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                                  EXHIBIT 10.12

                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                   AGREEMENT


Insurer:                           Alexander Hamilton Life Insurance Company

Policy Number:                     AH5001102

Bank:                              Chesapeake Federal Savings & Loan Association

Insured:                           Robert T. Jefferson

Relationship of Insured to Bank:   Director

The respective rights and duties of the Bank and the Insured in the subject
policy shall be as defined in the following:

I.   DEFINITIONS

     Refer to the policy contract for the definition of all terms in this
     Agreement.

II.  POLICY TITLE AND OWNERSHIP

     Title and ownership shall reside in the Bank for its use and for the use of
     the Insured all in accordance with this Agreement. The Bank alone may, to
     the extent of its interest, exercise the right to borrow or withdraw on the
     policy cash values. Where the Bank and the Insured (or assignee, with the
     consent of the Insured) mutually agree to exercise the right to increase
     the coverage under the subject split dollar policy, then, in such event,
     the rights, duties and benefits of the parties to such increased coverage
     shall continue to be subject to the terms of this Agreement.

III. BENEFICIARY DESIGNATION RIGHTS

     The Insured (or assignee) shall have the right and power to designate a
     beneficiary or beneficiaries to receive his share of the proceeds payable
     upon the death of the Insured, and to elect and change a payment option for
     such beneficiary, subject to any right or interest the Bank may have in
     such proceeds, as provided in this Agreement.

IV.  PREMIUM PAYMENT METHOD

     The Bank shall pay an amount equal to the planned premiums and any other
     premium payments that might become necessary to keep the policy in force.

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V.    TAXABLE BENEFIT

      Annually the Insured will receive a taxable benefit equal to the assumed
      cost of insurance as required by the Internal Revenue Service. The Bank
      (or its administrator) will report to the Employee the amount of imputed
      income received each year on Form W-2 or its equivalent.

VI.   DIVISION OF DEATH PROCEEDS

      Subject to Paragraph VII herein, the division of the death proceeds of the
      policy is as follows:

      A.   Upon the death of the Insured, the Insured's beneficiary(ies),
           designated in accordance with Paragraph III, shall be entitled to an
           amount equal to one hundred percent (100%) of the net at risk
           insurance portion of the proceeds. The net at risk insurance portion
           is the total proceeds less the cash value of the policy.

      B.   The Bank shall be entitled to the remainder of such proceeds.

      C.   The Bank and the Insured (or assignees) shall share in any interest
           due on the death proceeds on a pro rata basis as the proceeds due
           each respectively bears to the total proceeds, excluding any such
           interest.

VII.  DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY

      The Bank shall at all times he entitled to an amount equal to the policy's
      cash value, as that term is defined in the policy contract, less any
      policy loans and unpaid interest or cash withdrawals previously incurred
      by the Bank and any applicable surrender charges. Such cash value shall be
      determined as of the date of surrender or death as the case may be.

VIII. PREMIUM WAIVER

      If the policy contains a premium waiver provision, such waived amounts
      shall be considered for all purposes of this Agreement as having been paid
      by the Bank.

IX.   RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

      In the event the policy involves an endowment or annuity element, the
      Bank's right and interest in any endowment proceeds or annuity benefits,
      on expiration of the deferment period, shall be determined under the
      provisions of this Agreement by regarding such endowment proceeds or the
      commuted value of such annuity benefits as the policy's cash value. Such
      endowment proceeds or annuity benefits shall be considered to be like
      death proceeds for the purposes of division under this Agreement.

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X.    TERMINATION OF AGREEMENT

      This Agreement shall terminate at the option of the Bank following thirty
      (30) days written notice to the Insured if the Insured shall be discharged
      from service with the Bank for cause. The term "for cause" shall mean
      gross negligence or gross neglect or the commission of a felony or
      gross-misdemeanor involving moral turpitude, fraud, dishonesty or willful
      violation of any law that results in any adverse effect on the Bank.

      Upon such termination, the Insured (or assignee) shall have a ninety (90)
      day option to receive from the Bank an absolute assignment of the policy
      in consideration of a cash payment to the Bank, whereupon this Agreement
      shall terminate. Such cash payment shall be the greater of:

      1.   The Bank's share of the cash value of the policy on the date of such
           assignment, as defined in this Agreement.

      2.   The amount of the premiums which have been paid by the Bank prior to
           the date of such assignment.

      Should the Insured (or assignee) fail to exercise this option within the
      prescribed ninety (90) day period, the Insured (or assignee) agrees that
      all of his rights, interest and claims in the policy shall terminate as of
      the date of the termination of this Agreement.

      Except as provided above, this Agreement shall terminate upon distribution
      of the death benefit proceeds in accordance with Paragraph VI above.

XI.   INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

      The Insured may not, without the written consent of the Bank, assign to
      any individual, trust or other organization, any right, title or interest
      in the subject policy nor any rights, options, privileges or duties
      created under this Agreement.

XII.  AGREEMENT BINDING UPON THE PARTIES

      This Agreement shall bind the insured and the Bank, their heirs,
      successors, personal representatives and assigns.

XIII. NAMED FIDUCIARY AND PLAN ADMINISTRATOR

      Chesapeake Federal Savings & Loan Association is hereby designated the
      "Named Fiduciary" until resignation or removal by the board of directors.
      As Named Fiduciary, the bank shall be responsible for the management,
      control, and administration of this Split Dollar Plan as established
      herein. The Named Fiduciary may allocate to others certain aspects of the
      management and operation responsibilities of the plan, including

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      the employment of advisors and the delegation of any ministerial duties to
      qualified individuals.

XIV.  FUNDING POLICY

      The funding policy for this Split Dollar Plan shall be to maintain the
      subject policy in force by paying, when due, all premiums required.

XV.   CLAIM PROCEDURES FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR PLAN

      Claim forms or claim information as to the subject policy can be obtained
      by contacting The Benefit Marketing Group, Inc. (770-952-1529). When the
      Named Fiduciary has a claim which may be covered under the provisions
      described in the insurance policy, he should contact the office named
      above, and they will either complete a claim form and forward it to an
      authorized representative of the Insurer or advise the named Fiduciary
      what further requirements are necessary. The Insurer will evaluate and
      make a decision as to payment. If the claim is payable, a benefit check
      will be issued to the Named Fiduciary.

      In the event that a claim is not eligible under the policy, the Insurer
      will notify the Named Fiduciary of the denial pursuant to the requirements
      under the terms of the policy. If the Named Fiduciary is dissatisfied with
      the denial of the claim and wishes to contest such claim denial, he should
      contact the office named above and they will assist in making inquiry to
      the Insurer. All objections to the Insurer's actions should be in writing
      and submitted to the office named above for transmittal to the Insurer.

XVI.  GENDER

      Whenever in this Agreement words are used in the masculine or neuter
      gender, they shall be read and construed as in the masculine, feminine or
      neuter gender, whenever they should so apply.

XVII. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

      The Insurer shall not be deemed a party to this Agreement, but will
      respect the rights of the parties as herein developed upon receiving an
      executed copy of this Agreement. Payment or other performance in
      accordance with the policy provisions shall fully discharge the Insurer
      for any and all liability.

Executed at Baltimore, Maryland this 20/th/ day of October, 1997.

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                                             Chesapeake Federal Savings &
                                                   Loan Association



/s/                                By: /s/ William J. Bocek, Jr.
----------------------------          --------------------------
   Witness                                                 Title

/s/                                /s/ Robert T. Jefferson
----------------------------       -----------------------------
   Witness                         Robert T. Jefferson

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