<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1999

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from                   to
                               -----------------    ---------------------

Commission file Number  0-21292

                MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

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


                    14100 West National Avenue, PO Box 511160
                        New Berlin, Wisconsin 53151-1160
--------------------------------------------------------------------------------
                     (Address of principal executive office)

                                 (414) 827-6713
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code:


--------------------------------------------------------------------------------
         (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes   X      No
    -----      -----

                      Applicable Only to Corporate Issuers

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.

 Common Stock, par value $1.00 per share              1,491,438 Shares
------------------------------------------    ----------------------------------
                 Class                          Outstanding at August 1, 1999






<PAGE>   2


                MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.

                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>
                                                                                         PAGE NUMBER
<S>                                                                                          <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Unaudited Consolidated Statements of Financial Condition as of
         June 30, 1999 and December 31, 1998                                                    3

         Unaudited Consolidated Statements of Income for the Three Months and
         the Six Months ended June 30, 1999 and 1998                                            4

         Unaudited Consolidated Statements of Cash Flows for the Six Months
         ended June 30, 1999 and 1998                                                           5

         Notes to Unaudited Consolidated Financial Statements                                   6


Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations                                                                           9

Item 3.  Quantitative and Qualitative Disclosure About Market Risk                             18

PART II. OTHER INFORMATION

Items 1-6                                                                                      19

Signatures                                                                                     22
</TABLE>





                                       2
<PAGE>   3



PART I. FINANCIAL INFORMATION

MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                          JUNE 30,           DECEMBER 31,
                                                                            1999                1998
                                                                        ------------        -------------
                                                                                 (In Thousands)
<S>                                                                      <C>                 <C>
ASSETS
Cash and due from banks                                                  $  13,626           $   9,946
Interest-bearing deposits at other banks                                       651              10,095
Federal funds sold                                                           7,058               8,587
                                                                         ---------           ---------
Cash and cash equivalents                                                   21,335              28,628
Securities available-for-sale at fair value:
  Investment securities                                                     17,760              15,721
  Mortgage-related securities                                               17,492              22,850
Loans receivable                                                           270,033             251,815
Accrued interest receivable                                                  1,729               1,674
Federal Home Loan Bank stock                                                   995               1,057
Premises and equipment                                                      10,228              10,130
Other assets                                                                 4,592               2,628
                                                                         ---------           ---------
Total assets                                                             $ 344,164           $ 334,503
                                                                         =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits                                                               $ 298,012           $ 289,230
  Borrowings                                                                13,390              13,260
  Accrued interest payable                                                     323                 421
  Advance payments by borrowers for taxes and insurance                        713                  52
  Other liabilities                                                            726                 543
                                                                         ---------           ---------
Total liabilities                                                          313,164             303,506

Stockholders' equity
  Common stock $1.00 par value;
    Shares authorized: 6,000,000--1999; 3,000,000--1998;
    Shares issued: 1,507,788;
    Shares outstanding: 1,489,754--1999; 1,490,331--1998                     1,508               1,508
  Additional paid in capital                                                10,824              10,820
  Net unrealized loss on securities available-for-sale                        (636)                (88)
  Retained earnings                                                         19,978              19,391
  Treasury stock, at cost (18,034 shares--1999;
    17,457 shares--1998)                                                      (674)               (634)
                                                                         ---------           ---------
Total stockholders' equity                                                  31,000              30,997
                                                                         ---------           ---------
Total liabilities and stockholders' equity                               $ 344,164           $ 334,503
                                                                         =========           =========
</TABLE>




See notes to unaudited consolidated financial statements.





                                       3
<PAGE>   4




MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                                  JUNE 30,                             JUNE 30,
                                                          1999             1998                1999              1998
                                                        --------         --------            --------          --------
                                                                          (In Thousands, except per share data)
<S>                                                     <C>               <C>               <C>               <C>
Interest income:
  Loans, including fees                                 $ 5,355           $ 4,849           $10,507           $ 9,686
  Investment securities:
    Taxable                                                 146               179               275               374
    Exempt from federal income taxes                        102                19               204                30
  Mortgage-related securities                               275               495               579               974
  Other                                                      52               151               114               260
                                                        -------           -------           -------           -------
Total interest income                                     5,930             5,693            11,679            11,324

Interest expense:
  Deposits                                                2,478             2,596             4,938             5,083
  Borrowings                                                 77                10               193                35
                                                        -------           -------           -------           -------
Total interest expense                                    2,555             2,606             5,131             5,118

Net interest income                                       3,375             3,087             6,548             6,206
Provision for loan losses                                    50                75               100               150
                                                        -------           -------           -------           -------
Net interest income after provision for
  loan losses                                             3,325             3,012             6,448             6,056

Non-interest income:
  Service charges on deposit accounts                       188               188               359               375
  Service charges on loans                                   59                52               101                74
  Net gain (loss) on securities sales                         0                49                 9                49
  Other                                                     244               270               456               511
                                                        -------           -------           -------           -------
                                                            491               559               925             1,009

Non-interest expenses:
  Salaries and employee benefits                          1,462             1,446             3,531             3,252
  Premises and equipment                                    384               386               853               807
  Data processing                                           160               161               317               318
  Federal deposit insurance premiums                         30                18                60                37
  Other                                                     494               535             1,075             1,097
                                                        -------           -------           -------           -------
                                                          2,530             2,546             5,836             5,511

Income before income taxes                                1,286             1,025             1,537             1,554
Income taxes                                                441               367               502               547
                                                        -------           -------           -------           -------
Net income                                              $   845           $   658           $ 1,035           $ 1,007
                                                        =======           =======           =======           =======

Basic earnings per share                                $  0.57           $  0.44           $  0.69           $  0.67
                                                        =======           =======           =======           =======

Diluted earnings per share                              $  0.55           $  0.43           $  0.68           $  0.67
                                                        =======           =======           =======           =======

Dividends per share                                     $  0.15           $  0.14           $  0.30           $  0.25
                                                        =======           =======           =======           =======
</TABLE>


See notes to unaudited consolidated financial statements.




                                        4

<PAGE>   5




MERCHANTS AND MANUFACTURERS BANCORPORATION, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           SIX MONTHS ENDED JUNE 30,
                                                                                            1999              1998
                                                                                         ---------          --------
                                                                                                 (In Thousands)
<S>                                                                                       <C>             <C>
OPERATING ACTIVITIES
  Net income                                                                              $  1,036        $  1,007
  Adjustments to reconcile net income to cash provided by
     Operating activities:
          Provision for loan losses                                                            100             150
          Provision for depreciation                                                           321             275
          Net amortization of investments securities premiums and discounts                     29              60
          Net realized investment security gains                                                (9)            (49)
          Increase in accrued interest receivable                                              (55)           (114)
          Increase in cash surrender value, officer/director life insurance                 (1,281)            (25)
          Increase in accounts receivable                                                      217            (746)
          Increase in accrued interest payable                                                 (98)             19
          Other                                                                               (397)           (276)
                                                                                          --------        --------
Net cash provided (used) by operating activities                                              (137)            301

INVESTING ACTIVITIES
Purchases of securities available-for-sale                                                  (2,589)        (13,692)
Proceeds from sales of securities available-for-sale                                         2,704           9,132
Proceeds from redemptions and maturities of securities available-for-sale                    2,351           3,300
Net increase in loans                                                                      (18,354)         (4,625)
Purchase of premises and equipment                                                            (419)           (371)
Redemption (purchase) of Federal Home Loan Bank stock                                           62             (22)
                                                                                          --------        --------
Net cash used by investing activities                                                      (16,245)         (6,278)

FINANCING ACTIVITIES
Net increase in deposits                                                                     8,782          15,713
Net increase (decrease) in borrowings                                                          130          (1,500)
Increase in advance payments by borrowers for taxes and insurance                              661             735
Payments of cash dividends to stockholders                                                    (448)           (372)
Purchase of treasury stock                                                                    (107)           (205)
Proceeds from sale of treasury stock                                                            67             196
Proceeds from issuing additional common stock                                                    4             290
                                                                                          --------        --------
Net cash provided by financing activities                                                    9,089          14,857

Increase (decrease) in cash and cash equivalents                                            (7,293)          8,880
Cash and cash equivalents at beginning of period                                            28,628          15,358
                                                                                          --------        --------
Cash and cash equivalents at end of period                                                $ 21,335        $ 24,238
                                                                                          ========        ========


Supplemental cash flow information:
  Interest paid                                                                           $  5,163        $  5,098
  Income taxes paid                                                                            579             478
</TABLE>


See notes to unaudited consolidated financial statements




                                       5

<PAGE>   6



MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
Notes to Unaudited Consolidated Financial Statements
June 30, 1999

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the
accounts of Merchants and Manufacturers Bancorporation, Inc. (the Corporation)
and its wholly owned subsidiaries, Lincoln State Bank, Franklin State Bank,
Lincoln Community Bank (collectively, the Banks), Achieve Mortgage Corporation
and M&M Services, Inc. Lincoln State Bank also includes the accounts of its
wholly owned subsidiary, M&M Lincoln Investment Corporation. Lincoln Community
Bank also includes the accounts of its wholly owned subsidiary, Lincoln
Investment Management Corporation. All significant intercompany balances and
transactions have been eliminated.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended June 30, 1999
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Corporation's Form
10-K for the year ended December 31, 1998.

This 10-Q contains various forward-looking statements concerning the Company's
prospects that are based on the current expectations and beliefs of management.
Forward-looking statements may also be made by the Corporation from time to time
in other reports and documents as well as oral presentations. When used in
written documents or oral statements, the words anticipate, believe, estimate,
expect, objective and similar expressions are intended to identify
forward-looking statements. The statements contained herein and such future
statements involve or may involve certain assumptions, risks and uncertainties,
many of which are beyond the Corporation's control, that could cause the
Corporation's actual results and performance to differ materially from what is
expected. In addition to the assumptions and other factors referenced
specifically in connection with such statements, the following factors could
impact the business and financial prospects of the Corporation: general economic
conditions; legislative and regulatory initiatives; monetary and fiscal policies
of the federal government; deposit flows; disintermidiation; the cost of funds;
general market rates of interest; interest rates or investment returns on
competing investments; demand for loan products; demand for financial services;
changes in accounting policies or guidelines; and changes in the quality or
composition of the Corporation's loan and investment portfolio.




                                       6

<PAGE>   7



NOTE B -- EARNINGS PER SHARE

On August 27, 1998 the Board of Directors of the Corporation declared a 10%
common stock dividend that was distributed on October 15, 1998 to shareholders
of record on October 1, 1998. All prior periods share data have been adjusted to
reflect the 10% stock dividend.

Presented below are the calculations for basic and diluted earnings per share:

<TABLE>
<CAPTION>

                                                               Three Months Ended                      Six Months Ended
                                                                   June 30,                                June 30,
     Basic                                                   1999            1998                   1999             1998
     ------------------------------------------------ ---------------------------------      ----------------------------------
<S>                                                   <C>               <C>                  <C>                 <C>
     Net income                                       $        844,950  $       657,411      $       1,034,630   $    1,006,615
     Weighted average shares outstanding                     1,489,754        1,500,528              1,489,696        1,497,169
     Basic earnings per share                         $           0.57  $          0.44      $            0.69   $         0.67
                                                      =================================      ==================================

     Diluted:
     ------------------------------------------------ ---------------------------------      ----------------------------------
<S>                                                   <C>               <C>                  <C>                  <C>
     Net income                                       $        844,950  $       657,411      $       1,034,630    $   1,006,615
     Weighted average shares outstanding                     1,489,754        1,500,528              1,489,696        1,479,169
     Effect of dilutive stock options outstanding               33,263           16,569                 32,056           15,866
                                                      ---------------------------------      ----------------------------------
     Diluted weighted average shares outstanding             1,523,016        1,517,097              1,521,751        1,513,035
     Diluted earnings per share                       $           0.55  $          0.43                $  0.68   $         0.67
                                                      =================================      ==================================
</TABLE>


NOTE C - COMPREHENSIVE INCOME

The following table presents the Corporation's comprehensive income.

<TABLE>
<CAPTION>
                                                               Three Months Ended                      Six Months Ended
                                                                    June 30,                               June 30,
                                                            1999             1998                   1999             1998
                                                      ---------------------------------      ----------------------------------
<S>                                                   <C>               <C>                  <C>                 <C>
     Net income                                       $        844,950  $       657,411      $       1,034,630   $    1,006,615
     Other comprehensive income
       Net change in unrealized securities gains
          (losses), net                                       (390,752)         (76,459)              (547,697)         (33,587)
                                                      ---------------------------------      ----------------------------------
     Total comprehensive income                       $        454,198  $       580,952      $         486,933   $      973,028
                                                      =================================      ==================================
</TABLE>


NOTE D -- LOANS RECEIVABLE

Loans are comprised of the following categories:

<TABLE>
<CAPTION>
                                                                                    June 30
                                                                           1999                  1998
                                                                   ---------------------------------------
                                                                                (In Thousands)
<S>                                                                <C>                        <C>
                 Commercial business loans                         $      68,190              $    54,886
                 Commercial real estate                                  120,230                   92,724
                 Real estate mortgages                                    69,454                   73,073
                 Installments                                             13,329                   12,240
                 Other                                                     1,181                    1,010
                                                                   ---------------------------------------
                 Total loans                                             272,384                  233,933
                 Unearned income                                             (37)                     (51)
                 Allowance for loan losses                                (2,314)                  (2,229)
                                                                   ---------------------------------------
                 Loans, net                                        $     270,033              $   231,653
                                                                   =======================================
</TABLE>



                                       7


<PAGE>   8


The following table presents changes in the allowance for loan losses:

<TABLE>
<CAPTION>
                                                               Six Months Ended June 30
                                                                  1999           1998
                                                           -------------------------------
                                                                  (In Thousands)
<S>                                                        <C>                    <C>
             Balance at January 1                          $       2,302          $  2,093
                  Provisions                                         100               150
                  Charge-offs                                       (95)               (18)
                  Recoveries                                           7                 4
                                                           ===============================
             Balance at June 30                            $       2,314          $  2,229
                                                           ===============================
</TABLE>


NOTE E -- STOCKHOLDERS' EQUITY

Under federal law and regulations, the Banks are required to meet certain
capital requirements, leverage ratios and risk-based capital requirements. The
leverage ratio, in general, is stockholders' equity as a percentage of total
assets. The risk-based capital ratio, in general, is stockholders' equity plus
general loan loss allowances (within certain limitations) as a percentage of
risk adjusted assets.

As of June 30, 1999, the most recent notification from the Federal Deposit
Insurance Corporation categorized Lincoln State Bank, Lincoln Community Bank and
Franklin State Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Banks must
maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios
as set forth in the table. There are no conditions or events since that
notification that management believes have changed the banks' category.

<TABLE>
<CAPTION>
                                                                                                To Be Well Capitalized
                                                                         For Capital           Under Prompt Corrective
                                                Actual                 Adequacy Purposes          Action Provisions
                                      --------------------------- -------------------------- --------------------------
                                          Amount       Ratio         Amount       Ratio          Amount         Ratio
                                      --------------------------- -------------------------- --------------------------
                                                                       (In Thousands)
<S>                                      <C>            <C>         <C>            <C>          <C>          <C>
          AS OF JUNE 30, 1999
          Total Capital (to Risk-
             Weighted Assets):
               Lincoln State Bank        $16,308        10.59%      $12,314       >8.00%        $15,393     >10.00%
               Lincoln Community           9,477        11.73%        6,462       >8.00%          8,077     >10.00%
               Franklin State Bank         4,974        10.74%        3,706       >8.00%          4,632     >10.00%

          Tier 1 Capital (to Risk-
             Weighted Assets):
               Lincoln State Bank         15,190         9.87%        6,157       >4.00%          9,236      >6.00%
               Lincoln Community           8,664        10.73%        3,231       >4.00%          4,846      >6.00%
               Franklin State Bank         4,590         9.91%        1,853       >4.00%          2,779      >6.00%

          Tier 1 Capital (to Average
             Assets):
               Lincoln State Bank         15,190         8.69%        6,992       >4.00%          8,740      >5.00%
               Lincoln Community           8,664         8.90%        3,894       >4.00%          4,868      >5.00%
               Franklin State Bank         4,590         8.02%        2,288       >4.00%          2,860      >5.00%
</TABLE>






                                       8

<PAGE>   9



NOTE F -- PENDING ACQUISITION

On March 9, 1999, the Corporation entered into a definitive agreement to acquire
Pyramid Bancorp., Inc. (PBI) by exchanging nine shares of the Corporation's
stock for each outstanding common share of PBI. Upon closing, PBI will be merged
into the Corporation. The transaction is expected to close in the third quarter
of 1999, and will be accounted for as a pooling of interests. At June 30, 1999,
PBI had total assets and shareholder's equity of $108,936 and $8,934,
respectively.

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

Financial Condition

At June 30, 1999, the Corporation's consolidated total assets were $344.2
million as compared to $334.5 million at December 31, 1998. This increase was
due to a $18.2 million increase in loans, which was partially offset by a $11.0
million reduction in short term investments and a $3.3 million decline in
investment securities and mortgage-related securities. The increase in assets
was funded by a $8.8 million increase in total deposits.

Investment securities available-for-sale increased $2.0 million, or 13.0% from
$15.7 million at December 31, 1998 to $17.8 million at June 30, 1999. Purchases
of US government agency notes caused the increase.

Mortgage-related securities available-for-sale decreased $5.4 million, or 23.4%
from $22.9 million at December 31, 1998, to $17.5 million at June 30, 1999.
Purchases of mortgage-related securities were offset by sales, redemptions and
maturities of this type of security.

Net loans receivable increased $18.2 million, or 7.2%, from $251.8 million at
December 31, 1998 compared to $270.0 million at June 30, 1999. This increase was
primarily due to new commercial loan relationships. This movement corresponds to
the Corporation's strategic plan of emphasizing commercial business. Currently,
loans receivable consists mainly of commercial loans secured by business assets,
real estate, and guarantees as well as mortgages secured by residential
properties located in the Corporation's primary market area. At June 30, 1999
the Corporation has not designated any as loans held for sale.

Stockholders' equity at June 30, 1999 was $31.0 million unchanged from December
31, 1998. The change in the individual components of stockholders' equity
consisted of net income of $1.0 million, less the net purchase of treasury stock
of $36,000, payments of dividends to shareholders of $448,000 and the $548,000
net decrease in the market value of securities categorized as available for
sale. The Banks continue to exceed their regulatory capital requirements.



                                       9

<PAGE>   10



Nonperforming Assets and Allowance for Losses

Generally a loan is classified as nonaccrual and the accrual of interest on such
loan is discontinued when the contractual payment of principal or interest has
become 90 days past due or management has serious doubts about further
collectibility of principal or interest. Generally, loans are restored to
accrual status when the obligation is brought current, has performed in
accordance with the contractual terms for a reasonable period of time and the
ultimate collectibility of the total contractual principal and interest is no
longer in doubt.

Nonperforming assets are summarized, for the dates indicated, as follows:

<TABLE>
<CAPTION>
                                                                  June 30,          December 31,
                                                                    1999               1998
                                                               -------------       --------------
                                                                       (dollars in thousands)
<S>                                                              <C>                  <C>
Non-accrual loans:
    Mortgage loans
      One-to-four family                                         $  539               $  505
      Commercial real estate                                        505                    7
                                                                 ------               ------
        Total mortgage loans                                      1,044                  512

    Commercial business                                             553                  391
    Consumer and other                                              109                  118
                                                                 ------               ------
        Total non-accrual loans                                   1,706                1,021

Other real estate owned                                              25                    0
                                                                 ------               ------
        Total nonperforming assets                               $1,731               $1,021
                                                                 ======               ======

RATIOS:
Non-accrual loans to total loans                                   0.63%                0.40%
Nonperforming assets to total assets                               0.50                 0.31
Loan loss allowance to non-accrual loans                         135.64               225.47
Loan loss allowance to total loans                                 0.85                 0.91
</TABLE>


Nonperforming assets increased by $710,000 from $1.0 million at December 31,
1998 to $1.7 million at June 30, 1999, an increase of 69.5%. Management believes
that losses will be minimal on the remaining balances, due to the collateral
position in each situation.




                                       10

<PAGE>   11


Results of Operations

Net interest income for the three months ended June 30, 1999 was $3.38 million,
an increase of 9.3% from the $3.09 million reported for the same period in 1998.
The increased volume of interest-earning assets as well as an improved net
interest margin accounted for the higher net interest income. The weighted
average yield on interest-earning assets decreased from 7.95% for the three
months ended June 30, 1998 to 7.61% for the same period in 1999. Competitive
pressures and lower market interest rates caused the weighted average yield on
interest earning assets to decline. The lower average cost of new deposits
generated caused the weighted average rate paid on deposits and borrowings to
decrease from 3.77% for the three months ended June 30, 1998 to 3.38% for the
three months ended June 30, 1999. Net interest income for the six months ended
June 30, 1999 was $6.55 million, an increase of 5.5% from the $6.21 million
reported for the same period in 1998. The increased volume of interest-earning
assets was the primary reason for the improvement in the year-to-date net
interest income.

The following table sets forth the weighted average yield earned on the
Corporation's consolidated loan and investment portfolios, the weighted average
interest paid on deposits and borrowings, the net spread between yield earned
and rates paid and the net interest margin during the six and three months ended
June 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                    During the                  During the
                                                                 Three Months Ended             Six Months
                                                                     June 30,                  Ended June 30,

                                                                 1999        1998           1999         1998
                                                              ----------------------     -----------------------
<S>                                                              <C>         <C>            <C>          <C>
               Weighted average yield on
                  interest-earning assets                        7.61%       7.95%          7.60%        7.99%

               Weighted average rate paid on
                  deposit accounts and borrowings                3.38        3.77           3.45         3.76
                                                              ----------------------   -------------------------

               Net interest spread                               4.23%       4.18%          4.15%        4.23%
                                                              ======================   =========================

               Net interest margin (net interest
                  income divided by average
                  earning assets)                               4.33%       4.31%           4.26%       4.38%
                                                              ======================   =========================
</TABLE>


The provision for loan losses for the three month period ended June 30, 1999 was
$50,000 compared to $75,000 for the three months ended June 30, 1998. For the
six months ended June 30, 1999, the provision for loan losses was $100,000
compared to $150,000 for than the same period in 1998. The Corporation uses a
risk-based assessment of its loan portfolio to determine the level of the loan
loss allowance. This procedure is based on internal reviews intended to
determine the adequacy of the loan loss allowance in view of presently known
factors. However, changes in economic conditions in the future financial
conditions of borrowers cannot be predicted and may result in increased future
provisions to the loan loss allowance.




                                       11

<PAGE>   12



Non-interest income for the three months ended June 30, 1999 was $491,000
compared to $559,000 for the three months ended June 30, 1998, a decrease of
$68,000, or 12.2%. Non-interest income for the six months ended June 30, 1999
was $925,000 million compared to $1.0 million for the six months ended June 30,
1998, a decrease of $84,000, or 8.3%. The decrease for both periods is due to
fewer fees collected on ATM transactions and reduced gains on sales of
investment securities.

Non-interest expense for the three months ended June 30, 1999 was $2.53 million
compared to $2.55 million for the three months ended June 30, 1998, a decrease
of $16,000, or 0.1%. Non-interest expense for the six months ended June 30, 1999
was $5.84 million compared to $5.51 million for the six months ended June 30,
1998, an increase of $325,000, or 5.9%. Salaries and employee benefits increased
$16,000 or 1.1% from $1.45 million for the three-month period ended June 30,
1998 to $1.46 million for the 1999 three-month period. Salaries and employee
benefits increased $279,000 or 8.6% from $3.25 million for the six-month period
ended June 30, 1998 to $3.53 million for the six-month period ended June 30,
1999. Employee bonus payments, higher benefit costs and the hiring of new
commercial business developers accounted for this increase. Premises and
equipment expense decreased $2,000 from $386,000 for the three-month period
ended June 30, 1998 compared to $384,000 for the three-month period ended June
30, 1999. Premises and equipment expense increased $46,000 or 5.7% from $807,000
for the six-month period ended June 30, 1998 compared to $853,000 for the
six-month period ended June 30, 1999. The six-month increase in occupancy
expense can be attributed to maintenance and repairs made on the Corporation's
properties and the opening of a new branch of the Franklin State Bank. Federal
deposit insurance premiums increased $12,000 from $18,000 for the three-month
period ended June 30, 1998 to $30,000 and $23,000 for the six-month period ended
June 30, 1998 compared to 1999. The insurance premiums increased in 1999 due to
the higher level of deposits. Other expenses decreased $41,000 or 7.7% in the
second quarter and $22,000 or 0.1% for the six-month period ended June 30, 1999.
This can be attributed to decreases in operating expenses such as office
supplies, examination costs and human resource expenses.

Income before taxes for the three-month period ended June 30, 1999 was $1.29
million compared to $1.03 million for the three months ended June 30, 1998, an
increase of $261,000 or 23.1%. Income before taxes for the six-month period
ended June 30, 1999 was $1.54 million compared to $1.55 million for the six
months ended June 30, 1998, a decrease of $17,000 or 1.1%. The income tax
expense for the three months ended June 30, 1999 increased $74,000 over the 1998
second quarter tax expense. The effective tax rate for the three months ended
June 30, 1999 was 34.3% compared to 35.8% for the three months ended June 30,
1998. The income tax expense for the six months ended June 30, 1999 decreased
$45,000 over the same period in 1998. The effective tax rate for the six months
ended June 30, 1999 was 32.7% compared to 35.2% for the six months ended June
30, 1998. The decrease in the tax rate can be attributed to the purchase of
tax-exempt investment securities held by the Corporation and a reallocation of
expenses throughout the Corporation's subsidiaries. On an after tax basis, the
Corporation reported net income of $845,000 for the three month period ended
June 30, 1999 compared to $658,000 for the same period in 1998; and for the six
month period ended June 30, 1999, the Corporation reported net income of $1.04
million compared to $1.00 million for the same period in 1998.




                                       12

<PAGE>   13



Liquidity and Capital Resources

Liquidity management involves the ability to meet the cash flow requirements of
customers who may be either depositors wanting to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs. The Corporation had liquid assets of $21.3 million and $28.6 million at
June 30, 1999 and December 31, 1998, respectively.

Management believes liquidity and capital levels are adequate at June 30, 1999.
For a discussion of regulatory requirements, see Note D to the Unaudited
Consolidated Financial Statements.

Asset/Liability Management

Financial institutions are subject to interest rate risk to the extent their
interest-bearing liabilities (primarily deposits) mature or reprice at different
times and on a different basis than their interest-earning assets (consisting
primarily of loans and securities). Interest rate sensitivity management seeks
to match maturities on assets and liabilities and avoid fluctuating net interest
margins while enhancing net interest income during periods of changing interest
rates. The difference between the amount of interest-earning assets maturing or
repricing within a specific time period and the amount of interest-bearing
liabilities maturing or repricing within the same time period is referred to as
an interest rate gap. A gap is considered positive when the amount of interest
rate sensitive assets exceeds the amount of interest rate sensitive liabilities.
A gap is considered negative when the amount of interest rate sensitive
liabilities exceeds the amount of interest rate sensitive assets. During periods
of rising interest rates, a negative gap tends to adversely affect net interest
income while a positive gap tends to result in an increase in net interest
income. During a period of falling interest rates, a negative gap tends to
result in an increase in net interest income while a positive gap tends to
adversely affect net interest income.





                                       13
<PAGE>   14



The following table shows the interest rate sensitivity gap for four different
time intervals as of June 30, 1999. Certain assumptions regarding prepayment and
withdrawal rates are based upon the Corporation's historical experience, and
management believes such assumptions are reasonable.

<TABLE>
<CAPTION>
                                                            AMOUNTS MATURING OR REPRICING AS OF JUNE 30, 1999
                                                -------------------------------------------------------------------------
                                                    WITHIN     SIX TO TWELVE   ONE TO FIVE        OVER
                                                  SIX MONTHS       MONTHS         YEARS        FIVE YEARS       TOTAL
                                                -------------------------------------------------------------------------
                                                                          (DOLLARS IN THOUSANDS)
<S>                                                   <C>            <C>            <C>             <C>         <C>
   Interest-earning assets:
   Fixed-rate mortgage loans                          $ 31,360       $ 14,722       $ 81,534        $14,887     $ 142,503
   Adjustable-rate mortgage loans                       18,831          5,331         20,502          2,062        46,726
                                                -------------------------------------------------------------------------
         Total mortgage loans                           50,191         20,053        102,036         16,949       189,229
   Commercial business loans                            35,874          4,599         26,910          1,225        68,608
   Consumer loans                                        4,258          1,649          6,514            908        13,329
   Other loans                                             656            525              0              0         1,181
   Mortgage-related securities                          11,933              0          4,192          1,367        17,492
   Fixed rate investment securities and other              488            806          2,731         10,128        14,153
   Variable rate investment securities and
   other                                                11,317            995              0              0        12,312
                                                -------------------------------------------------------------------------
         Total interest-earning assets                $114,717       $ 28,627       $142,383        $30,577     $ 316,304
                                                =========================================================================

   Interest-bearing liabilities:
   Deposits
     Time deposits                                    $112,980       $ 36,378       $ 13,773        $     0     $ 163,131
     NOW accounts                                        1,500          1,500         14,997          6,998        24,995
     Savings accounts                                    3,580          3,580         35,798         16,706        59,664
     Money market accounts                                 475            475          4,752          2,217         7,919
     Advance payments for taxes and insurance                0            713              0              0           713
     Borrowings                                         13,390              0              0              0        13,390
                                                -------------------------------------------------------------------------
         Total interest-bearing liabilities           $131,925       $ 42,646       $ 69,320        $25,921     $ 269,812
                                                =========================================================================
   Interest-earning assets less
   interest-bearing
     Liabilities                                      ($17,208)      ($14,019)      $ 73,063        $ 4,656     $  46,492
                                                =========================================================================
   Cumulative interest rate sensitivity gap           ($17,208)      ($31,227)      $ 41,836        $46,492
                                                ============================================================
   Cumulative interest rate sensitivity gap as
   a
     Percentage of total assets                         (5.00%)        (9.07%)         12.16%         13.51%
                                                ============================================================
</TABLE>


At June 30, 1999, the Corporation's cumulative interest-rate sensitive gap as a
percentage of total assets was a negative 5.00% for six months and a negative
9.07% for one-year maturities. Therefore, the Corporation is negatively gapped
and may benefit from falling interest rates.

Certain shortcomings are inherent in the method of analysis presented in the
above schedule. For example, although certain assets and liabilities may have
similar maturities or periods of repricing, they may react in different degrees
to changes in market interest rates. Also, the interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market interest
rates, while interest rates on other types may lag behind changes in market
rates. Additionally, certain assets, such as adjustable rate mortgage loans,
have features that restrict changes in interest rates, on a short term basis
over the life of the asset. Further, in the event of a change in interest rates,
prepayment and early withdrawal levels would likely deviate significantly from
those assumed in calculating the schedule.





                                       14

<PAGE>   15



YEAR 2000 PREPAREDNESS

The Year 2000 poses a potential risk to normal operations of both Information
Technology (IT) and non-IT systems. The Year 2000 problem is pervasive and
complex. The majority of computer operating systems and programs currently in
use have been developed utilizing six digit date fields (YYMMDD). For example,
December 31st, 1999, would be represented by "991231" in computer code. The two
digit field for the year (in example "99") is the basis for all calculation
formulas within most computer systems, particularly those processed through
mainframe computers.

Up until now, this two-digit field has sufficed, using a subtraction of current
date from some future date (up to 12-31-99). As the industry enters the year
2000, the digit-field "00" will not permit accurate calculations based on the
current formulas. January 1, 2000 would be read as the year 000101. Many
computer systems will recognize this date as the year 1900 or other erroneous
dates. The potential impact is that data could cause system failures. This could
affect all forms of financial accounts, pensions, personnel benefits,
investments, legal commitments, record keeping, inventories, maintenance, and
file retention.

Systems that work independently of IT equipment have the same potential for
failure due to the prevalence of embedded computer chips. These "hidden" chips
have forced the Corporation to review all of its environmental, security, and
communication systems.

Year 2000 Project Status

The Corporation has taken the Year 2000 issue very seriously. The Corporation
sees the Year 2000 as an opportunity to help increase service, functionality,
and performance to its customers. Outdated systems, procedures, and products are
being replaced or renovated with those that will meet the challenges of the new
millennium.

A Year 2000 project team was assembled early in 1997 to assess the scope of the
project as it relates to all of the Corporation's banks and subsidiaries. Once
this assessment was completed, an aggressive project plan was put into place
that consists of renovating or replacing affected systems, validation and
testing of any changes, effective risk management and employee and consumer
awareness.

In developing its Year 2000 Project Plan, the Corporation defined the Year 2000
problem in 5 stages:

       Awareness:        The need to define the scope of the Year 2000 problem.
       Assessment:       Identify all systems and components which are affected.
       Renovation:       The problem should be "fixed" by the appropriate means.
       Validation:       Year 2000 compliance must be tested.
       Implementation:   Final confirmation of Year 2000 compliance.

The Corporation began working on its Year 2000 project in the spring of 1997.
The project plan was written, personnel recruited and timetables established.

       Awareness:        Completed Summer-Fall 1997






                                       15

<PAGE>   16


The awareness phase consisted of analyzing the effects that the Year 2000 posed
to the Corporation. It was during this phase that the project plan was written,
our company consultant was retained, the project time-lines established and
introductory information was sent to our employees.

         Assessment:                Completed Fall 1997 - Spring 1998

The assessment phase consisted of a complete inventory of all the Corporation's
facilities. This inventory was used to prioritize those systems considered
mission-critical and to assign project team members to determine their Year 2000
compliance.

         Renovation:                99% Completed

The renovation phase consisted of replacing or upgrading those systems that had
been found non-Year 2000 compliant. Based on the type of systems in place, the
renovation phase was completed by June 1, 1999. Small miscellaneous updates, not
directly related to Year 2000, for systems are anticipated till the end of the
year.

         Validation:                99% Completed

For those systems that had been renovated, they were tested to ensure Year 2000
compliance. Each system was tested by individuals familiar with its operation
and all tests were documented for support purposes. Validation was completed
along with renovation and implementation. No apparent problems inherent to the
Year 2000 have been observed in the completed testing. During the first week of
March 1999, the Corporation concluded its proxy testing and validation of its
outside service bureau. As with the Renovation phase, the Corporation will
continue to monitor and test its systems for readiness till the end of the year.

         Implementation:            99% Completed

The implementation phase consisted of implementing those renovated and validated
systems. Based on the type of systems in place, the implementation phase was
completed in the 2nd quarter of 1999. Monitoring of the systems will be ongoing
till the end of the year.

Corporate Customers

The Corporation and its subsidiary banks have prepared a corporate contingency
plan for addressing the Year 2000 problem and implementing the necessary
changes. One of the facets of this contingency plan is to ensure that its
customers are made aware of this problem and that they are involved at some
level in reviewing their company's ability to handle and effectively deal with
the year 2000. Each of the lending officers within the Corporation is aware of
the Year 2000 Problem and has reviewed those businesses to which funds have been
borrowed to assure that they are also becoming Year 2000 ready. The same review
process is being used with all new applicants. The Corporation is currently
revisiting businesses to review their state of Year 2000 readiness and efforts.
This second review is to be completed by September 1999.





                                       16
<PAGE>   17



Public Awareness

The Corporation fully realizes the impact that the media has on public
perception regarding the Year 2000. A campaign of public awareness has been
implemented that consists of informational pieces directly mailed to customers
or available throughout the Corporation. These, in addition to lobby displays
are intended to assure customers of the Corporation's efforts. Employees of the
Corporation have been trained on answering questions and where to direct
customers for additional information. The Corporation's web site also contains
information regarding this topic. Additional brochures regarding consumer fraud
will be made available in the third quarter of 1999. Materials from the FDIC and
the State of Wisconsin regarding Year 2000 readiness are being included in the
Corporation's public awareness plan.

Third Party Vendors

A third party vendor is a supplier, processor, or governmental agency that has
material interfaces directly with the Corporation.

Significant Vendors

The Corporation is working directly with all vendors with material interfaces.
It was the Corporation's goal that these interfaces be ready by June 1, 1999.
Currently, 99% of all interfaces have been tested and no apparent problems have
been discovered. Below are several key interfaces and their project status:

         Deposit and Loan Processing:            Currently Completed
         Loan Preparation:                       Currently Completed
         Payroll:                                Currently Completed
         Credit Card Processing:                 Currently Completed
         Asset Liability Management:             Currently Completed

Other Third Party Vendors

Other third party vendors are suppliers that provide services or products to the
Corporation. All vendors have been queried as to their Year 2000 readiness.
Approximately 99% of all vendors currently supply Year 2000 ready products or
services. The remaining one percent has indicated that their products or
services will be ready during the second half of 1999. To date, the Corporation
is not aware of any vendor with a Year 2000 issue that would significantly
impact the Corporation's operations, liquidity or capital resources. The
Corporation has tested for readiness wherever possible and feels comfortable
with the results. Should a vendor be unable to supply a Year 2000 ready product
or services, the Corporation will follow the guidelines set forth in its Year
2000 contingency plan.

Costs

Managing the Year 2000 issue will result in direct and indirect costs to the
Corporation. Based on the program to date the Corporation has incurred $12,000
in fees to an external consultant. In addition, over the past months nearly
all-existing hardware has been replaced and financed out of regular operating
sources. These items of equipment would normally have been replaced irrespective
of the Year 2000




                                       17

<PAGE>   18


issue. Internal staff costs incurred due to the project have amounted to
approximately $20,000 to $30,000.

The Corporation anticipates that it will incur expenses, both internal and
external for 1999 in the range of $30,000 to $50,000. Most of these costs will
be incurred due to staff time being allocated to the project and for contingency
planning preparation. The Corporation intends to fund these costs out of normal
operating sources.

The estimated costs of, and timetable for, becoming Year 2000 compliant
constitute "forward looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such estimates are
based on numerous assumptions by management, including assumptions regarding the
continued availability of certain resources, the accuracy of representations
made by third parties concerning their compliance with Year 2000 issues, and
other factors. The estimated costs of Year 2000 compliance also do not give
effect to any future corporate acquisitions made by the Corporation or its
subsidiaries.

Risk of Non-Compliance and Contingency Plans

Management of the Corporation believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. The major applications which
pose the greatest Year 2000 risk if the implementation of the Year 2000
Compliance Program is not successful are the Corporation's data processing
system (which processes various documents to allow for accurate record keeping
of transactional data), teller system and transaction interfaces (which provide
customer access to accounts), loan system (which monitors and transacts loan
payments by customers), and internal network system (which supports the computer
components throughout the Corporation). External vendors support most of these
systems. Failure by any of these systems could have a negative impact on the
Corporation's ability to process its customers' transactions.

Although the Corporation has completed 99% of its Year 2000 activities, and
although the Corporation has initiated Year 2000 Communications with significant
customers, vendors and other important parties, and is monitoring the progress
of such communications, such third parties nonetheless represent a risk that
cannot be assessed with precision nor absolutely controlled despite the
Corporation's best efforts. For that reason, the Corporation is modifying its
existing business resumption contingency plan to address alternatives in the
event of some kind of a Year 2000 failure. The Corporation's contingency plan
was completed and tested by June 30, 1999. Random testing of the plan will
continue through the end of the year.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        Not Applicable




                                       18

<PAGE>   19



PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings

           As of June 30, 1999 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 2.    Changes in Securities - NONE

Item 3     Defaults upon Senior Securities - NONE

Item 4     Submission of Matters to Vote of Security Holders
           ANNUAL MEETING OF SHAREHOLDERS. On May 25, 1999, at the Annual
           Meeting of the shareholders of the Corporation, the
           Corporation's shareholders reelected Thomas Gapinski, J. Michael
           Bartels, John Krawczyk, Gervase Rose, Robert Donaj and James
           Sass as directors for three year terms expiring on the date of
           the annual shareholders meeting to be held in 2001. The
           shareholders also ratified the adoption of the resolution to
           amend the Corporation's Articles of Incorporation to increase
           the number of authorized shares of $1.00 par value of common
           stock from 3,000,000 to 6,000,000 shares

           SHAREHOLDER VOTE WITH RESPECT TO MATTERS ACTED UPON AT THE
           ANNUAL MEETING

           ELECTION OF DIRECTORS. Under Wisconsin law, the number of
           persons corresponding to the number of director positions to be
           filled at the Annual Meeting who received the highest number of
           votes would be elected as directors. Thomas Gapinski, J. Michael
           Bartels, John Krawczyk, Gervase Rose, Robert Donaj and James
           Sass were standing for reelection. The vote with respect to the
           reelection of each was as follows:

           THOMAS GAPINSKI
                 1,489,750  Total votes were eligible to be cast
                 1,002,840  Votes were represented in person or by proxy at the
                            Annual Meeting
                   998,514  Votes were cast "FOR" the reelection of Mr. Gapinski
                         0  Votes were cast "AGAINST" the reelection of
                            Mr. Gapinski
                     4,326  Votes abstained or were broker non-votes

           J. MICHAEL BARTELS
                 1,489,750  Total votes were eligible to be cast
                 1,002,840  Votes were represented in person or by proxy at the
                            Annual Meeting
                   999,126  Votes were cast "FOR" the reelection of Mr. Bartels
                         0  Votes were cast "AGAINST" the reelection of
                            Mr. Bartels






                                       19

<PAGE>   20







        JOHN KRAWCZYK
            1,489,750  Total votes were eligible to be cast
            1,002,840  Votes were represented in person or by proxy at the
                       Annual Meeting
              998,458  Votes were cast "FOR" the reelection of Mr. Krawczyk
                    0  Votes were cast "AGAINST" the reelection of Mr. Krawczyk
                4,382  Votes abstained or were broker non-votes

        GERVASE ROSE
            1,489,750  Total votes were eligible to be cast
            1,002,840  Votes were represented in person or by proxy at the
                       Annual Meeting
              999,126  Votes were cast "FOR" the reelection of Mr. Rose
                    0  Votes were cast "AGAINST" the reelection of Mr. Rose
                3,714  Votes abstained or were broker non-votes

        ROBERT DONAJ
            1,489,750  Total votes were eligible to be cast
            1,002,840  Votes were represented in person or by proxy at the
                       Annual Meeting
              993,290  Votes were cast "FOR" the reelection of Mr. Donaj
                    0  Votes were cast "AGAINST" the reelection of Mr. Donaj
                9,550  Votes abstained or were broker non-votes

        JAMES SASS
            1,489,750  Total votes were eligible to be cast
            1,002,840  Votes were represented in person or by proxy at the
                       Annual Meeting
              996,921  Votes were cast "FOR" the reelection of Mr. Sass
                    0  Votes were cast "AGAINST" the reelection of Mr. Sass
                5,919  Votes abstained or were broker non-votes




                                       20
<PAGE>   21





       ADOPTION OF THE RESOLUTION TO AMEND THE CORPORATION'S ARTICLES
       OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
       $1.00 PAR VALUE OF COMMON STOCK FROM 3,000,000 TO 6,000,000
       SHARES. Under Wisconsin law, the resolution would be approved
       if, at the Annual Meeting, a greater number of votes were cast
       "FOR" the proposal than were cast "AGAINST" the proposal.
       Abstentions and broker non-votes were not counted except for
       purposes of establishing a quorum. The vote on the adoption of
       the resolution to amend the Corporation's Articles of
       Incorporation to increase the number of authorized shares of
       $1.00 par value of common stock from 3,000,000 to 6,000,000
       shares was as follows:

             1,489,750  Total votes were eligible to be cast
             1,002,840  Votes were represented in person or by proxy at the
                        Annual Meeting
               984,775  Votes were cast "FOR" the adoption of the resolution
                        to amend the corporation's Articles of Incorporation to
                        increase the number of authorized shares of $1.00 par
                        value of common stock from 3,000,000 to 6,000,000 shares
                12,803  Votes were cast "AGAINST" the adoption of the resolution
                        to amend the corporation's Articles of Incorporation
                        to increase the number of authorized shares of
                        $1.00 par value of common stock from 3,000,000 to
                        6,000,000 shares
                 5,262  Votes abstained or were broker non-votes

Item 5   Other Information - NONE

Item 6   Exhibits and Reports on Form 8-K

         The Corporation did not file any reports on Form 8-K during the
         three months ended June 30, 1999. Required exhibits are
         incorporated by reference to previously filed Securities Act
         registration statements.





                                       21
<PAGE>   22



                                   SIGNATURES

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

                                             MERCHANTS AND MANUFACTURERS
                                                 BANCORPORATION, INC.
                                      ------------------------------------------
                                                    (Registrant)



Date    August 10, 1999               /s/ James F. Bomberg
     --------------------             ------------------------------------------
                                      James F. Bomberg
                                      President & Chief Executive Officer


Date    August 10, 1999               /s/ James C. Mroczkowski
     --------------------             ------------------------------------------
                                      James C. Mroczkowski
                                      Executive Vice President & Chief Financial
                                      Officer
                                      Principal Financial Officer



                                       22