<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                             ---------------------


                                   FORM 10-Q

(Mark One)

[X]  Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 For the Quarterly Period Ended June 30, 2001.

                                      or

[_]  Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 For the Transition Period From __________ to __________.

Commission File Number 1-13676
                       -------

                            KANKAKEE BANCORP, INC.

           --------------------------------------------------------
            (Exact Name of Registrant as Specified in its Charter)

Delaware                                 36-3846489

(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
Incorporation or Organization)

310 South Schuyler Avenue,                     60901
Kankakee, Illinois

(Address of Principal Executive Offices)       (Zip Code)

                                (815) 937-4440

             (Registrant's telephone number, including area code)


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

                                    Yes    X     No _______
                                        -------

As of August 8, 2001, there were 1,207,408 issued and outstanding shares of the
Issuer's common stock (exclusive of 542,592 shares of the Issuer's common stock
held as treasury stock).
<PAGE>

                            KANKAKEE BANCORP, INC.

                                     INDEX
                                     -----

<TABLE>
<CAPTION>
                                                                                   Page
                                                                                  Number
<S>                                                                               <C>
Part I.   FINANCIAL INFORMATION

          Item 1.  Consolidated Financial
                   Statements (Unaudited)

                   Statements of Financial Condition,
                   June 30, 2001 and December 31, 2000                            1 - 2

                   Statements of Income and Comprehensive Income,
                   Three Months Ended June 30, 2001 and 2000                          3

                   Statements of Income and Comprehensive Income,
                   Six Months Ended June 30, 2001 and 2000                            4

                   Statements of Cash Flows, Six Months
                   Ended June 30, 2001 and 2000                                   5 - 6

                   Notes to Financial Statements                                      7

          Item 2.  Management's Discussion and Analysis
                   of Financial Condition and Results
                   of Operations                                                 8 - 18

          Item 3.  Quantitative and Qualitative Disclosure
                   About Market Risk                                             9 - 10

Part II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                                 19

          Item 2.  Changes in Securities                                             19

          Item 3.  Defaults Upon Senior Securities                                   19

          Item 4.  Submission of Matters to a Vote of Security Holders               19

          Item 5.  Other Information                                                 19

          Item 6.  Exhibits and Reports on Form 8-K                                  19

          SIGNATURES                                                                 20
</TABLE>
<PAGE>

          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                             June 30,            December 31,
                                                                               2001                  2000
                                                                             --------            ------------
<S>                                                                        <C>                   <C>
Assets
   Cash and due from banks                                                 $ 13,142,830          $ 18,707,762
   Federal funds sold                                                         3,082,981             1,329,776
   Money market funds                                                         4,167,880             5,109,735
                                                                           ------------          ------------
   Cash and cash equivalents                                                 20,393,691            25,147,273
                                                                           ------------          ------------
   Certificates of deposit                                                       50,000                50,000
   Securities:
   Investment securities:
      Available-for-sale, at fair value                                      40,574,225            57,169,644
      Held-to-maturity, at cost (fair value: June 30, 2001 -
      $2,110,071; December 31, 2000 - $1,434,708)                             2,104,897             1,447,846
                                                                           ------------          ------------
    Total investment securities                                              42,679,122            58,617,490
                                                                           ------------          ------------
Mortgage-backed securities:
  Available-for-sale, at fair value                                          13,709,705            16,050,792
  Held-to-maturity, at cost (fair
   value: June 30, 2001 -
  $51,567; December 31, 2000 - $67,727)                                          50,906                66,867
                                                                           ------------          ------------
    Total mortgage-backed securities                                         13,760,611            16,117,659
                                                                           ------------          ------------
 Non-marketable equity securities                                               501,000               501,000
 Loans, net of allowance for losses
  on loans ($2,191,420 at
  June 30, 2001; $2,156,420 at
   December 31, 2000)                                                       372,497,070           338,956,136
 Loans held for sale                                                            390,750                     -
 Real estate held for sale                                                      564,700               484,320
 Federal Home Loan Bank stock, at cost                                        2,368,400             2,112,000
 Office properties and equipment                                              8,446,849             8,594,823
 Accrued interest receivable                                                  3,076,250             3,282,214
 Prepaid expenses and other assets                                            1,436,733             1,225,070
 Intangible assets                                                            4,618,475             4,805,849
                                                                           ------------          ------------
Total assets                                                               $470,783,651          $459,893,834
                                                                           ============          ============
</TABLE>

                                                                     (Continued)

                                       1
<PAGE>

    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (continued)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>

                                                                                  June 30,     December 31,
                                                                                    2001          2000
                                                                                  ---------    ------------
<S>                                                                               <C>          <C>
Liabilities and stockholders' equity
 Liabilities:
  Deposits
     Noninterest bearing                                                        $ 24,518,539   $ 25,357,749
     Interest bearing                                                            376,705,711    362,692,592
  Short term borrowings                                                                    -     14,000,000
  Other borrowings                                                                27,000,000     15,000,000
  Advance payments by borrowers for taxes and insurance                            2,021,453      1,813,412
  Other liabilities                                                                1,263,294      1,740,938
                                                                                ------------   ------------
 Total liabilities                                                               431,508,997    420,604,691
                                                                                ------------   ------------

 Stockholders' equity
  Preferred stock, $.01 par value; authorized, 500,000
    shares; none outstanding                                                               -              -
  Common stock, $.01 par value; authorized, 3,500,000
    shares; issued 1,750,000                                                          17,500         17,500
  Additional paid-in capital                                                      15,308,401     15,328,249
  Retained income, partially restricted                                           35,358,788     34,285,960
  Treasury stock (545,092 shares at June 30, 2001;
   486,892 shares at December 31, 2000)                                          (11,863,866)   (10,458,535)
  Accumulated other comprehensive income                                             453,831        115,969
                                                                                ------------   ------------

  Total stockholders' equity                                                      39,274,654     39,289,143
                                                                                ------------   ------------

Total liabilities and stockholders' equity                                      $470,783,651   $459,893,834
                                                                                ============   ============
</TABLE>

See notes to consolidated financial statements (unaudited)

                                       2
<PAGE>

    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                               Three Months Ended June 30,
                                                                              -----------------------------
                                                                                    2001           2000
                                                                                ------------   ------------
<S>                                                                             <C>             <C>
Interest income:
 Loans                                                                          $  7,084,193   $  5,806,430
 Investment securities and other                                                     918,042      1,180,595
 Mortgage-backed securities                                                          255,582        315,259
                                                                                ------------   ------------
  Total interest income                                                            8,257,817      7,302,284
                                                                                ------------   ------------
Interest expense:
 Deposits                                                                          4,524,089      3,828,002
 Borrowed funds                                                                      328,652        199,438
                                                                                ------------   ------------
  Total interest expense                                                           4,852,741      4,027,440
                                                                                ------------   ------------
 Net interest income                                                               3,405,076      3,274,844

Provision for losses on loans                                                         40,000              -
                                                                                ------------   ------------
 Net interest income after provision for losses on loans                           3,365,076      3,274,844
Other income:
 Net gain on sales of real estate held for sale                                          931          5,216
 Net gain on sales of loan held for sale                                              40,080          1,702
 Fee income                                                                          616,781        466,929
 Insurance commissions                                                                21,341         22,823
 Other                                                                               110,289         96,511
                                                                                ------------   ------------
  Total other income                                                                 789,422        593,181
                                                                                ------------   ------------
Other expenses:
 Compensation and benefits                                                         1,618,205      1,504,499
 Occupancy                                                                           301,828        259,511
 Furniture and equipment                                                             164,960        174,811
 Federal deposit insurance premiums                                                   18,207         18,192
 Advertising                                                                         105,211         66,309
 Provision for losses on foreclosed assets                                            18,214         13,304
 Data processing services                                                             99,256         82,021
 Telephone and postage                                                               119,776         75,084
 Amortization of intangible assets                                                    93,687         94,617
 Other general and administrative                                                    512,420        415,371
                                                                                ------------   ------------
  Total other expenses                                                             3,051,764      2,703,719
                                                                                ------------   ------------
 Income before income taxes                                                        1,102,734      1,164,306
Income taxes                                                                         369,150        395,925
                                                                                ------------   ------------
Net income                                                                      $    733,584   $    768,381
                                                                                ============   ============
Net income                                                                      $    733,584   $    768,381
Other comprehensive income:
 Unrealized gains (losses) on available-for-sale
 securities, net of related income taxes                                            (135,780)       142,659
                                                                                ------------   ------------
Comprehensive income (loss)                                                     $    597,804   $    911,040
                                                                                ============   ============

 Basic earnings per share                                                              $0.61          $0.61
                                                                                ============   ============
 Diluted earnings per share                                                            $0.60          $0.59
                                                                                ============   ============
</TABLE>

See notes to consolidated financial statements (unaudited)

                                       3
<PAGE>

    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                             Six Months Ended June 30,
                                                                           -----------------------------

                                                                                2001          2000
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
Interest income:
 Loans                                                                        $13,939,859  $11,079,148
 Investment securities and other                                                1,975,286    2,495,134
 Mortgage-backed securities                                                       537,412      623,943
                                                                              -----------  -----------
   Total interest income                                                       16,452,557   14,198,225
                                                                              -----------  -----------
Interest expense:
 Deposits                                                                       9,011,143    7,513,495
 Borrowed funds                                                                   691,054      339,688
                                                                              -----------  -----------
   Total interest expense                                                       9,702,197    7,853,183
                                                                              -----------  -----------
 Net interest income                                                            6,750,360    6,345,042

Provision for losses on loans                                                      55,000            -
                                                                              -----------  -----------
 Net interest income after provision for losses on loans                        6,695,360    6,345,042
Other income:
 Net gain on sales of real estate held for sale                                    11,314       11,961
 Net gain on sales of loans held for sale                                          40,080        3,294
 Net gain on sales of property held for expansion                                       -       11,552
 Fee income                                                                     1,089,684      878,104
 Insurance commissions                                                             47,968      108,833
 Other                                                                            197,941      180,739
                                                                              -----------  -----------
   Total other income                                                           1,386,987    1,194,483
                                                                              -----------  -----------
Other expenses:
 Compensation and benefits                                                      3,173,361    3,079,050
 Occupancy                                                                        605,847      526,324
 Furniture and equipment                                                          348,981      351,097
 Federal deposit insurance premiums                                                36,534       36,340
 Advertising                                                                      173,729      144,320
 Provision for losses on foreclosed assets                                         34,914       31,726
 Data processing services                                                         199,958      169,976
 Telephone and postage                                                            221,756      177,094
 Amortization of intangible assets                                                187,374      189,234
 Other general and administrative                                               1,048,856      918,277
                                                                              -----------  -----------
   Total other expenses                                                         6,031,310    5,623,438
                                                                              -----------  -----------
 Income before income taxes                                                     2,051,037    1,916,087
Income taxes                                                                      686,450      647,425
                                                                              -----------  -----------
Net income                                                                    $ 1,364,587  $ 1,268,662
                                                                              ===========  ===========
Net income                                                                    $ 1,364,587  $ 1,268,662
Other comprehensive income:
 Unrealized gains (losses) on available-for-sale
 securities, net of related income taxes                                          337,862      (98,508)
                                                                              -----------  -----------
Comprehensive income (loss)                                                   $ 1,702,449  $ 1,170,154
                                                                              ===========  ===========

 Basic earnings per share                                                           $1.12        $1.01
                                                                              ===========  ===========
 Diluted earnings per share                                                         $1.10        $0.98
                                                                              ===========  ===========

</TABLE>

See notes to consolidated financial statements (unaudited)

                                       4
<PAGE>

                 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>
                                                                                     Six Months Ended June 30,
                                                                                     -------------------------

                                                                                    2001                   2000
                                                                                  -------                --------

<S>                                                                               <C>               <C>
Cash flows from operating activities:
 Net income                                                                          $  1,364,587   $  1,268,662
 Adjustments to reconcile net income to net
  cash provided by operating activities:
  Provision for losses on loans                                                            55,000              -
  Provisions for losses on real estate held for sale                                       34,914         31,726
  Depreciation and amortization                                                           656,998        644,514
  Amortization of investment premiums and discounts, net                                  (16,564)         4,652
  Accretion of loan fees and discounts, net                                                 2,020         19,279
  Deferred income tax provision (benefit)                                                  23,858        (41,838)
  Originations of loans held for sale                                                  (5,598,265)      (174,873)
  Proceeds from sales of loans                                                          5,247,595        178,167
  Decrease (increase) in interest receivable                                              205,964        (98,559)
  Decrease in interest payable on deposits                                               (130,036)       (23,152)
  Net gain on sales of loans                                                              (40,080)        (3,294)
  Net gain on sales of real estate held for sale                                          (11,314)       (11,961)
  Net income on sales of office related property                                                -        (11,553)
  Federal Home Loan Bank of Chicago, stock dividend                                       (79,100)             -
  Other, net                                                                             (986,405)       184,128
                                                                                     ------------   ------------
 Net cash from operating activities                                                       729,172      1,965,898
                                                                                     ------------   ------------

Cash flows from investing activities
 Investment securities
  Available-for sale:
   Purchases                                                                           (6,041,387)    (6,486,521)
   Proceeds from calls and maturities                                                  23,070,000     11,500,000
  Held-to-maturity:
   Purchases                                                                             (660,404)      (100,000)
   Proceeds from maturities and paydowns                                                    3,166          2,976
 Mortgage-backed securities:
  Available-for-sale:
   Purchases                                                                             (300,890)    (1,962,724)
   Proceeds from maturities and pay downs                                               2,737,439      1,794,958
  Held-to-maturity:
   Proceeds from maturities and pay downs                                                  15,962         16,834
  Proceeds from sales of real estate                                                       58,484        130,263
  Deferred loan fees and costs, net                                                       134,661         70,318
  Loans originated                                                                    (97,779,454)   (96,081,673)
  Principal collected on loans                                                         63,824,276     59,014,287
  Purchases of office properties and equipment, net                                      (322,350)      (105,947)
                                                                                     ------------   ------------
 Net cash from investing activities                                                   (15,260,497)   (32,207,229)
                                                                                     ------------   ------------
</TABLE>

See notes to consolidated financial statements (unaudited).

                                       5
<PAGE>

         CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (continued)
                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

<TABLE>
<CAPTION>

                                                               Six Months Ended June 30,
                                                             ----------------------------
                                                                  2001           2000
                                                              ------------   -----------
<S>                                                          <C>            <C>
Cash flows from financing activities
  Net increase in non-certificate of deposit accounts         $  9,053,886   $ 1,992,121
  Net increase in certificate of deposit accounts                4,250,059     9,427,375
  Net increase in advance payments by
    borrowers for taxes and insurance                              190,736       331,105
  Proceeds from short-term borrowings                            5,000,000    19,000,000
  Repayments of short-term borrowings                          (19,000,000)            -
  Proceeds from other borrowings                                12,000,000             -
  Repayments of other borrowings                                         -    (6,200,000)
  Proceeds from exercise of stock options                           66,281       600,577
  Dividends paid                                                  (291,759)     (302,621)
  Purchase of treasury stock                                    (1,491,460)     (535,470)
                                                              ------------   -----------
Net cash from financing activities                               9,777,743    24,313,087
                                                              ------------   -----------
Decrease in cash and cash equivalents                           (4,753,582)   (5,928,244)
Cash and cash equivalents:
  Beginning of period                                           25,147,273    30,093,583
                                                              ------------   -----------
  End of period                                               $ 20,393,691   $24,165,339
                                                              ============   ===========
Supplemental disclosures of cash flow information
 Cash paid during the period for:
  Interest on deposits                                        $  9,141,200   $ 7,490,300
                                                              ============   ===========
  Interest on borrowed funds                                  $    716,900   $   298,400
                                                              ============   ===========
  Income taxes                                                $    692,218   $   358,144
                                                              ============   ===========
Supplemental disclosures of non-cash investing activities:
 Real estate acquired through foreclosure                     $    182,393   $         -
                                                              ============   ===========
Increase (decrease) in unrealized gains on
 securities available-for-sale                                $    511,912     ($149,255)
                                                              ============   ===========
(Increase) decrease in deferred taxes attributable to the
 unrealized gains on securities available-for-sale               ($174,050)  $    50,747
                                                              ============   ===========
</TABLE>

See notes to consolidated financial statements (unaudited).

                                       6
<PAGE>

                     KANKAKEE BANCORP, INC. AND SUBSIDIARY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 June 30, 2001


Note 1 - Basis of Presentation

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-Q. 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. The statement of condition
at December 31, 2000 has been derived from the audited financial statements at
that date, but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
Operating results for the three-month and six-month periods ended June 30, 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 annual report for
Kankakee Bancorp, Inc. (the "Company") on Form 10-K for the year ended December
31, 2000.

Note 2 - Earnings Per Share

     Basic earnings per share of common stock have been determined by dividing
net income for the period by the average number of shares of common stock
outstanding. Diluted earnings per share of common stock have been determined by
dividing net income for the period by the average number of shares of common
stock and common stock equivalents outstanding. Common stock equivalents assume
exercise of stock options, and the calculation assumes purchase of treasury
stock with the option proceeds at the average market price for the period (when
dilutive). The Company has an incentive stock option plan for the benefit of
directors, officers and employees. Diluted earnings per share have been
determined considering the stock options granted, net of stock options which
have been exercised.

Note 3 - Accounting for Certain Investments in Debt and Equity Securities

     At June 30, 2001, stockholders' equity included a positive $454,000, which
represents the amount by which the market value of the available-for-sale
securities and the available-for-sale mortgage-backed securities exceeded the
book value, net of income tax of $234,000. A decrease in market interest rates
during the six months ended June 30, 2001 resulted in a $338,000 increase in the
market value, net of income tax effect, of the available-for-sale securities and
the available-for-sale mortgage-backed securities. At the end of 2000, the
market value of the available-for-sale securities portfolio exceeded the book
value by $116,000, net of income tax benefit.

                                       7
<PAGE>

                            KANKAKEE BANCORP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     The Company is a Delaware company formed in 1992 for the purpose of
becoming the savings and loan holding company of Kankakee Federal Savings Bank
(the "Bank"), the Company's principal subsidiary. The Bank was originally
chartered in 1885 as an Illinois savings and loan association and was converted
to a federally chartered thrift institution in 1937.

     The Company serves the financial needs of families and local businesses in
its primary market areas through its main office at 310 South Schuyler Avenue,
Kankakee, Illinois and fourteen branch offices located in the communities of
Ashkum, Bourbonnais, Bradley, Braidwood, Champaign, Coal City (2), Diamond,
Dwight, Herscher, Hoopeston, Manteno, Momence and Urbana, Illinois. The
Company's business involves attracting deposits from the general public and
using such deposits to originate residential mortgage loans and, to a lesser
extent, commercial real estate, consumer, commercial business, multi-family and
construction loans in its market areas. The Company also invests in investment
securities, mortgage-backed securities and various types of short term liquid
assets.

ECONOMIC CLIMATE AND BUSINESS DEVELOPMENTS

     During the first half of 2001, the Federal Open Market Committee (the
"FOMC") lowered its target short-term interest rates six times, by a total of
two and three-quarters percentage points. The federal funds target became 3.75%
and the Federal Reserve discount rate became 3.25%. The federal funds rate is
the rate at which financial institutions borrow from each other, while the
discount rate is the rate at which member institutions borrow from the Federal
Reserve. The FOMC continues to cite a slowing economy and the risk of recession
as the motivating factors for lowering interest rates. Lower rates should
provide stimulus to the economy by reducing borrowing costs for both businesses
and individuals.

     A slowing economy could adversely affect cash flows for both commercial and
individual borrowers, as a result of which, the Company could experience
increases in problem assets, delinquencies and losses on loans.

     Lower market interest rates could benefit the Company by reducing its cost
of funds, as term deposits and borrowed money reprice to lower rates at
maturity. However, lower interest rates could also reduce the Company's return
on interest-earning assets. As investments mature or are called, and as loans
are repaid or prepaid, the reinvestment rates on those funds are lower. The
impact of changes in market interest rates on the Company's financial condition
and results of operations is the Company's interest rate sensitivity. While
management believes that the Company's current level of interest rate
sensitivity is reasonable, significant fluctuations in interest rates may have
an adverse effect on the Company's financial condition and results of
operations.

     During 2000, the Company initiated an aggressive growth strategy which was
aimed at increasing deposits and growing the loan portfolio, while continuing to
reduce the size of the investment portfolio.  While committed to continuing
profitable growth of its assets and liabilities, the Company, during the second
quarter of 2001, again began to sell most of the long-term, fixed-rate single-
family mortgage loans it originated.  Loans with terms of less than 20 years
will continue to be retained in the portfolio.

                                       8
<PAGE>

FINANCIAL CONDITION

     Total assets of the Company increased by $10.9 million, or 2.4%, to $470.8
million at June 30, 2001 from $459.9 million at December 31, 2000.

     Cash and cash equivalents decreased by $4.7 million, or 18.9%, from $25.1
million at December 31, 2000 to $20.4 million at June 30, 2001.  The decrease
was primarily attributable to an increase in loans during the period.

     During the six-month period ended June 30, 2001, net loans receivable
increased by $33.5 million, or 9.9%, from $339.0 million to $372.5 million. This
was primarily the result of the origination of $69.0 million of real estate
loans and the origination of $28.8 million of consumer and commercial business
loans, offset by loan repayments which totaled $63.8 million.

     Loans held for sale were $391,000 as of June 30, 2001.  There were no loans
held for sale at December 31, 2000.  During the six months ended June 30, 2001,
$3.8 million in residential real estate loans were originated for sale and $3.4
million of those loans were sold.  In addition, $1.8 million in commercial real
estate loans were originated for sale and sold during the period.

     Securities available-for-sale decreased by $16.6 million, or 29.0%, to
$40.6 million at June 30, 2001 from $57.2 million at December 31, 2000 as the
result of the maturity, or the exercise of call options by issuers, of $23.1
million of securities, which was partially offset by the purchase of $6.0
million of securities and by the net change in market value adjustment.

     Mortgage-backed securities available-for-sale decreased by $2.4 million, or
14.6%, to $13.7 million at June 30, 2001 from $16.1 million at December 31,
2000.  The decrease resulted from the maturity of $2.7 million of securities,
which was partially offset by the purchase of $301,000 of securities and by the
net change in market value adjustments.

     Deposits increased by $13.1 million, or 3.3%, from $388.1 million at
December 31, 2000 to $401.2 million at June 30, 2001. During the six month
period, there was a $4.0 million increase in certificate of deposit accounts and
a $9.1 million increase in passbook, checking and money market accounts.

     Total borrowings decreased by $2.0 million, or 6.9%, from $29.0 million at
December 31, 2000 to $27.0 million at June 30, 2001.  The decrease was the
result of $19.0 million in repayments, which were partially offset by new
borrowings of $17.0 million.  Borrowings consisted entirely of advances from the
Federal Home Loan Bank of Chicago.

ASSET/LIABILITY MANAGEMENT

     Management attempts to control fluctuations in net interest income which
result from an imbalance in the amounts of assets and liabilities that reprice
during a period of time. The Company attempts to mitigate its interest rate
exposure, to the extent consistent with the maintenance of an adequate interest
rate spread.  Adjustable rate mortgage loans, and loans with typically shorter
terms, such as commercial real estate loans, commercial business loans and
consumer loans, have historically been, and continue to be, retained.
Historically, most fixed-rate mortgage loans, particularly those with terms of
20-years or longer, have been sold in the secondary market (with servicing
usually retained). Since the beginning of 2000 and through the first quarter of
2001, the Company retained virtually all the fixed-rate mortgage loans it
originated. Approximately $10.3 million of fixed-rate mortgage loans with terms
of 20 years or longer were originated and retained

                                       9
<PAGE>


during the first quarter of 2001. While the Company continues to promote the
origination of adjustable rate mortgages, commercial real estate loans,
commercial business loans and consumer loans, management determined that the
Company's asset/liability position was such that retention of additional longer
term fixed-rate mortgage loans was appropriate. In light of the changing
economic climate and the current interest rate environment, the Company has,
during the second quarter of 2001, resumed selling fixed-rate mortgage loans
with terms of 20 years or longer in the secondary market. Management reviews the
Company's asset/liability position on a regular basis.

     The Company has not entered into derivative financial instruments including
futures, forwards, interest rate risk swaps, option contracts, or other
financial instruments with similar characteristics.  However, the Company is a
party to financial instruments with off-balance sheet risk in the normal course
of business to meet the financing needs of its customers such as commitments to
extend credit and letters of credit.

NON-PERFORMING ASSETS AND ALLOWANCE FOR LOSSES ON LOANS

     The Company's non-performing assets decreased to $2.6 million, or 0.56%, of
total assets at June 30, 2001 from $3.5 million, or 0.76% of total assets at
December 31, 2000.  During the six month period ended June 30, 2001, non-
performing construction and development loans, non-performing one-to-four family
loans, non-performing consumer loans, and non-performing commercial business
loans decreased by $900,000, $27,000, $77,000 and $733,000, respectively.  These
decreases were partially offset by increases in non-performing commercial real
estate loans and non-performing multi-family loans of $447,000 and $121,000,
respectively.  In addition, foreclosed assets increased by $80,000 and
restructured troubled debts increased by $71,000.  The decrease in non-
performing construction and development loans was due to the repayment in full
of a single loan.  The decrease in non-performing commercial business loans was
due to the loans involved having been brought current.  The ratio of the
allowance for losses on loans to non-performing loans increased to 140.9% as of
June 30, 2001 compared to 83.9% as of December 31, 2000.  The increase in this
ratio, which excludes foreclosed assets and restructured troubled debt, was
primarily the result of the decrease of $1.0 million in non-performing loans.

     The Company classified $3.8 million of its assets as Special Mention, $2.5
million as Substandard and $103,000 as Loss as of June 30, 2001.  No assets were
classified as Doubtful at June 30, 2001.  This represents an increase of
$195,000 in the Special Mention category and a net increase of $282,000 in the
other categories from the December 31, 2000 totals for classified assets.  The
ratio of classified assets to total assets (including items classified as
Special Mention) was 1.36% at June 30, 2001 as compared to 1.29% at December 31,
2000.  The ratio of the allowance for losses on loans to classified assets
decreased to 34.2% as of June 30, 2001 compared to 36.3% as of December 31,
2000.

     The allowance for losses on loans is established through a provision for
losses on loans based on management's evaluation of the risk inherent in the
loan portfolio and changes in the nature and volume of its loan activity. Such
evaluation, which includes a review of all loans with respect to which full
collectibility may not be reasonably assured, considers the fair value of the
underlying collateral, economic conditions, historical loan loss experience,
level of classified loans and other factors that warrant recognition in
providing for an adequate allowance for losses on loans.

     While management believes that it uses the best information available to
determine the allowance for losses on loans, unforeseen market conditions could
result in adjustments to the allowance for losses on loans and net earnings
could be significantly affected if circumstances differ substantially from the
assumptions used in establishing the allowance for losses on loans.

                                       10
<PAGE>


RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2001 AND 2000

     Net income for the quarter ended June 30, 2001 was $734,000 compared to
$768,000 for the same period in 2000.  This represented a $34,000, or 4.5%,
decrease.  The decrease in net income resulted from an increase of $348,000 in
other expenses, and an increase of $40,000 in provisions for losses on loans,
which were substantially offset by increases in net interest income of $130,000
and other income of $196,000, and by a decrease of $27,000 in income tax
expense.

     Basic earnings per share were $.61 for both the quarter ended June 30, 2001
and the comparable 2000 period.  Diluted earnings per share were $.60 for the
quarter ended June 30, 2001 compared to $.59 for the comparable 2000 period.

     Net interest income increased $130,000, or 4.0%, during the quarter ended
June 30, 2001, compared to the quarter ended June 30, 2000.

     The table presented on page 17 ("Table I"), sets forth an analysis of the
Company's net interest income for the three-month periods ended June 30, 2001
and 2000.

     As Table I indicates, interest income increased $956,000, or 13.1%, to $8.3
million for the three-month period ended June 30, 2001 from $7.3 million for the
same period in 2000.  The increase in interest income was the result of an
increase in the average balance of interest-earning assets to $441.1 million
during the 2001 period from $385.6 million during the 2000 period, which was
partially offset by a decrease in the yield earned on interest-earning assets to
7.51% during the 2001 period from 7.60% during the 2000 period.  The increase in
the average balance of interest-earning assets was due to increases in balances
of loans and other interest-earning assets, which were partially offset by
decreases in balances of mortgage-backed securities and investment securities
during the quarter.  The decrease in the yield earned on interest-earning assets
was the result of decreasing market interest rates during the quarter, which
resulted in lower yields on short term assets and a lower yield on the
reinvestment of principal repayments and prepayments on loans and on newly
originated loans.  The increase in average loans was primarily the result of an
aggressive lending program during 2000 and the first half of 2001.

     Interest expense increased $825,000, or 20.5%, to $4.9 million during the
second quarter from $4.0 million in the same period in 2000.  The increase in
interest expense was the result of an increase in the average outstanding
balance of interest-bearing liabilities to $426.9 million during the 2001 period
from $374.5 million during the 2000 period, and by an increase in the average
yield on interest-bearing liabilities to 4.56% during the 2001 period from 4.31%
during the 2000 period.  The increase in average interest-bearing liabilities
resulted primarily from a more aggressive pricing policy and the continuing
movement to a sales oriented operation.  The increase in the average yield on
interest-bearing liabilities resulted from a more aggressive pricing policy,
primarily during 2000, the effects of which are reflected in higher interest
costs on certificate balances.

     Based on management's review of the adequacy of the allowance for losses on
loans, a provision for losses on loans of $40,000 was recorded during the second
quarter of 2001.  There was no provision for losses on loans recorded during the
second quarter of 2000.

     Other income for the three-month period ended June 30, 2001 increased
$196,000, or 33.1%, to $789,000 compared to $593,000 for the same period in
2000. The increase was attributable to increases of $150,000 in fee income,
$38,000 in gain on sale of loans held for sale and $14,000 in other income.
These increases were partially offset by decreases of $4,000 in gain on the sale
of real estate held for sale and $1,000 in insurance commissions. The $150,000
increase in fee

                                       11
<PAGE>

income resulted primarily from an increase in checking accounts subject to fees.

     Other expenses for the second quarter of 2001 increased $348,000 or 12.9%,
to $3.1 million from $2.7 million for the second quarter of 2000. There were
increases of $42,000 (16.3%) in occupancy costs, $97,000 (23.4%) in other
expenses, $17,000 (21.0%) in data processing services, $114,000 (7.6%) in
compensation and benefits, $39,000 (58.7%) in advertising, $45,000 (59.5%) in
telephone and postage and $5,000 (36.9%) in provision for losses on foreclosed
assets. These increases were partially offset by decreases of $10,000 (5.6%) and
$1,000 (1.0%) in furniture and equipment expense and amortization of intangible
assets, respectively. The increase in the cost of data processing services was
due to costs associated with an upgrade in mainframe hardware and to costs
associated with implementation of on-line banking. Postage expenses increased as
a result of an increase in the number of checking accounts and an extensive
mailing required to inform customers of the Company's privacy policy. A
contributing factor to the increase in compensation and benefits was the higher
cost of health insurance.

     Federal income taxes decreased $27,000 to $369,000 for the three-month
period ended June 30, 2001, compared to $396,000 for the same period in 2000.
The primary reason for this decrease was the decrease in pre-tax income.

RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001 and 2000

     Net income for the six-months ended June 30, 2001 was $1.4 million compared
to $1.3 million for the same period in 2000. This represented a $96,000, or
7.6%, increase. The increase in net income resulted from an increase of $405,000
in net interest income, and an increase of $193,000 in other income, which were
partially offset by increases of $408,000 in other expenses, $55,000 in
provision for losses on loans and $39,000 in income tax expense.

     Basic earnings per share were $1.12 for the six months ended June 30, 2001
compared to $1.01 for the 2000 period.  Diluted earnings per share were $1.10
for the six months ended June 30, 2001 compared to $.98 for the comparable 2000
period.

     Net interest income increased $405,000, or 6.4%, during the six months
ended June 30, 2001, compared to the six months ended June 30, 2000.

     The table presented on page 18 ("Table II"), sets forth an analysis of the
Company's net interest income for the six-month periods ended June 30, 2001 and
2000.

     As Table II indicates, interest income increased $2.3 million, or 15.9%, to
$16.5 million for the six-month period ended June 30, 2001 from $14.2 million
for the same period in 2000.  The increase in interest income was the result of
an increase in the yield earned on interest-earning assets to 7.62% during the
2001 period from 7.51% during the 2000 period, and an increase in the average
balance of interest-earning assets to $435.1 million during the 2001 period from
$380.0 million during the 2000 period.  The increase in the average balance of
interest-earning assets was primarily due to increases in balances of loans and
other interest-earning assets, which were partially offset by decreases in
balances of mortgage-backed securities and investment securities during the
period. The increase in the yield earned on interest-earning assets was the
result of increasing market interest rates during 2000, a period during which
the Company had significant growth. While market interest rates have decreased
significantly during the first six months of 2001, the repricing to lower rates
of maturing and prepaying assets has not yet reduced yields to the levels
experienced in the first six months of 2000.


                                       12
<PAGE>


     Interest expense increased $1.8 million, or 23.5%, to $9.7 million during
the first six months of 2001 from $7.9 million in the same period in 2000. The
increase in interest expense was the result of an increase in the average
outstanding balance of interest-bearing liabilities to $421.1 million during the
2001 period from $370.4 million during the 2000 period, and by an increase in
the average yield on interest-bearing liabilities to 4.65% during the 2001
period from 4.26% during the 2000 period. The increase in average interest-
bearing liabilities resulted primarily from a more aggressive pricing policy and
the continuing movement to a sales oriented operation. The increase in the
average yield on interest-bearing liabilities resulted from increasing market
rates during 2000 and a more aggressive pricing policy. While market interest
rates have decreased significantly during the first six months of 2001, the
impact of these decreases has not yet reduced funding costs to the same levels
as those of the first six months of 2000.

     Based on management's review of the adequacy of the allowance for losses on
loans, a provision for losses on loans of $55,000 was recorded during the first
six months of 2001.  There was no provision for losses on loans recorded during
the first six months of 2000.

     Other income for the six-month period ended June 30, 2001 increased
$193,000, or 16.1%, to $1.4 million compared to $1.2 million for the same period
in 2000. The increase was attributable to increases of $212,000 in fee income,
$17,000 in other income and $37,000 in gain on the sale of loans held for sale.
These increases were partially offset by decreases of $61,000 in insurance
commissions and $1,000 in gain on the sale of real estate held for sale. The
increase in fee income was primarily the result of an increase in checking
accounts subject to fees. The increase in gain on the sale of loans held for
sale was the result of resuming the sale of long-term, fixed-rate loans during
the second quarter. The decrease in insurance commissions was due to a high
level of commissions during the first quarter of 2000 which did not recur in
2001.

     Other expenses for the first half of 2001 increased $408,000, or 7.3%, to
$6.0 million from $5.6 million during the 2000 period. Most categories of other
expenses increased, including increases of $94,000 (3.1%) in compensation and
benefits, $80,000 (15.1%) in occupancy expenses, $29,000 (20.4%) in advertising,
$30,000 (17.6%) in data processing services, $45,000 (25.2%) in telephone and
postage and $131,000 (14.2%) in other expenses. The increase in compensation and
benefits was due in large part to increased costs of medical insurance in 2001.
The increase in the cost of data processing services was due to costs associated
with an upgrade in mainframe hardware and to costs associated with
implementation of on-line banking. Postage expenses increased as a result of an
increase in the number of checking accounts and an extensive mailing required to
inform customers of the Company's privacy policy.

LIQUIDITY AND CAPITAL RESOURCES

     The Company maintains a level of cash and other liquid assets sufficient to
fund normal volumes of loan commitments, deposit withdrawals and other
obligations. The Office of Thrift Supervision (the "OTS") regulations currently
require each savings association to maintain sufficient liquidity to ensure its
safe and sound operation.

     The Company's primary sources of funds are deposits and proceeds from
payments of principal and interest on loans and the sale or maturity of
investment securities and mortgage-backed securities. Management considers
current liquidity and additional sources of funds adequate to meet outstanding
liquidity needs.

     Federally insured savings banks, such as the Bank, are required by federal
law and OTS regulations to maintain minimum levels of regulatory capital. The
OTS has established the following minimum capital requirements: a risk-based
capital ratio, a core capital ratio and a tangible capital

                                       13
<PAGE>

ratio. In addition to these minimum regulatory capital requirements, another
provision of federal law grants the OTS broad power to take prompt corrective
action to resolve the problems of undercapitalized institutions. The OTS
regulations implementing this statutory authority (the "prompt corrective action
regulations") establish other capital thresholds which determine whether an
institution will be deemed to be "well capitalized", "adequately capitalized",
"undercapitalized", "significantly undercapitalized" or "critically
undercapitalized". The capital category to which an institution is assigned in
turn determines the actions the OTS may take to address the institution's
undercapitalization. The capital regulations of the OTS exclude the effect of
SFAS 115 for the purpose of calculating regulatory capital.

     The capital regulations currently require tangible capital of at least 1.5%
of adjusted total assets (as defined by regulation). Under the prompt corrective
action regulations, however, an institution with a ratio of tangible capital to
total assets below 2.0% is deemed to be "critically undercapitalized" and, as
such, will be subject to a variety of sanctions under the prompt corrective
action regulations, including, without limitation, limits on asset growth,
restrictions on activities and, ultimately, the appointment of a receiver.
Tangible capital generally includes common stockholders' equity and retained
income and certain non-cumulative perpetual preferred stock and related income
less intangible assets (other than specified amounts of mortgage servicing
rights) and certain non-includable investments in subsidiaries.

     The capital regulations also currently require core capital equal to at
least 3.0% of adjusted total assets (as defined by regulation). Under the prompt
corrective action regulations, however, an institution with a ratio of core
capital to adjusted total assets of 3.0% will be deemed to be "adequately
capitalized" only if the institution also has a composite rating of A1" under
the Uniform Financial Institutions Rating System ("UFIRS"). All other
institutions must maintain a minimum ratio of core capital to adjusted total
assets of 4.0% in order to be deemed to be "adequately capitalized", and an
institution, regardless of its UFIRS rating, will be deemed to be "well
capitalized" only if it maintains a ratio of core capital to adjusted total
assets of at least 5.0%. If an institution fails to remain at least "adequately
capitalized", the OTS may impose one or more of a variety of sanctions on the
institution to address its undercapitalized condition, including, without
limitation, requiring the submission of a capital plan, restricting growth and
restricting the payment of capital distributions (such as dividends). Core
capital generally consists of tangible capital plus specified amounts of certain
intangible assets.

     The OTS risk-based requirement currently requires associations to have
total capital of at least 8.0% of risk-weighted assets. In order to be
considered "well capitalized" under the prompt corrective action regulations,
however, an institution must maintain a ratio of total capital to total risk-
weighted assets of at least 10.0% and a ratio of core capital to total risk-
weighted assets of at least 6.0%. Total capital consists of core capital plus
supplementary capital, which consists of, among other things, maturing capital
instruments, such as subordinated debt and mandatorily redeemable preferred
stock, and a portion of the Bank's general allowance for losses on loans.

     As of June 30, 2001, the Bank exceeded all current minimum regulatory
capital standards and was deemed to be "well capitalized" for purposes of the
OTS's prompt corrective action regulations. At June 30, 2001, the Bank's
tangible capital was $32.2 million, or 6.9%, of adjusted total assets,
which exceeded the 1.5% requirement by $25.3 million and exceeded the 2.0%
"critically undercapitalized" threshold by $22.9 million. In addition, at June
30, 2001, the Bank had core capital of $32.2 million, or 6.9%, of adjusted total
assets, which exceeded the 4.0% requirement by $13.7 million and exceeded the
5.0% "well capitalized" threshold by $9.0 million. The Bank had risk-based
capital of $34.3 million at June 30, 2001, or 11.4%, of risk-adjusted assets,
which exceeded the minimum risk-based capital requirement by $10.3 million and
exceeded the 10.0% "well capitalized" threshold by $4.3 million. Additionally,
the Bank's $32.2 million of core capital equaled

                                       14
<PAGE>

10.7% of total risk-weighted assets, which exceeded the 6.0% "well capitalized"
threshold by $14.2 million.

EMERGING ACCOUNTING STANDARDS

     In June 2001, the Financial Accounting Standards Board issued two
statements which are summarized as follows:

     Business Combinations Statement of Financial Accounting Standard No. 141,
"Business Combinations" (FAS 141) addresses financial accounting and reporting
for business combinations.  It requires all business combinations covered by the
scope of the Standard to be accounted for using the purchase method.  It is
effective for business combinations initiated after June 30, 2001 and business
combinations completed July 1, 2001 and later which use the purchase method of
accounting.  The Company has no pending business combinations which would be
impacted by this statement.  The requirements of this statement would need to be
considered in any business combination contemplated in the future.

     Goodwill and Other Intangible Assets Statement of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets" (FAS 142) addresses
financial accounting and reporting for goodwill and other intangible assets.  It
addresses how intangible assets should be accounted for at the time of
acquisition and in subsequent periods.  It requires that goodwill and other
intangible assets having indefinite useful lives not be amortized.  Instead,
such assets must be tested at least annually for impairment.  Such assets having
finite useful lives would continue to be amortized over those lives.  The
Standard provides specific guidance for testing goodwill and other intangible
assets for impairment and also requires additional disclosures concerning
goodwill and other intangible assets.

     FAS 142 is effective for fiscal years beginning after December 15, 2001 and
must be applied to all goodwill and other intangible assets recognized in
financial statements as of the start of that fiscal year.  Impairment losses
resulting from the initial application of the Standard are to be reported as
resulting from a change in accounting principle.  At this time, the Company does
not believe the adoption of the Standard will have a material impact on the
consolidated financial statements.  However, the evaluation of the impact has
not yet been completed.

STOCK REPURCHASE

     During the quarter ended June 30, 2001, the Company repurchased 18,500
shares of common stock at a total cost of $442,000 under the repurchase program
approved the Company's Board of Directors in January 2001. Through June 30,
2001, a total of 667,507 shares of common stock of the Company had been
purchased under the current and previous repurchase programs at a total cost of
$14.3 million. As of June 30, 2001, the Company held 545,092 shares of its
common stock as treasury stock. During the period from June 30, 2001 through
August 8, 2001 no additional shares of common stock were repurchased.

STOCK OPTIONS

     During the second quarter of 2001, no options on shares of common stock
were exercised. Between June 30, 2001 and August 8, 2001, options on 2,500
shares of common stock were exercised. Through August 8, 2001, no notice was
received from holders of options of their intent to exercise options.

                                       15
<PAGE>

DIVIDENDS

     On July 10, 2001, a cash dividend of $.12 per share was declared, payable
on August 31, 2001 to stockholders of record as of August 10, 2001. Future
dividends will depend primarily upon earnings, financial condition and need for
funds, as well as restrictions imposed by regulatory authorities regarding
dividend payments and capital requirements.


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Reform Act of 1995, and
is including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are generally
identifiable by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project" or similar expressions. The Company's ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on the operations
and future prospects of the Company and its subsidiaries include, but are not
limited to, changes in: interest rates, general economic conditions,
legislative/regulatory changes, monetary and fiscal policies of the U. S.
Government, including policies of the U. S. Treasury and the Federal Reserve
Board, the quality of composition of the loan or investment portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
the Company's market area, implementation by the Company of new technologies,
the Company's ability to develop and maintain secure and reliable electronic
systems and accounting principles, policies and guidelines. These risks and
uncertainties should be considered in evaluating forward-looking statements and
undue reliance should not be placed on such statements. Further information
concerning the Company and its business, including additional factors that could
materially affect the Company's financial results, is included in the Company's
filings with the Securities and Exchange Commission.


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                                                TABLE I
                                                NET INTEREST INCOME ANALYSIS (UNAUDITED)
                                                 KANKAKEE BANCORP, INC. AND SUBSIDIARY

                                                      Three Months Ended June 30,
                                        -----------------------------------------
                                                     2001                        2000
                                        ----------------------------------- -----------------------------------
                                           Average                              Average
                                         Outstanding   Interest     Yield/    Outstanding   Interest     Yield/
                                           Balance    Earned/Paid    Rate       Balance    Earned/Paid    Rate
                                        ----------------------------------- -----------------------------------
                                                                 (Dollars in Thousands)
<S>                                     <C>           <C>           <C>       <C>          <C>           <C>
Interest-earning assets:
  Loans receivable (1)                      $362,541      $ 7,084      7.84%     $293,843      $ 5,806     7.93%
  Mortgage-backed securities (2)              14,573          256      7.05%       18,130          315     6.97%
  Investments securities (3)                  41,692          632      6.08%       60,840          949     6.26%
  Other interest-earning assets               19,972          248      4.98%       10,957          199     7.28%
  FHLB stock                                   2,315           38      6.58%        1,835           33     7.21%
                                            --------      -------                --------      -------

Total interest-earning assets                441,093        8,258      7.51%      385,605        7,302     7.60%
                                            --------      -------                --------      -------

Other assets                                  29,622                               29,068
                                            --------                             --------

Total assets                                $470,715                             $414,673
                                            ========                             ========

Interest-bearing liabilities:
  Certificate accounts                      $249,478        3,633      5.84%     $221,558        3,006     5.44%
  Savings deposits                            61,499          405      2.64%       61,942          388     2.51%
  Demand and NOW deposits                     88,942          486      2.19%       76,279          434     2.28%
  Borrowings                                  27,000          329      4.89%       14,750          199     5.41%
                                            --------      -------                --------      -------

Total interest-bearing liabilities           426,919        4,853      4.56%      374,529        4,027     4.31%
                                            --------      -------                --------      -------

Other liabilities                              4,616                                3,657
                                            --------                             --------

Total liabilities                            431,535                              378,186
                                            --------                             --------

Stockholders' equity                          39,180                               36,487
                                            --------                             --------

Total liabilities and
  stockholders' equity                      $470,715                             $414,673
                                            ========                             ========

Net interest income                                       $ 3,405                              $ 3,275
                                                          =======                              =======

Net interest rate spread                                               2.95%                               3.29%
                                                                       ====                                ====

Net earning assets                          $ 14,174                             $ 11,076
                                            ========                             ========

Net yield on average interest-
 earning assets (net interest
 margin)                                                               3.10%                               3.41%
                                                                       ====                                ====

Average interest-earning assets to
 average interest-bearing liabilities                      103.32%                              102.96%
                                                          =======                              =======
</TABLE>

(1)  Calculated including loans held for sale, and net of deferred loan fees,
     loan discounts, loans in process and the allowance for losses on loans.
(2)  Calculated including mortgage-backed securities available-for-sale.
(3)  Calculated including investment securities available-for-sale and
     certificates of deposit.


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                 TABLE II
                                                  NET INTEREST INCOME ANALYSIS (UNAUDITED)
                                                   KANKAKEE BANCORP, INC. AND SUBSIDIARY

                                                        Six Months Ended June 30,
                                      ------------------------------------------------------
                                                     2001                         2000
                                      ------------------------------------- ------------------------------------
                                           Average                              Average
                                         Outstanding   Interest     Yield/    Outstanding   Interest     Yield/
                                           Balance    Earned/Paid    Rate       Balance    Earned/Paid    Rate
                                      ------------------------------------- ------------------------------------
                                                                 (Dollars in Thousands)
<S>                                   <C>             <C>           <C>       <C>          <C>           <C>
Interest-earning assets:
  Loans receivable (1)                      $353,422      $13,940      7.95%     $283,456      $11,079     7.86%
  Mortgage-backed securities (2)              15,126          537      7.16%       18,041          624     6.96%
  Investments securities (3)                  46,929        1,408      6.05%       61,704        1,918     6.25%
  Other interest-earning assets               17,398          492      5.70%       14,941          512     6.89%
  FHLB stock                                   2,240           75      6.75%        1,825           65     7.16%
                                            --------      -------                --------      -------

Total interest-earning assets                435,115       16,452      7.62%      379,967       14,198     7.51%
                                            --------      -------                --------      -------

Other assets                                  29,468                               30,029
                                            --------                             --------

Total assets                                $464,583                             $409,996
                                            ========                             ========

Interest-bearing liabilities:
  Certificate accounts                      $247,940        7,240      5.89%     $219,997        5,895     5.39%
  Savings deposits                            59,375          762      2.59%       61,256          762     2.50%
  Demand and NOW deposits                     87,249        1,009      2.33%       75,955          856     2.27%
  Borrowings                                  26,571          691      5.24%       13,229          340     5.17%
                                            --------      -------                --------      -------

Total interest-bearing liabilities           421,135        9,702      4.65%      370,437        7,853     4.26%
                                            --------      -------                --------      -------

Other liabilities                              4,344                                3,237
                                            --------                             --------

Total liabilities                            425,479                              373,674
                                            --------                             --------

Stockholders' equity                          39,104                               36,322
                                            --------                             --------

Total liabilities and
  stockholders' equity                      $464,583                             $409,996
                                            ========                             ========

Net interest income                                       $ 6,750                              $ 6,345
                                                          =======                              =======

Net interest rate spread                                               2.97%                               3.25%
                                                                       ====                                ====

Net earning assets                          $ 13,980                             $  9,530
                                            ========                             ========

Net yield on average interest-
 earning assets (net interest
 margin)                                                               3.13%                               3.36%
                                                                       ====                                ====

Average interest-earning assets to
 average interest-bearing liabilities                      103.32%                              102.57%
                                                          =======                              =======
</TABLE>

(1)  Calculated including loans held for sale, and net of deferred loan fees,
     loan discounts, loans in process and the allowance for losses on loans.
(2)  Calculated including mortgage-backed securities available-for-sale.
(3)  Calculated including investment securities available-for-sale and
     certificates of deposit.


                                       18
<PAGE>

                            KANKAKEE BANCORP, INC.

                          PART II - OTHER INFORMATION
                          ---------------------------


Item 1.  Legal Proceedings  -  There are no material pending legal proceedings
         -----------------
         to which the Company or the Bank is a party other than ordinary routine
         litigation incidental to their respective businesses.

Item 2.  Changes in Securities   -   None
         ---------------------

Item 3.  Defaults Upon Senior Securities   -   None
         -------------------------------

Item 4.  Submission of Matters to a Vote of Security Holders  - The Annual
         ---------------------------------------------------
         Meeting of Stockholders of the Company was held on April 20, 2001. At
         the meeting, Brenda L. Baird and Larry D. Huffman were elected to serve
         as directors with terms expiring in 2004. Continuing with terms
         expiring in 2002 were William Cheffer and Michael A. Stanfa. Continuing
         with terms expiring in 2003 were Charles C. Huber, Thomas M. Schneider
         and Wesley E. Walker.

         The matters approved by stockholders at the meeting and the number of
         votes cast for, against or withheld (as well as the number of
         abstentions and broker non-votes) as to each matter are set forth
         below:

                                               Number of Votes
                                               ---------------
                                               For     Withheld
                                             --------  ---------

         The election of the following
         directors for a three-year term:

         Brenda L. Baird                      913,198   120,333
         Larry D. Huffman                     899,273   134,258


<TABLE>
<CAPTION>
                                                                                        Broker
                                                       For     Against    Abstain     Non-Votes
                                                     -------  ---------  ---------    ---------
<S>                                                  <C>      <C>        <C>          <C>
         The ratification of McGladrey
         & Pullen, LLP, as the auditors
         for the year ending December
         31, 2001                                    1,021,920   9,514       2,097          -
</TABLE>

Item 5.  Other Information   -   None
         -----------------

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

          a. Exhibits - None
             --------

          b. Reports on Form 8-K
             -------------------

             On April 18, 2001, the Company filed a report on Form 8-K stating
             under Item 5 that the Company had, on April 18, 2001, issued a news
             release announcing its earnings for the quarter ending March 31,
             2001, as well as other recent corporate events.


                                       19
<PAGE>

                            KANKAKEE BANCORP, INC.

                                  SIGNATURES
                                  ----------

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

                                             KANKAKEE BANCORP, INC.
                                             Registrant



Date:           August 8, 2001               /s/ LARRY D. HUFFMAN
       --------------------------            -----------------------------
                                             President and CEO



Date:           August 8, 2001               /s/ RONALD J. WALTERS
       --------------------------            -----------------------------
                                             Vice President and Treasurer
                                             (Principal Financial
                                             And Accounting Officer)


                                       20