average
balances were $3,200,000  higher.  For the year, income on Fed Funds was $80,000
more than 1995 because average balances increased $2,300,000 although rates were
56 basis points lower.

<PAGE>

In the third  quarter,  income on  taxable  securities  increased  approximately
$163,000 both because the rate increased 33 basis points and the average balance
increased  $9,400,000.  Income from tax-exempt securities increased $18,000 even
though the yield fell 61 basis points because the average  balance  increased by
more than $1,700,000.  The increase in rates on taxable securities was primarily
due to U.S.  Treasury  bonds which are purchased with two year  maturities.  The
yields on the government  bonds  purchased  this year have usually  exceeded the
yields on maturing  bonds.  On the other hand, the Company  generally  purchases
tax-exempt  bonds  with ten year  maturities.  Rates  are  lower on bonds  being
purchased  today than those earned ten years ago on the  tax-exempt  bonds which
they are  replacing.  For the first nine  months of the year,  income on taxable
securities increased approximately $320,000 over the prior year both due to a 31
basis  point  increase  in rates and a nearly  $6,000,000  increase  in  average
balances.  Income on  tax-exempt  securities  was $34,000  higher than the first
three quarters of 1995.  Rates  declined 70 basis points while average  balances
increased $1,400,000.

In the third  quarter of this year,  tax  equivalent  loan interest was $127,000
higher  than the same  period in 1995 due to an  increase  in  average  balances
exceeding  $6,000,000  while rates declined 8 basis points.  The growth in loans
was in the commercial  sector.  A strong local economy has contributed to demand
for land development  loans both for residential and commercial use. The decline
in mortgage  loan  balances was the result of the Bank's policy of selling fixed
rate mortgage  loans 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 three quarters of the year, loan interest income increased $580,000,  with
average balances up $8,000,000 while yields declined 9 basis points.

INTEREST  BEARING  LIABILITIES/INTEREST  EXPENSE  
In the third quarter of 1996, interest expense increased  approximately $179,000
both due to an  increase  in rates of 8 basis  points and an increase in average
balances of more than  $15,000,000.  Savings and NOW interest expense  increased
$73,000 both because balances increased  $6,900,000 and rates increased 15 basis
points.  Interest  on time  deposits  increased  $104,000 in 1996 over the prior
year. Balances increased  $8,500,000 but the rate paid on time deposits declined
9 basis  points in the third  quarter  of 1996  from that of 1995.  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 about  $620,000  higher than 1995 due to rates  increasing  22 basis
points and average balances increasing more than $13,000,000.

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  requires a minimum 15%  liquidity  ratio.
Throughout 1995 and the first nine months of 1996 the Company's  liquidity ratio
exceeded 20%.

<PAGE>

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 $11,300,000 at September 30, 1996,  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. During the first nine months of the year, the Fed Funds
Sold balances averaged $5,400,000.

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 quality of the loan portfolio is reviewed in light of
the current  allowance.  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.

<TABLE>
<CAPTION>

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 ..............    55,847      29,410     42,399      4,635     132,291
    Securities .........     4,198       9,718     26,580      8,061      48,557
    Fed funds ..........     3,300        --         --         --         3,300
    Other assets .......      --          --         --       13,075      13,075
      Total assets .....    63,345      39,128     68,979     25,771     197,223

  Liabilities &
   Shareholders' Equity:

    Demand, Savings
     & NOW .............    52,528        --         --       59,362     111,890
    Time ...............    20,079      20,746     23,500         12      64,337
    Other liabilities
     and equity ........      --          --         --       20,996      20,996

Total liabilities
  and equity ...........  $ 72,607    $ 20,746   $ 23,500   $ 80,370    $197,223

Rate sensitivity
  gap and ratios:
 Gap for period ........  $ (9,262)   $ 18,382   $ 45,479   $(54,599)       --
 Cumulative gap ........    (9,262)      9,120     54,599       --          --


Cumulative rate 
  sensitive ratio.......       .87        1.10       1.47       1.00
Dec. 31, 1995 rate 
  sensitive ratio.......       .92        1.18       1.46       1.00
</TABLE>
<PAGE>

Given the  asset  sensitive  position  of the Bank at  September  30,  1996,  if
interest  rates  decrease  200 basis  points  and  management  did not  respond,
management   estimates  that  annualized  net  interest  income  would  decrease
approximately  $400,000,  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.

<TABLE>

  Provision for Loan Losses            Third Quarter             Year-to-Date
  (in thousands)                     1996         1995         1996        1995
     <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 1996 as it was the prior year.  Year to date the  provision  has also
remained the same at $336,000. In September of 1996, the allowance for loan loss
as a percent of loans was 2.54%,  up from 2.46% a year  earlier.  The  allowance
percentage  increased even as loan balances  increased because of the low amount
of net charge offs the Bank has experienced.  For the first nine months of 1996,
the Bank had net charge offs of $68,000, compared with net recoveries of $71,000
last year.  Non-accrual,  past due 90 days, and renegotiated loans were .91% and
 .80% of total loans outstanding at September 30, 1996 and 1995 respectively.

Impaired  loans, as defined by Statement of Financial  Accounting  Standards No.
114,  Accounting by Creditors for  Impairment of a Loan,  totaled  approximately
$1,000,000 at September 30, 1996, compared to $900,000 at December 31, 1995, and
included non-accrual, and past due 90 days other than homogenous residential and
consumer  loans,  and an  additional  $200,000 of  commercial  loans  separately
identified as impaired.

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  $1,000,000  had  specific  reserves  calculated  in
accordance with SFAS No. 114 of $300,000 at September 30, 1996.

The  following  table  describes  nonperforming  assets at  September  30,  1996
compared to December 31, 1995. The loans categorized as ninety days past due are
all well secured and in the process of collection.

<PAGE>
<TABLE>

  Nonperforming Assets                   Quarter Ended           Year Ended
 (in thousands)                        September 30, 1996     December 31, 1995
<S>                                        <C>                   <C> 
Non-accrual loans ...............          $  855                $  926
90 days or more past due and
   still accruing ...............             348                    66
   Total nonperforming loans ....           1,203                   992
Other real estate ...............               0                    46
   Total nonperforming assets ...          $1,203                $1,038

Nonperforming loans as a percent
    of total loans ..............            .91%                  .80%
Nonperforming assets as a percent
   of total loans ...............            .91%                  .84%
Nonperforming loans as a percent
 of the loan loss reserve .......             36%                   34%

</TABLE>

The  decline  in other  real  estate  in 1996 was due to the sale of a parcel of
property which made up the December 31, 1995 balance.

The following  table sets forth loan balances and  summarizes the changes in the
allowance for loan losses for the first nine months of 1996 and 1995.

<TABLE>

Loans:                                       Year to date         Year to date
                                            Sept. 30, 1996       Sept. 30, 1995
(dollars in thousands)
<S>                                              <C>          <C>    
  Average daily balance of loans
   for the year to date ....................     129,459      121,310
  Amount of loans (gross) outstanding
   at end of the quarter ...................     132,291      125,258
Allowance for loan losses:
 Balance at beginning of year ..............       3,097        2,672
     Loans charged off:
       Real estate .........................          29            0
       Commercial ..........................          47            1
       Consumer ............................          49           40
         Total charge-offs .................         125           41

 Recoveries of loans previously charged off:
      Real estate ..........................           0            0
      Commercial ...........................          19           38
      Consumer .............................          38           74
         Total recoveries ..................          57          112

 Net loans charged off (recoveries) ........          68          (71)
  Additions to allowance charged to
          operations .......................         336          336
        Balance at end of quarter ..........   $   3,365    $   3,079

  Ratios:

   Net loans charged off to average
    loans outstanding ......................         .05%        (.06%)
  Allowance for loan losses to loans
      outstanding ..........................        2.54%        2.46%

</TABLE>
<PAGE>
<TABLE>

  Non-interest Income              Third Quarter               Year-to-Date
  (in thousands)                 1996          1995        1996          1995
<S>                              <C>           <C>         <C>           <C>   
  Total                          $420          $351        $1,279        $1,039
</TABLE>

Non-interest  income,  which includes service charges on deposit accounts,  loan
fees,  other operating  income,  and gain(loss) on sale of assets and securities
transactions,  increased by $69,000  (19%) in the third quarter of 1996 compared
to the same period in the previous year. The $50,000  increase in service charge
income was primarily due to changes in the service charge  schedule  implemented
in the last  half of 1995 as well as growth  in the  Bank.  Gains on loan  sales
increased  $29,000.  The volume of loan sales in the third  quarter of this year
was up $400,000  over last year and the  interest  rate  environment  produced a
better return. In addition, the Bank recorded, as an asset, more than $10,000 in
mortgage  servicing  rights (see  discussion of accounting  standard,  page 18).
Other operating income decreased $10,000.

For the year,  non-interest  income was up $240,000  (23%) compared to the first
nine   months  of  1995.   Included  in  1996  other   operating   income  is  a
non-reoccurring gain of $70,000 on the sale of a piece of other real estate.
<TABLE>
  Non-interest Expense               Third Quarter            Year-to-Date
  (in thousands)                   1996         1995       1996          1995
<S>                                <C>          <C>        <C>           <C>   
  Total                            $1,599       $1,465     $4,460        $4,422
</TABLE>

Non-interest  expense  increased  $134,000  (9%) in the  third  quarter  of 1996
compared to the same  period last year.  Contributing  to this  increase  was an
increase  of $14,000 in  occupancy  expense  and a  $121,000  increase  in other
expense.  Building  depreciation costs rose due to the Hartland branch which was
completed  in the third  quarter  of last year and the  renovations  to the main
office  which were put in service  earlier  this year.  Fees for  services  were
$71,000  higher in the third  quarter  of 1996 than the  previous  year's  third
quarter  principally because the Bank has hired consultants for selected special
projects.  These costs or similar costs are expected to continue into the fourth
quarter.  FDIC  expense  was  $10,000  higher in the third  quarter of this year
because  in the  third  quarter  of last  year the Bank  received  a rebate  for
payments made for the month of June and the third quarter of 1995,  resulting in
negative  expense for the  quarter.  Michigan  Single  Business  tax was $20,500
higher this year than last because the Bank  realized a tax benefit in the third
quarter of last year when the Hartland branch was put in service.  This increase
was partially  offset by a decrease of 2% in salaries and  benefits,  and .4% in
equipment expense.

For the year  non-interest  expense was $38,000  (1%) higher than 1995.  Further
increases in salary and other expense are anticipated  later this year, and into
1977,  as a trust  officer  will be hired  and some  start up costs  for a trust
department will be incurred.

<PAGE>
<TABLE>
  Income Tax Expense                 Third Quarter              Year-to-Date
  (in thousands)                   1996         1995         1996        1995
<S>                                <C>          <C>          <C>         <C>  

     Total                         $395         $368         $1,210      $1,024
</TABLE>

Fluctuations  in income taxes  resulted  primarily  from changes in the level of
profitability and in variations in the amount of tax-exempt income. The increase
of $27,000 in the third quarter tax accrual and $186,000 in the year to date tax
accrual was principally the result of increased profitability. Both year to date
income  before taxes and the Federal  income tax accrual were 18% higher in 1996
than in the previous year.
<TABLE>
  Capital (in thousands)              September 30, 1996      December 31, 1995
<S>                                         <C>                    <C>    
  Shareholders' Equity*                     $19,585                $17,455
  Ratio of Equity to Total Assets             9.93%                  9.54%
</TABLE>

*Amounts exclude securities  valuation  adjustments  recorded under Statement of
Financial  Accounting  Standards  No. 115 amounting to ($6,000) at September 30,
1996 and $75,000 at December 31, 1995.

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  $2,130,000 (12%) 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 $604,000.

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,  1996 was 15.36%,  and total  risk-based  capital was 16.61%.  At
September  30, 1995 these  ratios were 14.37% and 15.62%  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  10.06% at  September  30,  1996 and  9.87% in 1995.  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.

Presently the Bank has a capital project ongoing involving making renovations to
the Brighton branch.  The front face of the building has been expanded about ten
feet toward Grand River Avenue with a  predominate  arched  window  rounded by a
copper roof. The interior is being updated and an office and conference room are

<PAGE>

being be added.  The  project is expected  to be  completed  early in the fourth
quarter.  In addition,  the Bank has received regulatory approval to establish a
new branch in the northwest part of Brighton.

The projects  mentioned above will be financed from internally  generated funds.
As  of  September  30,  1996,  the  Company  had   outstanding   commitments  of
approximately $200,000 for capital projects.





ACCOUNTING STANDARD 
In May 1995,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial  Accounting  Standards  No. 122,  Accounting  for  Mortgage  Servicing
Rights,  an  amendment  of FASB  Statement  No. 65 (SFAS  122).  This  statement
requires a mortgage banking enterprise to recognize as separate assets rights to
service mortgage loans for others,  however those servicing rights are acquired.
SFAS 122 also requires the mortgage banking enterprise to assess its capitalized
mortgage servicing rights for impairment based on the fair value of those rights
with impairment recognized through a valuation allowance. This statement applies
to financial statements for fiscal years beginning after December 15, 1995, with
earlier adoption permitted. The Company adopted SFAS 122 in the first quarter of
1996.  The  impact  on the  financial  statements  was  creation  of an asset of
approximately  $60,000 for mortgage  servicing rights and, after amortization of
approximately  $10,000,  a $50,000 increase in pretax income for the nine months
ended September 30, 1996.

<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 1996.






                          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, 1996 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:  , 1996
<PAGE>