##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended March 31, 2010

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from             to





LAPORTE
BANCORP, INC.

(Exact name of Registrant as Specified in Its Charter)







|                                                               |  |                          |  |                                        
|-------------------------------------------------------------- |  | ------------------------ |  | ---------------------------------------
|Federal                                                        |  | 001-33733                |  | 26-1231235                             
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (Commission
File Number) |  | (I.R.S. Employer
Identification Number)

710 Indiana Avenue

La Porte, IN 46350

(219) 362-7511

(Address, Including Zip Code, and Telephone Number, Including Area Code, of

Registrants Principal Executive Officers)





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   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    YES   ̈    NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting
company. See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    YES   ̈    NO  x

Number of shares of common stock outstanding at May 5, 2010: 4,588,563, par value $0.01









---

##### Table of Contents

TABLE OF CONTENTS



|                                                                                                                   |  |           
|------------------------------------------------------------------------------------------------------------------ |  | ----------
|                                                                                                                   |  | PageNumber
|PART I  FINANCIAL INFORMATION                                                                                     |  |           
|                                                                                                                   | 
|Item 1. Consolidated Financial Statements  LaPorte Bancorp, Inc.                                                  |  |           
|                                                                                                                   | 
|Consolidated Balance Sheets,March 31, 2010 (Unaudited) and December 31, 2009                                       |  | 3         
|                                                                                                                   | 
|Consolidated Statements of Income and Comprehensive Income,Three Months Ended March 31, 2010 and 2009 (Unaudited)  |  | 4         
|                                                                                                                   | 
|Consolidated Statements of Changes in Shareholders Equity,Three Months Ended March 31, 2010 and 2009
 (Unaudited) |  | 5         
|                                                                                                                   | 
|Consolidated Statements of Cash Flows,Three Months Ended March 31, 2010 and 2009
(Unaudited)                       |  | 6         
|                                                                                                                   | 
|Notes to Consolidated Financial Statements (Unaudited)                                                             |  | 7         
|                                                                                                                   | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                      |  | 23        
|                                                                                                                   | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                 |  | 32        
|                                                                                                                   | 
|Item 4. Controls and Procedures                                                                                    |  | 33        
|                                                                                                                   | 
|PART II  OTHER INFORMATION                                                                                        |  |           
|                                                                                                                   | 
|Item 1. Legal Proceedings                                                                                          |  | 34        
|                                                                                                                   | 
|Item 1A. Risk Factors                                                                                              |  | 34        
|                                                                                                                   | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                |  | 34        
|                                                                                                                   | 
|Item 3. Defaults Upon Senior Securities                                                                            |  | 34        
|                                                                                                                   | 
|Item 4. Removed and Reserved                                                                                       |  | 34        
|                                                                                                                   | 
|Item 5. Other Information                                                                                          |  | 34        
|                                                                                                                   | 
|Item 6. Exhibits                                                                                                   |  | 35        
|                                                                                                                   | 
|Signatures                                                                                                         |  | 36        
|                                                                                                                   | 
|Certifications                                                                                                     |  | 37        



2



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

LAPORTE BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)



|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                                             |  | March 31,2010 |         |   | December 31,2009 |  
|                                                                                                                                                                             |  | (Unaudited)   |         |   |                  |  
|ASSETS                                                                                                                                                                       |  |               |         |   |                  |   |         |  
|Cash and due from financial institutions                                                                                                                                     |  | $             | 4,707   |   |                  | $ | 6,000   |  
|Securities available for sale                                                                                                                                                |  |               | 106,523 |   |                  |   | 102,095 |  
|Federal Home Loan Bank (FHLB) stock, at cost (restricted)                                                                                                                    |  |               | 4,206   |   |                  |   | 4,206   |  
|Loans held for sale, at fair value                                                                                                                                           |  |               | 1,034   |   |                  |   | 981     |  
|Loans, net of allowance for loan losses of $3,659 at March 31, 2010 (unaudited), $2,776 at December 31,
2009                                                                 |  |               | 267,230 |   |                  |   | 256,275 |  
|Mortgage servicing rights                                                                                                                                                    |  |               | 425     |   |                  |   | 424     |  
|Other real estate owned                                                                                                                                                      |  |               | 513     |   |                  |   | 554     |  
|Premises and equipment, net                                                                                                                                                  |  |               | 11,064  |   |                  |   | 11,150  |  
|Goodwill                                                                                                                                                                     |  |               | 8,431   |   |                  |   | 8,431   |  
|Other intangible assets                                                                                                                                                      |  |               | 868     |   |                  |   | 939     |  
|Bank owned life insurance                                                                                                                                                    |  |               | 9,691   |   |                  |   | 9,618   |  
|Accrued interest receivable and other assets                                                                                                                                 |  |               | 4,813   |   |                  |   | 5,154   |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|                                                                                                                                                                             |  |              
|Total assets                                                                                                                                                                 |  | $             | 419,505 |   |                  | $ | 405,827 |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|                                                                                                                                                                             |  |              
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                         |  |               |         |   |                  |   |         |  
|Deposits                                                                                                                                                                     |  |               |         |   |                  |   |         |  
|Non-interest bearing                                                                                                                                                         |  | $             | 33,356  |   |                  | $ | 34,066  |  
|Interest bearing                                                                                                                                                             |  |               | 256,524 |   |                  |   | 239,342 |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|Total deposits                                                                                                                                                               |  |               | 289,880 |   |                  |   | 273,408 |  
|Federal Home Loan Bank advances                                                                                                                                              |  |               | 52,274  |   |                  |   | 52,773  |  
|Subordinated debentures                                                                                                                                                      |  |               | 5,155   |   |                  |   | 5,155   |  
|Federal Deposit Insurance Corporation guaranteed unsecured borrowings                                                                                                        |  |               | 4,868   |   |                  |   | 4,852   |  
|Federal Reserve Bank discount window borrowings                                                                                                                              |  |               | 12,545  |   |                  |   | 16,675  |  
|Accrued interest payable and other liabilities                                                                                                                               |  |               | 4,976   |   |                  |   | 3,092   |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                            |  |               | 369,698 |   |                  |   | 355,955 |  
|                                                                                                                                                                             |  |              
|Shareholders equity                                                                                                                                                         |  |               |         |   |                  |   |         |  
|Preferred stock, no par value; 1,000,000 shares authorized; none issued                                                                                                      |  |               |        |   |                  |   |        |  
|Common stock, $0.01 par value; 19,000,000 shares authorized; 4,783,163 shares issued; and 4,588,963 and 4,607,963 shares
outstanding at March 31, 2010 and December 31, 2009 |  |               | 48      |   |                  |   | 48      |  
|Additional paid-in capital                                                                                                                                                   |  |               | 21,177  |   |                  |   | 21,188  |  
|Surplus                                                                                                                                                                      |  |               | 770     |   |                  |   | 770     |  
|Retained earnings                                                                                                                                                            |  |               | 29,290  |   |                  |   | 28,620  |  
|Accumulated other comprehensive income, net of tax of $599 at March 31, 2010 (unaudited) and $936 at December 31, 2009                                                       |  |               | 1,163   |   |                  |   | 1,817   |  
|Treasury stock, at cost (2010 - 194,200 shares, 2009  175,200 shares)                                                                                                       |  |               | (1,126  | ) |                  |   | (1,033  | )
|Unearned Employee Stock Ownership Plan (ESOP) shares                                                                                                                         |  |               | (1,515  | ) |                  |   | (1,538  | )
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                                                   |  |               | 49,807  |   |                  |   | 49,872  |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  
|                                                                                                                                                                             |  |              
|Total liabilities and shareholders equity                                                                                                                                   |  | $             | 419,505 |   |                  | $ | 405,827 |  
|                                                                                                                                                                             |  |               |         |   |                  |   |         |  

See accompanying notes to consolidated financial statements (unaudited)



3



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

(in thousands, except per share data)



|                                                    |  |                              |       |   |      |   |       |  
|--------------------------------------------------- |  | ---------------------------- | ----- | - | ---- | - | ----- | -
|                                                    |  | Three Months Ended March 31, |      
|                                                    |  | 2010                         |       |   | 2009 |  
|Interest and dividend income                        |  |                              |       |   |      |   |       |  
|Loans, including fees                               |  | $                            | 3,770 |   |      | $ | 3,384 |  
|Taxable securities                                  |  |                              | 779   |   |      |   | 1,139 |  
|Tax exempt securities                               |  |                              | 250   |   |      |   | 71    |  
|FHLB stock                                          |  |                              | 21    |   |      |   | 42    |  
|Other interest income                               |  |                              | 2     |   |      |   | 1     |  
|                                                    |  |                              |       |   |      |   |       |  
|Total interest and dividend income                  |  |                              | 4,822 |   |      |   | 4,637 |  
|                                                    |  |                             
|Interest expense                                    |  |                              |       |   |      |   |       |  
|Deposits                                            |  |                              | 1,156 |   |      |   | 1,267 |  
|Federal Home Loan Bank advances                     |  |                              | 579   |   |      |   | 776   |  
|Subordinated debentures                             |  |                              | 69    |   |      |   | 57    |  
|FDIC guaranteed unsecured borrowings                |  |                              | 50    |   |      |   | 26    |  
|Federal Reserve Bank discount window borrowings     |  |                              | 3     |   |      |   | 1     |  
|                                                    |  |                              |       |   |      |   |       |  
|Total interest expense                              |  |                              | 1,857 |   |      |   | 2,127 |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net interest income                                 |  |                              | 2,965 |   |      |   | 2,510 |  
|                                                    |  |                             
|Provision for loan losses                           |  |                              | 909   |   |      |   | 49    |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net interest income after provision for loan losses |  |                              | 2,056 |   |      |   | 2,461 |  
|                                                    |  |                             
|Noninterest income                                  |  |                              |       |   |      |   |       |  
|Service charges on deposits                         |  |                              | 177   |   |      |   | 200   |  
|ATM and debit card fees                             |  |                              | 86    |   |      |   | 67    |  
|Brokerage fees                                      |  |                              |      |   |      |   | (4    | )
|Trust fees                                          |  |                              | 6     |   |      |   | 39    |  
|Earnings on life insurance, net                     |  |                              | 92    |   |      |   | 92    |  
|Net gains on mortgage banking activities            |  |                              | 106   |   |      |   | 300   |  
|Loan servicing fees, net                            |  |                              | 17    |   |      |   | (2    | )
|Net gains on securities                             |  |                              | 808   |   |      |   | 136   |  
|Warehouse loan fees                                 |  |                              | 122   |   |      |   |      |  
|Losses on other assets                              |  |                              | (40   | ) |      |   | (60   | )
|Bank owned life insurance death benefit             |  |                              | 5     |   |      |   |      |  
|Other income                                        |  |                              | 92    |   |      |   | 48    |  
|                                                    |  |                              |       |   |      |   |       |  
|Total noninterest income                            |  |                              | 1,471 |   |      |   | 816   |  
|                                                    |  |                             
|Noninterest expense                                 |  |                              |       |   |      |   |       |  
|Salaries and employee benefits                      |  |                              | 1,414 |   |      |   | 1,368 |  
|Occupancy and equipment                             |  |                              | 495   |   |      |   | 512   |  
|Data processing                                     |  |                              | 115   |   |      |   | 108   |  
|Advertising                                         |  |                              | 49    |   |      |   | 41    |  
|Bank examination fees                               |  |                              | 105   |   |      |   | 113   |  
|Amortization of intangibles                         |  |                              | 71    |   |      |   | 93    |  
|FDIC insurance                                      |  |                              | 109   |   |      |   | 99    |  
|Collection and other real estate owned              |  |                              | 33    |   |      |   | 24    |  
|Other expenses                                      |  |                              | 303   |   |      |   | 289   |  
|                                                    |  |                              |       |   |      |   |       |  
|Total noninterest expense                           |  |                              | 2,694 |   |      |   | 2,647 |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Income before income taxes                          |  |                              | 833   |   |      |   | 630   |  
|                                                    |  |                             
|Income tax expense                                  |  |                              | 163   |   |      |   | 140   |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net income                                          |  | $                            | 670   |   |      | $ | 490   |  
|                                                    |  |                              |       |   |      |   |       |  
|Other comprehensive income (loss):                  |  |                              |       |   |      |   |       |  
|Unrealized gain on securities available for sale    |  | $                            | 233   |   |      | $ | 1,113 |  
|Reclassification for gain on security sales         |  |                              | (808  | ) |      |   | (136  | )
|Unrealized gain (loss) on derivative instrument     |  |                              | (416  | ) |      |   |      |  
|Income tax effect                                   |  |                              | 337   |   |      |   | (332  | )
|                                                    |  |                              |       |   |      |   |       |  
|Other comprehensive income (loss)                   |  |                              | (654  | ) |      |   | 645   |  
|                                                    |  |                              |       |   |      |   |       |  
|Comprehensive income                                |  | $                            | 16    |   |      | $ | 1,135 |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Basic and diluted earnings per share                |  | $                            | 0.15  |   |      | $ | 0.11  |  
|                                                    |  |                              |       |   |      |   |       |  

See accompanying notes to consolidated financial statements (unaudited)



4



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)

Three months ended March 31, 2010 and 2009

(in thousands, except share data)



|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ------ | ------- |  | ---------------- | --- | ---------------------------------------------- | - | ------ | ------------- | - | ----- | ------------------ |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                                                                                                           |  | CommonStock |    | AdditionalPaid-InCapital |   |        | Surplus |  | RetainedEarnings |     | AccumulatedOtherComprehensiveIncome,Net of Tax |   |        | TreasuryStock |   |       | UnearnedESOPShares |  |   | Total  |  
|                                                                                                                           |  |             |    |                          |   |        |         | 
|Balance at January 1, 2009                                                                                                 |  | $           | 48 |                          | $ | 21,235 |         |  | $                | 770 |                                                | $ | 26,108 |               | $ | 383   |                    |  | $ | (774   | ) |  | $ | (1,628 | ) |  | $ | 46,142 |  
|Comprehensive income:                                                                                                      |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Net income                                                                                                                 |  |             |   |                          |   |       |         |  |                  |    |                                                |   | 490    |               |   |      |                    |  |   |       |   |  |   |       |   |  |   | 490    |  
|Other comprehensive income:                                                                                                |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Net change in unrealized gain on securities available for sale, net of reclassification adjustments and tax
effects        |  |             |   |                          |   |       |         |  |                  |    |                                                |   |       |               |   | 645   |                    |  |   |       |   |  |   |       |   |  |   | 645    |  
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                                                                                 |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   | 1,135  |  
|Treasury shares purchased, 22,500 shares                                                                                   |  |             |   |                          |   |       |         |  |                  |    |                                                |   |       |               |   |      |                    |  |   | (131   | ) |  |   |       |   |  |   | (131   | )
|ESOP shares earned, 2,261 shares                                                                                           |  |             |   |                          |   | (11    | )       |  |                  |    |                                                |   |       |               |   |      |                    |  |   |       |   |  |   | 23     |   |  |   | 12     |  
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Balance at March 31, 2009                                                                                                  |  | $           | 48 |                          | $ | 21,224 |         |  | $                | 770 |                                                | $ | 26,598 |               | $ | 1,028 |                    |  | $ | (905   | ) |  | $ | (1,605 | ) |  | $ | 47,158 |  
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|                                                                                                                           |  |             |    |                          |   |        |         | 
|Balance at January 1, 2010                                                                                                 |  | $           | 48 |                          | $ | 21,188 |         |  | $                | 770 |                                                | $ | 28,620 |               | $ | 1,817 |                    |  | $ | (1,033 | ) |  | $ | (1,538 | ) |  | $ | 49,872 |  
|Comprehensive income:                                                                                                      |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Net income                                                                                                                 |  |             |   |                          |   |       |         |  |                  |    |                                                |   | 670    |               |   |      |                    |  |   |       |   |  |   |       |   |  |   | 670    |  
|Other comprehensive income (loss):                                                                                         |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Net change in unrealized gain (loss) on securities available for sale, net of reclassification adjustments and tax
effects |  |             |   |                          |   |       |         |  |                  |    |                                                |   |       |               |   | (380  | )                  |  |   |       |   |  |   |       |   |  |   | (380   | )
|Net change in unrealized gain (loss) on derivative instruments, net of tax effect                                          |  |             |   |                          |   |       |         |  |                  |    |                                                |   |       |               |   | (274  | )                  |  |   |       |   |  |   |       |   |  |   | (274   | )
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                                                                                 |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   | 16     |  
|Treasury shares purchased, 19,000 shares                                                                                   |  |             |   |                          |   |       |         |  |                  |    |                                                |   |       |               |   |      |                    |  |   | (93    | ) |  |   |       |   |  |   | (93    | )
|ESOP shares earned, 2,261 shares                                                                                           |  |             |   |                          |   | (11    | )       |  |                  |    |                                                |   |       |               |   |      |                    |  |   |       |   |  |   | 23     |   |  |   | 12     |  
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  
|Balance at March 31, 2010                                                                                                  |  | $           | 48 |                          | $ | 21,177 |         |  | $                | 770 |                                                | $ | 29,290 |               | $ | 1,163 |                    |  | $ | (1,126 | ) |  | $ | (1,515 | ) |  | $ | 49,807 |  
|                                                                                                                           |  |             |    |                          |   |        |         |  |                  |     |                                                |   |        |               |   |       |                    |  |   |        |   |  |   |        |   |  |   |        |  

See accompanying notes to consolidated financial statements (unaudited)



5



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)



|                                                                                          |  |                              |         |   |      |   |         |  
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                          |  | Three Months Ended March 31, |        
|                                                                                          |  | 2010                         |         |   | 2009 |  
|Cash flows from operating activities                                                      |  |                              |         |   |      |   |         |  
|Net income                                                                                |  | $                            | 670     |   |      | $ | 490     |  
|Adjustments to reconcile net income to net cash from operating activities:                |  |                              |         |   |      |   |         |  
|Depreciation                                                                              |  |                              | 176     |   |      |   | 197     |  
|Provision for loan losses                                                                 |  |                              | 909     |   |      |   | 49      |  
|Net gains on securities                                                                   |  |                              | (808    | ) |      |   | (136    | )
|Net gains on sales of loans                                                               |  |                              | (83     | ) |      |   | (255    | )
|Originations of loans held for sale                                                       |  |                              | (6,308  | ) |      |   | (13,781 | )
|Proceeds from sales of loans held for sale                                                |  |                              | 6,338   |   |      |   | 11,981  |  
|Recognition of mortgage servicing rights                                                  |  |                              | (23     | ) |      |   | (45     | )
|Amortization of mortgage servicing rights                                                 |  |                              | 19      |   |      |   | 36      |  
|Net change in loan servicing rights valuation allowance                                   |  |                              | 3       |   |      |   | (1      | )
|Net gains on sales of other real estate owned                                             |  |                              | (2      | ) |      |   | (7      | )
|Write down of other real estate owned                                                     |  |                              | 37      |   |      |   | 61      |  
|Earnings on life insurance, net                                                           |  |                              | (78     | ) |      |   | (92     | )
|Amortization of intangible assets                                                         |  |                              | 71      |   |      |   | 93      |  
|ESOP compensation expense                                                                 |  |                              | 12      |   |      |   | 12      |  
|Amortization of issuance costs of unsecured borrowings                                    |  |                              | 16      |   |      |   |        |  
|Change in assets and liabilities:                                                         |  |                              |         |   |      |   |         |  
|Accrued interest receivable and other assets                                              |  |                              | 262     |   |      |   | (496    | )
|Accrued interest payable and other liabilities                                            |  |                              | 323     |   |      |   | 106     |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash from operating activities                                                        |  |                              | 1,534   |   |      |   | (1,788  | )
|                                                                                          |  |                             
|Cash flows from investing activities                                                      |  |                              |         |   |      |   |         |  
|Net change in loans                                                                       |  |                              | (12,157 | ) |      |   | (2,386  | )
|Proceeds from sales of other real estate owned                                            |  |                              | 299     |   |      |   | 267     |  
|Proceeds from maturities, calls and principal repayments of securities available for sale |  |                              | 6,280   |   |      |   | 5,950   |  
|Proceeds from sales of securities available for sale                                      |  |                              | 22,894  |   |      |   | 4,737   |  
|Purchases of securities available for sale                                                |  |                              | (31,808 | ) |      |   | (16,632 | )
|Premises and equipment expenditures, net                                                  |  |                              | (90     | ) |      |   | (38     | )
|Bank owned life insurance death benefits                                                  |  |                              | 5       |   |      |   |        |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash from investing activities                                                        |  |                              | (14,577 | ) |      |   | (8,102  | )
|                                                                                          |  |                             
|Cash flows from financing activities                                                      |  |                              |         |   |      |   |         |  
|Net change in deposits                                                                    |  |                              | 16,472  |   |      |   | 15,645  |  
|Proceeds from FHLB advances                                                               |  |                              | 5,000   |   |      |   | 2,500   |  
|Repayment of FHLB advances                                                                |  |                              | (5,499  | ) |      |   | (15,496 | )
|Proceeds from issuance of unsecured borrowing, net of issuance costs                      |  |                              |        |   |      |   | 4,804   |  
|Net change in Federal Reserve Bank discount window borrowings                             |  |                              | (4,130  | ) |      |   | 2,670   |  
|Purchase of treasury stock                                                                |  |                              | (93     | ) |      |   | (131    | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash from financing activities                                                        |  |                              | 11,750  |   |      |   | 9,992   |  
|                                                                                          |  |                              |         |   |      |   |         |  
|                                                                                          |  |                             
|Net change in cash and cash equivalents                                                   |  |                              | (1,293  | ) |      |   | 102     |  
|                                                                                          |  |                             
|Cash and cash equivalents at beginning of period                                          |  |                              | 6,000   |   |      |   | 5,628   |  
|                                                                                          |  |                              |         |   |      |   |         |  
|                                                                                          |  |                             
|Cash and cash equivalents at end of period                                                |  | $                            | 4,707   |   |      | $ | 5,730   |  
|                                                                                          |  |                              |         |   |      |   |         |  
|                                                                                          |  |                             
|Supplemental cash flow information:                                                       |  |                              |         |   |      |   |         |  
|Cash paid during the period for:                                                          |  |                              |         |   |      |   |         |  
|Interest paid                                                                             |  | $                            | 1,910   |   |      | $ | 2,110   |  
|Income taxes paid                                                                         |  |                              |        |   |      |   |        |  
|Supplemental noncash disclosures:                                                         |  |                              |         |   |      |   |         |  
|Transfers from loans receivable to other real estate owned                                |  | $                            | 293     |   |      | $ | 77      |  
|Securities purchased not settled                                                          |  |                              | 1,561   |   |      |   |        |  

See accompanying notes
to consolidated financial statements (unaudited)



6



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 1  BASIS OF PRESENTATION AND CONSOLIDATION

The unaudited consolidated financial statements included herein include the accounts of LaPorte Bancorp, Inc. (the Bancorp), its wholly owned
subsidiary, The LaPorte Savings Bank (the Bank) and the Banks former wholly owned subsidiary, LPSB Investments LTD., Cayman (LPSB Ltd.) together referred to as the Company. The Bancorp was formed on
October 12, 2007. LPSB Ltd. began operations in 2002 when the Bank received approval from the Federal Deposit Insurance Corporation to form the subsidiary in the Cayman Islands. LPSB Ltd. held and managed a portion of the Banks investment
portfolio until July 30, 2008 when the securities were transferred to the Bank as LPSB Ltd. was in the process of being dissolved. LPSB Ltd. was deemed to be dissolved on March 17, 2009. Intercompany transactions and balances are
eliminated in consolidation.

The unaudited consolidated financial statements included herein have been prepared by management in accordance
with accounting principles generally accepted in the United States of America for interim financial statements and Article 8 of Regulation S-X of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated
financial statements contain all material adjustments (consisting of normal recurring accruals) and disclosures which are necessary in the opinion of management to make the financial statements not misleading and for a fair presentation of the
financial position and results of operations for the interim periods presented herein.

Certain information and footnote disclosures normally
included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, the interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009 included in the Form 10-K Annual Report of LaPorte
Bancorp, Inc. for the fiscal year ended December 31, 2009.

The results for the three-month period ended March 31, 2010 may not
indicate the results to be expected for the full year ending December 31, 2010.

Reclassifications: Some items in the prior year
financial statements were reclassified to conform to the current presentation.

NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards:

FASB ASC 810

In June 2009, the FASB
issued SFAS No. 166, Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140(ASC 810). The new accounting requirement amends previous guidance relating to the transfers of financial assets and
eliminates the concept of a qualifying special purpose entity. This Statement must be applied as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for interim periods within that
first annual reporting period and for interim and annual reporting periods thereafter. This Statement must be applied to transfers occurring on or after the effective date. Additionally, on and after the effective date, the concept of a qualifying
special-purpose entity is no longer relevant for accounting purposes. Therefore, formerly qualifying special-purpose entities should be evaluated for consolidation by reporting entities on and after the effective date in accordance with the
applicable consolidation guidance. Additionally, the disclosure provisions of this Statement were also amended and apply to transfers that occurred both before and after the effective date of this Statement. The adoption of this new guidance did not
have a material impact on the Companys consolidated financial condition or results of operations.



7



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS - continued

FASB ASC 810-10

In June 2009, the FASB
issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R)(ASC 810-10), which amended guidance for consolidation of variable interest entities by replacing the quantitative-based risks and rewards calculation for determining
which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact
the entitys economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. This Statement will be effective as of the beginning of each reporting entitys first
annual reporting period after November 15, 2009, and for interim and annual reporting periods thereafter. The adoption of this new guidance did not have a material impact on the consolidated financial condition or results of operations.

FASB ASU 2010-06

In January
2010, the FASB issued FASB Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures(ASC 820). This Update amended existing guidance for fair value measurements and disclosures which requires disclosures for
transfers in and out of Levels 1 and 2 fair value measurements and activity in Level 3 fair value measurements. The amendments in the guidance also clarify existing disclosures for level of disaggregation and disclosures about inputs and valuation
techniques. The amendments in the guidance also include conforming amendments to the guidance on employers disclosures about postretirement benefit plan assets. The guidance was effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.
The effect of adopting this new guidance did not have any material effect on the Companys consolidated financial condition or results of operations.

NOTE 3  EARNINGS PER SHARE

Basic
earnings per common share is determined by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding for the period. ESOP shares are considered outstanding for this calculation unless
unearned. Diluted earnings per common share is determined by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding for the period, adjusted for the dilutive effect of common share
equivalents (-0- for the three months ended March 31, 2010 and 2009). Diluted earnings per common share is equal to basic earnings per common share for the periods ended March 31, 2010 and 2009, as there were no potentially dilutive common
shares for the three months ended March 31, 2010 and 2009. The factors used in the earnings per common share computation follow:



|                                           |  |                                  |           |   |                                  |   |           |  
|------------------------------------------ |  | -------------------------------- | --------- | - | -------------------------------- | - | --------- | -
|                                           |  | Three Months EndedMarch 31, 2010 |           |   | Three Months EndedMarch 31, 2009 |  
|                                           |  | (Unaudited)                      |           |   | (Unaudited)                      |  
|Basic                                      |  |                                  |           |   |                                  |   |           |  
|Net income                                 |  | $                                | 670       |   |                                  | $ | 490       |  
|                                           |  |                                  |           |   |                                  |   |           |  
|                                           |  |                                 
|Weighted average common shares outstanding |  |                                  | 4,591,199 |   |                                  |   | 4,641,246 |  
|Less: Average unallocated ESOP shares      |  |                                  | (152,629  | ) |                                  |   | (161,674  | )
|                                           |  |                                  |           |   |                                  |   |           |  
|Average shares                             |  |                                  | 4,438,570 |   |                                  |   | 4,479,572 |  
|                                           |  |                                  |           |   |                                  |   |           |  
|                                           |  |                                 
|Basic earnings per common share            |  | $                                | 0.15      |   |                                  | $ | 0.11      |  
|                                           |  |                                  |           |   |                                  |   |           |  



8



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 4  SECURITIES AVAILABLE FOR SALE

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income
were as follows:

March 31, 2010 (Unaudited)



|                                                                |  |               |         |                 |   |                  |  |   |            |   |  |   |        
|--------------------------------------------------------------- |  | ------------- | ------- | --------------- | - | ---------------- |  | - | ---------- | - |  | - | -------
|                                                                |  | AmortizedCost |         | UnrealizedGains |   | UnrealizedLosses |  |   | Fair Value
|                                                                |  |               |         |                
|U.S. federal agency                                             |  | $             | 30,786  |                 | $ | 31               |  | $ | (140       | ) |  | $ | 30,677 
|State and municipal                                             |  |               | 27,921  |                 |   | 986              |  |   | (45        | ) |  |   | 28,862 
|Mortgage-backed securities - residential                        |  |               | 23,888  |                 |   | 809              |  |   | (32        | ) |  |   | 24,665 
|Government agency sponsored collateralized mortgage obligations |  |               | 16,974  |                 |   | 336              |  |   | (54        | ) |  |   | 17,256 
|Privately held collateralized mortgage obligations              |  |               | 4,864   |                 |   | 199              |  |   |           |   |  |   | 5,063  
|                                                                |  |               |         |                 |   |                  |  |   |            |   |  |   |        
|Total                                                           |  | $             | 104,433 |                 | $ | 2,361            |  | $ | (271       | ) |  | $ | 106,523
|                                                                |  |               |         |                 |   |                  |  |   |            |   |  |   |        

December 31, 2009



|                                                                |  |               |        |                 |   |                  |  |   |            |   |  |   |        
|--------------------------------------------------------------- |  | ------------- | ------ | --------------- | - | ---------------- |  | - | ---------- | - |  | - | -------
|                                                                |  | AmortizedCost |        | UnrealizedGains |   | UnrealizedLosses |  |   | Fair Value
|                                                                |  |               |        |                
|U.S. federal agency                                             |  | $             | 13,112 |                 | $ | 19               |  | $ | (159       | ) |  | $ | 12,972 
|State and municipal                                             |  |               | 24,761 |                 |   | 597              |  |   | (94        | ) |  |   | 25,264 
|Mortgage-backed securities - residential                        |  |               | 29,732 |                 |   | 1,350            |  |   |           |   |  |   | 31,082 
|Government agency sponsored collateralized mortgage obligations |  |               | 17,718 |                 |   | 456              |  |   | (26        | ) |  |   | 18,148 
|Privately held collateralized mortgage obligations              |  |               | 9,114  |                 |   | 398              |  |   | (18        | ) |  |   | 9,494  
|Corporate debt securities                                       |  |               | 4,993  |                 |   | 165              |  |   | (23        | ) |  |   | 5,135  
|                                                                |  |               |        |                 |   |                  |  |   |            |   |  |   |        
|Total                                                           |  | $             | 99,430 |                 | $ | 2,985            |  | $ | (320       | ) |  | $ | 102,095
|                                                                |  |               |        |                 |   |                  |  |   |            |   |  |   |        



9



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 4  SECURITIES AVAILABLE FOR SALE - continued

Securities with unrealized losses at March 31, 2010 and December 31, 2009, aggregated by investment category and length of time that individual
securities have been in a continuous unrealized loss position, are as follows:



|                                                                |  |                                                  |        |            |                                                |      |       |       |            |       |  |       |     |            |  |   |        |  |   |      |  
|--------------------------------------------------------------- |  | ------------------------------------------------ | ------ | ---------- | ---------------------------------------------- | ---- | ----- | ----- | ---------- | ----- |  | ----- | --- | ---------- |  | - | ------ |  | - | ---- | -
|March 31, 2010 (Unaudited)                                      |  | Continuing UnrealizedLoss ForLess Than 12 Months |        |            | Continuing UnrealizedLoss
For12 Months or More |      |       | Total |           
|                                                                |  | Fair                                             |        | Unrealized |                                                |      | Fair  |       | Unrealized |       |  | Fair  |     | Unrealized | 
|Description of Securities                                       |  | Value                                            |        | Loss       |                                                |      | Value |       | Loss       |       |  | Value |     | Loss       | 
|                                                                |  |                                                  |        |            |                                                |     
|U.S. federal agency                                             |  | $                                                | 20,281 |            | $                                              | (140 | )     |       | $          |      |  | $     |    |            |  | $ | 20,281 |  | $ | (140 | )
|State and municipal                                             |  |                                                  | 2,806  |            |                                                | (29  | )     |       |            | 285   |  |       | (16 | )          |  |   | 3,091  |  |   | (45  | )
|Mortgage-backed securities - residential                        |  |                                                  | 2,914  |            |                                                | (32  | )     |       |            |      |  |       |    |            |  |   | 2,914  |  |   | (32  | )
|Government agency sponsored collateralized mortgage obligations |  |                                                  | 4,837  |            |                                                | (54  | )     |       |            |      |  |       |    |            |  |   | 4,837  |  |   | (54  | )
|                                                                |  |                                                  |        |            |                                                |      |       |       |            |       |  |       |     |            |  |   |        |  |   |      |  
|                                                                |  |                                                  |        |            |                                                |     
|Total temporarily impaired                                      |  | $                                                | 30,838 |            | $                                              | (255 | )     |       | $          | 285   |  | $     | (16 | )          |  | $ | 31,123 |  | $ | (271 | )
|                                                                |  |                                                  |        |            |                                                |      |       |       |            |       |  |       |     |            |  |   |        |  |   |      |  
|                                                                |  |                                                  |       
|December 31, 2009                                               |  | Continuing UnrealizedLoss ForLess Than 12 Months |        |            | Continuing UnrealizedLoss
For12 Months or More |      |       | Total |           
|                                                                |  | Fair                                             |        | Unrealized |                                                |      | Fair  |       | Unrealized |       |  | Fair  |     | Unrealized | 
|Description of Securities                                       |  | Value                                            |        | Loss       |                                                |      | Value |       | Loss       |       |  | Value |     | Loss       | 
|                                                                |  |                                                  |        |            |                                                |     
|U.S. federal agency                                             |  | $                                                | 10,582 |            | $                                              | (159 | )     |       | $          |      |  | $     |    |            |  | $ | 10,582 |  | $ | (159 | )
|State and municipal                                             |  |                                                  | 5,496  |            |                                                | (67  | )     |       |            | 678   |  |       | (27 | )          |  |   | 6,174  |  |   | (94  | )
|Government agency sponsored collateralized mortgage obligations |  |                                                  | 2,620  |            |                                                | (26  | )     |       |            |      |  |       |    |            |  |   | 2,620  |  |   | (26  | )
|Privately held collateralized mortgage obligations              |  |                                                  | 1,236  |            |                                                | (1   | )     |       |            | 286   |  |       | (17 | )          |  |   | 1,522  |  |   | (18  | )
|Corporate debt securities                                       |  |                                                  |       |            |                                                |     |       |       |            | 962   |  |       | (23 | )          |  |   | 962    |  |   | (23  | )
|                                                                |  |                                                  |        |            |                                                |      |       |       |            |       |  |       |     |            |  |   |        |  |   |      |  
|                                                                |  |                                                  |        |            |                                                |     
|Total temporarily impaired                                      |  | $                                                | 19,934 |            | $                                              | (253 | )     |       | $          | 1,926 |  | $     | (67 | )          |  | $ | 21,860 |  | $ | (320 | )
|                                                                |  |                                                  |        |            |                                                |      |       |       |            |       |  |       |     |            |  |   |        |  |   |      |  

At March 31, 2010, the Company held 32 investments in debt securities which were in an unrealized loss position of
which 31 were in an unrealized loss position for less than twelve months and one was in an unrealized loss position for twelve months or more. The one security at an unrealized loss position for greater than twelve months was subsequently called
during April 2010. Management periodically evaluates each investment security for potential other-than-temporary impairment, relying primarily on industry analyst reports and observation of market conditions and interest rate fluctuations.
Management believes it will be able to collect all amounts due according to the contractual terms of the underlying investment securities and that the noted declines in fair value are considered temporary and due only to normal market interest rate
fluctuations. The Company does not intend to sell the securities and is not more likely than not to be required to sell these debt securities before there anticipated recovery.



10



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 4  SECURITIES AVAILABLE FOR SALE - continued

Sales of securities available for sale for the three months ended March 31, 2010 and 2009 were as follows:



|             |  |                    |        |   |      |   |      
|------------ |  | ------------------ | ------ | - | ---- | - | -----
|             |  | Three Months Ended
|             |  | March 31,         
|             |  | 2010               |        |   | 2009
|             |  | (Unaudited)       
|             |  |                   
|Proceeds     |  | $                  | 22,894 |   |      | $ | 4,737
|Gross gains  |  |                    | 840    |   |      |   | 135  
|Gross losses |  |                    | (17    | ) |      |   |     

Proceeds from calls of
securities available for sale during the three months ended March 31, 2010 and 2009 were $2,434 and $2,554, with gross gains of $0 and $1 and gross losses of $15 and $0, respectively.

The amortized cost and fair value of debt securities at March 31, 2010 by contractual maturity were as follows. Securities not due at a single
maturity date, primarily mortgage-backed securities and collateralized mortgage obligations (CMO), are shown separately.



|                                    |  |               |         |           |   |        
|----------------------------------- |  | ------------- | ------- | --------- | - | -------
|                                    |  | AmortizedCost |         | FairValue
|                                    |  |              
|Due in one year or less             |  | $             |        |           | $ |       
|Due from one to five years          |  |               | 11,104  |           |   | 11,143 
|Due from five to ten years          |  |               | 19,786  |           |   | 19,787 
|Due after ten years                 |  |               | 27,817  |           |   | 28,609 
|                                    |  |               |         |           |   |        
|Subtotal                            |  |               | 58,707  |           |   | 59,539 
|Mortgage-backed securities and CMOs |  |               | 45,726  |           |   | 46,984 
|                                    |  |               |         |           |   |        
|                                    |  |              
|Total                               |  | $             | 104,433 |           | $ | 106,523
|                                    |  |               |         |           |   |        

Securities pledged at March 31, 2010 and December 31, 2009
had a carrying amount of approximately $57,613 and $70,561 and were pledged to secure public deposits, FHLB advances, short-term borrowings through the Federal Reserve Discount Window and cash flow hedges.



11



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 5  LOANS

Loans at
March 31, 2010 (Unaudited) and December 31, 2009 were as follows:



|                                     |  |             |         |   |              |   |         |  
|------------------------------------ |  | ----------- | ------- | - | ------------ | - | ------- | -
|                                     |  | March 31,   |         |   | December 31, |  
|                                     |  | 2010        |         |   | 2009         |  
|                                     |  | (Unaudited) |         |   |              |  
|                                     |  |            
|Commercial                           |  | $           | 18,333  |   |              | $ | 18,122  |  
|Real Estate:                         |  |             |         |   |              |   |         |  
|One- to four-family                  |  |             | 68,181  |   |              |   | 70,126  |  
|Five or more family                  |  |             | 6,359   |   |              |   | 6,743   |  
|Commercial                           |  |             | 75,513  |   |              |   | 75,506  |  
|Construction                         |  |             | 6,081   |   |              |   | 5,420   |  
|Land                                 |  |             | 12,118  |   |              |   | 11,753  |  
|Mortgage warehouse                   |  |             | 58,466  |   |              |   | 43,765  |  
|Home equity                          |  |             | 14,964  |   |              |   | 15,704  |  
|Automobile and other                 |  |             | 10,756  |   |              |   | 11,790  |  
|                                     |  |             |         |   |              |   |         |  
|Subtotal                             |  |             | 270,771 |   |              |   | 258,929 |  
|Less: Net deferred loan (fees) costs |  |             | 118     |   |              |   | 122     |  
|Allowance for loan losses            |  |             | (3,659  | ) |              |   | (2,776  | )
|                                     |  |             |         |   |              |   |         |  
|                                     |  |            
|Loans, net                           |  | $           | 267,230 |   |              | $ | 256,275 |  
|                                     |  |             |         |   |              |   |         |  

During the month of May 2009, a mortgage warehouse lending division was established at the Bank. This division has approved
specific mortgage companies through which individual mortgage loans are originated by the mortgage company and funded by the Bank as a secured borrowing with pledge of collateral under the Banks agreement with the mortgage company. The
individual mortgage loans are held between the time of origination and subsequent repurchase by the mortgage company for sale of the loan into the secondary market. Each individual mortgage is assigned to the Bank until the loan is repurchased and
sold to the secondary market by the mortgage company. Also, the Bank takes possession of each original note and forwards such note to the end investor once the mortgage company has sold the loan. The individual loans are typically sold by the
mortgage company within 30 days of origination and are seldom held more than 90 days. Interest income is accrued by the Bank during this period and fee income for each loan sold is collected when the sale has been completed. As of March 31,
2010, the Bank had repurchase agreements with 10 mortgage companies. During the first quarter of 2010, the mortgage companies originated $358,254 in mortgage loans and sold $343,705 in mortgage loans. The Bank recorded interest income of $605,
mortgage warehouse loan fees of $122 and wire transfer fees of $37 during the first quarter of 2010.



12



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 5  LOANS - continued

Activity in the allowance for loan losses was as follows:



|                          |  |                              |       |   |      |   |       |  
|------------------------- |  | ---------------------------- | ----- | - | ---- | - | ----- | -
|                          |  | Three Months Ended March 31, |      
|                          |  | 2010                         |       |   | 2009 |  
|                          |  | (Unaudited)                  |      
|                          |  |                             
|Beginning balance         |  | $                            | 2,776 |   |      | $ | 2,512 |  
|Provision for loan losses |  |                              | 909   |   |      |   | 49    |  
|Loans charged-off         |  |                              | (37   | ) |      |   | (98   | )
|Recoveries                |  |                              | 11    |   |      |   | 20    |  
|                          |  |                              |       |   |      |   |       |  
|                          |  |                             
|Ending balance            |  | $                            | 3,659 |   |      | $ | 2,483 |  
|                          |  |                              |       |   |      |   |       |  

Individually impaired loans at March 31, 2010 (unaudited) and December 31, 2009 were as follows:



|                                                                    |  |             |       |              |   |      
|------------------------------------------------------------------- |  | ----------- | ----- | ------------ | - | -----
|                                                                    |  | March 31,   |       | December 31,
|                                                                    |  | 2010        |       | 2009        
|                                                                    |  | (Unaudited) |       |             
|                                                                    |  |            
|Loans with no allocated allowance for loan losses                   |  | $           | 2,706 |              | $ | 3,067
|Loans with allocated allowance for loan losses                      |  |             | 3,266 |              |   | 4,397
|                                                                    |  |             |       |              |   |      
|                                                                    |  |            
|Total                                                               |  | $           | 5,972 |              | $ | 7,464
|                                                                    |  |             |       |              |   |      
|                                                                    |  |            
|Amount of the allowance for loan losses allocated to impaired loans |  | $           | 1,347 |              | $ | 614  

Nonperforming loans at March 31,
2010 (unaudited) and December 31, 2009 were as follows:



|                                             |  |             |       |              |   |      
|-------------------------------------------- |  | ----------- | ----- | ------------ | - | -----
|                                             |  | March 31,   |       | December 31,
|                                             |  | 2010        |       | 2009        
|                                             |  | (Unaudited) |       |             
|                                             |  |            
|Loans past due over 90 days still on accrual |  | $           |      |              | $ |     
|Nonaccrual loans                             |  |             | 6,269 |              |   | 7,716



13



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued



LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)

NOTE 5  LOANS - continued

Purchased Loans

The Company purchased
loans during 2007, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance and
carrying amount of those loans is as follows:



|                                        |  |             |       |              |   |      
|--------------------------------------- |  | ----------- | ----- | ------------ | - | -----
|                                        |  | March 31,   |       | December 31,
|                                        |  | 2010        |       | 2009        
|                                        |  | (Unaudited) |       |             
|                                        |  |            
|Commercial                              |  | $           | 87    |              | $ | 93   
|Commercial real estate                  |  |             | 986   |              |   | 1,000
|Home equity                             |  |             | 15    |              |   | 16   
|One- to four-family                     |  |             | 168   |              |   | 170  
|                                        |  |             |       |              |   |      
|                                        |  |            
|Outstanding balance                     |  | $           | 1,256 |              | $ | 1,279
|                                        |  |             |       |              |   |      
|                                        |  |            
|Carrying amount, net of allowance of $0 |  | $           | 780   |              | $ | 797  
|                                        |  |             |       |              |   |      

Accretable yield, or income expected to be collected, is as follows:



|                                           |  |                    |     |   |      |   |     |  
|------------------------------------------ |  | ------------------ | --- | - | ---- | - | --- | -
|                                           |  | Three Months Ended |    
|                                           |  | March 31,          |    
|                                           |  | 2010               |     |   | 2009 |  
|                                           |  | (Unaudited)        |    
|                                           |  |                   
|Beginning balance                          |  | $                  | 28  |   |      | $ | 78  |  
|Reclassification from non-accretable yield |  |                    | 6   |   |      |   | 46  |  
|Accretion of income                        |  |                    | (20 | ) |      |   | (62 | )
|                                           |  |                    |     |   |      |   |     |  
|                                           |  |                   
|Ending balance                             |  | $                  | 14  |   |      | $ | 62  |  
|                                           |  |                    |     |   |      |   |     |  

For the purchased loans disclosed above, the Company did not increase the allowance for loan losses during 2010 or 2009. No
allowance for loan losses were reversed during 2010 or 2009.



14



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1  Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access
as of the measurement date.

Level 2  Significant other observable inputs other than Level 1 prices such as quoted
prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3  Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market
participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the
fair value of each type of financial asset:

Investment Securities: The fair values for investment securities are determined by quoted
market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

Loans Held for Sale and Loan Commitment Derivatives: The fair value of loans held for sale and residential mortgage loan commitments are
determined by obtaining quoted prices for similar loans and commitments with similar interest rates and maturities from major secondary markets (Level 2).

Derivatives-Interest Rate Swaps: The fair value of derivatives are based on valuation models using observable market data as of the measurement
date (Level 2). The valuation model inputs consist of available market data, such as interest rates or yield curves. These observable inputs can be validated to external sources, including brokers, market transactions and third-party pricing
services.

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally
based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the
appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other Real Estate Owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate
owned (OREO) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds
the fair value, less costs to sell, an impairment loss is recognized.



15



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE - continued



Mortgage Servicing Rights: The fair value of mortgage servicing rights is based on a valuation
model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income (Level 2). Fair value at March 31, 2010 was
determined using a discount rate of 9.0%, prepayment speeds ranging from 11.5% to 22.3%, depending on the stratification of the specific right, and a weighted average default rate of approximately 0.5%. Fair value at December 31, 2009 was determined
using a discount rate of 9.0%, prepayment speeds ranging from 11.1% to 22.7%, depending on the stratification of the specific right, and a weighted average default rate of approximately 0.5%.

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair
value option, are summarized below:



|                                                                |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|--------------------------------------------------------------- |  | ------------- | ------- | - | ----------------------------------------------------------- | - | ------------------------------------------ |  | - | --------------------------------------- | - |  | - | -
|                                                                |  |               |         |   | Fair Value Measurements 
atMarch 31, 2010                  
|                                                                |  |               |         |   |                                                             |   | (Unaudited)                                |  |   |                                        
|                                                                |  |               |         |  
|                                                                |  | CarryingValue |         |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOtherObservable Inputs(Level 2) |  |   | SignificantUnobservableInputs(Level
 3)
|Financial Assets                                                |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|Investment securities available for sale                        |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|U.S. federal agency                                             |  | $             | 30,677  |   |                                                             | $ |                                           |  | $ | 30,677                                  |   |  | $ | 
|State and municipal                                             |  |               | 28,862  |   |                                                             |   |                                           |  |   | 28,862                                  |   |  |   | 
|Mortgage-backed securities-residential                          |  |               | 24,665  |   |                                                             |   |                                           |  |   | 24,665                                  |   |  |   | 
|Government agency sponsored collateralized mortgage obligations |  |               | 17,256  |   |                                                             |   |                                           |  |   | 17,256                                  |   |  |   | 
|Privately held collateralized mortgage obligations              |  |               | 5,063   |   |                                                             |   |                                           |  |   | 5,063                                   |   |  |   | 
|                                                                |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|Total investment securities available-for-sale                  |  | $             | 106,523 |   |                                                             | $ |                                           |  | $ | 106,523                                 |   |  | $ | 
|                                                                |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|                                                                |  |               |         |  
|Loans held for sale                                             |  | $             | 1,034   |   |                                                             | $ |                                           |  | $ | 1,034                                   |   |  | $ | 
|Derivatives  residential mortgage loan commitments             |  |               | 33      |   |                                                             |   |                                           |  |   | 33                                      |   |  |   | 
|                                                                |  |               |         |  
|Financial Liabilities                                           |  |               |         |   |                                                             |   |                                            |  |   |                                         |   |  |   |  
|Derivatives  interest rate swaps                               |  |               | (328    | ) |                                                             |   |                                           |  |   | (328                                    | ) |  |   | 



16



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE - continued



|                                                                |  |               |         |                                                             |   |                                            |  |                                         |         |  |   |  
|--------------------------------------------------------------- |  | ------------- | ------- | ----------------------------------------------------------- | - | ------------------------------------------ |  | --------------------------------------- | ------- |  | - | -
|                                                                |  |               |         |                                                             |   | December 31, 2009                          |  |                                        
|                                                                |  | CarryingValue |         | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOtherObservable Inputs(Level 2) |  | SignificantUnobservableInputs(Level
 3)
|Financial Assets                                                |  |               |         |                                                             |   |                                            |  |                                         |         |  |   |  
|Investment securities available for sale                        |  |               |         |                                                             |   |                                            |  |                                         |         |  |   |  
|U.S. federal agency                                             |  | $             | 12,972  |                                                             | $ |                                           |  | $                                       | 12,972  |  | $ | 
|State and municipal                                             |  |               | 25,264  |                                                             |   |                                           |  |                                         | 25,264  |  |   | 
|Mortgage-backed securities  residential                        |  |               | 31,082  |                                                             |   |                                           |  |                                         | 31,082  |  |   | 
|Government agency sponsored collateralized mortgage obligations |  |               | 18,148  |                                                             |   |                                           |  |                                         | 18,148  |  |   | 
|Privately held collateralized mortgage obligations              |  |               | 9,494   |                                                             |   |                                           |  |                                         | 9,494   |  |   | 
|Corporate debt securities                                       |  |               | 5,135   |                                                             |   |                                           |  |                                         | 5,135   |  |   | 
|                                                                |  |               |         |                                                             |   |                                            |  |                                         |         |  |   |  
|                                                                |  |               |         |                                                            
|Total investment securities available-for-sale                  |  | $             | 102,095 |                                                             | $ |                                           |  | $                                       | 102,095 |  | $ | 
|                                                                |  |               |         |                                                             |   |                                            |  |                                         |         |  |   |  
|                                                                |  |               |         |                                                            
|Loans held for sale                                             |  | $             | 981     |                                                             | $ |                                           |  | $                                       | 981     |  | $ | 
|Derivatives  residential mortgage loan commitments             |  |               | 31      |                                                             |   |                                           |  |                                         | 31      |  |   | 
|Derivatives  interest rate swaps                               |  |               | 88      |                                                             |   |                                           |  |                                         | 88      |  |   | 

Loans held for sale were
carried at the fair value of $1,034, which was made up of the outstanding balance of $1,020, net of a valuation of $14 at March 31, 2010, resulting in income of $14 for the three months ended March 31, 2010. At December 31, 2009,
loans held for sale were carried at the fair value of $981, which was made up of the outstanding balance of $967, net of a valuation of $14 at December 31, 2009, resulting in income of $14 for the year ending December 31, 2009.



17



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE - continued



Assets measured at fair value on a non-recurring basis are summarized below:



|                             |  |               |       |                                                             |   |                                            |  |                                         |     |  |   |      
|---------------------------- |  | ------------- | ----- | ----------------------------------------------------------- | - | ------------------------------------------ |  | --------------------------------------- | --- |  | - | -----
|                             |  |               |       | Fair Value Measurements 
atMarch 31, 2010                  
|                             |  |               |       |                                                             |   | (Unaudited)                                |  |                                        
|                             |  |               |       |                                                            
|                             |  | CarryingValue |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOtherObservable Inputs(Level 2) |  | SignificantUnobservableInputs(Level
 3)
|Impaired loans               |  | $             | 1,919 |                                                             | $ |                                           |  | $                                       |    |  | $ | 1,919
|Other real estate owned, net |  |               | 199   |                                                             |   |                                           |  |                                         |    |  |   | 199  
|Mortgage servicing rights    |  |               | 307   |                                                             |   |                                           |  |                                         | 307 |  |   |     
|                             |  |              
|                             |  |               |       | Fair Value Measurements atDecember 31,
2009                
|                             |  | CarryingValue |       | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | SignificantOtherObservable Inputs(Level 2) |  | SignificantUnobservableInputs(Level
 3)
|Impaired loans               |  | $             | 3,783 |                                                             | $ |                                           |  | $                                       |    |  | $ | 3,783
|Other real estate owned, net |  |               | 230   |                                                             |   |                                           |  |                                         |    |  |   | 230  
|Mortgage servicing rights    |  |               | 318   |                                                             |   |                                           |  |                                         | 318 |  |   |     

Impaired loans, which
are measured for impairment using the fair value of the collateral for collateral dependent loans, had an outstanding amount of $3,266, with a valuation allowance of $1,347 at March 31, 2010, resulting in an additional provision for loan losses
of $800 for the three months ended March 31, 2010. At December 31, 2009, impaired loans had an outstanding amount of $4,397, with a valuation allowance of $614, resulting in an additional provision for loan losses of $323 for the year
ending December 31, 2009.

Other real estate owned, which is measured at the lower of cost or fair value less costs to sell, had a net
carrying amount of $199, which was made up of the outstanding balance of $315 net a valuation allowance of $116 at March 31, 2010, resulting in a write-down of $38 for the three months ended March 31, 2010. At December 31, 2009, other
real estate owned had a net carrying amount of $230, which was made up of the outstanding balance of $308, net of a valuation allowance of $78 at December 31, 2009, resulting in a write-down of $78 for the year ending December 31, 2009.

Mortgage servicing rights, which are carried at lower of cost or fair value, were carried at their fair value of $307, which was made up of
the outstanding balance of $360, net of a valuation allowance of $53 at March 31, 2010, resulting in a charge of $3 for the three months ended March 31, 2010. At December 31, 2009, mortgage servicing rights were carried at their fair
value of $318, which was made up of the outstanding balance of $368, net of a valuation allowance of $50, resulting in a charge of $8 for the year ending December 31, 2009.



18



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE - continued



The carrying amounts and estimated fair values of financial instruments, at March 31, 2010 and
December 31, 2009 are as follows:



|                                                |  |                |          |   |            |   |          |  
|----------------------------------------------- |  | -------------- | -------- | - | ---------- | - | -------- | -
|                                                |  | CarryingAmount |          |   | Fair Value |  
|March 31, 2010 (Unaudited)                      |  |                |          |   |            |   |          |  
|                                                |  |               
|Financial assets                                |  |                |          |   |            |   |          |  
|Cash and due from financial institutions        |  | $              | 4,707    |   |            | $ | 4,707    |  
|Securities available-for-sale                   |  |                | 106,523  |   |            |   | 106,523  |  
|Federal Home Loan Bank stock                    |  |                | 4,206    |   |            |   | N/A      |  
|Loans held for sale                             |  |                | 1,034    |   |            |   | 1,034    |  
|Loans, net                                      |  |                | 267,230  |   |            |   | 270,815  |  
|Accrued interest receivable                     |  |                | 1,637    |   |            |   | 1,637    |  
|                                                |  |               
|Financial liabilities                           |  |                |          |   |            |   |          |  
|Deposits                                        |  | $              | (289,880 | ) |            | $ | (280,686 | )
|Federal Home Loan Bank advances                 |  |                | (52,274  | ) |            |   | (53,954  | )
|Subordinated debentures                         |  |                | (5,155   | ) |            |   | (4,733   | )
|FDIC guaranteed unsecured borrowings            |  |                | (4,868   | ) |            |   | (5,170   | )
|Federal Reserve Bank discount window borrowings |  |                | (12,545  | ) |            |   | (12,545  | )
|Accrued interest payable                        |  |                | (343     | ) |            |   | (343     | )
|Derivatives  interest rate swaps               |  |                | (328     | ) |            |   | (328     | )
|                                                |  |               
|                                                |  | CarryingAmount |          |   | Fair Value |  
|December 31, 2009                               |  |                |          |   |            |   |          |  
|                                                |  |               
|Financial assets                                |  |                |          |   |            |   |          |  
|Cash and due from financial institutions        |  | $              | 6,000    |   |            | $ | 6,000    |  
|Securities available-for-sale                   |  |                | 102,095  |   |            |   | 102,095  |  
|Federal Home Loan Bank stock                    |  |                | 4,206    |   |            |   | N/A      |  
|Loans held for sale                             |  |                | 981      |   |            |   | 981      |  
|Loans, net                                      |  |                | 256,275  |   |            |   | 260,311  |  
|Accrued interest receivable                     |  |                | 1,650    |   |            |   | 1,650    |  
|Derivatives  interest rate swaps               |  |                | 88       |   |            |   | 88       |  
|                                                |  |               
|Financial liabilities                           |  |                |          |   |            |   |          |  
|Deposits                                        |  | $              | (273,408 | ) |            | $ | (263,933 | )
|Federal Home Loan Bank advances                 |  |                | (52,773  | ) |            |   | (54,547  | )
|Subordinated debentures                         |  |                | (5,155   | ) |            |   | (4,360   | )
|FDIC guaranteed unsecured borrowings            |  |                | (4,852   | ) |            |   | (5,152   | )
|Federal Reserve Bank discount window borrowings |  |                | (16,675  | ) |            |   | (16,675  | )
|Accrued interest payable                        |  |                | (396     | ) |            |   | (396     | )



19



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 6  FAIR VALUE - continued



The methods and assumptions, not previously presented, used to estimate fair value are described as
follows:

Carrying amount is the estimated fair value for cash and due from financial institutions, accrued interest receivable and payable,
demand deposits, Federal Reserve Bank discount window borrowings, and variable rate loans or deposits that reprice frequently and fully. The methods for determining the fair values for securities, loans held for sale, and interest rate swap
derivatives were described previously. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the
estimated life and credit risk. Fair value of debt is based on current rates for similar financing. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability. The fair value of off-balance
sheet items is not considered material.

NOTE 7  DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The
notional amount of the interest rate swap does not represent an amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreement.

Interest Rate Swaps Designated as Cash Flow Hedges: Interest rate swaps with notional amounts of $30.25 million and $15.25 million as of
March 31, 2010 and December 31, 2009, were designated as cash flow hedges of subordinated debentures, future FHLB advances and certain CDARS deposits and were determined to be fully effective during all periods presented. As such, no
amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other liabilities with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated
other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The hedge would no longer be considered effective if a portion of the hedge becomes ineffective, the item hedged is no
longer in existence or the Company discontinues hedge accounting. The Company expects the hedges to remain fully effective during the remaining terms of the swaps. The Company does not expect any amounts to be reclassed from other comprehensive
income (loss) over the next 12 months.



20



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 7  DERIVATIVES - continued



Information related to the interest-rate swaps designated as cash flow hedges as of March 31, 2010
is as follows:



|                                                                 |  |   |                    |  
|---------------------------------------------------------------- |  | - | ------------------ | -
|Subordinated debentures                                          |  |   |                    |  
|Notional amount                                                  |  | $ | 5,000              |  
|Fixed interest rate payable                                      |  |   | 5.54               | %
|Variable interest rate receivable (Three month LIBOR plus 3.10%) |  |   | 3.38               | %
|Maturity date                                                    |  |   | March 26, 2014     |  
|                                                                 | 
|Unrealized losses                                                |  |   | (39                | )
|CDARS deposits                                                   |  |   |                    |  
|Notional amount                                                  |  | $ | 10,250             |  
|Fixed interest rate payable                                      |  |   | 3.19               | %
|Variable interest rate receivable (One month LIBOR plus 0.55%)   |  |   | 0.80               | %
|Maturity date                                                    |  |   | October 9, 2014    |  
|Unrealized losses                                                |  |   | (106               | )
|                                                                 | 
|FHLB advance                                                     |  |   |                    |  
|Notional amount                                                  |  | $ | 5,000              |  
|Maturity date                                                    |  |   | September 20, 2015 |  
|Unrealized losses                                                |  |   | (59                | )
|                                                                 | 
|FHLB advance                                                     |  |   |                    |  
|Notional amount                                                  |  | $ | 10,000             |  
|Maturity date                                                    |  |   | July 19, 2016      |  
|Unrealized losses                                                |  |   | (124               | )

Interest income (expense) recorded on
these swap transactions totaled $89 during the first quarter of 2010 and is reported as a component of interest expense on subordinated debentures and deposits.



21



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - continued

LAPORTE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share data)



NOTE 7  DERIVATIVES - continued



The following table presents the net losses recorded in accumulated other comprehensive income and the
Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended March 31, 2010 and the year ended December 31, 2009:



|                        |  |                                                        |      |   |                                                           |   |                                                                                |  |   |  
|----------------------- |  | ------------------------------------------------------ | ---- | - | --------------------------------------------------------- | - | ------------------------------------------------------------------------------ |  | - | -
|                        |  | Amount of 
lossrecognizedin OCI(Effective Portion)2010 |      |   | Amount of gainreclassified from OCIto interest income2010 |   | Amount of gainrecognized in othernon interest 
income(Ineffective Portion)2010
|Interest rate contracts |  | $                                                      | (217 | ) |                                                           | $ |                                                                               |  | $ | 
|                        |  |                                                        |     
|                        |  | Amount of 
gainrecognizedin OCI(Effective Portion)2009 |      |   | Amount of gainreclassified from OCIto interest
income2009 |   | Amount of gainrecognized in othernon interest 
income(Ineffective Portion)2009
|Interest rate contracts |  | $                                                      | 58   |   |                                                           | $ |                                                                               |  | $ | 

The following table
reflects the cash flow hedges included in the Consolidated Balance Sheet as of March 31, 2010 (unaudited) and December 31, 2009:



|                                             |  |                |        |           |                   |      |                |  |           |        |  |   |   
|-------------------------------------------- |  | -------------- | ------ | --------- | ----------------- | ---- | -------------- |  | --------- | ------ |  | - | --
|                                             |  | March 31, 2010 |        |           | December 31, 2009
|                                             |  | NotionalAmount |        | FairValue |                   |      | NotionalAmount |  | FairValue
|Included in other assets (liabilities):      |  |                |        |           |                   |      |                |  |           |        |  |   |   
|Interest rate swaps related to               |  |                |        |           |                   |      |                |  |           |        |  |   |   
|Subordinated debentures                      |  | $              | 5,000  |           | $                 | (39  | )              |  | $         | 5,000  |  | $ | 34
|CDARS deposits                               |  |                | 10,250 |           |                   | (106 | )              |  |           | 10,250 |  |   | 54
|FHLB advances                                |  |                | 15,000 |           |                   | (183 | )              |  |           |       |  |   |  
|                                             |  |                |        |           |                   |      |                |  |           |        |  |   |   
|                                             |  |                |        |          
|Total included in other assets (liabilities) |  | $              | 30,250 |           | $                 | (328 | )              |  | $         | 15,250 |  | $ | 88
|                                             |  |                |        |           |                   |      |                |  |           |        |  |   |   

The counterparty to the Companys derivatives is exposed to
credit risk whenever the derivative is in a liability position. As a result, the Company has collateralized the liability with cash and security collateral held in safekeeping by Bank of New York. At March 31, 2010 and December 31, 2009,
the Company had $100 in cash and securities with a fair value of $1,000 and $251, respectively, posted as collateral for these derivatives.



22



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may
contain, forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.
Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Companys management and on information currently available to management, are generally identifiable by the use of words such as
believe, expect, anticipate, plan, intend, estimate, may, will, would, could, should or other similar expressions.
Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

The Companys ability to predict results or the actual effect of future plans or strategies is inherently uncertain. The factors which could have a
material adverse effect on the operations and future prospects of the Company and certain subsidiaries are detailed in Item 1A  Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009. In addition
to these risk factors, there are other factors that may impact any public company, including ours, which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries. These additional factors
include, but are not limited to, the following:



| |  |  | changes in prevailing real estate values and loan demand both nationally and within our current and future market area;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | increased competitive pressures among financial services companies;
| | - |  | -------------------------------------------------------------------



| |  |  | changes in consumer spending, borrowing and savings habits;
| | - |  | -----------------------------------------------------------



| |  |  | the amount of assessments and premiums we are required to pay for FDIC deposit insurance;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | legislative or regulatory changes that affect our business including our compliance costs;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | our ability to successfully manage our commercial lending;
| | - |  | ----------------------------------------------------------



| |  |  | the financial health of certain entities, including government sponsored enterprises, the securities of which are owned or acquired by the Company;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse changes in the securities market;
| | - |  | -----------------------------------------



| |  |  | the costs, effects and outcomes of existing or future litigation;
| | - |  | -----------------------------------------------------------------



| |  |  | the economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the United States to any such threats
and attacks;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the success of our mortgage warehouse lending program; and
| | - |  | ----------------------------------------------------------



| |  |  | the ability of the Company to manage the risks associated with the foregoing factors as well as anticipated risk factors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.



23



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Comparison of Financial Condition at March 31, 2010 and December 31, 2009

General: Total assets increased $13.7 million, or 3.4%, to $419.5 million at March 31, 2010 from $405.8 million at
December 31, 2009. The increase was primarily due to an increase in net loans of $11.0 million and an increase in securities available for sale of $4.4 million. Mortgage warehouse loans increased $14.7 million due to increased demand and
construction loans increased $661,000. All other loan categories experienced decreases or insignificant increases. The increase in assets was funded through an increase in total deposits of $16.5 million partially offset by a decrease in Federal
Reserve Bank discount window borrowings of $4.1 million and a decrease in FHLB of Indianapolis advances of $499,000.

Investment Securities:Total securities available for sale increased $4.4 million, or 4.3%, to $106.5 million at March 31,
2010 from $102.1 million at December 31, 2009 primarily due to the increase in deposits. There was a significant amount of restructuring of the securities portfolio in the first quarter of 2010. Managements analysis determined that market
conditions provided the opportunity to sell a number of securities and add these gains to capital permanently without a negative impact to long term earnings. The potential for rising interest rates, and the announcement that the Federal Reserve
Boards program to purchase mortgage backed securities will end sometime in 2010, led to concern of eroding prices on these securities and the potential to negatively impact capital at some point in the future. Management has been restructuring
the portfolio over the last several quarters as part of our asset and liability strategy. In addition we were able to eliminate our exposure in the corporate sector as well as reduce our exposure in a portion of our mortgage backed securities and
collateralized mortgage obligation securities, which had higher price volatility should interest rates start to rise in the future.

As of
March 31, 2010, management reviewed the securities portfolio for possible other-than-temporary impairment and determined there were no impairment charges to be recorded. At March 31, 2010, the total available for sale securities portfolio
reflected a net unrealized gain of $2.1 million compared to a net unrealized gain of $2.7 million at December 31, 2009.

Loans Held for Sale:There was no material change in the balance of loans held for sale at March 31, 2010 compared to
December 31, 2009. The level of refinance activity of our one-to-four-family residential mortgages decreased in the first quarter of 2010.

Net Loans:Net loans increased $11.0 million, or 4.3%, to $267.2 million at March 31, 2010 compared to $256.3 million at
December 31, 2009. This increase is primarily attributable to an increase in mortgage warehouse loans and to a lesser degree commercial construction loans. All other loan demand has leveled off or decreased slightly in the first quarter of
2010.

There was no material change in the balance of commercial business and commercial real estate loans at March 31, 2010 compared to
December 31, 2009. This type of loan activity has continued to be slow primarily due to the overall national and local economic concerns, and management does not anticipate a significant increase in the near future.

Total construction loans increased $661,000, or 12.2%, to $6.1 million at March 31, 2010 compared to $5.4 million at December 31, 2009. This
increase is primarily due to an increase in commercial construction draws on current projects of $983,000 offset partially by a decrease in residential construction of $322,000.

Mortgage warehouse loans increased $14.7 million, or 33.6%, to $58.5 million at March 31, 2010 compared to $43.8 million at December 31, 2009.
This increase is primarily due to increased activity in residential mortgages with mortgage companies outside of our local market.

One-to
four-family residential loans decreased $1.9 million, or 2.8%, to $68.2 million at March 31, 2010 compared to $70.1 million at December 31, 2009, primarily attributable to repayment activity along with refinance activity. We continue to
see refinance activity level off and do not anticipate a significant increase in activity during 2010.



24



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Nonperforming Assets: The table below sets forth the amounts and categories of
our nonperforming assets at the dates indicated.



|                                                          |  |                        |       |   |                  |   |       |  
|--------------------------------------------------------- |  | ---------------------- | ----- | - | ---------------- | - | ----- | -
|                                                          |  | March 31,2010          |       |   | December 31,2009 |  
|                                                          |  | (Dollars in thousands) |      
|Nonaccrual loans:                                         |  |                        |       |   |                  |   |       |  
|Real estate:                                              |  |                        |       |   |                  |   |       |  
|One- to four- family (1)                                  |  | $                      | 619   |   |                  | $ | 1,059 |  
|Five or more family                                       |  |                        |      |   |                  |   |      |  
|Commercial                                                |  |                        | 3,441 |   |                  |   | 3,854 |  
|Construction                                              |  |                        | 858   |   |                  |   | 858   |  
|Land                                                      |  |                        | 462   |   |                  |   | 1,169 |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total real estate                                         |  | $                      | 5,380 |   |                  | $ | 6,940 |  
|Consumer and other loans:                                 |  |                        |       |   |                  |   |       |  
|Home equity (2)                                           |  |                        | 472   |   |                  |   | 392   |  
|Commercial                                                |  |                        | 396   |   |                  |   | 381   |  
|Automobile and other                                      |  |                        | 21    |   |                  |   | 3     |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total consumer and other loans                            |  |                        | 889   |   |                  |   | 776   |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total nonaccrual loans                                    |  | $                      | 6,269 |   |                  | $ | 7,716 |  
|                                                          |  |                        |       |   |                  |   |       |  
|                                                          |  |                       
|Troubled debt restructured                                |  |                        |       |   |                  |   |       |  
|Commercial real estate                                    |  | $                      |      |   |                  | $ |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total troubled debt restructured                          |  | $                      |      |   |                  | $ |      |  
|                                                          |  |                       
|Loans greater than 90 days delinquent and still accruing: |  |                        |       |   |                  |   |       |  
|Real estate:                                              |  |                        |       |   |                  |   |       |  
|One- to four- family                                      |  | $                      |      |   |                  | $ |      |  
|Five or more family                                       |  |                        |      |   |                  |   |      |  
|Commercial                                                |  |                        |      |   |                  |   |      |  
|Construction                                              |  |                        |      |   |                  |   |      |  
|Land                                                      |  |                        |      |   |                  |   |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total real estate                                         |  | $                      |      |   |                  | $ |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|Consumer and other loans:                                 |  |                        |       |   |                  |   |       |  
|Home equity                                               |  |                        |      |   |                  |   |      |  
|Commercial                                                |  |                        |      |   |                  |   |      |  
|Automobile and other                                      |  |                        |      |   |                  |   |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total consumer and other loans                            |  | $                      |      |   |                  | $ |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|                                                          |  |                       
|Total nonperforming loans                                 |  | $                      | 6,269 |   |                  | $ | 7,716 |  
|                                                          |  |                        |       |   |                  |   |       |  
|                                                          |  |                       
|Foreclosed assets:                                        |  |                        |       |   |                  |   |       |  
|One- to four- family                                      |  | $                      | 358   |   |                  | $ | 399   |  
|Five or more family                                       |  |                        |      |   |                  |   |      |  
|Commercial                                                |  |                        | 155   |   |                  |   | 155   |  
|Construction                                              |  |                        |      |   |                  |   |      |  
|Land                                                      |  |                        |      |   |                  |   |      |  
|Consumer                                                  |  |                        |      |   |                  |   |      |  
|Business assets                                           |  |                        |      |   |                  |   |      |  
|                                                          |  |                        |       |   |                  |   |       |  
|Total foreclosed assets                                   |  | $                      | 513   |   |                  | $ | 554   |  
|                                                          |  |                        |       |   |                  |   |       |  
|                                                          |  |                       
|Total nonperforming assets                                |  | $                      | 6,782 |   |                  | $ | 8,270 |  
|                                                          |  |                        |       |   |                  |   |       |  
|                                                          |  |                       
|Ratios:                                                   |  |                        |       |   |                  |   |       |  
|Nonperforming loans to total loans                        |  |                        | 2.32  | % |                  |   | 2.98  | %
|Nonperforming assets to total assets                      |  |                        | 1.62  | % |                  |   | 2.04  | %



|(1) | $117 and $120 of the nonaccrual one- to four- family loans at March 31, 2010 and December 31, 2009, respectively, were loans acquired with credit
deterioration from the acquisition of City Savings Bank.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | $15 and $16 of the nonaccrual home equity loans at March 31, 2010 and December 31, 2009, respectively, were loans acquired with credit deterioration from the
acquisition of City Savings Bank.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



25



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



There was a decrease in five or more family loans of $384,000, or 5.7%, to $6.4 million at
March 31, 2010 compared to $6.7 million at December 31, 2009, primarily due to repayment activity.

Consumer and home equity loans,
including indirect automobile loans, decreased $1.8 million, or 6.5%, to $25.7 million at March 31, 2010 compared $27.5 million at December 31, 2009. There was a decrease of $621,000 in home equity lines of credit, as well as a decrease in
indirect automobile loans of $473,000 and a decrease of $516,000 in fixed consumer loans. The demand for home equity lines and loans has decreased due to the continued decline in home values as well as a change in the loan-to-value ratios required
for these loans.

The allowance for loan losses increased $883,000, or 31.8%, to $3.7 million at March 31, 2010 compared to $2.8 million
at December 31, 2009. The allowance for loan losses to total loans ratio was 1.35% at March 31, 2010 compared to 1.13% at December 31, 2010. The increase is due to a provision of $909,000 allocated during the first quarter of 2010,
primarily attributable to one nonperforming commercial loan relationship. During the first quarter of 2010, the Company received $1.0 million in life insurance proceeds related to the death of the owner of the commercial business, which were applied
to the loan balance. The remaining outstanding balance of the relationship was $2.2 million at March 31, 2010, and is secured by a chemical manufacturing facility, equipment and inventory and a personal guarantee. The Company had a more
extensive review of the chemical inventory in late March which led to the additional reserve in the first quarter. The balance of this relationship after the specific reserves is now $995,000.

Total nonperforming loans to total loans ratio was 2.32% at March 31, 2010 compared to 2.98% at December 31, 2009, primarily due to the $1.0
million in insurance proceeds received and applied to one nonperforming loan during the first quarter of 2010. In addition, there was a decrease in other nonperforming loans of $447,000. Total nonperforming loans were $6.3 million at March 31,
2010 compared to $7.7 million at December 31, 2009.

Other Real Estate Owned:Other real estate owned decreased
$41,000, or 7.4%, to $513,000 at March 31, 2010 compared to $554,000 at December 31, 2009, primarily due to a write-down of $36,000 on one of the properties. At March 31, 2010, the Company held five properties in other real estate
owned, of which four are one-to-four-family residential homes and one is a commercial car wash facility.

Goodwill and
Other Intangible Assets:The Companys goodwill totaled $8.4 million at March 31, 2010 and at December 31, 2009. Accounting standards require goodwill to be tested for impairment on an annual basis, or more frequently if
circumstances indicate that an asset might be impaired, by comparing the fair value of such goodwill to its recorded or carrying amount. If the carrying amount of the goodwill exceeds the fair value, an impairment charge must be recorded in an
amount equal to the excess. The annual impairment review of the $8.4 million of goodwill previously recorded was performed in the fourth quarter of 2009. As a result of the impairment testing performed, no impairment charge was recorded by the
Company.

The Companys stock price has not significantly changed from the previous analysis and earnings have continued to increase
therefore, management determined that an updated analysis from an independent third party as of the end of the first quarter was not necessary at this time. A full independent review will be done to test the goodwill for impairment annually unless
circumstances indicate an updated review is necessary. As the Companys stock price per common share is currently less than its book value per common share, it is reasonably possible that management may conclude that goodwill, totaling $8.4
million at March 31, 2010, is impaired as a result of a future assessment. If our goodwill is determined to be impaired, the related charge to earnings could be material.



26



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Deposits:Total deposits increased $16.5 million, or 6.0%, to $289.9 million at
March 31, 2010 compared to $273.4 million at December 31, 2009, primarily attributable to an increase in money market accounts of $14.1 million, of which approximately $9.0 million came from public fund accounts. There was an increase in
other savings and NOW accounts of $1.8 million in addition to an increase in retail certificates of deposit and IRAs greater than $100,000 of $3.4 million. There was a decrease in retail certificates of deposit and IRAs less than
$100,000 of $2.0 million, primarily attributable to the competitive interest rates being offered at other local financial institutions. There was no significant change in non-interest bearing checking accounts during the first quarter of 2010.

Borrowed Funds:Federal Home Loan Bank of Indianapolis borrowings decreased $499,000, or 0.9%, to $52.3 million at
March 31, 2010 compared to $52.8 million at December 31, 2009, primarily due to a maturing advance which was not renewed due to sufficient liquidity from the increase in deposits. There was also a decrease in overnight borrowings at the
Federal Reserve discount window of $4.1 million to $12.5 million at March 31, 2010 compared to $16.7 million at December 31, 2009, again due to the increase in deposits.

On February 3, 2010 the Company entered into two forward interest rate swap contracts against $15.0 million in Federal Home Loan Bank of
Indianapolis advances maturing in July and September, in order to address the concern of rising interest rates. The Company has a $10.0 million advance maturing in July 2010 at an interest rate of 6.09% and $5.0 million advance maturing in September
2010 at an interest rate of 5.95%.

Total Shareholders Equity:Total shareholders equity decreased $65,000,
or less than 1.0%, to $49.8 million at March 31, 2010 compared to $49.9 million at December 31, 2009, primarily due to a decrease in other comprehensive income (loss) of $654,000. The unrealized gain on securities decreased $380,000
partially due to securities that were sold and gains reported through net income, as well as changes in market values on securities held in the Companys available-for-sale investment portfolio. There was also a decrease of $275,000 in other
comprehensive income (loss) related to the interest rate swaps the Company has entered into at March 31, 2010 compared to December 31, 2009. Offsetting the decrease in other comprehensive income (loss) was an increase in net income of
$670,000 for the three months ended March 31, 2010.

Comparison of Operating Results For Three Month Period Ended March 31, 2010
and March 31, 2009

Net Income:Net income increased $180,000, or 36.7%, to $670,000 for the three months ended
March 31, 2010 compared to $490,000 for the three months ended March 31, 2009. This increase is primarily due to the increase in net interest income, fees attributable to the new mortgage warehouse division that started in May of 2009 and
an increase in net gains on securities available for sale of $672,000. These increases were partially offset by an increase in the provision for loan losses of $860,000 in the first quarter of 2010 compared to the prior year period.

Net Interest Income:Net interest income increased $455,000, or 18.1%, to $3.0 million for the three months ended March 31,
2010 compared to $2.5 million for the three months ended March 31, 2009. The increase is primarily due to an increase in the annualized net interest spread of 28 basis points, to 3.02%, for the first quarter of 2010 compared to 2.74% for the
same prior year period. The annualized average cost of interest-bearing liabilities decreased 49 basis points, primarily attributable to a decrease in the annualized average cost of certificates of deposit and IRA time deposits of 64 basis points.
The decrease in the cost of interest-bearing liabilities was partially offset by a decrease in the annualized average yield on interest-earning assets of 21 basis points. This decrease in the annualized average yield on interest-earning assets was
minimized due to the addition of the mortgage warehouse loans at an annualized average yield of 7.14%. Net average interest-earning assets increased $11.3 million in the three months ended March 31, 2010 compared to the prior year period, which
also contributed to the increase in net interest income.



27



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



The following table sets forth the average balance sheet, average annualized yield and
cost and certain other information for the three months ended March 31, 2010 and March 31, 2009. No tax-equivalent yield adjustments were made. All average balances are daily average balances. Nonaccrual loans were included in the
computation of average balances, but have been reflected in the table as loans carrying a zero yield. The annualized yields set forth below include the effect of deferred fees, and discounts and premiums that are amortized or accreted to interest
income or expense.



|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|------------------------------------------------------ |  | ------------------------------------ | ------- | -------- | ---- | -------------------- |  | ---- | ------------------------- |  | -------- | ------- | -------------------- | - | ----- |  | ---- | -
|                                                       |  | For the Three Months Ended March 31, |        
|                                                       |  | 2010                                 |         |          | 2009 |                     
|                                                       |  | (Dollars in thousands)               |        
|                                                       |  | AverageOutstandingBalance            |         | Interest |      | AnnualizedYield/Cost |  |      | AverageOutstandingBalance |  | Interest |         | AnnualizedYield/Cost |  
|Loans                                                  |  | $                                    | 244,238 |          | $    | 3,770                |  | 6.17 | %                         |  | $        | 223,066 |                      | $ | 3,384 |  | 6.07 | %
|Taxable securities                                     |  |                                      | 77,798  |          |      | 779                  |  | 4.01 | %                         |  |          | 93,798  |                      |   | 1,139 |  | 4.86 | %
|Tax exempt securities                                  |  |                                      | 24,761  |          |      | 250                  |  | 4.04 | %                         |  |          | 6,969   |                      |   | 71    |  | 4.08 | %
|Federal Home Loan Bank of Indianapolis stock           |  |                                      | 4,206   |          |      | 21                   |  | 2.00 | %                         |  |          | 4,206   |                      |   | 42    |  | 3.99 | %
|Federal funds sold and other interest-bearing deposits |  |                                      | 5,779   |          |      | 2                    |  | 0.14 | %                         |  |          | 2,130   |                      |   | 1     |  | 0.19 | %
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total interest earning assets                          |  |                                      | 356,782 |          |      | 4,822                |  | 5.41 | %                         |  |          | 330,169 |                      |   | 4,637 |  | 5.62 | %
|Non-interest earning assets                            |  |                                      | 41,636  |          |      |                      |  |      |                           |  |          | 43,265  |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total assets                                           |  | $                                    | 398,418 |          |      |                      |  |      |                           |  | $        | 373,434 |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                     
|Savings deposits                                       |  | $                                    | 44,475  |          |      | 12                   |  | 0.11 | %                         |  | $        | 42,850  |                      |   | 16    |  | 0.15 | %
|Money market and NOW accounts                          |  |                                      | 56,368  |          |      | 123                  |  | 0.87 | %                         |  |          | 37,814  |                      |   | 77    |  | 0.81 | %
|CDs and IRAs                                           |  |                                      | 145,699 |          |      | 1,021                |  | 2.80 | %                         |  |          | 136,503 |                      |   | 1,174 |  | 3.44 | %
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total interest-bearing deposits                        |  |                                      | 246,542 |          |      | 1,156                |  | 1.88 | %                         |  |          | 217,167 |                      |   | 1,267 |  | 2.33 | %
|FHLB advances                                          |  |                                      | 52,340  |          |      | 579                  |  | 4.42 | %                         |  |          | 69,645  |                      |   | 776   |  | 4.46 | %
|Subordinated debentures                                |  |                                      | 5,155   |          |      | 69                   |  | 5.35 | %                         |  |          | 5,155   |                      |   | 57    |  | 4.42 | %
|FDIC guaranteed unsecured borrowing                    |  |                                      | 4,859   |          |      | 50                   |  | 4.12 | %                         |  |          | 2,639   |                      |   | 26    |  | 3.94 | %
|Federal Reserve Bank discount window borrowings        |  |                                      | 2,104   |          |      | 3                    |  | 0.57 | %                         |  |          | 1,090   |                      |   | 1     |  | 0.37 | %
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total interest-bearing liabilities                     |  |                                      | 311,000 |          |      | 1,857                |  | 2.39 | %                         |  |          | 295,696 |                      |   | 2,127 |  | 2.88 | %
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Non-interest bearing deposits                          |  |                                      | 34,004  |          |      |                      |  |      |                           |  |          | 28,060  |                      |   |       |  |      |  
|Other liabilities                                      |  |                                      | 3,459   |          |      |                      |  |      |                           |  |          | 3,071   |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total liabilities                                      |  |                                      | 348,463 |          |      |                      |  |      |                           |  |          | 326,827 |                      |   |       |  |      |  
|Shareholders equity                                   |  |                                      | 49,955  |          |      |                      |  |      |                           |  |          | 46,607  |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Total liabilities & shareholders equity               |  | $                                    | 398,418 |          |      |                      |  |      |                           |  | $        | 373,434 |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|                                                       |  |                                      |         |          |      |                     
|Net interest income                                    |  |                                      |         |          | $    | 2,965                |  |      |                           |  |          |         |                      | $ | 2,510 |  |      |  
|                                                       |  |                                      |         |          |      |                      |  |      |                           |  |          |         |                      |   |       |  |      |  
|Net interest rate spread                               |  |                                      |         |          |      |                      |  | 3.02 | %                         |  |          |         |                      |   |       |  | 2.74 | %
|Net interest margin                                    |  |                                      |         |          |      |                      |  | 3.32 | %                         |  |          |         |                      |   |       |  | 3.04 | %



28



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Interest and Dividend Income:Interest and dividend income increased $185,000, or
4.0%, for the three month period ending March 31, 2010 compared to the same prior year period, primarily due to an increase in the average total interest-earning assets of $26.6 million. Partially offsetting the increase in interest and
dividend income is a decrease in the annualized average yield on interest-earning assets of 21 basis points, due to the continued decline in interest rates and the impact this has had on the loans and securities.

Interest income on loans, including fees, increased $386,000, or 11.4%, to $3.8 million for the three month period ending March 31, 2010 compared to
$3.4 million for the same prior year period. This increase is primarily due to an increase in the average loan balances of $21.2 million for the first quarter of 2010 as well as an increase in the annualized average yield on loans of 10 basis points
compared to the prior year period. This is a result of the annualized average yield of mortgage warehouse loan portfolio of 7.14%, which was not reflected in the prior year period.

Interest income from taxable securities decreased $360,000, or 31.6%, to $779,000 for the three months ended March 31, 2010 compared to $1.1 million
for the same prior year period, primarily due to a decrease in the average balance of taxable securities of $16.0 million. There was a significant shift into tax exempt securities over the same time period resulting in an increase in average tax
exempt securities of $17.8 million for the three months ended March 31, 2010 compared to the prior year period. The restructure was implemented due to the tax advantage and the yield spreads on municipal securities when compared to taxable
securities. Interest income from tax exempt securities increased $179,000, or 252.1% in the first quarter of 2010 compared to the prior year period.

Dividend income from Federal Home Loan Bank of Indianapolis (FHLBI) stock decreased $21,000, or 50.0%, in the three months ended March 31, 2010
compared to the same prior year period, attributable to the decrease in the annualized average yield from 3.99% to 2.00%. The FHLBI has decreased the dividend paid due to impairment charges they have recorded attributable to their private label
mortgage backed securities.

Interest Expense:Interest expense decreased $270,000, or 12.7%, for the three months
ended March 31, 2010 compared to the same prior year period. The decrease is primarily attributable to a decrease in the annualized average cost of interest-bearing liabilities of 49 basis points to 2.39% for the three months ended
March 31, 2010 from 2.88% for the same prior year period. The decrease is primarily due to the continued decrease in interest rates paid on new and maturing certificates of deposit and IRA time deposits as well as a decrease of $17.3 million in
the average balance on FHLBI advances for the first quarter of 2010 compared to the same prior year period.

The annualized average cost of
interest-bearing deposits decreased 45 basis points to 1.88% for the three months ended March 31, 2010 compared to 2.33% for the same prior year period, primarily due to the decrease in the annualized average cost of certificates of deposit and
IRA time deposits of 64 basis points. The annualized average cost of savings deposits also decreased 4 basis points over the same time period. Management does not anticipate a continued decrease in the cost of interest-bearing deposits due to the
historically low interest rate environment and the possibility of an increase in interest rates at some point in the future.

Interest expense
on FHLBI advances decreased $197,000, or 25.4%, for the three months ended March 31, 2010 compared to the same prior year period, primarily due to the decrease in the average balance of $17.3 million. The annualized average cost of FHLBI
advances also decreased 4 basis points over the same time period. Management expects the average cost of FHLBI advances to continue to decrease in 2010 due to $15.0 million in advances maturing in the next six months at an average cost of 6.04%. On
February 3, 2010, the Company entered into two forward interest rate swap contracts against the $15.0 million in advances, in order to address the concern of rising interest rates and in order to lock in interest rates for a longer time period.
Interest expense on the subordinated debentures increased 93 basis points for the first quarter of 2010 compared to the prior year period, attributable to the interest rate swap the Company executed against the debenture in April 2009 which fixed
the interest rate at 5.54% for five years. This action was taken in order to hedge against a potential interest rate increase. Interest expense on the FDIC guaranteed unsecured debt increased $24,000, or 92.3%, in the three months ended
March 31, 2010 compared to the same prior year period, reflecting the fact that this debt originated in February 2009.



29



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Provision for Loan Losses:The Bank recognizes a provision for loan losses, which
is charged to earnings, at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management considers
historical loan loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect borrowers ability to repay, the estimated value of any underlying collateral, peer group information and
prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or as future events occur. After an evaluation of these factors,
management recognized a provision for loan losses of $909,000 for the first quarter of 2010 compared to $49,000 for the same prior year period. Net charge-offs for the 2010 and 2009 periods were $26,000 and $77,000, respectively.

The increase in the provision is primarily attributable to one nonperforming commercial loan relationship. During the first quarter of 2010, the Company
received $1.0 million in life insurance proceeds related to the death of the owner of the commercial business, which were applied to the loan balance. The remaining outstanding balance on the loan is $2.2 million, which is secured by a chemical
manufacturing facility, equipment and inventory and a personal guarantee. The Company had a more extensive review of the chemical inventory in late March which led to the additional reserve in the first quarter. The balance of this relationship
after the specific reserves is now $995,000. The provision for the mortgage warehouse loans also increased in the first quarter of 2010, due to the increase in the loan balances compared to the previous quarter.

One of the factors management considers when evaluating the level of the allowance for loan losses is the historical loan loss experience. Given the
existing overall economic concerns, we elected to rely on more recent loan loss experience to establish the minimum reserve ratios for the general loan pools. In the first quarter of 2010, the Company also elected to increase the inherent risk
factor used when evaluating the allowance for loan loss provision due continued economic concerns on both a local and national level.

Noninterest Income:Noninterest income increased $655,000, or 80.3%, to $1.5 million for the three months ended March 31,
2010 compared to $816,000 for the same prior year period, primarily attributable to a $672,000 increase in net gains on securities. Managements analysis determined that market conditions provided the opportunity to sell a number of securities
and add these gains to capital permanently without a negative impact to long term earnings. The potential for rising interest rates, and the announcement that the Federal Reserve Boards program to purchase mortgage backed securities will end
sometime in 2010, led to concern of eroding prices on these securities and the potential to negatively impact capital at some point in the future. Mortgage warehouse loan fees and wire transfer fees increased a total of $162,000 in the first quarter
of 2010 since the new line of business started in the second quarter of 2009. ATM and debit card fees increased $19,000, or 28.4%, due to increased activity.

Partially offsetting these increases in noninterest income was a decrease of $194,000 in net gains on mortgage banking activities. Mortgage banking
activities slowed in the first quarter of 2010 compared to the same prior year period. Refinance activity has leveled off, which was anticipated due to the length of time interest rates have remained at historically low levels. Service charges on
deposit accounts decreased $23,000, or 11.5%, primarily due to a decrease in overdraft charges, as the number of overdrafts has gone down. Trust fees decreased $33,000, or 84.6%, attributable to the decision to outsource trust services.

Noninterest Expense:Noninterest expense increased $47,000, or 1.8%, to $2.7 million in the first quarter of 2010 compared to $2.6
million for the same prior year period, primarily attributable to an increase of $46,000, or 3.4%, in salaries and employee benefits. This is primarily due to an increase in the addition of the mortgage warehouse staff in the second quarter of 2009.
There was also a decrease in the supplemental retirement expense of $22,000 due to the retirement of one participant in the plan. Data processing expense increased $7,000, or 6.5%, primarily due to an increase in online banking bill pay fees as well
as normal increases in the annual maintenance contract renewals. FDIC insurance increased $10,000, or 10.1% over the prior year period due to an increase in deposits. Collection and other real estate expenses increased $9,000, or 37.5%, attributable
to legal and insurance expenses related to delinquent loans or other real estate owned.



30



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



Partially offsetting these increases in noninterest expense was a decrease in occupancy expense of
$17,000, or 3.3%, in the first quarter of 2010 compared to the same prior year period. Depreciation expense decreased $21,000 offset by an increase in building services of $29,000, primarily due to an increase in snow removal expenses in the first
quarter of 2010. Amortization of intangibles decreased $22,000 in the first quarter of 2010 when compared to the prior year period, since the core deposit intangible asset is amortized into expense on an accelerated basis.

Income Taxes:Income tax expense increased $23,000 for the first three months of 2010 compared to the first three months of 2009,
primarily due to the increase in income before taxes of $203,000. The effective tax rate was 19.6% for the first quarter of 2010 and 22.2% for the same prior year period. The effective tax rate was lower in the first quarter of 2010 due to a higher
ratio of total income before tax attributable to tax exempt securities and life insurance income.

Liquidity and Capital Resources

Maintenance of adequate liquidity requires that sufficient resources be available at all times to meet cash flow requirements of the Company.
Liquidity in a banking institution is required primarily to provide for deposit withdrawals and the credit needs of customers and to take advantage of investment opportunities as they arise. A bank may achieve desired liquidity from both assets and
liabilities. Cash and deposits held in other financial institutions, Federal funds sold, other short term investments in interest-bearing time deposits in other financial institutions and securities available-for-sale, maturing loans and
investments, payments of principal and interest on loans and investments, and potential loan sales are sources of asset liquidity. Deposit growth and access to credit lines established with correspondent banks, the Federal Home Loan Bank and market
sources of funds are sources of liability liquidity. The Company reviews its liquidity position on a regular basis based upon its current position and expected trends of loans and deposits. The policy of the Board of Directors is to maintain
sufficient capital at not less than the well-capitalized thresholds established by banking regulators. Management believes that the Company maintains adequate sources of liquidity to meet its liquidity needs.

The Companys liquid assets, defined as cash and due from financial institutions and the market value of unpledged securities available-for-sale
totaled $53.6 million at March 31, 2010 and constituted 12.78% of total assets at that date, compared to $37.4 million, or 9.22%, of total assets at December 31, 2009.

The Company also maintains lines of credit with the Federal Home Loan Bank. The total of these lines of credit were $66.7 million at March 31, 2010,
of which $52.3 million in Federal Home Loan Bank advances were outstanding. The Company has additional securities and certain approved real estate loans available to pledge as collateral in order to increase our lines of credit with the Federal Home
Loan Bank. At March 31, 2010, we had $48.9 million in unpledged securities available for sale. The Company actively utilizes its borrowing capacity with the Federal Home Loan Bank to manage liquidity and to provide a funding alternative to time
deposits, if the Federal Home Loan Banks rates and terms are more favorable. The advances from the Federal Home Loan Bank can have maturities from overnight to multiple years. At March 31, 2010, $23.2 million of these advances were due
within one year, and $29.1 million had maturities greater than a year.

The Company also utilizes the Federal Reserve discount window as a
source of short-term funding. At March 31, 2010, the Companys overnight borrowings with the Federal Reserve Bank discount window totaled $12.5 million. The Companys borrowing capacity at the Federal Reserve Bank discount window is
based on the collateral value of pledged securities. The collateral value of securities pledged to the Federal Reserve discount window at March 31, 2010 totaled $48.2 million. At March 31, 2010, we had $47.8 million in unpledged securities
available for sale.

Federal regulations establish guidelines for calculating risk-adjusted capital ratios and minimum ratio
requirements. Under these regulations, banks are required to maintain a total risk-based capital ratio of 8.0% of risk-weighted assets and a Tier 1 risk-based capital ratio (primarily total shareholders equity less intangible assets) of at
least 4.0% of risk-weighted assets. The Bank had total and Tier 1 risk-based capital ratios of 15.33% and 14.08% at March 31, 2010, and was well-capitalized under the regulatory guidelines.



31



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued



In addition, regulators have adopted a minimum leverage ratio standard for Tier 1 capital to average
assets. The minimum ratio for top-rated institutions may be as low as 3%. However, regulatory agencies have stated that most institutions should maintain ratios at least 1 to 2 percentage points above the 3% minimum. As of March 31, 2010, the
Banks leverage ratio was 10.54%. Capital levels for the Bank remain above the established regulatory capital requirements.

Impact of
Inflation

The primary impact of inflation on the Bank is its effect on interest rates. The Banks primary source of income is
net interest income, which is affected by changes in interest rates. The Bank attempts to limit the impact of inflation on its net interest margin through management of interest rate-sensitive assets and liabilities and analyses of interest rate
sensitivity. The effect of inflation on premises and equipment as well as on noninterest expenses has not been significant for the periods presented.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Proper management of the interest rate sensitivity and maturities of our assets and liabilities is required to protect and enhance our net interest margin
and asset values, subject to market conditions. Interest rate sensitivity spread management is an important tool for achieving this objective and for developing ways in which to improve profitability.

The Company constantly monitors earning asset and deposit levels, developments and trends in interest rates, liquidity, capital adequacy and marketplace
opportunities. Management responds to all of these to protect and possibly enhance net interest income while managing risks within acceptable levels as set forth in the Companys policies. In addition, alternative business plans and
transactions are contemplated for their potential impact. This process is known as asset/liability management and is carried out by changing the maturities and relative proportions of the various types of loans, investments, deposits and borrowings
in the ways described above.

A commonly used tool to manage and analyze the interest rate sensitivity of a bank is a computer simulation
model. To quantify the extent of risks in both the Companys current position and in transactions it might make in the future, the Company uses a model to simulate the impact of different interest rate scenarios on net interest income. The
hypothetical impact of a 12 month nonparallel ramp (generally, a nonparallel change in interest rates of +/- 3.00%) and smaller incremental interest rate changes are modeled at least quarterly, representing the primary means the Company uses for
interest rate risk management decisions.

At March 31, 2010, given a +3.00% or 3.00% shock in interest rates, our model results in
the Banks net interest income for the next twelve months changing by $(260,000), or (1.93)%, and $(518,000), or (3.86)%, respectively.

The Company measures its economic value of equity at risk on a quarterly basis. Economic value of equity at risk measures the Companys exposure to
changes in its economic value of equity due to changes in a forecast interest rate environment. At March 31, 2010, given a +3.00% or -3.00% shock in interest rates, our model results in the Banks economic value of equity at risk for the
next twelve months changing by (11.03)%, and (9.31)%, respectively.

When preparing its modeling, the Company makes significant assumptions
about the lag in the rate of change in various asset and liability categories. The Company bases its assumptions on past experience and comparisons with other banks, and tests the validity of its assumptions by reviewing actual results with
projected expectations.



32



---

##### Table of Contents

PART I  FINANCIAL INFORMATION



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

The Company has
adopted disclosure controls and procedures designed to facilitate financial reporting. The Companys disclosure controls currently consist of communications among the Companys Chief Executive Officer, the Companys Chief Financial
Officer and each department head to identify any transactions, events, trends, risks or contingencies which may be material to its operations. These disclosure controls also contain certain elements of the Companys internal controls adopted in
connection with applicable accounting and regulatory guidelines. In addition, the Companys Chief Executive Officer, Chief Financial Officer, Audit Committee and independent registered public accounting firm also meet on a quarterly basis to
discuss disclosure matters. The Companys Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Companys disclosure controls and procedures as of the end of the period covered by this report and found
them to be effective.

The Company maintains internal control over financial reporting. There have not been any significant changes in such
internal control over financial reporting in the last quarter that has materially affected, or is likely to materially affect, our internal control over financial reporting.



33



---

##### Table of Contents

PART II  OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

As of
March 31, 2010, there are no material pending legal proceedings to which the Company or its subsidiaries is a party other than ordinary routine litigation incidental to their respective businesses.

ITEM 1A. RISK FACTORS

As of March 31, 2010, there were no material changes to the Risk Factors disclosed in the Companys Annual Report
for the year ended December 31, 2009 on Form 10-K filed on March 22, 2010. However, the risks described in our 2009 Annual Report on Form 10-K are not the only risks that we face. Additional risks not presently known to us, or that we
currently deem immaterial, may also adversely affect our business, financial condition or results of operations.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------



| | (a) | Unregistered Sales of Equity Securities: Not applicable
| | --- | -------------------------------------------------------



| | (b) | Use of Proceeds: Not applicable
| | --- | -------------------------------



| | (c) | Repurchase of Our Equity Securities
| | --- | -----------------------------------

The following table presents a summary of the Companys share repurchases during the quarter ended March 31, 2010.



|                       |  |                                |  |                            |      |                                                                                  |        |                                                                                |       
|---------------------- |  | ------------------------------ |  | -------------------------- | ---- | -------------------------------------------------------------------------------- | ------ | ------------------------------------------------------------------------------ | ------
|Period                 |  | Total numberof sharespurchased |  | Averageprice paidper share |      | Total number ofshares purchased aspart of
publiclyannounced plans orprograms (1) |        | Maximum numberof shares that mayyet be purchasedunder the plans orprograms
(1)
|January 1-January 31   |  | 16,900                         |  | $                          | 4.89 |                                                                                  | 16,900 |                                                                                | 18,800
|February 1-February 28 |  | 1,200                          |  |                            | 4.57 |                                                                                  | 1,200  |                                                                                | 17,600
|March 1-March 31       |  | 900                            |  |                            | 5.49 |                                                                                  | 900    |                                                                                | 16,700
|                       |  |                                |  |                            |      |                                                                                  |        |                                                                                |       
|Total                  |  | 19,000                         |  | $                          | 4.90 |                                                                                  | 19,000 |                                                                                | 16,700
|                       |  |                                |  |                            |      |                                                                                  |        |                                                                                |       



|(1) | On November 13, 2009, the Company commenced a stock repurchase program pursuant to which the Company intends to repurchase, in the open market and in privately
negotiated transactions, up to 3 percent (approximately 63,400 shares) of the Companys outstanding public shares. The timing of the repurchases will depend on certain factors, including but not limited to, market conditions and prices, the
Companys liquidity requirements and alternative uses of capital. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None



|ITEM 4. | REMOVED AND RESERVED
|------- | --------------------



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None



34



---

##### Table of Contents

PART II  OTHER INFORMATION



|ITEM 6. | EXHIBITS
|------- | --------



|              |  |                                                                                                                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                         
|              | 
|31.01         |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                              
|              | 
|31.02         |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                              
|              | 
|32.01         |  | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



35



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|            |  |                                      
|----------- |  | -------------------------------------
|            |  | LaPorte Bancorp, Inc.                
|            | 
|May 6, 2010 |  | /s/ Lee A. Brady                     
|Date        |  | Lee A. Brady,                        
|            |  | President and Chief Executive Officer
|            | 
|May 6, 2010 |  | /s/ Michele M. Thompson              
|Date        |  | Michele M. Thompson,                 
|            |  | Executive Vice President and         
|            |  | Chief Financial Officer              



36