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, 2003

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 by check mark whether the registrant is an accelerated filer (as define
in Rule 12b-2 of the act).
Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 3, 2003, Common stock, $1.00 par value, 1,495,623
shares outstanding.




<PAGE>


                    FIRST BANKING CENTER, INC AND SUBSIDIARY
                                      INDEX
                               September 30, 2003


                                                                           Page
                                                                           ----
Part I   Financial Information

         Item 1 Consolidated Financial Statements

                Unaudited Consolidated Balance Sheets,                       3
                September 30, 2003 and December 31, 2002

                Unaudited Consolidated Statements of Income,                 4
                For the three and nine month periods ended
                September 30, 2003 and 2002

                Unaudited Consolidated Statements of Cash Flows,             5
                For the nine months ended September 30, 2003 and 2002

                Notes to Unaudited Consolidated Financial Statements        6-8

         Item 2 Management's Discussion and Analysis of                     9-16
                Financial Condition and Results of Operations

         Item 3 Quantitative and Qualitative Disclosures about Market      16-17
                Risk

         Item 4 Controls and Procedures                                     17

Part II  Other Information

         Item 1 Legal Proceedings                                           18

         Item 2 Changes in Securities and Use of Proceeds                   18

         Item 3 Defaults upon Senior Securities                             18

         Item 4 Submission of Matters to a Vote of Security Holders         18

         Item 5 Other Information                                           18

         Item 6 Exhibits and Reports on Form 8-K                            18

         Signatures                                                        19-23
















                                     Page 2
<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,
ASSETS                                                                                  2003            2002
                                                                                    ----------------------------
                                                                                        (Dollars in thousands)
<S>                                                                                <C>             <C>
  Cash and due from banks                                                           $   15,182      $   22,203
  Federal funds sold                                                                     7,205          11,058
  Interest-bearing deposits in banks                                                       228             441
  Available for sale securities                                                         79,864          87,630
  Loans, less allowance for loan losses of $4,727 and
    $4,988 in 2003 and 2002, respectively                                              376,556         367,156
  Office buildings and equipment, net                                                   11,398          10,576
  Other real estate owned                                                                1,750               -
  FHLB Stock                                                                            11,109          10,488
  Other assets                                                                           9,582           8,605
                                                                                    -------------- -------------
      TOTAL ASSETS                                                                  $  512,874      $  518,157
                                                                                    ============== =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
  Deposits
    Demand                                                                          $   60,190      $   72,957
    Savings and NOW accounts                                                           173,161         174,431
    Time                                                                               144,621         146,413
                                                                                    -------------- -------------
      Total Deposits                                                                   377,972         393,801
  Short-term borrowings                                                                 33,915          25,077
  Other borrowings                                                                      44,692          46,755
  Other liabilities                                                                      3,456           3,804
                                                                                    -------------- -------------
      TOTAL LIABILITIES                                                             $  460,035      $  469,437
                                                                                    -------------- -------------

STOCKHOLDERS' EQUITY
  Common Stock, $1.00 par value 3,000,000 shares authorized; 1,495,950 and
    1,494,029 shares issued; 1,495,723 and 1,494,029 shares outstanding as of
    September 30, 2003 and December 31, 2002, respectively                               1,496           1,494
  Surplus                                                                                4,435           4,375
  Retained Earnings                                                                     45,578          41,287
  Accumulated other comprehensive income                                                 1,340           1,564
  Common stock in treasury, at cost-227 and 0 shares as of September 30, 2003
    and December 31, 2002, respectively                                                    (10)              -
                                                                                    -------------- -------------
      TOTAL STOCKHOLDERS' EQUITY                                                    $   52,839      $   48,720
                                                                                    -------------- -------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $  512,874      $  518,157
                                                                                    ============== =============



                                  See accompanying notes to financial statements
</TABLE>



                                     Page 3
<PAGE>

<TABLE>

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




                                                          Three months ended             Nine months ended
                                                            September 30,                  September 30,
                                                          2003            2002           2003           2002
                                                   ----------------------------------------------------------
                                                          (Dollars in thousands, except per share data)
<S>                                               <C>             <C>             <C>             <C>
INTEREST INCOME
  Interest and fees on loans                       $      6,404    $      6,360    $    18,477     $   19,159
  Interest and dividends on securities:
    Taxable                                                 458             270          1,538            818
    Non-taxable                                             408             413          1,242          1,207
  Interest on federal funds sold                             13              31             73             80
  Interest on interest-bearing deposits in banks              1              40             16             66
                                                   ----------------------------------------------------------
       TOTAL INTEREST INCOME                              7,284           7,114         21,346         21,330
                                                   ----------------------------------------------------------


INTEREST EXPENSE
  Interest on deposits                                    1,243           1,634          4,079          4,971
  Interest on short-term borrowings                          44              96            171            325
  Interest on other borrowings                              442             458          1,365          1,266
                                                   ----------------------------------------------------------
       TOTAL INTEREST EXPENSE                             1,729           2,188          5,615          6,562
                                                   ----------------------------------------------------------
       NET INTEREST INCOME                                5,555           4,926         15,731         14,768

  Provision for loan losses                                   0              91             90            271
                                                   ----------------------------------------------------------
       NET INTEREST INCOME AFTER PROVISION FOR
          LOAN LOSSES                                     5,555           4,835         15,641         14,497
                                                   ----------------------------------------------------------

NON-INTEREST INCOME
  Trust fees                                                119             125            377            400
  Service charges on deposit accounts                       478             523          1,423          1,414
  Investment securities gains                               107               0            107             13
  Automated teller machines                                 106             102            284            272
  Other                                                     328             307            756            896
                                                   ----------------------------------------------------------
       TOTAL NON-INTEREST INCOME                          1,138           1,057          2,947          2,995
                                                   ----------------------------------------------------------

NON-INTEREST EXPENSE
  Salary and employee benefits                            2,239           2,095          6,673          6,180
  Occupancy                                                 262             253            838            741
  Equipment                                                 355             437          1,049          1,187
  Data processing services                                  261             224            763            685
  Advertising and marketing                                 152             128            372            197
  Stationary and office supplies                            114              85            326            241
  Other                                                     661             494          1,767          1,575
                                                   ----------------------------------------------------------
       TOTAL NON-INTEREST EXPENSE                         4,044           3,716         11,788         10,806
                                                   ----------------------------------------------------------

       INCOME BEFORE INCOME TAXES                         2,649           2,176          6,800          6,686

  Income taxes                                              796             619          1,926          1,827
                                                   ----------------------------------------------------------
       NET INCOME                                  $      1,853    $      1,557    $     4,874     $    4,859
                                                   ==========================================================

        Basic earnings per share                   $       1.24    $       1.06    $      3.26     $     3.30
        Diluted earnings per share                 $       1.21    $       1.03    $      3.19     $     3.23



                                         See accompanying notes to financial statements

</TABLE>

                                     Page 4
<PAGE>


<TABLE>

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


                                                                         Nine months ended
                                                                           September 30,
                                                                          2003         2002
                                                                     ------------------------
                                                                       (Dollars in thousands)
<S>                                                                 <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                         $    4,874   $    4,859
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation                                                            686          637
    Provision for loan losses                                                90          271
    Amortization of premiums and accretion of discounts
      on securities, net                                                    384           64
    Amortization                                                            113           76
    Investment securities gains                                            (107)         (13)
    Tax benefit of nonqualified stock options exercised                       0            7
    Increase in other assets                                             (3,346)        (569)
    Decrease in other liabilities                                          (349)        (364)
                                                                     ------------------------
     Net cash provided by operating activities before loan
      originations and sales                                              2,345        4,968
    Loans originated for sale                                           (57,898)     (43,896)
    Proceeds from sale of loans                                          62,012       44,733
                                                                     ------------------------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                         6,459        5,805
                                                                     ------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net decrease (increase) in interest-bearing deposits
      in banks                                                              213       (8,085)
    Net decrease in federal funds sold                                    3,853        4,943
    Proceeds from sales of available for sale securities                  9,135        7,615
    Proceeds from maturities and calls of available for
      sale securities                                                    54,808       54,295
    Purchase of available for sale securities                           (56,792)     (70,969)
    Net decrease in loans                                               (13,604)      (2,058)
    Purchase of office buildings and equipment, net                      (1,508)        (638)
                                                                     ------------------------
        NET CASH USED IN INVESTING ACTIVITIES                            (3,895)     (14,897)
                                                                     ------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in deposits                                 (15,829)      21,078
    Dividends paid                                                         (583)        (546)
    Proceeds from other borrowings                                        9,084       10,130
    Payments on other borrowings                                         (2,063)     (17,403)
    Net decrease in short term borrowings                                  (246)      (7,638)
    Proceeds from sale of common stock                                       62            0
    Treasury stock transactions, net                                        (10)         (91)
                                                                     ------------------------
        NET CASH (USED IN) PROVIDED BY FINANCING
          ACTIVITIES                                                     (9,585)       5,530
                                                                     ------------------------
    NET DECREASE IN CASH AND DUE FROM BANKS                              (7,021)      (3,562)

CASH AND DUE FROM BANKS:
    Beginning                                                            22,203       20,735
                                                                     ------------------------
    Ending                                                           $   15,182   $   17,173
                                                                     ========================

Supplemental Disclosures of Cash Flow
Information,
  Cash Paid During the Year for:
    Interest                                                         $    5,894   $    6,696
    Income taxes                                                     $    1,058   $    1,671

Supplemental Schedule of Noncash Investing Activities,
  Change in Accumulated Other Comprehensive Income(Loss),
  Unrealized Gain (Loss) on Available-for-Sale                       $     (224)  $    1,203
    Securities, Net
  Other real estate acquired in settlement of loans                  $    1,750   $       53


                        See accompanying notes to financial statements
</TABLE>


                                     Page 5
<PAGE>


                    FIRST BANKING CENTER, INC AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                September 30, 2003

NOTE 1 - Basis of Presentation

The unaudited  consolidated  financial  statements include the accounts of First
Banking Center,  Inc. (the "Company") and First Banking Center, its wholly owned
subsidiary.  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, 2003 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
accounting  principles  generally  accepted in the United  States of America and
industry practice.  Certain information in footnote disclosure normally included
in  financial  statements  prepared in  accordance  with  accounting  principles
generally  accepted in the United  States of America 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, 2002 audited financial statements.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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
<TABLE>

The following information  calculates the computation of earnings per share on a
basic and diluted basis.
<CAPTION>
                                                        Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                         2003         2002         2003       2002
                                                      ----------------------------------------------
                                                      (Amounts in thousands, except per share data)
<S>                                                  <C>          <C>          <C>        <C>
Basic
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Weighted average shares outstanding                      1,496        1,472        1,496      1,472
Basic earnings per share                              $   1.24     $   1.06     $   3.26   $   3.30

Diluted
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Weighted average shares outstanding                      1,496        1,472        1,496      1,472
Effect of dilutive stock options outstanding                32           34           32         34
                                                      ----------------------------------------------
Diluted weighted average shares outstanding              1,528        1,506        1,528      1,506
Diluted earnings per share                            $   1.21     $   1.03     $   3.19   $   3.23

</TABLE>

NOTE 3 - Comprehensive Income
<TABLE>

The following table presents our comprehensive income.
<CAPTION>


                                                        Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                         2003         2002         2003       2002
                                                      ----------------------------------------------
                                                                  (Dollars in thousands)
<S>                                                  <C>          <C>          <C>        <C>
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Other comprehensive income
  Net change in unrealized gain (loss) on available
   for sale securities                                    (762)         669         (224)     1,203
                                                      ----------------------------------------------
Total comprehensive income                            $  1,091     $  2,226     $  4,650   $  6,062
                                                      ==============================================
</TABLE>

                                     Page 6
<PAGE>


NOTE 4 - Stock-based Compensation Plan:

For the nine  months  ended  September  30,  2003 and 2002,  the Company had one
stock-based key officer and employee compensation plan. The Company accounts for
this plan under the recognitions  and measurement  principles of APB Opinion No.
25, Accounting for Stock Issued to Employees,  and related  Interpretations.  No
stock-based  employee  compensation  cost is  reflected  in the  income,  as all
options  granted  under those  plans had an  exercise  price equal to the market
value of the underlying  common stock on the date of grant.  The following table
illustrates  the effect on net income and  earnings per share if the Company had
applied the fair value recognition  provisions of Financial Accounting Standards
Board (FASB)  Statement No. 123,  Accounting for  Stock-Based  Compensation,  to
stock-based employee compensation.

<TABLE>
<CAPTION>

                                                        Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                         2003         2002         2003       2002
                                                    -------------------------------------------------
                                                    (Amounts in thousands, except for per share data)
<S>                                                  <C>          <C>          <C>        <C>
Net income, as reported                               $  1,853     $  1,557     $  4,874   $  4,859
Deduct total stock-based employee compensation expense
 determined under fair value based method for all
 awards, net of related tax effects                          -            0         (727)      (598)
                                                    -------------------------------------------------
Pro forma net income                                  $  1,853     $  1,557     $  4,147   $  4,261
                                                    =================================================
Earnings per share:
Basic:
As reported                                           $   1.24     $   1.06     $   3.26   $   3.30
Pro forma                                                 1.24         1.06         2.77       2.90
Diluted:
As reported                                           $   1.21     $   1.03     $   3.19   $   3.23
Pro forma                                                 1.21         1.01         2.71       2.83

</TABLE>


In  determining  compensation  cost using the fair value  method  prescribed  in
Statement  No. 123,  the value of each grant is estimated at the grant date with
the following weighted-average assumptions used for grants on September 30, 2003
and 2002, respectively:  dividend yield of 1.7 percent and 1.6 percent; expected
price  volatility  of 5.2 percent and 5.2 percent,  blended  risk-free  interest
rates of 4.22  percent  and  4.27  percent;  and  expected  lives  of 10  years,
respectively.


NOTE 5 - Commitments and Contingencies

In the normal  course of  business,  the Company is  involved  in various  legal
proceedings.  In the opinion of  management,  any liability  resulting from such
proceedings  would  not  have a  material  adverse  effect  on the  consolidated
financial statements.

The Company is party to financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing  needs of its  customers.  These
financial   instruments   include   commitments  to  extend  credit,   financial
guarantees,  and standby letters of credit.  They involve,  to varying  degrees,
elements  of credit  risk in excess of amounts  recognized  on the  consolidated
balance sheets.

The  Company's  exposure  to credit loss in the event of  nonperformance  by the
other party to the financial  instrument  for  commitments  to extend credit and
standby letters of credit is represented by the  contractual  notional amount of
those  instruments.  The  Company  uses  the  same  credit  policies  in  making
commitments  and  issuing  letters  of  credit  as they do for  on-balance-sheet
instruments.

                                     Page 7
<PAGE>

<TABLE>


A summary of the  contract  or  notional  amount of the  Company's  exposure  to
off-balance-sheet risk as of September 30 is as follows:
<CAPTION>


                                                     2003           2002
                                               -----------------------------
                                                  (Amounts in thousands)
<S>                                              <C>            <C>
Financial instruments whose contract
  amounts represent credit risk:
    Commitments to extend credit                  $ 78,880       $ 64,332
    Standby letters of credit                        3,087          3,893

</TABLE>



Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon,  the total  commitment  amounts do not  necessarily
represent  future cash  requirements.  Standby letters of credit are conditional
commitments  issued to guarantee the performance of a customer to a third-party.
Those  guarantees are primarily  issued to support public and private  borrowing
arrangements.  The  credit  risk  involved  in  issuing  letters  of  credit  is
essentially the same as that involved in extending loan facilities to customers.
The Company evaluates each customer's credit worthiness on a case-by-case basis.
The amount of  collateral  obtained,  if deemed  necessary  by the Company  upon
extension  of  credit,  is  based  on  management's  credit  evaluation  of  the
counterparty.  Collateral  held  varies  but may  include  accounts  receivable,
inventory,  property and equipment, and income-producing  commercial properties.
Credit card commitments are unsecured.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third-party.  Those  guarantees are
primarily  issued to support  public and  private  borrowing  arrangements  and,
generally,  have terms of one year or less.  The credit risk involved in issuing
letters of credit is  essentially  the same as that  involved in extending  loan
facilities to customers.  The Bank holds collateral,  which may include accounts
receivable,  inventory,  property,  equipment, and income-producing  properties,
supporting those commitments if deemed necessary. In the event the customer does
not perform in accordance with the terms of the agreement with the  third-party,
the Bank would be required to fund the commitment.  The maximum potential amount
of future  payments  the Bank could be  required to make is  represented  by the
contractual  amount shown in the summary on the previous page. If the commitment
is funded the Bank would be  entitled to seek  recovery  from the  customer.  At
September  30, 2003 and  December 31,  2002,  no amounts  have been  recorded as
liabilities for the Bank's potential obligations under these guarantees.





                                     Page 8
<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, 2003

The following discussion provides additional analysis of the financial condition
and results of  operations  of the  Company for the three and nine months  ended
September 30, 2003.  This  discussion  focuses on the  significant  factors that
affected the Company's  earnings so far in 2003, with comparisons to 2002. As of
September  30,  2003,  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  three  wholly  owned  subsidiaries,  FBC  Financial
Services, Corp., a brokerage and financial services subsidiary,  FBC-Burlington,
Inc., an investment subsidiary located in Nevada and Burco Holdings, LLC, a real
estate  subsidiary for the purpose of holding and liquidating  property acquired
as other real estate.


Overview

As of September 30, 2003,  total Company assets were $512.8  million  decreasing
1.02% from $518.2  million as of December 31, 2002.  Total income,  for the nine
months ended September 30, 2003, was $4.9 million or $3.26 per share, increasing
$15  thousand  or .3% from  $4.9  million  or  $3.30  per  share  in  2002.  The
significant items resulting in the above-mentioned results are discussed below.

Financial Condition

Loans

Loans  outstanding  were $381.3 million and $372.1 million on September 30, 2003
and December 31, 2002 respectively.  This represents an increase of $9.1 million
or 2.5%.  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,
                                               2003             2002        Balance             2003              2002
                                         ---------------------------------------------     ---------------------------------
                                                     (Dollars in millions)
<S>                                          <C>              <C>           <C>                 <C>             <C>
Residential Real Estate                       $169.8           $163.9         $5.9               44.6%           44.0%
Commercial Real Estate                         $98.8            $91.8         $7.0               26.0%           24.7%
Construction and Land Development              $35.9            $42.4        ($6.5)               9.4%           11.4%
Commercial                                     $27.3            $26.2         $1.1                7.2%            7.0%
Agricultural Real Estate                       $18.4            $18.7        ($0.3)               4.8%            5.0%

</TABLE>

Allowance for Loan Losses

The  allowance  for loan  losses  was $4.7  million  or 1.24% of gross  loans on
September  30,  2003,  compared  with $5.0  million  or 1.34% of gross  loans on
December 31, 2002. Net charge-offs were $351 thousand or .09% of gross loans and
$97  thousand  or .03% for the nine  months  ended  September  30, 2003 and 2002
respectively.

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,

                                     Page 9
<PAGE>

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 company
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.

For the nine months  ending  September  30,  2003,  $90  thousand was charged to
current  earnings and added to the  allowance  for loan losses  compared to $271
thousand during the first nine months of 2002. The bank charged less to earnings
during  2003 versus 2002  because  management  determined  the  allowance  to be
adequate as of September 30, 2003.

Non-accrual, Past Due and Renegotiated Loans

<TABLE>
<CAPTION>

                                                September 30,     December 31,
                                                    2003              2002
                                              ----------------------------------
                                                    (Dollars in thousands)
<S>                                               <C>               <C>
Non-accrual Loans (a)                              $1,653            $2,016
Past Due 90 days + (b)                                  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 debt or in its  restoration  to  current status.

The non-accrual  loans  consisted  primarily of $314 thousand of commercial real
estate loans,  $1.2 million of residential real estate loans and $87 thousand of
agricultural  real estate. On September 30, 2003, the ratio of non-accrual loans
to the allowance for loan losses was 35% compared to 40.4% on December 31, 2002.
The company believes it has an adequate allowance for any anticipated losses for
these loans.


As of  September  30,  2003,  the Company had loans  totaling  $21.3  million in
addition to those  listed as  non-accrual,  past due or  restructured  that were
identified by the Banks' internal asset rating systems as classified  assets and
loans which  management  has  determined  require  additional  monitoring.  This
represents  a  decrease  of $2.9  million  or  12.2%  from  December  31,  2002.
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,
2003.  The  company's  loans are  concentrated  geographically  in the Wisconsin
counties of Racine, Walworth, Kenosha, Lafayette and Green.

                                     Page 10
<PAGE>

Investments securities - Available for Sale

The fair value of the  securities  available-for-sale  portfolio  decreased $7.8
million or 8.9% from  December  31, 2002.  For the purposes of this  discussion,
changes in  investment  security  balances  are based on  amortized  costs.  The
decrease  came from four areas of the  portfolio.  The company  purchased  $41.5
million  of  U.S.  Government  Agency  Discount  Notes,  $7.6  million  of  U.S.
mortgage-backed  securities,  $4.7  million of municipal  securities  and $.5 of
Corporate  Bonds.  The  company  sold $9.1  million  of U.S.  Government  Agency
Discount Notes. The company had $34.0 million of U.S. Government Agency Discount
Notes and $1.7 million of municipal securities mature. There were $.5 million of
U.S.  Government  Agency  Discount  Notes,  $.7 million of U.S.  mortgage-backed
securities and $1.6 million of municipal securities called.

Deposits and Borrowed Funds

Total  deposits and  borrowed  funds were $456.6  million on September  30, 2003
compared to $465.6  million on  December  31,  2002.  This is a decrease of $9.0
million or 1.9%.  The decrease is mainly due to seasonal  fluctuations  in Money
Market and Savings  accounts.  The following table summarizes the changes in the
major  classifications  of deposits and borrowed funds.  Most of this change was
the result of a new  interest  bearing  checking  account  which was  offered in
September,  2003.  Customers have been  switching  from a  non-interest  bearing
checking account to this new interest bearing account.
<TABLE>
<CAPTION>

                                                 September 30,       December 31,       Change in
                                                     2003                2002            Balance
                                               ------------------------------------    -----------
                                                      (Dollars in millions)
<S>                                                <C>                 <C>              <C>
Money Market and Savings                            $134.9              $144.8            ($9.9)
NOW Accounts                                         $38.3               $29.6             $8.7
Demand  Deposits                                     $60.2               $73.0           ($12.8)
Time Deposits less than $100,000                     $89.6               $90.2            ($0.6)
Time Deposits equal or greater than $100,000         $55.0               $56.2            ($1.2)
Securities sold under agreement to repurchase        $24.7               $25.0            ($0.3)
Federal Home Loan Borrowings                         $44.2               $46.2            ($2.0)

</TABLE>

Capital resources

As of September 30, 2003,  the Company's  stockholders'  equity  increased  $4.1
million or 8.5% from  December  31,  2002.  Net income of $4.9  million  was the
primary  reason for the increase.  The company  purchased $112 thousand and sold
$102  thousand  of  treasury  stock  during  the  first  nine  months  of  2003.
Accumulated other comprehensive income decreased $224 thousand from $1.6 million
to  $1.3  million.  Dividends  were  paid in June  2003  in the  amount  of $583
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  13.0% at
September  30,  2003,  well  above the 4%  minimum  required.  Total  capital to
risk-adjusted assets was 14.3%, also well above the 8% minimum requirement.  The
leverage ratio was at 9.8% compared to the 4% minimum requirement.  According to
FDIC capital guidelines, the Company's subsidiary bank is considered to be "well
capitalized."

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.

                                     Page 11
<PAGE>

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  22%,  which
compares to a positive 20% as of December 31,  2002.  Although  these ratios are
outside the Bank's  target  range,  the Bank's  management  feels the ratios are
appropriate  at this time due to  management's  projection  for future  interest
rates.

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 $22.6 million at
September 30, 2003,  compared with $33.7 million at December 31, 2002.  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 $6.5 million. Net cash used in investing activities was
$3.9 million.  Net cash used in financing  activities was $9.6 million,  for the
nine months ended September 30, 2003.

For the nine months ending  September  30, 2002,  net cash provided by operating
activities  was $5.8 million.  Net cash used in investing  activities  was $14.9
million. Net cash provided by financing activities was $5.5 million.

Impact of Inflation and Changing Prices

The  consolidated  financial  statements  and the  accompanying  notes have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America,  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

                                     Page 12
<PAGE>

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

Financial  Accounting  Standards Board Interpretation (FIN) No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness of Others - an  Interpretation of FASB Statements No.
5, 57 and 107 and Rescission of FASB  Interpretation  No. 34". FIN 45 elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize,  at the inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing the guarantee. The initial recognition and measurement provisions of FIN
45 are applicable on a prospective  basis to guarantees issued or modified after
December 31, 2002.  The  disclosure  requirements  of FIN 45 are  effective  for
financial  statements  of interim or annual  periods  ending after  December 15,
2002, and were adopted in the Company's financial  statements for the year ended
December 31,  2002.  Implementation  of the  remaining  provisions  of FIN 45 on
January 1, 2003 did not have a  significant  impact on the  Company's  financial
statements.

The Financial Accounting Standards Board has issued Statement 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging".  This Statement amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities under Statement 133. The Statement is effective for contracts
entered  into or  modified  after June 30,  2003 and for  hedging  relationships
designated after June 30, 2003.  Implementation  of the Statement did not have a
material impact on the financial statements.

The Financial  Accounting  Standards Board has issued Statement 150, "Accounting
for Certain Financial  Instruments with  Characteristics of both Liabilities and
Equity".  This Statement  establishes standards for how an issuer classifies and
measures certain financial  instruments with characteristics of both liabilities
and equity and  requires  that certain  freestanding  financial  instruments  be
reported as liabilities in the balance sheet. Depending on the type of financial
instrument,  it is  required  to be  accounted  for at either  fair value or the
present  value of future cash flows  determined  at each balance sheet date with
the change in that value reported as interest  expense in the income  statement.
Prior  to  the   application  of  Statement  No.  150,  either  those  financial
instruments  were not required to be recognized,  or if recognized were reported
in the  balance  sheet as equity and  changes in the value of those  instruments
were normally not recognized in net income.  For the Company,  the Statement was
effective July 1, 2003 and  implementation did not have a material impact on the
consolidated financial statements.

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 an annualized  tax-equivalent basis,
which accounts for income earned on nontaxable loans and securities that are not
fully subject to federal taxes.  Net interest income was $16.4 million and $15.4
million for the nine months  ended  September  30, 2003 and 2002.  Net  interest
margin as a  percentage  of average  earning  assets  (includes  loans placed on
nonaccrual  status) was 4.56% and 4.73% for the nine months ended  September 30,
2003 and 2002.

                                     Page 13
<PAGE>

The major component of interest income and fees on loans is the income generated
by loans.  Interest income and fees on loans decreased due to decreased rates on
increasing average balances. The rates earned decreased from 7.09% to 6.66%.

As of September 30, 2003 average balances outstanding increased,  however, rates
paid for liabilities decreased causing a decrease in interest expense. The major
components  of interest  expense are interest  paid on  Certificates  of Deposit
(Time Deposits) and on Money Market Deposits.  Interest expense on Time Deposits
decreased due to decreased rates paid on increasing average balances.  The rates
paid decreased from 2.83% to 2.24%, for the nine months ended September 30, 2002
and 2003 respectively.  Interest expense on Money Market Deposits decreased as a
result  of  decreased  rates on  decreased  average  balances.  The  rates  paid
decreased from 1.33% to .66%,  for the nine months ended  September 30, 2002 and
2003 respectively.



The  following  table  summarizes  the  changes  and  reasons for the changes in
interest  earned and paid during the three and nine months ended  September  30,
2003 and 2002.
<TABLE>
<CAPTION>

                                                                            Three months ended
                                                                              September 30,
                                                               2003                              2002
                                                 -------------------------------   -------------------------------
                                                             Interest  Average                Interest   Average
                                                   Average    Earned    Yield        Average   Earned     Yield
                                                   Balance   or Paid   or Cost       Balance  or Paid    or Cost
                                                 -------------------------------   -------------------------------
                                                                       (Dollars in thousands)
<S>                                             <C>          <C>       <C>          <C>         <C>      <C>
Interest Income:
  Interest and fees on loans (a)                 $ 375,757    6,416     6.83%        366,039     6,377    6.97%
  Interest and dividends on securities:
    Taxable                                         58,044      458     3.16%         27,471       270    3.93%
    Nontaxable (a)                                  36,392      618     6.79%         34,921       626    7.17%
  Interest on Fed funds sold                         5,987       13     0.87%          7,886        31    1.57%
  Interest on interest-bearing deposits in banks       382        1     1.05%          8,632        40    1.85%

                                                 -------------------------------   -------------------------------
       Total Interest Income                     $ 476,562    7,506     6.30%        444,949     7,344    6.60%
                                                 ===============================   ===============================

Interest Expense
  Interest on deposits                           $ 314,871    1,243     1.58%        301,233     1,634    2.17%
  Interest on short-term borrowings                 25,413       44     0.69%         21,810        96    1.76%
  Interest on other borrowings                      45,101      442     3.92%         41,116       458    4.46%
                                                 -------------------------------   -------------------------------
       Total Interest Expense                    $ 385,385    1,729     1.79%        364,159     2,188    2.40%
                                                 ===============================   ===============================
Net interest margin                                         $ 5,777     4.85%                  $ 5,156    4.64%
                                                            ====================               ===================
</TABLE>

                                     Page 14
<PAGE>

<TABLE>
<CAPTION>

                                                                            Nine months ended
                                                                              September 30,
                                                               2003                              2002
                                                 -------------------------------   -------------------------------
                                                             Interest  Average                Interest   Average
                                                   Average    Earned     Yield       Average   Earned     Yield
                                                   Balance   or Paid   or Cost       Balance  or Paid    or Cost
                                                 -------------------------------   -------------------------------
                                                                       (Dollars in thousands)
<S>                                             <C>         <C>        <C>          <C>        <C>       <C>
Interest Income:
  Interest and fees on loans (a)                 $ 370,589   18,510     6.66%        361,330    19,215    7.09%
  Interest and dividends on securities:
    Taxable                                         60,984    1,538     3.36%         28,653       818    3.81%
    Nontaxable (a)                                  36,391    1,882     6.90%         34,021     1,828    7.16%
  Interest on Fed funds sold                         9,530       73     1.02%          6,999        80    1.52%
  Interest on interest-bearing deposits in banks     1,751       16     1.22%          4,739        66    1.86%
                                                 -------------------------------   -------------------------------
       Total Interest Income                     $ 479,245   22,019     6.13%        435,742    22,007    6.73%
                                                 ===============================   ===============================

Interest Expense
  Interest on deposits                           $ 315,984    4,079     1.72%        295,086     4,971     2.25%
  Interest on short-term borrowings                 24,391      171     0.93%         22,556       325     1.92%
  Interest on other borrowings                      45,962    1,365     3.96%         37,635     1,266     4.49%
                                                 -------------------------------   -------------------------------
        Total Interest Expense                   $ 386,337    5,615     1.94%        355,277     6,562     2.46%
                                                 ===============================   ===============================
Net interest margin                                         $16,404     4.56%                  $15,445     4.73%
                                                            ====================               ===================

<FN>
(a)  The interest and average yield for nontaxable loans and investments are  presented on an  annualized  federal
     taxable equivalent basis assuming a 34% tax rate.
</FN>
</TABLE>


Non-interest income

Non-interest  income  increased  $81 thousand or 7.7% for the three months ended
September  30, 2003 compared to the three months ended  September 30, 2002.  The
increase  was  primarily  due to gains in the sale of  securities.  Non-interest
income  decreased  overall  $48  thousand  or 1.6%  for the  nine  months  ended
September  30, 2003 compared to the nine months ended  September  30, 2002.  The
decrease was primarily the result of a decline in brokerage annuity sales.

Non-interest expense

Non-interest  expense  increased $328 thousand or 8.8% and $982 thousand or 9.1%
for the three and nine months ended September 30, 2003 compared to the three and
nine months ended September 30, 2002.  Salaries and benefits  accounted for $144
thousand  and $493  thousand of the increase for the three and nine months ended
September  30, 2003  compared to the three and nine months ended  September  30,
2002.  The increase in salaries and benefits is due to normal wage increases and
increased  health  insurance  costs as well as  additional  expenses  due to the
opening of a branch and the  acquisition of a branch during the second  quarter.
Occupancy expense increased $97 thousand for the nine months ended September 30,
2003  compared to the nine months  ended  September  30, 2002 due  primarily  to
increases in real estate taxes,  depreciation  and  utilities.  Advertising  and
marketing  expense increased $24 thousand and $175 thousand while other expenses
increased  $167  thousand and $192  thousand for the three and nine months ended
September  30, 2003  compared to the three and nine months ended  September  30,
2002,  some of which  can be  attributed  to the  opening  of a  branch  and the
acquisition of a branch during the second quarter.


Critical Accounting Policies


Allowance for Loan Losses

Management  believes the allowance for loan losses accounting policy is critical
to the portrayal  and  understanding  of our financial  condition and results of
operations.  As such,  selection and  application of this  "critical  accounting
policy" involves judgments, estimates, and uncertainties that are susceptible to
change.  In the event that different  assumptions or conditions were to prevail,
and depending upon the severity of such changes,  the  possibility of materially
different   financial  condition  or  results  or  operations  is  a  reasonable
likelihood.

                                     Page 15
<PAGE>

Income Taxes

See Note 1 of the notes to our audited consolidated financial statements for the
year ended  December 31, 2002 for our income tax accounting  policy.  Income tax
expense recorded in the consolidated  income statement  involves  interpretation
and application of certain  accounting  pronouncements and federal and state tax
codes, and is, therefore,  considered a critical  accounting  policy. We undergo
examinations by various regulatory taxing authorities. Such agencies may require
that changes in the amount of tax expense or valuation  allowance be  recognized
when  their  interpretations  differ  from those of  management,  based on their
judgments about information available to them at the time of their examinations.
See Note 11 of the notes to our audited  consolidated  financial  statements for
the year ended December 31, 2002 for more income tax information.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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,  2003,  projects  that net  portfolio  value  would  decrease  by
approximately  5.82% if  interest  rates  would rise 200 basis  points and would
decrease by  approximately  3.01% if interest  rates would rise 100 basis points
over  the  next  year.  It  projects  an  increase  in net  portfolio  value  of
approximately  7.65% if  interest  rates  would  drop 200  basis  points  and an
increase of  approximately  3.16% if interest rates would drop 100 basis points.
Both simulations are within board-established policy limits. The Company has not
experienced any material  changes to its market risk position since December 31,
2002, as disclosed in the Company's 2002 Form 10K Annual  Report.  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 20% of the market
value of portfolio equity.

                                     Page 16
<PAGE>

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.


Item 4.  Controls and Procedures

Within  the 90 days  prior  to the  date of this  report,  the  Company's  Chief
Executive  Officer and Chief Financial  Officer carried out an evaluation,  with
the participation of other members of management as they deemed appropriate,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures as contemplated by Exchange Act Rule 13a-14. Based upon,
and as of the date of that  evaluation,  the Chief  Executive  Officer and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures are effective,  in all material respects,  in timely alerting them to
material information relating to the Company (and its consolidated subsidiaries)
required to be included in the periodic  reports the Company is required to file
and submit to the SEC under the Exchange Act.

There have been no significant  changes to the Company's internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date that the internal  controls  were most  recently  evaluated.  There were no
significant  deficiencies or material  weaknesses  identified in that evaluation
and, therefore, no corrective actions were taken.


                                     Page 17
<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

         (a)   Exhibits

               31.1 Certification  of  the  Chief  Executive   Officer  pursuant
                    to Rule 13a-14(a)/15(d)-14(a) as adopted pursuant to Section
                    302  of the  Sarbanes-Oxley  Act of 2002  (exhibit is  being
                    filed herewith).

               31.2 Certification of the  Chief  Financial  Officer  pursuant to
                    Rule  13a-14(a)/15(d)-14(a) as  adopted  pursuant to Section
                    302  of  the  Sarbanes-Oxley  Act of 2002  (exhibit is being
                    filed herewith).

               32.1 Certification of the Chief Executive Officer  pursuant to 18
                    U.S.C.  Section  1350 as adopted  pursuant to Section 906 of
                    the  Sarbanes-Oxley  Act  of  2002  (exhibit is being  filed
                    herewith).

               32.2 Certification of the Chief Executive  Officer pursuant to 18
                    U.S.C.  Section 1350 as adopted  pursuant to  Section 906 of
                    the  Sarbanes-Oxley  Act  of 2002  (exhibit  is being  filed
                    herewith).

         (b)   Reports on Form 8-K

               None


                                     Page 18
<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, 2003                   /s/ Brantly Chappell
Date                                --------------------
                                        Brantly Chappell
                                        Chief Executive Officer



November 14, 2003                   /s/ James Schuster
Date                                ------------------
                                        James Schuster
                                        Chief Financial Officer



                                     Page 19
<PAGE>


Exhibit 31.1


    CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Brantly Chappell, Chief Executive Officer, certify that:

1) I have reviewed this quarterly  report on Form 10-Q of First Banking  Center,
Inc.;

2) Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4)  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5) The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and


Date: November 14, 2003




      /s/ Brantly Chappell
      --------------------
          Brantly Chappell
          Chief Executive Officer





                                     Page 20
<PAGE>

Exhibit 31.2


    CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, James Schuster, Chief Financial Officer, certify that:

1) I have reviewed this quarterly  report on Form 10-Q of First Banking  Center,
Inc.;

2) Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4)  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5) The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and


Date: November 14, 2003




      /s/ James Schuster
      ------------------
          James Schuster
          Chief Financial Officer





                                     Page 21
<PAGE>



Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The  following  certification  is provided by the  undersigned  Chief  Executive
Officer of First Banking Center,  Inc. on the basis of such officer's  knowledge
and belief for the sole purpose of complying  with 18 U.S.C.  Section  1350,  as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                 CERTIFICATION

In connection  with the  Quarterly  Report of First  Banking  Center,  Inc. (the
"Company")  on Form 10-Q for the period ended  September  30, 2003 as filed with
the Securities and Exchange  Commission on November 14, 2003 (the "Report"),  I,
Brantly  Chappell,  Chief  Executive  Officer of the  Company,  hereby  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.





      /s/Brantly Chappell
      ------------------------------
      Name:  Brantly Chappell
      Title: Chief Executive Officer
      Date:  November 14, 2003





                                     Page 22
<PAGE>


Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The  following  certification  is provided by the  undersigned  Chief  Financial
Officer of First Banking Center,  Inc. on the basis of such officer's  knowledge
and belief for the sole purpose of complying  with 18 U.S.C.  Section  1350,  as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                 CERTIFICATION

In connection  with the  Quarterly  Report of First  Banking  Center,  Inc. (the
"Company")  on Form 10-Q for the period ended  September  30, 2003 as filed with
the Securities and Exchange  Commission on November 14, 2003 (the "Report"),  I,
James Schuster, Chief Financial Officer of the Company, hereby certify, pursuant
to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.





      /s/James Schuster
      ------------------------------
      Name:  James Schuster
      Title: Chief Financial Officer
      Date:  November 14, 2003


                                     Page 23
[{"type": "10-Q", "sequence": "1", "filename": "sept10q.txt", "description": "SEPTEMBER 2003 10Q", "secsgml_size_bytes": 83790}]
{"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": "031002752"}, "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, 2003

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 by check mark whether the registrant is an accelerated filer (as define
in Rule 12b-2 of the act).
Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 3, 2003, Common stock, $1.00 par value, 1,495,623
shares outstanding.
FIRST BANKING CENTER, INC AND SUBSIDIARY
                                      INDEX
                               September 30, 2003

                                                                           Page
                                                                           ----
Part I   Financial Information

         Item 1 Consolidated Financial Statements

                Unaudited Consolidated Balance Sheets,                       3
                September 30, 2003 and December 31, 2002

                Unaudited Consolidated Statements of Income,                 4
                For the three and nine month periods ended
                September 30, 2003 and 2002

                Unaudited Consolidated Statements of Cash Flows,             5
                For the nine months ended September 30, 2003 and 2002

                Notes to Unaudited Consolidated Financial Statements        6-8

         Item 2 Management's Discussion and Analysis of                     9-16
                Financial Condition and Results of Operations

         Item 3 Quantitative and Qualitative Disclosures about Market      16-17
                Risk

         Item 4 Controls and Procedures                                     17

Part II  Other Information

         Item 1 Legal Proceedings                                           18

         Item 2 Changes in Securities and Use of Proceeds                   18

         Item 3 Defaults upon Senior Securities                             18

         Item 4 Submission of Matters to a Vote of Security Holders         18

         Item 5 Other Information                                           18

         Item 6 Exhibits and Reports on Form 8-K                            18

         Signatures                                                        19-23

                                     Page 2
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements

                            FIRST BANKING CENTER, INC. AND SUBSIDIARY
                              UNAUDITED CONSOLIDATED BALANCE SHEETS
September 30,   December 31,
ASSETS                                                                                  2003            2002
                                                                                    ----------------------------
                                                                                        (Dollars in thousands)
Cash and due from banks                                                           $   15,182      $   22,203
  Federal funds sold                                                                     7,205          11,058
  Interest-bearing deposits in banks                                                       228             441
  Available for sale securities                                                         79,864          87,630
  Loans, less allowance for loan losses of $4,727 and
    $4,988 in 2003 and 2002, respectively                                              376,556         367,156
  Office buildings and equipment, net                                                   11,398          10,576
  Other real estate owned                                                                1,750               -
  FHLB Stock                                                                            11,109          10,488
  Other assets                                                                           9,582           8,605
                                                                                    -------------- -------------
      TOTAL ASSETS                                                                  $  512,874      $  518,157
                                                                                    ============== =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
  Deposits
    Demand                                                                          $   60,190      $   72,957
    Savings and NOW accounts                                                           173,161         174,431
    Time                                                                               144,621         146,413
                                                                                    -------------- -------------
      Total Deposits                                                                   377,972         393,801
  Short-term borrowings                                                                 33,915          25,077
  Other borrowings                                                                      44,692          46,755
  Other liabilities                                                                      3,456           3,804
                                                                                    -------------- -------------
      TOTAL LIABILITIES                                                             $  460,035      $  469,437
                                                                                    -------------- -------------

STOCKHOLDERS' EQUITY
  Common Stock, $1.00 par value 3,000,000 shares authorized; 1,495,950 and
    1,494,029 shares issued; 1,495,723 and 1,494,029 shares outstanding as of
    September 30, 2003 and December 31, 2002, respectively                               1,496           1,494
  Surplus                                                                                4,435           4,375
  Retained Earnings                                                                     45,578          41,287
  Accumulated other comprehensive income                                                 1,340           1,564
  Common stock in treasury, at cost-227 and 0 shares as of September 30, 2003
    and December 31, 2002, respectively                                                    (10)              -
                                                                                    -------------- -------------
      TOTAL STOCKHOLDERS' EQUITY                                                    $   52,839      $   48,720
                                                                                    -------------- -------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $  512,874      $  518,157
                                                                                    ============== =============

                                  See accompanying notes to financial statements
Page 3
FIRST BANKING CENTER, INC. AND SUBSIDIARY
                                         UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three months ended             Nine months ended
                                                            September 30,                  September 30,
                                                          2003            2002           2003           2002
                                                   ----------------------------------------------------------
                                                          (Dollars in thousands, except per share data)
INTEREST INCOME
  Interest and fees on loans                       $      6,404    $      6,360    $    18,477     $   19,159
  Interest and dividends on securities:
    Taxable                                                 458             270          1,538            818
    Non-taxable                                             408             413          1,242          1,207
  Interest on federal funds sold                             13              31             73             80
  Interest on interest-bearing deposits in banks              1              40             16             66
                                                   ----------------------------------------------------------
       TOTAL INTEREST INCOME                              7,284           7,114         21,346         21,330
                                                   ----------------------------------------------------------

INTEREST EXPENSE
  Interest on deposits                                    1,243           1,634          4,079          4,971
  Interest on short-term borrowings                          44              96            171            325
  Interest on other borrowings                              442             458          1,365          1,266
                                                   ----------------------------------------------------------
       TOTAL INTEREST EXPENSE                             1,729           2,188          5,615          6,562
                                                   ----------------------------------------------------------
       NET INTEREST INCOME                                5,555           4,926         15,731         14,768

  Provision for loan losses                                   0              91             90            271
                                                   ----------------------------------------------------------
       NET INTEREST INCOME AFTER PROVISION FOR
          LOAN LOSSES                                     5,555           4,835         15,641         14,497
                                                   ----------------------------------------------------------

NON-INTEREST INCOME
  Trust fees                                                119             125            377            400
  Service charges on deposit accounts                       478             523          1,423          1,414
  Investment securities gains                               107               0            107             13
  Automated teller machines                                 106             102            284            272
  Other                                                     328             307            756            896
                                                   ----------------------------------------------------------
       TOTAL NON-INTEREST INCOME                          1,138           1,057          2,947          2,995
                                                   ----------------------------------------------------------

NON-INTEREST EXPENSE
  Salary and employee benefits                            2,239           2,095          6,673          6,180
  Occupancy                                                 262             253            838            741
  Equipment                                                 355             437          1,049          1,187
  Data processing services                                  261             224            763            685
  Advertising and marketing                                 152             128            372            197
  Stationary and office supplies                            114              85            326            241
  Other                                                     661             494          1,767          1,575
                                                   ----------------------------------------------------------
       TOTAL NON-INTEREST EXPENSE                         4,044           3,716         11,788         10,806
                                                   ----------------------------------------------------------

       INCOME BEFORE INCOME TAXES                         2,649           2,176          6,800          6,686

  Income taxes                                              796             619          1,926          1,827
                                                   ----------------------------------------------------------
       NET INCOME                                  $      1,853    $      1,557    $     4,874     $    4,859
                                                   ==========================================================

        Basic earnings per share                   $       1.24    $       1.06    $      3.26     $     3.30
        Diluted earnings per share                 $       1.21    $       1.03    $      3.19     $     3.23

                                         See accompanying notes to financial statements
Page 4
FIRST BANKING CENTER, INC. AND SUBSIDIARY
                        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
                                                                           September 30,
                                                                          2003         2002
                                                                     ------------------------
                                                                       (Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                         $    4,874   $    4,859
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation                                                            686          637
    Provision for loan losses                                                90          271
    Amortization of premiums and accretion of discounts
      on securities, net                                                    384           64
    Amortization                                                            113           76
    Investment securities gains                                            (107)         (13)
    Tax benefit of nonqualified stock options exercised                       0            7
    Increase in other assets                                             (3,346)        (569)
    Decrease in other liabilities                                          (349)        (364)
                                                                     ------------------------
     Net cash provided by operating activities before loan
      originations and sales                                              2,345        4,968
    Loans originated for sale                                           (57,898)     (43,896)
    Proceeds from sale of loans                                          62,012       44,733
                                                                     ------------------------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                         6,459        5,805
                                                                     ------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net decrease (increase) in interest-bearing deposits
      in banks                                                              213       (8,085)
    Net decrease in federal funds sold                                    3,853        4,943
    Proceeds from sales of available for sale securities                  9,135        7,615
    Proceeds from maturities and calls of available for
      sale securities                                                    54,808       54,295
    Purchase of available for sale securities                           (56,792)     (70,969)
    Net decrease in loans                                               (13,604)      (2,058)
    Purchase of office buildings and equipment, net                      (1,508)        (638)
                                                                     ------------------------
        NET CASH USED IN INVESTING ACTIVITIES                            (3,895)     (14,897)
                                                                     ------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in deposits                                 (15,829)      21,078
    Dividends paid                                                         (583)        (546)
    Proceeds from other borrowings                                        9,084       10,130
    Payments on other borrowings                                         (2,063)     (17,403)
    Net decrease in short term borrowings                                  (246)      (7,638)
    Proceeds from sale of common stock                                       62            0
    Treasury stock transactions, net                                        (10)         (91)
                                                                     ------------------------
        NET CASH (USED IN) PROVIDED BY FINANCING
          ACTIVITIES                                                     (9,585)       5,530
                                                                     ------------------------
    NET DECREASE IN CASH AND DUE FROM BANKS                              (7,021)      (3,562)

CASH AND DUE FROM BANKS:
    Beginning                                                            22,203       20,735
                                                                     ------------------------
    Ending                                                           $   15,182   $   17,173
                                                                     ========================

Supplemental Disclosures of Cash Flow
Information,
  Cash Paid During the Year for:
    Interest                                                         $    5,894   $    6,696
    Income taxes                                                     $    1,058   $    1,671

Supplemental Schedule of Noncash Investing Activities,
  Change in Accumulated Other Comprehensive Income(Loss),
  Unrealized Gain (Loss) on Available-for-Sale                       $     (224)  $    1,203
    Securities, Net
  Other real estate acquired in settlement of loans                  $    1,750   $       53

                        See accompanying notes to financial statements
Page 5
FIRST BANKING CENTER, INC AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                September 30, 2003

NOTE 1 - Basis of Presentation

The unaudited  consolidated  financial  statements include the accounts of First
Banking Center,  Inc. (the "Company") and First Banking Center, its wholly owned
subsidiary.  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, 2003 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
accounting  principles  generally  accepted in the United  States of America and
industry practice.  Certain information in footnote disclosure normally included
in  financial  statements  prepared in  accordance  with  accounting  principles
generally  accepted in the United  States of America 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, 2002 audited financial statements.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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,
                                                         2003         2002         2003       2002
                                                      ----------------------------------------------
                                                      (Amounts in thousands, except per share data)
Basic
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Weighted average shares outstanding                      1,496        1,472        1,496      1,472
Basic earnings per share                              $   1.24     $   1.06     $   3.26   $   3.30

Diluted
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Weighted average shares outstanding                      1,496        1,472        1,496      1,472
Effect of dilutive stock options outstanding                32           34           32         34
                                                      ----------------------------------------------
Diluted weighted average shares outstanding              1,528        1,506        1,528      1,506
Diluted earnings per share                            $   1.21     $   1.03     $   3.19   $   3.23
NOTE 3 - Comprehensive Income

The following table presents our comprehensive income.
Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                         2003         2002         2003       2002
                                                      ----------------------------------------------
                                                                  (Dollars in thousands)
Net income                                            $  1,853     $  1,557     $  4,874   $  4,859
Other comprehensive income
  Net change in unrealized gain (loss) on available
   for sale securities                                    (762)         669         (224)     1,203
                                                      ----------------------------------------------
Total comprehensive income                            $  1,091     $  2,226     $  4,650   $  6,062
                                                      ==============================================
Page 6
NOTE 4 - Stock-based Compensation Plan:

For the nine  months  ended  September  30,  2003 and 2002,  the Company had one
stock-based key officer and employee compensation plan. The Company accounts for
this plan under the recognitions  and measurement  principles of APB Opinion No.
25, Accounting for Stock Issued to Employees,  and related  Interpretations.  No
stock-based  employee  compensation  cost is  reflected  in the  income,  as all
options  granted  under those  plans had an  exercise  price equal to the market
value of the underlying  common stock on the date of grant.  The following table
illustrates  the effect on net income and  earnings per share if the Company had
applied the fair value recognition  provisions of Financial Accounting Standards
Board (FASB)  Statement No. 123,  Accounting for  Stock-Based  Compensation,  to
stock-based employee compensation.
Three Months Ended        Nine Months Ended
                                                           September 30,            September 30,
                                                         2003         2002         2003       2002
                                                    -------------------------------------------------
                                                    (Amounts in thousands, except for per share data)
Net income, as reported                               $  1,853     $  1,557     $  4,874   $  4,859
Deduct total stock-based employee compensation expense
 determined under fair value based method for all
 awards, net of related tax effects                          -            0         (727)      (598)
                                                    -------------------------------------------------
Pro forma net income                                  $  1,853     $  1,557     $  4,147   $  4,261
                                                    =================================================
Earnings per share:
Basic:
As reported                                           $   1.24     $   1.06     $   3.26   $   3.30
Pro forma                                                 1.24         1.06         2.77       2.90
Diluted:
As reported                                           $   1.21     $   1.03     $   3.19   $   3.23
Pro forma                                                 1.21         1.01         2.71       2.83
In  determining  compensation  cost using the fair value  method  prescribed  in
Statement  No. 123,  the value of each grant is estimated at the grant date with
the following weighted-average assumptions used for grants on September 30, 2003
and 2002, respectively:  dividend yield of 1.7 percent and 1.6 percent; expected
price  volatility  of 5.2 percent and 5.2 percent,  blended  risk-free  interest
rates of 4.22  percent  and  4.27  percent;  and  expected  lives  of 10  years,
respectively.

NOTE 5 - Commitments and Contingencies

In the normal  course of  business,  the Company is  involved  in various  legal
proceedings.  In the opinion of  management,  any liability  resulting from such
proceedings  would  not  have a  material  adverse  effect  on the  consolidated
financial statements.

The Company is party to financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing  needs of its  customers.  These
financial   instruments   include   commitments  to  extend  credit,   financial
guarantees,  and standby letters of credit.  They involve,  to varying  degrees,
elements  of credit  risk in excess of amounts  recognized  on the  consolidated
balance sheets.

The  Company's  exposure  to credit loss in the event of  nonperformance  by the
other party to the financial  instrument  for  commitments  to extend credit and
standby letters of credit is represented by the  contractual  notional amount of
those  instruments.  The  Company  uses  the  same  credit  policies  in  making
commitments  and  issuing  letters  of  credit  as they do for  on-balance-sheet
instruments.

                                     Page 7
A summary of the  contract  or  notional  amount of the  Company's  exposure  to
off-balance-sheet risk as of September 30 is as follows:
2003           2002
                                               -----------------------------
                                                  (Amounts in thousands)
Financial instruments whose contract
  amounts represent credit risk:
    Commitments to extend credit                  $ 78,880       $ 64,332
    Standby letters of credit                        3,087          3,893
Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. Since many of the  commitments are expected to expire
without  being  drawn  upon,  the total  commitment  amounts do not  necessarily
represent  future cash  requirements.  Standby letters of credit are conditional
commitments  issued to guarantee the performance of a customer to a third-party.
Those  guarantees are primarily  issued to support public and private  borrowing
arrangements.  The  credit  risk  involved  in  issuing  letters  of  credit  is
essentially the same as that involved in extending loan facilities to customers.
The Company evaluates each customer's credit worthiness on a case-by-case basis.
The amount of  collateral  obtained,  if deemed  necessary  by the Company  upon
extension  of  credit,  is  based  on  management's  credit  evaluation  of  the
counterparty.  Collateral  held  varies  but may  include  accounts  receivable,
inventory,  property and equipment, and income-producing  commercial properties.
Credit card commitments are unsecured.

Standby  letters of credit  are  conditional  commitments  issued by the Bank to
guarantee the performance of a customer to a third-party.  Those  guarantees are
primarily  issued to support  public and  private  borrowing  arrangements  and,
generally,  have terms of one year or less.  The credit risk involved in issuing
letters of credit is  essentially  the same as that  involved in extending  loan
facilities to customers.  The Bank holds collateral,  which may include accounts
receivable,  inventory,  property,  equipment, and income-producing  properties,
supporting those commitments if deemed necessary. In the event the customer does
not perform in accordance with the terms of the agreement with the  third-party,
the Bank would be required to fund the commitment.  The maximum potential amount
of future  payments  the Bank could be  required to make is  represented  by the
contractual  amount shown in the summary on the previous page. If the commitment
is funded the Bank would be  entitled to seek  recovery  from the  customer.  At
September  30, 2003 and  December 31,  2002,  no amounts  have been  recorded as
liabilities for the Bank's potential obligations under these guarantees.

                                     Page 8
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, 2003

The following discussion provides additional analysis of the financial condition
and results of  operations  of the  Company for the three and nine months  ended
September 30, 2003.  This  discussion  focuses on the  significant  factors that
affected the Company's  earnings so far in 2003, with comparisons to 2002. As of
September  30,  2003,  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  three  wholly  owned  subsidiaries,  FBC  Financial
Services, Corp., a brokerage and financial services subsidiary,  FBC-Burlington,
Inc., an investment subsidiary located in Nevada and Burco Holdings, LLC, a real
estate  subsidiary for the purpose of holding and liquidating  property acquired
as other real estate.

Overview

As of September 30, 2003,  total Company assets were $512.8  million  decreasing
1.02% from $518.2  million as of December 31, 2002.  Total income,  for the nine
months ended September 30, 2003, was $4.9 million or $3.26 per share, increasing
$15  thousand  or .3% from  $4.9  million  or  $3.30  per  share  in  2002.  The
significant items resulting in the above-mentioned results are discussed below.

Financial Condition

Loans

Loans  outstanding  were $381.3 million and $372.1 million on September 30, 2003
and December 31, 2002 respectively.  This represents an increase of $9.1 million
or 2.5%.  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,
                                               2003             2002        Balance             2003              2002
                                         ---------------------------------------------     ---------------------------------
                                                     (Dollars in millions)
Residential Real Estate                       $169.8           $163.9         $5.9               44.6%           44.0%
Commercial Real Estate                         $98.8            $91.8         $7.0               26.0%           24.7%
Construction and Land Development              $35.9            $42.4        ($6.5)               9.4%           11.4%
Commercial                                     $27.3            $26.2         $1.1                7.2%            7.0%
Agricultural Real Estate                       $18.4            $18.7        ($0.3)               4.8%            5.0%
Allowance for Loan Losses

The  allowance  for loan  losses  was $4.7  million  or 1.24% of gross  loans on
September  30,  2003,  compared  with $5.0  million  or 1.34% of gross  loans on
December 31, 2002. Net charge-offs were $351 thousand or .09% of gross loans and
$97  thousand  or .03% for the nine  months  ended  September  30, 2003 and 2002
respectively.

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,

                                     Page 9
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 company
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.

For the nine months  ending  September  30,  2003,  $90  thousand was charged to
current  earnings and added to the  allowance  for loan losses  compared to $271
thousand during the first nine months of 2002. The bank charged less to earnings
during  2003 versus 2002  because  management  determined  the  allowance  to be
adequate as of September 30, 2003.

Non-accrual, Past Due and Renegotiated Loans
September 30,     December 31,
                                                    2003              2002
                                              ----------------------------------
                                                    (Dollars in thousands)
Non-accrual Loans (a)                              $1,653            $2,016
Past Due 90 days + (b)                                  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 debt or in its  restoration  to  current status.

The non-accrual  loans  consisted  primarily of $314 thousand of commercial real
estate loans,  $1.2 million of residential real estate loans and $87 thousand of
agricultural  real estate. On September 30, 2003, the ratio of non-accrual loans
to the allowance for loan losses was 35% compared to 40.4% on December 31, 2002.
The company believes it has an adequate allowance for any anticipated losses for
these loans.

As of  September  30,  2003,  the Company had loans  totaling  $21.3  million in
addition to those  listed as  non-accrual,  past due or  restructured  that were
identified by the Banks' internal asset rating systems as classified  assets and
loans which  management  has  determined  require  additional  monitoring.  This
represents  a  decrease  of $2.9  million  or  12.2%  from  December  31,  2002.
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,
2003.  The  company's  loans are  concentrated  geographically  in the Wisconsin
counties of Racine, Walworth, Kenosha, Lafayette and Green.

                                     Page 10
Investments securities - Available for Sale

The fair value of the  securities  available-for-sale  portfolio  decreased $7.8
million or 8.9% from  December  31, 2002.  For the purposes of this  discussion,
changes in  investment  security  balances  are based on  amortized  costs.  The
decrease  came from four areas of the  portfolio.  The company  purchased  $41.5
million  of  U.S.  Government  Agency  Discount  Notes,  $7.6  million  of  U.S.
mortgage-backed  securities,  $4.7  million of municipal  securities  and $.5 of
Corporate  Bonds.  The  company  sold $9.1  million  of U.S.  Government  Agency
Discount Notes. The company had $34.0 million of U.S. Government Agency Discount
Notes and $1.7 million of municipal securities mature. There were $.5 million of
U.S.  Government  Agency  Discount  Notes,  $.7 million of U.S.  mortgage-backed
securities and $1.6 million of municipal securities called.

Deposits and Borrowed Funds

Total  deposits and  borrowed  funds were $456.6  million on September  30, 2003
compared to $465.6  million on  December  31,  2002.  This is a decrease of $9.0
million or 1.9%.  The decrease is mainly due to seasonal  fluctuations  in Money
Market and Savings  accounts.  The following table summarizes the changes in the
major  classifications  of deposits and borrowed funds.  Most of this change was
the result of a new  interest  bearing  checking  account  which was  offered in
September,  2003.  Customers have been  switching  from a  non-interest  bearing
checking account to this new interest bearing account.
September 30,       December 31,       Change in
                                                     2003                2002            Balance
                                               ------------------------------------    -----------
                                                      (Dollars in millions)
Money Market and Savings                            $134.9              $144.8            ($9.9)
NOW Accounts                                         $38.3               $29.6             $8.7
Demand  Deposits                                     $60.2               $73.0           ($12.8)
Time Deposits less than $100,000                     $89.6               $90.2            ($0.6)
Time Deposits equal or greater than $100,000         $55.0               $56.2            ($1.2)
Securities sold under agreement to repurchase        $24.7               $25.0            ($0.3)
Federal Home Loan Borrowings                         $44.2               $46.2            ($2.0)
Capital resources

As of September 30, 2003,  the Company's  stockholders'  equity  increased  $4.1
million or 8.5% from  December  31,  2002.  Net income of $4.9  million  was the
primary  reason for the increase.  The company  purchased $112 thousand and sold
$102  thousand  of  treasury  stock  during  the  first  nine  months  of  2003.
Accumulated other comprehensive income decreased $224 thousand from $1.6 million
to  $1.3  million.  Dividends  were  paid in June  2003  in the  amount  of $583
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  13.0% at
September  30,  2003,  well  above the 4%  minimum  required.  Total  capital to
risk-adjusted assets was 14.3%, also well above the 8% minimum requirement.  The
leverage ratio was at 9.8% compared to the 4% minimum requirement.  According to
FDIC capital guidelines, the Company's subsidiary bank is considered to be "well
capitalized."

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.

                                     Page 11
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  22%,  which
compares to a positive 20% as of December 31,  2002.  Although  these ratios are
outside the Bank's  target  range,  the Bank's  management  feels the ratios are
appropriate  at this time due to  management's  projection  for future  interest
rates.

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 $22.6 million at
September 30, 2003,  compared with $33.7 million at December 31, 2002.  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 $6.5 million. Net cash used in investing activities was
$3.9 million.  Net cash used in financing  activities was $9.6 million,  for the
nine months ended September 30, 2003.

For the nine months ending  September  30, 2002,  net cash provided by operating
activities  was $5.8 million.  Net cash used in investing  activities  was $14.9
million. Net cash provided by financing activities was $5.5 million.

Impact of Inflation and Changing Prices

The  consolidated  financial  statements  and the  accompanying  notes have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America,  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

                                     Page 12
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

Financial  Accounting  Standards Board Interpretation (FIN) No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness of Others - an  Interpretation of FASB Statements No.
5, 57 and 107 and Rescission of FASB  Interpretation  No. 34". FIN 45 elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize,  at the inception of a
guarantee,  a  liability  for the fair  value of the  obligation  undertaken  in
issuing the guarantee. The initial recognition and measurement provisions of FIN
45 are applicable on a prospective  basis to guarantees issued or modified after
December 31, 2002.  The  disclosure  requirements  of FIN 45 are  effective  for
financial  statements  of interim or annual  periods  ending after  December 15,
2002, and were adopted in the Company's financial  statements for the year ended
December 31,  2002.  Implementation  of the  remaining  provisions  of FIN 45 on
January 1, 2003 did not have a  significant  impact on the  Company's  financial
statements.

The Financial Accounting Standards Board has issued Statement 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging".  This Statement amends and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities under Statement 133. The Statement is effective for contracts
entered  into or  modified  after June 30,  2003 and for  hedging  relationships
designated after June 30, 2003.  Implementation  of the Statement did not have a
material impact on the financial statements.

The Financial  Accounting  Standards Board has issued Statement 150, "Accounting
for Certain Financial  Instruments with  Characteristics of both Liabilities and
Equity".  This Statement  establishes standards for how an issuer classifies and
measures certain financial  instruments with characteristics of both liabilities
and equity and  requires  that certain  freestanding  financial  instruments  be
reported as liabilities in the balance sheet. Depending on the type of financial
instrument,  it is  required  to be  accounted  for at either  fair value or the
present  value of future cash flows  determined  at each balance sheet date with
the change in that value reported as interest  expense in the income  statement.
Prior  to  the   application  of  Statement  No.  150,  either  those  financial
instruments  were not required to be recognized,  or if recognized were reported
in the  balance  sheet as equity and  changes in the value of those  instruments
were normally not recognized in net income.  For the Company,  the Statement was
effective July 1, 2003 and  implementation did not have a material impact on the
consolidated financial statements.

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 an annualized  tax-equivalent basis,
which accounts for income earned on nontaxable loans and securities that are not
fully subject to federal taxes.  Net interest income was $16.4 million and $15.4
million for the nine months  ended  September  30, 2003 and 2002.  Net  interest
margin as a  percentage  of average  earning  assets  (includes  loans placed on
nonaccrual  status) was 4.56% and 4.73% for the nine months ended  September 30,
2003 and 2002.

                                     Page 13
The major component of interest income and fees on loans is the income generated
by loans.  Interest income and fees on loans decreased due to decreased rates on
increasing average balances. The rates earned decreased from 7.09% to 6.66%.

As of September 30, 2003 average balances outstanding increased,  however, rates
paid for liabilities decreased causing a decrease in interest expense. The major
components  of interest  expense are interest  paid on  Certificates  of Deposit
(Time Deposits) and on Money Market Deposits.  Interest expense on Time Deposits
decreased due to decreased rates paid on increasing average balances.  The rates
paid decreased from 2.83% to 2.24%, for the nine months ended September 30, 2002
and 2003 respectively.  Interest expense on Money Market Deposits decreased as a
result  of  decreased  rates on  decreased  average  balances.  The  rates  paid
decreased from 1.33% to .66%,  for the nine months ended  September 30, 2002 and
2003 respectively.

The  following  table  summarizes  the  changes  and  reasons for the changes in
interest  earned and paid during the three and nine months ended  September  30,
2003 and 2002.
Three months ended
                                                                              September 30,
                                                               2003                              2002
                                                 -------------------------------   -------------------------------
                                                             Interest  Average                Interest   Average
                                                   Average    Earned    Yield        Average   Earned     Yield
                                                   Balance   or Paid   or Cost       Balance  or Paid    or Cost
                                                 -------------------------------   -------------------------------
                                                                       (Dollars in thousands)
Interest Income:
  Interest and fees on loans (a)                 $ 375,757    6,416     6.83%        366,039     6,377    6.97%
  Interest and dividends on securities:
    Taxable                                         58,044      458     3.16%         27,471       270    3.93%
    Nontaxable (a)                                  36,392      618     6.79%         34,921       626    7.17%
  Interest on Fed funds sold                         5,987       13     0.87%          7,886        31    1.57%
  Interest on interest-bearing deposits in banks       382        1     1.05%          8,632        40    1.85%

                                                 -------------------------------   -------------------------------
       Total Interest Income                     $ 476,562    7,506     6.30%        444,949     7,344    6.60%
                                                 ===============================   ===============================

Interest Expense
  Interest on deposits                           $ 314,871    1,243     1.58%        301,233     1,634    2.17%
  Interest on short-term borrowings                 25,413       44     0.69%         21,810        96    1.76%
  Interest on other borrowings                      45,101      442     3.92%         41,116       458    4.46%
                                                 -------------------------------   -------------------------------
       Total Interest Expense                    $ 385,385    1,729     1.79%        364,159     2,188    2.40%
                                                 ===============================   ===============================
Net interest margin                                         $ 5,777     4.85%                  $ 5,156    4.64%
                                                            ====================               ===================
Page 14
Nine months ended
                                                                              September 30,
                                                               2003                              2002
                                                 -------------------------------   -------------------------------
                                                             Interest  Average                Interest   Average
                                                   Average    Earned     Yield       Average   Earned     Yield
                                                   Balance   or Paid   or Cost       Balance  or Paid    or Cost
                                                 -------------------------------   -------------------------------
                                                                       (Dollars in thousands)
Interest Income:
  Interest and fees on loans (a)                 $ 370,589   18,510     6.66%        361,330    19,215    7.09%
  Interest and dividends on securities:
    Taxable                                         60,984    1,538     3.36%         28,653       818    3.81%
    Nontaxable (a)                                  36,391    1,882     6.90%         34,021     1,828    7.16%
  Interest on Fed funds sold                         9,530       73     1.02%          6,999        80    1.52%
  Interest on interest-bearing deposits in banks     1,751       16     1.22%          4,739        66    1.86%
                                                 -------------------------------   -------------------------------
       Total Interest Income                     $ 479,245   22,019     6.13%        435,742    22,007    6.73%
                                                 ===============================   ===============================

Interest Expense
  Interest on deposits                           $ 315,984    4,079     1.72%        295,086     4,971     2.25%
  Interest on short-term borrowings                 24,391      171     0.93%         22,556       325     1.92%
  Interest on other borrowings                      45,962    1,365     3.96%         37,635     1,266     4.49%
                                                 -------------------------------   -------------------------------
        Total Interest Expense                   $ 386,337    5,615     1.94%        355,277     6,562     2.46%
                                                 ===============================   ===============================
Net interest margin                                         $16,404     4.56%                  $15,445     4.73%
                                                            ====================               ===================
(a)  The interest and average yield for nontaxable loans and investments are  presented on an  annualized  federal
     taxable equivalent basis assuming a 34% tax rate.
Non-interest income

Non-interest  income  increased  $81 thousand or 7.7% for the three months ended
September  30, 2003 compared to the three months ended  September 30, 2002.  The
increase  was  primarily  due to gains in the sale of  securities.  Non-interest
income  decreased  overall  $48  thousand  or 1.6%  for the  nine  months  ended
September  30, 2003 compared to the nine months ended  September  30, 2002.  The
decrease was primarily the result of a decline in brokerage annuity sales.

Non-interest expense

Non-interest  expense  increased $328 thousand or 8.8% and $982 thousand or 9.1%
for the three and nine months ended September 30, 2003 compared to the three and
nine months ended September 30, 2002.  Salaries and benefits  accounted for $144
thousand  and $493  thousand of the increase for the three and nine months ended
September  30, 2003  compared to the three and nine months ended  September  30,
2002.  The increase in salaries and benefits is due to normal wage increases and
increased  health  insurance  costs as well as  additional  expenses  due to the
opening of a branch and the  acquisition of a branch during the second  quarter.
Occupancy expense increased $97 thousand for the nine months ended September 30,
2003  compared to the nine months  ended  September  30, 2002 due  primarily  to
increases in real estate taxes,  depreciation  and  utilities.  Advertising  and
marketing  expense increased $24 thousand and $175 thousand while other expenses
increased  $167  thousand and $192  thousand for the three and nine months ended
September  30, 2003  compared to the three and nine months ended  September  30,
2002,  some of which  can be  attributed  to the  opening  of a  branch  and the
acquisition of a branch during the second quarter.

Critical Accounting Policies

Allowance for Loan Losses

Management  believes the allowance for loan losses accounting policy is critical
to the portrayal  and  understanding  of our financial  condition and results of
operations.  As such,  selection and  application of this  "critical  accounting
policy" involves judgments, estimates, and uncertainties that are susceptible to
change.  In the event that different  assumptions or conditions were to prevail,
and depending upon the severity of such changes,  the  possibility of materially
different   financial  condition  or  results  or  operations  is  a  reasonable
likelihood.

                                     Page 15
Income Taxes

See Note 1 of the notes to our audited consolidated financial statements for the
year ended  December 31, 2002 for our income tax accounting  policy.  Income tax
expense recorded in the consolidated  income statement  involves  interpretation
and application of certain  accounting  pronouncements and federal and state tax
codes, and is, therefore,  considered a critical  accounting  policy. We undergo
examinations by various regulatory taxing authorities. Such agencies may require
that changes in the amount of tax expense or valuation  allowance be  recognized
when  their  interpretations  differ  from those of  management,  based on their
judgments about information available to them at the time of their examinations.
See Note 11 of the notes to our audited  consolidated  financial  statements for
the year ended December 31, 2002 for more income tax information.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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,  2003,  projects  that net  portfolio  value  would  decrease  by
approximately  5.82% if  interest  rates  would rise 200 basis  points and would
decrease by  approximately  3.01% if interest  rates would rise 100 basis points
over  the  next  year.  It  projects  an  increase  in net  portfolio  value  of
approximately  7.65% if  interest  rates  would  drop 200  basis  points  and an
increase of  approximately  3.16% if interest rates would drop 100 basis points.
Both simulations are within board-established policy limits. The Company has not
experienced any material  changes to its market risk position since December 31,
2002, as disclosed in the Company's 2002 Form 10K Annual  Report.  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 20% of the market
value of portfolio equity.

                                     Page 16
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.

Item 4.  Controls and Procedures

Within  the 90 days  prior  to the  date of this  report,  the  Company's  Chief
Executive  Officer and Chief Financial  Officer carried out an evaluation,  with
the participation of other members of management as they deemed appropriate,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures as contemplated by Exchange Act Rule 13a-14. Based upon,
and as of the date of that  evaluation,  the Chief  Executive  Officer and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures are effective,  in all material respects,  in timely alerting them to
material information relating to the Company (and its consolidated subsidiaries)
required to be included in the periodic  reports the Company is required to file
and submit to the SEC under the Exchange Act.

There have been no significant  changes to the Company's internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date that the internal  controls  were most  recently  evaluated.  There were no
significant  deficiencies or material  weaknesses  identified in that evaluation
and, therefore, no corrective actions were taken.

                                     Page 17
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

         (a)   Exhibits

               31.1 Certification  of  the  Chief  Executive   Officer  pursuant
                    to Rule 13a-14(a)/15(d)-14(a) as adopted pursuant to Section
                    302  of the  Sarbanes-Oxley  Act of 2002  (exhibit is  being
                    filed herewith).

               31.2 Certification of the  Chief  Financial  Officer  pursuant to
                    Rule  13a-14(a)/15(d)-14(a) as  adopted  pursuant to Section
                    302  of  the  Sarbanes-Oxley  Act of 2002  (exhibit is being
                    filed herewith).

               32.1 Certification of the Chief Executive Officer  pursuant to 18
                    U.S.C.  Section  1350 as adopted  pursuant to Section 906 of
                    the  Sarbanes-Oxley  Act  of  2002  (exhibit is being  filed
                    herewith).

               32.2 Certification of the Chief Executive  Officer pursuant to 18
                    U.S.C.  Section 1350 as adopted  pursuant to  Section 906 of
                    the  Sarbanes-Oxley  Act  of 2002  (exhibit  is being  filed
                    herewith).

         (b)   Reports on Form 8-K

               None

                                     Page 18
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, 2003                   /s/ Brantly Chappell
Date                                --------------------
                                        Brantly Chappell
                                        Chief Executive Officer

November 14, 2003                   /s/ James Schuster
Date                                ------------------
                                        James Schuster
                                        Chief Financial Officer

                                     Page 19
Exhibit 31.1

    CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Brantly Chappell, Chief Executive Officer, certify that:

1) I have reviewed this quarterly  report on Form 10-Q of First Banking  Center,
Inc.;

2) Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4)  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5) The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

Date: November 14, 2003

      /s/ Brantly Chappell
      --------------------
          Brantly Chappell
          Chief Executive Officer

                                     Page 20
Exhibit 31.2

    CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, James Schuster, Chief Financial Officer, certify that:

1) I have reviewed this quarterly  report on Form 10-Q of First Banking  Center,
Inc.;

2) Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4)  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5) The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

Date: November 14, 2003

      /s/ James Schuster
      ------------------
          James Schuster
          Chief Financial Officer

                                     Page 21
Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The  following  certification  is provided by the  undersigned  Chief  Executive
Officer of First Banking Center,  Inc. on the basis of such officer's  knowledge
and belief for the sole purpose of complying  with 18 U.S.C.  Section  1350,  as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                 CERTIFICATION

In connection  with the  Quarterly  Report of First  Banking  Center,  Inc. (the
"Company")  on Form 10-Q for the period ended  September  30, 2003 as filed with
the Securities and Exchange  Commission on November 14, 2003 (the "Report"),  I,
Brantly  Chappell,  Chief  Executive  Officer of the  Company,  hereby  certify,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.

      /s/Brantly Chappell
      ------------------------------
      Name:  Brantly Chappell
      Title: Chief Executive Officer
      Date:  November 14, 2003

                                     Page 22
Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The  following  certification  is provided by the  undersigned  Chief  Financial
Officer of First Banking Center,  Inc. on the basis of such officer's  knowledge
and belief for the sole purpose of complying  with 18 U.S.C.  Section  1350,  as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                 CERTIFICATION

In connection  with the  Quarterly  Report of First  Banking  Center,  Inc. (the
"Company")  on Form 10-Q for the period ended  September  30, 2003 as filed with
the Securities and Exchange  Commission on November 14, 2003 (the "Report"),  I,
James Schuster, Chief Financial Officer of the Company, hereby certify, pursuant
to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.

      /s/James Schuster
      ------------------------------
      Name:  James Schuster
      Title: Chief Financial Officer
      Date:  November 14, 2003

                                     Page 23