##### Table of Contents

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended September 30, 2005



| ̈ | Transition report under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------



For the transition period from  to



Commission file number 333-103651



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MARCO COMMUNITY BANCORP, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 84-1620092                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



1770 San Marco Road

Marco Island, Florida 34145

(Address of Principal Executive Offices)



(239) 389-5200

(Issuers Telephone Number, Including Area Code)





(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)



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



Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).    YES ̈NO  x



State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest practicable date;



|                                       |  |                                
|-------------------------------------- |  | -------------------------------
|Common stock, par value $.01 per share |  | 1,826,659 shares               
|(class)                                |  | Outstanding at October 19, 2005



Transitional Small Business Format
(Check One):    YES ̈NO  x



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



INDEX



|                                                                                                                                |  |      
|------------------------------------------------------------------------------------------------------------------------------- |  | -----
|                                                                                                                                |  | Page 
|PART I. FINANCIAL INFORMATION                                                                                                   |  |      
|                                                                                                                                | 
|Item 1. Financial Statements                                                                                                    |  |      
|                                                                                                                                | 
|Condensed Consolidated Balance Sheets -At September 30, 2005 (unaudited) and at December 31, 2004                               |  | 2    
|                                                                                                                                | 
|Condensed Consolidated Statements of Operations -Three and Nine Months ended September 30, 2005 and 2004 (unaudited)            |  | 3    
|                                                                                                                                | 
|Condensed Consolidated Statements of Changes in Stockholders Equity -Nine Months ended September 30, 2005 and 2004 (unaudited) |  | 4    
|                                                                                                                                | 
|Condensed Consolidated Statements of Cash Flows -Nine Months ended September 30, 2005 and 2004 (unaudited)                      |  | 5    
|                                                                                                                                | 
|Notes to Condensed Consolidated Financial Statements (unaudited)                                                                |  | 6-11 
|                                                                                                                                | 
|Review by Independent Registered Public Accounting Firm                                                                         |  | 12   
|                                                                                                                                | 
|Report of Independent Registered Public Accounting Firm                                                                         |  | 13   
|                                                                                                                                | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                                   |  | 14-19
|                                                                                                                                | 
|Item 3. Controls and Procedures                                                                                                 |  | 20   
|                                                                                                                                | 
|PART II. OTHER INFORMATION                                                                                                      |  |      
|                                                                                                                                | 
|Item 1. Legal Proceedings                                                                                                       |  | 20   
|                                                                                                                                | 
|Item 6. Exhibits                                                                                                                |  | 21   
|                                                                                                                                | 
|SIGNATURES                                                                                                                      |  | 22   



1



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



Condensed Consolidated Balance Sheets



|                                                                                                                                  |  |                   |             |                  |             |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | ---------------- | ----------- | -
|                                                                                                                                  |  | September 30,2005 |             | December 31,2004 |            
|                                                                                                                                  |  | (Unaudited)       |             |                  |            
|Assets                                                                                                                            |  |                   |             |                  |             |  
|                                                                                                                                  |  |                  
|Cash and due from banks                                                                                                           |  | $                 | 4,951,618   |                  | 3,089,801   |  
|Federal funds sold                                                                                                                |  |                   | 21,333,000  |                  | 10,259,000  |  
|Interest-bearing deposits                                                                                                         |  |                   | 2,032,869   |                  | 4,694,612   |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Total cash and cash equivalents                                                                                                   |  |                   | 28,317,487  |                  | 18,043,413  |  
|                                                                                                                                  |  |                  
|Loans, net of allowance for loan losses of $1,380,230 in 2005 and $1,081,118 in 2004                                              |  |                   | 118,547,354 |                  | 95,871,269  |  
|Premises and equipment, net                                                                                                       |  |                   | 3,778,534   |                  | 3,577,018   |  
|Federal Reserve Bank stock, at cost                                                                                               |  |                   | 372,000     |                  | 228,150     |  
|Accrued interest receivable                                                                                                       |  |                   | 538,713     |                  | 362,905     |  
|Deferred income taxes                                                                                                             |  |                   | 165,675     |                  | 401,028     |  
|Other assets                                                                                                                      |  |                   | 141,927     |                  | 90,010      |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Total assets                                                                                                                      |  | $                 | 151,861,690 |                  | 118,573,793 |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Liabilities and Stockholders Equity                                                                                              |  |                   |             |                  |             |  
|                                                                                                                                  |  |                  
|Liabilities:                                                                                                                      |  |                   |             |                  |             |  
|Noninterest-bearing demand deposits                                                                                               |  |                   | 6,371,731   |                  | 4,480,244   |  
|Savings, NOW and money-market deposits                                                                                            |  |                   | 81,642,134  |                  | 65,831,087  |  
|Time deposits                                                                                                                     |  |                   | 45,465,047  |                  | 33,197,650  |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Total deposits                                                                                                                    |  |                   | 133,478,912 |                  | 103,508,981 |  
|                                                                                                                                  |  |                  
|Official checks                                                                                                                   |  |                   | 222,378     |                  | 1,113,018   |  
|Accrued interest payable and other liabilities                                                                                    |  |                   | 939,665     |                  | 278,749     |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Total liabilities                                                                                                                 |  |                   | 134,640,955 |                  | 104,900,748 |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Stockholders equity:                                                                                                             |  |                   |             |                  |             |  
|Preferred stock, no par value; 1,000,000 shares authorized, none issued or outstanding                                            |  |                   |            |                  |            |  
|Common stock, $.01 par value; 9,000,000 shares authorized, 1,826,659 and 1,573,091 shares issued and outstanding in 2005 and
2004 |  |                   | 18,267      |                  | 15,731      |  
|Additional paid-in capital                                                                                                        |  |                   | 16,635,982  |                  | 14,322,125  |  
|Retained earnings (accumulated deficit)                                                                                           |  |                   | 566,486     |                  | (664,811    | )
|                                                                                                                                  |  |                   |             |                  |             |  
|Total stockholders equity                                                                                                        |  |                   | 17,220,735  |                  | 13,673,045  |  
|                                                                                                                                  |  |                   |             |                  |             |  
|Total liabilities and stockholders equity                                                                                        |  | $                 | 151,861,690 |                  | 118,573,793 |  
|                                                                                                                                  |  |                   |             |                  |             |  



See
Accompanying Notes to Condensed Consolidated Financial Statements.



2



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Condensed Consolidated Statements of Operations (Unaudited)



|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|------------------------------------------------------ |  | ------------------------------- | --------- | ------------------------------ | --------- | ---- | --------- | ---- | --------- | -
|                                                       |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30, |          
|                                                       |  | 2005                            |           | 2004                           |           | 2005 |           | 2004 |          
|Interest income:                                       |  |                                 |           |                                |           |      |           |      |           |  
|Loans                                                  |  | $                               | 2,066,635 |                                | 977,448   |      | 5,565,907 |      | 1,927,716 |  
|Other interest-earning assets                          |  |                                 | 208,645   |                                | 56,403    |      | 413,802   |      | 127,290   |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Total interest income                                  |  |                                 | 2,275,280 |                                | 1,033,851 |      | 5,979,709 |      | 2,055,006 |  
|                                                       |  |                                 |           |                               
|Interest expense-                                      |  |                                 |           |                                |           |      |           |      |           |  
|Deposits                                               |  |                                 | 725,698   |                                | 361,384   |      | 1,882,252 |      | 622,818   |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Net interest income                                    |  |                                 | 1,549,582 |                                | 672,467   |      | 4,097,457 |      | 1,432,188 |  
|                                                       |  |                                 |           |                               
|Provision for loan losses                              |  |                                 | 77,553    |                                | 220,019   |      | 301,112   |      | 696,159   |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Net interest income after provision for loan losses    |  |                                 | 1,472,029 |                                | 452,448   |      | 3,796,345 |      | 736,029   |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Noninterest income:                                    |  |                                 |           |                                |           |      |           |      |           |  
|Service charges on deposit accounts                    |  |                                 | 3,744     |                                | 3,062     |      | 11,602    |      | 6,244     |  
|Brokerage fees                                         |  |                                 | 155,040   |                                |          |      | 519,107   |      |          |  
|Other service charges and fees                         |  |                                 | 73,734    |                                | 24,547    |      | 201,682   |      | 35,609    |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Total noninterest income                               |  |                                 | 232,518   |                                | 27,609    |      | 732,391   |      | 41,853    |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Noninterest expenses:                                  |  |                                 |           |                                |           |      |           |      |           |  
|Salaries and employee benefits                         |  |                                 | 558,299   |                                | 232,199   |      | 1,381,125 |      | 609,031   |  
|Occupancy and equipment                                |  |                                 | 125,075   |                                | 60,504    |      | 327,498   |      | 149,557   |  
|Advertising                                            |  |                                 | 22,567    |                                | 11,500    |      | 104,006   |      | 51,508    |  
|Insurance                                              |  |                                 | 6,506     |                                | 5,907     |      | 19,927    |      | 15,052    |  
|Data processing                                        |  |                                 | 40,659    |                                | 19,853    |      | 118,703   |      | 64,231    |  
|Telephone                                              |  |                                 | 8,781     |                                | 5,364     |      | 28,108    |      | 13,253    |  
|Professional fees                                      |  |                                 | 60,591    |                                | 30,852    |      | 188,188   |      | 97,528    |  
|Stationery and supplies                                |  |                                 | 13,741    |                                | 18,267    |      | 51,789    |      | 42,391    |  
|Other                                                  |  |                                 | 114,060   |                                | 55,228    |      | 335,458   |      | 167,287   |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Total noninterest expenses                             |  |                                 | 950,279   |                                | 439,674   |      | 2,554,802 |      | 1,209,838 |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Earnings (loss) before income taxes                    |  |                                 | 754,268   |                                | 40,383    |      | 1,973,934 |      | (431,956  | )
|Income taxes                                           |  |                                 | 284,104   |                                | 15,209    |      | 742,637   |      | (162,534  | )
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Net earnings (loss)                                    |  | $                               | 470,164   |                                | 25,174    |      | 1,231,297 |      | (269,422  | )
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Net earnings (loss) per share, basic                   |  | $                               | 0.18      |                                | 0.01      |      | 0.50      |      | (0.14     | )
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Weighted-average number of shares outstanding, basic   |  |                                 | 2,648,534 |                                | 1,952,676 |      | 2,486,360 |      | 1,951,296 |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Net earnings (loss) per share, diluted                 |  | $                               | 0.17      |                                | 0.01      |      | 0.49      |      | (0.14     | )
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Weighted-average number of shares outstanding, diluted |  |                                 | 2,696,802 |                                | 1,952,676 |      | 2,536,452 |      | 1,951,296 |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  
|Dividends per share                                    |  | $                               |          |                                |          |      |          |      |          |  
|                                                       |  |                                 |           |                                |           |      |           |      |           |  



See
Accompanying Notes to Condensed Consolidated Financial Statements.



3



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Condensed Consolidated Statements of Changes in Stockholders Equity



Nine Months Ended September 30, 2005 and 2004



|                                                                    |  |             |        |                          |            |                                      |           |   |                          |            |  
|------------------------------------------------------------------- |  | ----------- | ------ | ------------------------ | ---------- | ------------------------------------ | --------- | - | ------------------------ | ---------- | -
|                                                                    |  | CommonStock |        | AdditionalPaid-InCapital |            | RetainedEarnings(AccumulatedDeficit) |           |   | TotalStockholdersEquity |           
|Balance at December 31, 2003                                        |  | $           | 13,000 |                          | 11,645,950 |                                      | (566,819  | ) |                          | 11,092,131 |  
|Exercise of stock warrants (3,991 shares) (unaudited)               |  |             | 40     |                          | 35,879     |                                      |          |   |                          | 35,919     |  
|Net loss (unaudited)                                                |  |             |       |                          |           |                                      | (269,422  | ) |                          | (269,422   | )
|                                                                    |  |             |        |                          |            |                                      |           |   |                          |            |  
|Balance at September 30, 2004 (unaudited)                           |  | $           | 13,040 |                          | 11,681,829 |                                      | (836,241  | ) |                          | 10,858,628 |  
|                                                                    |  |             |        |                          |            |                                      |           |   |                          |            |  
|Balance at December 31, 2004                                        |  | $           | 15,731 |                          | 14,322,125 |                                      | (664,811  | ) |                          | 13,673,045 |  
|Exercise of stock options and warrants (253,568 shares) (unaudited) |  |             | 2,536  |                          | 2,313,857  |                                      |          |   |                          | 2,316,393  |  
|Net earnings (unaudited)                                            |  |             |       |                          |           |                                      | 1,231,297 |   |                          | 1,231,297  |  
|                                                                    |  |             |        |                          |            |                                      |           |   |                          |            |  
|Balance at September 30, 2005 (unaudited)                           |  | $           | 18,267 |                          | 16,635,982 |                                      | 566,486   |   |                          | 17,220,735 |  
|                                                                    |  |             |        |                          |            |                                      |           |   |                          |            |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



4



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Condensed Consolidated Statements of Cash Flows (Unaudited)



|                                                                                                     |  |                                |             |   |      |             |  
|---------------------------------------------------------------------------------------------------- |  | ------------------------------ | ----------- | - | ---- | ----------- | -
|                                                                                                     |  | Nine Months EndedSeptember 30, |            
|                                                                                                     |  | 2005                           |             |   | 2004 |            
|Cash flows from operating activities:                                                                |  |                                |             |   |      |             |  
|Net earnings (loss)                                                                                  |  | $                              | 1,231,297   |   |      | (269,422    | )
|Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |  |                                |             |   |      |             |  
|Depreciation                                                                                         |  |                                | 178,145     |   |      | 63,743      |  
|Provision for loan losses                                                                            |  |                                | 301,112     |   |      | 696,159     |  
|Deferred income taxes                                                                                |  |                                | 235,353     |   |      | (162,534    | )
|Amortization of loan fees and costs, net                                                             |  |                                | (69,182     | ) |      | (51,939     | )
|Increase in accrued interest receivable                                                              |  |                                | (175,808    | ) |      | (189,181    | )
|(Increase) decrease in other assets                                                                  |  |                                | (51,917     | ) |      | 56,040      |  
|(Decrease) increase in official checks, accrued interest payable and other liabilities               |  |                                | (229,724    | ) |      | 3,134,522   |  
|                                                                                                     |  |                                |             |   |      |             |  
|Net cash provided by operating activities                                                            |  |                                | 1,419,276   |   |      | 3,277,388   |  
|                                                                                                     |  |                                |             |   |      |             |  
|Cash flows from investing activities:                                                                |  |                                |             |   |      |             |  
|Net increase in loans                                                                                |  |                                | (22,908,015 | ) |      | (63,581,240 | )
|Purchase of premises and equipment                                                                   |  |                                | (379,661    | ) |      | (1,823,615  | )
|(Purchase) redemption of Federal Reserve Bank Stock                                                  |  |                                | (143,850    | ) |      | 5,650       |  
|                                                                                                     |  |                                |             |   |      |             |  
|Net cash used in investing activities                                                                |  |                                | (23,431,526 | ) |      | (65,399,205 | )
|                                                                                                     |  |                                |             |   |      |             |  
|Cash flows from financing activities:                                                                |  |                                |             |   |      |             |  
|Net increase in deposits                                                                             |  |                                | 29,969,931  |   |      | 68,878,240  |  
|Net proceeds from exercise of common stock warrants and options                                      |  |                                | 2,316,393   |   |      | 35,919      |  
|                                                                                                     |  |                                |             |   |      |             |  
|Net cash provided by financing activities                                                            |  |                                | 32,286,324  |   |      | 68,914,159  |  
|                                                                                                     |  |                                |             |   |      |             |  
|Net increase in cash and cash equivalents                                                            |  |                                | 10,274,074  |   |      | 6,792,342   |  
|Cash and cash equivalents at beginning of period                                                     |  |                                | 18,043,413  |   |      | 9,848,814   |  
|                                                                                                     |  |                                |             |   |      |             |  
|Cash and cash equivalents at end of period                                                           |  | $                              | 28,317,487  |   |      | 16,641,156  |  
|                                                                                                     |  |                                |             |   |      |             |  
|Supplemental disclosure of cash flow information:                                                    |  |                                |             |   |      |             |  
|Cash paid during the period for:                                                                     |  |                                |             |   |      |             |  
|Interest, net of interest capitalized of $52,000 in 2004                                             |  | $                              | 1,806,302   |   |      | 511,658     |  
|                                                                                                     |  |                                |             |   |      |             |  
|Income taxes                                                                                         |  | $                              | 225,000     |   |      |            |  
|                                                                                                     |  |                                |             |   |      |             |  



See
Accompanying Notes to Condensed Consolidated Financial Statements.



5



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##### Table of Contents

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited)



|1. | Description of Business and Basis of Presentation
|-- | -------------------------------------------------



General. Marco Community Bancorp, Inc. (the Holding Company) which was incorporated on January 28, 2003 owns 100% of the
outstanding common stock of Marco Community Bank (the Bank) and MCB Commercial Lending Corp. (MCBCLC) (collectively the Company). The Holding Companys only business activity is the operation of the Bank and
MCBCLC. The Bank is a state (Florida) chartered commercial bank. The Bank offers a variety of community banking services to individual and corporate customers through its banking office located in Marco Island, Florida. The deposits of the Bank are
insured by the Federal Deposit Insurance Corporation. The Bank commenced operations on August 18, 2003. MCBCLC was incorporated to provide commercial loans to our customers that would otherwise seek financing elsewhere because of lending limit
constraints.



In the opinion of management, the accompanying
condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at September 30, 2005, the results of operations for the three- and
nine-month periods ended September 30, 2005 and 2004 and cash flows for the nine month periods ended September 30, 2005 and 2004. The results of operations for the three- and nine- month periods ended September 30, 2005 are not
necessarily indicative of the results to be expected for the year ending December 31, 2005.



|2. | Loan Impairment and Loan Losses
|-- | -------------------------------



The Company had no impaired loans during the nine months ended September 30, 2005 or 2004. Also, at September 30, 2005 and 2004, the Company had
no nonaccrual loans or loans which were over ninety days past due but still accruing interest.



The activity in the allowance for loan losses follows:



|                          |  |                                 |           |                                |         |      |           |   |      |        
|------------------------- |  | ------------------------------- | --------- | ------------------------------ | ------- | ---- | --------- | - | ---- | -------
|                          |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30,
|                          |  | 2005                            |           | 2004                           |         | 2005 |           |   | 2004
|Beginning balance         |  | $                               | 1,302,677 |                                | 711,856 |      | 1,081,118 |   |      | 235,716
|Charge-offs               |  |                                 |          |                                |        |      | (2,000    | ) |      |       
|Provision for loan losses |  |                                 | 77,553    |                                | 220,019 |      | 301,112   |   |      | 696,159
|                          |  |                                 |           |                                |         |      |           |   |      |        
|Ending balance            |  | $                               | 1,380,230 |                                | 931,875 |      | 1,380,230 |   |      | 931,875
|                          |  |                                 |           |                                |         |      |           |   |      |        



(continued)



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|3. | Earnings (Loss) Per Share (EPS)
|-- | ---------------------------------



Earnings (loss) per share (EPS) of common stock has been computed on the basis of the weighted-average number of shares of common stock
outstanding. Outstanding stock options and warrants are considered dilutive securities in 2005 for purposes of calculating diluted EPS which is computed using the treasury stock method. All per share amounts reflect the three-for-two stock split
declared on October 18, 2005. The following table presents the calculations of EPS.



|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|--------------------------------------------------------------------------- |  | -------- | --------- | ---------------------- | --------- | -------------- | - | -------------- |  | - | ---------------------- | - | -------------- | --------- |  | - | ----- | -
|                                                                            |  | 2005     |           | 2004                   |          
|                                                                            |  | Earnings |           | Weighted-AverageShares |           | PerShareAmount |   | Earnings(Loss) |  |   | Weighted-AverageShares |   | PerShareAmount |          
|Three Months Ended September 30:                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Basic EPS:                                                                  |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Net earnings available to common stockholders                               |  | $        | 470,164   |                        | 2,648,534 |                | $ | 0.18           |  | $ | 25,174                 |   |                | 1,952,676 |  | $ | 0.01  |  
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Effect of dilutive securities-                                              |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Incremental shares from assumed conversion of options and warrants          |  |          |           |                        | 48,268    |                |   |                |  |   |                        |   |                |          |  |   |       |  
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Diluted EPS:                                                                |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Net earnings available to common stockholder and assumed conversions        |  | $        | 470,164   |                        | 2,696,802 |                | $ | 0.17           |  | $ | 25,174                 |   |                | 1,952,676 |  | $ | 0.01  |  
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Nine Months Ended September 30:                                             |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Basic EPS:                                                                  |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Net earnings (loss) available to common stockholders                        |  | $        | 1,231,297 |                        | 2,486,360 |                | $ | 0.50           |  | $ | (269,422               | ) |                | 1,951,296 |  | $ | (0.14 | )
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Effect of dilutive securities-                                              |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Incremental shares from assumed conversion of options and warrants          |  |          |           |                        | 50,092    |                |   |                |  |   |                        |   |                |          |  |   |       |  
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Diluted EPS:                                                                |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  
|Net earnings (loss) available to common stockholder and assumed conversions |  | $        | 1,231,297 |                        | 2,536,452 |                | $ | 0.49           |  | $ | (269,422               | ) |                | 1,951,296 |  | $ | (0.14 | )
|                                                                            |  |          |           |                        |           |                |   |                |  |   |                        |   |                |           |  |   |       |  



(continued)



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|4. | Regulatory Capital
|-- | ------------------



The Bank is required to maintain certain minimum regulatory capital requirements. The following is a summary at September 30, 2005 of the regulatory
capital requirements for a well capitalized financial institution and the Banks actual capital on a percentage basis:



|                                                |  |        |   |  |                       |  
|----------------------------------------------- |  | ------ | - |  | --------------------- | -
|                                                |  | Actual |   |  | RegulatoryRequirement |  
|Total capital to risk-weighted assets           |  | 13.59  | % |  | 10.00                 | %
|Tier I capital to risk-weighted assets          |  | 12.34  | % |  | 6.00                  | %
|Tier I capital to total assets - leverage ratio |  | 9.30   | % |  | 5.00                  | %



|5. | Stock Compensation Plans
|-- | ------------------------



In 2004, the Company adopted three stock option plans. The Employees Stock Option Plan is for the benefit of officers and other key employees of the
Holding Company, the Bank and MCBCLC. A total of 187,500 shares (adjusted) have been reserved for this plan. Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant.
These options have ten year terms and vest 20% a year over a five year period. At September 30, 2005, 60,600 options (adjusted) remain available for grant.



The Directors Stock Option Plan is for the benefit of directors of the Holding Company, the Bank and MCBCLC. A total
of 142,500 shares (adjusted) have been reserved for this plan. Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant. These options have ten year terms and vest 20% a
year over a five year period. At September 30, 2005, 11,250 options (adjusted) remain available for grant.



The Advisory Directors Stock Option Plan is for the benefit of advisory directors of the Company. A total of 37,500 shares (adjusted) have been
reserved for this plan. Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant. These options have six year terms and begin vesting one year after the date of grant at
25% a year over a four year period. At September 30, 2005, 13,500 options (adjusted) remain available for grant.



(continued)



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|5. | Stock Compensation Plans, Continued
|-- | -----------------------------------



A summary of the plans is as follows. All options and exercise price information has been adjusted to reflect the three-for-two stock split declared on
October 18, 2005 (in thousands, except for share and per share information):



|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|----------------------------------------- |  | --------------- | - |  | -------------------------------------- | --------- | --------------------------------------- | ---- | -------------------- | ---- | -
|                                          |  | Numberof Shares |   |  | Range of PerShare OptionExercise Price |           | Weighted-Average PerShare ExercisePrice |      | AggregateOptionPrice |     
|The Employees Plan:                      |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at December 31, 2004  |  | 125,250         |   |  | $                                      | 6.00-6.67 |                                         | 6.10 |                      | 764  |  
|Options granted                           |  | 38,250          |   |  |                                        | 6.67-8.00 |                                         | 6.81 |                      | 260  |  
|Options exercised                         |  | (1,950          | ) |  |                                        | 6.00      |                                         | 6.00 |                      | (12  | )
|Options forfeited                         |  | (38,550         | ) |  |                                        | 6.00-6.67 |                                         | 6.05 |                      | (233 | )
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at September 30, 2005 |  | 123,000         |   |  | $                                      | 6.00-8.00 |                                         | 6.33 |                      | 779  |  
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|The Directors Plan:                      |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at December 31, 2004  |  | 120,000         |   |  | $                                      | 6.00-6.67 |                                         | 6.11 |                      | 733  |  
|Options granted                           |  | 11,250          |   |  |                                        | 6.67      |                                         | 6.67 |                      | 75   |  
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at September 30, 2005 |  | 131,250         |   |  | $                                      | 6.00-6.67 |                                         | 6.15 |                      | 808  |  
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|The Advisory Directors Plan:             |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at December 31, 2004  |  | 26,250          |   |  | $                                      | 6.00      |                                         | 6.00 |                      | 158  |  
|Options forfeited                         |  | (2,250          | ) |  |                                        | 6.00      |                                         | 6.00 |                      | (14  | )
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  
|Options outstanding at September 30, 2005 |  | 24,000          |   |  | $                                      | 6.00      |                                         | 6.00 |                      | 144  |  
|                                          |  |                 |   |  |                                        |           |                                         |      |                      |      |  



The weighted-average
remaining contractual life of the outstanding stock options at September 30, 2005 was 7.7 years.



(continued)



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|5. | Stock Compensation Plans, Continued
|-- | -----------------------------------



Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148
Accounting for Stock-Based Compensation Transition and Disclosure,(collectively, SFAS No. 123), encourages all entities to adopt a fair value based method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. However, it also allows an entity to continue to measure compensation cost for those
plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees(APB No. 25), whereby compensation cost is the excess,
if any, of the quoted market price of the stock at the grant date (or other measurement date) over the amount an employee must pay to acquire the stock. The Company accounts for their stock option plans under the recognition and measurement
principles of APB No. 25. No stock-based employee compensation cost is reflected in net earnings (loss), as all options granted under these 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
earnings (loss) and basic and diluted earnings (loss) per share as if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation. For purposes of proforma disclosure, the estimated fair
value is included in expense in the period vesting occurs ($ in thousands, except per share amounts):



|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | --- | ---- | ------------------------------ | - | ---- | ----- | - | ---- | ---- | -
|                                                                                                                                        |  | Three Months EndedSeptember 30, |     |      | Nine Months EndedSeptember 30, |  
|                                                                                                                                        |  | 2005                            |     | 2004 |                                |   | 2005 |       |   | 2004 |     
|Net earnings (loss), as reported                                                                                                        |  | $                               | 470 |      | 25                             |   |      | 1,231 |   |      | (269 | )
|Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax
benefit |  |                                 |    |      | (22                            | ) |      | (69   | ) |      | (184 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|Proforma net earnings (loss)                                                                                                            |  | $                               | 470 |      | 3                              |   |      | 1,162 |   |      | (453 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|Basic earnings (loss) per share:                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|As reported                                                                                                                             |  | $                               | .18 |      | .01                            |   |      | .50   |   |      | (.14 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|Proforma                                                                                                                                |  | $                               | .18 |      |                               |   |      | .47   |   |      | (.23 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|Diluted earnings (loss) per share:                                                                                                      |  |                                 |     |      |                                |   |      |       |   |      |      |  
|As reported                                                                                                                             |  | $                               | .17 |      | .01                            |   |      | .49   |   |      | (.14 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  
|Proforma                                                                                                                                |  | $                               | .17 |      |                               |   |      | .46   |   |      | (.23 | )
|                                                                                                                                        |  |                                 |     |      |                                |   |      |       |   |      |      |  



(continued)



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|5. | Stock Compensation Plans, Continued
|-- | -----------------------------------



The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:



|                                                                                |  |                                 |            |   |                                |          |   |      |            |   |      |          |  
|------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------ | -------- | - | ---- | ---------- | - | ---- | -------- | -
|                                                                                |  | Three Months EndedSeptember 30, |            |   | Nine Months EndedSeptember 30, |         
|                                                                                |  | 2005                            |            |   | 2004                           |          |   | 2005 |            |   | 2004 |         
|Assumptions:                                                                    |  |                                 |            |   |                                |          |   |      |            |   |      |          |  
|Weighted-average risk-free rate of return                                       |  |                                 | 4.25       | % |                                | 4.30     | % |      | 4.25       | % |      | 4.06     | %
|Annualized dividend yield                                                       |  |                                 |           |   |                                |         |   |      |           |   |      |         |  
|Expected stock volatility                                                       |  |                                 | 10.78      | % |                                | 10.97    | % |      | 10.83      | % |      | 10.97    | %
|Expected life of options granted                                                |  |                                 | 6.50 years |   |                                | 10 years |   |      | 8.07 years |   |      | 10 years |  
|                                                                                |  |                                 |            |  
|Grant-date fair value of options issued during the period                       |  | $                               | 66         |   |                                | 88       |   |      | 93         |   |      | 579      |  
|                                                                                |  |                                 |            |   |                                |          |   |      |            |   |      |          |  
|Weighted-average grant-date fair value of each option granted during the period |  | $                               | 1.73       |   |                                | 1.90     |   |      | 1.88       |   |      | 2.19     |  
|                                                                                |  |                                 |            |   |                                |          |   |      |            |   |      |          |  



|6. | Stock Split
|-- | -----------



On October 18, 2005, the board of directors declared a three-for-two stock split on all outstanding common shares for stockholders of record on
November 15, 2005, which will be distributed on December 15, 2005. Stockholders will receive cash in lieu of fractional shares resulting from this split based on the market value of the common stock on the record date.



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Review by Independent Registered Public Accounting Firm



Hacker, Johnson & Smith PA, the Companys independent registered public accounting firm, have made a limited review of the financial data as of September 30, 2005, and for the three- and nine- month
periods ended September 30, 2005 and 2004 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.



Their report furnished pursuant to Article 10 of Regulation S-X is included herein.



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##### Table of Contents

Report of Independent Registered Public Accounting Firm



Marco Community Bancorp, Inc.

Marco Island, Florida:



We
have reviewed the accompanying interim condensed consolidated balance sheet of Marco Community Bancorp, Inc. and Subsidiaries (the Company) as of September 30, 2005, the related interim condensed consolidated statements of
operations for the three- and nine- month periods ended September 30, 2005 and 2004 and the related interim condensed consolidated statements of cash flows and changes in stockholders equity for the nine-month periods ended
September 30, 2005 and 2004. These interim condensed financial statements are the responsibility of the Companys management.



We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the
Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying interim condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.



We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the
consolidated balance sheet of the Company as of December 31, 2004, and the related consolidated statements of operations, changes in stockholders equity and cash flows for the year then ended (not presented herein); and in our report
dated March 18, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2004, is
fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.



/s/ Hacker, Johnson & Smith PA



HACKER, JOHNSON & SMITH PA

Tampa, Florida

November 1, 2005



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Item 2. Managements Discussion and Analysis

of Financial Condition and Results of
Operations



Comparison of September 30, 2005 and
December 31, 2004



General



Marco Community Bancorp, Inc. (the Holding Company), which was
incorporated on January 28, 2003, owns 100% of the outstanding common stock of Marco Community Bank (the Bank) and MCB Commercial Lending Corp. (MCBCLC) (collectively the Company). The Holding Companys
only business is the ownership and operation of the Bank and MCBCLC. The Bank is a Florida state-chartered commercial bank and its deposits are insured by the Federal Deposit Insurance Corporation. The Bank commenced operations on August 18,
2003. MCBCLC was incorporated to provide commercial loans to our customers that would otherwise seek financing elsewhere because of lending limit constraints.



Liquidity and Capital Resources



The Companys primary source of cash during the nine months ended September 30, 2005 was from net deposit inflows of $30.0 million. Cash was
used primarily to originate loans, net of principal repayments totaling $22.9 million. At September 30, 2005, the Bank exceeded its regulatory liquidity requirements.



Off-Balance Sheet Arrangements and Aggregate Contractual Obligations



The Company is a 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 unused lines of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated
balance sheet. The contract on notional amounts of those instruments reflect the extent of the Companys involvement in particular classes of financial instruments.



The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instruments
for unused lines of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.



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 committed amounts do not necessarily represent future cash requirements. The Company evaluates each customers credit worthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the
Company upon extension of credit, is based on managements credit evaluation of the counterparty.



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Item 2. Managements Discussion and Analysis

of Financial Condition and Results of Operations, Continued



Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, Continued



Unused lines of credit typically result in loans with a market interest rate
when funded.



A summary of the Companys financial
instruments with off-balance sheet risk at September 30, 2005 follows:



|                       |  |                |           
|---------------------- |  | -------------- | ----------
|                       |  | ContractAmount
|Unused lines of credit |  | $              | 30,783,000
|                       |  |                |           



Management believes
that the Company has adequate resources to fund all of its commitments.



Selected Ratios



The following table shows
selected ratios for the periods ended or at the dates indicated:



|                                                 |  |                                     |   |  |                            |    |  |                                     |   
|------------------------------------------------ |  | ----------------------------------- | - |  | -------------------------- | -- |  | ----------------------------------- | --
|                                                 |  | Nine Months Ended September 30,2005 |   |  | Year EndedDecember 31,2004 |    |  | Nine Months Ended September 30,2004 |   
|Average equity as a percentage of average assets |  | 11.14                               | % |  | 14.00                      | %  |  | 16.07                               | % 
|Total equity to total assets at end of period    |  | 11.34                               | % |  | 11.53                      | %  |  | 10.54                               | % 
|Return on average assets (1)                     |  | 1.21                                | % |  | (0.12                      | )% |  | (0.53                               | )%
|Return on average equity (1)                     |  | 10.83                               | % |  | (0.88                      | )% |  | (3.31                               | )%
|Noninterest expense to average assets (1)        |  | 2.51                                | % |  | 2.28                       | %  |  | 2.39                                | % 

---

|(1) | Annualized for the nine months ended September 30, 2005 and 2004.
|--- | -----------------------------------------------------------------



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Results of Operations



The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend
income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average costs; (iii) net interest/dividend income;
(iv) interest-rate spread; and (v) net interest margin. Yields and costs were derived by dividing annualized income or expense by the average balance of assets or liabilities, respectively, for the periods shown.



|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|---------------------------------------------------------------- |  | -------------------------------- | ------- | -------------------- | ---- | ----------------- |  | ---- | -------------- |  | -------------------- | ------ | ----------------- | - | ----- |  | ---- | -
|                                                                 |  | Three Months Ended September 30, |        
|                                                                 |  | 2005                             |         |                      | 2004 |                  
|                                                                 |  | AverageBalance                   |         | InterestandDividends |      | AverageYield/Cost |  |      | AverageBalance |  | InterestandDividends |        | AverageYield/Cost |  
|                                                                 |  | ($ in thousands)                 |        
|Interest-earning assets:                                         |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Loans                                                            |  | $                                | 116,004 |                      |      | 2,066             |  | 7.07 | %              |  | $                    | 72,661 |                   |   | 978   |  | 5.33 | %
|Other interest-earning assets (1)                                |  |                                  | 23,704  |                      |      | 209               |  | 3.50 |                |  |                      | 15,600 |                   |   | 56    |  | 1.42 |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-earning assets                                    |  |                                  | 139,708 |                      |      | 2,275             |  | 6.46 |                |  |                      | 88,261 |                   |   | 1,034 |  | 4.64 |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-earning assets                                       |  |                                  | 6,228   |                      |      |                   |  |      |                |  |                      | 5,072  |                   |   |       |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total assets                                                     |  | $                                | 145,936 |                      |      |                   |  |      |                |  | $                    | 93,333 |                   |   |       |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-bearing liabilities (2):                                |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Savings, MMDA, NOW                                               |  |                                  | 76,092  |                      |      | 320               |  | 1.67 |                |  |                      | 54,385 |                   |   | 220   |  | 1.60 |  
|Time deposits                                                    |  |                                  | 45,403  |                      |      | 406               |  | 3.55 |                |  |                      | 22,657 |                   |   | 150   |  | 2.63 |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-bearing liabilities                               |  |                                  | 121,495 |                      |      | 726               |  | 2.37 |                |  |                      | 77,042 |                   |   | 370   |  | 1.91 |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-bearing liabilities                                  |  |                                  | 7,659   |                      |      |                   |  |      |                |  |                      | 5,463  |                   |   |       |  |      |  
|Stockholders equity                                             |  |                                  | 16,782  |                      |      |                   |  |      |                |  |                      | 10,828 |                   |   |       |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total liabilities and stockholders equity                       |  | $                                | 145,936 |                      |      |                   |  |      |                |  | $                    | 93,333 |                   |   |       |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest income                                              |  |                                  |         |                      | $    | 1,549             |  |      |                |  |                      |        |                   | $ | 664   |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-rate spread (3)                                         |  |                                  |         |                      |      |                   |  | 4.09 | %              |  |                      |        |                   |   |       |  | 2.73 | %
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest-earning assets, net margin (4)                      |  | $                                | 18,213  |                      |      |                   |  | 4.40 | %              |  | $                    | 11,219 |                   |   |       |  | 2.98 | %
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities |  |                                  | 1.15    |                      |      |                   |  |      |                |  |                      | 1.15   |                   |   |       |  |      |  
|                                                                 |  |                                  |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  

---

|(1) | Includes interest-earning deposits, federal funds sold and Federal Reserve Bank stock.
|--- | --------------------------------------------------------------------------------------

|(2) | In 2004, prior to capitalization of interest.
|--- | ---------------------------------------------

|(3) | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Net interest margin is annualized net interest income divided by average interest-earning assets.
|--- | -------------------------------------------------------------------------------------------------



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



The following table sets forth, for the periods indicated, information regarding (i) the
total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average costs;
(iii) net interest/dividend income; (iv) interest-rate spread; and (v) net interest margin. Yields and costs were derived by dividing annualized income or expense by the average balance of assets or liabilities, respectively, for the
periods shown.



|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|---------------------------------------------------------------- |  | ------------------------------- | ------- | -------------------- | ---- | ----------------- |  | ---- | -------------- |  | -------------------- | ------ | ----------------- | - | ----- |  | ---- | -
|                                                                 |  | Nine Months Ended September 30, |        
|                                                                 |  | 2005                            |         |                      | 2004 |                  
|                                                                 |  | AverageBalance                  |         | InterestandDividends |      | AverageYield/Cost |  |      | AverageBalance |  | InterestandDividends |        | AverageYield/Cost |  
|                                                                 |  | ($ in thousands)                |        
|Interest-earning assets:                                         |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Loans                                                            |  | $                               | 111,536 |                      |      | 5,566             |  | 6.67 | %              |  | $                    | 49,187 |                   |   | 1,928 |  | 5.24 | %
|Other interest-earning assets (1)                                |  |                                 | 18,851  |                      |      | 414               |  | 2.94 |                |  |                      | 14,030 |                   |   | 127   |  | 1.21 |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-earning assets                                    |  |                                 | 130,387 |                      |      | 5,980             |  | 6.13 |                |  |                      | 63,217 |                   |   | 2,055 |  | 4.35 |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-earning assets                                       |  |                                 | 5,976   |                      |      |                   |  |      |                |  |                      | 4,503  |                   |   |       |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total assets                                                     |  | $                               | 136,363 |                      |      |                   |  |      |                |  | $                    | 67,720 |                   |   |       |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-bearing liabilities (2):                                |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Savings, MMDA, NOW                                               |  |                                 | 75,890  |                      |      | 909               |  | 1.60 |                |  |                      | 40,399 |                   |   | 472   |  | 1.56 |  
|Time deposits                                                    |  |                                 | 38,648  |                      |      | 974               |  | 3.37 |                |  |                      | 11,772 |                   |   | 203   |  | 2.31 |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-bearing liabilities                               |  |                                 | 114,538 |                      |      | 1,883             |  | 2.20 |                |  |                      | 52,171 |                   |   | 675   |  | 1.73 |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-bearing liabilities                                  |  |                                 | 6,633   |                      |      |                   |  |      |                |  |                      | 4,668  |                   |   |       |  |      |  
|Stockholders equity                                             |  |                                 | 15,192  |                      |      |                   |  |      |                |  |                      | 10,881 |                   |   |       |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total liabilities and stockholders equity                       |  | $                               | 136,363 |                      |      |                   |  |      |                |  | $                    | 67,720 |                   |   |       |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest income                                              |  |                                 |         |                      | $    | 4,097             |  |      |                |  |                      |        |                   | $ | 1,380 |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-rate spread (3)                                         |  |                                 |         |                      |      |                   |  | 3.93 | %              |  |                      |        |                   |   |       |  | 2.62 | %
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest-earning assets, net margin (4)                      |  | $                               | 15,849  |                      |      |                   |  | 4.20 | %              |  | $                    | 11,046 |                   |   |       |  | 2.92 | %
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities |  |                                 | 1.14    |                      |      |                   |  |      |                |  |                      | 1.21   |                   |   |       |  |      |  
|                                                                 |  |                                 |         |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  

---

|(1) | Includes interest-earning deposits, federal funds sold and Federal Reserve Bank stock.
|--- | --------------------------------------------------------------------------------------

|(2) | In 2004, prior to capitalization of interest.
|--- | ---------------------------------------------

|(3) | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Net interest margin is annualized net interest income divided by average interest-earning assets.
|--- | -------------------------------------------------------------------------------------------------



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Comparison of the Three-Month Periods Ended September 30, 2005 and
2004



General. Net earnings for the three months ended
September 30, 2005 were $470,000 or $0.18 basic earnings per share and $0.17 diluted earnings per share compared to net earnings of $25,000 or $0.01 basic and diluted earnings per share for the three months ended September 30, 2004. The
increase in the Companys net earnings was primarily due to an increase in net interest income and noninterest income, partially offset by an increase in noninterest expenses and the provision for income taxes.



Interest Income and Expense. Interest income increased to $2,275,000 for the
three months ended September 30, 2005 from $1,034,000 for the three months ended September 30, 2004. Interest income on loans increased to $2,066,000 primarily due to an increase in the average loan portfolio balance for the three months
ended September 30, 2005 combined with an increase in the weighted-average yield earned in 2005.



Interest expense on interest-bearing deposits increased to $726,000 for the three months ended September 30, 2005 compared to $370,000, prior to interest capitalization, for the three months ended
September 30, 2004. Interest expense on interest-bearing deposits increased due to an increase in the average balance in 2005 combined with an increase in the weighted interest rate paid on deposits.



Provision for Loan Losses. The provision for loan losses is charged to
operations to bring the total allowance to a level deemed appropriate by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general
economic conditions, particularly as they relate to the Companys market areas, and other factors related to the collectibility of the Companys loan portfolio. The provision for loan losses was $78,000 for the three months ended
September 30, 2005 compared to $220,000 for the comparable period in 2004. Management believes the balance in the allowance for loan losses of $1,380,000 at September 30, 2005 is adequate.



Noninterest Income.Noninterest income increased to $233,000 during the three
month period ended September 30, 2005 compared to $28,000 for the same period in 2004. Brokerage fees from MCBCLC transactions accounted for $155,000 of the increase.



Noninterest Expenses. Noninterest expenses increased to $950,000 during the three-month period ended September 30, 2005
compared to $440,000 for the same period in 2004. Noninterest expense increased primarily due to the overall growth of the Company.



Income Taxes. The Company recorded a provision for income taxes of $284,000 for the three-month period ended September 30, 2005 (an effective rate of
37.7%) compared to a provision for income tax of $15,000 for the 2004 period (an effective rate of 37.7%).



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Comparison of the Nine-Month Periods Ended September 30, 2005 and
2004



General. Net earnings for the nine months ended
September 30, 2005 were $1,231,000 or $0.50 basic and $0.49 diluted earnings per share compared to a net loss of $269,000 or $0.14 basic and diluted loss per share for the nine months ended September 30, 2004. The increase in the
Companys net earnings was primarily due to an increase in net interest income and noninterest income, partially offset by an increase in noninterest expenses and the provision for income taxes.



Interest Income and Expense. Interest income increased to $5,980,000 for the
nine months ended September 30, 2005 from $2,055,000 for the nine months ended September 30, 2004. Interest income on loans increased to $5,566,000 primarily due to an increase in the average loan portfolio balance for the nine months
ended September 30, 2005 combined with an increase in the weighted-average yield earned in 2005.



Interest expense on interest-bearing deposits increased to $1,882,000 for the nine months ended September 30, 2005 compared to $675,000, prior to interest capitalization, for the nine months ended
September 30, 2004. Interest expense on interest-bearing deposits increased due to an increase in the average balance in 2005 combined with an increase in the weighted interest rate paid on deposits.



Provision for Loan Losses. The provision for loan losses is charged to
operations to bring the total allowance to a level deemed appropriate by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general
economic conditions, particularly as they relate to the Companys market areas, and other factors related to the collectibility of the Companys loan portfolio. The provision for loan losses was $301,000 for the nine months ended
September 30, 2005 compared to $696,000 for the comparable period in 2004. Management believes the balance in the allowance for loan losses of $1,380,000 at September 30, 2005 is adequate.



Noninterest Income.Noninterest income increased to $732,000 during the nine
month period ended September 30, 2005 compared $42,000 for the same period in 2004. Brokerage fees from MCBCLC transactions accounted for $519,000 of the increase.



Noninterest Expenses. Noninterest expenses increased to $2,555,000 during the nine-month period ended September 30, 2005
compared to $1,210,000 for the same period in 2004. Noninterest expense increased primarily due to the overall growth of the Company.



Income Taxes. The Company recorded a provision for income taxes of $743,000 for the nine-month period ended September 30, 2005 (an effective rate of
37.6%) compared to an income tax benefit of $163,000 for the 2004 period (an effective rate of 37.6%).



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Item 3. Controls and Procedures



|a. | Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports
that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures performed within 90 days of the filing date of this report, the Chief Executive and Chief Financial officers of the Company concluded that the Companys disclosure controls and procedures were
adequate.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. | Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent
to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



PART II. OTHER INFORMATION



Item 1. Legal Proceedings



There are no
material pending legal proceedings to which Marco Community Bancorp, Inc. and Subsidiaries is a party or to which any property is subject.



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



Item 6. Exhibits



The exhibits denominated
with (a) were filed with the Companys Form SB-2 which was filed with the Securities and Exchange Commission on March 7, 2003, those denominated with (b) were filed with the Companys Form 10-KSB which was filed with the
Securities and Exchange Commission on March 29, 2004, those denominated with (c) were filed with the Companys Form SB-2 SEC No. 333-117877 which was filed with the Securities and Exchange Commission on August 2, 2004 and
those denominated with (d) were filed with the Companys Form 10-QSB which was filed with the Securities and Exchange Commission on November 15, 2004.



|            |  |                                                                                                                                              
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                       
|(a) 3.1     |  | Articles of Incorporation of Marco Community Bancorp, Inc. as filed with the Florida Department of State                                     
|            | 
|(a) 3.2     |  | Bylaws of Marco Community Bancorp, Inc.                                                                                                      
|            | 
|(a) 4.1     |  | Specimen Common Stock Certificate                                                                                                            
|            | 
|(a) 4.2     |  | 2003 Warrant Plan                                                                                                                            
|            | 
|(c) 4.4     |  | Specimen Warrant Certificate (2004)                                                                                                          
|            | 
|(c) 10.2    |  | Letter Agreement with Thomas M. Whelan                                                                                                       
|            | 
|(d) 10.3    |  | Employees Stock Option Plan                                                                                                                 
|            | 
|(d) 10.4    |  | Directors Stock Option Plan                                                                                                                 
|            | 
|(d) 10.5    |  | Advisory Directors Stock Option Plan                                                                                                        
|            | 
|31.1        |  | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            | 
|31.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            | 
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
|            | 
|32.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002



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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES



SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                       |  |                               |  |                                            
|---------------------- |  | ----------------------------- |  | -------------------------------------------
|                       |  | MARCO COMMUNITY BANCORP, INC.
|                       |  | (Registrant)                 
|                       |  |                              
|Date: November 4, 2005 |  | By:                           |  | /s/ Richard Storm, Jr.                     
|                       |  |                               |  | Richard Storm, Jr.,                        
|                       |  |                               |  | Chief Executive Officer                    
|                       |  |                              
|Date: November 4, 2005 |  | By:                           |  | /s/ Thomas M. Whelan                       
|                       |  |                               |  | Thomas M. Whelan, Senior Vice President and
|                       |  |                               |  | Chief Financial Officer                    



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