Securities and Exchange
CommissionWashington, D.C. 20549

_________________

# FORM 10-Q

[X] Quarterly Report
Pursuant to Section 13 or 15(d)

of the Securities
Exchange Act of 1934

# For the quarterly
period ended March 31, 2004

or

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

_________________

# Commission File
#000-30521

Pavilion Bancorp, Inc.(Exact
name of registrant as specified in its charter)

|Michigan
(State or other jurisdiction of
incorporation or organization) | 38-3088340
  (I.R.S. Employer
Identification No.)
|----------------------------------------------------------------------- | -------------------------------------------------

135 East Maumee Street,
Adrian, Michigan 49221(Address of principal executive offices, including Zip Code)

Registrants
telephone number, including area code:(517) 265-5144, Fax (517) 265-3926

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

|Yes [X] | No [__]
|------- | -------

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

|Yes [__] | No [X]
|-------- | ------

As of May 6, 2004 there were 845,420
outstanding shares of the registrants common stock, no par value.

Page 1

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# CROSS REFERENCE TABLE

|ITEM NO. | DESCRIPTION | PAGE NO.
|-------- | ----------- | --------

---

|PART I - FINANCIAL INFORMATION                                               
|-----------------------------------------------------------------------------
|Item 1.
Item 2.
Item 3.
Item 4.                                              
|PART II -OTHER INFORMATION                                                   
|Item 1.      
Item 2.      
Item 3.      
Item 4.      
Item 5.      
Item 6.
|Signatures                                                                   
|Exhibit Index                                                                

Page 2

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Independent
Accountants Report

We have reviewed the consolidated
balance sheet of Pavilion Bancorp, Inc. (the Corporation) as of March 31, 2004, and the
related consolidated statements of income, and cash flows for the three-month period then
ended, included in the Corporations SEC Form 10-Q. These financial statements are
the responsibility of the Corporations management.

We conducted our review in accordance
with standards established by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.

Based on our review, we are not aware
of any material modifications that should be made to the consolidated financial statements
referenced above for them to be in conformity with generally accepted accounting
principles.

Plante & Moran, PLLCAuburn
Hills, MIMay 7, 2004

Page 3

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# PART IFINANCIAL INFORMATION

# ITEM 1- FINANCIAL
STATEMENTS

CONDENSED CONSOLIDATED BALANCE
SHEETSIn thousands of dollars, except share data

|                                                      | March 31, 
   2004    
(unaudited) | December 31,
    2003
|----------------------------------------------------- | ---------------------------------- | ---------------------
|                                                      |                                    |                      
|ASSETS                                                |                                    |                      
|Cash and due from banks                               |                                    |                      
|                                                      |                                    |                      
|Total cash and cash equivalents                       |                                    |                      
|                                                      |                                    |                      
|Securities available for sale                         |                                    |                      
|Federal Home Loan Bank stock, at cost                 |                                    |                      
|Federal Reserve Bank stock, at cost                   |                                    |                      
|Loans held for sale                                   |                                    |                      
|Loans receivable, net of allowance for loan losses    |                                    |                      
|Premises and equipment, net                           |                                    |                      
|Accrued interest receivable                           |                                    |                      
|Mortgage servicing asset                              |                                    |                      
|Other assets                                          |                                    |                      
|                                                      |                                    |                      
|Total Assets                                          |                                    |                      
|                                                      |                                    |                      
|                                                      |                                    |                      
|LIABILITIES AND SHAREHOLDERS' EQUITY                  |                                    |                      
|Deposits                                              |                                    |                      
|Noninterest bearing                                   |                                    |                      
|Interest bearing                                      |                                    |                      
|                                                      |                                    |                      
|Total deposits                                        |                                    |                      
|                                                      |                                    |                      
|Borrowed funds                                        |                                    |                      
|Accrued interest payable                              |                                    |                      
|Other liabilities                                     |                                    |                      
|Trust preferred securities                            |                                    |                      
|Common stock subject to repurchase obligation in ESOP |                                    |                      
|                                                      |                                    |                      
|Total liabilities                                     |                                    |                      
|                                                      |                                    |                      
|Shareholders' equity                                  |                                    |                      
|Common stock and paid-in capital, no par value        |                                    |                      
|Retained earnings                                     |                                    |                      
|Accumulated other comprehensive income (loss),        |                                    |                      
|net of tax                                            |                                    |                      
|                                                      |                                    |                      
|Total shareholders' equity                            |                                    |                      
|                                                      |                                    |                      
|Total liabilities and shareholders' equity            |                                    |                      
|                                                      |                                    |                      

Page 4

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| | CONDENSED
CONSOLIDATED STATEMENTS OFINCOME
AND COMPREHENSIVE INCOME (unaudited) In thousands of dollars, except share data
| | --------------------------------------------------------------------------------------------------------------------------

|                                                    | Three Months EndedMarch 31,
|--------------------------------------------------- | ---------------------------
|                                                    |                            
|                                                   
|                                                    |                            
|Interest and dividend income                        |                            
|Loans receivable, including fees                    |                            
|Securities                                          |                            
|Federal funds sold and other                        |                            
|                                                    |                            
|Total interest and dividend income                  |                            
|                                                    |                            
|Interest expense                                    |                            
|Deposits                                            |                            
|Federal Home Loan Bank advances                     |                            
|Other                                               |                            
|                                                    |                            
|Total interest expense                              |                            
|                                                    |                            
|Net interest income                                 |                            
|Provision for loan losses                           |                            
|                                                    |                            
|Net interest income after provision for loan losses |                            
|                                                    |                            
|Noninterest income                                  |                            
|Service charges and fees                            |                            
|Gains on loan sales                                 |                            
|Loan servicing fees, net of amortization            |                            
|Other                                               |                            
|                                                    |                            
|                                                    |                            
|                                                    |                            
|Noninterest expense                                 |                            
|Salaries and employee benefits                      |                            
|Occupancy and equipment                             |                            
|Other                                               |                            
|                                                    |                            
|                                                    |                            
|                                                    |                            
|                                                    |                            
|Income before income tax                            |                            
|Income tax expense                                  |                            
|                                                    |                            
|Net income                                          |                            
|                                                    |                            
|                                                    |                            
|Basic earnings per share                            |                            
|                                                    |                            
|Diluted earnings per share                          |                            
|                                                    |                            
|Dividends per share                                 |                            
|                                                    |                            

Page 5

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| | CONDENSED
CONSOLIDATED STATEMENT OF
| | -----------------------------------

| | CASH
FLOWS (unaudited)
| | ----------------------

|In
thousands of dollars
|-----------------------

|                                                 | Three Months EndedMarch 31,
|------------------------------------------------ | ---------------------------
|                                                 |                            
|                                                
|                                                 |                            
|Cash Flows from operating activities             |                            
|Net income                                       |                            
|Adjustments to reconcile net income to           |                            
|net cash from operating activities               |                            
|Depreciation                                     |                            
|Provision for loan losses                        |                            
|Net amortization and accretion on securities     |                            
|available for sale                               |                            
|Net change in:                                   |                            
|Accrued interest receivable                      |                            
|Loans held for sale                              |                            
|Other assets                                     |                            
|Accrued interest payable                         |                            
|Other liabilities                                |                            
|                                                 |                            
|Net cash from operating activities               |                            
|                                                 |                            
|Cash flows from investing activities             |                            
|Securities available for sale:                   |                            
|Maturities, calls and principal payments         |                            
|Purchases                                        |                            
|Purchase of Federal Reserve Bank stock           |                            
|Purchase of Federal Home Loan Bank Stock         |                            
|Net premises and equipment expenditures          |                            
|Net decrease (increase) in loans                 |                            
|                                                 |                            
|Net cash from investing activities               |                            
|                                                 |                            
|Cash flows from financing activities             |                            
|Net change in deposits                           |                            
|Net change in borrowed funds                     |                            
|Change in shareholders' equity                   |                            
|                                                 |                            
|Net cash from financing activities               |                            
|                                                 |                            
|Net change in cash and cash equivalents          |                            
|                                                 |                            
|Cash and cash equivalents at beginning of period |                            
|                                                 |                            
|Cash and cash equivalents at end of period       |                            
|                                                 |                            
|Cash paid for:                                   |                            
|Interest                                         |                            
|Income taxes                                     |                            

Page 6

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# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)

# NOTE 1  PRINCIPLES
OF CONSOLIDATION AND NATURE OF OPERATIONS

The unaudited condensed consolidated
financial statements include the accounts of Pavilion Bancorp, Inc. (the
Company) and its wholly-owned subsidiaries, Bank of Lenawee and Bank of
Washtenaw (together the Banks). Bank of Lenawee includes its wholly-owned
subsidiaries, Pavilion Financial Services and Pavilion Mortgage Company. All significant
intercompany balances and transactions have been eliminated in consolidation.

The Company is a two-bank holding
company which conducts limited business activities. The Banks perform the majority of the
Companys business activities.

The Banks provide a range of banking
services to individuals, commercial businesses, light industries and municipal entities
located in their service areas. Each bank maintains a diversified loan portfolio,
including loans to individuals for home mortgages, automobiles and personal expenditures,
and loans to business enterprises for current operations and expansion. The Banks offer
traditional bank deposit products, including checking, savings, money market savings,
individual retirement accounts, and certificates of deposit as well as a mobile banking
courier service.

# NOTE 2  BASIS OF
PRESENTATION

The unaudited condensed consolidated
financial statements of the Company have been prepared in accordance with generally
accepted accounting principles for interim financial information and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by 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 three month period ended March 31, 2004 are not
necessarily indicative of the results that may be expected for the year ending December
31, 2004. For further information, refer to the consolidated financial statements and
footnotes thereto included in the Companys Annual Report on Form 10-K for the year
ended December 31, 2003.

Page 7

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# NOTE 3  EARNINGS
PER SHARE

A reconciliation of the numerators
and denominators of the basic earnings and diluted earnings per share computations for the
three months ended March 31, 2004 and 2003 is presented below:

|                                                    |  | 
|--------------------------------------------------- |  | 
|                                                    |  | 
|                                                    |  | 
|Basic earnings per share                            |  | 
|Net income available to common shareholders         |  | 
|                                                    |  | 
|Weighted average common shares outstanding          |  | 
|                                                    |  | 
|Basic earnings per share                            |  | 
|                                                    |  | 
|Diluted earnings per share                          |  | 
|Net income available to common shareholders         |  | 
|                                                    |  | 
|Weighted average common shares outstanding          |  | 
|Add:  Dilutive effects of exercise of stock options |  | 
|                                                    |  | 
|Weighted average common and dilutive                |  | 
|potential shares outstanding                        |  | 
|                                                    |  | 
|Diluted earnings per share                          |  | 
|                                                    |  | 

# NOTE 4  ACCOUNTING
FOR STOCK BASED COMPENSATION

Compensation expense under stock
options is reported using the intrinsic value method. The exercise price of stock options
is generally equivalent to the market price of the underlying common stock as of the date
of grant. No stock-based compensation cost is reflected in net income, for stock options
granted with an exercise price equal to or greater than the market price of the underlying
common stock at date of grant. For stock options granted below market price, compensation
expense is based upon the difference between the market price and the exercise price at
the date of grant and is recorded over the vesting period of the options. Compensation
expense actually recognized for the three months ending March 31, 2004 and 2003 was not
significant. The following table illustrates the effect on net income and earnings per
share if expense was measured using the fair value recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation.

|                                       | Three Months EndedMarch 31,
|-------------------------------------- | ---------------------------
|                                       |                            
|                                      
|                                       |                            
|                                       |                            
|Net income as reported                 |                            
|                                       |                            
|Less:  Stock-based compensation        |                            
|expense determined under fair value    |                            
|based method                           |                            
|                                       |                            
|Pro forma net income                   |                            
|                                       |                            
|Basic earnings per share as reported   |                            
|Pro forma basic earning per share      |                            
|                                       |                            
|Diluted earnings per share as reported |                            
|Pro forma diluted earnings per share   |                            

Page 8

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The weighted average fair value of
stock options granted during the three months ended March 31, 2004 and 2003 were $11.43
and $10.15. The fair value of options granted during the three months ended March 31, 2004
and 2003 were estimated using an option pricing model with the following weighted average
information as of the grant dates:

|                           | 2004 | 2003
|-------------------------- | ---- | ----
|                           |      |     
|                           |      |     
|Risk free rate of interest |      |     
|Expected option life       |      |     
|Expected dividend yield    |      |     
|Expected volatility        |      |     

In future years, as additional
options are granted, the proforma effect on net income and earnings per share may
increase. Stock options are used to reward directors and certain executive officers and
provide them with an additional equity interest. Options are issued for ten year periods
and have varying vesting schedules.

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

This discussion provides information
about the consolidated financial condition and results of operations of the Company as of
March 31, 2004 and for the three month periods ended March 31, 2004 and 2003.

# FINANCIAL CONDITION

Cash and cash equivalents
Cash and cash equivalents of $11.6
million increased 15%, or $1.5 million during the first three months of 2004 reflective of
routine daily fluctuation.

Securities
Securities available for sale
increased $10.4 million during the first quarter of 2004. The increase represents the
employment of our customers increased deposit accounts funding. The mix of the securities
portfolio was enhanced by additional government agency investments of relatively short
term duration.

Loans
During the first three months of
2004, loans, net of allowance for loan losses, declined $ 3.7 million, or 1.37%. The mix
of the loan portfolio continues to remain relatively unchanged from prior periods. Over
the long term, the trend continues toward an increased portion of small business loans in
the Banks markets.

Credit Quality 
The Company continues to monitor the
asset quality of the loan portfolio utilizing a loan review officer who, combined with
external loan review specialists, periodically submits reports to the Chief Lending
Officer and to the Board of Directors regarding the credit quality of each loan portfolio.
This review is independent of the loan approval process. Also, management continues to
monitor delinquencies, nonperforming assets and potential problem loans to assess the
continued quality of the Companys loan portfolios.

Nonperforming loans are comprised of
(1) loans accounted for on a nonaccrual basis, (2) loans contractually past due 90 days or
more as to interest or principal payments (but not included in the nonaccrual loans in (1)
above) and (3) other nonperforming loans (but not included in (1) or (2) above) which
consist of loan arrangements under the Business Manager program. The aggregate amount of
nonperforming loans, in thousands of dollars, is shown in the table below. The
Companys classifications of nonperforming loans are generally consistent with loans
identified as impaired. Management has been successful in a concerted effort to relieve
the Company of the majority of its other real estate holdings and reducing its other asset
balances outstanding.

The chart below shows the makeup of
the Companys nonperforming assets by type, in thousands of dollars, as of March 31,
2004 and 2003, and December 31, 2003.

Page 9

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|                                                                  | 3/31/04 | 12/31/03 | 3/31/03
|----------------------------------------------------------------- | ------- | -------- | -------
|                                                                  |         |          |        
|Nonaccrual Loans                                                  |         |          | $      
|90 days or more past due & still accruing                         |         |          |        
|                                                                  |         |          |        
|Total nonperforming loans                                         |         |          |        
|Other real estate                                                 |         |          |        
|                                                                  |         |          |        
|Total nonperforming assets                                        |         |          | $      
|                                                                  |         |          |        
|Nonperforming loans as a percent of total loans                   |         |          |        
|Nonperforming assets as a percent of total loans                  |         |          |        
|Nonperforming loans as a percent of the allowance for loan losses |         |          |        

The Company decreased its funding of
provision for loan losses during the first quarter of 2004 over the same period in 2003
based on managements assessment of the adequacy of the allowance for loan losses.
The allowance provides for probable incurred losses in the current portfolio over time.
Near term activity is expected to remain similarly moderate in proportion as experienced
this quarter. Activity in the allowance for loan losses, in thousands of dollars, for the
three months ended March 31, 2004 and 2003 follows:

|                                   | 2004 | 2003
|---------------------------------- | ---- | ----
|                                   |      |     
|                                   |      |     
|Balance at beginning of period     |      |     
|Loan charge-offs net of recoveries |      |     
|Provision charged to operations    |      |     
|                                   |      |     
|Balance at end of period           |      |     
|                                   |      |     

Deposits
Total deposits increased $10 million
or 3.8% during the quarter to $274.0 million at March 31, 2004 from $264.0 million at
December 31, 2003. This increase is considered to be above normal. Management anticipates
deposit growth will continue during the remainder of 2004 as a result of continued
expansion in the Companys existing markets and the effects of Federal Reserve
monetary policy. At present, the Federal Reserve monetary policy is creating substantial
amounts of money supply in the economy and below natural market interest rates.

Liquidity
The Companys borrowing position
increased only slightly during the first quarter of 2004 from $14.6 million at year end
2003 compared to the balance of $15.1 million at the March 31, 2004 quarter end. The
increase is representative of normal daily fluctuations. The Company has a number of
additional liquidity sources should the need arise, and management presently has no
concerns as to the liquidity position of the Company.

Capital Resources
During the first quarter of 2004,
equity capital increased $372,000, primarily as a result of retention of the quarterly
earnings. The number of outstanding shares at December 31, 2003 of 805,392 increased to
845,420 at March 31, 2004, as a result of a 5% stock dividend issued January 30, 2004 less
fractional shares paid in cash. Management monitors the capital levels of the Company and
the Banks to provide for current and future business opportunities and to meet regulatory
guidelines for well capitalized institutions. Well capitalized
institutions are eligible for reduced FDIC premiums, and also enjoy other reduced
regulatory restrictions.

At March 31, 2004 and December 31,
2003, the Company and the Banks exceeded all regulatory minimum capital requirements and
are considered to be well capitalized.

Page 10

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# Results of Operations

Net Income
Net income declined 11.3% when
comparing the results of the first three months of 2004 to the same period in 2003.

Net Interest Income
The yield on interest earning assets
decreased for the quarter ended March 31, 2004 as compared to the same period in the prior
year primarily as a result of the general decline of market rates. The cost of funds on
interest bearing liabilities also decreased for the quarter ended March 31, 2004 as
compared to the same period during the prior year due to the continued declining rate
environment. With interest rates decreasing to below natural levels, the Companys
net interest margin decreased by 40 basis points over the 2003 first quarter to 4.72 %.
The Companys net interest margin remains quite strong, and management continues to
take steps to neutralize some portion of this risk.

The following table shows the year to
date daily average balances for interest earning assets and interest bearing liabilities,
interest earned or paid, and the annualized effective rate or yield, for the three month
periods ended March 31, 2004 and 2003.

|                                    | 2004AverageOutstandingBalance | InterestEarned/Paid | Yield/Rate | 2003AverageOutstandingBalance | InterestEarned/Paid | Yield/Rate
|----------------------------------- | ----------------------------- | ------------------- | ---------- | ----------------------------- | ------------------- | ----------
|                                    |                               |                     |            |                               |                     |           
|Interest earning assets:            |                               |                    
|Loans (1)                           |                               |                     | $          | 270,791                       |                     | $         
|Investment securities (2)(3)        |                               |                     |            | 28,568                        |                     |           
|Federal funds sold and other        |                               |                     |            | 4,897                         |                     |           
|                                    |                               |                     |            |                               |                     |           
|Total int. earning assets           |                               |                     |            | 305,475                       |                     |           
|                                    |                               |                    
|Interest bearing liabilities:       |                               |                    
|Interest bearing demand deposits    |                               |                     | $          | 68,640                        |                     | $         
|Savings deposits                    |                               |                     |            | 34,348                        |                     |           
|Time deposits                       |                               |                     |            | 116,105                       |                     |           
|Other borrowings                    |                               |                     |            | 18,841                        |                     |           
|                                    |                               |                     |            |                               |                     |           
|Total int. bearing liabilities      |                               |                     |            | 237,937                       |                     |           
|                                    |                               |                    
|Net interest income (3)             |                               |                     |            | $                             | 3,584               |           
|                                    |                               |                     |            |                               |                     |           
|Net spread (3)                      |                               |                     |            |                               |                     | 4.32      
|                                    |                               |                     |            |                               |                     |           
|Net interest margin (3)             |                               |                     |            |                               |                     | 4.72      
|                                    |                               |                     |            |                               |                     |           
|Ratio of interest earning assets to |                               |                    
|interest bearing liabilities        |                               |                     |            | 1.28                          |                     |           
|                                    |                               |                     |            |                               |                     |           

|(1) | Non-accrual
loans and overdrafts are included in the average balances of loans.
|--- | -------------------------------------------------------------------------------

|(2) | Includes
Federal Home Loan Bank stock.
|--- | --------------------------------------

|(3) | Interest
income on tax-exempt           securities has not been adjusted to a taxable equivalent
basis.
|--- | -------------------------------------------------------------------------------------------------------

Page 11

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Noninterest Income
For the first quarter of 2004,
noninterest income from banking products and services declined 32.7% as compared to the
same period in 2003. The Companys volume of mortgage loan sales into the secondary
market declined precipitously from net gains of $1.1 million on sales in the first quarter
of 2003 to $.5 million in the first quarter of 2004. The decline is the result of a slight
increase in mortgage rates from the prior years historic lows and the resulting
refinancing activity. Losses on sales of other real estate owned caused a net loss of
$83,000 in the category of other noninterest income during the first quarter of 2003. The
Company continued to experience solid revenues from charges and fees associated with
retail deposit services during the first quarter of 2004.

Noninterest Expense
Noninterest expense of $3,441,000
during the first quarter of 2004 declined from $3,563,000 over the same period of 2003.
Total noninterest expenses for the first three months of 2004 were 3.4% below the same
period for 2003. A decrease in salaries and employee benefits of approximately 8.6% was
the primary factor contributing to the overall decline. This salaries and employee benefit
decrease in the first quarter of 2004 is attributable to the lower than same period 2003
incentive commissions paid to the mortgage origination staff.

Federal Income Tax
Federal income taxes during the first
quarter 2004 of $ 329,000 were 15.4% less than the $ 389,000 recognized during the same
period in 2003 . The reduction is directly related to the decrease in income earned before
income taxes.

Critical Accounting
PoliciesCertain of the Companys
accounting policies are important to the portrayal of the Companys financial
condition, since they require management to make difficult, complex or subjective
judgments, some of which may relate to matters that are inherently uncertain. Estimates
associated with these policies are susceptible to material changes as a result of changes
in facts and circumstances. Facts and circumstances which could affect these judgments
include, but without limitation, changes in interest rates, in the performance of the
economy or in the financial condition of borrowers. Management believes that its critical
accounting policies include determining the allowance for loan losses, determining the
fair value of securities and other financial instruments and the valuation of mortgage
servicing rights.

Forward-Looking
StatementsThis discussion and analysis of
financial condition and results of operations and other sections of this Form 10-Q contain
forward looking statements that are based on managements beliefs, assumptions,
current expectations, estimates and projections about the financial services industry, the
economy and about the Company itself. Words such as anticipates,
believes, estimates, expects, forecasts,
foresee, intends, is likely, plans,
projects, variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions (Future
Factors) that are difficult to predict with regard to timing, extent, likelihood and
degree of occurrence. Therefore, actual results and outcomes may materially differ from
what may be expressed or forecast in such forward-lookingstatements. Furthermore,
the Company undertakes no obligation to update, amend or clarify forward-looking
statements, whether as a result of new information, future events or otherwise. Future
Factors include:

Page 12

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| | changes
in interest rates and interest rate relationships; demand for products and services;
|- | --------------------------------------------------------------------------------------------

| | the
degree of competition by traditional and non-traditional competitors;
|- | -------------------------------------------------------------------------

| | changes
in banking regulations;
|- | -------------------------------

| | changes in tax laws;
|- | --------------------

| | changes
in prices, levies and assessments;
|- | ------------------------------------------

| | the
impact of technology, governmental and regulatory policy changes;
|- | ---------------------------------------------------------------------

| | the
outcome of pending and future litigation and contingencies;
|- | ---------------------------------------------------------------

| | trends
in customer behavior as well as their ability to repay loans; and
|- | ------------------------------------------------------------------------

| | changes
in the national and local economies.
|- | --------------------------------------------

These are representative of the
Future Factors that could cause a difference between an actual outcome and a
forward-looking statement.

# ITEM 3 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys primary market
risk exposure is interest rate risk and liquidity risk. All of the Companys
transactions are denominated in U.S. dollars with no specific foreign exchange exposure.
The Company has a limited exposure to commodity prices and land values related to
agricultural loans. Any impacts that changes in foreign exchange rates and commodity
prices would have on interest rates are assumed to not be significant.

Interest rate risk (IRR) is the
exposure of a banking organizations financial condition to adverse movements in
interest rates. Accepting this risk can be an important source of profitability and
stockholder value; however, excessive levels of IRR could pose a significant threat to the
Companys earnings and capital base. Accordingly, effective risk management that
maintains IRR at prudent levels is essential to the Companys safety and soundness.

Evaluating a financial
institutions exposure to changes in interest rates includes assessing both the
adequacy of the management process used to control IRR and the organizations
quantitative level of exposure. When assessing the IRR management process, the Company
seeks to ensure that appropriate policies, procedures, management information systems and
internal controls are in place to maintain IRR at prudent levels with consistency and
continuity. Evaluating the quantitative level of IRR exposure requires the Company to
assess the existing and potential future effects of changes in interest rates on its
consolidated financial condition, including capital adequacy, earnings, liquidity, and,
where appropriate, asset quality.

The Company has not experienced a
material change in its financial instruments that are sensitive to changes in interest
rates since December 31, 2003, which information can be located in the Companys
annual report on Form 10-K.

# ITEM 4  CONTROLS
AND PROCEDURES

| | (a) | Evaluation of Disclosure Controls and Procedures. The Companys
               Chief Executive Officer and Chief Financial Officer, after evaluating the
               effectiveness of the companys disclosure controls and procedures (as
               defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the
               period covered by this Form 10-Q Quarterly Report, have concluded that the
               Companys disclosure controls and procedures were adequate and effective to
               ensure that material information relating to the company would be made known to
               them by others within the company, particularly during the period in which this
               Form 10-Q Quarterly Report was being prepared.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Changes in Internal Controls. During the period covered by this report,
               there have been no changes in the Companys internal control over financial
               reporting that have materially affected or are reasonably likely to materially
               affect the Companys internal control over financial reporting.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 13

---



# PART IIOTHER INFORMATION

# ITEM 1  LEGAL
PROCEEDINGS

The Company is not involved in any
material legal proceedings. The Companys wholly-owned subsidiaries, Bank of Lenawee
and Bank of Washtenaw, are involved in ordinary routine litigation incident to their
business; however, no such proceedings are expected to result in any material adverse
effect on the operations or earnings of the Banks. Neither the Banks nor the Company are
involved in any proceedings to which any director, principal officer, affiliate thereof,
or person who owns of record or beneficially five percent (5%) or more of the outstanding
stock of the Company or the Banks, or any associate of the foregoing, is a party or has a
material interest adverse to the Company or the Banks.

ITEM 2  CHANGES IN
SECURITIES,Use of Proceeds and Issuer Purchases of Equity Securities

# ITEM 3  DEFAULTS
UPON SENIOR SECURITIES  None

# ITEM 4  SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS  None

# ITEM 5  OTHER
INFORMATION  None

# ITEM 6  EXHIBITS
AND REPORTS ON FORM 8-K

|(a) | Listing
of Exhibits (numbered as in Item 601 of Regulation S-K):
|--- | ----------------------------------------------------------------

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

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

| | 32.1 | Certificate
of the Chief Executive  Officer and the Chief Financial  Officer of Pavilion
                           Bancorp,  Inc.  pursuant to 18 U.S.C.  Section 1350, as
adopted  pursuant to Section 906                            of the Sarbanes-Oxley Act of
2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Report
on Form 8-K dated January 5, 2004, submitting a press release announcing declaration of a
cash dividend and a stock dividend.
| | ------------------------------------------------------------------------------------------------------------------------------------

| | Report
on Form 8-K dated March 19, 2004, submitting a press release announcing a cash dividend.
| | -----------------------------------------------------------------------------------------------

| | Report
on Form 8-K dated March 16, 2004, announcing a change in certifying accountants.
| | ---------------------------------------------------------------------------------------

| | Report
on Form 8-K/A filed March 26, 2004, amending Form 8-K dated March 16, 2004, and filing
letter from former certifying accountants.
| | ----------------------------------------------------------------------------------------------------------------------------------------

Page 14

---



# SIGNATURES

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

|Date:      May  7, 2004
Date:      May  7, 2004 |  | Pavilion Bancorp, Inc.
/s/ Douglas L. Kapnick
Douglas L. KapnickChief Executive Officer/s/ Loren V. Happel
Loren V. HappelChief Financial Officer
|----------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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---



EXHIBIT INDEX

|Exhibit | Description
|------- | -----------

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

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

|32.1 | Certificate
of the Chief Executive  Officer and the Chief Financial  Officer of Pavilion Bancorp,
Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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---



EXHIBIT 31.1

I, Douglas L. Kapnick, certify that:

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

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

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

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

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

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

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

|5. | The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of directors:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

Date:   May 7, 2004

| |  | /s/ Douglas L. Kapnick
Douglas L. KapnickChief Executive Officer
| |  | ------------------------------------------------------------------------------

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---



EXHIBIT 31.2

I, Loren V. Happel, certify that:

|4. | I have reviewed this quarterly report on Form 10-Q of Pavilion Bancorp, Inc.;
|-- | -----------------------------------------------------------------------------

|5. | Based on my knowledge, this report does not contain any untrue statement of a
          material fact or omit to state a material fact necessary to make the statements
          made, in light of the circumstances under which such statements were made, not
          misleading with respect to the period covered by this report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this report;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

|5. | The registrants other certifying officers and I have disclosed, based on
          our most recent evaluation of internal control over financial reporting, to the
          registrants auditors and the audit committee of the registrants
          board of directors:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

Date: May 7, 2004

| |  | /s/ Loren V. Happel
Loren V. HappelChief Financial Officer
| |  | ------------------------------------------------------------------------

Page 18

---



EXHIBIT 32.1

Douglas
L. Kapnick, Chief Executive Officer of Pavilion Bancorp, Inc. and Loren V. Happel, Chief
Financial Officer of Pavilion Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

|(1) | the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004
          which this statement accompanies fully complies with the requirements of Section
          13(a) or 15(d) of the Securities Exchange Act of 1934, and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | the information contained in the Quarterly Report on Form 10-Q for the quarterly
          period ended March 31, 2004 fairly presents, in all material respects, the
          financial condition and results of operations of Pavilion Bancorp, Inc..
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated: May 7, 2004

| |  | /s/ Douglas L. Kapnick
Douglas L. KapnickChief Executive Officer/s/ Loren V. Happel
Loren V. HappelChief Financial Officer
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

Page 19