FORM 10-Q
                       Securities and Exchange Commission
                             Washington, D.C. 20549
                            -------------------------

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

                     of the Securities Exchange Act of 1934

                  For the quarterly period ended March 31, 2001

                                       or

              |_| Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                            -------------------------

                           Commission File #000-30521

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

          Michigan                                              38-3088340
 (State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             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          |_|

As of May 11, 2001,  there were 849,095  outstanding  shares of the registrant's
common stock, no par value.

                                     Page 1
<PAGE>
                              CROSS REFERENCE TABLE


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

                         PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements (Condensed)
          (a)   Report of Independent Accountants                              3
          (b)   Consolidated Balance Sheets                                    4
          (c)   Consolidated Statements of Income and Comprehensive Income     5
          (d)   Consolidated Statements of Cash Flows                          6
          (e)   Notes to Financial Statements                                  7

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

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          14


                           PART II -OTHER INFORMATION

Item 1.   Legal Proceedings                                                   14
Item 2.   Changes in Securities and Use of Proceeds                           14
Item 3.   Defaults Upon Senior Securities                                     15
Item 4.   Submission of Matters to a Vote of Security Holders                 15
Item 5.   Other Information                                                   15
Item 6.   Exhibits and Reports on Form 8-K                                    15

Signatures                                                                    15


                                     Page 2
<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS



Shareholders and Board of Directors
Lenawee Bancorp, Inc.
Adrian, Michigan


We have reviewed the consolidated  balance sheet of Lenawee Bancorp,  Inc. as of
March 31, 2001 and the related condensed  consolidated  statements of income and
comprehensive  income and cash flows for the three month periods ended March 31,
2001  and  2000.  These  financial  statements  are  the  responsibility  of the
Company'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  accompanying  financial  statements for them to be in conformity
with generally accepted accounting principles.




                                            /s/ Crowe, Chizek and Company LLP

South Bend, Indiana
May 2, 2001


                                     Page 3
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1- FINANCIAL STATEMENTS

<TABLE>
(b) CONDENSED CONSOLIDATED BALANCE SHEETS                                               March 31,
In thousands of dollars                                                                   2001        December 31,
                                                                                       (unaudited)        2000
                                                                                       -----------        ----
<S>                                                                                   <C>              <C>
ASSETS
Cash and due from banks                                                               $     19,472     $      7,842
Federal funds sold                                                                           8,780            5,150
                                                                                      ------------     ------------
     Total cash and cash equivalents                                                        28,252           12,992

Securities available for sale                                                               20,610           19,321
Federal Home Loan Bank stock, at cost                                                        2,504            2,504
Federal Reserve Bank stock, at cost                                                            480              360

Loans receivable, net of allowance for loan losses                                         215,534          212,317
Loans held for sale                                                                          1,270              803
Premises and equipment, net                                                                  6,325            5,988
Accrued interest receivable                                                                  1,976            1,899
Mortgage servicing asset                                                                     1,589            1,516
Other assets                                                                                 1,864            2,047
                                                                                      ------------     ------------
     Total assets                                                                     $    280,404     $    259,747
                                                                                      ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
     Noninterest bearing                                                              $     39,933     $     37,095
     Interest bearing                                                                      204,686          187,047
                                                                                      ------------     ------------
         Total deposits                                                                    244,619          224,145

Borrowed funds                                                                               7,064            7,936
Accrued interest payable                                                                       962              946
Other liabilities                                                                            1,479            1,256
                                                                                      ------------     ------------
     Total liabilities                                                                     254,124          234,280

Common stock subject to repurchase obligation in ESOP                                        5,191            5,114

Shareholders' Equity
     Common stock and paid-in capital, no par value                                          9,634            9,632
     Retained earnings                                                                      11,324           10,755
     Accumulated other comprehensive income (loss),
       net of tax                                                                              131              (34)
                                                                                      ------------     ------------
         Total shareholders' equity                                                         21,089           20,353
                                                                                      ------------     ------------

              Total liabilities and shareholders' equity                              $    280,404     $    259,747
                                                                                      ============     ============
</TABLE>
See accompanying notes to consolidated financial statements.

                                     Page 4
<PAGE>
<TABLE>
(c)  CONDENSED CONSOLIDATED STATEMENTS OF
     INCOME AND COMPREHENSIVE INCOME (unaudited)                                           Three Months Ended
In thousands of dollars, except per share data                                                  March 31,
                                                                                      -----------------------------
                                                                                           2001           2000
                                                                                           ----           ----
<S>                                                                                    <C>              <C>
Interest and dividend income
     Loans receivable, including fees                                                 $      4,996     $      4,451
     Taxable securities                                                                        245              260
     Nontaxable securities                                                                      65              100
     Federal funds sold                                                                         93               21
     Other                                                                                      10                1
                                                                                      ------------     ------------
         Total interest and dividend income                                                  5,409            4,833

Interest expense
     Deposits                                                                                2,174            1,745
     Federal Home Loan Bank advances                                                            82              174
     Other                                                                                      18               25
                                                                                      ------------     ------------
         Total interest expense                                                              2,274            1,944
                                                                                      ------------     ------------
Net interest income                                                                          3,135            2,889
     Provision for loan losses                                                                 100               30
                                                                                      ------------     ------------

Net interest income after provision for loan losses                                          3,035            2,859

Noninterest income
     Service charges and fees                                                                  237              268
     Net gains on loan sales                                                                   405               60
     Other                                                                                     115               98
                                                                                      ------------     ------------
                                                                                               757              426
Noninterest expense
     Salaries and employee benefits                                                          1,545            1,313
     Occupancy and equipment                                                                   477              404
     Other                                                                                     692              524
                                                                                      ------------     ------------
                                                                                             2,714            2,241
                                                                                      ------------     ------------
Income before income tax                                                                     1,078            1,044
     Income tax expense                                                                        345              340
                                                                                      ------------     ------------
Net income                                                                            $        733     $        704
                                                                                      ============     ============
Comprehensive income                                                                  $        898     $        628
                                                                                      ============     ============
Basic earnings per share                                                              $       0.86     $       0.83
                                                                                      ============     ============
Diluted earnings per share                                                            $       0.85     $       0.81
                                                                                      ============     ============
Dividends per share                                                                   $       0.20     $       0.34
                                                                                      ============     ============
</TABLE>
          See accompanying notes to consolidated financial statements.

                                     Page 5
<PAGE>
<TABLE>
(d)  CONDENSED CONSOLIDATED STATEMENTS OF
     CASH FLOWS (unaudited)                                                                Three Months Ended
In thousands of dollars                                                                         March 31,
                                                                                      -----------------------------
                                                                                           2001           2000
                                                                                           ----           ----
<S>                                                                                   <C>              <C>
Cash flows from operating activities
     Net income                                                                       $        733        $     704
     Adjustments to reconcile net income to
       net cash from operating activities
         Depreciation                                                                          177              182
         Provision for loan losses                                                             100               30
         Net amortization and accretion on securities
           available for sale                                                                   14               16
         Amortization of mortgage servicing rights                                             132               22
         Loans originated for sale                                                         (47,188)          (4,221)
         Proceeds from sale of mortgage loans                                               46,921            4,322
         Net gains on sales of mortgage loans                                                 (405)             (60)
     Net change in:
         Accrued interest receivable                                                           (77)            (209)
         Other assets                                                                          165              152
         Accrued interest payable                                                               16               73
         Other liabilities                                                                     156             (237)
                                                                                      ------------     ------------
              Net cash from operating activities                                               744              774
                                                                                      ------------     ------------
Cash flows from investing activities Securities available for sale:
         Maturities, calls and principal payments                                              947            1,814
         Purchases                                                                          (2,000)               -
     Purchase of Federal Reserve Bank stock                                                   (120)               -
     Net premises and equipment expenditures                                                  (514)             (54)
     Net increase in loans                                                                  (3,317)          (5,766)
                                                                                      ------------     ------------
              Net cash from investing activities                                            (5,004)          (4,006)
                                                                                      ------------     ------------
Cash flows from financing activities
     Net change in deposits                                                                 20,477            6,684
     Net change in borrowed funds                                                             (872)          (3,293)
     Change in shareholders' equity                                                            (85)            (220)
                                                                                      ------------     ------------
              Net cash from financing activities                                            19,520            3,171
                                                                                      ------------     ------------
Net change in cash and cash equivalents                                                     15,260              (61)

Cash and cash equivalents at beginning of period                                            12,992            9,510
                                                                                      ------------     ------------
Cash and cash equivalents at end of period                                            $     28,252     $      9,449
                                                                                      ============     ============

     Cash paid for:
         Interest                                                                     $      2,258      $     1,871
         Income taxes                                                                            -                -
</TABLE>
          See accompanying notes to consolidated financial statements.

                                     Page 6
<PAGE>
(e)   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 Lenawee Bancorp, Inc. (the "Company") and its wholly-owned subsidiaries, Bank
of Lenawee and Bank of Washtenaw  (together  "the  Banks").  The Bank of Lenawee
includes its wholly-owned subsidiaries,  Lenawee Financial Services and Pavilion
Mortgage Company (the "Mortgage Company"). The Mortgage Company began operations
on January 2, 2001 and was formed to  provide a broader  array of  products  for
expanding  market needs.  The Bank of Washtenaw  began  operations on January 8,
2001 and was formed to expand the Company's  market  presence.  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 full range of banking services to individuals,  agricultural
businesses,  commercial  businesses and light industries  located in its service
area. It 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 a variety of
deposit  products,   including  checking,   savings,  money  market,  individual
retirement accounts and certificates of deposit.


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, 2001
are not necessarily  indicative of the results that may be expected for the year
ending  December 31, 2001. 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, 2000.

                                     Page 7
<PAGE>
NOTE 3 - EARNING 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,
2001 and 2000 is presented below:
<TABLE>
                                                                                   2001            2000
                                                                                   ----            ----
      <S>                                                                       <C>             <C>
      Basic earnings per share
      Net income available to common shareholders                               $    733,000    $    704,000
                                                                                ============    ============
      Weighted average common shares outstanding                                     851,884         852,939
                                                                                ============    ============
      Basic earnings per share                                                  $       0.86    $       0.83
                                                                                ============    ============

      Diluted earnings per share
      Net income available to common shareholders                               $    733,000    $    704,000
                                                                                ============    ============
      Weighted average common shares outstanding                                     851,884         852,939
      Add:  Dilutive effects of exercise of stock options                              9,951          12,343
                                                                                ------------    ------------
      Weighted average common and dilutive
        potential shares outstanding                                                 861,835         865,282
                                                                                ============    ============
      Diluted earnings per share                                                $       0.85    $       0.81
                                                                                ============    ============
</TABLE>

NOTE 4 - ACCOUNTING FOR STOCK BASED COMPENSATION

The  following  proforma  information  presents net income and basic and diluted
earnings per share had the fair value  method been used to measure  compensation
for stock options  granted.  The exercise price of options  granted is generally
equivalent to the market value of the  underlying  stock at the grant date.  For
stock options granted below market price, compensation expense is based upon the
difference  between the market value and the exercise price at the date of grant
and is recorded  over the vesting  period of the options.  Compensation  expense
actually  recognized for stock options was not  significant for the three months
ended March 31, 2001 and 2000.
<TABLE>
                                                                                    2001             2000
                                                                                    ----             ----
     <S>                                                                        <C>             <C>
     Net income as reported                                                     $    733,000    $    704,000
     Proforma net income                                                             721,000         691,000
     Reported earnings per common share
         Basic                                                                  $       0.86    $       0.83
         Diluted                                                                        0.85            0.81
     Proforma earnings per common share
         Basic                                                                          0.85            0.81
         Diluted                                                                        0.84            0.80
</TABLE>

No options  were  granted  during the three  months  ended March 31,  2001.  The
weighted  average fair value of stock  options  granted  during the three months
ended March 31, 2000 was $21.43 and was estimated  using an option pricing model
with the following weighted average information as of the grant date;  risk-free
interest rate of 6.65%,  expected  option life of 8 years,  expected stock price
volatility  of 0.21 and  expected  dividends  of  1.35%.  In  future  years,  as
additional  options are granted,  the proforma effect on net income and earnings
per share may increase.

                                     Page 8
<PAGE>
NOTE 4 - ACCOUNTING FOR STOCK BASED COMPENSATION (Continued)

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 vest over five years.  Information about options available for grant
and options granted follows:
<TABLE>
                                                                            Weighted-
                                                                             Average
                                                    Available                Options                Exercise
                                                    For Grant              Outstanding               Price
                                                    ---------              -----------               ------
     <S>                                           <C>                    <C>                    <C>
     Balance at January 1, 2000                          27,460                 22,160           $      25.14
         Options issued                                  (5,720)                 5,720                  44.00
                                                   ------------           ------------           ------------
     Balance at March 31, 2000
       and December 31, 2000
       and March 31, 2001                                21,740                 27,880           $      29.01
                                                   ============           ============           ============
</TABLE>

At March 31, 2001, options  outstanding had a weighted average remaining life of
6.9 years.  There  were  21,180  options  exercisable  at March 31,  2001 with a
weighted-average exercise price of $25.68.


NOTE 5 - NEW ACCOUNTING PRONOUNCEMENT

Beginning January 1, 2001, a new accounting standard required all derivatives to
be recorded at fair value.  Unless  designated as hedges,  changes in these fair
values are required to be recorded in the income  statement.  Fair value changes
involving  hedges will be recorded by  offsetting  gains or losses on the hedges
and on the  hedged  item,  even if the  fair  value  of the  hedged  item is not
otherwise recorded.  Adoption of this standard on January 1, 2001 did not have a
material effect on the Company's financial condition or results of operations.


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, 2001 and for the three
month periods ended March 31, 2001 and 2000.

FINANCIAL CONDITION

Cash and cash equivalents
The  increase  in cash and cash  equivalents  of  approximately  117%,  or $15.2
million,  during the first  three  months of 2001 was  primarily  related to the
significant growth in the Company's deposits, as discussed more fully below.

Securities
The Company's  investment  securities  portfolio  increased  slightly during the
first quarter of 2001. Principal  repayments on mortgage-backed  securities were
more than offset by the

                                     Page 9
<PAGE>
purchase of a $2.0 million  government agency securities during the period.  The
mix of the  securities  portfolio  remains  relatively  unchanged from period to
period over the long term.

Loans
Loan growth continued  through the first quarter of 2001. During the first three
months,  annualized  loan  growth  was  approximately  6%.  The mix of the  loan
portfolio continues to remain relatively unchanged from prior periods.  Over the
long term,  the trend  continues  toward an increased  percentage of residential
mortgage and business loans.

In addition to the increase in loans for the portfolio,  the Company experienced
a significant increase in the volume of its residential mortgage loans sold into
the secondary  market.  The significant  decreases in short-term  interest rates
during the first quarter has also caused a decline in mortgage  interest  rates,
increasing consumers interest in refinancing existing mortgage loans. Management
expects this trend to continue into the second quarter of 2001.

Credit Quality
The  Company  continues  to  monitor  the asset  quality  of the loan  portfolio
utilizing a loan review officer who, combined with an external loan review team,
periodically  submits  reports to the Chief Lending  Officer and to the Board of
Directors  regarding the credit  quality of the 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 portfolio.

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.

The chart below shows the makeup of the Company's  nonperforming assets by type,
in thousands of dollars, as of March 31, 2001 and 2000, and December 31, 2000.
<TABLE>
                                                                        3/31/2001      12/31/2000       3/31/2000
                                                                        ---------      ----------       ---------
     <S>                                                               <C>            <C>              <C>
     Nonaccrual loans                                                  $       112    $        113     $      1,571
     90 days or more past due & still accruing                                 214             523               85
     Other nonperforming loans                                                   -               -            1,148
                                                                       -----------    ------------     ------------
         Total nonperforming loans                                             326             636            2,804
     Other real estate                                                         583             294              377
                                                                       -----------    ------------     ------------
         Total nonperforming assets                                    $       909    $        930     $      3,181
                                                                       ===========    ============     ============

     Nonperforming loans as a percent of total loans                          .15%            .30%            1.38%
     Nonperforming assets as a percent of total loans                         .41%            .43%            1.57%
     Nonperforming loans as a percent of the allowance
       for loan losses                                                      14.04%          27.81%           60.18%
</TABLE>

During the first quarter of 2001,  the Company  increased its provision for loan
losses  over the same  period in 2000 due to  increases  in loan  volume and net
charge-offs. The provision provides for currently anticipated

                                    Page 10
<PAGE>
losses  inherent in the current  portfolio.  Activity in the  allowance for loan
losses,  in thousands of dollars,  for the three months ended March 31, 2001 and
2000 follows:
<TABLE>
                                                                                     2001             2000
                                                                                     ----             ----
     <S>                                                                          <C>             <C>
     Balance at beginning of period                                               $      2,287    $      4,646
     Loans charged off                                                                    (135)            (44)
     Recoveries credited to allowance                                                       70              27
     Provision charged to operations                                                       100              30
                                                                                  ------------    ------------
     Balance at end of period                                                     $      2,322    $      4,659
                                                                                  ============    ============
</TABLE>

The  decrease in  non-performing  loans and the  allowance  for loan losses from
March 31, 2000 to March 31, 2001 is primarily related to the charge-off of loans
related to a single borrower  subsequent to March 31, 2000 as described in prior
filings of the Company.

Deposits
Total deposits increased  significantly during the quarter at a rate higher than
experienced  in recent  periods.  Annualized  deposit growth for the quarter was
33.5%,  compared to 12.5% for all of 2000. Interest bearing deposits experienced
the majority of the increase  during the period.  The increase was a combination
of  promotions  related to the opening of the Bank of  Washtenaw  and a shift in
consumer preferences to short-term deposit investments due to the decline in the
capital  markets  during the period.  Management  anticipates  moderate  deposit
growth  during 2001 as a result of continued  expansion in the Company's new and
existing markets.

Liquidity
The Bank maintained an average funds sold position for the first quarter of 2001
primarily  related to the  increase  in deposits as  discussed  above,  although
generally  the Bank moves in and out of the fed funds market as liquidity  needs
vary.  Borrowings  declined  slightly  from  December 31, 2000,  and  management
anticipates  that deposit and loan growth will cause continued  variation in the
short term funds position of the Company. The Company has a number of additional
liquidity  sources should the need arise,  and management has no concerns of the
liquidity position of the Company.

                                    Page 11
<PAGE>
Capital Resources
The Company and both Banks were  categorized  as well  capitalized  at March 31,
2001. Actual and required capital levels (in millions) and ratios were:
<TABLE>
                                                                                                Minimum Required
                                                                                                   To Be Well
                                                                     Minimum Required              Capitalized
                                                                        For Capital          Under Prompt Corrective
                                                Actual               Adequacy Purposes         Action Regulations
                                                ------               -----------------         ------------------
                                          Amount     Ratio           Amount      Ratio         Amount     Ratio
                                          ------     -----           ------      -----         ------     -----
<S>                                       <C>        <C>             <C>         <C>           <C>        <C>
Total capital (to risk weighted assets)
   Consolidated                           $  28.5    11.4%           $ 20.1      8.0%          $ 25.1     10.0%
   Bank of Lenawee                           23.2    10.1%             18.4      8.0%            23.0     10.0%
   Bank of Washtenaw                          4.2    20.7%              1.6      8.0%             2.0     10.0%
Tier 1 capital (to risk weighted assets)
   Consolidated                              26.1    10.4%             10.0      4.0%            15.0      6.0%
   Bank of Lenawee                           21.1     9.2%              9.2      4.0%            13.8      6.0%
   Bank of Washtenaw                          4.0    19.8%               .8      4.0%             1.2      6.0%
Tier 1 capital (to average assets)
   Consolidated                              26.1     9.5%             11.0      4.0%            13.7      5.0%
   Bank of Lenawee                           21.1     8.3%             10.1      4.0%            12.6      5.0%
   Bank of Washtenaw                          4.0    19.2%               .8      4.0%             1.0      5.0%
</TABLE>


                                    Page 12
<PAGE>
Results of Operations

Net Income

Net income  increased 4%, basic earnings per share increased from $0.83 to $0.86
and dividends per share decreased from $0.34 to $0.20 when comparing the results
of the first three months of 2001 to the same period in 2000.

The  increase  in net income and  earnings  per share was  primarily  related to
continued  growth in net interest income and a significant  increase in the gain
on sales of mortgage  loans  which were  offset by an  increase in  non-interest
expense,  as more fully discussed below. The decrease in dividends per share was
related to a special  dividend of $0.15 per share that was paid during the three
months  ended  March 31,  2000 which was not paid this year in order to preserve
the Corporation's capital base for the formation of the Bank of Washtenaw during
the first quarter of 2001.

Net Interest Income
The yield on interest  earning assets decreased for the quarter ended  March 31,
2001 as compared to the same period in the prior year  primarily  as a result of
the general decline in industry rates during the first quarter of 2001. However,
the cost of funds on  interest  bearing  liabilities  increased  for the quarter
ended  March 31,  2001 as  compared  to the same  period  during the prior  year
primarily as a result of  increasing  time  deposit  rates during 2000 for which
2001  declining  interest  rates  have not  fully  impacted  due to the  varying
contractual maturities of these time deposits. The combination of higher cost of
funds and a lower yield on interest  earning assets has resulted in decreases in
the interest rate spread and net interest  margin of the Company.  However,  the
Company's net interest margin remains quite strong, and management  continues to
take steps to neutralize some portion of this risk.

                                    Page 13
<PAGE>
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, 2001 and 2000.

<TABLE>
Yield Analysis of Consolidated Average Assets and Liabilities
Dollars in thousands                               3/31/2001                                3/31/2000
                                                   ---------                                ---------
                                    Average        Interest                    Average      Interest
                                  Outstanding       Earned/      Yield/      Outstanding     Earned/     Yield/
                                    Balance          Paid         Rate         Balance        Paid        Rate
                                    -------          ----         ----         -------        ----        ----
<S>                               <C>             <C>             <C>      <C>            <C>              <C>
Interest earning assets:
Loans (1)                        $   217,001     $     4,996      9.21%    $   192,514    $     4,451      9.25%
Investment securities (2) (3)         22,048             310      5.62%         24,684            360      5.83%
Federal funds sold and other           7,883             103      5.23%          1,688             22      5.21%
                                 -----------     -----------               -----------    -----------
     Total int. earning assets       246,932           5,409      8.76%        218,886          4,833      8.83%

Interest bearing liabilities:
Interest bearing demand
  deposits                       $    55,532     $       378      2.72%    $    51,792    $       422      3.26%
Savings deposits                      23,215              85      1.46%         23,486             88      1.50%
Time deposits                        113,657           1,711      6.02%         89,980          1,235      5.49%
Other borrowings                       7,782             100      5.15%         13,336            199      5.97%
                                 -----------     -----------               -----------    -----------
     Total int. bearing
          liabilities                200,186           2,274      4.54%        178,594          1,944      4.35%

Net interest income (3)                          $     3,135                              $     2,889
                                                 ===========                              ===========
Net spread (3)                                                    4.22%                                    4.48%
                                                                 ======                                   ======
Net interest margin (3)                                           5.08%                                    5.28%
                                                                 ======                                   ======
Ratio of interest earning assets to
  interest bearing liabilities          1.23                                      1.23
                                     =======                                  ========
</TABLE>

(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.


Noninterest Income
For the first  quarter of 2001,  noninterest  income from  banking  products and
services  increased  78% as  compared  to the same  period  in  2000.  Declining
interest  rates  during the first  quarter of 2001  resulted  in an  increase in
originations  of  residential  mortgage  loans and,  accordingly,  the Company's
volume of loan sales. An increase in net gains on loan sales of $345,000 was the
primary factor contributing to the overall noninterest income growth.

Noninterest Expense
Noninterest expense has also increased over the same period of 2000,  reflecting
continued  growth and  expansion  of the  Company.  Total  noninterest  expense,
excluding  provision for loan losses, for the first three months of 2001 was 21%
above the same period for 2000. An increase in salaries and employee benefits of
approximately  18% was the primary factor  contributing to the overall increase.
This increase,  along with slight increases in occupancy and equipment and other
expense,  are mainly  attributable to the staffing and start-up costs related to
the formation of the Bank of Washtenaw and general  Company  growth.  Management
expects  these costs to continue  rising as the  Company  experiences  continued
growth consistent with its Strategic Plan.

Federal Income Tax
The slight  increase in federal income taxes during the first quarter of 2001 is
directly related to the increase in income before income taxes.

Forward-Looking Statements
This  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,

                                     Page 14
<PAGE>
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", "product", "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  forecasted  in  such  forward-looking  statements.
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:

o      changes in  interest  rates and  interest rate relationships;  demand for
       products and services;
o      the degree of competition by traditional and non-traditional competitors;
o      changes in banking regulations;
o      changes in tax laws;
o      changes in prices, levies and assessments;
o      the impact of technology, governmental and regulatory policy changes;
o      the outcome of pending and future litigation and contingencies;
o      trends in customer behavior as well as their ability to repay loans; and
o      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.

                                    Page 15
<PAGE>
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  related to  agricultural  loans.  Any impacts that changes in
foreign  exchange  rates and commodity  prices would have on interest  rates are
assumed to be insignificant.

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  consistence 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, 2000,  which
information can be located in the Form 10-K document.

                                     PART II
                                OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

There are no material legal proceedings pending against the Company.


ITEM 2 - CHANGES IN SECURITIES

None.

                                    Page 16
<PAGE>
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: None

(b)      Report on Form 8-K: None


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.

Lenawee Bancorp, Inc.
May 14, 2001


         /s/ Patrick K. Gill
         Patrick K. Gill
         President

         /s/ Loren V. Happel
         Loren V. Happel
         Chief Financial Officer




                                    Page 17