<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


         [X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                           THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly
                    Period ended March 31, 2002

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

                        Commission File Number: 333-6581

                         ST. JOSEPH CAPITAL CORPORATION
                         -------------------------------
        (Exact name of small business issuer as specified in its charter)

            DELAWARE                                    35-1977746
            --------                                    ----------
  (State or other jurisdiction           (I.R.S. Employer Identification Number)
of incorporation or organization)

                 3820 EDISON LAKES PARKWAY, MISHAWAKA, IN 46545
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (219) 273-9700
                                 --------------
                           (Issuer's telephone number)

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date:

         1,679,105 shares of common stock, $0.01 par value per share, were
outstanding as of May 6, 2002.

    Transitional Small Business Disclosure Format (check one):  Yes     No  X
                                                                    ---    ---







<PAGE>



                                TABLE OF CONTENTS

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
                         PART I - FINANCIAL INFORMATION

ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                  Condensed Consolidated Balance Sheets,
                      March 31, 2002 (Unaudited), December 31, 2001 (Audited)
                            and March 31, 2001 (Unaudited)                     3

                  Condensed Consolidated Statements of Income,
                      Three Months Ended March 31, 2002 and 2001 (Unaudited)   4

                  Condensed Consolidated Statements of Changes in Shareholders'
                      Equity, Three Months Ended March 31, 2002 and 2001
                      (Unaudited)                                              5

                  Condensed Consolidated Statements of Cash Flows,
                           Three Months Ended March 31, 2002
                           and 2001 (Unaudited)                                6

                  Notes to Condensed Consolidated Financial Statements
                          (Unaudited)                                          7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION             7

                           PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS                                                  17

ITEM 2.    CHANGES IN SECURITIES                                              17

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES                                    17

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                17

ITEM 5.    OTHER INFORMATION                                                  17

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                   17

SIGNATURES                                                                    18

                                       2

<PAGE>

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         PART I - FINANCIAL INFORMATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                      MARCH 31,                       MARCH 31,
ASSETS                                                                                 2002         DECEMBER 31,        2001
                                                                                    (UNAUDITED)        2001          (UNAUDITED)
                                                                                    -----------     ------------     -----------
<S>                                                                               <C>              <C>             <C>
         Cash and due from banks                                                  $  12,207,483    $  19,532,168   $  14,077,045
         Interest-bearing deposits in other financial institutions-
          short-term                                                                    271,893          489,111         383,139
         Federal funds sold                                                           5,600,000             --         7,850,000
                                                                                  -------------    -------------   -------------
                  Total cash and cash equivalents                                    18,079,376       20,021,279      22,310,184
         Securities available for sale                                               38,414,844       45,172,394      20,226,494
         Federal Home Loan Bank (FHLB) stock                                          1,628,500        1,628,500       1,578,500
         Loans receivable, net of allowance for loan losses of
           $2,452,000 at March 31, 2001, $2,274,000 at
           December 31, 2001 and $1,932,000 at March 31, 2001                       152,446,527      144,688,499     135,400,589
         Accrued interest receivable                                                  1,122,024        1,037,738         935,140
         Premises and equipment, net                                                  1,247,909        1,286,132       1,411,190
         Other assets                                                                 1,203,285          969,955         556,635
                                                                                  -------------    -------------   -------------
                  Total assets                                                    $ 214,142,465    $ 214,804,497    $182,418,732
                                                                                  =============    =============    ============


LIABILITIES AND SHAREHOLDERS'  EQUITY
LIABILITIES
         Deposits
              Noninterest-bearing demand                                          $  17,811,953    $  29,843,196   $  17,824,871
              Savings, NOW and money market                                          93,533,306       85,242,416      61,710,221
              Certificates of deposit                                                40,790,282       38,222,320      43,835,478
                                                                                  -------------    -------------   -------------
             Total deposits                                                         152,135,541      153,307,932     123,370,570
         Securities sold under agreements to repurchase                              12,369,541       10,509,100       8,185,640
         FHLB advances                                                               29,070,000       30,570,000      31,570,000
         Accrued interest payable                                                       185,250          158,121         263,949
         Other liabilities                                                              132,337          243,944           9,197
                                                                                  -------------    -------------   -------------
                  Total liabilities                                                 193,892,669      194,789,097     163,399,356
SHAREHOLDERS' EQUITY
         Common stock, $.01 par value, 2,500,000 shares authorized; 1,679,105
              shares issued and outstanding at March 31, 2002, 1,678,112 shares
              issued and outstanding at December 31, 2001 and 1,675,112 shares
              issued and outstanding at March 31, 2001                                   16,791           16,781          16,751
         Additional paid in capital                                                  18,342,577       18,331,399      18,311,089
         Retained earnings                                                            1,903,993        1,526,583         561,040
         Accumulated other comprehensive income (loss), net
              of  tax of $(9,043), $93,758 and $86,998  at March 31, 2002,
              December 31, 2001 and March 31, 2001                                      (13,565)         140,637         130,496
                                                                                  -------------    -------------   -------------
                  Total shareholders' equity                                         20,249,796       20,015,400      19,019,376
                                                                                  -------------    -------------   -------------
                  Total liabilities and shareholders' equity                      $ 214,142,465    $ 214,804,497   $ 182,418,732
                                                                                  =============    =============   =============
</TABLE>




     See accompanying notes to condensed consolidated financial statements.

                                        3
<PAGE>
ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                      Three Months  Three Months
                                                         Ended         Ended
                                                      Mar 31, 2002  Mar 31, 2001
                                                      ------------  ------------
Interest and dividend income
         Loans receivable, including fees               $2,382,001   $2,757,316
         Securities available for sale - taxable           387,785      287,093
         Securities available for sale - tax exempt         72,717       20,861
         FHLB stock                                         24,093       28,003
         Federal funds sold                                  8,678      102,658
         Other interest earning assets                       7,881        2,515
                                                        ----------   -----------
                  Total interest and
                  dividend income                        2,883,155    3,198,446

Interest expense
         Deposits                                          679,493    1,361,839
         Federal funds purchased                             8,862       19,871
         Securities sold under agreements to
           repurchase                                       28,874       76,388
         FHLB advances                                     426,185      390,184
                                                        ----------   -----------
                  Total interest expense                 1,143,414    1,848,282
                                                        ----------   -----------

NET INTEREST INCOME                                      1,739,741    1,350,164

Provision for loan losses                                  178,000       80,000
                                                        ----------   -----------


NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES                              1,561,741    1,270,164

Noninterest income
         Gain (loss) on sales and calls of securities
            available for sale, net                         82,526       22,368
         Other income                                      114,586       69,727
                                                        ----------   -----------
                  Total noninterest income                 197,112       92,095

Noninterest expense
     Salaries and employee benefits                        759,491      543,117
     Occupancy and equipment                               121,675      111,561
     Other expense                                         294,777      209,949
                                                        ----------   -----------
         Total noninterest expense                       1,175,943      864,627
                                                        ----------   -----------

INCOME BEFORE INCOME TAX EXPENSE                           582,910      497,632

Income tax expense                                         205,500      188,300
                                                        ----------   -----------


NET INCOME                                              $  377,410   $  309,332
                                                        ==========   ===========

Basic income per common share                           $      .22   $       .18
                                                        ==========   ===========
Diluted income per common share                         $      .22   $       .18
                                                        ==========   ===========


     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (UNAUDITED)

                                             Three Months   Three Months
                                                Ended          Ended
                                             Mar 31, 2002   Mar 31, 2001
                                                Total           Total
                                            Shareholders'    Shareholders'
                                                Equity           Equity
                                            -------------   --------------
BALANCE AT BEGINNING OF PERIOD:             $ 20,015,400    $ 18,560,574

Comprehensive income:
     Net income                                  377,410         309,332

     Net change in net unrealized
       appreciation (depreciation) on
       securities available for sale, net
       of reclassification adjustments
       and tax effects                          (154,202)        140,520
                                            ------------    ------------

         Total comprehensive income              223,208         449,852

Purchase of 2,900 shares of treasury
  stock                                             --           (33,065)

Proceeds from issuance of common
  stock, net                                      11,188            --

Sale of 2,900 shares of treasury
  stock                                             --            42,015
                                            ------------    ------------

BALANCE AT END OF PERIOD:                   $ 20,249,796    $ 19,019,376
                                            ============    ============




     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             Three Months   Three Months
                                                                Ended          Ended
                                                           March 31, 2002   March 31, 2001
                                                           --------------   --------------
<S>                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                             $    377,410    $    309,332
     Adjustments to reconcile net income to net cash
       from operating activities
         Depreciation                                             63,697          69,078
         Provision for loan loss                                 178,000          80,000
         Net amortization on securities
              available for sale                                  63,483          20,911
         Loss/(gain) on sales and calls of securities
              available for sale, net                            (82,526)        (22,368)
         Net change in:
              Accrued interest receivable                        (84,286)        176,912
              Other assets                                      (130,529)        (37,947)
              Accrued interest payable                            27,129          25,563
              Other liabilities                                 (111,607)       (177,727)
                                                            ------------    ------------
                      Net cash from operating activities         300,771         443,754
                                                            ------------    ------------


CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of securities available for sale                (7,550,642)     (7,172,718)
     Proceeds from sales of securities available for sale      3,820,232       7,353,636
     Proceeds from maturities and calls of securities
         available for sale                                   10,250,000       3,000,000
     Purchase of FHLB stock                                         --          (200,000)
     Net change in loans receivable                           (7,936,028)     (5,639,642)
     Purchase of premises and equipment, net                     (25,474)        (68,287)
                                                            ------------    ------------
         Net cash from investing activities                   (1,441,912)     (2,727,011)
                                                            ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Net change in deposits                                   (1,172,391)        939,048
     Net change in securities sold under agreements
         to repurchase                                         1,860,441         102,167
     Proceeds from (repayment) FHLB advances, net             (1,500,000)      4,000,000
     Proceeds from the issuance of common stock                   11,188            --
     Purchase of treasury stock                                     --           (33,065)
     Sale of treasury stock                                         --            42,015
                                                            ------------    ------------
         Net cash from financing activities                     (800,762)      5,050,165
                                                            ------------    ------------
Net change in cash and cash equivalents                       (1,941,903)      2,766,908

Cash and cash equivalents at beginning of period              20,021,279      19,543,276
                                                            ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $ 18,079,376    $ 22,310,184
                                                            ============    ============

Supplemental disclosures of cash flow information
     Cash paid during the period for
         Interest                                           $  1,116,285    $  1,822,719
         Income taxes                                       $    251,000         178,000
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements include
the accounts of St. Joseph Capital Corporation and our wholly owned subsidiary,
St. Joseph Capital Bank (the "Bank").

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form 10-QSB.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete presentation of financial
statements. In the opinion of management, the unaudited condensed consolidated
financial statements contain all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation. All
significant inter-company accounts and transactions have been eliminated in
consolidation. The income reported for the periods presented is not necessarily
indicative of the results to be expected for the full year.

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

OVERVIEW

         St. Joseph was formed in February 1996 for the purpose of organizing
the Bank. The Bank opened in February 1997 with $10.0 million in assets and grew
to $214.1 million as of March 31, 2002. We expect continued opportunities for
growth, even though the rate of growth will probably be slower than we have
experienced to date.

         The following discussion provides additional information regarding our
operations for the three-month period ended March 31, 2002 and 2001 and
financial condition as of March 31, 2002, December 31, 2001 and March 31, 2001.
This discussion should be read in conjunction with our consolidated financial
statements and the accompanying notes thereto and other information in our 2001
10-KSB.

GENERAL

         We are a bank holding company that owns the St. Joseph Capital Bank, a
full-service commercial banking institution located in Mishawaka, Indiana. The
Bank provides a broad range of banking products and services, including credit,
cash management, deposit and asset management to its targeted client base of
executive and professionals and small to medium-sized businesses. Our market
area encompasses a substantial portion of the Indiana communities of Mishawaka,
South Bend, Notre Dame, Granger, Osceola and Elkhart, as well as certain
Michigan communities, including Niles, Edwardsburg and Cassopolis. Due to the
overlap of this metropolitan area over state lines, this region is often
referred to as "Michiana."

         We started our banking operations on February 13, 1997 with the goal of
building a locally owned and managed financial institution to meet the banking
needs of our targeted clients. As part of our operating strategy, we strive to
offer clients a high level of service on a consistent basis. Our rapid growth
since 1997 has largely been a product of our success in attracting targeted
individuals and businesses to become clients coupled with our ability to recruit
and retain a community-oriented management team with significant commercial
banking experience in the Michiana area. We have also taken advantage of the
client disruption caused by the acquisition of a number of the area's other
locally owned financial institutions by large and super-regional bank holding
companies.

         Our rapid growth, coupled with our desire to take advantage of
additional opportunities to increase our market share, lead us to increase the
capital in during 1999 to support additional growth, which we have realized.
This growth, as well as continued growth, will eventually allow us to take
advantage of the operating leverage available to larger financial institutions.

                                       7
<PAGE>

         An increase in the bank's capital also allowed us to increase our
lending limit, which will enable us to compete more effectively in our
marketplace. Increasing our client base allows us to spread our fixed costs over
a larger universe of clients thereby improving our operating efficiency.

         A hallmark of our operations has been our commitment to operate out of
a single location as a way of keeping tight control on our fixed, overhead
expenses. The delivery of our banking services is accomplished through our
headquarters facility, a courier service program, our ATM/debit card product,
our postage paid bank-by-mail program, telephone banking and computer banking.
The diversity of our delivery systems enables our clients to choose the method
of banking which is most convenient for them. While no plans currently exist, we
may also expand our product offerings, move into new markets or make strategic
acquisitions of other financial institutions in the future. We intend to
continue to pursue an aggressive growth strategy focused on the addition of
experienced banking personnel in the Michiana area, while also maintaining
strong asset quality and enhancing our profitability.

         We have and will continue to price our loan products and deposit
products competitively. The net interest income generated by the lending and
deposit-gathering activities of the Bank should continue to increase as the
overall size of the Bank increases.

         We currently maintain our office at 3820 Edison Lakes Parkway,
Mishawaka, Indiana, 46545. Our telephone number is (574) 273-9700.

BUSINESS STRATEGY

         We expect to establish and maintain a high standard of quality in each
service we provide, and our employees are expected to emphasize service in their
dealings with clients. We believe that the use of state-of-the-art technology
will permit each employee to devote more time and attention to personal service,
respond more quickly to a client's requests and deliver services in the most
timely manner possible.

         Our goal is to create and maintain a "client-driven" organization
focused on providing high value to clients by promptly delivering products and
services matched directly to their needs. Furthermore, we expect to gain market
share by developing strong ties to our community. In this regard, most of our
directors currently hold, and have held in the past, leadership positions in a
number of community organizations, and intend to continue this active
involvement in future years. Members of the senior management team are also in
leadership positions in a variety of community organizations and intend to
continue this active involvement in future years. Additionally, all employees
are encouraged to be active in the civic, charitable and social organizations
located in the Michiana area.

         The Bank offers a broad range of deposit services, including checking
accounts, money market accounts, savings accounts and time deposits of various
types, as well as a full range of short to intermediate term personal and
commercial loans. Commercial loans include lines of credit to finance accounts
receivable and inventory, term loans to finance machinery and equipment, as well
as commercial mortgages to finance land and buildings. The Bank makes personal
loans directly to its clients for various purposes, including purchases of
automobiles, boats and other recreational vehicles, home improvements, education
and personal investments. The Bank also makes residential mortgage loans and
substantially all of them are retained by the Bank and consist of balloon
payment, adjustable and fixed rate mortgages. The Bank offers other services,
including credit cards, cashier's checks, traveler's checks and automated teller
access.

LENDING ACTIVITIES

         We provide a broad range of commercial and retail lending services to
corporations, partnerships and individuals. The Bank actively markets its
services to qualified borrowers. Lending officers actively solicit the business
of new borrowers entering our market area as well as long-standing members of
the local business community. The Bank has established lending policies, which
include a number of underwriting factors to be considered in making a loan,
including location, loan to value ratio, cash flow, interest rate and the credit
history of the borrower.

         Our legal lending limit is approximately $3,150,000. The board of
directors, however, has established an "in-house" limit of $2,500,000. The board
may from time to time raise or lower the "in-house" limit, as it deems
appropriate to comply with safe and sound banking practices and respond to
overall economic conditions.

                                       8
<PAGE>

         As part of the loan monitoring activity at the bank, the officers' loan
committee meets weekly to review loan portfolio dynamics. Loan review officer's
present detailed reports on the loan portfolio to the board during board
meetings. Management has attempted to identify problem loans at an early stage
and to aggressively seek a resolution of these situations.

         COMMERCIAL LOANS. We are an active commercial lender in the Michiana
area. Our areas of emphasis include, but are not limited to, loans to
manufacturers, building contractors, developers and business services companies.
We also provide a wide range of operating loans, including lines of credit for
working capital and operational purposes, as well as term loans for the
acquisition of equipment and other purposes. Collateral for these loans
generally includes accounts receivable, inventory, equipment and real estate. In
addition, the Bank has taken personal guarantees to help assure payment when
appropriate. Terms of commercial business loans generally range from one to five
years. A significant portion of our commercial business loans has floating
interest rates or re-price within one year. We also make commercial real estate
loans, which are generally secured by the underlying real estate and
improvements. However, we may also require additional assets of the borrower as
collateral.

         RESIDENTIAL REAL ESTATE MORTGAGE LOANS. The main focus of our lending
activity continues to be on the commercial side and we have viewed residential
mortgages primarily as a way to attract and service targeted clients. We offer a
variety of adjustable rate products as well as traditional 15-year fixed rate
loans. The growth in the residential loan portfolio has been a result of
refinancing activities, acquisition and construction of existing or new homes.
The Bank has retained substantially all real estate loans in its portfolio.

         CONSUMER LENDING. We provide all types of consumer loans including
motor vehicles, home improvement, home equity, signature loans and small
personal credit lines. The Bank has no indirect lending, and intends to actively
seek to increase its personal lines of credit and home equity loans.

COMPETITION

         Our market area is competitive. We compete for loans principally
through the range and quality of service we provide and interest rates. We
believe that our reputation in the communities we serve and personal service
philosophy enhances our ability to compete favorably in attracting and retaining
individual and business clients. We actively solicit deposits by offering
clients personal attention, professional service and competitive rates.

         There are other commercial banks, savings and loans and credit unions,
along with other financial institutions that operate in our primary market area.
In addition, many other financial institutions based in the communities
surrounding these areas also actively compete for clients within these market
areas. We also face competition from finance companies, insurance companies,
mortgage companies, securities brokerage firms, money market mutual funds, loan
production offices and other providers of financial services.

         Under the Gramm-Leach-Bliley Act of 1999, securities firms and
insurance companies that elect to become financial holding companies may acquire
banks and other financial institutions. The Gramm-Leach-Bliley Act may
significantly change the competitive environment in which we conduct business.
The financial services industry is also likely to become more competitive as
further technological advances enable more companies to provide financial
services. These technological advances may diminish the importance of depository
institutions and other financial intermediaries in the transfer of funds between
parties.

MARKET AREA

         We offer a full range of commercial and consumer banking services
primarily within a fifteen-mile radius of our main office located in Mishawaka,
Indiana. This area encompasses a substantial portion of the Indiana communities
of Mishawaka, South Bend, Notre Dame, Granger, Osceola and Elkhart, and certain
Michigan communities, including Niles, Edwardsburg and Cassopolis. Due to the
overlap of this metropolitan area over state lines, this region is often
referred to as "Michiana."

                                       9
<PAGE>

         The local economy is diversified among manufacturing, retail and
wholesale trades and service industries. The area's retail, distribution,
convention and tourism, health care and services sectors have expanded to offset
the decrease in manufacturing jobs, which has occurred in recent years. The
University of Notre Dame is the area's largest employer and contributes to the
stability of the local economy. South Bend is also home to other colleges and
technical schools providing additional stability and access to a skilled work
force.

         Memorial Hospital and St. Joseph's Medical Center are the two largest
health care providers in the Michiana area. Bosch Braking Systems Corp.,
Honeywell and A M General Corp. are three of the region's largest manufacturers,
and the area is also home to a number of smaller manufacturing, retail and
service businesses. Many major manufacturing companies are also located in
adjacent Elkhart County, including Coachmen Industries, CTS Corporation and
Skyline Corporation. We believe this diverse commercial base provides
significant potential for business banking services, together with personal
banking services for owners and employees of these entities.

EMPLOYEES

         We have 46 full-time equivalent employees. None of our employees are
covered by a collective bargaining agreement with St. Joseph or the bank. We
consider our employee relations to be excellent.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

         This document (including information incorporated by reference)
contains, and future oral and written statements of the company and our
management may contain, forward-looking statements, within the meaning of such
term in the Private Securities Litigation Reform Act of 1995, with respect to
our financial condition, results of operations, plans, objectives, future
performance and business. Forward-looking statements, which may be based upon
beliefs, expectations and assumptions of our management and on information
currently available to management, are generally identifiable by the use of
words such as "believe," "expect," "anticipate," "plan," "intend," "estimate,"
"may," "will," "would," "could," "should" or other similar expressions.
Additionally, all statements in this document, including forward-looking
statements, speak only as of the date they are made, and we undertake no
obligation to update any statement in light of new information or future events.

         Our ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors that could have a material adverse
effect on the operations and future prospects of the Company and its
subsidiaries include, but are not limited to, the following:

     -   The strength of the United States economy in general and the strength
         of the local economies in which we conduct our operations which may be
         less favorable than expected an may result in, among other things, a
         deterioration in the credit quality and value of our assets.

     -   The economic impact of the terrorist attacks that occurred on September
         11th, as well as any future threats and attacks, and the response of
         the United States to any such threats and attacks.

     -   The effects of, and changes in, federal, state and local laws,
         regulations and policies affecting banking, securities, insurance and
         monetary and financial matters.

     -   The effects of changes in interest rates (including the effects of
         changes in the rate of prepayments of our assets) and the policies of
         the Board of Governors of the Federal Reserve System.

     -   Our ability to compete with other financial institutions as effectively
         as we currently intend due to increases in competitive pressures in the
         financial services sector.

     -   Our inability to obtain new clients and to retain existing clients.

     -   The timely development and acceptance of products and services,
         including products and services offered through alternative delivery
         channels such as the Internet.

     -   Technological changes implemented by us and by other parties, including
         third party vendors, which may be more difficult or more expensive than
         anticipated or which may have unforeseen consequences to us and our
         clients.

     -   Our ability to develop and maintain secure and reliable electronic
         systems.

     -   Our ability to retain key executives and employees and the difficulty
         that we may experience in replacing key executives and employees in an
         effective manner.

     -   Consumer spending and saving habits which may change in a manner that
         affects our business adversely.

                                       10
<PAGE>

     -   Business combinations and the integration of acquired businesses that
         may be more difficult or expensive than expected.

     -   The costs, effects and outcomes of existing or future litigation.

     -   Changes in accounting policies and practices, as may be adopted by
         state and federal regulatory agencies and the Financial Accounting
         Standards Board.

     -   Our ability to manage the risks associated with the foregoing as well
         as anticipated.

         These risks and uncertainties should be considered in evaluating
     forward-looking statements and undue reliance should not be placed on such
     statements. Additional information concerning us and our business including
     other factors that could materially affect our financial results, is
     included in our filings with the Securities and Exchange Commission.

FINANCIAL CONDITION

MARCH 31, 2002 COMPARED TO DECEMBER 31, 2001 AND MARCH 31, 2001

         During the three-month period of 2002, our assets decreased $700
thousand or .32% from $214.8 million on December 31, 2001, to $214.1 million on
March 31, 2002 and increased $31.7 million or 17.4% from $182.4 on March 31,
2001. While total assets were lower at March 31, 2002 compared to December 31,
2001, the quarterly average was up 3.9%. The decrease in assets during the 1st
quarter was a result of normal fluctuations and management doesn't anticipate
this to be trend. The growth in assets from March 30, 2001 is mostly
attributable to commercial and real estate loan volume and growth in the Bank's
securities portfolio. Management continues to focus on small- to medium-sized
business clients, the original strategy since opening in February 1997. The
growth in the loan portfolio funded by increased deposits is anticipated to
continue.

         CASH AND CASH EQUIVALENTS. Cash and cash equivalents decreased by $1.9
million and $4.2 million to $18.1 million at March 31, 2002 from $20.0 million
at December 31, 2001 and $22.3 million at March 31, 2001. This decrease was
primarily the result of the decrease in cash and due from banks. Cash and due
from banks represented cash maintained at correspondent banks, in the form of
demand deposits as well as cash maintained at the Federal Reserve Bank of
Chicago and federal funds sold is the investment used for short-term liquid
assets. The decrease was a result of the fluctuations in the size of the cash
letter that occur during the normal course of our business as well as the need
to fund the growth in the loan portfolio.

         INVESTMENT PORTFOLIO. Securities available for sale totaled $38.4
million at March 31, 2001, which represented a decrease of $6.8 million or 15.0%
from $45.2 million at December 31, 2001 and an increase of $18.2 million or
90.0% from $20.2 million at March 31, 2001. The decrease from December 31, 2001
was a result of normal maturities and calls as well as the sale of securities
available for sale. The increase from March 31, 2001 was a result of management
investing excess liquidity into higher yielding assets.

         LOAN PORTFOLIO. Loans receivable net of allowance was $152.4 million at
March 31, 2002 reflecting a $7.7 million increase or 5.3% and a $17.0 million
increase or 12.6% from $144.7 million at December 31, 2001 and $135.4 million at
March 31, 2001. Commercial loans increased by $4.2 million or 4.3% and $7.0
million or 7.4% to $101.2 million at March 31, 2002 from $97.0 million at
December 31, 2001 and $94.2 million at March 31, 2001. Commercial loans were
65.3%, 66.0% and 68.6% of the total loan portfolio at March 31, 2002, December
31, 2001 and March 31, 2001. The continued significant concentration of the loan
portfolio in commercial loans and the continued future growth of this portion of
our lending business is consistent with our stated strategy of focusing on small
to mid size businesses or what is commonly known as "wholesale banking." Our
commercial lending business generates the greatest amount of local deposits, and
is the primary source of demand deposits.

                                       11
<PAGE>

         Residential mortgage loans also increased by $5.3 million or 12.4% and
$9.8 million or 25.7% to $47.9 million at March 31, 2002 from $42.6 million at
December 31, 2001 and $38.1 million at March 31, 2001. Residential mortgage
loans were 30.9%, 29.0% and 27.7% of the total loan portfolio at March 31, 2002,
December 31, 2001 and March 31, 2001. Cosumer loans also decreased by $1.6
million or 21.6% and increased $.8 million or 16.0% to $5.8 million at March 31,
2002 from $7.4 million at December 31, 2001 and $5.0 million at March 31, 2001.
Consumer loans were 3.8%, 5.0% and 3.7% of the total loan portfolio at March 31,
2002, December 31, 2001 and March 31, 2001. Although residential mortgage loan
and consumer loan portfolios have increased and are expected to continue to
increase in future periods, given our stated strategy, the commercial sector of
the lending efforts and resultant assets are expected to remain the dominant
loan portfolio category.

         The quality of our loan portfolio remains strong. We have not
experienced any charge-offs since inception. We believe we have instilled a very
strong credit culture within our lending department as it pertains to the
underwriting and administration processes. Over 87% of the loan portfolio
consists of loans extended directly to companies and individuals doing business
and residing within our market area or having strong, long-standing ties to
management. The remaining portion is comprised of commercial loans participated
with certain non-affiliated commercial banks outside of our immediate area,
which are underwritten using the same loan underwriting criteria as though our
bank was the originating bank.

         There has been substantial evidence of a much slower economic recovery
during 2002, which has kept market interest rates at historical low levels.
During this period we have grown and have maintained our interest rate spread,
while experiencing no significant change in asset quality or in non-performing
loan totals. However, an extended economic recovery could result in some
increase in problem assets, which could possibly result in some increase in
losses on loans.

         The allowance for loan losses balance and the provision for loan losses
are judgmentally determined by management based upon periodic reviews of the
loan portfolio. In addition, as we do not have an established charge-off
history, management considers the level of charge-offs experienced by peer
financial institutions having loan portfolio mix and risk characteristics
similar to our loan portfolio mix and risk characteristics. Estimating the risk
of loss and the amount of loss is necessarily subjective. Accordingly, the
allowance is maintained by management at a level considered adequate to cover
losses that are currently anticipated based on past loss experience, general
economic conditions, information about specific borrower situations including
their financial position and collateral values and other factors and estimates
which are subject to change over time.

         While management's periodic analysis of the adequacy of the allowance
for loan losses may allocate portions of the allowance for specific problem loan
situations, the entire allowance is available for any loan charge-offs that
occur.

         DEPOSITS. Deposits decreased $1.2 million to $152.1 at March 31, 2002
from $153.3 million at December 31, 2001. Deposits increased $28.7 million to
$152.1 at March 31, 2002 from $123.4 million at March 31, 2001. Certificates of
deposit, which comprised 26.8% of total deposits, increased $2.6 million during
the three-months of 2002. Savings, NOW and money market accounts, which
comprised 61.5% of total deposits, increased $8.3 million during the
three-months of 2002. The decrease in deposits during the 1st quarter of 2002
was a result of normal client withdrawals. The increase in deposits since March
30, 2001 in general was a result of successful marketing campaigns by the Bank.
As of March 31, 2002, we had $6.0 million or 3.9% of total deposit in
certificates of deposit placed by a broker for a fee.

         SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE. Securities sold under
agreements to repurchase increased by $1.9 million and $4.2 million to $12.4
million at March 31, 2002 from $10.5 million at December 31, 2001 and $8.2
million at March 31, 2001. Securities sold under agreement to repurchase are a
stable source of relationship-based deposits from our commercial clients.

         FHLB ADVANCES. FHLB advances decreased by $1.5 million and $2.5 million
to $29.1 million as of March 31, 2002 from $30.6 million at December 31, 2001
and $31.6 million at March 31, 2001. As of March 31, 2002, the bank held
$1,628,500 of FHLB stock. The decreases in FHLB advances were a result of normal
maturities and calls of FHLB advances that management expected and planned for
as part of the overall asset liability management.

                                       12
<PAGE>

LIQUIDITY

         Liquidity is measured by our ability to raise funds through deposits,
borrowed funds, capital or cash flow from the repayment of loans and investment
securities. These funds are used to meet deposit withdrawals, maintain reserve
requirements, fund loans and support our operations. Liquidity is primarily
achieved through the growth of deposits and liquid assets such as securities
available for sale, matured securities, and federal fund sold. Asset and
liability management is the process of managing our balance sheet to achieve a
mix of earning assets and liabilities that maximizes profitability, while
providing adequate liquidity.

         Our liquidity strategy is to fund loan growth with deposits, repurchase
agreements and Federal Home Loan Bank (FHLB) advances and to maintain adequate
level of short-term investments to meet typical daily loan and deposit activity.
Since the bank opened in February 1997, deposit and repurchase agreement growth
from depositors located in our market area as well as Federal Home Loan Bank
advances has been sufficient to meet our substantial loan growth. In the future,
to assist in providing the additional funds, we may increase the amount of
certificates of deposit from clients outside of our market area and placed by
brokers for a fee, as well as certificates of deposit obtained from the deposit
owners directly. We may rely on out-of-area deposits to fund future asset
growth. As of March 31, 2002 we had $6.0 million in deposits placed by a broker
for a fee.

         Our bank has the ability to borrow money on a daily basis through
correspondent banks via established federal funds purchased lines; however, we
view these funds as only a secondary and temporary source of funds. We borrowed
an average of $1.8 million in federal funds during the three-month period of
2002. Our bank's federal funds sold position averaged $2.2 million during the
three-month period of 2002.

         In addition to normal loan funding and deposit flow, we must maintain
liquidity to meet the demands of certain unfunded loan commitments and standby
letters of credit. As of March 31, 2002, our bank had a total of $65.5 million
in unfunded loan commitments and $1.3 million in unfunded standby letters of
credit. We monitor fluctuations in loan balances and commitment levels, and
include such data in managing our overall liquidity.

CAPITAL RESOURCES

         Shareholders' equity was $20.2 million at March 31, 2002, an increase
of $235 thousand and $1.2 million from $20.0 million as of December 31, 2001 and
$19.0 million as of March 31, 2001. The increase was mainly attributable to the
growth in net income as well as the net change in the unrealized loss on
securities available for sale.

         We are subject to regulatory capital requirements administered by the
State of Indiana and federal banking agencies. Failure to meet the various
capital requirements can initiate regulatory action that could have a direct
material effect on the financial statements. Since our bank commenced
operations, both the company and our bank have been categorized as "Well
Capitalized," the highest classification contained within banking regulations.
The capital ratios of the company and the bank as of March 31, 2002 are
disclosed in the table below.

<TABLE>
<CAPTION>

                                        ------------------------   -----------------------------
                                         Minimum Required For      Minimum Required To Be Well         Corporation's
--------------------------------------     Capital Adequacy           Capitalized Under Prompt            Capital     Bank's Capital
            March 31, 2002                    Purposes             Corrective Action Regulations           Ratio          Ratio
--------------------------------------  -----------------------    -----------------------------       -------------  --------------
<S>                                              <C>                          <C>                           <C>           <C>
Ratio of Total Capital to Risk
   Weighted Assets                               8.0%                         10.0%                         13.90%        12.87%

Ratio of Tier 1 Capital to Risk
   Weighted Assets                               4.0%                          6.0%                         12.65%        11.62%

Ratio of Tier 1 Capital to Average
   Assets                                        4.0%                          5.0%                          9.44%         8.76%
</TABLE>


                                       13
<PAGE>




RESULTS OF OPERATIONS

MARCH 31, 2002 COMPARED WITH MARCH 31, 2001

         OVERVIEW. Consolidated net income for the three-month period of 2002
was $377,410 ($.22 per basic and diluted share), which represents a 22.0%
increase over net income of $309,332 ($.18 per basic and diluted share) recorded
during the same period of 2001. The improvement in net income during both time
periods was primarily the result of an increase in net interest income, higher
noninterest income and greater employee efficiency.

         INTEREST INCOME. Interest income during the three-month period of 2002
was $2,883,155, a 9.9% decrease from the $3,198,446 earned during the
three-month period of 2001. During the three-month period of 2002, earning
assets averaged $196.6 million, an increase from average earning assets of
$164.9 million during the three-month period of 2001. The growth in earning
assets during the period was negatively impacted by the decline in yield on
earning assets. During the three-month period of 2002 and 2001, the weighted
average yield on earning assets was 5.81% and 7.78%, respectively. The decrease
in yields as compared to the three-month period of 2001 was primarily due to the
overall decline of market interest rates, in part evidenced by the 400 basis
point drop in the prime rate since January 3, 2001. Interest income should
continue to grow as the loan portfolio and other interest earning assets
increase.

         INTEREST EXPENSE. Interest expense during the three-month period of
2002 was $1,143,414, a 38.1% decrease from the $1,848,282 expensed during the
three-month period of 2001. The decline in interest expense during the
three-month period of 2002 compared to the same period in 2001 was result of the
significant reduction in market interest rates that has taken place during 2001.
During the three-month period of 2002, interest-bearing liabilities averaged
$193.5 million, higher than the average interest-bearing funds of $158.4 million
during the three-month period of 2001. Positively impacting interest expense
during the three-month period of 2002 was the decline in the cost of
interest-bearing funds due to the decline in market rates as mentioned above.
During the three-month period of 2002 and 2001, interest-bearing liabilities had
a weighted average rate of 2.38% and 4.72%, respectively, reflecting the
above-mentioned decline in market interest rates.

         NET INTEREST INCOME. Net interest income during the three-month period
of 2002 was $1,739,741, an increase of 28.9% over the $1,350,164 earned during
the three-month period of 2001. The net interest margin on a fully tax
equivalent (FTE) basis increased from 3.33% during the three-month period of
2001 to 3.64% in the three-month period of 2002. As our bank experienced
significant asset growth during the three-month period of 2002 when compared to
the same time period in 2001, net interest margin increased primarily due to our
ability to reduce funding costs at a faster pace than the reduction in our asset
yields.

         ALLOWANCE FOR LOAN LOSSES. Provisions to the allowance for loan losses
during the three-month period of 2002 were $178,000, an increase from the
$80,000 expensed during the same time period in 2001. The allowance for loan
losses as a percentage of total loans outstanding as of March 31, 2002 was
1.58%, compared to 1.55% and 1.41% at December 31, 2001 and March 31, 2001,
respectively. The increase in the allowance for loan losses as a percentage of
total loans receivable was primarily a result of management's risk assessment of
the portfolio. The risk assessment is based on numerous statistical and other
factors including the specific asset class of each loan (i.e. commercial,
residential or consumer), the internal risk rating of each loan, specific
industry concentrations, an assessment for large dollar and unsecured loans and
specific reserves for watchlist credits.

         In each accounting period, the allowance for loan losses is adjusted to
the amount believed necessary to maintain the allowance at adequate levels.
Through the loan review and credit department, we attempt to allocate specific
portions of the allowance for loan losses based on specifically identifiable
problem loans. The evaluation of the allowance for loan losses is further based
on, although not limited to, consideration of the internally prepared Loan Loss
Reserve Analysis ("Reserve Analysis"), composition of the loan portfolio, third
party analysis of the loan administration processes and loan portfolio and
general economic conditions. In addition, our bank's status as a relatively new
banking organization and the rapid loan growth since inception is taken into
account.

                                       14
<PAGE>




         The Reserve Analysis, used since the inception of our bank and
completed quarterly, applies reserve allocation factors to outstanding loan
balances to calculate an overall allowance dollar amount. For commercial loans,
which continue to comprise a vast majority of our total loans, reserve
allocation factors are based upon the loan ratings as determined by our
comprehensive loan rating paradigm that is administered by our loan review
function. For retail loans, reserve allocation factors are based upon the type
of credit. The Reserve Analysis is reviewed regularly by senior management and
the Board of Directors and is adjusted periodically based upon identifiable
trends and experience.

         We have not experienced any charge-offs from loans receivable since
inception. Accordingly, in estimating the risk of loss in our loan portfolio we
considered the level of charge-offs on loans experienced by peer financial
institutions having a loan portfolio mix and risk characteristics similar to our
loan portfolio mix and risk characteristics. At March 31, 2002, no portion of
the allowance for loan losses was allocated to impaired loan balances, as there
were no loans considered impaired. Management believes the allowance for loan
losses at March 31, 2002 was adequate to absorb losses in the loan portfolio,
including potential losses due to the slowing economy.

         NONINTEREST INCOME. Noninterest income during the three-month period of
2002 was $197,112, an increase of 114.0% over the $92,095 earned during the same
time period in 2001. Noninterest income, excluding the net gains on sales of
securities, during the three-month period of 2001 was $114,586, an increase of
64.3% over the $69,727 earned during the same time period in 2001. Excluding the
net gains on sales of securities, service charge income accounted for the
increase in noninterest income. The increase in service charge income during
both time periods primarily resulted from new accounts opened during the last 12
months.

         NONINTEREST EXPENSE. Noninterest expense during the three-month period
of 2002 was $1,175,943, an increase of 36.0% over the $864,627 expensed during
the same time period in 2001. An increase in salaries and benefits, as well as
general overhead costs, was recorded. The increases in salaries and benefits
primarily resulted from the hiring of additional staff and annual pay increases.
General overhead costs have also increased reflecting the additional expenses
required to administer our increased asset base.

     TAXES. We have utilized our entire net operating loss carry forward and
have shown adequate profitability to warrant recording our net deferred tax
assets. Consequently, we reversed all of the remaining valuation allowance for
deferred tax assets during 2000, therefore making the Company a full taxpayer
during 2001. As we continue to be profitable, we will continue to report income
tax expense.

MANAGEMENT OF INTEREST SENSITIVITY

         Our primary market risk exposure is interest rate risk and, to a lesser
extent, liquidity risk. Interest rate risk is the exposure of our financial
condition to adverse movements in interest rates. We derive our income primarily
from the excess of interest collected on our interest-earning assets over the
interest paid on our interest-bearing liabilities. The rates of interest we earn
on our assets and owe on our liabilities generally are established contractually
for a period of time. Since market interest rates change over time, we are
exposed to lower profitability if we cannot adapt to interest rate changes.
Accepting interest rate risk can be an important source of profitability and
shareholder value; however, excessive levels of interest rate risk could pose a
significant threat to our earnings and capital base. Accordingly, effective risk
management that maintains interest rate risk at prudent levels is essential to
our safety and soundness.

         Evaluating the exposure to changes in interest rates includes assessing
both the adequacy of the process used to control interest rate risk and the
quantitative level of exposure. Our interest rate risk management process seeks
to ensure that appropriate policies, procedures, management, information systems
and internal controls are in place to maintain interest rate risk at prudent
levels with consistency and continuity. In evaluating the quantitative level of
interest rate risk, we assess the existing and potential future effects of
changes in interest rates on our financial condition, including capital
adequacy, earnings, liquidity and asset quality.

         We use three interest rate risk measurement techniques. The first,
which is commonly referred to as GAP analysis, measures the difference between
the dollar amounts of interest sensitive assets and liabilities that will be
refinanced or repriced during a given time period. A significant repricing gap
could result in a negative impact to our net interest margin during periods of
changing market interest rates.

                                       15
<PAGE>

         The second interest rate risk measurement used is commonly referred to
as net interest income simulation analysis. We believe that this methodology
provides a more accurate measurement of interest rate risk than the GAP
analysis, and therefore, serves as one of our primary interest rate risk
measurement techniques. The simulation model assesses the direction and
magnitude of variations in net interest income resulting from potential changes
in market interest rates. Key assumptions in the model include prepayment speeds
on various loan and investment assets; cash flows and maturities of
interest-sensitive assets and liabilities; and changes in market conditions
impacting loan and deposit volume and pricing. These assumptions are inherently
uncertain and subject to fluctuation and revision in a dynamic environment;
therefore, the model cannot precisely estimate net interest income or exactly
predict the impact of higher or lower interest rates on net interest income.
Actual results will differ from simulated results due to timing, magnitude, and
frequency of interest rate changes and changes in market conditions and the
company's strategies, among other factors.

         We conducted multiple simulations as of March 31, 2002, whereby it was
assumed that a simultaneous, instant and sustained change in market interest
rates occurred. Results of the simulation suggest that we could expect net
interest income to decrease by approximately $148,000, if interest rates
gradually decline by 100 basis points over the next twelve months, and to
increase approximately $135,000, if interest rates gradually increase 100 basis
points over the next twelve months, from forecast levels of net interest income
absent any changes in rates. These variances in net interest income were within
our policy parameters established to manage interest rate risk. Other
simulations are run quarterly looking at changes to interest income given 200
and 300 basis point changes in interest rates.

         The third interest rate risk measurement used is commonly referred to
as an "EVE" analysis or an Economic Value of Equity analysis. As well as the
simulation analysis, we believe that this methodology provides a more accurate
measurement of interest rate risk than the GAP analysis, and therefore, serves
as one of our primary interest rate risk measurement techniques. The EVE
analysis assesses the impact to the value of equity given potential changes in
market interest rates. Key assumptions in the model include prepayment speeds on
various loans, discount rates and the duration of assets and liabilities as
determined by the federal regulatory agencies. These assumptions are inherently
uncertain, subject to fluctuation and revision in a dynamic environment;
therefore, the model cannot precisely estimate the value of equity or exactly
predict the impact that higher or lower interest rates will have on the value of
equity. Actual results will differ from simulated results due to timing,
magnitude, and frequency of interest rate changes and changes in market
conditions and the company's strategies, among other factors.

         Results of the economic value of equity analysis done as of March 31,
2002, suggest that we could expect the value of our equity to increase 3.76% and
7.13%, if there was an immediate interest rate shift upward of 100 and 200 basis
points and to decrease 4.69% and 4.38%, if there was an immediate interest rate
shift downward of 100 and 200 basis points. Management believes the different
scenarios indicate that the bank has a relatively low overall interest rate
risk.

IMPACT OF INFLATION AND CHANGES IN PRICES

         The majority of our assets and liabilities are monetary in nature and
therefore we differ greatly from most commercial and industrial companies that
have significant investments in fixed assets or inventories. However, inflation
does have an important impact on the growth of total assets in the banking
industry and the resulting need to increase equity capital at higher than normal
rates in order to maintain an appropriate equity to assets ratio. Inflation
significantly affects noninterest expense, which tends to rise during periods of
general inflation.

                                       16
<PAGE>


RECENT REGULATORY DEVELOPMENTS

         On October 26, 2001, President Bush signed into law the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act"). Among its other
provisions, the USA PATRIOT Act requires each financial institution: (i) to
establish an anti-money laundering program; (ii) to establish due diligence
policies, procedures and controls with respect to its private banking accounts
and correspondent banking accounts involving foreign individuals and certain
foreign banks; and (iii) to avoid establishing, maintaining, administering, or
managing correspondent accounts in the United States for, or on behalf of,
foreign banks that do not have a physical presence in any country. The USA
PATRIOT Act also requires the Secretary of the Treasury to prescribe, by
regulations to be issued jointly with the federal banking regulators and certain
other agencies, minimum standards that financial institutions must follow to
verify the identity of customers, both foreign and domestic, when a customer
opens an account. In addition, the USA PATRIOT Act contains a provision
encouraging cooperation among financial institutions, regulatory authorities and
law enforcement authorities with respect to individuals, entities and
organizations suspected of engaging in terrorist acts or money laundering
activities.

         During the first quarter of 2002, the Financial Crimes Enforcement
Network (FinCEN), a bureau of the Department of the Treasury, issued proposed
and interim regulations as mandated by the USA PATRIOT Act that would: (i)
prohibit certain financial institutions from providing correspondent accounts to
foreign shell banks; (ii) require such financial institutions to take reasonable
steps to ensure that correspondent accounts provided to foreign banks are not
being used to indirectly provide banking services to foreign shell banks; (iii)
require certain financial institutions that provide correspondent accounts to
foreign banks to maintain records of the ownership of such foreign banks and
their agents in the United States; (iv) require the termination of correspondent
accounts of foreign banks that fail to turn over their account records in
response to a lawful request from the Secretary of the Treasury or the Attorney
General; and (v) encourage information sharing among financial institutions and
federal law enforcement agencies to identify, prevent, deter and report money
laundering and terrorist activity. To date, it has not been possible to predict
the impact the USA PATRIOT ACT and its implementing regulations may have on the
Company or the Bank in the future.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         As a depository of funds, the Bank may occasionally be named as a
defendant in lawsuits (such as garnishment proceedings) involving claims to the
ownership of funds in particular accounts. Such litigation is incidental to the
Bank's business.

         We are not aware of any pending litigation.

ITEM 2.  CHANGES IN SECURITIES
         Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         Not applicable.

ITEM 5.  OTHER INFORMATION
         Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits
                  None.

         (b)      Reports on Form 8-K
                  None.

                                       17
<PAGE>

                                   SIGNATURES

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

                                  ST. JOSEPH CAPITAL CORPORATION
                                  (Registrant)


Date:  May 8, 2002                /s/ John W. Rosenthal
                                  ----------------------------------------------
                                  John W. Rosenthal
                                  President

Date:  May 8, 2002               /s/ Edward R. Pooley
                                 -----------------------------------------------
                                 Edward R. Pooley
                                 Principal Financial Officer

                                       18