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U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

|                |  |                                                                               
|--------------- |  | ------------------------------------------------------------------------------
|(Mark One)      |  |                                                                               
|X IN BALLOT BOX |  | ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



| | For the fiscal year ended December 31, 2001
| | -------------------------------------------

|                |  |                                                                                   
|--------------- |  | ----------------------------------------------------------------------------------
|OPEN BALLOT BOX |  | TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



| | For the transition period from  to  .
| | -------------------------------------



| | Commission file number 0-29837
| | ------------------------------

FIRST SHARES BANCORP, INC.
(Name of small business issuer in its charter)

|                                                                       |  |                                                
|---------------------------------------------------------------------- |  | -----------------------------------------------
|Indiana
(State or other jurisdiction of incorporation or organization) |  | 35-1948962
(I.R.S. Employer Identification No.)

|                                                                                     |  |                 
|------------------------------------------------------------------------------------ |  | ----------------
|996 South State Road 135
Greenwood, Indiana
(Address of principal executive offices) |  | 46143
(Zip Code)

Issuers Telephone Number: (317) 882-4790

Securities registered under Section 12(b) of the Exchange Act:           None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.01 par value
(Title of class)

Check whether the issuer (1) 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 IN BALLOT BOX No OPEN BALLOT BOX.

Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X IN BALLOT BOX

Issuers revenues for its most recent fiscal year:            $10,266,000

Aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of March
15, 2002 (See definition of affiliate in Rule 12b-2 of the Exchange Act):
          $6,764,472.

Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

(Issuers involved in bankruptcy proceeding
during the past five years)
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes OPEN BALLOT BOX No OPEN BALLOT BOX.

(Applicable only to corporate registrants)
Number of shares common stock outstanding, as of March 15, 2002:           1,052,779

Documents Incorporated by Reference:Proxy Statement for 2002 Annual Meeting
incorporated by reference into Part III of Form 10-KSB.

Transitional Small Business Disclosure Format
(Check one): OPEN BALLOT BOX Yes X IN BALLOT BOX No





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TABLE OF CONTENTS



|                                     |                                                                                                                         |  |  |  |  |  |  | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I                              
|                                     | Item 1. Description of Business                                                                                        
|                                     | Item 2. Description of Property                                                                                        
|                                     | Item 3. Legal Proceedings                                                                                              
|                                     | Item 4. Submission of Matters to a Vote of Security Holders                                                            
|Part II                             
|                                     | Item 5. Market for Common Equity and Related Stockholder Matters                                                       
|                                     | Item 6. Managements Discussion and Analysis or Plan of Operation                                                      
|                                     | Item 7. Financial Statements                                                                                           
|                                     | Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure                           
|Part III                            
|                                     | Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
|                                     | Item 10. Executive Compensation                                                                                        
|                                     | Item 11. Security Ownership of Certain Beneficial Owners and Management                                                
|                                     | Item 12. Certain Relationships and Related Transactions                                                                
|                                     | Item 13. Exhibits and Reports on Form 8-K                                                                              
|Signatures                          
|Management's Discussion and Analysis
|Financial Statements                



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FIRST SHARES BANCORP, INC.

FORM 10-KSB

Table of Contents

|           |  |          |    |                                                                                                                 |  |      |    | 
|---------- |  | -------- | -- | --------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|           |  |          |    |                                                                                                                 |  | Page |   
|           |  |          |    |                                                                                                                 |  |      |   
|PART I     |  |          | 3 
|           |  | Item 1.  |    | Description of Business                                                                                         |  |      | 3  | 
|           |  | Item 2.  |    | Description of Property                                                                                         |  |      | 13 | 
|           |  | Item 3.  |    | Legal Proceedings                                                                                               |  |      | 14 | 
|           |  | Item 4.  |    | Submission of Matters to a Vote of Security Holders                                                             |  |      | 14 | 
|PART II    |  |          | 14 |                                                                                                                
|           |  | Item 5.  |    | Market for Common Equity and Related Stockholder Matters                                                        |  |      | 14 | 
|           |  | Item 6.  |    | Managements Discussion and Analysis or Plan of Operation                                                       |  |      | 14 | 
|           |  | Item 7.  |    | Financial Statements                                                                                            |  |      | 14 | 
|           |  | Item 8.  |    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                            |  |      | 14 | 
|PART III   |  |          | 15 |                                                                                                                
|           |  | Item 9.  |    | Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act |  |      | 15 | 
|           |  | Item 10. |    | Executive Compensation                                                                                          |  |      | 15 | 
|           |  | Item 11. |    | Security Ownership of Certain Beneficial Owners and Management                                                  |  |      | 15 | 
|           |  | Item 12. |    | Certain Relationships and Related Transactions                                                                  |  |      | 15 | 
|           |  | Item 13. |    | Exhibits and Reports on Form 8-K                                                                                |  |      | 16 | 
|Signatures |  |          | 18 |                                                                                                                

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PART I




Item 1. Description of Business.

The information in this section contains forward-looking statements.
Although we believe that our expectations in such forward-looking statements
are reasonable, we cannot promise that our expectations will turn out to be
correct. Actual results could be materially different from and worse than our
expectations for various reasons, including competitive, economic and other
factors.

General

First Shares Bancorp, Inc., an Indiana corporation formed in 1991, is a
bank holding company that owns all of the common shares of First Bank, an
Indiana-chartered bank with deposit accounts insured by the FDIC. After years
of slow growth, we implemented an aggressive new growth strategy in 1999 with
the goal of capturing a significant portion of the market for banking services
in the Central Indiana counties, south of Indianapolis. To help fund our
growth, we conducted an initial public offering of our common shares in 2000,
raising net proceeds of approximately $2.7 million.

We offer a broad range of commercial banking products and services to
small and medium-sized businesses and retail customers from our seven locations
in Central Indiana. Our products include commercial, consumer and real estate
loans, credit cards, a broad range of deposit products and other non-deposit
banking services.

Strategy

Bank Growth. When current management assumed control of First Shares
Bancorp in March of 1999, it adopted a growth strategy of increasing assets,
deposits and loans. Between March 31, 1999, and December 31, 2001, total assets
increased from $44.0 million to $128.1 million (191%), total loans increased
from $27.4 million to $93.7 million (242%), and deposits increased from $39.3
million to $111.4 million (183%). This growth was accomplished primarily by
attracting customers from our competitors and was accomplished during periods
where our ability to maximize our growth was impeded by our regulatory capital
levels.

Our goal is to continue our growth and build a profitable,
customer-focused financial institution. We believe our capital structure after
this offering, our management, and data and operational systems are sufficient
to achieve further growth in asset size, revenues and capital. This growth
should enable us to more effectively serve the needs of our customers and
expand our customer base.

We expect to continue our expansion strategy primarily through internal
growth and potentially through acquisitions. We believe that our largest source
of growth is through referrals by existing customers, and that the primary
reason for referrals is positive customer feedback regarding our customer
service and response time. The Central Indiana banking market is dominated by
large national and regional financial institutions. This dominance was achieved
through the purchase of Indiana-based financial institutions and holding
companies over the past several years, which resulted in a significant
consolidation of the Indiana banking industry. We believe that small- and
medium-size businesses often are not of sufficient size to be of interest to
these large banks. We also believe potential customers frequently have
difficulty in finding personalized banking services and seek a banking
relationship with a smaller and more service-oriented community banking
organization such as us. Through our primary emphasis on customer service,
managements experience and our product lines, we will continue to focus on
attracting these customers to achieve internal growth.

We also believe that the economic expansion which has occurred in our
market area contributes significantly to new opportunities for internal growth.
As of the 2000 census, the most recent date for which figures were available,
the three counties in which we conduct most of our activities had a combined
population of approximately 196,855. One of those counties, Johnson County, was
the third fastest growing county in Indiana based on population increase from
1990 to 2000. Employment in the area is in diversified sectors, including
manufacturing, construction, retail

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trade, services and government. As of November 30, 2001, the three-county
area had an unemployment rate of less than 4%.

In order to promote internal growth, we currently pay interest on deposits
at rates competitive with the highest in our market area. In addition, we have
increased our loan origination efforts and have expanded our indirect consumer
lending through automobile and recreational vehicle dealers.

In addition to internal growth, we believe there may be opportunities to
grow through opening new branches and possibly through branch acquisitions. We
currently have six branches and an additional location from which our mortgage
loan business operates. We intend to continue to evaluate the benefits of
establishing new branches in appropriate locations. We believe that branch
locations may continue to become available for purchase from time to time as
bank holding companies eliminate certain overlapping branches resulting from
bank consolidation. We have considered and intend to consider a variety of
criteria when evaluating the creation or acquisition of new branches. These
include (i) the geographic location, (ii) the investment required for, and
opportunity costs of, the branch and (iii) economies of scale that may be
achieved.

Operations and Marketing. Our objective is to continue to build a
profitable, growing community banking franchise. We believe that, in meeting
the needs of consumers and small- to medium-sized businesses in our market
area, our most important strategy is to provide excellent customer service.
This strategy is emphasized above all others, from top management down to each
bank teller. Our operational systems have been designed to complement customer
service. We have Internet banking capabilities, which allow customers to
perform several banking functions on-line. We believe our banking locations are
small enough to facilitate personalized services and decision-making, yet of
sufficient size to meet most customers needs.

We seek to maximize operational and support efficiencies consistent with
maintaining high quality customer service. Various management and
administrative functions are consolidated, including consumer credit
administration and lending, investment management and accounting. This enables
branch personnel to focus better on customer service and sales.

In expanding our banking franchise, we have focused on identifying and
developing products and services that satisfy customer needs, particularly
customer service. We offer a wide range of consumer deposit products including
regular checking, interest bearing checking, money market accounts, regular
savings, certificates of deposit, and IRAs. We also offer ATM cards and debit
cards which provide customers with additional access to their accounts. Our
consumer loan products include home mortgages, home equity loans, automobile
loans and other secured and unsecured loans originated directly by our branches
and from indirect sources. See Loans below for a discussion of the loan
products we provide.

Loans

We have the ability to provide a broad range of commercial and retail
lending services. As of December 31, 2001, our loan portfolio consisted of
approximately 36% commercial and commercial real estate loans, 27% residential
mortgage loans (including home equity loans), 11% residential construction
loans and 26% automobile and other consumer loans. We follow a uniform credit
policy which sets forth underwriting and loan administration criteria,
including levels of loan commitment, loan types, credit criteria, concentration
limits, loan administration, loan review and grading and related matters. At
December 31, 2001, substantially all loans outstanding were to customers within
our market area.

Commercial Loans. Commercial loans are made primarily to small- and
medium-sized businesses. These loans are made on a secured and, to a limited
extent, on an unsecured basis and are made available for general operating
purposes, acquisition of fixed assets including real estate, purchases of
equipment and machinery, financing of inventory and accounts receivable, as
well as any other purposes considered appropriate. We generally look to a
borrowers business operations as the principal source of repayment, but also
receive, when appropriate, mortgages on real estate, security interests in
inventory, accounts receivable and other personal property and/or personal
guarantees. Approximately 39% of our commercial loans are commercial real
estate loans secured by a first lien on

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the commercial real estate. In addition, virtually all of our commercial
loans that are not mortgage loans are secured by a lien on equipment, inventory
and/or other assets of the commercial borrower.

Commercial lending involves more risk than residential lending because
loan balances are greater and repayment is dependent upon the borrowers
operations. We attempt to minimize the risks associated with these transactions
by generally limiting our lending to owner-operated businesses with an
established profitable history. In many cases, risk is further reduced by
requiring personal guarantees, additional collateral or other credit
enhancements as deemed necessary.

Residential Mortgage Loans. We originate residential mortgage loans, which
are generally long-term, with either fixed or variable interest rates. Our
general policy is to retain all or a portion of variable interest rate mortgage
loans in our loan portfolio and to sell virtually all fixed rate loans in the
secondary market. This policy is subject to review by management and may be
revised as a result of changing market and economic conditions and other
factors. We also offer home equity loans. We do not retain servicing rights
with respect to the residential mortgage loans that we originate and sell into
the secondary market.

Personal Loans and Lines of Credit. We make personal loans and lines of
credit available to consumers for various purposes, such as the purchase of
automobiles, boats and other recreational vehicles, and the making of home
improvements and personal investments. We retain all of these loans.

Consumer loans generally have shorter terms and higher interest rates than
residential mortgage loans and, except for home equity lines of credit, usually
involve more credit risk than mortgage loans because of the type and nature of
the collateral. Consumer lending collections are dependent on a borrowers
continuing financial stability and are thus likely to be adversely affected by
job loss, illness or personal bankruptcy. In many cases, repossessed collateral
for a defaulted consumer loan will not provide an adequate source of repayment
of the outstanding loan balance because of depreciation of the underlying
collateral. We underwrite our loans carefully, with a strong emphasis on the
amount of the down payment, credit history, credit quality, collateral type,
employment stability and monthly income. These loans are generally expected to
be repaid on a monthly repayment schedule with the payment amount tied to the
borrowers periodic income. We believe that the generally higher yields earned
on consumer loans helps compensate for the increased credit risk associated
with such loans and that consumer loans are important to our efforts to serve
the credit needs of our customer base.

Loan Policies. Although we take a progressive and competitive approach to
lending, we emphasize high quality in our loans. We believe that quality
control is achievable while still providing prompt and personal service. We are
subject to written loan policies that contain general lending guidelines and
are subject to periodic review and revision by our Loan Committee and our board
of directors. These policies set procedures for loan administration,
documentation, approval and reporting requirements for various types of loans.

We recognize that lending money involves a degree of risk. Our loan
policies are designed to assist us in managing the risk involved in making
loans. These policies provide a general framework for our loan operations while
recognizing that not all loan activities and procedures can be anticipated.

Our loan policies include procedures for oversight and monitoring of our
lending practices and loan portfolio. We have a Loan Committee comprised
currently of our President, our Executive Vice President and other lending
officers and four outside directors. Our President has signatory authority for
secured loans up to $200,000 and unsecured loans up to $50,000, and our
Executive Vice President has signatory authority for secured loans up to
$150,000 and unsecured loans up to $50,000. Various other lending officers
have signatory authority for secured loans ranging from $20,000 to $100,000 and
for unsecured loans ranging from $5,000 to $25,000. These limits are cumulative
for commercial loans up to a maximum loan of $400,000, allowing up to three
officers to approve a loan higher than one officers limit but less than the
sum of their limits, so long as one of the officers approving the loan is
either the President or the Executive Vice President. Residential mortgage
loans meeting Federal Home Loan Mortgage Corporation guidelines for credit
quality and documentation may be approved by our Vice President of Mortgage
Loans, up to the established maximum conforming loan amount as periodically
determined by secondary market agencies such as FHLMC and FNMA. Residential
mortgage loans not meeting FHLMC guidelines may be

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approved by our Vice President of Mortgage Loans up to $100,000. The Loan
Committee is responsible for approving all loans that exceed the above limits.
All loan limits are subject to review and revision by our board of directors
and the Loan Committee from time to time.

Our loan policies provide guidelines for loan-to-value ratios that limit
the size of certain types of loans to a maximum percentage of the value of the
collateral securing the loans, which percentage varies by the type of
collateral, including the following maximum loan-to-value ratios:



| |  |  | raw land (65%)                                                           
| | - |  | -------------------------------------------------------------------------
|
| |  |  | land development (75%)                                                   
|
| |  |  | commercial and multi-family real estate (80%)                            
|
| |  |  | one- to four-family residential real estate (80%)                        
|
| |  |  | improved property, including farmland (80%)                              
|
| |  |  | junior liens on real estate (90%, or 100% if we hold the senior mortgage)

We use credit risk insurance, principally for owner-occupied residential
real estate mortgage loans where the loan-to-value ratio exceeds 80%.
Regulatory and supervisory loan-to-value limits are established by the Federal
Deposit Insurance Corporation Improvement Act of 1991. Our internal
loan-to-value limitations follow those limits.

Our loan policies also include other underwriting standards for loans
secured by liens on real estate. These underwriting standards are designed to
determine the maximum loan amount for which a borrower can qualify based upon
the type of collateral securing the loan and the borrowers income and ability
to repay the loan. Monthly payment obligations, including the proposed loan,
any residential mortgage loan payment or rent and child support or alimony
payment (if any) should not exceed 40% of the borrowers gross monthly income.
Monthly housing expense, including the residential mortgage loan payment, real
estate taxes and insurance on the property, or rent, should not exceed 30% of
gross monthly income. In addition, the loan policies require that we obtain a
written appraisal by a state certified appraiser for loans in excess of
$250,000 secured by real estate, subject to certain limited exceptions. The
appraiser must be selected by us and must be independent and licensed. For
loans secured by real estate that are less than $250,000, we may elect to
conduct an in-house real estate evaluation.

Our loan policies also include maximum loan terms for each category of
loans secured by liens on real estate. Loans secured by one- to four-family
residential real estate or multi-family residential real estate with variable
interest rates have a maximum term of 20 years. Loans secured by commercial
real estate or farmland with variable interest rates are generally offered with
a maximum term of 15 years, which may be increased to a maximum term of 20
years where the credit is strong and the property is very durable and
desirable. Home equity loans with variable interest rates have a maximum term
of 10 years. Loans secured by vacant land or by mobile homes attached to real
estate are subject to a maximum term of 15 years. We generally sell to the
secondary market all loans secured by residential real estate with fixed
interest rates, thereby reducing our interest rate risk and credit risk.

In addition, our loan policies provide guidelines for:



| |  |  | personal guarantees                                 
| | - |  | ----------------------------------------------------
|
| |  |  | environmental inspections of real estate            
|
| |  |  | loans to employees, executive officers and directors
|
| |  |  | problem loan identification                         
|
| |  |  | maintenance of a loan loss reserve                  
|
| |  |  | other matters relating to our lending practices     

Deposits and Other Services

Deposits. We offer a broad range of deposit products, including checking,
business checking, savings and money market accounts, certificates of deposit
and direct-deposit services. Transaction accounts and certificates of deposit
are tailored to the primary market area at rates and with fee structures
competitive with those offered in Central Indiana. All deposit accounts are
insured by the FDIC up to the maximum amount permitted by law,

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currently $100,000. We solicit these accounts from individuals,
businesses, associations, financial institutions and government entities.

Other Services. In addition to our basic deposit products, we offer our
customers certain other services, such as commercial sweep accounts,
bank-by-phone and Internet banking capabilities. We believe our personalized
service approach benefits from customer visits to our banking locations. In
addition, we maintain relationships with correspondent banks and other
independent financial institutions to provide other services requested by our
customers, including loan participations where the requested loan amounts
exceed our policies or legal lending limits.

Competition

There are many thrift institutions, credit unions and commercial banks
located within our primary service area. Most are branches of larger financial
institutions which, in our view, are managed with a philosophy of strong
centralization. We face competition from thrift institutions, credit unions and
other banks as well as finance companies, insurance companies, mortgage
companies, securities brokerage firms, money market funds, trust companies and
other providers of financial services. Most of our competitors are larger and
have higher lending limits than we do. In some of our newer markets we are also
competing against financial institutions with established customer bases. We
compete for loans principally through our ability to communicate effectively
with our customers and understand and meet their needs. We believe that our
personal service philosophy enhances and will continue to enhance our ability
to compete favorably in attracting individuals and small- and medium-sized
businesses. We actively solicit retail customers and compete for deposits by
offering customers personal attention, professional service and competitive
interest rates.

Employees

As of December 31, 2001, we had 64 full-time employees and 10 part-time
employees. None of these employees is represented by a union. We consider
relations with our employees to be good.

Supervision and Regulation

General

Financial institutions and their holding companies are extensively
regulated under federal and state law. Consequently, our growth and earnings
performance can be affected not only by management decisions and general
economic conditions, but also by the statutes administered by, and the
regulations and policies of, various governmental regulatory authorities. Those
authorities include, but are not limited to, the Federal Reserve Board, the
Federal Deposit Insurance Corporation (the FDIC), the Indiana Department of
Financial Institutions (the DFI), the Internal Revenue Service and state
taxing authorities. The effect of such statutes, regulations and policies can
be significant and cannot be predicted with a high degree of certainty.

The system of supervision and regulation applicable to us establishes a
comprehensive framework for our operations and is intended primarily for the
protection of the FDICs deposit insurance funds, our depositors and the
public, rather than our shareholders.

Federal laws and regulations, including provisions added by the Federal
Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) and
regulations promulgated thereunder, establish supervisory standards applicable
to our lending activities, including internal controls, credit underwriting,
loan documentation and loan-to-value ratios for loans secured by real property.

The following references to statutes and regulations are intended to
summarize certain government regulation of our business and are qualified by
reference to the text of such statutes and regulations. Any change in
government regulation may have a material adverse effect on our business.

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First Shares Bancorp

General. First Shares is a bank holding company and, as such, is subject
to regulation by, the Federal Reserve Board under the federal Bank Holding
Company Act of 1956 (the BHCA). Under the BHCA, First Shares is subject to
examination by the Federal Reserve Board and is required to file reports of our
operations and such additional information as the Federal Reserve Board may
require.

Under Federal Reserve Board policy, First Shares is expected to act as a
source of financial strength to First Bank and to commit resources to support
First Bank in circumstances where First Shares might not do so absent such a
policy. In addition, in certain circumstances, First Shares, as an Indiana bank
holding company, may be required by order of the DFI to increase the capital of
First Bank or reduce the amount of its deposits.

Any loans by a bank holding company to a subsidiary bank are subordinate
in right of payment to deposits and to certain other indebtedness of the
subsidiary bank. In the event of a bank holding companys bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank would be assumed by the bankruptcy
trustee and entitled to a priority of payment. This priority would also apply
to guarantees of capital plans under FDICIA.

Investments and Activities. Under current law, absent election as
financial holding companies, bank holding companies are prohibited, with
certain limited exceptions, from engaging in activities other than those of
banking or of managing or controlling banks. They are also prohibited from
acquiring or retaining direct or indirect ownership or control of voting shares
or assets of any company which is not a bank or bank holding company, other
than subsidiary companies furnishing services to or performing services for its
subsidiaries, and other subsidiaries engaged in activities which the Federal
Reserve Board determines to be so closely related to banking or managing or
controlling banks as to be incidental to these operations.

In general, any direct or indirect acquisition by First Shares of any
voting shares of any bank that would result in First Shares direct or indirect
ownership or control of more than 5 percent of any class of voting shares of
such bank, and any merger or consolidation of First Shares with another bank
holding company, will require the prior written approval of the Federal Reserve
Board under the BHCA. In acting on such applications, the Federal Reserve Board
must consider various factors, including among others, the effect of the
proposed transaction on competition in relevant geographic and product markets,
the convenience and needs of the communities to be served and each partys
financial condition, managerial resources and record of performance under the
Community Reinvestment Act.

The merger or consolidation of First Bank with another bank, or the
acquisition by First Bank of assets of another bank, or the assumption of
liability by First Bank to pay any deposits in another bank, will require the
prior written approval of the primary federal bank regulatory agency of the
acquiring or surviving bank under the federal Bank Merger Act. The approval
decision is based upon a consideration of factors similar to those outlined
above with respect to the BHCA. In addition, in certain cases, an application
to, and the prior approval of, the Federal Reserve Board under the BHCA and/or
the DFI under the Indiana Financial Institutions Act, may be required.

Effective March 11, 2000, the Gramm-Leach-Bliley Act of 1999 permits a
bank holding company to qualify as a financial holding company and, as a
result, be permitted to engage in a broader range of activities that are
financial in nature and in activities that are determined to be incidental or
complementary to activities that are financial in nature. The
Gramm-Leach-Bliley Act amends the BHCA to include a list of activities that are
financial in nature, and the list includes activities such as underwriting of
securities, dealing in and making a market in securities, insurance
underwriting and agency activities, and merchant banking. The Federal Reserve
Board is authorized to determine other activities that are financial in nature
or incidental or complementary to such activities. The Gramm-Leach-Bliley Act
also authorizes banks to engage, through financial subsidiaries, in certain of
the activities permitted for financial holding companies. We have not elected
to be treated as a financial holding company because, among other things, we
have no present plans to engage in the broader range of activities permitted by
the Gramm-Leach-Bliley Act.

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Dividends. First Shares is a corporation separate and distinct from First
Bank. Most of First Shares revenues will be received in the form of dividends
or interest paid by First Bank. First Bank is subject to statutory restrictions
on its ability to pay dividends. See, - First Bank  Dividends. The Federal
Reserve Board has issued a policy statement on the payment of cash dividends by
bank holding companies. In the policy statement, the Federal Reserve Board
expressed its view that a bank holding company should not pay cash dividends
exceeding its net income or which could only be funded in ways that weakened
the bank holding companys financial health, such as by borrowing.
Additionally, the Federal Reserve Board possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions
that represent unsafe or unsound practices or violations of applicable statutes
and regulations. Among these powers is the ability in appropriate cases to
proscribe the payment of dividends by banks and bank holding companies. The
Federal Reserve Board and the DFI possess similar enforcement powers over First
Bank. It is also unlawful for any insured depository institution to pay a
dividend at a time when it is in default of payment of any assessment to the
FDIC. The prompt corrective action provisions of FDICIA impose further
restrictions on the payment of dividends by insured banks which fail to meet
specified capital levels and, in some cases, their parent bank holding
companies.

In addition to the restrictions on dividends imposed by the Federal
Reserve Board, the Indiana Business Corporation Law imposes certain
restrictions on the declaration and payment of dividends by Indiana
corporations such as First Shares. See, Dividend Policy.

Federal Reserve Board Restrictions. At the direction of the Federal
Reserve Board, First Shares agreed to certain restrictions in January, 2001. We
have agreed that we will not do any of the following without the prior written
consent of the Federal Reserve Board:



| |  |  | Declare or pay any dividends;         
| | - |  | --------------------------------------
|
| |  |  | Incur any debt; or                    
|
| |  |  | Purchase or redeem any treasury stock.

We have no indication of when the Federal Reserve Board will permit First
Shares to be released from these restrictions. By letter dated February 19,
2002, the Federal Reserve Board gave its consent for First Shares to conduct
this offering of Debentures and Equity Contracts and pay the interest on the
Debentures.

First Bank

General. First Bank is an Indiana banking corporation that is not a member
of the Federal Reserve System. As a state-chartered, non-member bank, First
Bank is subject to the examination, supervision, reporting and enforcement
jurisdiction of the DFI, as the chartering authority for Indiana banks, and the
FDIC, as the primary federal bank regulatory agency for state-chartered,
non-member banks. First Banks deposit accounts are insured up to $100,000 per
depositor by the Bank Insurance Fund (BIF) of the FDIC, which has
supervision, reporting and enforcement jurisdiction over BIF insured banks.
These agencies, and federal and state law, extensively regulate various aspects
of the banking business including, among other things:



| |  |  | permissible types and amounts of loans                              
| | - |  | --------------------------------------------------------------------
|
| |  |  | investments and other activities                                    
|
| |  |  | capital adequacy                                                    
|
| |  |  | branching                                                           
|
| |  |  | interest rates on loans and on deposits                             
|
| |  |  | the maintenance of non-interest bearing reserves on deposit accounts
|
| |  |  | the safety and soundness of banking practices                       

Deposit Insurance.As an FDIC-insured institution, First Bank is required
to pay deposit insurance premium assessments to the FDIC. Under FDICIA, the
FDIC adopted a risk-based assessment system under which all insured depository
institutions are placed into one of nine categories and assessed insurance
premiums based upon their level of capital and supervisory evaluation.
Institutions classified as well-capitalized (as defined by the FDIC) and not
exhibiting financial, operational or compliance weaknesses pay the lowest
premium. Institutions that are less

9



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##### Table of Contents



than well-capitalized (as defined by the FDIC) and exhibit such weaknesses
in a moderately severe to unsatisfactory degree pay the highest premium. Risk
classification of all insured institutions is made by the FDIC for each
semi-annual assessment period.

The FDIC is required to establish semi-annual assessment rates so as to
maintain the ratio of each deposit insurance fund to total estimated insured
deposits at not less than 1.25%. Currently, the FDIC has established a schedule
of BIF insurance assessments ranging from 0% of deposits for institutions in
the highest category to .27% of deposits for institutions in the lowest
category.

The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution or
its directors have engaged or are engaging in unsafe or unsound practices, or
have violated any applicable law, regulation, order or any condition imposed in
writing by, or written agreement with, the FDIC, or if the institution is in an
unsafe or unsound condition to continue operations. The FDIC may also suspend
deposit insurance temporarily during the hearing process for a permanent
termination of insurance if the institution has no tangible capital.

Dividends. As a banking corporation organized under Indiana law, First
Bank is restricted as to the maximum amount of dividends it may pay to First
Shares. Indiana law prohibits First Bank from declaring or paying dividends
that would impair First Banks capital or that would be greater than its
undivided profits. In addition, the prior approval of the DFI is required for
the payment of any dividend if the aggregate amount of all dividends paid by
First Bank during a calendar year, including the proposed dividend, would
exceed the sum of the retained net income of First Bank for the year to date
and previous two years.

The Federal Deposit Insurance Act (the FDIA) generally prohibits a
depository institution from making any capital distribution (including payment
of a dividend) or paying any management fee to its holding company if the
depository institution would thereafter be undercapitalized. The FDIC may
prevent an insured bank from paying dividends if the bank is in default of
payment of any assessment due to the FDIC. In addition, payment of dividends by
a bank may be prevented by the applicable federal regulatory authority if the
payment is determined, by reason of the financial condition of the bank, to be
an unsafe and unsound banking practice. As described above, the Federal Reserve
Board has issued a policy statement providing that bank holding companies and
insured banks should generally only pay dividends out of current operating
earnings.

Insider Transactions. First Bank is subject to certain federal and state
statutory and regulatory restrictions on any extensions of credit to First
Shares or any subsidiaries of First Shares, on investments in the stock or
other securities of First Shares or any subsidiaries of First Shares, and on
the acceptance of the stock or other securities of First Shares or any
subsidiaries of First Shares as collateral for loans to any person. Certain
limitations and reporting requirements are also placed on extensions of credit
by First Bank to its directors and officers, to directors and officers of First
Shares and any subsidiaries of First Shares, to principal shareholders of First
Shares, and to related interests of such directors, officers and principal
shareholders. In addition, this legislation and these regulations may affect
the terms upon which any person who is a director or officer of First Shares or
any of its subsidiaries or a principal shareholder of First Shares may obtain
credit from banks with which First Bank maintains a correspondent relationship.

Consumer Banking. Our business includes making a variety of types of loans
to individuals. In making these loans, we are subject to state usury and
regulatory laws and to various federal statutes, such as the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the
Real Estate Settlement Procedures Act and the Home Mortgage Disclosure Act, and
the regulations promulgated thereunder, which prohibit discrimination, specify
disclosures to be made to borrowers regarding credit and settlement costs and
regulate our mortgage loan servicing activities, including the maintenance and
operation of escrow accounts and the transfer of mortgage loan servicing. In
receiving deposits, we are subject to extensive regulation under state and
federal law and regulations, including the Truth in Savings Act, the Expedited
Funds Availability Act, the Bank Secrecy Act, the Electronic Funds Transfer
Act, and the FDIA. Violation of these laws could result in the imposition of
significant damages and fines upon us and our directors and officers.

10



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##### Table of Contents



Monetary Policies. The commercial banking business is affected not only by
general economic conditions but also by the monetary policies of the Federal
Reserve Board. The instruments of monetary policy employed by the Federal
Reserve Board include open market operations in United States Government
securities, changes in the discount rate on member bank borrowing and changes
in reserve requirements against deposits held by all federally insured banks.
Federal Reserve Board monetary policies have had a significant effect on the
operating results of commercial banks in the past and are expected to continue
to do so in the future. In view of changing conditions in the national economy
and in the money markets, as well as the effect of actions by monetary fiscal
authorities, including the Federal Reserve Board, no prediction can be made as
to possible future changes in interest rates, deposit levels, loan demand or
our business and earnings.

Community Reinvestment Act. Under the Community Reinvestment Act (the
CRA) and the implementing regulations, we have a continuing and affirmative
obligation to help meet the credit needs of our local community, including low
and moderate-income neighborhoods, consistent with the safe and sound operation
of the institution. The CRA requires the board of directors of financial
institutions, such as us, to adopt a CRA statement for each assessment area
that, among other things, describes its efforts to help meet community credit
needs and the specific types of credit that the institution is willing to
extend. Our service area is currently designated as certain portions of Brown,
Morgan and Johnson Counties in Indiana. Our board of directors is required to
review the appropriateness of this delineation at least annually.

Capital Adequacy Requirements

Both bank holding companies and banks are subject to regulatory capital
requirements imposed by the Federal Reserve Board and the FDIC which vary based
on differences in risk profiles. The capital adequacy guidelines issued by the
Federal Reserve Board are applied on a bank-only basis until a bank and its
holding company assets are $150,000,000. The FDICs risk-based capital
guidelines apply directly to insured state banks regardless of whether they are
subsidiaries of a bank holding company. Both agencies requirements, which are
substantially similar, provide that banking organizations must have capital (as
defined in the rules) equivalent to 8% of risk-weighted assets. The risk
weights assigned to assets are based primarily on credit risks. Depending upon
the riskiness of a particular asset, it is assigned to a risk category. For
example, securities with an unconditional guarantee by the United States
government are assigned to the lowest risk category. The aggregate amount of
assets assigned to each risk category is multiplied by the risk weight assigned
to that category to determine the weighted values, which are added together to
determine total risk-weighted assets.

Both the Federal Reserve Board and the FDIC have also adopted minimum
capital leverage ratios to be used in tandem with the risk-based guidelines in
assessing the overall capital adequacy of banks and bank holding companies. The
guidelines define a two-tier capital framework. Tier 1 capital consists of
common and qualifying preferred shareholders equity, less goodwill and other
adjustments. Tier 2 capital consists of mandatory convertible, subordinated,
and other qualifying term debt, preferred stock not qualifying for Tier 1,
hybrid debt instruments and a limited allowance for credit losses up to a
designated percentage of risk-weighted assets. Under these guidelines,
institutions must maintain a specified minimum ratio of qualifying capital to
risk-weighted assets. At least 50% of an institutions qualifying capital must
be core or Tier 1 capital, and the balance may be supplementary or Tier
2 capital. The guidelines imposed on the banks include a minimum leverage
ratio standard of capital adequacy. The leverage standard requires top-rated
institutions to maintain a minimum Tier 1 capital to assets ratio of 3%, with
institutions receiving less than the highest rating required to maintain a
ratio of 4% or greater, based upon their particular circumstances and risk
profiles.

Federal bank regulatory authorities have adopted regulations revising the
risk-based capital guidelines to further ensure that the guidelines take
adequate account of interest rate risk. Interest rate risk is the adverse
effect that changes in market interest rates may have on a banks financial
condition and is inherent to the business of banking. Under the regulations,
when evaluating a banks capital adequacy, the revised capital standards now
explicitly include a banks exposure to declines in the economic value of its
capital due to changes in interest rates. The exposure of a banks economic
value generally represents the change in the present value of its assets, less
the change in the value of its liabilities, plus the change in the value of its
interest rate off-balance sheet contracts.

11



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##### Table of Contents



The FDIA establishes five capital categories, and the federal bank
regulatory agencies, as directed by the FDIA, have adopted, subject to certain
exceptions, the following minimum requirements for each of such categories:

|                               |  |                  |  |                   |  |                                                         
|------------------------------ |  | ---------------- |  | ----------------- |  | --------------------------------------------------------
|                               |  | Total Risk-Based |  | Tier 1 Risk-Based |  |                                                         
|                               |  | Capital Ratio    |  | Capital Ratio     |  | Leverage Ratio                                          
|                               |  |                  |  |                   |  |                                                         
|Well capitalized               |  | 10% or above     |  | 6% or above       |  | 5% or above                                             
|Adequately capitalized         |  | 8% or above      |  | 4% or above       |  | 4% or above                                             
|Undercapitalized               |  | Less than 8%     |  | Less than 4%      |  | Less than 4%                                            
|Significantly undercapitalized |  | Less than 6%     |  | Less than 3%      |  | Less than 3%                                            
|Critically undercapitalized    |  |                 |  |                  |  | A ratio of tangible
equity to total
assets of 2% or less

Subject to certain exceptions, these capital ratios are generally determined on
the basis of Call Reports submitted by each depository institution and the
reports of examination of the appropriate federal bank regulatory agency.

The foregoing capital guidelines could affect First Shares and First Bank
in several ways. If First Bank grows rapidly, its capital base may become
insufficient to support continued growth, making an additional capital infusion
necessary. The capital guidelines could also impact First Banks ability to pay
dividends. Rapid growth, poor loan portfolio performance or poor earnings
performance, or a combination of these factors, could change First Banks
capital position in a relatively short period of time. Failure to meet these
capital requirements would require First Bank to develop and file with the FDIC
a plan describing the means and a schedule for achieving the minimum capital
requirements. In addition, we would not be able to receive regulatory approval
of any application that required consideration of capital adequacy, such as a
branch or merger application, unless we could demonstrate a reasonable plan to
meet the capital requirement within a reasonable period of time.

As of December 31, 2001, First Bank had total Tier 1 capital of $8.9
million, or 6.95% of average total assets and a 10.18% ratio of total capital
to total risk-weighted assets and met the criteria to be classified by the FDIC
as well capitalized. First Bank had agreed with the DFI and the FDIC that its
ratio of Tier 1 capital to average total assets would be no less than 7.0% at
December 31, 2001 and for certain prior periods, and First Bank notified both
the DFI and the FDIC that its leverage ratio was 6.95% at December 31, 2001. As
of January 31, 2002, First Banks leverage capital ratio
was 7.02% and as of February 28, 2002 it was 7.10%. Neither the
DFI nor the FDIC have taken any regulatory action
in response to the deficiency at December 31, 2001. Any action by the FDIC or
the DFI may have an adverse impact on First Bank and First Shares. If
a proposed public
offering is successful, however, we expect to infuse First Bank with most of
the net proceeds from the sale of debentures and equity contracts,
increasing First Banks capital ratio to between approximately
8.39% and 9.99% (based on First Bank's February 28, 2002
financial results).
See Note 17 to the financial statements.

Gramm-Leach-Bliley Act

The Gramm-Leach-Bliley Act, previously known as the Financial Services
Modernization Act of 1999, became effective on March 11, 2000. Among other
things, the Gramm-Leach-Bliley Act repeals the restrictions on banks
affiliating with securities firms contained in sections 20 and 32 of the
Glass-Steagall Act. This act also creates a new financial holding company
under the Bank Holding Company Act, which will permit holding companies to
engage in a statutorily provided list of financial activities, including
insurance and securities underwriting and agency activities, merchant banking,
and insurance company portfolio investment activities, and authorizes such
other financial activities as may be determined by rule or order of the Federal
Reserve Board.

12



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##### Table of Contents



In addition, the Gramm-Leach-Bliley Act imposes significant new financial
privacy obligations and reporting requirements on all financial institutions,
including banks. Among other things, it will require financial institutions (a)
to establish privacy policies and disclose them to customers both at the
commencement of a customer relationship and on an annual basis and (b) to
permit customers to opt out of a financial institutions disclosure of
financial information to nonaffiliated third parties. The Gramm-Leach-Bliley
Act requires the federal financial regulators to promulgate regulations
implementing these provisions within six months of enactment, and the statutes
privacy requirements will take effect one year after enactment.

The Gramm-Leach-Bliley Act is intended to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hocbasis. Nevertheless, this act may have the result of increasing the amount
of competition that First Shares and First Bank face from larger institutions
and other types of companies. In fact, it is not possible to predict the full
effect that the Gramm-Leach-Bliley Act will have on the First Shares and First
Bank.

Legislative Proposals

New proposed legislation which could significantly affect First Shares and
First Bank may be introduced from time to time. We cannot predict the future
course of legislative proposals or their impact on First Shares and First Bank,
should they be adopted.




Item 2. Description of Property

We conduct our operations from six locations in Central Indiana:



| |  |  | Approximately 5,000 square feet at 996 South State Road
135, Greenwood, Indiana, which we occupy under a lease expiring
in 2004;                                                                                                                                 
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Approximately 2,150 square feet at 1266 North Madison
Avenue, Greenwood, Indiana, which we occupy under a lease
expiring on March 31, 2002 with a renewal option of three years
following the expiration date, which has been exercised;                         
|
| |  |  | Approximately 1,100 square feet at 250 North State Road
135, Bargersville, Indiana, which we occupy under a lease
expiring on December 31, 2002 with a renewal option of three
years following the expiration date;                                              
|
| |  |  | Approximately 4,000 square feet at 180 West Washington
Street, Morgantown, Indiana, which we own;                                                                                                                                                                
|
| |  |  | Approximately 1,800 square feet at 110 North State Road
135, Trafalgar, Indiana, which we own;                                                                                                                                                                   
|
| |  |  | Approximately 3,000 square feet at 160 East Main Street,
Nashville, Indiana, located on real estate owned by an entity
that is owned and controlled by Frank A. Rogers, one of our
directors and which we occupy under a lease expiring on November
30, 2006; and
|
| |  |  | Approximately 4,800 square feet at 3195 Fairview Road,
Greenwood, Indiana, which we occupy under a lease expiring on
January 31, 2007, with a renewal option of five years following
the expiration date.                                                        

We believe the condition of our facilities is adequate to support our current
operations.

13



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##### Table of Contents






Item 3. Legal Proceedings

We currently and from time to time are involved in litigation incidental
to the conduct of our business. However, we are not a party to any lawsuit or
proceeding which, in the opinion of management, is likely to have a material
adverse effect on us.




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

No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.




PART II




Item 5. Market for Common Equity and Related Stockholder Matters.

Our Common Stock is traded in the over-the-counter market and is quoted on
the Nasdaq OTC Bulletin Board under the symbol FBGI.

The following table sets forth the high and low sale prices of the Common
Stock for the periods indicated as well as the dividends paid during the
periods. Prior to September 30, 2000,our stock was not publicly traded.

|               |  |      |      |  |     |  |      |          |  |   |   | 
|-------------- |  | ---- | ---- |  | --- |  | ---- | -------- |  | - | - | 
|Quarter Ended  |  | High |      |  | Low |  |      | Dividend | 
|               |  |      |      |  |     |  |      |          | 
|March 2000     |  |      |     |  |     |  |     |          |  | $ |  | 
|June 2000      |  |      |     |  |     |  |     |          |  |   |  | 
|September 2000 |  |      |     |  |     |  |     |          |  |   |  | 
|December 2000  |  |      | 9.00 |  |     |  | 8.00 |          |  |   |  | 
|March 2001     |  |      | 8.00 |  |     |  | 6.50 |          |  |   |  | 
|June 2001      |  |      | 9.32 |  |     |  | 6.05 |          |  |   |  | 
|September 2001 |  |      | 9.24 |  |     |  | 8.00 |          |  |   |  | 
|December 2001  |  |      | 8.10 |  |     |  | 8.00 |          |  |   |  | 

At December 31, 2001, there were approximately 126 record holders of the Common
Stock.

For information on regulatory restrictions on the payment of dividends,
see Item 1. Description of BusinessSupervision and RegulationFirst Shares
BancorpDividends.




Item 6. Managements Discussion and Analysis or Plan of Operation.

Our Managements Discussion and Analysis is incorporated by reference from
a portion of our Annual Report to Security Holders and is filed as Exhibit 13.1
to this report.




Item 7. Financial Statements.

Our Financial Statements are incorporated by reference from a portion of
our Annual Report to Security Holders and are filed as Exhibit 13.2 to this
report.




Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

14



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##### Table of Contents






PART III




Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

The information required by this item with respect to our directors is
incorporated by reference from the section entitled Proposal No. 1: Election
of Directors in our Proxy Statement for the 2002 Annual Meeting of
Shareholders and the section entitled Compliance with Section 16(a) of the
Securities Exchange Act of 1934 in such Proxy Statement.

Listed below is certain information about our executive officers or
executive officers of our affiliates who are not directors.

|                  |  |                                                  |  |              |  |  |            |  |  | 
|----------------- |  | ------------------------------------------------ |  | ------------ |  |  | ---------- |  |  | 
|                  |  |                                                  |  | Age at       |  |  | Year First | 
|                  |  |                                                  |  | December 31, |  |  | Elected    | 
|Name              |  | Position                                         |  | 2001         |  |  | Officer    | 
|                  |  |                                                  |  |              |  |  |            | 
|John Ditmars      |  | Executive Vice President                         |  | 45           |  |  | 1999       | 
|Kimberly B. Kling |  | Secretary, Treasurer and
Chief Financial Officer |  | 34           |  |  | 1999       | 

Set forth below is the principal occupation for the last five years of
each of our executive officers who is not also a director.

John Ditmarsis our Executive Vice President, a position he has held since
March 1999. Previously, he was the Senior Lending Officer and head of the
Commercial Lending Department at Citizens Bank of Central Indiana.

Kimberly B. Klingis our Secretary, Treasurer and Chief Financial Officer,
duties she assumed in 1999. From 1994 to 1999, she was Controller, Secretary
and Treasurer for Kellie Plumbing, Inc. and Johnson County Distributors, Inc.,
and from 1991 to 1994 she was a staff accountant for Alemite Corporation,
Charlotte, North Carolina.




Item 10. Executive Compensation.

The information required by this item is incorporated by reference from
the section entitled Executive Compensation in our Proxy Statement for the
2002 Annual Meeting of Shareholders.




Item 11. Security Ownership of Certain Beneficial Owners and Management.

The information required by this item is incorporated by reference from
the section entitled Voting Securities and Beneficial Owners in our Proxy
Statement for the 2002 Annual Meeting of Shareholders.




Item 12. Certain Relationships and Related Transactions.

The information required by this item is incorporated by reference from
the section entitled Certain Transactions in our Proxy Statement for the 2002
Annual Meeting of Shareholders.

15



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##### Table of Contents






Item 13. Exhibits and Reports on Form 8-K.

Exhibits

The following exhibits are filed with this Report.

|      |  |                                                                                                                                                                                                                                                                                         
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1   |  | Articles of Incorporation of First Shares Bancorp, Inc. and
amendments, incorporated by reference from Exhibit 3.1 to the
Registration Statement on Form SB-2 of First Shares Bancorp, Inc., file
no. 333-31520, as amended (the 2000 Registration
Statement).                        
|     
|3.2   |  | Bylaws of First Shares Bancorp, Inc., incorporated by reference
from Exhibit 3.2 to the 2000 Registration Statement.                                                                                                                                                                    
|     
|4     |  | Specimen Common Stock Certificate, incorporated by reference from
Exhibit 4 to the 2000 Registration Statement                                                                                                                                                                          
|     
|10.1  |  | 1996 Amended and Restated Stock Option Plan, incorporated by
reference from Exhibit 10.1 to the Registration Statement on Form SB-2
of First Shares Bancorp, Inc., file no. 333-83640 (the 2002
Registration Statement).*                                                             
|     
|10.2  |  | 1999 Amended and Restated Stock Option Plan, incorporated by
reference from Exhibit 10.2 to the 2000 Registration Statement.*                                                                                                                                                           
|     
|10.3  |  | Employment Agreement of Jerry R. Engle and amendment thereof,
incorporated by reference from Exhibit 10.3 to the 2000 Registration
Statement.*                                                                                                                                          
|     
|10.4  |  | Form of Director Deferred Compensation Agreements, incorporated by
reference from Exhibit 10.4 to the 2000 Registration Statement.*                                                                                                                                                     
|     
|10.5  |  | Deferred Compensation Agreement dated October 26, 1999 between
First Bank and H. Dean Hawkins and Termination of First Bank Deferred
Compensation Agreement for H. Dean Hawkins dated January 31, 2000,
incorporated by reference from Exhibit 10.5 to the 2000 Registration
Statement.*
|     
|10.6  |  | Lease Agreement dated March 29, 1999 between Greenwood ICC Realty,
LLC and First State Bank, incorporated by reference from Exhibit 10.7
to the 2000 Registration Statement.                                                                                                            
|     
|10.7  |  | Lease dated April 12, 1999 between M. Kenton and Linda S. Franklin
and First State Bank, incorporated by reference from Exhibit 10.8 to
the 2000 Registration Statement.                                                                                                                
|     
|10.8  |  | Lease dated December 8, 1999 between G & P Real Estate, LLC and
First Bank, incorporated by reference from Exhibit 10.9 to the 2000
Registration Statement.                                                                                                                             
|     
|10.9  |  | Lease Agreement dated January 23, 2002 between R & A Enterprises,
Inc. and First Bank, incorporated by reference from Exhibit 10.10 to
the 2002 Registration Statement.                                                                                                                 
|     
|10.10 |  | Commercial Lease Agreement dated February 20, 2002 between
Commercial 100, L.L.C. and First Bank, incorporated by reference from
Exhibit 10.11 to the 2002 Registration Statement.                                                                                                      
|     
|13.1  |  | Managements Discussion and Analysis incorporated by reference from
Annual Report to Shareholders. (1)                                                                                                                                                                                  
|     
|13.2  |  | Financial Statements incorporated by reference from Annual Report
to Shareholders. (1)                                                                                                                                                                                                  

16



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##### Table of Contents



|   |  |                                                                                                                                                                                              
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|21 |  | Subsidiaries of First Shares Bancorp, Inc., incorporated by
reference from Exhibit 21 to the Annual Report on Form 10-KSB of First
Shares Bancorp, Inc. for the year ended December 31, 2000.



---

|*   |  | Employee benefit plan  
|--- |  | -----------------------
|   
|(1) |  | Filed with this report.

Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended December 31,
2001.

17



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##### Table of Contents






SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

| |  |                            |  |                   
| |  | -------------------------- |  | ------------------
| |  | FIRST SHARES BANCORP, INC.
|
| |  | By:                        |  | /s/ Jerry R. Engle
| |  |                            |  |                   
| |  |                            |  | Jerry R. Engle    
| |  |                            |  | President         
|
| |  | Date: March 26, 2002      

In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|                                        |  |                                                                                    |  |               
|--------------------------------------- |  | ---------------------------------------------------------------------------------- |  | --------------
|Signature                               |  | Title                                                                              |  | Date          
|                                        |  |                                                                                    |  |               
|/s/ Frank A. RogersFrank A. Rogers      |  | Chairman of the Board and Director                                                 |  | March 26, 2002
|                                       
|/s/ Jerry R. EngleJerry R. Engle        |  | Director and President and
Chief Executive Officer
(Principal Executive Officer)   |  | March 26, 2002
|                                       
|/s/ John DitmarsJohn Ditmars            |  | Executive Vice President
and Chief Operating Officer
(Principal Operating Officer) |  | March 26, 2002
|                                       
|/s/ Kimberly B.  KlingKimberly B. Kling |  | Secretary, Treasurer and Chief
Financial Officer
(Principal Accounting Officer)    |  | March 26, 2002
|                                       
|/s/ Ralph M. FoleyRalph M. Foley        |  | Director                                                                           |  | March 26, 2002
|                                       
|/s/ H. Dean HawkinsH.   Dean Hawkins    |  | Director                                                                           |  | March 26, 2002
|                                       
|/s/ Gary W. LewisGary W. Lewis          |  | Director                                                                           |  | March 26, 2002
|                                       
|/s/ R. J. McConnellR. J. McConnell      |  | Director                                                                           |  | March 26, 2002

18



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##### Table of Contents



|                                           |  |          |  |               
|------------------------------------------ |  | -------- |  | --------------
|Signature                                  |  | Title    |  | Date          
|                                           |  |          |  |               
|                                          
|/s/ William J. MeredithWilliam J. Meredith |  | Director |  | March 26, 2002
|                                          
|Norman D. Stockton                         |  | Director |  | March 26, 2002

19