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

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

                  For the quarterly period ended June 30, 2001
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ________ to _______

                         Commission file number 0-25752

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

                               MICHIGAN 38-2869722
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

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

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

                             -----------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes_X_No___

The number of shares outstanding of each of the issuers classes of common stock,
as of the latest  practicable  date:  1,569,215  shares of the Company's  Common
Stock (no par value) were outstanding as of June 30, 2001.

<PAGE>


                                     INDEX


                                                                            Page
                                                                          Number
Part I.   Financial Information (unaudited):

       Item 1.
       Interim Financial Statements:
       Consolidated Balance Sheet as of June 30, 2001 and Dec. 31, 2000........4
       Consolidated Statements of Income, three months ended
       June 30, 2001 and 2000, and six months ended  June 30, 2001 and 2000....5
       Consolidated    Statement   of    Stockholders' Equity and Comprehensive
       Income for three months ended June 30, 2001 and 2000....................6
       Consolidated Statement of Stockholders' Equity and Comprehensive
       Income for six months ended June 30, 2001 and 2000......................7
       Consolidated Statements of Cash Flows For six months ended
       June 30, 2001 and 2000..................................................8
       Notes to Interim Consolidated Financial Statements......................9

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

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

Part II.  Other Information

       Item 4.................................................................21

       Item 6.................................................................22

       Signatures.............................................................22


<PAGE>


                         PART I - FINANCIAL INFORMATION

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


<PAGE>

                       FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>

Consolidated Balance Sheets (unaudited)                                              June 30     December 31

Assets                                                                                  2001            2000
                                                                                        ----            ----
<S>                                                                             <C>             <C>
Cash and due from banks                                                          $17,253,272    $ 17,501,547
Short term investments                                                            20,955,985      25,743,118
                                                                                  ----------      ----------
   Total cash and cash equivalents                                                38,209,257      43,244,665

Investment securities held to maturity, net (fair value of $18,871,000
   at June 30, 2001 and $19,218,000 at Dec. 31, 2000)                             18,258,098      18,886,677
Investment securities available for sale, at fair value                           17,996,776      19,847,480
Mortgage-backed securities held to maturity, net (fair value of
   $104,000 at June 30, 2001 and $578,000 at Dec. 31, 2000)                          103,907         576,994
Mortgage-back securities available for sale, at fair value                         4,475,120               0
                                                                                   ---------               -
      Total investment securities                                                 40,833,901      39,311,151

Loans:
   Commercial                                                                    213,961,314     197,203,204
   Consumer                                                                       31,316,310      31,180,063
   Real estate mortgages                                                          25,484,509      27,840,497
                                                                                  ----------      ----------
      Total loans                                                                270,762,133     256,223,764
   Less unearned income                                                              769,654         809,746
   Less allowance for loan losses                                                  5,691,623       5,193,263
                                                                                   ---------       ---------
      Net loans                                                                  264,300,856     250,220,755

Premises and equipment - net                                                       8,323,061       8,238,743
Land available for sale - net                                                      1,530,290       1,530,290
Accrued interest and other assets                                                  5,138,572       5,817,824
                                                                                   ---------       ---------
      Total assets                                                              $358,335,937    $348,363,428
                                                                                ============    ============

Liabilities and Stockholders' Equity
Liabilities
Deposits:
   Non-interest bearing demand                                                  $ 60,957,701    $ 55,252,490
   NOW                                                                            31,259,766      34,637,247
   Savings and money market                                                       91,222,600      98,887,217
   Time                                                                          135,144,532     121,436,864
                                                                                 -----------     -----------
      Total deposits                                                             318,584,599     310,213,818

Notes payable                                                                      5,792,911       6,000,000
Accrued interest, taxes, and other liabilities                                     3,007,143       3,262,975
                                                                                   ---------       ---------
      Total liabilities                                                          327,384,653     319,476,793

Stockholders' Equity
Common stock, no par value.  Authorized 4,200,000 shares; 1,569,215
shares issued and outstanding at June 30, 2001 and 1,567,748 shares
issued and outstanding at Dec. 31, 2000                                            5,078,051       5,025,476
Retained earnings                                                                 25,923,283      24,027,158
Unearned management retention plan                                                  (154,510)       (183,188)
Accumulated other comprehensive income, net                                          104,460          17,189
                                                                                     -------          ------
      Total stockholders' equity                                                  30,951,284      28,886,635
                                                                                  ----------      ----------
      Total liabilities and stockholders' equity                                $358,335,937    $348,363,428
                                                                                ============    ============
   See notes to interim consolidated financial statements

</TABLE>

<PAGE>

                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>

Consolidated Statements of Income
Unaudited                                                     Three Months Ended June          Six Months Ended June
                                                                   2001          2000            2001           2000
                                                                   ----          ----            ----           ----
<S>                                                          <C>           <C>            <C>            <C>
Interest income:
   Interest and fees on loans                                $6,100,402    $5,635,956     $12,296,295    $10,742,895
   Interest and dividends on investment securities:
      U.S. Treasury and agency securities                       249,185       388,893         505,767        844,212
      Obligations of state and political subdivisions           227,610       228,647         458,933        449,434
      Other securities                                           16,563        18,443          32,117         34,311
   Interest on short term investments                           199,057        30,425         470,899         85,227
                                                                -------        ------         -------         ------
      Total interest income                                   6,792,817     6,302,364      13,764,011     12,156,079
                                                              ---------     ---------      ----------     ----------

Interest expense:
   Interest on deposits                                       2,685,892     2,265,152       5,483,342      4,469,216
   Other interest expense                                       107,002       111,515         213,019        157,707
                                                                -------       -------         -------        -------
      Total interest expense                                  2,792,894     2,376,667       5,696,361      4,626,923
                                                              ---------     ---------       ---------      ---------

      Net interest income                                     3,999,923     3,925,697       8,067,650      7,529,156

Provision for loan losses                                       300,000       300,000         600,000        600,000
                                                                -------       -------         -------        -------
      Net interest income after provision for loan            3,699,923     3,625,697       7,467,650      6,929,156
                                                              ---------     ---------       ---------      ---------
losses

Non-interest income:
   Service charges                                              671,974       543,076       1,272,100        994,848
   Gain on sale of loans                                         60,713        17,751         104,543         33,994
   Trust income                                                  29,489        47,364          90,320         91,659
   Other                                                         40,702         6,714          61,226         11,061
                                                                 ------         -----          ------         ------
      Total non-interest income                                 802,878       614,905       1,528,189      1,131,562
                                                                -------       -------       ---------      ---------

Non-interest expense:
   Salaries and employee benefits                             1,476,023     1,322,489       2,971,903      2,671,116
   Net occupancy                                                187,662       174,400         403,539        364,210
   Equipment expense                                            208,887       229,461         422,134        461,960
   Fees                                                         179,984        96,810         355,637        159,773
   Printing and supplies                                         37,883        66,172          96,265        128,396
   Michigan Single Business Tax                                  60,000        60,300         125,500        120,500
   Other                                                        608,206       535,562       1,053,997        958,903
                                                                -------       -------       ---------        -------
      Total non-interest expense                              2,758,645     2,485,194       5,428,975      4,864,858
                                                              ---------     ---------       ---------      ---------

Income before federal income taxes                            1,744,156     1,755,408       3,566,864      3,195,860

Federal income taxes                                            512,400       515,000       1,043,400        925,800
                                                                -------       -------       ---------        -------

      Net income                                             $1,231,756    $1,240,408      $2,523,464     $2,270,060
                                                             ==========    ==========      ==========     ==========

Per share statistics*
   Basic EPS                                                       $.79          $.79           $1.61          $1.45
   Diluted EPS                                                     $.79          $.79           $1.61          $1.45
   Dividends                                                       $.20          $.20            $.40           $.40

</TABLE>

*Based on 1,568,362 average shares  outstanding during the period ended June 30,
2001 and 1,565,203 average shares  outstanding  during the period ended June 30,
2000. See notes to interim consolidated financial statements.

<PAGE>



                       FNBH BANCORP, INC. AND SUBSIDIARY
    Consolidated Statement of Stockholders' Equity and Comprehensive Income
               For the Three Months Ended June 30, 2001 and 2000
                                  (Unaudited)
<TABLE>
                                                                                          Unearned        Accumulated
                                                                                         Management          Other
                                                             Common       Retained       Retention       Comprehensive
                                                             Stock        Earnings          Plan         Income (loss)        Total
                                                             -----        --------          ----         -------------        -----
<S>                                                         <C>           <C>            <C>              <C>            <C>
Balances at March 31, 2000                                  $4,919,280    21,439,969     (127,585)        (188,258)      26,043,406
Amortization of management retention plan                                                   9,009                             9,009
Comprehensive income:
   Net income                                                              1,240,408                                      1,240,408
   Change in unrealized loss on debt securities
   available for sale, net of tax effect                                                                    43,888           43,888
                                                                                                                             ------
        Total comprehensive income                                                                                        1,284,296
                                                                                                                          =========

Cash dividends (20(cent)per share)                            ________      (313,041)     _______           ______         (313,041)
                                                                            ---------                                     ---------

Balances at June 30, 2000                                   $4,919,280     22,367,336    (118,576)        (144,370)      27,023,670
                                                            ==========     ==========    =========        =========      ==========
See notes to interim consolidated financial statements
</TABLE>
<TABLE>

                                                                                          Unearned        Accumulated
                                                                                         Management          Other
                                                             Common       Retained       Retention       Comprehensive
                                                             Stock        Earnings          Plan         Income (loss)        Total
                                                             -----        --------          ----         -------------        -----
<S>                                                         <C>            <C>           <C>               <C>            <C>

Balances at March 31, 2001                                  $5,068,423     25,005,317    (167,958)         107,098       30,012,880
Issued 264 shares for employee purchase plan                     9,628                                                        9,628
Amortization of management retention plan                                                  13,448                            13,448
Comprehensive income:
   Net income                                                               1,231,756                                     1,231,756
   Change in unrealized gain on debt securities
   available for sale, net of tax effect                                                                    (2,638)          (2,638)
                                                                                                                            -------
        Total comprehensive income                                                                                        1,229,118
                                                                                                                          =========

Cash dividends (20(cent)per share)                           _________       (313,790)     ______           ______         (313,790)
                                                                             ---------                                    ---------
Balances at June 30, 2001                                   $5,078,051     25,923,283    (154,510)         104,460       30,951,284
                                                            ==========     ==========    =========         =======       ==========
</TABLE>

<PAGE>

                        FNBH BANCORP, INC. AND SUBSIDIARY
     Consolidated Statement of Stockholders' Equity and Comprehensive Income
                 For the Six Months Ended June 30, 2001 and 2000
                                   (Unaudited)
<TABLE>
                                                                                          Unearned        Accumulated
                                                                                         Management          Other
                                                              Common       Retained       Retention      Comprehensive
                                                              Stock        Earnings         Plan         Income (loss)        Total
                                                              -----        --------         ----         -------------        -----

<S>                                                          <C>           <C>           <C>                <C>           <C>
Balances at December 31, 1999                                $4,919,280    20,723,357    (139,597)          (191,394)    25,311,646
Amortization of management retention plan                                                  21,021                            21,021
Comprehensive income:
   Net income                                                               2,270,060                                     2,270,060
   Change in unrealized loss on debt securities
   available for sale, net of tax effect                                                                      47,024         47,024
                                                                                                                             ------
        Total comprehensive income                                                                                        2,317,084
                                                                                                                          =========

Cash dividends (40(cent)per share)                             ________      (626,081)     _______            ______       (626,081)
                                                                             ---------                                     ---------
Balances at June 30, 2000                                    $4,919,280     22,367,336   (118,576)          (144,370)    27,023,670
                                                             ==========     ==========   =========          =========    ==========
See notes to interim consolidated financial statements
</TABLE>
<TABLE>


                                                                                          Unearned        Accumulated
                                                                                         Management          Other
                                                              Common       Retained       Retention      Comprehensive
                                                              Stock        Earnings         Plan         Income (loss)        Total
                                                              -----        --------         ----         -------------        -----

<S>                                                          <C>           <C>            <C>                <C>          <C>
Balances at December 31, 2000                                $5,025,476    24,027,158     (183,188)          17,189      28,886,635
Issued 1,467 shares for employee purchase plan                   52,575                                                      52,575
Amortization of management retention plan                                                   28,678                           28,678
Comprehensive income
   Net income                                                               2,523,464                                     2,523,464
   Change in unrealized loss on debt securities
available for sale, net of tax effect                                                                        87,271          87,271
                                                                                                                             ------
       Total comprehensive income                                                                                         2,610,735
                                                                                                                          =========

Cash dividends (40(cent)per share)                                           (627,339)                                     (627,339)
                                                             ----------    ----------     ---------         -------        ---------
Balances at June 30, 2001                                    $5,078,051    25,923,283     (154,510)         104,460      30,951,284
                                                             ==========    ==========     =========         =======      ==========
</TABLE>

<PAGE>

                        FNBH BANCORP, INC. AND SUBSIDIARY
<TABLE>

Consolidated Statements of Cash Flows
Unaudited                                                                       Six months ended June 30
                                                                                        2001            2000
                                                                                        ----            ----
<S>                                                                               <C>            <C>
Cash flows from operating activities:
   Net income                                                                     $2,523,464     $ 2,270,060
   Adjustments to reconcile net income to net cash provided by operating activities:
      Provision for loan losses                                                      600,000         600,000
      Depreciation and amortization                                                  450,445         468,565
      Net amortization (accretion) on investment securities                           (1,279)         25,202
      Earned portion of management retention plan                                     28,678          21,021
      Gain on sale of loans                                                         (104,543)        (33,994)
      Proceeds from sale of loans                                                  6,596,121       2,719,233
      Origination of loans held for sale                                          (7,015,535)     (3,068,216)
      (Increase) decrease in accrued interest income and other assets                679,252        (162,002)
      Increase (decrease) in accrued interest, taxes, and other liabilities         (301,032)        504,855
                                                                                   ---------         -------
         Net cash provided by operating activities                                 3,455,571       3,344,724
                                                                                   ---------       ---------

Cash flows from investing activities:
   Purchases of available for sale securities                                     (7,522,894)     (5,982,298)
   Proceeds  from maturities and calls of available for sale securities            5,000,000      11,000,000
   Proceeds from mortgage-backed securities paydowns-available for sale               39,675               0
   Purchases of held to maturity securities                                                0      (2,496,205)
   Proceeds from maturities and calls of held to maturity securities                 620,000         605,000
   Proceeds from mortgage-backed securities paydowns-held to maturity                474,219         200,228
   Purchase of loans                                                                (142,540)              0
   Net increase in loans                                                         (14,013,604)    (33,104,607)
   Capital expenditures                                                             (534,763)        (90,364)
                                                                                   ---------        --------
         Net cash used in investing activities                                   (16,079,907)    (29,868,246)
                                                                                ------------    ------------

Cash flows from financing activities:
   Net increase in deposits                                                        8,370,781       7,241,452
   Increase in borrowings                                                                  0       8,850,000
   Payments on FHLB note                                                            (207,089)              0
   Shares issued for employee stock purchase plan                                     52,575               0
   Dividends paid                                                                   (627,339)       (626,081)
                                                                                   ---------       ---------
         Net cash provided by financing activities                                 7,588,928      15,465,371
                                                                                   ---------      ----------

Net decrease in cash and cash equivalents                                         (5,035,408)    (11,058,151)

Cash and cash equivalents at beginning of year                                    43,244,665      24,414,282
                                                                                  ----------      ----------

Cash and cash equivalents at end of period                                       $38,209,257     $13,356,131
                                                                                 ===========     ===========

Supplemental disclosures:
   Interest paid                                                                 $ 5,744,774     $ 4,671,297
   Federal income taxes paid                                                       1,172,000         850,000
   Loans charged off                                                                 169,775         268,947
</TABLE>
See notes to interim consolidated financial statements
<PAGE>

Notes to Interim Consolidated Financial Statements(unaudited)
The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America 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  accounting  principles  generally
accepted in the United States of America 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,  2001,  and
consolidated  results of  operations  for the three  months and six months ended
June 30, 2001 and 2000 and consolidated cash flows for the six months ended June
30, 2001 and 2000.

2. The results of operations  for the three months and six months ended June 30,
2001 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 2000 Annual Report contained in the Registrant's  report
on Form 10-K filing.

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

5.  Management's  assessment  of the  allowance  for loan  losses is based on an
evaluation  of the loan  portfolio,  recent loss  experience,  current  economic
conditions,  and other pertinent factors.  Loans on non-accrual status and those
past due more than 90 days amounted to  $1,697,000 at June 30, 2001,  $1,680,000
at June  30,  2000,  and  $817,000  at  December  31,  2000.  (See  Management's
Discussion and Analysis of financial condition and results of operations).

6. Basic and  dilutive  earnings  per share (EPS) are  computed by dividing  net
income  by  the  respective   weighted   average   common  shares   outstanding.
                                Second Quarter                  Year to Date
                                    2001        2000             2001       2000
<TABLE>
<S>                           <C>         <C>              <C>        <C>
Net income                    $1,231,756  $1,240,408       $2,523,464 $2,270,060

Shares outstanding (basic)     1,568,957   1,565,203        1,568,362  1,565,203
Dilutive shares                        0           0                0          0
                               ---------   ---------        ---------  ---------
 Shares outstanding (diluted)  1,568,957   1,565,203        1,568,362  1,565,203
Earnings per share:
 Basic EPS                          $.79        $.79            $1.61      $1.45
 Diluted EPS                        $.79        $.79            $1.61      $1.45
</TABLE>
<PAGE>
Item 2.


                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
                          Interim Financial Statements

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

The Company,  a Michigan  business  corporation,  is a one bank holding company,
which owns all of the outstanding capital stock of First National Bank in Howell
(the Bank) and all of the outstanding stock of HB Realty Co., a subsidiary which
owns real estate.  The  following is a discussion  of the  Company's  results of
operations for the three months and six months ended June 30, 2001 and 2000, and
also  provides  information  relating  to  the  Company's  financial  condition,
focusing on its liquidity and capital resources.

Earnings(in thousands    Second Quarter                          Year-to-Date
except per share data)   2001      2000                         2001      2000
                         ----      ----                         ----      ----
<TABLE>
<S>                    <C>       <C>                          <C>       <C>
Net income             $1,232    $1,240                       $2,523    $2,270
Net Income per Share    $ .79     $ .79                        $1.61     $1.45
</TABLE>

Net income for the three  months  ended June 30,  2001  decreased  approximately
$8,000  compared  to the same  period  last year.  In the second  quarter of the
current year net interest income  increased  $74,000 (2%),  non-interest  income
grew $188,000 (31%) and the federal tax accrual decreased  slightly.  Offsetting
these favorable  occurrences was an increase in non-interest expense of $274,000
(11%).

Net  income for the first half of the year  increased  $253,000  (11%) from that
reported last year.  Contributing  to 2001 earnings were an increase of $538,000
(7%) in net  interest  income  and a $396,000  (35%)  increase  in  non-interest
income.  Partially  offsetting  these  increases  in income  were  increases  of
$564,000 (12%) in non-interest  expense,  and of $118,000 (13%) in the provision
for federal income tax.

<PAGE>
Net Interest Income       Second Quarter                          Year-to-Date
(in thousands)            2001      2000                         2001      2000
                          ----      ----                         ----      ----
<TABLE>
<S>                     <C>       <C>                         <C>       <C>
Interest Income         $6,793    $6,302                      $13,764   $12,156
Interest Expense         2,793     2,376                        5,696     4,627
                         -----     -----                        -----     -----
Net Interest Income    $ 4,000    $3,926                       $8,068    $7,529
</TABLE>

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

                                    TABLE 1
                    INTEREST YIELDS AND COSTS (in thousands)
                             June 30, 2001 and 2000

<TABLE>
                                               ---------------Second Quarter Averages----------------
                                                      2001                                2000
                                                      ----                                ----
                                         Average                              Average
                                         Balance     Interest      Rate       Balance     Interest       Rate
<S>                                      <C>          <C>         <C>         <C>          <C>          <C>
Assets:
Short term investments                   $19,285      $ 199.0     4.08%       $ 1,862       $ 30.4      6.46%
Securities:  Taxable                      17,174        265.8     6.19%        30,048        407.4      5.42%
                   Tax-exempt(1)          18,499        307.9     6.66%        18,559        314.6      6.78%
Loans(2)(3)                              267,633      6,142.2     9.08%       233,139      5,673.6      9.63%
                                         -------      -------                 -------      -------
Total earning assets/total
interest income                          322,591     $6,914.9     8.49%       283,608     $6,426.0      8.97%
                                                     --------                             --------
Cash & due from banks                     13,375                               11,877
All other assets                          15,172                               16,091
Allowance for loan loss                   (5,512)                              (4,867)
                                         -------                              -------
   Total assets                         $345,626                             $306,709
                                        ========                             ========
Liabilities and
  Stockholders' Equity
Interest bearing deposits:
Savings & NOW accounts                  $120,170      $ 768.0     2.56%     $ 120,168      $ 854.7      2.85%
Time                                     130,432      1,917.9     5.90%        99,901      1,410.5      5.66%
Fed funds purchased                            0            0                     597                   7.61%
                                                                                              11.5
FHLB Notes                                 5,793        107.0     7.31%         5,433        100.0      7.28%
                                           -----        -----                   -----        -----
Total interest bearing
liabilities/total interest expense       256,395    $ 2,792.9     4.37%       226,099     $2,376.7      4.21%
                                                    ---------                             --------
Non-interest bearing deposits             55,564                               51,329
All other liabilities                      3,087                                2,589
Stockholders' Equity                      30,580                               26,692
                                          ------                               ------
Total liabilities and
   shareholders' equity                 $345,626                             $306,709
                                        ========                             --------
Interest spread                                                   4.12%                                 4.76%
                                                                  =====                                 =====
Net interest income-FTE                             $ 4,122.0                            $ 4,049.3
                                                    =========                            =========
Net interest margin                                               5.02%                                 5.62%
                                                                  =====                                 =====
</TABLE>

(1)  Average  yields in the above table have been  adjusted to a  tax-equivalent
     basis  using a 34% tax rate and  exclude  the  effect of any  market  value
     adjustments recorded under Statement of Financial Standards No. 115.
<PAGE>

(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  $207,000 in 2001 and
     $177,000 in 2000.

<TABLE>

                                                ----------------Year to Date Averages-----------------
                                                        2001                              2000
                                                        ----                              ----

                                        Average                               Average
                                        Balance       Interest     Rate       Balance     Interest      Rate
<S>                                    <C>             <C>        <C>        <C>           <C>         <C>
Assets:
Short term investments                 $ 19,909        $ 468.9    4.69%      $  2,915      $  85.2     5.78%
Securities:  Taxable                     17,611          539.8    6.13%        33,008        878.5     5.34%
             Tax-exempt(1)               18,658          627.5    6.73%        18,263        619.4     6.78%
Loans(2)(3)                             264,334       12,379.2    9.34%       225,192     10,807.4     9.51%
                                        -------       --------                -------     --------
Total earning assets/total
interest income                         320,512     $ 14,015.4    8.72%       279,378    $12,390.5     8.80%
                                                    ----------                           ---------
Cash & due from banks                    12,961                                11,060
All other assets                         15,255                                16,220
Allowance for loan loss                  (5,400)                               (4,728)
                                        -------                               -------
   Total assets                        $343,328                              $301,930
                                       ========                              ========
Liabilities and
  Stockholders' Equity
Interest bearing deposits:
Savings & NOW accounts                 $123,360      $ 1,664.5    2.72%      $121,067    $ 1,714.9     2.84%
Time                                    126,859        3,818.9    6.07%        98,938      2,754.3     5.58%
Purchased funds                               0              0                    667         20.1     5.97%
FHLB Notes                                5,810          213.0    7.29%         3,775        137.6     7.21%
                                          -----          -----                  -----        -----
Total interest bearing
liabilities/total interest expense      256,029      $ 5,696.4    4.48%       224,447     $4,626.9     4.13%
                                                     ---------                            --------
Non-interest bearing deposits            53,744                                48,507
All other liabilities                     3,372                                 2,755
Stockholders' Equity                     30,183                                26,221
                                         ------                                ------
Total liabilities and
  shareholders' equity                 $343,328                             $ 301,930
                                       ========                             =========
Interest spread                                                   4.24%                                4.67%
                                                                  =====                                =====
Net interest income-FTE                               $8,319.0                            $7,763.6
                                                      ========                            ========
Net interest margin                                               5.14%                                5.48%
                                                                  =====                                =====
</TABLE>
(1)  Average  yields in the above table have been  adjusted to a  tax-equivalent
     basis  using a 34% tax rate and  exclude  the  effect of any  market  value
     adjustments  recorded under  Statement of Financial  Standards No. 115.
(2)  For purposes of the computations above,  non-accruing loans are included in
     the average daily loan balances.
(3)  Interest on loans includes  origination fees totaling  $394,000 in 2001 and
     $325,000 in 2000.


Interest Earning Assets/Interest Income

On a tax equivalent basis, interest income increased  approximately  $489,000 in
the second quarter of 2001 compared to that of 2000. The increase was the result
<PAGE>
of a $39,000,000 (14%) growth in average balances on earning assets as the yield
on earning  assets  declined 48 basis  points (5%) year to year.  Loan  interest
increased nearly $470,000 due to a $34,500,000  (15%) increase in loans although
rates declined by 55 basis points. In the second quarter,  tax equivalent income
on short and long term investments  increased  approximately $20,000 because the
average  balances  increased  $4,500,000  although the rate earned  decreased 35
basis points.

For the  first  half of the  year,  tax  equivalent  interest  income  increased
$1,625,000.  Loan  interest  income  increased  approximately  $1,570,000,  with
average balances up $39,000,000  (17%) although yields declined 17 basis points.
As a percentage, each type of loan grew equally,  approximately 17%, but because
of the larger base in commercial  loans,  that  portfolio  increased the most in
dollar volume. Commercial loans increased $30,400,000 on average, while consumer
loans increased $4,700,000 and mortgage loans increased  $4,100,000.  The Bank's
resources in the loan department are primarily deployed making commercial loans.
With the declining  interest rates,  the Bank also had  considerable  demand for
residential mortgage loans. These loans are sold in the secondary market if they
conform  to  market  standards.  In the  first  half  of  2001,  the  Bank  sold
approximately  $6,500,000  mortgage  loans,  compared to $1,900,000 in the first
half of 2000.

For the first six months of the year,  income on short and long term investments
increased  $53,000  from that  earned the prior year due to a nearly  $2,000,000
increase in average balances although the yields decreased by 3 basis points.

Interest Bearing Liabilities/Interest Expense

In the second quarter of 2001,  interest  expense  increased  $416,000 due to an
increase in average balances of $30,300,000  (13%) and in the interest rate paid
of 16 basis points.  Savings and NOW interest  expense  decreased  approximately
$87,000.  Average  balances  remained  unchanged  but rates  decreased  29 basis
points.  Interest on time deposits  increased  $507,000 in the second quarter of
2001 over the prior year. Balances increased approximately $30,500,000 (31%) and
the rate paid increased 24 basis points  compared to that of 2000. In the second
half of 2000, the Bank marketed  certificates  of deposit quite  aggressively as
loans were growing faster than deposits and the Bank was borrowing money through
the Fed Funds  market.  Most of the new business was in short term  certificates
that are  maturing in the next  quarter.  The Bank has  sufficient  liquidity to
absorb any runoff from these deposits.

In the first half of the year,  interest expense was $1,070,000  higher than the
previous year due to average balances of interest bearing liabilities increasing
$31,600,000  and the average  rate  increased 35 basis  points.  Savings and NOW
interest  expense  decreased  approximately  $50,000  because the interest  rate
decreased 12 basis points although balances increased  $2,300,000 (2%). Interest
on  time  deposits  increased  approximately   $1,065,000  because  the  balance
increased $27,900,000 (28%) and the rate increased 49 basis points.
<PAGE>
In the first half of 2001, the Bank did not need to borrow short term money. The
Bank does, however,  have two loans, entered into in 2000, from the Federal Home
Loan  Bank 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
position.  It is  reasonable  to expect  that part of future  loan  growth  will
continue to be funded with FHLBI borrowings.

Liquidity

Liquidity is monitored by the Bank's Asset/Liability Management Committee (ALCO)
which meets at least monthly.  With the availability of lines of credit from the
Federal Home Loan Bank,  the way liquidity is viewed and the ratios to calculate
it have changed recently. The Board of Directors has approved a liquidity policy
which requires the Bank,  while it is well  capitalized as defined by the FFIEC,
to maintain a current ratio of no less than 1:1. Additional  requirements of the
policy are that when FHLBI  available  credit is considered,  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 of local depositors known to the Bank. As of June
30, 2001, the Bank had Large  Certificates  totaling  approximately  $44,570,000
compared to $33,100,000 at December 31, 2000.

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  $16,000,000  line of credit
available  at the  FHLBI  ($6,000,000  of which  has  been  used,  as  mentioned
previously)  and the Bank has pledged  certain  mortgage loans as collateral for
this borrowing.  The Bank also has a blanket repurchase agreement in place where
it can  borrow  from  a  broker  pledging  Treasury  and  Agency  securities  as
collateral. In the event the Bank must borrow for an extended period, management
may look to  "available  for sale"  securities in the  investment  portfolio for
liquidity.

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

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.

<TABLE>
Interest Rate Sensitivity
(dollars in thousands)                              0-3         4-12           1-5           5+
                                                 Months       Months         Years        Years         Total
                                                 ------       ------         -----        -----         -----
<S>                                            <C>           <C>          <C>           <C>          <C>
Assets:
Loans....................................      $101,210      $32,493      $124,969      $11,320      $269,992
Securities...............................         4,918       10,205        15,433       10,278        40,834
Short term investments...................        20,956                                                20,956
                                                 ------       ------        ------       ------        ------
   Total rate sensitive assets...........      $127,084      $42,698      $140,402      $21,598      $331,782

Liabilities & Stockholders' Equity:
   Savings & NOW.........................       $50,802                                 $71,680      $122,482
   Time..................................        36,228       73,261        25,230          426       135,145
   Other borrowings......................                        224         4,088        1,481         5,793
                                                 ------          ---         -----        -----         -----
      Total rate sensitive liabilities...       $87,030      $73,485       $29,318      $73,587      $263,420

Rate sensitivity gap and ratios:
   Gap for period........................       $40,054     ($30,787)     $111,084     $(51,989)
   Cumulative gap........................        40,054        9,267       120,351

Cumulative rate sensitive ratio..........          1.46         1.06          1.63         1.26
Dec. 31, 2000 rate sensitive ratio.......          1.17         1.16          1.34         1.23
</TABLE>

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

In the gap table above, the short term (one year and less)  cumulative  interest
rate  sensitivity is positive.  Accordingly,  if market interest rates decrease,
this  positive  gap  position  indicates  that  the  interest  margin  would  be
negatively  affected.  However,  gap  analysis is limited and may not provide an
accurate  indication of the impact of general interest rate movements on the net
interest margin since repricing of various  categories of assets and liabilities
is subject  to the Bank's  needs,  competitive  pressures,  and the needs of the
<PAGE>
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  negative  impact of interest  rates  continuing  to move
downward.

<TABLE>
Provision for Loan Losses      Second Quarter                    Year-to-Date
(in thousands)                 2001      2000                  2001       2000
                               ----      ----                  ----       ----
<S>                            <C>       <C>                   <C>        <C>
         Total                 $300      $300                  $600       $600
                               ====      ====                  ====       ====
</TABLE>

The  provision  for loan  losses was  unchanged  in the  second  quarter of 2001
compared  to the  prior  year.  Year to date the  provision  is also  unchanged.
Although  the  average  balance  in loans  increased  17% in the  last  year and
non-performing loans are somewhat higher, management determined the allowance to
be sufficient based on the level of risk in the portfolio.  In June of 2001, the
allowance  for loan loss as a percent  of loans was 2.11%,  compared  to 2.00% a
year earlier and 2.03% at December  31, 2000.  For the first six months of 2001,
the Bank had net charge offs of $101,000, compared to $229,000 in the first half
of 2000.  Non-accrual,  past due 90 days, and  renegotiated  loans were .63% and
 .69% of total loans  outstanding  at June 30, 2001 and 2000,  respectively,  and
 .32% of total loans at December 31, 2000.

Impaired loans, as defined by Statement of Financial Accounting Standards (SFAS)
No. 114, Accounting by Creditors for Impairment of a Loan, totaled approximately
$6,400,000  at June 30,  2001,  and included  non-accrual,  and past due 90 days
other  than  homogenous  residential  and  consumer  loans,  and  $5,000,000  of
commercial  loans  separately  identified  as impaired.  Impaired  loans totaled
$3,900,000  at December  31,  2000.  A loan is  considered  impaired  when it is
probable that all or part of amounts due according to the  contractual  terms of
the loan agreement will be  uncollectable  on a timely basis.  One of the loans,
for  $2,400,000,  is current  and making  regular  payments;  however,  the cash
generated  solely by the  business  is  currently  not  adequate  to cover  debt
service. Another loan, for $1,200,000,  was made to a doctor to purchase medical
buildings in Lansing.  Although  the loan is current,  cash flow from the leases
has not been sufficient to cover debt service. Both loans are secured with first
mortgages  on  commercial  real  estate  and the real  estate is being  actively
marketed.

Management  assessment  of  the  allowance  for  loan  losses  is  based  on the
composition of the loan portfolio, an evaluation of specific credits, historical
loss  experience,  the level of  nonperforming  loans  and loans  that have been
identified as impaired. Externally, the local economy and events or trends which
might negatively  impact the loan portfolio are also considered.  Impaired loans
had specific  reserves  calculated in accordance with SFAS No. 114 of $2,800,000
at June 30,  2001.
<PAGE>

Nonperforming  assets  are  loans for which the  accrual  of  interest  has been
discontinued,  accruing  loans 90 days or more past due in  payments,  and other
real estate which has been acquired primarily through foreclosure and is waiting
disposition. The following table describes nonperforming assets at June 30, 2001
compared to December 31, 2000.
<TABLE>

Nonperforming Assets
(in thousands)                                    June 30,2001          December 31, 2000
                                                  ------------          -----------------
<S>                                                     <C>                        <C>
Non-accrual loans                                       $1,432                     $  608
90 days or more past due and still accruing                265                        209
                                                         -----                        ---
         Total nonperforming loans                       1,697                        817
Other real estate                                            0                        604
                                                         -----                        ---
         Total nonperforming assets                     $1,697                     $1,421

Nonperforming loans as a percent of total loans           .63%                        32%
Nonperforming assets as a percent of total loans          .63%                       .57%
Loan loss reserve as a percent of nonperforming loans     335%                       636%
</TABLE>

The following  table sets forth loan balances and  summarizes the changes in the
allowance for loan losses for the first six months of 2001 and 2000.
<TABLE>

                                                                       Year to date         Year to date
Loans:   (dollars in thousands)                                       June 30, 2001         June 30, 2000
                                                                      -------------         -------------
<S>                                                                       <C>                   <C>
   Average daily balance of loans for the year to date                    264,334               225,192
   Amount  of  loans,  net of  unearned  income,
outstanding at end of the quarter                                         269,992               243,210
Allowance for loan losses:
   Balance at beginning of year                                             5,193                 4,483
   Loans charged off:
      Real estate                                                               0                     0
      Commercial                                                               57                   233
      Consumer                                                                112                    36
                                                                              ---                    --
         Total charge-offs                                                    169                   269
   Recoveries of loans previously charged off:
      Real estate                                                               0                     0
      Commercial                                                               46                    18
      Consumer                                                                 22                    22
                                                                               --                    --
         Total recoveries                                                      68                    40

Net loans charged off                                                         101                   229
Additions to allowance charged to operations                                  600                   600
                                                                              ---                   ---
         Balance at end of quarter                                         $5,692                $4,854

Ratios:
    Net loans charged off (annualized) to average
    loans outstanding                                                        .08%                  .20%
    Allowance for loan losses to loans outstanding                          2.11%                 2.00%
</TABLE>
<PAGE>
<TABLE>
Non-interest Income            Second Quarter                     Year-to-Date
(in thousands)                2001       2000                   2001       2000
                              ----       ----                   ----       ----
<S>                           <C>        <C>                   <C>        <C>
Total                         $803       $615                  $1,528     $1,132
                              ====       ====                  ======     ======
</TABLE>

Non-interest  income,  which includes service charges on deposit accounts,  loan
fees,  trust fees,  other operating  income,  and gain (loss) on sale of assets,
increased by $188,000  (31%) in the second  quarter of 2001 compared to the same
period in the previous  year.  Service  charge  income  increased  approximately
$129,000  (24%)  primarily  the result of  management's  analysis  of  bank-wide
service  charges last year resulting in some  increases  which took place in the
middle of the second quarter. Gain on the sale of loans increased $43,000 (242%)
due to increased  volume of residential  mortgage sales, the result of customers
refinancing  in the low rate  environment  of the last three months.  Trust fees
declined $18,000 (38%) as the trust  department  focused on staffing rather than
business  development.  Other income increased  $34,000 due to a $42,000 gain on
the sale of other real estate.

For the year, non-interest income increased $396,000 (35%).  Contributing to the
increase was a $277,000 increase in service charge income,  primarily the result
of adjustments made to service charges as mentioned above.  Gains on the sale of
loans increased  approximately  $70,000 due to increased  volume as noted above.
Other income increased  $50,000 but includes $58,000 in non-recurring  gains due
to the sale of property.
<TABLE>

Non-interest Expense           Second Quarter                     Year-to-Date
(in thousands)                2001       2000                   2001       2000
                              ----       ----                   ----       ----
<S>                         <C>        <C>                    <C>        <C>
Total                       $2,759     $2,485                 $5,429     $4,865
                            ======     ======                 ======     ======
</TABLE>

Non-interest  expense  increased  $274,000  (11%) in the second  quarter of 2001
compared to the same  period last year.  There were  increases  in salaries  and
benefits  expense of $154,000 (12%)  principally due to a $95,000 (10%) increase
in salary expense and a $38,000 (104%) increase in 401 (k) employer contribution
costs.  The  fluctuation  in 401 (k) expense is the result of an  unusually  low
expense  in the second  quarter  of 2000 due to  credits  in the plan.  Fees for
outside services  increased $83,000 (86%), the result of costs related to hiring
consultants  for  Strategic  Planning  and ALCO  matters.  "Other"  non-interest
expense  increased $73,000 (14%) primarily due to accruals for losses related to
check fraud.


For the first half of the year,  non-interest  expense increased  $564,000 (12%)
compared to the prior year.  There was a $301,000 (11%) increase in salaries and
benefits, made up of a $111,000 (6%) increase in salary expense, a $42,000 (21%)
increase payroll taxes, a $46,000 (45%) increase in 401(k) employer contribution
costs, and an $87,300 (24%) increase in profit sharing accruals. The increase in
<PAGE>
salary expense was the result of normal salary  increases and staffing  changes.
The  increase in payroll tax was the result of a larger  profit  share payout in
2001.  The increase in pension cost is the result of unusually  low cost in 2000
explained  above.  The  increase  in profit  sharing  accruals  is the result of
increased earnings and employee eligibility. Occupancy expense was $39,000 (11%)
higher due to  unusually  high snow  removal  costs this year.  Fees for outside
services  increased  $196,000  (123%) over the previous  year  primarily  due to
staffing the trust  department  with contract  help while  searching for a trust
officer and the costs related to filling the  position,  as well as items listed
above.  "Other"  non-interest  expense  increased $95,000 (10%) primarily due to
loss accruals mentioned above.
<TABLE>
Income Tax Expense             Second Quarter                     Year-to-Date
(in thousands)                2001       2000                   2001       2000
                              ----       ----                   ----       ----
<S>                           <C>        <C>                  <C>          <C>
         Total                $512       $515                 $1,043       $926
                              ====       ====                 ======       ====
</TABLE>

Fluctuations  in income taxes  resulted  primarily  from changes in the level of
profitability.

<TABLE>
Capital (in thousands)            June 30, 2001               December 31, 2000
                                  -------------               -----------------
<S>                                  <C>                            <C>
Stockholders' Equity*                $30,847                        $28,869
Ratio of Equity to Total Assets        8.61%                          8.29%
</TABLE>

*Amounts exclude securities  valuation  adjustments  recorded under Statement of
Financial  Accounting  Standards  No. 115 amounting to $104,000 at June 30, 2001
and $17,000 at December 31, 2000.

A financial institution's capital ratio is looked upon by the regulators and the
public as an indication of its soundness.  Stockholders'  equity,  excluding the
securities valuation adjustment, increased $1,980,000 (7%) during the first half
of the year.  This increase was  principally  the result of net income earned by
the company reduced by dividends paid of $627,000.

The Federal  Reserve Board provides  guidelines  for the  measurement of capital
adequacy. The Bank's capital, as adjusted under these guidelines, is referred to
as risk-based  capital.  The Bank's Tier 1 risk-based  capital ratio at June 30,
2001 was 9.77%, and total risk-based  capital was 11.02%. At June 30, 2000 these
ratios were 9.46% and 10.71% respectively.  Minimum regulatory Tier 1 risk-based
and total  risk-based  capital ratios under the Federal Reserve Board guidelines
are 4% and 8% respectively.

The capital guidelines also provide for a standard to measure risk-based capital
to total assets which is called the leverage  ratio.  The Bank's  leverage ratio
was 8.26% at June 30,  2001 and 7.99% in 2000.  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.
<PAGE>

In 1998 the Company  exercised an option to purchase an 18 acre tract of land in
northwest  Brighton primarily to acquire a prime site for a new branch. The cost
of the property was approximately  $4,000,000.  In 1999 a new branch of the Bank
was built on land valued at  approximately  $800,000.  During 2000 one parcel of
the property was sold.  The  remaining  property is held for sale.  Improvements
needed to enhance the  salability  of the  property  are not  expected to exceed
$200,000.

The  Company  also  owns two  other  branch  sites,  one in  Howell  which  cost
approximately  $250,000 and one in Hamburg  which cost  approximately  $330,000.
Construction  has begun on the Howell branch with completion  anticipated in the
last quarter of 2001.  The Company  does not expect to build the Hamburg  branch
this year. It will, however,  commence building additional office space for back
office functions in the third quarter with occupancy  anticipated early in 2002.
All  building  projects are expected to be financed  from  internally  generated
funds.

Accounting Standards

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities (SFAS 133). SFAS 133, which has been subsequently amended
by SFAS No. 137 and SFAS No. 138,  requires  companies to record  derivatives on
the balance sheet as either assets or liabilities,  measured at fair value.  The
accounting  for increases and decreases in the value of  derivatives  depends on
the intended use of the derivative and whether the derivatives  will qualify for
hedge accounting.  This Statement is in effect but has no material impact on the
financial condition or operations of the Company.

The FASB has issued SFAS No. 140,  Accounting  for  Transfers  and  Servicing of
Financial  Assets  and  Extinguishments  of  Liabilities.  SFAS No.  140,  which
replaces  SFAS No. 125,  Accounting  for  Transfers  and  Servicing of Financial
Assets and Extinguishments of Liabilities,  revises the standards for accounting
for the  securitization  and other transfers of financial assets and collateral.
SFAS No. 140 also  requires  certain  disclosures,  but carries over most of the
provisions  of SFAS No.  125.  This  Statement  is in effect but has no material
impact on the financial condition or operations of the Company.

On June 29,  2001,  the FASB  approved  for  issuance  SFAS  No.  141,  Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. Under SFAS
No. 141,  all  business  combinations  initiated  after June 30,  2001,  must be
accounted for using the purchase method of accounting. With the adoption of SFAS
No. 142,  goodwill is no longer  subject to  amortization,  but instead  must be
reviewed for  impairment.  The  amortization of goodwill ceases upon adoption of
SFAS No. 142, which is effective for fiscal years  beginning  after December 15,
2001.  The  company had no goodwill  amortization  expense  during the six month
<PAGE>
period  ended  June  30,  2001.  Accordingly,  based  upon  the  lack  of  prior
acquisitions,  management  does not expect  that these  Statements  will have an
impact on the Company's results of operations.

Emerging  Issues Task Force (EITF) Issue 99-20,  Recognition of Interest  Income
and  Impairment on Purchased  and Retained  Beneficial  Interest in  Securitized
Financial  Assets,  is effective for the Company's  quarter ended June 30, 2001.
The  adoption  of EITF  99-20 did not have a  material  impact on the  financial
condition or operations of the Company.

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, 2000 other than previously discussed.



                           PART II - OTHER INFORMATION

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

The registrant's  annual meeting of stockholders was held on April 25, 2001. The
stockholders  voted on the election of directors and the Employee Stock Purchase
Plan.

Votes were cast as follows for the three nominees for the office of director.

Term expiring in 2004:
                    Shares voted for   Shares voted against     Shares Abstained
 Barbara Draper Martin       957,208                  2,640                    0
 Randolph E. Rudisill        953,143                    880                5,825
 W. Rickard Scofield         954,023                      0                5,825

Additionally, the following directors continue in office.

Term expiring in 2002:
         Dona Scott Laskey
         James R. McAuliffe
         R. Michael Yost

Term expiring in 2003:
         Donald K. Burkel
         Harry E. Griffith
         Gary R. Boss

<PAGE>

In a separate  proxy  mailing,  votes were cast as follows  for  Adoption of the
Employee Stock Purchase Plan:

         For                                784,184
         Against                             27,622
         Abstain                             84,290


Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits
          There are none applicable.

(b)  Reports on Form 8-K:
          There were no reports on Form 8-K filed  during the second  quarter of
          2001.




                                   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, 2001 to be signed on its behalf by the undersigned  hereunto duly
authorized.


                  FNBH BANCORP, INC.



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


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



DATE:  August 10, 2001