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

_________________

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

For the quarterly period
ended June 30, 2004 OR [ ] TRANSITION REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition
period from ________ to _______

Commission file number
0-25752

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

|                                | 
|------------------------------- | 
|MICHIGAN                        | 
|(State or other jurisdiction of | 
|incorporation or                | 
|organization)                   | 

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

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

_________________

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___

Indicate by check mark whether the  registrant  is an  accelerated  filer (as defined in Rule 12b-2 of the Exchange
Act).  Yes  X   No___

The number of shares outstanding of
each of the issuers classes of common stock, as of the latest practicable date:
3,177,583 shares of the Companys Common Stock (no par value) were outstanding as of
July 31, 2004.

1

---



INDEX

|                                                                      | 
|--------------------------------------------------------------------- | 
|Part I   Financial Information (unaudited):                           | 
|                                                                     
|Item 1                                                                | 
|Interim Financial Statements:                                         | 
|Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003 | 
|Consolidated Statements of Income, three months ended                 | 
|June 30, 2004 and 2003 and six months ended June 30, 2004 and 2003    | 
|Consolidated Statements of Stockholders Equity and Comprehensive     | 
|Income for three months ended June 30, 2004 and 2003                  | 
|Consolidated Statements of Stockholders Equity and Comprehensive     | 
|Income for six months ended June 30, 2004 and 2003                    | 
|Consolidated Statements of Cash Flows for six months ended            | 
|June 30, 2004 and 2003                                                | 
|                                                                     
|Notes to Interim Consolidated Financial Statements                    | 
|                                                                     
|Item 2                                                                | 
|Managements Discussion and Analysis of                               | 
|Financial Condition and Results of Operations                         | 
|                                                                     
|Item 3                                                                | 
|Quantitative and Qualitative Disclosures about Market Risk            | 
|                                                                     
|Item 4                                                                | 
|Controls and Procedures                                               | 
|                                                                     
|Part II.   Other Information                                          | 
|                                                                     
|Item 2                                                                | 
|Changes in Securities and Use of Proceeds                             | 
|                                                                     
|Item 6                                                                | 
|Submission of Matters to a Vote of Security Holders                   | 
|                                                                     
|Exhibits and Reports on From 8-K                                      | 
|                                                                     
|Signatures                                                            | 

---



PART I  FINANCIAL
INFORMATION

Item 1.Financial StatementsUnaudited interim consolidated
financial statements follow.

# FNBH BANCORP, INC. AND
SUBSIDIARIES

|June 302004                                                            | December 312003
|---------------------------------------------------------------------- | ---------------
|                                                                       |                
|AssetsCash and due from banks                                          |                
|Short term investments                                                 |                
|                                                                       |                
|Total cash and cash equivalents                                        |                
|                                                                       |                
|Certificates of deposit                                                |                
|Investment securities held to maturity, net (fair value of $16,473,198 |                
|at June 30, 2004 and $16,006,625 at Dec. 31, 2003)                     |                
|Investment securities available for sale, at fair value                |                
|Mortgage-backed securitities available for sale, at fair value         |                
|FHLBI and FRB stock, at cost                                           |                
|                                                                       |                
|Total investment securities                                            |                
|                                                                       |                
|Loans:                                                                 |                
|Commercial                                                             |                
|Consumer                                                               |                
|Real estate mortgage                                                   |                
|                                                                       |                
|Total loans                                                            |                
|Less allowance for loan losses                                         |                
|                                                                       |                
|Net loans                                                              |                
|                                                                       |                
|Premises and equipment, net                                            |                
|Land and facilities held for sale, net                                 |                
|Other real estate owned, held for sale                                 |                
|Accrued interest and other assets                                      |                
|                                                                       |                
|Total assets                                                           |                
|                                                                       |                
|                                                                       |                
|Liabilities and Stockholders' Equity                                   |                
|Liabilities                                                            |                
|Deposits:                                                              |                
|Demand (non-interest bearing)                                          |                
|NOW                                                                    |                
|Savings and money market                                               |                
|Time                                                                   |                
|Brokered certificates of deposit                                       |                
|                                                                       |                
|Total deposits                                                         |                
|Other borrowings                                                       |                
|Accrued interest, taxes, and other liabilities                         |                
|                                                                       |                
|Total liabilities                                                      |                
|Stockholders' Equity                                                   |                
|Common stock, no par value.  Authorized 4,200,000 shares; 3,177,583    |                
|shares issued and outstanding at June 30, 2004 and 3,168,931 shares    |                
|issued and outstanding at Dec. 31, 2003                                |                
|Retained earnings                                                      |                
|Unearned long term incentive plan                                      |                
|Accumulated other comprehensive income, net                            |                
|                                                                       |                
|Total stockholders' equity                                             |                
|                                                                       |                
|Total liabilities and stockholders' equity                             |                
|                                                                       |                

See notes to interim
consolidated financial statements.

4

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# FNBH BANCORP, INC. AND
SUBSIDIARIES

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

See notes to interim
consolidated financial statements.

5

---



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

|                                                     | Common stock | Retained earnings | Unearned long term incentive plan | Accumulated other comprehensive imcome | Total    
|---------------------------------------------------- | ------------ | ----------------- | --------------------------------- | -------------------------------------- | ---------
|                                                     |              |                   |                                   |                                        |          
|Balances at March 31, 2003                           |              |                   | $                                 | 5,488,298                              |          
|Issued 3,036 shares for long term incentive plan     |              |                   |                                   | 72,454                                 |          
|Amortization of long term incentive plan             |              |                   |                                   |                                        |          
|Issued 757 shares for employee stock purchase plan   |              |                   |                                   | 15,511                                 |          
|Issued 251 shares for current directors' fees        |              |                   |                                   | 5,943                                  |          
|Issued 1,689 shares for directors' variable fee plan |              |                   |                                   | 39,996                                 |          
|Comprehensive income:                                |              |                  
|Net income                                           |              |                   |                                   |                                        | 1,327,413
|Change in unrealized gain (loss) on debt securities  |              |                  
|available for sale, net of tax effect                |              |                   |                                   |                                        |          
|                                                     |              |                   |                                   |                                        |          
|Total comprehensive income                           |              |                   |                                   |                                        |          
|Cash dividends ($.17 per share)                      |              |                   |                                   |                                        | (537,981 
|                                                     |              |                   |                                   |                                        |          
|Balances at June 30, 2003                            |              |                   | $                                 | 5,622,202                              |          
|                                                     |              |                   |                                   |                                        |          
|                                                     |              |                  
|                                                     |              |                  
|                                                     |              |                   |                                  
|                                                     |              |                   |                                   |                                        |          
|Balances at March 31, 2004                           |              |                   | $                                 | 5,742,206                              |          
|Issued 4,261 shares for long term incentive plan     |              |                   |                                   | 115,985                                |          
|Amortization of long term incentive plan             |              |                   |                                   |                                        |          
|Issued 2,148 shares for employee stock purchase plan |              |                   |                                   | 52,583                                 |          
|Issued 363 shares for current directors' fees        |              |                   |                                   | 10,162                                 |          
|Issued 1,179 shares for director's variable fee plan |              |                   |                                   | 32,092                                 |          
|Comprehensive income:                                |              |                  
|Net income                                           |              |                   |                                   |                                        | 1,315,270
|Change in unrealized gain(loss) on debt securities   |              |                  
|available for sale, net of tax effect                |              |                   |                                   |                                        |          
|                                                     |              |                   |                                   |                                        |          
|Total comprehensive income                           |              |                   |                                   |                                        |          
|Cash dividends ($.17 per share)                      |              |                   |                                   |                                        | (539,793 
|                                                     |              |                   |                                   |                                        |          
|Balances at June 30, 2004                            |              |                   | $                                 | 5,953,028                              |          
|                                                     |              |                   |                                   |                                        |          

See notes to interim
consolidated financial statements.

6

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FNBH BANCORP, INC. AND
SUBSIDIARIES   Consolidated Statements of Stockholders' Equity and Comprehensive Income
        For the Six Months Ended June 30, 2004 and 2003 (Unaudited)

|                                                     | Common stock | Retained earnings | Unearned long term incentive plan | Accumulated other comprehensive imcome | Total     
|---------------------------------------------------- | ------------ | ----------------- | --------------------------------- | -------------------------------------- | ----------
|                                                     |              |                   |                                   |                                        |           
|Balances at December 31, 2002                        |              |                   | $                                 | 5,465,089                              |           
|Issued 3,036 shares for long term incentive plan     |              |                   |                                   | 72,454                                 |           
|Amortization of long term incentive plan             |              |                   |                                   |                                        |           
|Issued 1,674 shares for employee stock purchase plan |              |                   |                                   | 33,970                                 |           
|Issued 450 shares for current directors' fees        |              |                   |                                   | 10,693                                 |           
|Issued 1,689 shares for directors' variable fee plan |              |                   |                                   | 39,996                                 |           
|Comprehensive income:                                |              |                  
|Net income                                           |              |                   |                                   |                                        | 2,645,062 
|Change in unrealized gain(loss) on debt securities   |              |                  
|available for sale, net of tax effect                |              |                   |                                   |                                        |           
|                                                     |              |                   |                                   |                                        |           
|Total comprehensive income                           |              |                   |                                   |                                        |           
|Cash dividends ($.34 per share)                      |              |                   |                                   |                                        | (1,074,841
|                                                     |              |                   |                                   |                                        |           
|Balances at June 30, 2003                            |              |                   | $                                 | 5,622,202                              |           
|                                                     |              |                   |                                   |                                        |           
|                                                     |              |                  
|                                                     |              |                  
|                                                     |              |                   |                                  
|                                                     |              |                   |                                   |                                        |           
|Balances at December 31, 2003                        |              |                   | $                                 | 5,725,898                              |           
|Issued 4,261 shares for long term incentive plan     |              |                   |                                   | 115,985                                |           
|Amortization of long term incentive plan             |              |                   |                                   |                                        |           
|Issued 2,576 shares for employee stock purchase plan |              |                   |                                   | 62,453                                 |           
|Issued 499 shares for current directors' fees        |              |                   |                                   | 13,706                                 |           
|Issued 283 shares for deferred directors' fees       |              |                   |                                   | 5,953                                  |           
|Issued 1,179 shares for director's variable fee plan |              |                   |                                   | 32,092                                 |           
|Retired 146 shares from long term incentive plan     |              |                   |                                   | (3,059                                 | )         
|Comprehensive income:                                |              |                  
|Net income                                           |              |                   |                                   |                                        | 2,771,074 
|Change in unrealized gain(loss) on debt securities   |              |                  
|available for sale, net of tax effect                |              |                   |                                   |                                        |           
|                                                     |              |                   |                                   |                                        |           
|Total comprehensive income                           |              |                   |                                   |                                        |           
|Cash dividends ($.34 per share)                      |              |                   |                                   |                                        | (1,078,557
|                                                     |              |                   |                                   |                                        |           
|Balances at June 30, 2004                            |              |                   | $                                 | 5,953,028                              |           
|                                                     |              |                   |                                   |                                        |           

See notes to interim
consolidated financial statements.

7

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# FNBH BANCORP, INC. AND
SUBSIDIARIES

Consolidated Statements
of Cash Flows (Unaudited)

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

See notes to interim
consolidated financial statements.

8

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Notes to Interim
Consolidated Financial Statements (unaudited)

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

1.    
          In the opinion of management of 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 June 30, 2004, and
          consolidated results of operations for the three months and six months ended
          June 30, 2004 and 2003 and consolidated cash flows for the six months ended June
          30, 2004 and 2003.

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

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

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

5.    
          Managements assessment of the allowance for loan losses is based on an
          evaluation of the loan portfolio, recent loss experience, current economic
          conditions, and other pertinent factors. Loans on non-accrual status and those
          past due more than 90 days amounted to $2,216,000 at June 30, 2004, $6,498,000
          at June 30, 2003, and $4,293,000 at December 31, 2003. (See Managements
          Discussion and Analysis of Financial Condition and Results of Operations).

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

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

9

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Item 2.

Managements
Discussion and Analysisof 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 six months ended June 30,
2004 and 2003, and also provides information relating to the Companys financial
condition, focusing on its liquidity and capital resources.

|                                       | Second Quarter | Year-to-Date
|-------------------------------------- | -------------- | ------------
|                                       |                |             
|                                       |                |             
|                                       |                |             
|(in thousands except per share data)   |                |             
|                                       |                |             
|Net Income                             |                |             
|                                       |                |             
|Basic and diluted net income per share |                |             

Net income for the three months ended
June 30, 2004 decreased approximately $12,000 (.9%) compared to the same period last year.
In the second quarter of the current year, the provision for loan losses decreased $75,000
(27.3%), noninterest income increased $89,000 (9.7%) and the provision for federal income
taxes decreased $33,000 (5.7%). Offsetting these favorable occurrences was a decrease in
net interest income of $5,000 (.1%) and an increase in noninterest expenses of $205,000
(6.1%).

10

---



Net income for the six months ended
June 30, 2004 increased approximately $126,000 (4.8%) compared to the same period last
year. Contributing to the increase in 2004 earnings were higher net interest income of
$176,000 (1.9%) and higher noninterest income of $330,000 (17.8%). Partially offsetting
these favorable variances were an increase in the provision for loan losses of $95,000
(15.8%), higher noninterest expenses of $267,000 (4.1%) and a higher provision for federal
income taxes of $19,000 (1.6%).

|                                     | Second Quarter | Year-to-Date
|------------------------------------ | -------------- | ------------
|                                     |                |             
|                                     |                |             
|                                     |                |             
|(in thousands except per share data) |                |             
|                                     |                |             
|Interest Income                      |                |             
|                                     |                |             
|Interest Expense                     |                |             
|                                     |                |             
|Net Interest Income                  |                |             

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

11

---



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

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

(1)  Average yields in
the above table have been adjusted to a tax-equivalent basis using a 34% tax rate and
exclude the effect of any market value adjustments recorded under Statement of Financial
Accounting Standards No. 115. (2)  For purposes of the computation above, non-accruing
loans are included in the average daily loan balances. (3)  Interest on loans includes
origination fees totaling $177,000 in 2004 and $172,000 in 2003.

12

---



TABLE 2      INTEREST
YIELDS AND COSTS (in thousands)       June 30, 2004 and 2003

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

(1)  Average yield in the
above table have been adjusted to a tax-equivalent basis using a 34% tax rate and exclude
the effect of any market value adjustments recorded under Statement of Financial
Accounting Standards No. 115. (2)  For purposes of the computation above, non-accruing
loans are included in the average daily loan balances. (3)  Interest on loans includes
origination fees totaling $344,000 in 2004 and $330,000 in 2003.

13

---



Interest Earning
Assets/Interest Income

On tax equivalent basis, interest
income decreased approximately $205,000 (3.2%) in the second quarter of 2004 compared to
the second quarter of 2003. The decrease was the result of a 60 basis point reduction in
the yield on earning assets partially offset by an increase in the average balance of
interest earning assets of $27,000,000 (6.9%). The reduction in yield is the result of a
change in the mix of earning assets in 2004 as well as lower interest rates.

The quarterly average balance of
short term investments and securities was $28,700,000 (56.2%) higher in the second quarter
of 2004 as compared with the same period in 2003. Offsetting the increase in average
balances was a decrease in the yield on these investments of 107 basis points due to lower
market interest rates. Loans which earn a higher yield than investments, had a decrease in
average balances of $1,700,000 in the second quarter of 2004 compared to the same period
last year as well as a 35 basis point reduction in yield. This reduction was primarily the
result of the prime rate being 25 basis points lower in the second quarter of 2004
compared to the second quarter of 2003. Loan balances at June 30, 2004 have decreased
$14,000,000 from December 31, 2003, and by $8,000,000 from March 31, 2004. The decrease is
attributable to soft loan demand during the first half of this year and competitive
pressures in our markets. Management is focusing its efforts on reversing this trend;
however, the continuation of this trend will have an unfavorable impact on net interest
margin.

For the first half of the year, tax
equivalent interest income decreased $317,000 (2.5%). Loan interest income decreased
$514,000 (4.5%). The average rate earned on loans decreased 46 basis points while average
balances increased $6,600,000 (2.0%). The slight increase in loan growth occurred across
all portfolios but was most significant in the consumer loan areas. Average commercial
loans increased $1,800,000 (.7%), consumer loans increased $3,000,000 (9.0%) and mortgage
loans increase $1,800,000 (5.5%) from the previous year. In addition to the mortgage loans
held in the Banks loan portfolio, the Bank also originates mortgage loans for sale
in the secondary market. Loans originated for sale were $2,274,000 in the first half of
2004 compared to $14,000,000 in the first half of 2003. The decline was the result of
increases in mortgage rates and lower refinancing activity. Positively affecting interest
income was an increase in short term investments and securities income of $197,000
(15.8%), the result of higher average balances of $18,000,000 (31.7%).

Interest Bearing
Liabilities/Interest Expense

Interest expense on deposits for the
second quarter of 2004 decreased $187,000 (12.9%) from the second quarter 2003. The
positive change in interest expense is the result of a lower yield paid on deposits of 35
basis points partially offset by higher average balances of $19,500,000.

Interest expense on deposits declined
during the first half of 2004 compared to the first half of last year by $483,000 (14.8%)
due to a decrease in the average rate paid on deposits of 42 basis points partially offset
by an increase in interest bearing average deposit balances of $17,500,000 (5.7%).

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

14

---



Liquidity

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

Deposits are the principal source of
funds for the Bank. Management monitors rates at other financial institutions in the area
to ascertain that its rates are competitive in the market. Management also attempts to
offer a wide variety of products to meet the needs of its customers. The makeup of the
Banks Large Certificates, which are generally considered to be more
volatile and sensitive to changes in rates, consists principally of local depositors known
to the Bank. As of June 30, 2004, the Bank had Large Certificates totaling approximately
$57,000,000 compared to $54,000,000 at December 31, 2003. At June 30, 2004, the Bank had
$3,600,000 in brokered certificates which were issued through a dealer in September 2003
to help fund loan growth. Included in the issuance were $1,200,000 maturing in September
2004 and $2,400,000 maturing in September 2005.

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

Interest Rate Risk

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

15

---



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

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

|                                 | 0-3 Months | 4-12 Months | 1-5 Years | 5+ Years | Total
|-------------------------------- | ---------- | ----------- | --------- | -------- | -----
|                                 |            |             |           |          |      
|Assets:                          |            |             |           |          |      
|Loans                            |            |             | $         | 163,487  |      
|Securities                       |            |             |           | 5,032    |      
|Brokered CD's                    |            |             |           | 98       |      
|Short term investments           |            |             |           | 23,214   |      
|                                 |            |             |           |          |      
|Total rate sensitive assets      |            |             | $         | 191,831  |      
|                                 |            |            
|Liabilities:                     |            |            
|Savings & NOW                    |            |             | $         | 91,160   |      
|Time                             |            |             |           | 34,549   |      
|Other borrowings                 |            |             |           | -        |      
|                                 |            |             |           |          |      
|Total rate sensitive liabilities |            |             | $         | 125,709  |      
|                                 |            |            
|Rate sensitivity gap and ratios: |            |            
|Gap for period                   |            |             | $         | 66,122   |      
|Cumulative gap                   |            |             |           | 66,122   |      
|                                 |            |            
|Cumulative rate sensitive ratio  |            |             |           | 1.53     |      

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

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

16

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|               | Second Quarter | Year-to-Date
|-------------- | -------------- | ------------
|               |                |             
|               |                |             
|               |                |             
|(in thousands) |                |             
|               |                |             
|Total          |                |             

The Company provided a loan loss
provision of $200,000 in the second quarter of 2004 having provided a provision of
$275,000 in the same period last year. The provision in the second quarter of 2004 is
based upon an analysis of estimated losses inherent in the portfolio and other economic
factors. Non-performing loans at June 30, 2004 are down $2,077,000 from December 31, 2003,
and have decreased $4,282,000 from the balance at June 30, 2003. Net charge offs for the
second quarter of 2004 were $294,000 compared to $366,000 in the same period in 2003.

Year to date the provision is
$695,000 compared to $600,000 in the prior year. Management has determined that the
allowance is adequate based on potential losses inherent in the portfolio. At June 30,
2004 the allowance for loan loss as a percent of loans was 1.85%, compared to 1.71% a year
earlier and 1.72% at December 31, 2003. For the first half of 2004, the Bank had net
charge offs of $488,000 compared to $512,000 for the first half of 2003. Non-accrual, past
due 90 days, and renegotiated loans were .67% and 1.89% of total loans outstanding at June
30, 2004 and 2003, respectively, and 1.24% of total loans at December 31, 2003.

Impaired loans, as defined by
Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan, totaled approximately $5,600,000 at June 30, 2004, and included
non-accrual and past due 90 days other than homogenous residential and consumer loans, and
$4,700,000 of commercial loans separately identified as impaired. Impaired loans totaled
$9,600,000 at December 31, 2003 and $9,800,000 at June 30, 2003. A loan is considered
impaired when it is probable that all or part of amounts due according to the contractual
terms of the loan agreement will not be collectable on a timely basis. Nonperforming loans
are reviewed regularly for collectability. Any uncollectable balances are promptly charged
off.

The adequacy of the allowance for
loan losses is determined by managements assessment of the composition of the loan
portfolio, an evaluation of specific credits, an analysis of the value of the underlying
collateral for those loans, historical loss experience, relevant economic factors, the
level of nonperforming loans, loans that have been identified as impaired, and the overall
credit quality of the portfolio. Management continues to refine its techniques in this
analysis. Impaired loans had specific reserves calculated in accordance with SFAS No. 114
of $1,715,000 at June 30, 2004, $1,600,000 at December 31, 2003, and $1,650,000 at June
30, 2003.

17

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

Loans are generally placed on a
nonaccrual basis when principal or interest is past due 90 days or more and when, in the
opinion of management, full collection of principal and interest is unlikely. Loans
categorized as ninety days past due and still accruing are well secured and in the process
of collection. The following table reflects nonperforming assets at June 30, 2004 compared
to December 31, 2003.

|Nonperforming Assets                                  | June 30, 2004 | December 31, 2003
|----------------------------------------------------- | ------------- | -----------------
|                                                      |               |                  
|(in thousands)                                        |               |                  
|Nonaccrual loans                                      |               |                  
|90 days or more past due and still accruing           |               |                  
|                                                      |               |                  
|Total nonperforming loans                             |               |                  
|Other real estate                                     |               |                  
|                                                      |               |                  
|Total nonperforming assets                            |               |                  
|                                                      |               |                  
|Nonperforming loans as a percent of total loans       |               |                  
|Loan loss reserve as a percent of nonperforming loans |               |                  

18

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

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

19

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|               | Second Quarter | Year-to-Date
|-------------- | -------------- | ------------
|               |                |             
|               |                |             
|               |                |             
|(in thousands) |                |             
|               |                |             
|Total          |                |             

Noninterest income which includes
service charges and other fee income, trust income, gain on sale of loans and other
miscellaneous income increased by $89,000 (9.7%) during the second quarter of 2004 from
the comparable quarter in 2003. Service charges and other fee income increased $208,000
(30.7%) during the second quarter 2004 from the second quarter 2003 as a result of an
impairment reserve on mortgage servicing rights taken in the second quarter of 2003 for
$145,000 while the second quarter of 2004 had a recapture of the impairment reserve of
$33,000. Other fee income also increased $25,000 due to increased loan renewal and credit
line fees in the second quarter of 2004. Trust income decreased $6,000 (8.1%) due to
nonrecurring fees of $15,000 recognized in the second quarter of 2003 compared to only
$6,000 of similar fees recognized in 2004. Gain on the sale of loans has decreased $76,000
(78.1%) due to lower volume of mortgage loans originated for sale. During the second
quarter of 2004, $1,400,000 of loans were sold compared to $5,800,000 in the same quarter
of 2003. Other income decreased $34,000 (49.1%) in the second quarter of 2004 compared to
the same quarter of 2003 due to the reversal of a reserve in 2003 for other real estate of
$45,000.

For the year, noninterest income
increased $330,000 (17.8%). Contributing to the increase was the $178,000 increase in
service charges as a result of changes in the mortgage servicing rights impairment reserve
discussed above and increased other income as a result of the recognition of a deferred
gain of $299,000 which occurred in the first quarter of 2004 relating to the sale of other
real estate held for sale. Offsetting this is a reduction in the gain on the sale of loans
of $198,000 due to lower volume of loans originated for sale in 2004.

|               | Second Quarter | Year-to-Date
|-------------- | -------------- | ------------
|               |                |             
|               |                |             
|               |                |             
|(in thousands) |                |             
|               |                |             
|Total          |                |             

Noninterest expense increased
$205,000 (6.1%) in the second quarter of 2004 compared to same period in 2003. Salaries
and benefits increased $153,000 (8.5%) due to salary and benefit costs related to the
branch opened in December 2003, an additional commercial lender hired in April 2004,
hiring costs related to filling various loan positions, and retirement expenses for the
former chief executive officer. Occupancy cost increased $16,000 (6.4%) in 2004 due to the
costs associated with the branch opened in December 2003. Professional and service fees
increased $127,000 (46.4%) during the second quarter of 2004 compared with the same
quarter in the previous year due to costs related to various training initiatives,
increase audit fees for compliance with the Sarbanes-Oxley Act, and consultant fees for
sales training, leadership training, and consultant fees for employee recruitment. Other
expenses increased $13,000 (2.3%) as a result of an increase in expense related to
overdrawn deposit accounts of $80,000 and increased computer service fees as a result of
costs associated with new software systems. Other expenses in the second quarter of 2003
were higher as a result of expense recorded related to the write down of a property held
for sale that was later sold in 2004. Offsetting these increases, equipment expense was
lower by $69,000 (23.7%) due to lower equipment maintenance costs including software
amortization, advertising expense was lower by $23,000 (22.9%) due to fewer advertising
campaigns in 2004, and printing and supplies was also lower by $13,000 (13.8%).

20

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For the first half of the year,
noninterest expense increased by $267,000 (4.1%) compared to the prior year. Salaries and
benefits increased $214,000 (6.0%) due to the reasons discussed above as well as higher
benefit costs and normal merit increases. Occupancy costs increased $78,000 (16.3%) due to
higher building services expenses, property taxes and depreciation on facilities added in
2003. Professional and service fees increased $176,000 (30.5%) for the reasons discussed
above. Offsetting these increases were decreases in equipment expense of $131,000 (22.9%),
decreased advertising expense of $17,000 (9.7%), decreases printing and supplies expense
of $14,000 (7.9%) and decreased other expenses of $40,000 (3.9%).

|               | Second Quarter | Year-to-Date
|-------------- | -------------- | ------------
|               |                |             
|               |                |             
|               |                |             
|(in thousands) |                |             
|               |                |             
|Total          |                |             

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

|Capital                         | June 30, 2004 | December 31, 2003
|------------------------------- | ------------- | -----------------
|                                |               |                  
|(in thousands )                 |               |                  
|                                |               |                  
|Stockholders' Equity*           |               |                  
|                                |               |                  
|Ratio of Equity to Total Assets |               |                  

*Amounts include securities valuation
adjustments recorded under SFAS No. 115 amounting to $(288,000) at June 30, 2004 and
$307,000 at December 31, 2003.

The Federal Reserve Board provides
guidelines for the measurement of capital adequacy. The Banks capital, as adjusted
under these guidelines, is referred to as risk-based capital. The Banks Tier 1
risk-based capital ratio at June 30, 2004 was 11.84%, and total risk-based capital was
13.09%. At June 30, 2003, these ratios were 10.03% and 11.28% respectively. Minimum
regulatory Tier 1 risk-based and total risk-based capital ratios under the Federal Reserve
Board guidelines are 4% and 8%, respectively.

21

---



The capital guidelines also provide
for a standard to measure risk-based capital to total assets which is called the leverage
ratio. The Banks leverage ratio was 9.56% at June 30, 2004, and 8.70% in 2003. 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.

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

Critical Accounting
Policies

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

Contractual Obligations

As of June 30, 2004, December 31,
2003, and June 30, 2003, the Bank had outstanding irrevocable standby letters of credit,
which carry a maximum potential commitment of approximately $3,200,000, $2,600,000 and
$3,300,000, respectively. These letters of credit are conditional commitments issued by
the Bank to guarantee the performance of a customer to a third party. The majority of
these letters of credit are short-term guarantees of one year or less, although some have
maturities which extend as long as two years. The credit risk involved in issuing letters
of credit is essentially the same as that involved in extending loans to customers. The
Bank primarily holds real estate as collateral supporting those commitments for which
collateral is deemed necessary. The extent of collateral held on those commitments at June
30, 2004, December 31, 2003 and June 30, 2003, where there is collateral, is in excess of
the committed amount. A letter of credit is not recorded on the balance sheet until a
customer fails to perform.

Impact of New Accounting
Standards

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

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

22

---



Item 3. Quantitative and
Qualitative Disclosures About Market Risk

There has been no material change in
the market risk faced by the Company since December 31, 2003 other than previously
discussed.

Item 4. Controls and
Procedures

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

|(b) | Changes
in Internal Controls.
|--- | -----------------------------

| | During
the fiscal quarter covered by this Report, there have not been any changes in our internal
control over financial reporting that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---



PART II  OTHER
INFORMATION

Item 2. Changes in Securities, Use
of Proceeds and Issuer Purchased of Equity Securities

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

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

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

The
registrants annual meeting of stockholders was held on April 21, 2004. The
stockholders voted on the election of directors.

The following nominee for the office
of director was elected for a term expiring in 2006:

Herbert
W. Bursch

The following three nominees for the
office of director were elected for a term expiring in 2007:

Barbara Draper
      Randolph E.
Rudisill
      W. Rickard Scofield

Additionally, the following directors
continue in office.

Term expiring in
2005:
      Athena Bacalis
      Dona Scott Laskey
      James R. McAuliffe
      R. Michael Yost

Term expiring in
2006:
      Gary R. Boss
      Donald K. Burkel
      Richard F. Hopper

24

---



Item 6. Exhibits and
Reports on Form 8-K

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

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

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

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

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

|(b) | Reports
on Form 8-K:
|--- | --------------------

The
Company filed an amended 8-K/A report on April 5, 2004, under Item 4 regarding the decline
of KPMG, the Companys independent auditors to stand for re-election.

The
Company filed a report on 8-K on April 23, 2004, under Item 12 regarding the
Companys First Quarter 2004 Earnings Press Release.

25

---



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 June 30, 2004 to be signed on its behalf by the
undersigned hereunto duly authorized.

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

DATE: August 5, 2004

26

---



EXHIBIT 31.1

CERTIFICATE OF THECHIEF
EXECUTIVE OFFICER OF

FNBH BANCORP, INC.

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

I, Herbert W. Bursch, certify that:

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

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

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

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

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

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

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

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

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

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

Date: August 5, 2004

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

27

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EXHIBIT 31.2

CERTIFICATE OF THECHIEF
FINANCIAL OFFICER OF

FNBH BANCORP, INC.

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

I, Janice B. Trouba, certify that:

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

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

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

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

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

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

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

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

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

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

Date: August 5, 2004

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

28

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EXHIBIT 32.1

CERTIFICATE OF THECHIEF
EXECUTIVE OFFICER OF

FNBH BANCORP, INC.

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

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

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

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

|Date:  August 5, 2004 |  | FNBH BANCORP, INC.By: /s/ Herbert W. Bursch      
      Herbert W. BurschIts:  Chief Executive Officer
|--------------------- |  | --------------------------------------------------------------------------------------------------------------------

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

29

---



EXHIBIT 32.2

CERTIFICATE OF THECHIEF
FINANCIAL OFFICER OF

FNBH BANCORP, INC.

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

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

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

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

|Date:  August 5, 2004 |  | FNBH BANCORP, INC.By: /s/ Janice B. Trouba      
      Janice B. TroubaIts:  Chief Financial Officer
|--------------------- |  | ------------------------------------------------------------------------------------------------------------------

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

30