**FORM      10-Q**

**[X]      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange      Act      of 1934 **

**[      ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange      Act of 1934 **

**MERCHANTS      AND MANUFACTURERS BANCORPORATION, INC.**

| Wisconsin                                                                     | 39-1413328                                             |
|-------------------------------------------------------------------------------|--------------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (I.R.S.                Employer Identification Number) |

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**MERCHANTS      AND MANUFACTURERS BANCORPORATION, INC.**

**FORM      10-Q**

**INDEX**

**Part      I. Financial Information                                                                                              Page      Number**

| Item                1. Financial Statements                                                                                                                                                                                                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                            |   |
| Unaudited                Consolidated Statements of Financial Condition as of March                31, 2007, December 31, 2006, and March 31, 2006                                                                                                                                              | 3      |
|                                                                                                                                                                                                                                                                                            |   |
|      Unaudited              Consolidated Statements of Income for the Three Months ended              March 31, 2007 and March 31, 2006                                                                                                                                | 4      |
|                                                                                                                                                                                                                                                                                            |   |
|                        Unaudited Consolidated Statements                of                Changes in Shareholders' Equity and Comprehensive                Income                for the Three Months ended March 31, 2007 and March 31,                2006 | 5      |
|                                                                                                                                                                                                                                                                                            |   |
| Unaudited                Consolidated Statements of Cash Flows for the Three Months ended                March 31, 2007 and March 31, 2006                                                                                                                                                      | 6      |
|                                                                                                                                                                                                                                                                                            |   |
| Notes                to Unaudited Consolidated Financial                Statements                                                                                                                                                                                                              | 7      |
|                                                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                                            |   |
| Item                2. Management's Discussion and Analysis of Financial Condition and                Results                of Operations                                                                                                                                                      | 11     |
|                                                                                                                                                                                                                                                                                            |   |
| Item                3. Quantitative and Qualitative Disclosures About                Market Risk                                                                                                                                                                                                | 20     |
|                                                                                                                                                                                                                                                                                            |   |
| Item                4. Controls and                Procedures                                                                                                                                                                                                                                   | 20     |
|                                                                                                                                                                                                                                                                                            |   |

**Part      II. Other Information**

|                     |   |
|--------------------------|--------|
| Items                1-6 | 21     |
|                     |   |
| Signatures               | 22     |

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Table          of Contents

| **Part                I. Financial Information**                                           |   |                                                                        |      |                            |   |                         |   |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|-----------|---------------------------------|--------|------------------------------|--------|
| **Merchants                and Manufacturers Bancorporation, Inc.**                        |   |                                                                        |      |                            |   |
| **Unaudited                Consolidated Statements of Financial                Condition** |   |                                                                        |      |                            |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |
|                                                                                       |   | **March                31,**                                                |      | **December                31,** |   | **March                31,** |   |
|                                                                                       |   | **2007**                                                                    |      | **2006**                        |   | **2006**                     |   |
|                                                                                       |   | *(Dollars                in Thousands, Except Share and Per Share Amounts)* |      |
| **ASSETS**                                                                                 |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Cash                and due from banks                                                     |   | $                                                                           | 37,937    |                            | $      | 36,500                       |   | $ | 33,935 |   |
| Interest                bearing deposits in banks                                          |   |                                                                        | 5,310     |                            |   | 1,024                        |   |   | 420 |   |
| Federal                funds sold                                                          |   |                                                                        | 24,841    |                            |   | 6,035                        |   |   | 370 |   |
| Cash                and cash equivalents                                                   |   |                                                                        | 68,088    |                            |   | 43,559                       |   |   | 34,725 |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Available-for-sale                securities                                               |   |                                                                        | 151,277   |                            |   | 158,253                      |   |   | 174,617 |   |
| Loans,                less allowance for loan losses of $12,468 at March 31, 2007,         |   |                                                                        |      |                            |   |                         |   |   |   |   |
| $12,798                at December 31, 2006 and $11,951 at March 31, 2006                  |   |                                                                        | 1,169,607 |                            |   | 1,193,658                    |   |   | 1,158,109 |   |
| Accrued                interest receivable                                                 |   |                                                                        | 7,713     |                            |   | 7,667                        |   |   | 7,179 |   |
| FHLB                stock                                                                  |   |                                                                        | 11,963    |                            |   | 11,963                       |   |   | 20,372 |   |
| Premises                and equipment                                                      |   |                                                                        | 35,037    |                            |   | 35,197                       |   |   | 33,803 |   |
| Goodwill                                                                                   |   |                                                                        | 32,104    |                            |   | 32,081                       |   |   | 32,006 |   |
| Intangible                assets                                                           |   |                                                                        | 2,702     |                            |   | 2,794                        |   |   | 3,149 |   |
| Other                assets                                                                |   |                                                                        | 23,136    |                            |   | 20,768                       |   |   | 21,670 |   |
| **Total                assets**                                                            |   | $                                                                           | 1,501,627 |                            | $      | 1,505,940                    |   | $ | 1,485,630 |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                    |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Liabilities                                                                                |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Deposits:                                                                                  |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Non-interest                bearing                                                        |   | $                                                                           | 121,990   |                            | $      | 136,709                      |   | $ | 123,958 |   |
| Interest                bearing                                                            |   |                                                                        | 1,056,098 |                            |   | 1,028,528                    |   |   | 991,306 |   |
| Total                deposits                                                              |   |                                                                        | 1,178,088 |                            |   | 1,165,237                    |   |   | 1,114,9094 |   |
| Short-term                borrowings                                                       |   |                                                                        | 34,533    |                            |   | 59,710                       |   |   | 100,077 |   |
| Long-term                borrowings                                                        |   |                                                                        | 123,764   |                            |   | 118,521                      |   |   | 117,355 |   |
| Junior                subordinated debt owed to unconsolidated trusts                      |   |                                                                        | 53,611    |                            |   | 53,611                       |   |   | 46,394 |   |
| Accrued                interest payable                                                    |   |                                                                        | 4,861     |                            |   | 4,465                        |   |   | 3,783 |   |
| Other                liabilities                                                           |   |                                                                        | 12,013    |                            |   | 10,099                       |   |   | 9,695 |   |
| **Total                liabilities**                                                       |   |                                                                        | 1,406,870 |                            |   | 1,411,643                    |   |   | 1,392,208 |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Stockholders'                equity                                                        |   |                                                                        |      |                            |   |                         |   |   |   |   |
| Preferred                stock, $1.00 par value; 250,000 shares authorized,                |   |                                                                        |      |                            |   |                         |   |   |   |   |
| shares                issued and shares outstanding - none                                 |   |                                                                        | -         |                            |   | -                            |   |   | - |   |
| Common                stock $1.00 par value; 25,000,000 shares authorized;                 |   |                                                                        |      |                            |   |                         |   |   |   |   |
| shares                issued: 3,770,251 at March 31, 2007, December 31, 2006               |   |                                                                        |      |                            |   |                         |   |   |   |   |
| and                March 31, 2006; shares outstanding: 3,661,857 at                        |   |                                                                        |      |                            |   |                         |   |   |   |   |
| March                31, 2007, 3,677,180 at December 31, 2006 and 3,702,180                |   |                                                                        |      |                            |   |                         |   |   |   |   |
| at                March 31, 2006                                                           |   |                                                                        | 3,770     |                            |   | 3,770                        |   |   | 3,770 |   |
| Additional                paid-in capital                                             |   |                                                                        | 53,672    |                            |   | 53,684                       |   |   | 53,668 |   |
| Retained                earnings                                                           |   |                                                                        | 40,878    |                            |   | 40,259                       |   |   | 39,290 |   |
| Accumulated                other comprehensive loss                                        |   |                                                                        | (546      | )                               |   | (881                         | )      |   | (1,602 | ) |
| Treasury                stock, at cost (109,512 shares at March 31, 2007, 93,071           |   |                                                                        |      |                            |   |                         |   |   |   |   |
| shares                at December 31, 2006 and 68,071 shares at March 31, 2006)            |   |                                                                        | (3,017    | )                               |   | (2,535                       | )      |   | (1,704 | ) |
| **Total                stockholders' equity**                                              |   |                                                                        | 94,757    |                            |   | 94,297                       |   |   | 93,422 |   |
| **Total                liabilities and stockholders' equity**                              |   | $                                                                           | 1,501,627 |                            | $      | 1,505,940                    |   | $ | 1,485,630 |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |   |   |   |
|                                                                                       |   |                                                                        |      |                            |   |                         |   |   |   |   |
| *See                notes to unaudited consolidated financial statements.*                 |   |                                                                        |      |                            |   |                         |   |   |   |   |

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Table          of Contents

| **Merchants                and Manufacturers Bancorporation, Inc.**                                |   |                                                              |   |
|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
| **Unaudited                Consolidated Statements of Income**                                     |   |
|                                                                                               |   |                                                              |   |   |   |
|                                                                                               |   | **Three                Months Ended**                             |   |
|                                                                                               |   | **March                31,**                                      |   |
|                                                                                               |   | **2007**                                                          |   | **2006** |   |
|                                                                                               |   | *(Dollars                In Thousands, Except Per Share Amounts)* |   |
| Interest                and dividend income:                                                       |   |                                                              |   |   |   |
| Interest                and fees on loans                                                          |   | $                                                                 | 21,764 |   | $ | 19,320 |   |
| Interest                and dividends on securities:                                               |   |                                                              |   |   |   |   |   |
| Taxable                                                                                            |   |                                                              | 245    |   |   | 343 |   |
| Tax-exempt                                                                                         |   |                                                              | 564    |   |   | 642 |   |
| Interest                on mortgage-backed securities                                              |   |                                                              | 960    |   |   | 969 |   |
| Interest                on interest bearing deposits in banksand                federal funds sold |   |                                                              | 275    |   |   | 62 |   |
| Total                interest and dividend income                                                  |   |                                                              | 23,808 |   |   | 21,336 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Interest                expense:                                                                   |   |                                                              |   |   |   |   |   |
| Interest                on deposits                                                           |   |                                                              | 9,312  |   |   | 6,943 |   |
| Interest                on short-term borrowings                                                   |   |                                                              | 808    |   |   | 1,083 |   |
| Interest                on long-term borrowings                                                    |   |                                                              | 1,400  |   |   | 1,129 |   |
| Interest                on junior subordinated debt owed tounconsolidated                trusts    |   |                                                              | 1,046  |   |   | 863 |   |
| Total                interest expense                                                              |   |                                                              | 12,566 |   |   | 10,018 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Net                interest income                                                                 |   |                                                              | 11,242 |   |   | 11,318 |   |
| Provision                for loan losses                                                           |   |                                                              | 450    |   |   | 390 |   |
| Net                interest income after provision for loan losses                                 |   |                                                              | 10,792 |   |   | 10,928 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Non-interest                income:                                                                |   |                                                              |   |   |   |   |   |
| Service                charges on deposit accounts                                                 |   |                                                              | 1,041  |   |   | 1,052 |   |
| Service                charges on loans                                                            |   |                                                              | 931    |   |   | 751 |   |
| Gain                on sale of loans, net                                                          |   |                                                              | 24     |   |   | 15 |   |
| Net                gain (loss) on sale of premises and equipment                                   |   |                                                              | (1     | ) |   | 175 |   |
| Tax                fees, brokerage and insurance commissions                                       |   |                                                              | 877    |   |   | 804 |   |
| Other                                                                                              |   |                                                              | 625    |   |   | 970 |   |
| Total                noninterest income                                                            |   |                                                              | 3,497  |   |   | 3,767 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Noninterest                expenses:                                                               |   |                                                              |   |   |   |   |   |
| Salaries                and employee benefits                                                      |   |                                                              | 7,016  |   |   | 7,757 |   |
| Premises                and equipment                                                              |   |                                                              | 2,031  |   |   | 1,829 |   |
| Data                processing fees                                                                |   |                                                              | 897    |   |   | 910 |   |
| Marketing                and business development                                                  |   |                                                              | 476    |   |   | 503 |   |
| Other                                                                                              |   |                                                              | 1,949  |   |   | 2,257 |   |
| Total                noninterest expense                                                           |   |                                                              | 12,369 |   |   | 13,256 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Income                before income taxes                                                          |   |                                                              | 1,920  |   |   | 1,439 |   |
| Income                taxes                                                                        |   |                                                              | 642    |   |   | 411 |   |
| Net                income                                                                          |   | $                                                                 | 1,278  |   | $ | 1,028 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Basic                earnings per share                                                            |   | $                                                                 | 0.35   |   | $ | 0.28 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Diluted                earnings per share                                                          |   | $                                                                 | 0.35   |   | $ | 0.28 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| Dividends                per share                                                                 |   | $                                                                 | 0.18   |   | $ | 0.18 |   |
|                                                                                               |   |                                                              |   |   |   |   |   |
| *See                notes to unaudited consolidated financial statements.*                         |   |                                                              |   |

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Table          of Contents

| **Merchants                  and Manufacturers Bancorporation, Inc.**                                                               |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Unaudited                  Consolidated Statements of Changes in                  Stockholders' Equity and Comprehensive Income** |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                |   | Shares                  of  |   |   |   |   |   |   |   | Accumulated  |   |   |   |   |   |
|                                                                                                                                |   | Common                    |   |   |   | Additional  |   |   |   | Other  |   |   |   |   |   |
|                                                                                                                                |   | Stock  |   | Common  |   | Paid-In  |   | Retained  |   | Comprehensive  |   | Treasury  |   |   |   |
|                                                                                                                                |   | Outstanding  |   | Stock  |   | Capital  |   | Earnings  |   | Income |   | Stock  |   | Total  |   |
|                                                                                                                                |   | (In                  thousands, except Shares of Common Stock Outstanding and per share                  data)  |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three                Months Ended March 31, 2006                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2005                                                                                       |   |   | 3,701,621 |   | $ | 3,770 |   | $ | 53,614 |   | $ | 38,928 |   | $ | (1,369 | ) | $ | (1,718 | ) | $ | 93,225 |   |
| Comprehensive                  income:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                         |   |   | - |   |   | - |   |   | - |   |   | 1,028 |   |   | - |   |   | - |   |   | 1,028 |   |
| Change                  in net unrealized losses on                                                                                 |   |   |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| available-for-sale                  securities                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (357 | ) |   | - |   |   | (357 | ) |
| Income                  tax effect                                                                                                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 124 |   |   | - |   |   | 124 |   |
| Total                  comprehensive income                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 795 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                  compensation                                                                                           |   |   |   |   |   |   |   |   | 60 |   |   |   |   |   |   |   |   |   |   |   | 60 |   |
| Cash                  dividend - $0.18 per share                                                                                    |   |   | - |   |   | - |   |   | - |   |   | (666 | ) |   | - |   |   | - |   |   | (666 | ) |
| Exercise                  of stock options                                                                                          |   |   | 559 |   |   | - |   |   | (6 | ) |   | - |   |   |   |   |   | 14 |   |   | 8 |   |
| Balance                  at March 31, 2006                                                                                          |   |   | 3,702,180 |   | $ | 3,770 |   | $ | 53,668 |   | $ | 39,290 |   | $ | (1,602 | ) | $ | (1,704 | ) | $ | 93,422 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three                Months Ended March 31,                2007                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2006                                                                                       |   |   | 3,677,180 |   | $ | 3,770 |   | $ | 53,684 |   | $ | 40,259 |   | $ | (881 | ) | $ | (2,535 | ) | $ | 94,297 |   |
| Comprehensive                  income:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                         |   |   | - |   |   | - |   |   | - |   |   | 1,278 |   |   | - |   |   | - |   |   | 1,278 |   |
| Change                  in net unrealized gains on                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| available-for-sale                  securities                                                                                      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 516 |   |   | - |   |   | 516 |   |
| Reclassification                  adjustment for gains                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| realized                  in net income                                                                                             |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Income                  tax effect                                                                                                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (181 | ) |   | - |   |   | (181 | ) |
| Total                  comprehensive income                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,613 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                  compensation                                                                                           |   |   | - |   |   | - |   |   | 5 |   |   | - |   |   | - |   |   | - |   |   | 5 |   |
| Cash                  dividend - $0.18 per share                                                                                    |   |   | - |   |   | - |   |   | - |   |   | (659 | ) |   | - |   |   | - |   |   | (659 | ) |
| Purchase                  of treasury stock                                                                                         |   |   | (17,000 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (524 | ) |   | (524 | ) |
| Exercise                  of stock options                                                                                          |   |   | 1,677 |   |   | - |   |   | (17 | ) |   | - |   |   | - |   |   | 42 |   |   | 25 |   |
| Balance                  at March 31, 2007                                                                                          |   |   | 3,661,857 |   | $ | 3,770 |   | $ | 53,672 |   | $ | 40,878 |   | $ | (546 | ) | $ | (3,017 | ) | $ | 94,757 |   |
|                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *See                  notes to unaudited consolidated financial                  statements.*                                       |

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Table          of Contents

| **Merchants                and Manufacturers Bancorporation, Inc. and                Subsidiaries**         |   |                                            |    |     |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|----------|--------|
| **Unaudited                Consolidated Statements of Cash                Flows**                           |   |                                            |    |     |   |
|                                                                                                        |   |                                            |    |     |   |
|                                                                                                        |   | **Three                Months Ended March 31,** |    |
|                                                                                                        |   | **2007**                                        |    | **2006** |   |
|                                                                                                        |   | *(Dollars                in Thousands)*         |    |
| Cash                Flows From Operating Activities                                                         |   |                                            |    |     |   |
| Net                income                                                                                   |   | $                                               | 1,278   |     | $      | 1,028 |   |
| Adjustments                to reconcile net income to cash provided by operating                activities: |   |                                            |    |     |   |   |   |
| Provision                for loan losses                                                                    |   |                                            | 450     |     |   | 390 |   |
| Depreciation                                                                                                |   |                                            | 715     |     |   | 673 |   |
| Amortization                and accretion of premiums and discounts, net                                    |   |                                            | 59      |     |   | 126 |   |
| Amortization                of intangibles                                                                  |   |                                            | 92      |     |   | 119 |   |
| Gain                on sale of loans, net                                                                   |   |                                            | (24     | )        |   | (15 | ) |
| Loans                originated for sale                                                                    |   |                                            | (9,544  | )        |   | (7,399 | ) |
| Proceeds                from sales of loans                                                                 |   |                                            | 9,073   |     |   | 7,044 |   |
| (Gain)                loss on sale of fixed assets, net                                                     |   |                                            | 1       |     |   | (175 | ) |
| Increase                in accrued interest receivable                                                      |   |                                            | (46     | )        |   | (304 | ) |
| Increase                in accrued interest payable                                                         |   |                                            | 396     |     |   | 152 |   |
| Stock-based                compensation expense                                                             |   |                                            | 5       |     |   | 60 |   |
| Other                                                                                                       |   |                                            | 157     |     |   | (2,426 | ) |
| **Net                cash provided by (used in) operating activities**                                      |   |                                            | 2,612   |     |   | (727 | ) |
|                                                                                                        |   |                                            |    |     |   |   |   |
| Cash                Flows From Investing Activities                                                         |   |                                            |    |     |   |   |   |
| Purchase                of available-for-sale securities                                                    |   |                                            | (811    | )        |   | (8,646 | ) |
| Proceeds                from redemptions and maturities of available-for-sale                securities     |   |                                            | 8,252   |     |   | 8,358 |   |
| Net                (increase) decrease in loans                                                             |   |                                            | 22,858  |     |   | (38,113 | ) |
| Purchase                of premises and equipment, net                                                      |   |                                            | (556    | )        |   | (911 | ) |
| Proceeds                from sale of other real estate owned                                                |   |                                            | 123     |     |   | 1,638 |   |
| Redemption                of Federal Home Loan Bank stock                                                   |   |                                            | -       |     |   | 44 |   |
| **Net                cash provided by (used in) investing activities**                                      |   |                                            | 29,866  |     |   | (37,630 | ) |
|                                                                                                        |   |                                            |    |     |   |   |   |
| Cash                Flows From Financing Activities                                                         |   |                                            |    |     |   |   |   |
| Net                increase (decrease) in deposits                                                          |   |                                            | 12,851  |     |   | (45,259 | ) |
| Dividends                paid                                                                               |   |                                            | (659    | )        |   | (666 | ) |
| Net                increase (decrease) in short-term borrowings                                             |   |                                            | (25,176 | )        |   | 55,745 |   |
| Proceeds                from long-term borrowings                                                           |   |                                            | 20,500  |     |   | 27,055 |   |
| Repayment                of long-term borrowings                                                            |   |                                            | (15,258 | )        |   | (10,807 | ) |
| Increase                in advance payments by borrowers for taxes and insurance                            |   |                                            | 292     |     |   | 228 |   |
| Common                stock transactions, net                                                               |   |                                            | (499    | )        |   | 8 |   |
| **Net                cash provided by (used in) financing activities**                                      |   |                                            | (7,949  | )        |   | 26,304 |   |
|                                                                                                        |   |                                            |    |     |   |   |   |
| **Increase                (decrease) in cash and cash equivalents**                                         |   |                                            | 24,529  |     |   | (12,053 | ) |
| Cash                and cash equivalents at beginning of period                                             |   |                                            | 43,559  |     |   | 46,778 |   |
| Cash                and cash equivalents at end of period                                                   |   | $                                               | 68,088  |     | $      | 34,725 |   |
|                                                                                                        |   |                                            |    |     |   |   |   |
| Supplemental                Cash Flow Information and Noncash Transactions:                                 |   |                                            |    |     |   |   |   |
| Interest                paid                                                                                |   | $                                               | 12,170  |     | $      | 9,866 |   |
| Income                taxes paid                                                                            |   |                                            | 302     |     |   | 429 |   |
| Loans                transferred to other real estate owned                                                 |   |                                            | 1,238   |     |   | 600 |   |
|                                                                                                        |   |                                            |    |     |   |   |   |
| Supplemental                Schedules of Noncash Investing Activities:                                      |   |                                            |    |     |   |   |   |
| Change                in accumulated other comprehensive income, unrealized                                 |   |                                            |    |     |   |   |   |
| losses                on available-for-sale securities, net                                                 |   | $                                               | 335     |     | $      | (233 | ) |
|                                                                                                        |   |                                            |    |     |   |   |   |
| *See                notes to unaudited consolidated financial statements*                                   |   |                                            |    |     |   |   |   |

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Table          of Contents

**Merchants      and Manufacturers Bancorporation, Inc.**

Notes      to Unaudited Consolidated Financial Statements

**NOTE      A -- Basis of Presentation**

**NOTE      B -- Earnings Per Share **

|                                                        |   | Three                Months Ended                                       |   |
|-------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                                                        |   | March                31,                                                |   |
| Basic:                                                      |   | 2007                                                                    |   | 2006 |   |
|                                                        |   | *(Dollars                In Thousands, Except Per Share Amounts)*       |   |
| Net                income                                   |   | $                                                                       | 1,278  |   | $ | 1,028 |   |
| Weighted                average shares outstanding          |   |                                                                    | 3,666  |   |   | 3,702 |   |
| Basic                earnings per share                     |   | $                                                                       | 0.35   |   | $ | 0.28 |   |
|                                                        |   |                                                                    |   |   |   |   |   |
| Diluted:                                                    |   |                                                                    |   |   |   |   |   |
|                                                             |   | *(Dollars                In Thousands, Except Per Share Amounts)*  |
| Net                income                                   |   | $                                                                       | 1,278  |   | $ | 1,028 |   |
| Weighted                average shares outstanding          |   |                                                                    | 3,666  |   |   | 3,702 |   |
| Effect                of dilutive stock options outstanding |   |                                                                    | 3      |   |   | 9 |   |
| Diluted                weighted average shares outstanding  |   |                                                                    | 3,669  |   |   | 3,711 |   |
| Diluted                earnings per share                   |   | $                                                                       | 0.35   |   | $ | 0.28 |   |

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**NOTE      C -- Loans Receivable**

|                                                  |   | March                31, 2007 |      | December                31, 2006        |   | March                31,2006 |   |
|-------------------------------------------------------|--------|------------------------------------|-----------|-----------------------------------------|--------|------------------------------|--------|
|                                                  |   |                               |      | *(Dollars                in Thousands)* |   |                         |   |
| First                Mortgage:                        |   |                               |      |                                    |   |                         |   |
| Conventional                single-family residential |   | $                                  | 198,927   |                                    | $      | 196,223                      |   | $ | 178,175 |   |
| Commercial                and multifamily residential |   |                               | 470,671   |                                    |   | 497,496                      |   |   | 483,593 |   |
| Construction                                          |   |                               | 103,226   |                                    |   | 102,461                      |   |   | 89,825 |   |
| Farmland                                              |   |                               | 64,429    |                                    |   | 65,398                       |   |   | 55,261 |   |
|                                                  |   |                               | 837,253   |                                    |   | 861,578                      |   |   | 806,854 |   |
|                                                  |   |                               |      |                                    |   |                         |   |   |   |   |
| Commercial                business loans              |   |                               | 255,170   |                                    |   | 252,897                      |   |   | 280,907 |   |
| Consumer                and installment loans         |   |                               | 52,665    |                                    |   | 54,798                       |   |   | 47,881 |   |
| Home                equity loans                      |   |                               | 31,218    |                                    |   | 31,321                       |   |   | 28,202 |   |
| Other                                                 |   |                               | 5,769     |                                    |   | 5,862                        |   |   | 6,216 |   |
|                                                  |   |                               | 344,822   |                                    |   | 344,878                      |   |   | 363,206 |   |
| Total                loans                            |   |                               | 1,182,075 |                                    |   | 1,206,456                    |   |   | 1,170,060 |   |
|                                                  |   |                               |      |                                    |   |                         |   |   |   |   |
| Less:                Allowance for loan losses        |   |                               | (12,468   | )                                       |   | (12,798                      | )      |   | (11,951 | ) |
| Loans,                net                             |   | $                                  | 1,169,607 |                                    | $      | 1,193,658                    |   | $ | 1,158,109 |   |

**NOTE      D - Stock-Based Compensation Plan**

|                                              |   | Three                months ended March 31, 2007 |    |
|---------------------------------------------------|--------|--------------------------------------------------|---------|
|                                              |   |                                             |    | Weighted |   | Weighted |   | Aggregate |   |
|                                              |   |                                             |    | Average |   | Average                  Remaining |   | Intrinsic |   |
|                                              |   | Options                                          |    | Exercise                Price |   | Contractual                Term |   | Value |   |
|                                              |   |                                             |    |   |   |   |   |   |   |
| Outstanding                at beginning of period |   |                                             | 110,223 |   | $ | 33.71 |   |   |   |   |   |   |   |
| Granted                                           |   |                                             | -       |   |   | - |   |   |   |   |   |   |   |
| Canceled                                          |   |                                             | -       |   |   | - |   |   |   |   |   |   |   |
| Exercised                                         |   |                                             | (1,677  | ) |   | 15.11 |   |   |   |   |   |   |   |
| Outstanding                at end of period       |   |                                             | 108,546 |   | $ | 34.00 |   |   | 4.5 |   | $ | 59,000 |   |
|                                              |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Options                exercisable                |   |                                             | 108,546 |   | $ | 34.00 |   |   | 4.5 |   | $ | 59,000 |   |
|                                              |   |                                             |    |   |   |   |   |   |   |   |   |   |   |

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|                                                                                           |   | Options                Outstanding |                          | Options                Exercisable |
|------------------------------------------------------------------------------------------------|--------|------------------------------------|-------------------------------|------------------------------------|
|                                                                                           |   |                               | Weighted                      | Weighted                           |   |   | Weighted |
| Exercise                                                                                       |   | Number                             | Average                       | Average                            |   | Number | Average |
| Price                Range                                                                     |   | Outstanding                        | Exercise                Price | Life*                              |   | Outstanding | Exercise                Price |
|                                                                                           |   |                               |                          |                               |   |   |   |
| $                            15.11 |   | 3,907                              | $                15.11        | 1.0                                |   | 3,907 | $                15.11 |
| 25.45-28.31                                                                                    |   | 46,017                             | 27.95                         | 2.0                                |   | 46,017 | 27.95 |
| 30.50-35.00                                                                                    |   | 20,700                             | 30.65                         | 7.6                                |   | 20,700 | 30.65 |
| 45.00-46.00                                                                                    |   | 37,922                             | 45.11                         | 6.8                                |   | 37,922 | 45.11 |
|                                                                                           |   | 108,546                            | $                34.00        |                               |   | 108,546 | $                34.00 |
|                                                                                           |   |                               |                          |                               |   |   |   |

|                                              |   |    |   | Weighted                    |   |
|---------------------------------------------------|--------|---------|--------|-----------------------------|--------|
|                                              |   |    |   | Average                     |   |
|                                              |   |    |   | Grant                  Date |   |
|                                              |   | Options |   | Fair                  Value |   |
|                                              |   |    |   |                        |   |
| Nonvested                  at beginning of period |   |    | 3,278  |                        | $      | 30.50 |   |
| Granted                                           |   |    | -      |                        |   | - |   |
| Vested                                            |   |    | (3,278 | )                           |   | 30.50 |   |
| Canceled                                          |   |    | -      |                        |   | - |   |
| Nonvested                  at end of period       |   |    | -      |                        | $      | - |   |

**NOTE      E - Recent Accounting Pronouncements**

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*The      Fair Value Option for Financial Assets and Financial Liabilities - Including      an      amendment of FASB Statement No. 115, *
*Fair      Value Measurements*

**NOTE      F - Commitments and Contingent Liabilities**

|                                                   |   | March                31, 2007 |    | December                31, 2006              |   | March                31, 2006 |   |
|--------------------------------------------------------|--------|-------------------------------|---------|-----------------------------------------------|--------|-------------------------------|--------|
|                                                   |   |                          |    | *(Dollars                in Thousands)*  |   |                          |   |
|                                                   |   |                          |    |                                          |   |                          |   |
| Commitments                to originate mortgage loans |   | $                             | 27,209  |                                          | $      | 23,984                        |   | $ | 22,768 |   |
|                                                   |   |                          |    |                                          |   |                          |   |   |   |   |
| Unused                lines of credit:                 |   |                          |    |                                          |   |                          |   |   |   |   |
| Commercial                business                     |   |                          | 194,173 |                                          |   | 209,211                       |   |   | 198,045 |   |
| Home                equity                             |   |                          | 43,451  |                                          |   | 41,676                        |   |   | 35,389 |   |
| Credit                cards                            |   |                          | 19,897  |                                          |   | 18,608                        |   |   | 17,381 |   |
|                                                   |   |                          |    |                                          |   |                          |   |   |   |   |
| Standby                letters of credit               |   |                          | 5,715   |                                          |   | 4,870                         |   |   | 14,267 |   |

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

*Overview*

*Financial      Condition*

**Total      Assets**

**Investment      Securities**

**Loans      Receivable**

**Total      Deposits and Borrowings**

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Table          of Contents

**Capital      Resources**

**Nonperforming      Assets and Allowance for Losses**

|                                                    |   | March                31, 2007 |   | December                31, 2006                             |   | March                31, 2006 |   |
|---------------------------------------------------------|--------|-------------------------------|--------|--------------------------------------------------------------|--------|-------------------------------|--------|
|                                                    |   |                          |   |  *(Dollars                in                Thousands)* |   |                          |   |
| Non-accrual                loans:                       |   |                          |   |                                                         |   |                          |   |
| Conventional                single-family residential   |   | $                             | 9,607  |                                                         | $      | 7,668                         |   | $ | 2,197 |   |
| Commercial                and multifamily residential   |   |                          | 3,367  |                                                         |   | 2,856                         |   |   | 2,498 |   |
| Commercial                business loans                |   |                          | 1,905  |                                                         |   | 3,427                         |   |   | 1,889 |   |
| Consumer                and installment loans           |   |                          | 862    |                                                         |   | 781                           |   |   | 850 |   |
| Total                non-accrual loans                  |   |                          | 15,741 |                                                         |   | 14,732                        |   |   | 7,434 |   |
|                                                    |   |                          |   |                                                         |   |                          |   |   |   |   |
| Other                real estate owned                  |   |                          | 1,631  |                                                         |   | 516                           |   |   | 949 |   |
| Total                nonperforming assets               |   | $                             | 17,372 |                                                         | $      | 15,248                        |   | $ | 8,383 |   |
|                                                    |   |                          |   |                                                         |   |                          |   |   |   |   |
| **Ratios:**                                             |   |                          |   |                                                         |   |                          |   |   |   |   |
| Non-accrual                loans to total loans         |   |                          | 1.33   | %                                                            |   | 1.22                          | %      |   | 0.64 | % |
| Nonperforming                assets to total assets     |   |                          | 1.16   | %                                                            |   | 1.01                          | %      |   | 0.56 | % |
| Loan                loss allowance to non-accrual loans |   |                          | 79.21  | %                                                            |   | 86.87                         | %      |   | 160.76 | % |
| Loan                loss allowance to total loans  |   |                          | 1.05   | %                                                            |   | 1.06                          | %      |   | 1.02 | % |

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Table          of Contents

|                                                  |   | Three                Months EndedMarch                31,    |   |
|-------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                  |   | 2007                                                         |   | 2006 |   |
|                                                  |   | *(Dollars                in                Thousands)*  |   |
|                                                  |   |                                                         |   |   |   |
| Balance                at beginning of period         |   | $                                                            | 12,798 |   | $ | 13,051 |   |
| Provision                for loan losses              |   |                                                         | 450    |   |   | 390 |   |
| Charge-offs:                                          |   |                                                         |   |   |   |   |   |
| Commercial                and multifamily residential |   |                                                         | (702   | ) |   | (253 | ) |
| Commercial                business loans              |   |                                                         | (69    | ) |   | (1,028 | ) |
| Consumer                and installment loans         |   |                                                         | (201   | ) |   | (286 | ) |
| Total                charge-offs                      |   |                                                         | (972   | ) |   | (1,567 | ) |
|                                                  |   |                                                         |   |   |   |   |   |
| Recoveries:                                           |   |                                                         |   |   |   |   |   |
| Commercial                and multifamily residential |   |                                                         | 121    |   |   | 4 |   |
| Commercial                business loans              |   |                                                         | 15     |   |   | 6 |   |
| Consumer                and installment loans         |   |                                                         | 56     |   |   | 67 |   |
| Total                recoveries                       |   |                                                         | 192    |   |   | 77 |   |
|                                                  |   |                                                         |   |   |   |   |   |
| Net                charge-offs                        |   |                                                         | (780   | ) |   | (1,490 | ) |
|                                                  |   |                                                         |   |   |   |   |   |
| Balance                      at end of period         |   | $                                                            | 12,468 |   | $ | 11,951 |   |

**Potential      Problem Loans**

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Table          of Contents

** **

*Comparison      of Three Months Ended March 31, 2007 and 2006*

**Net      Income**

**Net      Interest Income**

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Table          of Contents

| **AVERAGE                BALANCES, INTEREST RATES AND YIELDS** |
|----------------------------------------------------------------|
|                                                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                           | **For                the Three Months Ended March 31,** |
|                                                           |   |   | **2007** |   |   |   |   |   | **2006** |   |   |
|                                                           | **Average                Balance** |   | **Interest** |   | **Average                Rate** |   | **Average                Balance** |   | **Interest** |   | **Average                Rate** |

|                                                                                                           |   |   |      |   |   |  *(Dollars                in                Thousands)* |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------------------------------------------------------------|--------|--------|--------|--------|
| **Assets**                                                                                                     |   |   |      |   |   |                                                         |   |   |   |   |   |   |   |
| Loans,                net (1)(2)                                                                               |   | $      | 1,192,280 |   | $      | 21,724                                                       |   |   | 7.39   | %      | $ | 1,134,915 |   | $ | 19,283 |   |   | 6.89 | % |
| Loans                exempt from federal income taxes (3)                                                      |   |   | 3,453     |   |   | 61                                                           |   |   | 7.12   | %      |   | 3,386 |   |   | 56 |   |   | 6.71 | % |
| Taxable                investment securities (4)                                                               |   |   | 24,188    |   |   | 245                                                          |   |   | 4.11   | %      |   | 37,919 |   |   | 343 |   |   | 3.67 | % |
| Mortgage-related                securities (4)                                                                 |   |   | 81,509    |   |   | 960                                                          |   |   | 4.78   | %      |   | 89,415 |   |   | 969 |   |   | 4.40 | % |
| Investment                securities exempt from federal income taxes (3)(4)                                   |   |   | 60,810    |   |   | 855                                                          |   |   | 5.70   | %      |   | 69,280 |   |   | 973 |   |   | 5.69 | % |
| Other                securities                                                                                |   |   | 20,599    |   |   | 275                                                          |   |   | 5.41   | %      |   | 5,560 |   |   | 62 |   |   | 4.52 | % |
| Interest                earning assets                                                                         |   |   | 1,382,839 |   |   | 24,119                                                       |   |   | 7.07   | %      |   | 1,340,475 |   |   | 21,686 |   |   | 6.56 | % |
| Non                interest earning assets                                                                     |   |   | 119,220   |   |   |                                                         |   |   |   |   |   | 138,444 |   |   |   |   |   |   |   |
| Average                assets                                                                                  |   | $      | 1,502,059 |   |   |                                                         |   |   |   |   | $ | 1,478,919 |   |   |   |   |   |   |   |
|                                                                                                           |   |   |      |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders' Equity**                                                        |   |   |      |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                deposits                                                                                    |   | $      | 106,096   |   |   | 243                                                          |   |   | 0.93   | %      | $ | 107,187 |   |   | 199 |   |   | 0.75 | % |
| Money                market deposits                                                                           |   |   | 240,459   |   |   | 2,055                                                        |   |   | 3.47   | %      |   | 243,051 |   |   | 1,569 |   |   | 2.62 | % |
| Savings                deposits                                                                                |   |   | 122,544   |   |   | 463                                                          |   |   | 1.53   | %      |   | 131,126 |   |   | 413 |   |   | 1.28 | % |
| Time                deposits                                                                                   |   |   | 569,615   |   |   | 6,551                                                        |   |   | 4.66   | %      |   | 504,632 |   |   | 4,762 |   |   | 3.83 | % |
| Short-term                borrowings                                                                           |   |   | 57,822    |   |   | 808                                                          |   |   | 5.67   | %      |   | 87,343 |   |   | 1,083 |   |   | 5.03 | % |
| Long-term                borrowings                                                                            |   |   | 122,377   |   |   | 1,400                                                        |   |   | 4.64   | %      |   | 112,621 |   |   | 1,129 |   |   | 4.07 | % |
| Junior                subordinated debt owed to unconsolidated trusts                                          |   |   | 53,611    |   |   | 1,046                                                        |   |   | 7.91   | %      |   | 46,394 |   |   | 863 |   |   | 7.54 | % |
| Interest                bearing liabilities                                                                    |   |   | 1,272,524 |   |   | 12,566                                                       |   |   | 4.00   | %      |   | 1,232,354 |   |   | 10,018 |   |   | 3.30 | % |
| Demand                deposits and other non interest bearing liabilities                                      |   |   | 134,839   |   |   |                                                         |   |   |   |   |   | 152,421 |   |   |   |   |   |   |   |
| Stockholders'                equity                                                                            |   |   | 94,696    |   |   |                                                         |   |   |   |   |   | 94,144 |   |   |   |   |   |   |   |
| Average                liabilities and stockholders' equity                                                    |   | $      | 1,502,059 |   |   |                                                         |   |   |   |   | $ | 1,478,919 |   |   |   |   |   |   |   |
| Net                interest spread (5)                                                                         |   |   |      |   | $      | 11,553                                                       |   |   | 3.07   | %      |   |   |   | $ | 11,668 |   |   | 3.26 | % |
| Net                interest earning assets                                                                     |   | $      | 110,315   |   |   |                                                         |   |   |   |   | $ | 108,121 |   |   |   |   |   |   |   |
| Net                interest margin on a fully tax equivalent basis (6)                                         |   |   |      |   |   |                                                         |   |   | 3.39   | %      |   |   |   |   |   |   |   | 3.53 | % |
| Net                interest margin (6)                                                                         |   |   |      |   |   |                                                         |   |   | 3.30   | %      |   |   |   |   |   |   |   | 3.42 | % |
| Ratio                of average interest-earning assets to average interest-bearing                liabilities |   |   |      |   |   |                                                         |   |   | 1.09   |   |   |   |   |   |   |   |   | 1.09 |   |

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Table          of Contents

| **VOLUME,                RATE AND MIX ANALYSIS OF NET INTEREST INCOME**         |   |
|---------------------------------------------------------------------------------|--------|
|                                                                            |   |   |   |   |   |   |   |
|                                                                            |   | **Three                Months Ended March 31, 2007** |   |
|                                                                            |   | **Compared                to March 31, 2006** |   |
|                                                                            |   | **Change                Due to Volume** |   | **Change                Due to Rate** |   | **Total                Change** |   |
|                                                                            |   | *(Dollars                in Thousands)* |   |
| Interest-Earning                Assets:                                         |   |   |   |   |   |   |   |
| Loans,                net (1)                                                   |   | $ | 1,004 |   | $ | 1,437 |   | $ | 2,441 |   |
| Loans                exempt from federal income taxes (2)                       |   |   | 1 |   |   | 3 |   |   | 4 |   |
| Taxable                investment securities                               |   |   | (146 | ) |   | 48 |   |   | (98 | ) |
| Mortgage-related                securities                                      |   |   | (494 | ) |   | 485 |   |   | (9 | ) |
| Investment                securities exempt from federal income taxes (2)  |   |   | (119 | ) |   | 1 |   |   | (118 | ) |
| Other                securities                                            |   |   | 198 |   |   | 15 |   |   | 213 |   |
| Total                interest-earning assets                                    |   | $ | 444 |   | $ | 1,989 |   | $ | 2,433 |   |
| Interest-Bearing                Liabilities:                                    |   |   |   |   |   |   |   |   |   |   |
| NOW                deposits                                                     |   | $ | (2 | ) | $ | 46 |   | $ | 44 |   |
| Money                market deposits                                            |   |   | (17 | ) |   | 503 |   |   | 486 |   |
| Savings                deposits                                                 |   |   | (24 | ) |   | 74 |   |   | 50 |   |
| Time                deposits                                                    |   |   | 663 |   |   | 1,126 |   |   | 1,789 |   |
| Short-term                borrowings                                            |   |   | (440 | ) |   | 165 |   |   | (275 | ) |
| Long-term                borrowings                                             |   |   | (103 | ) |   | 168 |   |   | 271 |   |
| Junior                subordinated debt owed to unconsolidated trusts           |   |   | 139 |   |   | 44 |   |   | 183 |   |
| Total                interest-bearing liabilities                               |   | $ | 422 |   | $ | 2,126 |   | $ | 2,548 |   |
| Net                change in net interest income                                |   |   |   |   |   |   |   | $ | (115 | ) |

| (1) | Interest                earned on loans includes loan fees (which are not material in amount)                and                interest income which has been received from borrowers whose loans                were                removed from non-accrual during the period                indicated. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Taxable-equivalent                adjustments were made using a 34% corporate tax rate for                all years presented in calculating interest income and                yields. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Provision      for Loan Losses**

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Table          of Contents

**Non-Interest      Income**

|                                                         |   | Three                Months Ended March 31, |   |
|--------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                         |   | 2007                                        |   | 2006 |   |
|                                                         |   | *(Dollars                in Thousands)*     |   |
| Service                charges on deposit accounts           |   | $                                           | 1,041  |   | $ | 1,052 |   |
| Service                charges on loans                      |   |                                        | 931    |   |   | 751 |   |
| Tax                fees, brokerage and insurance commissions |   |                                        | 877    |   |   | 804 |   |
| Gain                on sale of loans, net                    |   |                                        | 24     |   |   | 15 |   |
| Gain                (loss) on sale of fixed assets, net      |   |                                        | (1     | ) |   | 175 |   |
| Other                                                        |   |                                        | 625    |   |   | 970 |   |
| Total                non-interest income                     |   | $                                           | 3,497  |   | $ | 3,767 |   |

**Non-Interest      Expense**

|                                              |   | Three                Months Ended March 31, |   |
|---------------------------------------------------|--------|---------------------------------------------|--------|
|                                              |   | 2007                                        |   | 2006 |   |
|                                              |   | *(Dollars                in Thousands)*     |   |
| Salaries                and employee benefits     |   | $                                           | 7,016  |   | $ | 7,757 |   |
| Premises                and equipment             |   |                                        | 2,031  |   |   | 1,829 |   |
| Data                processing fees               |   |                                        | 897    |   |   | 910 |   |
| Marketing                and business development |   |                                        | 476    |   |   | 503 |   |
| Other                                             |   |                                        | 1,949  |   |   | 2,257 |   |
| Total                noninterest expense          |   | $                                           | 12,369 |   | $ | 13,256 |   |

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**Income      Taxes**

**Liquidity**

** **

**Asset/Liability      Management**

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Table          of Contents

|                                                                     |   | **Amounts                Maturing or Repricing as of March 31, 2007** |    |
|--------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|
|                                                                     |   | **Within**                                                            |    | **Six                to Twelve** |   | **One                to Five** |   | **Over** |   |   |   |
|                                                                     |   | **Six                months**                                         |    | **Months** |   | **Years** |   | **Five                Years** |   | **Total** |   |
|                                                                     |   |                                                                  |    | *(Dollars                in Thousands)* |   |   |   |
| Interest-earning                assets:                                  |   |                                                                  |    |   |   |   |   |   |   |   |   |
| Fixed-rate                mortgage loans                                 |   | $                                                                     | 129,267 |   | $ | 98,846 |   | $ | 366,940 |   | $ | 15,135 |   | $ | 610,188 |   |
| Adjustable-rate                mortgage loans                            |   |                                                                  | 152,088 |   |   | 22,617 |   |   | 37,531 |   |   | 14,829 |   |   | 227,065 |   |
| Total                mortgage loans                                      |   |                                                                  | 281,355 |   |   | 121,463 |   |   | 404,471 |   |   | 29,964 |   |   | 837,253 |   |
| Commercial                business loans                                 |   |                                                                  | 143,284 |   |   | 29,558 |   |   | 78,011 |   |   | 4,317 |   |   | 255,170 |   |
| Consumer                loans                                            |   |                                                                  | 19,132  |   |   | 7,782 |   |   | 24,235 |   |   | 1,516 |   |   | 52,665 |   |
| Home                equity loans                                         |   |                                                                  | 28,303  |   |   | 145 |   |   | 2,770 |   |   | - |   |   | 31,218 |   |
| Other                loans                                               |   |                                                                  | 2,360   |   |   | 282 |   |   | 2,373 |   |   | 754 |   |   | 5,769 |   |
| Mortgage-related                securities                               |   |                                                                  | 3,187   |   |   | 5,765 |   |   | 44,102 |   |   | 25,880 |   |   | 78,934 |   |
| Fixed                rate investment securities and other                |   |                                                                  | 2,145   |   |   | 2,122 |   |   | 26,600 |   |   | 41,476 |   |   | 72,343 |   |
| Variable                rate investment securities and other             |   |                                                                  | 43,239  |   |   | - |   |   | - |   |   | - |   |   | 43,239 |   |
| Total                interest-earning assets                             |   | $                                                                     | 523,005 |   | $ | 167,117 |   | $ | 582,562 |   | $ | 103,907 |   | $ | 1,376,591 |   |
|                                                                     |   |                                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                             |   |                                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                 |   |                                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time                deposits                                             |   | $                                                                     | 237,991 |   | $ | 130,631 |   | $ | 206,224 |   | $ | 11,039 |   | $ | 585,885 |   |
| NOW                accounts                                              |   |                                                                  | 6,429   |   |   | 6,429 |   |   | 64,284 |   |   | 30,000 |   |   | 107,142 |   |
| Savings                accounts                                          |   |                                                                  | 7,632   |   |   | 7,632 |   |   | 76,325 |   |   | 35,618 |   |   | 127,207 |   |
| Money                market accounts                                     |   |                                                                  | 17,023  |   |   | 13,969 |   |   | 139,686 |   |   | 65,187 |   |   | 235,864 |   |
| Short-term                borrowings                                     |   |                                                                  | 31,969  |   |   | 2,564 |   |   | - |   |   | - |   |   | 34,533 |   |
| Long-term                borrowings                                      |   |                                                                  | 10,511  |   |   | 19,759 |   |   | 91,902 |   |   | 1,592 |   |   | 123,764 |   |
| Junior                subordinated debt owed to unconsolidated trusts    |   |                                                                  | 28,352  |   |   | - |   |   | - |   |   | 25,259 |   |   | 53,611 |   |
| Total                interest-bearing liabilities                        |   | $                                                                     | 339,907 |   | $ | 180,984 |   | $ | 578,421 |   | $ | 168,695 |   | $ | 1,268,006 |   |
|                                                                     |   |                                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets less interest-bearing liabilities |   | $                                                                     | 183,098 |   |   | ($                13,867 | ) | $ | 4,141 |   |   | ($                64,788 | ) | $ | 108,585 |   |
| Cumulative                interest rate sensitivity gap                  |   | $                                                                     | 183,098 |   | $ | 169,231 |   | $ | 173,372 |   | $ | 108,584 |   |   |   |   |
| Cumulative                interest rate sensitivity gap as a             |   |                                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| percentage                of total assets                                |   |                                                                  | 12.19   | % |   | 11.27 | % |   | 11.55 | % |   | 7.23 | % |   |   |   |

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Table          of Contents

**Forward-Looking      Statements**

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4. Controls and Procedures**

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control Over Financial Reporting**

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Table          of Contents

**Part        II. Other Information**

| Item                  1.  | Legal                  Proceedings                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      | As                  of March 31, 2007 there were no material pending legal proceedings,                  other                  than ordinary routine litigation incidental to the business of                  the                  Corporation, to which the Corporation or any of its subsidiaries                  was a                  party or to which any of their property was subject.                                               |
| Item                  1A. | Risk                  Factors There                  have been no material changes from the risk factors previously                  disclosed                  in Part I, Item 1A, "Risk Factors," of our Form 10-K for the year                  ended                  December 31, 2006. Please refer to that section for disclosures                  regarding                  the risks and uncertainties relating to our business. |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Item                  2.  | Unregistered                  Sales of Equity Securities and Use of Proceeds (a) NONE (b) NONE (c) The                  following table provides information regarding shares of common                  stock                  repurchased by the Corporation during the first quarter of                  2007.                                                                                                  |

|  Period                                          |   | Total                  Number of Shares Purchased |   | Average                  Price Paid Per Share |   | Total                  Number of Shares Purchased As Part of Publicly Announced                  Program |   | Maximum                  Number of Shares that May Yet be Purchased Under the                  Program |   |
|-------------------------------------------------------|--------|---------------------------------------------------|--------|-----------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|
|                                                  |   |                                              |   |                                          |   |                                                                                                     |   |                                                                                                   |   |
| January                  1 2007 - January 31, 2007    |   |                                              | 17,000 |                                          | $      | 30.85                                                                                                    |   |                                                                                                   | -      |   |   | - |   |
| February                  1, 2007 - February 28, 2007 |   |                                              | -      |                                          |   | -                                                                                                        |   |                                                                                                   | -      |   |   | - |   |
| March                  1, 2007 - March 31, 2007       |   |                                              | -      |                                          |   | -                                                                                                        |   |                                                                                                   | -      |   |   | - |   |
| Total                                                 |   |                                              | 17,000 |                                          | $      | 30.85                                                                                                    |   |                                                                                                   | -      |   |   | - |   |

| Item                  3. | Defaults                  upon Senior Securities - NONE |
|--------------------------|---------------------------------------------------------|

| EXHIBIT                31.1  Certification                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the                Chief                Executive Officer EXHIBIT                31.2  Certification                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the                Chief                Financial Officer EXHIBIT                32.1* Certification                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the                Chief                Executive Officer EXHIBIT                32.2* Certification                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the                Chief                Financial Officer_____________ *These                certifications are not "filed" for purposes of Section 18 of the                Securities Exchange Act of 1934, as amended, or incorporated by reference                into any filing under the Securities Act of 1933, as amended, or                the                Securities Exchange Act of 1934, as                amended. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

**MERCHANTS      AND MANUFACTURERS BANCORPORATION, INC.**

| Date                 May                9, 2007  | /s/                Michael J. Murry                                                 |
|------------------------------------------------------------|-------------------------------------------------------------------------------------|
|                                                       | Michael                J. Murry                                                     |
|                                                       | Chairman                of the Board of Directors                                   |
|                                                       | and                Chief Executive Officer                                          |
|                                                       | Principal                Executive Officer                                          |
|                                                       |                                                                                |
| Date                 May                9, 2007  | /s/                Frederick R. Klug                                                |
|                                                       | Frederick                R. Klug                                                    |
|                                                       | Executive                Vice President & ChiefFinancial                Officer |
|                                                       | Principal                Financial Officer                                          |

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**10-Q      EXHIBIT LIST**