UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                       OF THE SECURITIES EXCAHNGE ACT 1934

For the quarterly period ended September 30, 2001

OR

[    ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-11132

                           FIRST BANKING CENTER, INC.
             (Exact name of registrant as specified in its charter)

            Wisconsin                                        39-1391327
    (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                        Identification No.)



                    400 Milwaukee Ave., Burlington, WI 53105
               (Address of principal executive offices) (Zip Code)



                                 (262) 763-3581
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for 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 [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 2, 2001. Common stock,  $1.00 par value,  1,463,815
shares outstanding.

<PAGE>
                    FIRST BANKING CENTER, INC AND SUBSIDIARY
                                      INDEX
                               September 30, 2001



Part I   Financial Information

         Item 1  Consolidated Financial Statements

                 Unaudited Consolidated Balance Sheets,
                 September 30, 2001 and December 31, 2000

                 Unaudited Consolidated Statements of Income,
                 For the three and nine months ended September 30, 2001 and 2000

                 Unaudited Consolidated Statements of Cash Flows,
                 For the nine months ended September 30, 2001 and 2000

                 Notes to Unaudited Consolidated Financial Statements

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

         Item 3  Quantitative and Qualitative Disclosures about Market Risk

Part II  Other Information

         Item 1  Legal Proceedings

         Item 2  Changes in Securities and Use of Proceeds

         Item 3  Defaults upon Senior Securities

         Item 4  Submission of Matters to a Vote of Security Holders

         Item 5  Other Information

         Item 6  Exhibits and Reports on Form 8-K

         Signature

<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
                                    FIRST BANKING CENTER, INC. AND SUBSIDIARY
                                      UNAUDITED CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                                                      September 30,   December 31,
                                                                                         2001           2000
                                                                                     ------------------------------
                                                                                            (In thousands)
<S>                                                                                  <C>             <C>
ASSETS
  Cash and due from banks                                                                    $12,577       $29,287
  Federal funds sold                                                                           4,332             0
  Interest-bearing deposits in banks                                                          10,167           696
  Available for sale securities                                                               53,506        65,189
  Loans, less allowance for loan losses of $4,104 and
    $3,927 in 2001 and 2000, respectively                                                    351,789       316,641
  Office buildings and equipment, net                                                         10,437         9,825
  Other assets                                                                                11,572         9,220
                                                                                     ------------------------------

      TOTAL ASSETS                                                                          $454,380      $430,858
                                                                                     ==============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Deposits
    Demand                                                                                   $54,372       $59,602
    Savings and NOW accounts                                                                 153,690       150,438
    Time                                                                                     129,809       124,900
                                                                                     ------------------------------
      Total Deposits                                                                         337,871       334,940
  Securities sold under agreements to repurchase
      and federal funds purchased                                                             22,032        17,299
  Short-term borrowings                                                                       17,349        26,168
  Long-term borrowings                                                                        29,515         9,876
  Due to Brokers for security purchase                                                         2,323             0
  Other liabilities                                                                            3,523         4,627
                                                                                     ------------------------------

      TOTAL LIABILITIES                                                                     $412,613      $392,910
                                                                                     ------------------------------

STOCKHOLDERS' EQUITY
  Common Stock, $1.00 par value 3,000,000 shares authorized; 1,489,380 shares
    issued as of September 30, 2001 and
    December 31, 2000, respectively                                                            1,489         1,489
  Surplus                                                                                      4,177         4,178
  Retained Earnings                                                                           36,112        32,525
                                                                                     ------------------------------
                                                                                              41,778        38,192
  Common stock in treasury, at cost-27,115 and 12,358 shares
   for September 30, 2001 and December 31, 2000, respectively                                ($1,027)        ($452)
  Accumulated other comprehensive income                                                       1,016           208
                                                                                     ------------------------------

      TOTAL STOCKHOLDERS' EQUITY                                                             $41,767       $37,948
                                                                                     ------------------------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                            $454,380      $430,858
                                                                                     ==============================



                                 "See accompanying notes to financial statements"
</TABLE>

<PAGE>
<TABLE>
                                        FIRST BANKING CENTER, INC. AND SUBSIDIARY
                                       UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

<CAPTION>
                                                                        Three months ended           Nine months ended
                                                                          September 30,                September 30,
                                                                        2001           2000          2001          2000
                                                                 ----------------------------------------------------------
                                                                           (In thousands, except per share data)
<S>                                                                  <C>            <C>           <C>           <C>
INTEREST INCOME
  Interest and fees on loans                                            $7,333         $7,221        $22,153       $20,436
  Interest and dividends on securities
    Taxable                                                                297            478          1,014         1,482
    Non-taxable                                                            371            333          1,045           986
  Interest on federal funds sold                                            53             87            213           143
  Interest on interest-bearing deposits in banks                            41              2            112             3
                                                                 ----------------------------------------------------------
      TOTAL INTEREST INCOME                                              8,095          8,121         24,537        23,050
                                                                 ----------------------------------------------------------

INTEREST EXPENSE
  Interest on deposits                                                   2,758          3,363          9,088         9,142
  Interest on securities sold under agreements to repurchase
    and federal funds purchased                                            184            255            660           753
  Interest on short-term borrowings                                        250            101            766           310
  Interest on long-term borrowings                                         250            305            553           910
                                                                 ----------------------------------------------------------
      TOTAL INTEREST EXPENSE                                             3,442          4,024         11,067        11,115
                                                                 ----------------------------------------------------------
      NET INTEREST INCOME BEFORE PROVISION FOR
         LOAN LOSSES                                                     4,653          4,097         13,470        11,935
  Provision for loan losses                                                 90             90            270           270
                                                                 ----------------------------------------------------------
      NET INTEREST INCOME AFTER PROVISION FOR
        LOAN LOSSES                                                      4,563          4,007         13,200        11,665
                                                                 ----------------------------------------------------------

NON-INTEREST INCOME
  Trust                                                                    138            100            413           325
  Service charges on deposit accounts                                      403            341          1,122           988
  Investment securities gains (losses)                                       0              0              0            (5)
  Automated teller machines                                                102            104            272           284
  Other income                                                             276            205            692           679
                                                                 ----------------------------------------------------------
      TOTAL NON-INTEREST INCOME                                            919            750          2,499         2,271
                                                                 ----------------------------------------------------------

NON-INTEREST EXPENSE
  Salary and employee benefits                                           1,916          1,691          5,639         5,038
  Occupancy                                                                254            200            727           640
  Equipment                                                                337            345          1,010         1,034
  Data Processing services                                                 212            212            595           520
  Goodwill amortization                                                     25             26             76            77
  Stationary and office supplies                                            91             72            283           216
  Other                                                                    677            505          1,868         1,608
                                                                 ----------------------------------------------------------
      TOTAL NON-INTEREST EXPENSE                                         3,512          3,051         10,198         9,133
                                                                 ----------------------------------------------------------

      INCOME BEFORE INCOME TAXES                                         1,970          1,706          5,501         4,803
  Income taxes                                                             507            491          1,413         1,338
                                                                 ----------------------------------------------------------
      NET INCOME                                                        $1,463         $1,215         $4,088        $3,465
                                                                 ==========================================================

        Basic earnings per share                                         $1.00          $0.83          $2.80         $2.36
        Diluted earnings per share                                       $0.99          $0.82          $2.76         $2.33
        Dividends per share                                              $0.34          $0.32          $0.34         $0.32



                                     "See accompanying notes to financial statements"
</TABLE>

<PAGE>
<TABLE>

                                 FIRST BANKING CENTER, INC. AND SUBSIDIARY
                              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                                                        Nine months ended
                                                                                          September 30,
                                                                                        2001         2000
                                                                                  ---------------------------
                                                                                        (In thousands)
<S>                                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                          $4,088        $3,465
    Depreciation                                                                            617          653
    Provision for loan losses                                                              270           270
    Loans originated for sale                                                          (66,590)      (21,507)
    Proceeds from sale of loans                                                         65,878        23,347
    Gain on sale of loans                                                                    0            (9)
    Gain on disposal of office building and equipment                                        0           104
    Amortization of premiums and accretion of discounts
      on securities, net                                                                    37            37
    Amortization                                                                            76            78
    Loss on sale of investment securities                                                    0             5
    Increase in other assets                                                            (2,844)         (804)
    Increase in accrued expenses and other liabilities                                   1,219           295
                                                                                  ---------------------------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                                        2,751         5,934
                                                                                  ---------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net increase in interest-bearing deposits in banks                                  (9,471)         (703)
    Net (increase) decrease in federal funds sold                                       (4,332)        2,121
    Activity in available for sale securities:
       Proceeds from sales of available for sale securities                              2,786         8,669
       Proceeds from maturities of available for sale securities                        99,948         9,540
       Purchase of available for sale securities                                       (89,864)      (25,156)
    Net increase in loans                                                              (34,706)      (14,486)
    Purchase of office buildings and equipment, net                                     (1,229)       (1,061)
                                                                                  ---------------------------
        NET CASH USED IN INVESTING ACTIVITIES                                          (36,868)      (21,076)
                                                                                  ---------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in deposits                                                             2,931        15,318
    Dividends paid                                                                        (500)         (474)
    Proceeds from other borrowings                                                      25,000             0
    Payments on other borrowings                                                       (14,180)       (1,706)
    Net increase (decrease) in securities sold under agreements
      to repurchase and federal funds purchased                                          4,733        (4,131)
    Purchase of treasury stock                                                            (606)         (403)
    Proceeds from reissuance of treasury stock under
       stock option plan                                                                    29            38
                                                                                  ---------------------------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                       17,407         8,642
                                                                                  ---------------------------
    Net decrease in Cash and Due From Banks                                            (16,710)       (6,500)
Cash and Due From Banks-Beginning of Period                                             29,287        19,123
                                                                                  ---------------------------
                                                                                  ---------------------------
    Cash and Due From Banks-End of Period                                              $12,577       $12,623
                                                                                  ===========================

Supplemental disclosures of cash flow information: Cash paid during the period
    for:
    Interest                                                                           $11,347       $11,106
    Income taxes                                                                        $1,610        $1,000
Supplemental schedule of non-cash investing and financing activities:
           Net change in unrealized gain on available for sale securities                 $808          $454



                              "See accompanying notes to financial statements"

</TABLE>

<PAGE>
                    FIRST BANKING CENTER, INC AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                September 30,2001

NOTE 1 - Basis of Presentation

The unaudited  consolidated  financial  statements include the accounts of First
Banking  Center,  Inc. and its  subsidiary  (the  "Company").  In the opinion of
management,  all adjustments  (consisting only of normal recurring  adjustments)
necessary  for a  fair  presentation  of  the  financial  position,  results  of
operation and cash flows for the interim  periods have been made. The results of
operations  for the three  and nine  months  ended  September  30,  2001 are not
necessarily indicative of the results to be expected for the entire fiscal year.

The unaudited interim financial statements have been prepared in conformity with
generally  accepted  accounting   principles  and  industry  practice.   Certain
information in footnote  disclosure  normally  included in financial  statements
prepared  in  accordance  with  generally  accepted  accounting  principles  and
industry   practice  has  been  condensed  or  omitted  pursuant  to  rules  and
regulations  of  the  Securities  and  Exchange   Commission.   These  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto included in the Company's December 31, 2000 audited
financial statements.

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates and  assumptions
which affect the reported  amounts of assets and  liabilities  and disclosure of
contingent assets and liabilities as of the date of the financial statements, as
well as the reported amounts of income and expenses during the reported periods.
Actual results could differ from those estimates.

NOTE 2 - Earnings Per Share

The following information  calculates the computation of earnings per share on a
basic and diluted basis.
<TABLE>
<CAPTION>
                                                                            Three Months Ended               Nine Months Ended
                                                                               September 30,                    September 30,
                                                                            2001            2000             2001            2000
                                                                       -------------------------------------------------------------
                                                                                (In thousands, except per share data)
<S>                                                                      <C>             <C>              <C>             <C>
Basic
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Weighted average shares outstanding                                          1,462           1,470            1,462           1,470
Basic earnings per share                                                     $1.00           $0.83            $2.80           $2.36
                                                                       =============================================================

Diluted
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Weighted average shares outstanding                                          1,462           1,470            1,462           1,470
Effect of dilutive stock options outstanding                                    18              15               18              15
                                                                       -------------------------------------------------------------
Diluted weighted average shares outstanding                                  1,480           1,485            1,480           1,485
Diluted earnings per share                                                   $0.99           $0.82            $2.76           $2.33
                                                                       =============================================================
</TABLE>

NOTE 3-Comprehensive Income

The following table presents our comprehensive income.
<TABLE>
<CAPTION>

                                                                            Three Months Ended               Nine Months Ended
                                                                               September 30,                    September 30,
                                                                            2001            2000             2001            2000
                                                                       -------------------------------------------------------------
                                                                              (In thousands)                   (In thousands)
<S>                                                                      <C>             <C>              <C>             <C>
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Other comprehensive income
  Net change in unrealized gain on available for sale securities              $343            $443             $808            $454
                                                                       -------------------------------------------------------------
Total comprehensive income                                                  $1,806          $1,658           $4,896          $3,919
                                                                       =============================================================
</TABLE>

<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

                    FIRST BANKING CENTER, INC AND SUBSIDIARY
                       MANAGEMENTS DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            As of September 30, 2001

The following discussion provides additional analysis of the financial condition
and results of operations of the Company for the nine months ended September 30,
2001.  This  discussion  focuses on the  significant  factors that  affected the
Company's earnings so far in 2001, with comparisons to 2000. As of September 30,
2001,  First Banking  Center (the "Bank") was the only direct  subsidiary of the
Company and its operations  contributed  nearly all of the revenue for the year.
The Company provides various support functions for the Bank and receives payment
from the Bank for these services. These intercompany payments are eliminated for
the purpose of these consolidated financial statements.  The Bank has two wholly
owned  subsidiaries,  FBC Financial  Services,  Corp., a brokerage and financial
services subsidiary, and FBC-Burlington,  Inc., an investment subsidiary located
in Nevada.

Overview

As of September 30, 2001,  total Company assets were $454.4  million  increasing
5.46% from $430.9 million as of December 31, 2000. Total income, as of September
30,  2001,  was $4.1  million  or $2.80 per  share,  increasing  18.0% from $3.5
million  or $2.36 per share in 2000.  The  significant  items  resulting  in the
above-mentioned results are discussed below.

Financial Condition

Loans

Loans  outstanding  were $355.9 million and $320.6 million on September 30, 2001
and December 31, 2000 respectively. This represents an increase of $35.3 million
or 11.0%.  The following table  summarizes the changes to date in the major loan
classifications.
<TABLE>
<CAPTION>

                                                                                                  As a % of Total Loans
                                        September 30,      December 31,    Change in          September 30,     December 31,
                                             2001              2000         Balance               2001              2000
                                      -------------------------------------------------    ------------------------------------
                                      -------------------------------------------------    ------------------------------------
                                                    (Amounts in million)
<S>                                     <C>                <C>             <C>                <C>               <C>
Residential Real Estate                    $157.3            $135.7          $21.6                44.2%             43.9%
Commercial Real Estate                      $87.9             $85.2           $2.7                24.7%             26.3%
Construction and Land Development           $40.0             $42.2          ($2.2)               11.3%             13.1%
Commercial                                  $29.9             $26.2           $3.7                 8.4%              8.2%

</TABLE>

Allowance for Loan Losses

The  allowance  for possible loan losses was $4.1 million or 1.2% of gross loans
on  September  30,  2001,  compared  with $3.9 million or 1.2% of gross loans on
December 31,  2000.  Net  charge-offs  were $93 thousand or .03% of gross loans,
compared to net charge-offs of $14 thousand or .004% of gross loans for December
31, 2000.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes that the  collectibility of the principal is unlikely.  The
allowance for loan losses is adequate to cover probable  credit losses  relating
to specifically  identified loans, as well as probable credit losses inherent in
the balance of the loan portfolio. In accordance with FASB Statements 5 and 114,
the  allowance is provided for losses that have been  incurred as of the balance
sheet  date.  The  allowance  is  based  on past  events  and  current  economic
conditions,  and does not include  the  effects of  expected  losses on specific
loans or groups of loans that are related to future  events or expected  changes
in economic  conditions.  Management  reviews a calculation of the allowance for
loan losses on a quarterly  basis.  While  management uses the best  information
available to make its  evaluation,  future  adjustments  to the allowance may be
necessary  if there are  significant  changes in economic  conditions.  Impaired
loans are  measured  based on the present  value of  expected  future cash flows
discounted at the loan's effective  interest rate or, as a practical  expedient,
at the loan's observable market price or the fair value of the collateral if the
loan is  collateral  dependent.  A loan is  impaired  when  it is  probable  the
creditor  will be unable to  collect  all  contractual  principal  and  interest
payments due in accordance with the terms of the loan agreement.

<PAGE>
In addition,  various regulatory agencies  periodically review the allowance for
loan  losses.  These  agencies  may  require the bank to make  additions  to the
allowance for loan losses based on their  judgments of  collectibility  based on
information available to them at the time of their examination.

As of September  30,  2001,  $270  thousand was charged to current  earnings and
added to the allowance for loan losses.

Non-accrual, Past Due and Renegotiated Loans
<TABLE>
<CAPTION>
                                                                                September 30,     December 31,
                                                                                   2001              2000
                                                                               --------------------------------
                                                                                       (In thousands)
<S>                                                                             <C>               <C>
Non-accrual Loans (a)                                                              $1,479             $827
Past Due 90 days +                                                                      0                0
Restructured Loans                                                                      0                0

</TABLE>

The  policy of the  Company  is to place a loan on  non-accrual  status  if: (a)
payment in full of interest and principal is not  expected,  or (b) principal or
interest  has  been in  default  for a  period  of 90 days  or more  unless  the
obligation is both in the process of collection  and well secured.  Well secured
is defined as collateral with sufficient market value to repay principal and all
accrued  interest.  A debt is in the process of  collection if collection of the
debt  is  proceeding  in due  course  either  through  legal  action,  including
judgement  enforcement  procedures,  or in  appropriate  circumstances,  through
collection  efforts not involving legal action which are reasonably  expected to
result in repayment of the dept or in its  restoration  to current  status.  The
non-accrual loans consisted primarily of $1.1 million of residential real estate
loans,   $154  thousand  of  commercial  real  estate,   and  $120  thousand  of
construction  and land  development  loans.  On September 30, 2001, the ratio of
non-accrual  loans to the allowance for loan losses was 36.0%  compared to 21.1%
on December 31, 2000.

As of September 30, 2001, the Company had loans totaling $24,583,000 in addition
to those listed as non-accrual, past due or renegotiated that were identified by
the Banks'  internal asset rating  systems as classified  assets and loans which
management has determined  require  additional  monitoring.  This  represents an
increase of $7,207,000 or 41.5% from December 31, 2000.  Management is not aware
of any significant  loans,  group of loans or segments of the loan portfolio not
included  above,  where  full  collectibility  cannot  reasonably  be  expected.
Management  has  committed  resources  and is  focusing  on efforts  designed to
control the amount of classified assets. The company does not have a substantial
portion of its loans  concentrated  in one or a few  industries nor does it have
any foreign loans  outstanding as of September 30, 2001. The company's loans are
concentrated  geographically  in the  Wisconsin  counties  of Racine,  Walworth,
Kenosha, Lafayette and Green.

Investments securities - Available for Sale

The securities  available-for-sale  portfolio  decreased  $11.7 million or 17.9%
from  December  31,  2000.  The  decrease  came in four areas of the  portfolio.
Commercial  paper decreased $2.6 million due to maturities.  Money market mutual
funds  decreased  $4.2 as the proceeds  were  transferred  to fed funds.  Equity
securities in the amount of $2.3 million were transferred to other assets due to
changes required for regulatory  reporting.  U.S.  Government  Agency securities
declined  $10.0  due  to the  call  features  exercised  by  various  Government
Agencies. The Company purchased $82.6 million of U.S. Government Agency Discount
Notes and had $80.2 million of U.S.  Government  Agency  Discount  Notes mature.
These Discount Notes where used as collateral for the Company's sweep repurchase
accounts.

Deposits and Borrowed Funds

Total  deposits and  borrowed  funds were $406.8  million on September  30, 2001
compared to $388.3  million on December 31,  2000.  This is an increase of $18.5
million or 4.8%. The increase in Federal Home Loan  Borrowings  came in the form
of $5 million of 3 year fixed rate borrowings,  $3 million of 10 year fixed rate
borrowings  which is  callable  in 3 years,  and $2  million  dollars  or 3 year
variable rate LIBOR based borrowings. The following table summarizes the changes
in the major classifications of deposits and borrowed funds.

<PAGE>
<TABLE>
<CAPTION>
                                                       September 30,       December 31,        Change in
                                                          2001                2000               Balance
                                                      ----------------------------------      -----------
                                                              (Amounts in millions)
<S>                                                   <C>                  <C>                <C>
Money Market and Savings                                 $131.1             $121.8               $9.3
Demand  Deposits                                          $54.4              $59.6              ($5.2)
Time Deposits less than $100,000                          $93.7              $86.6               $7.1
Time Deposits equal or greater than $100,000              $36.1              $38.3              ($2.2)
Securities sold under agreement to repurchase             $22.0              $17.3               $4.7
Federal Home Loan Borrowings                              $46.2              $35.3              $10.9

</TABLE>

Capital resources

As of September 30, 2001,  the Company's  stockholders'  equity  increased  $3.8
million or 10.1%.  Net income of $4.1  million was the  primary  reasons for the
increase in equity. The company purchased $606 thousand of treasury stock so far
in 2001.  Unrealized  gains on  available  for sale  securities  increased  $808
thousand to $1,016 thousand.

In December 1990,  the Federal  Reserve  Board's  risk-based  guidelines  became
effective.  Under these  guidelines  capital is measured  against the  Company's
subsidiary  bank's  risk-weighted  assets.  The Company's tier 1 capital (common
stockholders'  equity  less  goodwill)  to  risk-weighted  assets  was  11.3% at
September  30,  2001,  well  above the 4%  minimum  required.  Total  capital to
risk-adjusted assets was 12.4%, also well above the 8% minimum requirement.  The
leverage ratio was at 9.1% compared to the 4% minimum requirement.  According to
FDIC capital guidelines, the Company's subsidiary bank is considered to be "well
capitalized."

Results of operations
Net Interest Income

Net interest income is the difference  between interest income and fees on loans
and interest expense,  and is the largest  contributing factor to net income for
the  Company.  All  discussions  of rate are on a  tax-equivalent  basis,  which
accounts for income earned on  securities  that are not fully subject to federal
taxes. Net interest income was $13.5 million and $11.9 million for September 30,
2001 and September 30, 2000 respectively. Net interest income as a percentage of
average  earning  assets  (net  interest  margin) was 4.7% and 4.6% for the nine
months ended 2001 and 2000 respectively.

The  following  table  summarizes  the  changes  and  reasons for the changes in
interest income and fees on loans during 2001 and 2000. The increase in interest
income and fees on loans as of September  30, 2001 and 2000 was primarily due to
increased average earning assets.
<TABLE>
<CAPTION>
                                                                                                     Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
<S>                                              <C>                      <C>               <C>                     <C>
Interest income                                      $25.0                       $23.7           $1.3                        $2.7
Earning assets (Average balances)                   $393.5                      $364.3          $29.2                       $20.0
Yield on earning assets                              8.48%                       8.66%         -0.18%                       0.53%

</TABLE>

The  following  table  summarizes  the  changes  and  reasons for the changes in
interest  expense for the nine months ended  September  30, 2001 and 2000. As of
September 30, 2001 average balances outstanding  increased,  however, rates paid
for liabilities decreased causing no change in interest expense. The increase in
interest  expense as of September  30, 2000 was due to increased  rates paid for
liabilities and increased average balances outstanding.
<TABLE>
<CAPTION>
                                                                                                     Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
<S>                                              <C>                      <C>               <C>                     <C>
Interest expense                                     $11.1                       $11.1           $0.0                        $1.9
Interest bearing liabilities (Average balances)     $327.7                      $307.1          $20.6                       $18.6
Cost of interest bearing liabilities                 4.50%                       4.83%         -0.33%                       0.56%

</TABLE>

<PAGE>
The major component of interest income and fees on loans is the income generated
by loans.  The table below  summarizes the income,  average balance and yield on
loans for 2001 and 2000.
<TABLE>
<CAPTION>
                                                                                                     Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
<S>                                              <C>                      <C>               <C>                     <C>
Interest income                                      $22.2                       $20.4           $1.8                        $2.7
Loans (Average balances)                            $333.9                      $303.3          $30.6                       $26.5
Yield on loans                                       8.85%                       8.98%         -0.13%                       0.44%
</TABLE>

The major  components of interest  expense are interest paid on  Certificates of
Deposit (Time Deposits) and on Money Market Deposits. The tables below summarize
the expense,  average  balance and rates on these  components for 2001 and 2000.
The increase in interest expense on Time Deposits was a result of an increase in
average  balances,  as of  September  30,  2001.  The  decrease in Money  Market
Deposits was a result of decreased rates paid, as of September 30, 2001.
<TABLE>
<CAPTION>
                                                                                                     Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
     Time deposits                                   2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
<S>                                              <C>                      <C>               <C>                     <C>
Interest expense                                      $6.0                        $5.9           $0.1                        $0.7
Time deposits (Average balances)                    $174.7                      $172.5           $2.2                        $6.3
Cost of time deposits                                4.61%                       4.54%          0.07%                       0.41%
</TABLE>
<TABLE>
<CAPTION>
                                                                                                     Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
     Money Market deposits                           2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
<S>                                              <C>                      <C>               <C>                     <C>
Interest expense                                      $3.1                        $3.3          ($0.2)                       $1.1
Money Market deposits (Average balances)            $101.1                       $87.3          $13.8                       $14.2
Cost of Money Market deposits                        4.02%                       4.99%         -0.97%                       0.95%
</TABLE>

Non-interest income

Non-interest  income  increased $228 thousand or 10.0% as of September 30, 2001.
The increase came in primarily two areas.  Service  charges on deposit  accounts
increased  $134  thousand  as the number of  accounts  grew and charges for some
services  were  increased.  Trust income  increased $88 thousand as that line of
business continues to grow.

Non-interest expense

Non-interest  expense  increased $1.1 million or 11.7% as of September 30, 2001.
Salaries and benefits accounted for $601 thousand.  The increase in salaries and
benefits is due to normal wage increases,  increased  health insurance costs and
additional staff resulting from the addition of two branches.  Occupancy expense
increased  $87 thousand  due  primarily to increases in real estate and personal
property taxes.  Data  processing  costs increased $75 thousand due to increased
volumes and additional  services used.  Other expenses  increased $327 thousand.
This is the result of opening two branches this year.

Asset/liability management

The principal  function of  asset/liability  management is to manage the balance
sheet mix,  maturities,  repricing  characteristics  and pricing  components  to
provide an adequate and stable net interest  margin with an acceptable  level of
risk over time and through interest rate cycles.

Interest-sensitive  assets  and  liabilities  are  those  that  are  subject  to
repricing   within  a  specific   relevant  time  horizon.   The  Bank  measures
interest-sensitive  assets and  liabilities,  and their  relationship  with each
other at terms of immediate, quarterly intervals up to 1 year, and over 1 year.

Changes in net interest income,  other than volume related,  arise when interest
rates on assets  reprice in a time frame or interest  rate  environment  that is
different  from the repricing  period for  liabilities.  Changes in net interest
income  also  arise  from  changes  in the mix of  interest  earning  assets and
interest-bearing liabilities.

<PAGE>
The Bank's  strategy with respect to  asset/liability  management is to maximize
net  interest  income  while  limiting  its  exposure  to a  potential  downward
movement.  Strategy is implemented by the Bank's management,  which takes action
based upon its analysis of the Bank's  present  positioning,  its desired future
positioning,  economic  forecasts,  and its goals.  It is the  Bank's  desire to
maintain a cumulative GAP of positive or negative 15% of rate  sensitive  assets
at the 1-year  time frame.  The  current  percentage  is a positive  11%,  which
compares to a positive 2% as of December 31, 2000.

Liquidity

Liquidity  measures  the  ability  of  First  Banking  Center  to meet  maturing
obligations and its existing commitments,  to withstand  fluctuations in deposit
levels, to fund its operations,  and to provide for customers' credit needs. One
source of  liquidity is cash and  short-term  assets,  such as  interest-bearing
deposits in other banks and federal  funds sold,  which totaled $27.1 million at
September 30, 2001,  compared with $30.0 million at December 31, 2000.  The Bank
has a variety of sources of  short-term  liquidity  available  to it,  including
federal funds purchased from correspondent  banks, sales of securities available
for sale, FHLB advances, lines of credit and loan participations or sales. First
Banking Center also generates  liquidity from the regular principal payments and
prepayments made on its portfolio of loans and mortgage-backed securities.

The   liquidity  of  First   Banking   Center  is  comprised  of  three  primary
classifications: cash flows from operating activities, cash flows from investing
activities,  and cash flows from  financing  activities.  Net cash  provided  by
operating activities was $2.7 million. Net cash used in investing activities was
$36.9 million. Net cash provided by financing activities was $17.4 million.

As of September  30, 2000,  net cash provided by operating  activities  was $5.9
million.  Net cash used in  investing  activities  was $21.1  million.  Net cash
provided by financing activities was $8.6 million.

Impact of Inflation and Changing Prices

The  consolidated  financial  statements  and the  accompanying  notes have been
prepared in accordance  with generally  accepted  accounting  principles,  which
require the measurement of financial  position and operating results in terms of
historical  dollar  amounts  without  considering  the  changes in the  relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased  cost of First Banking  Center's  operations.  Unlike
industrial companies,  nearly all of the assets and liabilities of First Banking
Center are monetary in nature. As a result, interest rates have a greater impact
on First Banking  Center's  performance than do the effects of general levels of
inflation.  Interest rates do not  necessarily  move in the same direction or to
the same extent as the price of goods and services.

Forward Looking  Statements- Safe Harbor Statement under the Private  Securities
Litigation Reform Act of 1995

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

<PAGE>
Current Accounting Developments

Statement  of  Financial   Accounting  Standard  ("SFAS")  133,  Accounting  for
Derivative  Instruments and Hedging  Activities,  as amended by SFAS 137 and 138
establishes  accounting and reporting  standards requiring that every derivative
instrument   (including  certain  derivative   instruments   embedded  in  other
contracts)  be  recorded in the  balance  sheet as either an asset or  liability
measured at its fair value.  SFAS 133 requires that changes in the  derivative's
fair value be recognized  currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset  related  results  on the  hedged  item in the income
statement,  and requires  that a company must formally  document,  designate and
assess the effectiveness of transactions that receive hedge accounting. SFAS 133
was  effective   January  1,  2001.  The  Company   adopted  SFAS  133  and  the
implementation  of this standard did not have a material impact on the Company's
financial statements.

SFAS 140,  Accounting  for  Transfers  and  Servicing  of  Financial  Assets and
Extinguishments  of  Liabilities,  a  replacement  of SFAS 125,  Accounting  for
Transfers and Servicing of Financial Assets and  Extinguishments  of Liabilities
revises the standards for accounting for  securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it carries
over most of SFAS 125's provisions  without  reconsideration.  SFAS 140 provides
consistent  standards for distinguishing  transfers of financial assets that are
sales from transfers that are secured borrowings. The provisions of SFAS 140 are
effective  for transfers  after March 31, 2001. It is effective for  disclosures
about securitizations and collateral and for recognition and reclassification of
collateral for fiscal years ending after December 15, 2000. The Company  adopted
SFAS 140 and the  implementation of this standard did not have a material impact
on the Company's financial statements.

On September  30, 2001,  the  Financial  Accounting  Standards  Board  finalized
Statement of Financial  Accounting  Standards 141, Business  Combinations  (SFAS
141) and Statement of Financial  Accounting  Standards  142,  Goodwill and Other
Intangible  Assets  (SFAS 142).  SFAS 141  requires  all  business  combinations
initiated  after  September  30,  2001 to be  accounted  for using the  purchase
method.  Under the  provisions  of SFAS 142,  goodwill  is no longer  subject to
amortization  over its estimated  useful life, but instead will be subject to at
least annual  assessments  for  impairment by applying a fair-value  based test.
SFAS 142 also  requires that an acquired  intangible  asset should be separately
recognized  if  the  benefit  of  the  intangible   asset  is  obtained  through
contractual  or other legal  rights,  or if the asset can be sold,  transferred,
licensed, rented or exchanged, regardless of the acquirer's intent to do so. The
provisions of SFAS 142 are effective for fiscal years  beginning  after December
31,  2001.  The  Company  is in the  process  of  evaluating  its  goodwill  and
intangible assets for impairment under the provisions of SFAS 142.

SFAS 143,  Accounting  for Asset  Retirement  Obligations,  addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible  long-lived  assets and the  associated  asset  retirement  costs.  The
statement  requires that the fair value of a liability  for an asset  retirement
obligation be  recognized in the period it is incurred if a reasonable  estimate
of fair value can be made. The associated  retirement costs are capitalized as a
component  of the  carrying  amount of the  long-lived  asset and  allocated  to
expense  over the useful  life of the asset.  The  statement  is  effective  for
financial  statements  issued for fiscal  years  beginning  after June 15, 2002.
Management  does not believe the adoption of the statement  will have a material
impact on the Company's financial statements.

SFAS 144,  Accounting  for the  Impairment  or  Disposal of  Long-Lived  Assets,
establishes accounting and reporting standards for the impairment or disposal of
long-lived  assets.  This  statement  supercedes  SFAS 121,  Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived  Assets to be Disposed.  SFAS
144  provides  one  accounting  model to be used  for  long-lived  assets  to be
disposed  of by sale,  whether  previously  held for use or newly  acquired  and
broadens the  presentation of  discontinued  operations to include more disposal
transactions.  The provisions of SFAS 144 are effective for financial statements
issued for fiscal years beginning after December 15, 2001.  Management  believes
the adoption of the statement  will not have a material  effect on the Company's
financial statements.

<PAGE>
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The company has not experienced any material changes to its market risk position
since  December 31, 2000,  from that  disclosed in the company's  2000 Form 10-K
Annual Report.  First Banking  Center,  like other  financial  institutions,  is
subject to direct and  indirect  market  risk.  Direct  market  risk exists from
changes in interest rates. First Banking Center's net income is dependent on its
net interest income. Net interest income is susceptible to interest rate risk to
the degree that  interest-bearing  liabilities  mature or reprice on a different
basis than interest-earning assets. When interest-bearing  liabilities mature or
reprice  more  quickly  than  interest-earning  assets  in  a  given  period,  a
significant  increase in market  rates of interest  could  adversely  affect net
interest income.

Similarly,  when  interest-earning  assets  mature or reprice  more quickly than
interest-bearing liabilities,  falling interest rates could result in a decrease
in net income.

In an attempt to manage its  exposure to changes in interest  rates,  management
monitors  First  Banking  Center's  interest  rate  risk.  The   Asset/Liability
Committee  meets quarterly to review First Banking  Center's  interest rate risk
position  and   profitability,   and  to  make  or  recommend   adjustments  for
consideration  by the Board of  Directors.  Management  also  reviews the Bank's
securities portfolio,  formulates investment strategies, and oversees the timing
and   implementation  of  transactions  to  assure  attainment  of  the  Board's
objectives in the most effective manner.  Notwithstanding First Banking Center's
interest rate risk management  activities,  the potential for changing  interest
rates is an uncertainty that can have an adverse effect on net income.

In adjusting  First Banking  Center's  asset/liability  position,  the Board and
management  attempt to manage First  Banking  Center's  interest rate risk while
maintaining or enhancing net interest margins. At times,  depending on the level
of general  interest rates, the  relationship  between  long-term and short-term
interest  rates,  market  conditions  and  competitive  factors,  the  Board and
management  may decide to increase  First  Banking  Center's  interest rate risk
position  somewhat in order to increase its net interest  margin.  First Banking
Center's  results of operations  and net portfolio  values remain  vulnerable to
increases  in  interest  rates and to  fluctuations  in the  difference  between
long-term and short-term interest rates.

One approach  used to quantify  interest  rate risk is the net  portfolio  value
("NPV") analysis.  In essence,  this analysis  calculates the difference between
the present  value of  liabilities  and the present value of expected cash flows
from assets and off-balance-sheet contracts. The most recent NPV analysis, as of
September  30,  2001,  projects  that net  portfolio  value  would  decrease  by
approximately  8.0% if  interest  rates  would  rise 200 basis  points and would
decrease by  approximately  4.0% if interest  rates would rise 100 basis  points
over  the  next  year.  It  projects  an  increase  in net  portfolio  value  of
approximately   10.6%  if  interest  rates  would  drop  200  basis  points  and
approximately  5.0%  if  interest  rates  would  drop  100  basis  points.  Both
simulations are within  board-established  policy limits. First Banking Center's
policy is to limit the  effect of a 200 basis  point rate shock to plus or minus
20% of  projected  net  interest  income and to minus 35% of the market value of
portfolio equity.

First  Banking  Center does not  currently  engage in trading  activities or use
derivative   instruments  to  control  interest  rate  risk.  Even  though  such
activities may be permitted  with the approval of the Board of Directors,  First
Banking  Center does not intend to engage in such  activities  in the  immediate
future.

Interest rate risk is the most  significant  market risk affecting First Banking
Center.  Other types of market risk, such as foreign currency exchange rate risk
and  commodity  price risk,  do not arise in the normal  course of First Banking
Center's business activities.


<PAGE>
Part II-OTHER INFORMATION
Item 1.  Legal Proceedings

              None

Item 2.  Changes in Securities

             None

Item 3.  Defaults upon Senior Securities

             None

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

         None

Item 5.  Other Information

             None

Item 6.  Exhibits and Reports on Form 8-K

             None


<PAGE>
                   FIRST BANKING CENTER, INC AND SUBSIDIARIES


                                   SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1943, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.










                           First Banking Center, Inc.





November 14, 2001                           _________________________
Date                                        Brantly Chappell
                                            Chief Executive Officer




November 14, 2001                           __________________________
Date                                        James Schuster
                                            Chief Financial Officer
[{"type": "10-Q", "sequence": "1", "filename": "sep200110q.txt", "description": "10Q FOR THE QUARTER ENDED SEPTEMBER 30, 2001", "secsgml_size_bytes": 65651}]
{"company-data": {"conformed-name": "FIRST BANKING CENTER INC", "cik": "0000356858", "assigned-sic": "6022", "irs-number": "391391327", "state-of-incorporation": "WI", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-11132", "film-number": "1788904"}, "business-address": {"street1": "400 MILWAUKEE AVE", "street2": "P O BOX 660", "city": "BURLINGTON", "state": "WI", "zip": "53105", "phone": "4147633581"}, "mail-address": {"street1": "567 BROAD ST", "street2": "PO BOX 970", "city": "LAKE GENEVA", "state": "WI", "zip": "53147"}, "former-company": {"former-conformed-name": "FIRST COMMUNITY BANK GROUP INC", "date-changed": "19850312"}}
UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                       OF THE SECURITIES EXCAHNGE ACT 1934

For the quarterly period ended September 30, 2001

OR

[    ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-11132

                           FIRST BANKING CENTER, INC.
             (Exact name of registrant as specified in its charter)

            Wisconsin                                        39-1391327
    (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                        Identification No.)

                    400 Milwaukee Ave., Burlington, WI 53105
               (Address of principal executive offices) (Zip Code)

                                 (262) 763-3581
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for 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 [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of November 2, 2001. Common stock,  $1.00 par value,  1,463,815
shares outstanding.
FIRST BANKING CENTER, INC AND SUBSIDIARY
                                      INDEX
                               September 30, 2001

Part I   Financial Information

         Item 1  Consolidated Financial Statements

                 Unaudited Consolidated Balance Sheets,
                 September 30, 2001 and December 31, 2000

                 Unaudited Consolidated Statements of Income,
                 For the three and nine months ended September 30, 2001 and 2000

                 Unaudited Consolidated Statements of Cash Flows,
                 For the nine months ended September 30, 2001 and 2000

                 Notes to Unaudited Consolidated Financial Statements

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

         Item 3  Quantitative and Qualitative Disclosures about Market Risk

Part II  Other Information

         Item 1  Legal Proceedings

         Item 2  Changes in Securities and Use of Proceeds

         Item 3  Defaults upon Senior Securities

         Item 4  Submission of Matters to a Vote of Security Holders

         Item 5  Other Information

         Item 6  Exhibits and Reports on Form 8-K

         Signature
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements

                                    FIRST BANKING CENTER, INC. AND SUBSIDIARY
                                      UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30,   December 31,
                                                                                         2001           2000
                                                                                     ------------------------------
                                                                                            (In thousands)
ASSETS
  Cash and due from banks                                                                    $12,577       $29,287
  Federal funds sold                                                                           4,332             0
  Interest-bearing deposits in banks                                                          10,167           696
  Available for sale securities                                                               53,506        65,189
  Loans, less allowance for loan losses of $4,104 and
    $3,927 in 2001 and 2000, respectively                                                    351,789       316,641
  Office buildings and equipment, net                                                         10,437         9,825
  Other assets                                                                                11,572         9,220
                                                                                     ------------------------------

      TOTAL ASSETS                                                                          $454,380      $430,858
                                                                                     ==============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Deposits
    Demand                                                                                   $54,372       $59,602
    Savings and NOW accounts                                                                 153,690       150,438
    Time                                                                                     129,809       124,900
                                                                                     ------------------------------
      Total Deposits                                                                         337,871       334,940
  Securities sold under agreements to repurchase
      and federal funds purchased                                                             22,032        17,299
  Short-term borrowings                                                                       17,349        26,168
  Long-term borrowings                                                                        29,515         9,876
  Due to Brokers for security purchase                                                         2,323             0
  Other liabilities                                                                            3,523         4,627
                                                                                     ------------------------------

      TOTAL LIABILITIES                                                                     $412,613      $392,910
                                                                                     ------------------------------

STOCKHOLDERS' EQUITY
  Common Stock, $1.00 par value 3,000,000 shares authorized; 1,489,380 shares
    issued as of September 30, 2001 and
    December 31, 2000, respectively                                                            1,489         1,489
  Surplus                                                                                      4,177         4,178
  Retained Earnings                                                                           36,112        32,525
                                                                                     ------------------------------
                                                                                              41,778        38,192
  Common stock in treasury, at cost-27,115 and 12,358 shares
   for September 30, 2001 and December 31, 2000, respectively                                ($1,027)        ($452)
  Accumulated other comprehensive income                                                       1,016           208
                                                                                     ------------------------------

      TOTAL STOCKHOLDERS' EQUITY                                                             $41,767       $37,948
                                                                                     ------------------------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                            $454,380      $430,858
                                                                                     ==============================

                                 "See accompanying notes to financial statements"
FIRST BANKING CENTER, INC. AND SUBSIDIARY
                                       UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three months ended           Nine months ended
                                                                          September 30,                September 30,
                                                                        2001           2000          2001          2000
                                                                 ----------------------------------------------------------
                                                                           (In thousands, except per share data)
INTEREST INCOME
  Interest and fees on loans                                            $7,333         $7,221        $22,153       $20,436
  Interest and dividends on securities
    Taxable                                                                297            478          1,014         1,482
    Non-taxable                                                            371            333          1,045           986
  Interest on federal funds sold                                            53             87            213           143
  Interest on interest-bearing deposits in banks                            41              2            112             3
                                                                 ----------------------------------------------------------
      TOTAL INTEREST INCOME                                              8,095          8,121         24,537        23,050
                                                                 ----------------------------------------------------------

INTEREST EXPENSE
  Interest on deposits                                                   2,758          3,363          9,088         9,142
  Interest on securities sold under agreements to repurchase
    and federal funds purchased                                            184            255            660           753
  Interest on short-term borrowings                                        250            101            766           310
  Interest on long-term borrowings                                         250            305            553           910
                                                                 ----------------------------------------------------------
      TOTAL INTEREST EXPENSE                                             3,442          4,024         11,067        11,115
                                                                 ----------------------------------------------------------
      NET INTEREST INCOME BEFORE PROVISION FOR
         LOAN LOSSES                                                     4,653          4,097         13,470        11,935
  Provision for loan losses                                                 90             90            270           270
                                                                 ----------------------------------------------------------
      NET INTEREST INCOME AFTER PROVISION FOR
        LOAN LOSSES                                                      4,563          4,007         13,200        11,665
                                                                 ----------------------------------------------------------

NON-INTEREST INCOME
  Trust                                                                    138            100            413           325
  Service charges on deposit accounts                                      403            341          1,122           988
  Investment securities gains (losses)                                       0              0              0            (5)
  Automated teller machines                                                102            104            272           284
  Other income                                                             276            205            692           679
                                                                 ----------------------------------------------------------
      TOTAL NON-INTEREST INCOME                                            919            750          2,499         2,271
                                                                 ----------------------------------------------------------

NON-INTEREST EXPENSE
  Salary and employee benefits                                           1,916          1,691          5,639         5,038
  Occupancy                                                                254            200            727           640
  Equipment                                                                337            345          1,010         1,034
  Data Processing services                                                 212            212            595           520
  Goodwill amortization                                                     25             26             76            77
  Stationary and office supplies                                            91             72            283           216
  Other                                                                    677            505          1,868         1,608
                                                                 ----------------------------------------------------------
      TOTAL NON-INTEREST EXPENSE                                         3,512          3,051         10,198         9,133
                                                                 ----------------------------------------------------------

      INCOME BEFORE INCOME TAXES                                         1,970          1,706          5,501         4,803
  Income taxes                                                             507            491          1,413         1,338
                                                                 ----------------------------------------------------------
      NET INCOME                                                        $1,463         $1,215         $4,088        $3,465
                                                                 ==========================================================

        Basic earnings per share                                         $1.00          $0.83          $2.80         $2.36
        Diluted earnings per share                                       $0.99          $0.82          $2.76         $2.33
        Dividends per share                                              $0.34          $0.32          $0.34         $0.32

                                     "See accompanying notes to financial statements"
FIRST BANKING CENTER, INC. AND SUBSIDIARY
                              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
                                                                                          September 30,
                                                                                        2001         2000
                                                                                  ---------------------------
                                                                                        (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                          $4,088        $3,465
    Depreciation                                                                            617          653
    Provision for loan losses                                                              270           270
    Loans originated for sale                                                          (66,590)      (21,507)
    Proceeds from sale of loans                                                         65,878        23,347
    Gain on sale of loans                                                                    0            (9)
    Gain on disposal of office building and equipment                                        0           104
    Amortization of premiums and accretion of discounts
      on securities, net                                                                    37            37
    Amortization                                                                            76            78
    Loss on sale of investment securities                                                    0             5
    Increase in other assets                                                            (2,844)         (804)
    Increase in accrued expenses and other liabilities                                   1,219           295
                                                                                  ---------------------------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                                        2,751         5,934
                                                                                  ---------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net increase in interest-bearing deposits in banks                                  (9,471)         (703)
    Net (increase) decrease in federal funds sold                                       (4,332)        2,121
    Activity in available for sale securities:
       Proceeds from sales of available for sale securities                              2,786         8,669
       Proceeds from maturities of available for sale securities                        99,948         9,540
       Purchase of available for sale securities                                       (89,864)      (25,156)
    Net increase in loans                                                              (34,706)      (14,486)
    Purchase of office buildings and equipment, net                                     (1,229)       (1,061)
                                                                                  ---------------------------
        NET CASH USED IN INVESTING ACTIVITIES                                          (36,868)      (21,076)
                                                                                  ---------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in deposits                                                             2,931        15,318
    Dividends paid                                                                        (500)         (474)
    Proceeds from other borrowings                                                      25,000             0
    Payments on other borrowings                                                       (14,180)       (1,706)
    Net increase (decrease) in securities sold under agreements
      to repurchase and federal funds purchased                                          4,733        (4,131)
    Purchase of treasury stock                                                            (606)         (403)
    Proceeds from reissuance of treasury stock under
       stock option plan                                                                    29            38
                                                                                  ---------------------------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                       17,407         8,642
                                                                                  ---------------------------
    Net decrease in Cash and Due From Banks                                            (16,710)       (6,500)
Cash and Due From Banks-Beginning of Period                                             29,287        19,123
                                                                                  ---------------------------
                                                                                  ---------------------------
    Cash and Due From Banks-End of Period                                              $12,577       $12,623
                                                                                  ===========================

Supplemental disclosures of cash flow information: Cash paid during the period
    for:
    Interest                                                                           $11,347       $11,106
    Income taxes                                                                        $1,610        $1,000
Supplemental schedule of non-cash investing and financing activities:
           Net change in unrealized gain on available for sale securities                 $808          $454

                              "See accompanying notes to financial statements"
FIRST BANKING CENTER, INC AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                September 30,2001

NOTE 1 - Basis of Presentation

The unaudited  consolidated  financial  statements include the accounts of First
Banking  Center,  Inc. and its  subsidiary  (the  "Company").  In the opinion of
management,  all adjustments  (consisting only of normal recurring  adjustments)
necessary  for a  fair  presentation  of  the  financial  position,  results  of
operation and cash flows for the interim  periods have been made. The results of
operations  for the three  and nine  months  ended  September  30,  2001 are not
necessarily indicative of the results to be expected for the entire fiscal year.

The unaudited interim financial statements have been prepared in conformity with
generally  accepted  accounting   principles  and  industry  practice.   Certain
information in footnote  disclosure  normally  included in financial  statements
prepared  in  accordance  with  generally  accepted  accounting  principles  and
industry   practice  has  been  condensed  or  omitted  pursuant  to  rules  and
regulations  of  the  Securities  and  Exchange   Commission.   These  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto included in the Company's December 31, 2000 audited
financial statements.

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates and  assumptions
which affect the reported  amounts of assets and  liabilities  and disclosure of
contingent assets and liabilities as of the date of the financial statements, as
well as the reported amounts of income and expenses during the reported periods.
Actual results could differ from those estimates.

NOTE 2 - Earnings Per Share

The following information  calculates the computation of earnings per share on a
basic and diluted basis.
Three Months Ended               Nine Months Ended
                                                                               September 30,                    September 30,
                                                                            2001            2000             2001            2000
                                                                       -------------------------------------------------------------
                                                                                (In thousands, except per share data)
Basic
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Weighted average shares outstanding                                          1,462           1,470            1,462           1,470
Basic earnings per share                                                     $1.00           $0.83            $2.80           $2.36
                                                                       =============================================================

Diluted
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Weighted average shares outstanding                                          1,462           1,470            1,462           1,470
Effect of dilutive stock options outstanding                                    18              15               18              15
                                                                       -------------------------------------------------------------
Diluted weighted average shares outstanding                                  1,480           1,485            1,480           1,485
Diluted earnings per share                                                   $0.99           $0.82            $2.76           $2.33
                                                                       =============================================================
NOTE 3-Comprehensive Income

The following table presents our comprehensive income.
Three Months Ended               Nine Months Ended
                                                                               September 30,                    September 30,
                                                                            2001            2000             2001            2000
                                                                       -------------------------------------------------------------
                                                                              (In thousands)                   (In thousands)
Net income                                                                  $1,463          $1,215           $4,088          $3,465
Other comprehensive income
  Net change in unrealized gain on available for sale securities              $343            $443             $808            $454
                                                                       -------------------------------------------------------------
Total comprehensive income                                                  $1,806          $1,658           $4,896          $3,919
                                                                       =============================================================
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

                    FIRST BANKING CENTER, INC AND SUBSIDIARY
                       MANAGEMENTS DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                            As of September 30, 2001

The following discussion provides additional analysis of the financial condition
and results of operations of the Company for the nine months ended September 30,
2001.  This  discussion  focuses on the  significant  factors that  affected the
Company's earnings so far in 2001, with comparisons to 2000. As of September 30,
2001,  First Banking  Center (the "Bank") was the only direct  subsidiary of the
Company and its operations  contributed  nearly all of the revenue for the year.
The Company provides various support functions for the Bank and receives payment
from the Bank for these services. These intercompany payments are eliminated for
the purpose of these consolidated financial statements.  The Bank has two wholly
owned  subsidiaries,  FBC Financial  Services,  Corp., a brokerage and financial
services subsidiary, and FBC-Burlington,  Inc., an investment subsidiary located
in Nevada.

Overview

As of September 30, 2001,  total Company assets were $454.4  million  increasing
5.46% from $430.9 million as of December 31, 2000. Total income, as of September
30,  2001,  was $4.1  million  or $2.80 per  share,  increasing  18.0% from $3.5
million  or $2.36 per share in 2000.  The  significant  items  resulting  in the
above-mentioned results are discussed below.

Financial Condition

Loans

Loans  outstanding  were $355.9 million and $320.6 million on September 30, 2001
and December 31, 2000 respectively. This represents an increase of $35.3 million
or 11.0%.  The following table  summarizes the changes to date in the major loan
classifications.
As a % of Total Loans
                                        September 30,      December 31,    Change in          September 30,     December 31,
                                             2001              2000         Balance               2001              2000
                                      -------------------------------------------------    ------------------------------------
                                      -------------------------------------------------    ------------------------------------
                                                    (Amounts in million)
Residential Real Estate                    $157.3            $135.7          $21.6                44.2%             43.9%
Commercial Real Estate                      $87.9             $85.2           $2.7                24.7%             26.3%
Construction and Land Development           $40.0             $42.2          ($2.2)               11.3%             13.1%
Commercial                                  $29.9             $26.2           $3.7                 8.4%              8.2%
Allowance for Loan Losses

The  allowance  for possible loan losses was $4.1 million or 1.2% of gross loans
on  September  30,  2001,  compared  with $3.9 million or 1.2% of gross loans on
December 31,  2000.  Net  charge-offs  were $93 thousand or .03% of gross loans,
compared to net charge-offs of $14 thousand or .004% of gross loans for December
31, 2000.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes that the  collectibility of the principal is unlikely.  The
allowance for loan losses is adequate to cover probable  credit losses  relating
to specifically  identified loans, as well as probable credit losses inherent in
the balance of the loan portfolio. In accordance with FASB Statements 5 and 114,
the  allowance is provided for losses that have been  incurred as of the balance
sheet  date.  The  allowance  is  based  on past  events  and  current  economic
conditions,  and does not include  the  effects of  expected  losses on specific
loans or groups of loans that are related to future  events or expected  changes
in economic  conditions.  Management  reviews a calculation of the allowance for
loan losses on a quarterly  basis.  While  management uses the best  information
available to make its  evaluation,  future  adjustments  to the allowance may be
necessary  if there are  significant  changes in economic  conditions.  Impaired
loans are  measured  based on the present  value of  expected  future cash flows
discounted at the loan's effective  interest rate or, as a practical  expedient,
at the loan's observable market price or the fair value of the collateral if the
loan is  collateral  dependent.  A loan is  impaired  when  it is  probable  the
creditor  will be unable to  collect  all  contractual  principal  and  interest
payments due in accordance with the terms of the loan agreement.
In addition,  various regulatory agencies  periodically review the allowance for
loan  losses.  These  agencies  may  require the bank to make  additions  to the
allowance for loan losses based on their  judgments of  collectibility  based on
information available to them at the time of their examination.

As of September  30,  2001,  $270  thousand was charged to current  earnings and
added to the allowance for loan losses.

Non-accrual, Past Due and Renegotiated Loans
September 30,     December 31,
                                                                                   2001              2000
                                                                               --------------------------------
                                                                                       (In thousands)
Non-accrual Loans (a)                                                              $1,479             $827
Past Due 90 days +                                                                      0                0
Restructured Loans                                                                      0                0
The  policy of the  Company  is to place a loan on  non-accrual  status  if: (a)
payment in full of interest and principal is not  expected,  or (b) principal or
interest  has  been in  default  for a  period  of 90 days  or more  unless  the
obligation is both in the process of collection  and well secured.  Well secured
is defined as collateral with sufficient market value to repay principal and all
accrued  interest.  A debt is in the process of  collection if collection of the
debt  is  proceeding  in due  course  either  through  legal  action,  including
judgement  enforcement  procedures,  or in  appropriate  circumstances,  through
collection  efforts not involving legal action which are reasonably  expected to
result in repayment of the dept or in its  restoration  to current  status.  The
non-accrual loans consisted primarily of $1.1 million of residential real estate
loans,   $154  thousand  of  commercial  real  estate,   and  $120  thousand  of
construction  and land  development  loans.  On September 30, 2001, the ratio of
non-accrual  loans to the allowance for loan losses was 36.0%  compared to 21.1%
on December 31, 2000.

As of September 30, 2001, the Company had loans totaling $24,583,000 in addition
to those listed as non-accrual, past due or renegotiated that were identified by
the Banks'  internal asset rating  systems as classified  assets and loans which
management has determined  require  additional  monitoring.  This  represents an
increase of $7,207,000 or 41.5% from December 31, 2000.  Management is not aware
of any significant  loans,  group of loans or segments of the loan portfolio not
included  above,  where  full  collectibility  cannot  reasonably  be  expected.
Management  has  committed  resources  and is  focusing  on efforts  designed to
control the amount of classified assets. The company does not have a substantial
portion of its loans  concentrated  in one or a few  industries nor does it have
any foreign loans  outstanding as of September 30, 2001. The company's loans are
concentrated  geographically  in the  Wisconsin  counties  of Racine,  Walworth,
Kenosha, Lafayette and Green.

Investments securities - Available for Sale

The securities  available-for-sale  portfolio  decreased  $11.7 million or 17.9%
from  December  31,  2000.  The  decrease  came in four areas of the  portfolio.
Commercial  paper decreased $2.6 million due to maturities.  Money market mutual
funds  decreased  $4.2 as the proceeds  were  transferred  to fed funds.  Equity
securities in the amount of $2.3 million were transferred to other assets due to
changes required for regulatory  reporting.  U.S.  Government  Agency securities
declined  $10.0  due  to the  call  features  exercised  by  various  Government
Agencies. The Company purchased $82.6 million of U.S. Government Agency Discount
Notes and had $80.2 million of U.S.  Government  Agency  Discount  Notes mature.
These Discount Notes where used as collateral for the Company's sweep repurchase
accounts.

Deposits and Borrowed Funds

Total  deposits and  borrowed  funds were $406.8  million on September  30, 2001
compared to $388.3  million on December 31,  2000.  This is an increase of $18.5
million or 4.8%. The increase in Federal Home Loan  Borrowings  came in the form
of $5 million of 3 year fixed rate borrowings,  $3 million of 10 year fixed rate
borrowings  which is  callable  in 3 years,  and $2  million  dollars  or 3 year
variable rate LIBOR based borrowings. The following table summarizes the changes
in the major classifications of deposits and borrowed funds.
September 30,       December 31,        Change in
                                                          2001                2000               Balance
                                                      ----------------------------------      -----------
                                                              (Amounts in millions)
Money Market and Savings                                 $131.1             $121.8               $9.3
Demand  Deposits                                          $54.4              $59.6              ($5.2)
Time Deposits less than $100,000                          $93.7              $86.6               $7.1
Time Deposits equal or greater than $100,000              $36.1              $38.3              ($2.2)
Securities sold under agreement to repurchase             $22.0              $17.3               $4.7
Federal Home Loan Borrowings                              $46.2              $35.3              $10.9
Capital resources

As of September 30, 2001,  the Company's  stockholders'  equity  increased  $3.8
million or 10.1%.  Net income of $4.1  million was the  primary  reasons for the
increase in equity. The company purchased $606 thousand of treasury stock so far
in 2001.  Unrealized  gains on  available  for sale  securities  increased  $808
thousand to $1,016 thousand.

In December 1990,  the Federal  Reserve  Board's  risk-based  guidelines  became
effective.  Under these  guidelines  capital is measured  against the  Company's
subsidiary  bank's  risk-weighted  assets.  The Company's tier 1 capital (common
stockholders'  equity  less  goodwill)  to  risk-weighted  assets  was  11.3% at
September  30,  2001,  well  above the 4%  minimum  required.  Total  capital to
risk-adjusted assets was 12.4%, also well above the 8% minimum requirement.  The
leverage ratio was at 9.1% compared to the 4% minimum requirement.  According to
FDIC capital guidelines, the Company's subsidiary bank is considered to be "well
capitalized."

Results of operations
Net Interest Income

Net interest income is the difference  between interest income and fees on loans
and interest expense,  and is the largest  contributing factor to net income for
the  Company.  All  discussions  of rate are on a  tax-equivalent  basis,  which
accounts for income earned on  securities  that are not fully subject to federal
taxes. Net interest income was $13.5 million and $11.9 million for September 30,
2001 and September 30, 2000 respectively. Net interest income as a percentage of
average  earning  assets  (net  interest  margin) was 4.7% and 4.6% for the nine
months ended 2001 and 2000 respectively.

The  following  table  summarizes  the  changes  and  reasons for the changes in
interest income and fees on loans during 2001 and 2000. The increase in interest
income and fees on loans as of September  30, 2001 and 2000 was primarily due to
increased average earning assets.
Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
Interest income                                      $25.0                       $23.7           $1.3                        $2.7
Earning assets (Average balances)                   $393.5                      $364.3          $29.2                       $20.0
Yield on earning assets                              8.48%                       8.66%         -0.18%                       0.53%
The  following  table  summarizes  the  changes  and  reasons for the changes in
interest  expense for the nine months ended  September  30, 2001 and 2000. As of
September 30, 2001 average balances outstanding  increased,  however, rates paid
for liabilities decreased causing no change in interest expense. The increase in
interest  expense as of September  30, 2000 was due to increased  rates paid for
liabilities and increased average balances outstanding.
Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
Interest expense                                     $11.1                       $11.1           $0.0                        $1.9
Interest bearing liabilities (Average balances)     $327.7                      $307.1          $20.6                       $18.6
Cost of interest bearing liabilities                 4.50%                       4.83%         -0.33%                       0.56%
The major component of interest income and fees on loans is the income generated
by loans.  The table below  summarizes the income,  average balance and yield on
loans for 2001 and 2000.
Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
                                                     2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
Interest income                                      $22.2                       $20.4           $1.8                        $2.7
Loans (Average balances)                            $333.9                      $303.3          $30.6                       $26.5
Yield on loans                                       8.85%                       8.98%         -0.13%                       0.44%
The major  components of interest  expense are interest paid on  Certificates of
Deposit (Time Deposits) and on Money Market Deposits. The tables below summarize
the expense,  average  balance and rates on these  components for 2001 and 2000.
The increase in interest expense on Time Deposits was a result of an increase in
average  balances,  as of  September  30,  2001.  The  decrease in Money  Market
Deposits was a result of decreased rates paid, as of September 30, 2001.
Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
     Time deposits                                   2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
Interest expense                                      $6.0                        $5.9           $0.1                        $0.7
Time deposits (Average balances)                    $174.7                      $172.5           $2.2                        $6.3
Cost of time deposits                                4.61%                       4.54%          0.07%                       0.41%
Dollar/rate change
                                                 For the nine months ended: September 30,   For the nine months ended: September 30,
     Money Market deposits                           2001                        2000           2001                        2000
                                                 ----------------------------------------   ----------------------------------------
                                                 ----------------------------------------   ----------------------------------------
                                                                           (Amounts in millions)
Interest expense                                      $3.1                        $3.3          ($0.2)                       $1.1
Money Market deposits (Average balances)            $101.1                       $87.3          $13.8                       $14.2
Cost of Money Market deposits                        4.02%                       4.99%         -0.97%                       0.95%
Non-interest income

Non-interest  income  increased $228 thousand or 10.0% as of September 30, 2001.
The increase came in primarily two areas.  Service  charges on deposit  accounts
increased  $134  thousand  as the number of  accounts  grew and charges for some
services  were  increased.  Trust income  increased $88 thousand as that line of
business continues to grow.

Non-interest expense

Non-interest  expense  increased $1.1 million or 11.7% as of September 30, 2001.
Salaries and benefits accounted for $601 thousand.  The increase in salaries and
benefits is due to normal wage increases,  increased  health insurance costs and
additional staff resulting from the addition of two branches.  Occupancy expense
increased  $87 thousand  due  primarily to increases in real estate and personal
property taxes.  Data  processing  costs increased $75 thousand due to increased
volumes and additional  services used.  Other expenses  increased $327 thousand.
This is the result of opening two branches this year.

Asset/liability management

The principal  function of  asset/liability  management is to manage the balance
sheet mix,  maturities,  repricing  characteristics  and pricing  components  to
provide an adequate and stable net interest  margin with an acceptable  level of
risk over time and through interest rate cycles.

Interest-sensitive  assets  and  liabilities  are  those  that  are  subject  to
repricing   within  a  specific   relevant  time  horizon.   The  Bank  measures
interest-sensitive  assets and  liabilities,  and their  relationship  with each
other at terms of immediate, quarterly intervals up to 1 year, and over 1 year.

Changes in net interest income,  other than volume related,  arise when interest
rates on assets  reprice in a time frame or interest  rate  environment  that is
different  from the repricing  period for  liabilities.  Changes in net interest
income  also  arise  from  changes  in the mix of  interest  earning  assets and
interest-bearing liabilities.
The Bank's  strategy with respect to  asset/liability  management is to maximize
net  interest  income  while  limiting  its  exposure  to a  potential  downward
movement.  Strategy is implemented by the Bank's management,  which takes action
based upon its analysis of the Bank's  present  positioning,  its desired future
positioning,  economic  forecasts,  and its goals.  It is the  Bank's  desire to
maintain a cumulative GAP of positive or negative 15% of rate  sensitive  assets
at the 1-year  time frame.  The  current  percentage  is a positive  11%,  which
compares to a positive 2% as of December 31, 2000.

Liquidity

Liquidity  measures  the  ability  of  First  Banking  Center  to meet  maturing
obligations and its existing commitments,  to withstand  fluctuations in deposit
levels, to fund its operations,  and to provide for customers' credit needs. One
source of  liquidity is cash and  short-term  assets,  such as  interest-bearing
deposits in other banks and federal  funds sold,  which totaled $27.1 million at
September 30, 2001,  compared with $30.0 million at December 31, 2000.  The Bank
has a variety of sources of  short-term  liquidity  available  to it,  including
federal funds purchased from correspondent  banks, sales of securities available
for sale, FHLB advances, lines of credit and loan participations or sales. First
Banking Center also generates  liquidity from the regular principal payments and
prepayments made on its portfolio of loans and mortgage-backed securities.

The   liquidity  of  First   Banking   Center  is  comprised  of  three  primary
classifications: cash flows from operating activities, cash flows from investing
activities,  and cash flows from  financing  activities.  Net cash  provided  by
operating activities was $2.7 million. Net cash used in investing activities was
$36.9 million. Net cash provided by financing activities was $17.4 million.

As of September  30, 2000,  net cash provided by operating  activities  was $5.9
million.  Net cash used in  investing  activities  was $21.1  million.  Net cash
provided by financing activities was $8.6 million.

Impact of Inflation and Changing Prices

The  consolidated  financial  statements  and the  accompanying  notes have been
prepared in accordance  with generally  accepted  accounting  principles,  which
require the measurement of financial  position and operating results in terms of
historical  dollar  amounts  without  considering  the  changes in the  relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased  cost of First Banking  Center's  operations.  Unlike
industrial companies,  nearly all of the assets and liabilities of First Banking
Center are monetary in nature. As a result, interest rates have a greater impact
on First Banking  Center's  performance than do the effects of general levels of
inflation.  Interest rates do not  necessarily  move in the same direction or to
the same extent as the price of goods and services.

Forward Looking  Statements- Safe Harbor Statement under the Private  Securities
Litigation Reform Act of 1995

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

Statement  of  Financial   Accounting  Standard  ("SFAS")  133,  Accounting  for
Derivative  Instruments and Hedging  Activities,  as amended by SFAS 137 and 138
establishes  accounting and reporting  standards requiring that every derivative
instrument   (including  certain  derivative   instruments   embedded  in  other
contracts)  be  recorded in the  balance  sheet as either an asset or  liability
measured at its fair value.  SFAS 133 requires that changes in the  derivative's
fair value be recognized  currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset  related  results  on the  hedged  item in the income
statement,  and requires  that a company must formally  document,  designate and
assess the effectiveness of transactions that receive hedge accounting. SFAS 133
was  effective   January  1,  2001.  The  Company   adopted  SFAS  133  and  the
implementation  of this standard did not have a material impact on the Company's
financial statements.

SFAS 140,  Accounting  for  Transfers  and  Servicing  of  Financial  Assets and
Extinguishments  of  Liabilities,  a  replacement  of SFAS 125,  Accounting  for
Transfers and Servicing of Financial Assets and  Extinguishments  of Liabilities
revises the standards for accounting for  securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but it carries
over most of SFAS 125's provisions  without  reconsideration.  SFAS 140 provides
consistent  standards for distinguishing  transfers of financial assets that are
sales from transfers that are secured borrowings. The provisions of SFAS 140 are
effective  for transfers  after March 31, 2001. It is effective for  disclosures
about securitizations and collateral and for recognition and reclassification of
collateral for fiscal years ending after December 15, 2000. The Company  adopted
SFAS 140 and the  implementation of this standard did not have a material impact
on the Company's financial statements.

On September  30, 2001,  the  Financial  Accounting  Standards  Board  finalized
Statement of Financial  Accounting  Standards 141, Business  Combinations  (SFAS
141) and Statement of Financial  Accounting  Standards  142,  Goodwill and Other
Intangible  Assets  (SFAS 142).  SFAS 141  requires  all  business  combinations
initiated  after  September  30,  2001 to be  accounted  for using the  purchase
method.  Under the  provisions  of SFAS 142,  goodwill  is no longer  subject to
amortization  over its estimated  useful life, but instead will be subject to at
least annual  assessments  for  impairment by applying a fair-value  based test.
SFAS 142 also  requires that an acquired  intangible  asset should be separately
recognized  if  the  benefit  of  the  intangible   asset  is  obtained  through
contractual  or other legal  rights,  or if the asset can be sold,  transferred,
licensed, rented or exchanged, regardless of the acquirer's intent to do so. The
provisions of SFAS 142 are effective for fiscal years  beginning  after December
31,  2001.  The  Company  is in the  process  of  evaluating  its  goodwill  and
intangible assets for impairment under the provisions of SFAS 142.

SFAS 143,  Accounting  for Asset  Retirement  Obligations,  addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible  long-lived  assets and the  associated  asset  retirement  costs.  The
statement  requires that the fair value of a liability  for an asset  retirement
obligation be  recognized in the period it is incurred if a reasonable  estimate
of fair value can be made. The associated  retirement costs are capitalized as a
component  of the  carrying  amount of the  long-lived  asset and  allocated  to
expense  over the useful  life of the asset.  The  statement  is  effective  for
financial  statements  issued for fiscal  years  beginning  after June 15, 2002.
Management  does not believe the adoption of the statement  will have a material
impact on the Company's financial statements.

SFAS 144,  Accounting  for the  Impairment  or  Disposal of  Long-Lived  Assets,
establishes accounting and reporting standards for the impairment or disposal of
long-lived  assets.  This  statement  supercedes  SFAS 121,  Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived  Assets to be Disposed.  SFAS
144  provides  one  accounting  model to be used  for  long-lived  assets  to be
disposed  of by sale,  whether  previously  held for use or newly  acquired  and
broadens the  presentation of  discontinued  operations to include more disposal
transactions.  The provisions of SFAS 144 are effective for financial statements
issued for fiscal years beginning after December 15, 2001.  Management  believes
the adoption of the statement  will not have a material  effect on the Company's
financial statements.
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The company has not experienced any material changes to its market risk position
since  December 31, 2000,  from that  disclosed in the company's  2000 Form 10-K
Annual Report.  First Banking  Center,  like other  financial  institutions,  is
subject to direct and  indirect  market  risk.  Direct  market  risk exists from
changes in interest rates. First Banking Center's net income is dependent on its
net interest income. Net interest income is susceptible to interest rate risk to
the degree that  interest-bearing  liabilities  mature or reprice on a different
basis than interest-earning assets. When interest-bearing  liabilities mature or
reprice  more  quickly  than  interest-earning  assets  in  a  given  period,  a
significant  increase in market  rates of interest  could  adversely  affect net
interest income.

Similarly,  when  interest-earning  assets  mature or reprice  more quickly than
interest-bearing liabilities,  falling interest rates could result in a decrease
in net income.

In an attempt to manage its  exposure to changes in interest  rates,  management
monitors  First  Banking  Center's  interest  rate  risk.  The   Asset/Liability
Committee  meets quarterly to review First Banking  Center's  interest rate risk
position  and   profitability,   and  to  make  or  recommend   adjustments  for
consideration  by the Board of  Directors.  Management  also  reviews the Bank's
securities portfolio,  formulates investment strategies, and oversees the timing
and   implementation  of  transactions  to  assure  attainment  of  the  Board's
objectives in the most effective manner.  Notwithstanding First Banking Center's
interest rate risk management  activities,  the potential for changing  interest
rates is an uncertainty that can have an adverse effect on net income.

In adjusting  First Banking  Center's  asset/liability  position,  the Board and
management  attempt to manage First  Banking  Center's  interest rate risk while
maintaining or enhancing net interest margins. At times,  depending on the level
of general  interest rates, the  relationship  between  long-term and short-term
interest  rates,  market  conditions  and  competitive  factors,  the  Board and
management  may decide to increase  First  Banking  Center's  interest rate risk
position  somewhat in order to increase its net interest  margin.  First Banking
Center's  results of operations  and net portfolio  values remain  vulnerable to
increases  in  interest  rates and to  fluctuations  in the  difference  between
long-term and short-term interest rates.

One approach  used to quantify  interest  rate risk is the net  portfolio  value
("NPV") analysis.  In essence,  this analysis  calculates the difference between
the present  value of  liabilities  and the present value of expected cash flows
from assets and off-balance-sheet contracts. The most recent NPV analysis, as of
September  30,  2001,  projects  that net  portfolio  value  would  decrease  by
approximately  8.0% if  interest  rates  would  rise 200 basis  points and would
decrease by  approximately  4.0% if interest  rates would rise 100 basis  points
over  the  next  year.  It  projects  an  increase  in net  portfolio  value  of
approximately   10.6%  if  interest  rates  would  drop  200  basis  points  and
approximately  5.0%  if  interest  rates  would  drop  100  basis  points.  Both
simulations are within  board-established  policy limits. First Banking Center's
policy is to limit the  effect of a 200 basis  point rate shock to plus or minus
20% of  projected  net  interest  income and to minus 35% of the market value of
portfolio equity.

First  Banking  Center does not  currently  engage in trading  activities or use
derivative   instruments  to  control  interest  rate  risk.  Even  though  such
activities may be permitted  with the approval of the Board of Directors,  First
Banking  Center does not intend to engage in such  activities  in the  immediate
future.

Interest rate risk is the most  significant  market risk affecting First Banking
Center.  Other types of market risk, such as foreign currency exchange rate risk
and  commodity  price risk,  do not arise in the normal  course of First Banking
Center's business activities.
Part II-OTHER INFORMATION
Item 1.  Legal Proceedings

              None

Item 2.  Changes in Securities

             None

Item 3.  Defaults upon Senior Securities

             None

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

         None

Item 5.  Other Information

             None

Item 6.  Exhibits and Reports on Form 8-K

             None
FIRST BANKING CENTER, INC AND SUBSIDIARIES

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1943, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                           First Banking Center, Inc.

November 14, 2001                           _________________________
Date                                        Brantly Chappell
                                            Chief Executive Officer

November 14, 2001                           __________________________
Date                                        James Schuster
                                            Chief Financial Officer