<PAGE>   1


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.   20549

                                   FORM 10-K

 Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended         December 31, 1997
                                  ----------------------------------------------

Commission File Number 0-16595
                       ---------------------------------------------------------

                           SUBURBAN BANCSHARES, INC.
--------------------------------------------------------------------------------
            (Exact name of registrant's as specified in its charter)

<TABLE>
<S>                                                                <C>                        <C>
                           Delaware                                                                     54-1319411
-----------------------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)                               (I.R.S. Employer Identification Number)

7505 Greenway Center Drive                                         Greenbelt, Maryland                          20770            
-----------------------------------------------------------------------------------------------------------------------------------
(Address of principal executive office)                                                                       (Zip Code)
</TABLE>

                                (301) 474-6694
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
                 (Former address if changed since last report)

                    Common Stock, Par Value $0.01 per share
--------------------------------------------------------------------------------
                                (Title of Class)

Name of each Exchange on which registered:         N/A
                                          --------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No 
                                             ---    ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  (  )

The aggregate market value of the Company's voting stock held by non-affiliates
on March 2, 1998, based on the average of the closing bid and asked prices of
such stock on that date:      Approximately $40,040,391
                          -----------------------------

<TABLE>
      <S>                                            <C>
      Common Stock   $0.01 Par Value                 Outstanding at March 2, 1998
      ------------------------------                 ----------------------------
               (class)                                            10,951,218
</TABLE>
<PAGE>   2
                      Documents Incorporated by Reference

Portions of the Corporation's 1997 Annual Report to Shareholders are
incorporated by reference in Part II to the extent provided in Items 5, 6, 7
and 8 hereof.

Portions of the Corporation's definitive proxy statement relating to the 1998
annual meeting of shareholders are incorporated by reference in Part III to the
extent provided in Items 10, 11, 12 and 13 hereof.

                                     PART I
ITEM 1.  Business

GENERAL

         SUBURBAN BANCSHARES, INC. (the "Company" or "Bancshares"), which is
headquartered in Greenbelt, Maryland, was formed under the general corporation
laws of the State of Delaware in 1985 and is registered as a bank holding
company.  The Company formed two national banking associations in Northern
Virginia:  Bank 2000, N.A. and BankStar, N.A., which were merged into a single
bank in March 1991 under the name of Suburban Bank of Virginia, N.A. ("Suburban
Virginia").  In April 1990, the Company acquired Jefferson Bank and Trust
Company, a state-chartered bank with four offices serving the Maryland suburbs
of Washington, D.C.  In March 1991, Jefferson's name was changed to Suburban
Bank of Maryland ("Suburban Maryland").

         On February 19, 1993, the Company entered into an Agreement and Plan
of Reorganization and Recapitalization (the "Plan") with Winfield M. Kelly,
Jr., which provided for a restructure of the Company's Board of Directors and
management, a centralization of operational functions, and the commencement of
a public offering to raise between $4 and $7 million in new capital.  The
offering was concluded on September 27, 1993, with the sale of 5,756,294 shares
with total proceeds to the Company totaling $5,613,237.  Warrants which
accompanied the new shares and which were exercisable in 1994 and  in 1995,
raised another $1,949,849 in new capital.

         On May 12, 1995, the Company completed the disposition of most of the
assets and all of the deposit liabilities of Suburban Virginia to Tysons
Financial Corporation and its subsidiary, Tysons National Bank in McLean,
Virginia. In August 1995, the remaining assets and liabilities of Suburban
Virginia were merged into Suburban Maryland (the "Bank") in a transaction
accounted for as a pooling of interests.

         In October 1996, William R. Johnson announced that he would step down
as President at the beginning of 1997, and on January 2, 1997, Stephen A.
Horvath was named President and Chief Operating Officer of Suburban Bancshares,
Inc. and President and Chief Executive Officer of Suburban Bank of Maryland.
Mr. Horvath also serves as a Director on the Boards of Directors of the Company
and the Bank.

         Currently the Company has a total of seven offices located in the
Maryland suburbs of Washington, D.C. in the communities of Greenbelt, Capitol
Heights, Clinton, Oxon Hill, Rockville, Bethesda and White Flint.  The counties
of Prince George's and Montgomery are the Company's primary markets, but also
served are the surrounding counties in Maryland and the District of Columbia.

         The Bank provides a variety of general commercial and retail banking
services, which include lending, depository, cash management and related
financial services to business and professional customers, as well as retail
customers, on a personalized basis.  The primary focus of the Bank is toward
the small businesses and professionals and their employees in their market
service areas, providing such services as SBA (Small Business Administration)
loans, commercial loans, asset-based and government contract loans, commercial
and residential real estate loans, and consumer-type loans such as home equity,
vehicle, home improvement, mortgage and personal loans.  The Bank also offers
ATM access, credit cards and other financial services.

         The Company is not dependent upon a single customer, or a few
customers, the loss of one or more of which would have a material adverse
effect on its operations.  The operations and earnings of the Company are not
materially affected by seasonal changes or by Federal, state or local
environmental laws or regulations.

COMPETITION

         The Bank operates in a highly competitive environment in which it must
share its market with large regional banks as well as institutions not subject
to the regulatory restrictions of banks and bank holding companies, such as
money market and other mutual funds.





                                       2
<PAGE>   3
ITEM 1.  Business (continued)

The Bank encounters competition from diversified financial institutions,
ranging in size from small banks to the mega-banks operating in the
Mid-Atlantic region, and include commercial banks, savings and loan
associations, credit unions and other lending institutions.

         The principal competitive factors among the Company's competitors can
be classified into two categories: pricing and services.  Interest rates on
deposits, especially time deposits, and interest rates and fees charged to
customers on loans are very competitive.  From a service perspective, financial
institutions compete against each other in convenience of location, types of
services, service costs and banking hours.  The Company is generally
competitive with institutions in its primary service areas with respect to
interest rates paid on deposit accounts, charges for services provided, and
interest rates and fees charged on loans.

EMPLOYEES

         As of March 2, 1998, the Company employed 73 full-time equivalent
employees.  The employees of the Company are not represented by any collective
bargaining group.  Management of the Company considers relations with its
employees to be satisfactory.

SUPERVISION AND REGULATION

OVERVIEW

         The Company and the Bank are subject to governmental supervision,
regulation and control and, as such, may be susceptible to future adjustments
and legislative or policy changes.

         The Company is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended, and, as such, is subject to regulation
and supervision by the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board" or "FRB").  The Company is required to file quarterly
reports of its operations with the FRB.

         Suburban Bank of Maryland is a state-chartered non-member bank and is
subject primarily to regulation and examination by the Commissioner of
Financial Regulation for the State of Maryland (the "Commissioner") and by the
Federal Deposit Insurance Corporation (the "FDIC"), which insures Bank's
deposits to the maximum extent permitted by law.

BANK HOLDING COMPANY REGULATIONS

         As a bank holding company, the Company can engage in banking-related
activities as permitted by the Federal Reserve Board, directly or through
newly-formed subsidiaries or by acquiring companies already established in such
activities subject to the FRB regulations relating to those activities.
However, except for activities related to its operation as the holding company
of the Bank, the Company does not anticipate engaging in any other
banking-related activity in the foreseeable future.

CAPITAL ADEQUACY

         The Bank and the Company are subject to various regulatory capital
requirements administered by the Federal banking agencies.  Failure to meet
minimum capital requirements can initiate certain mandatory - and possibly
additional discretionary - actions by regulators that, if undertaken, could
have a direct material effect on the Company's financial statements.  Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

         Quantitative measures established by regulation to ensure capital
adequacy require the Bank and the Company to maintain amounts and ratios (set
forth in the table below) of total and Tier 1 capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as
defined) to average assets (as defined).  Management believes, as of December
31, 1997, that the Bank and the Company meet all capital adequacy requirements
to which it is subject.

         As of December 31, 1997, the most recent notification from the Federal
Deposit Insurance Corporation categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action.  To be categorized as
well capitalized the Bank must maintain





                                       3
<PAGE>   4
ITEM 1.  Business (continued)

minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set
forth in the table.  There are no conditions or events since that notification
that management believes have changed the Bank's category.

         The Company's and the Bank's actual capital amounts and ratios are
presented in the table below:

<TABLE>
<CAPTION>
                                                                           FOR CAPITAL             TO BE WELL
                                                       ACTUAL           ADEQUACY PURPOSES         CAPITALIZED
 (in thousands)                                   AMOUNT     RATIO      AMOUNT      RATIO      AMOUNT      RATIO
 <S>                                               <C>       <C>         <C>         <C>       <C>           <C>
 As of December 31, 1997:
    Total capital (to risk-weighted assets):
           Company                                 $18,959   18.74%      $8,094      8.00%     $10,118       10.00%
           Suburban Bank of Maryland                14,415   14.48        7,966      8.00        9,958       10.00
    Tier 1 capital (to risk-weighted assets):
           Company                                  17,692   17.49        4,047      4.00        6,071        6.00
           Suburban Bank of Maryland                13,168   13.22        3,983      4.00        5,975        6.00
    Tier 1 capital (to average assets):                           
           Company                                  17,692   10.82        6,542      4.00        8,178        5.00
           Suburban Bank of Maryland                13,168    8.25        6,383      4.00        7,979        5.00
                                                                  
 As of December 31, 1996:
     Total capital (to risk-weighted assets):
           Company                                 $16,689   20.45%      $6,530      8.00%      $8,162       10.00%
           Suburban Bank of Maryland                12,292   15.36        6,403      8.00        8,003       10.00
     Tier 1 capital (to risk-weighted assets):                                                                    
           Company                                  15,663   19.19        3,265      4.00        4,897        6.00
           Suburban Bank of Maryland                11,286   14.10        3,201      4.00        4,802        6.00
     Tier 1 capital (to average assets):                                                                          
           Company                                  15,663   12.75        4,913      4.00        6,141        5.00
           Suburban Bank of Maryland                11,286    9.47        4,766      4.00        5,958        5.00
</TABLE>





                                       4
<PAGE>   5
ITEM 1.  Business (continued)

                            STATISTICAL INFORMATION

         The following tables present statistical information relating to
Suburban Bancshares, Inc. and its subsidiaries on a consolidated basis.

I.       DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY

         The table presented below shows average balances, net interest income
and net interest margin:

AVERAGE BALANCES, INTEREST YIELDS AND RATES, AND NET INTEREST MARGIN

<TABLE>
<CAPTION>
Years ended December 31,                      1997                              1996                                1995
                                                                                                                
Assets                          Average    Interest   Average     Average  Interest    Average       Average    Interest    Average
                                Balance               Yield or    Balance              Yield or      Balance                Yield or
                                                      Rate                             Rate                                 Rate
<S>                             <C>           <C>          <C>    <C>         <C>            <C>       <C>         <C>       <C>
Interest-earning assets:                                                                                                     
 Loans                          $ 92,200      $8,752       9.49%  $74,014     $7,409         10.01%     $64,616    $6,525    10.10%
 Investment securities            27,471       1,746       6.35%   17,325      1,080          6.23%      20,235     1,229     6.07%
 Federal funds sold and other                                                                                                      
 deposits                         15,730         865       5.50%   13,017        687          5.28%      10,377       604     5.82%
Total interest-earning assets    135,401      11,363       8.39%  104,356      9,176          8.79%      95,228     8,358     8.78%
                                                                                                                             
Noninterest-earning assets:                                                                                                  
  Cash and due from banks          7,517                            7,073                                 6,322              
  Premises and equipment           1,591                            1,213                                 1,045              
  Other assets                     5,302                            2,155                                 3,124              
  Less: Allowance for loan                                                                                                    
  losses                          (1,530)                          (1,525)                               (2,342)               
                                                                                                                             
Total noninterest-earning                                                                                                    
assets                            12,880                            8,916                                 8,149              
                                                                                                                             
TOTAL ASSETS                    $148,281                         $113,272                              $103,377              
                                                                                                                             
Liabilities and shareholders'                                                                                                
equity                                                                                                                       
                                                                                                                             
 Interest-bearing liabilities:                                                                                                     
 Checking, money market &                                                                                                          
 savings                        $ 76,276      $3,030       3.97%  $56,186     $2,030          3.61%     $50,455    $1,816     3.60%
 Time deposits                    27,111       1,490       5.50%   23,499      1,332          5.67%      23,416     1,290     5.51%
 Securities sold under                                                                                                       
 repurchase agreements             1,220          50       4.08%       --         --             --         261        13     4.83%
                                                                                                                             
Total interest-bearing                                                                                                             
liabilities                      104,607       4,570       4.37%   79,685      3,362          4.22%      74,132     3,119     4.21%
                                                                                                                             
Noninterest-bearing                                                                                                          
liabilities:                                                                                                                 
 Noninterest-bearing deposits     24,442                           19,332                                18,612              
                                                                                                                             
Total funding sources            129,049       4,570       3.54%   99,017      3,362          3.39%      92,744     3,119     3.36%
                                                                                                                             
Other liabilities                    820                              495                                   553              

TOTAL LIABILITIES                129,869                           99,512                                93,297              
                                                                                                                             
Shareholders' equity              18,412                           13,760                                10,080              
                                                                                                                             
TOTAL LIABILITIES AND                                                                                                        
SHAREHOLDERS' EQUITY            $148,281                         $113,272                              $103,377              
                                                                                                                             
Net interest income                           $6,793                          $5,814                               $5,239    
                                                                                                                             
Net interest spread                                        4.85%                              5.40%                           5.42%
                                                                                                                             
Net interest margin                                        5.02%                              5.57%                           5.50%
</TABLE>
Basis of preparation:   Amounts are in thousands; balances are presented as
annualized daily averages; nonaccrual loans are included in the loan category
as earning assets.





                                       5
<PAGE>   6
ITEM 1.  Business (continued)

         The following table presents the dollar amount of change in interest
income and expense and the corresponding amounts attributable to changes in
rate and to changes in volume:

 NET INTEREST INCOME ANALYSIS

<TABLE>
<CAPTION>
                                                             1997 OVER 1996                            1996 OVER 1995
                                                 ---------------------------------------------------------------------------------
 (in thousands)                                     INCREASE          CHANGE DUE TO          INCREASE           CHANGE DUE TO
                                                                  -----------------------                   ----------------------
                                                   (DECREASE)       RATE       VOLUME       (DECREASE)       RATE       VOLUME
                                                 ---------------------------------------------------------------------------------
 <S>                                                     <C>       <C>           <C>                <C>     <C>             <C>
 Interest-Earning Assets:

    Loans                                                $1,343     $(400)       $1,743             $885      $(56)         $941

    Taxable investment securities                           666       104           562             (150)       31          (181)

    Money market investments                                178       (38)          216               83       (60)          143
                                                 ---------------------------------------------------------------------------------

 Total Interest-Earning Assets                            2,187      (334)        2,521              818       (85)          903

 Interest-Bearing Liabilities:

    Checking, savings & money markets                     1,000       218           782              214         7           207

    Time deposits                                           158       (42)          200               42        37             5

    Fed funds purchased/repurchase agreements                50        --            50              (13)       --           (13)
                                                 ---------------------------------------------------------------------------------
 Total Interest-Bearing Liabilities                       1,208       176         1,032              243        44           199
                                                 =================================================================================

 NET INTEREST INCOME                                       $979     $(510)       $1,489             $575     $(129)         $704
                                                 =================================================================================
</TABLE>


NOTE:    The rate/volume change is allocated between volume change and rate
         change using the ratio each of the components bears to the absolute
         value of their total.

         II.      INVESTMENT PORTFOLIO

         The following table shows the estimated fair value of the investment
portfolio of the Company by category at December 31:

<TABLE>
<CAPTION>
 (in thousands)                                              1997             1996            1995
                                                             ----             ----            ----
 <S>                                                        <C>             <C>               <C>
 U.S. Treasury                                              $   4,404       $   7,379        $  9,638
 Federal Agencies                                              24,976          12,921           7,079
 Mortgage-back obligations ("MBO")                                 91             166             311
 Collateralized mortgage obligations                               --              34              44
 Other                                                            889             790             995
                                                          ------------     -----------      ----------
 TOTAL                                                        $30,360       $  21,290         $18,067
                                                          ============     ===========      ==========

</TABLE>


         All securities are classified as available for sale.





                                       6
<PAGE>   7
ITEM 1.  Business (continued)

         The table presented below sets forth by type and contractual maturity
the Company's investment securities as of December 31, 1997 (dollars in
thousands).  Expected maturities may differ from contracted maturities because
borrowers may have the right to call or prepay certain obligations with or
without call premiums or prepayment penalties.

<TABLE>
<CAPTION>
   Maturity - estimated           U.S.            Federal
        fair value             Treasuries         Agencies         MBO's         Other          Total             Yield
--------------------------   --------------    -------------     ----------     ---------     ------------      ------------
 <S>                                <C>            <C>              <C>           <C>           <C>                   <C>
 1 Year or less                     $2,945         $  1,197          $  --        $  291        $  4,433              6.20%
 > 1 to 5 Years                      1,459           19,270             13           598          21,340              6.21%
                                                                                                                             
 > 5 to 10 Years                        --            4,509             --            --           4,509              6.86%
 Over 10 Years                          --               --             78            --              78              7.25%
                             --------------    -------------     ----------     ---------     -----------       ------------ 
 Total estimated
    fair value                      $4,404          $24,976            $91          $889         $30,360              6.32%
                             ==============    =============     ==========     =========     ===========       ============
 Yield                               6.17%            6.35%          7.04%         6.08%           6.32%

 Weighted Average
 Maturity in Years                   1.03             3.17          14.49          1.45            2.84
</TABLE>

None of the Company's securities holdings by individual issuers (excluding the
United States government or its agencies) exceeded 10% of total shareholders'
equity at December 31, 1997.

III.     LOAN PORTFOLIO

         The following table presents the major categories of the Company's
loan portfolio at December 31 (in thousands):


<TABLE>
<CAPTION>
                                             1997             1996              1995
                                       --------------   --------------     -------------
 <S>                                       <C>              <C>               <C>
 Construction                              $ 12,071         $   9,944         $  4,461
 Real Estate                                 44,181            35,157           32,098
 Commercial                                  49,644            21,941           20,030
 Individual                                   5,069             5,046            4,622
 Other                                        2,578             1,360            1,811
                                       --------------   --------------     -------------
                                           $113,543           $73,448          $63,022
 Less: Allowance for loan losses             (1,473)           (1,508)          (1,467)
                                       --------------   --------------     -------------
 Total loans, net                          $112,070           $71,940           $61,555
                                       ==============   ==============     =============
</TABLE>

The following table presents the contractual maturity distribution and
interest-rate sensitivity of the Company's commercial and real estate loans at
December 31, 1997 (in thousands).  The Company's experience indicates that
certain loans, on an individual basis, will be renewed, rescheduled or repaid
prior to scheduled maturity.  Accordingly, the table should not be regarded as
a forecast of future cash collections.





                                       7
<PAGE>   8

ITEM 1.  Business (continued)

<TABLE>
<CAPTION>
                                                                              REMAINING MATURITIES
                                             -------------------------------------------------------------------------------------
                                                1 YEAR OR LESS        1 TO 5 YEARS        DUE AFTER 5 YEARS          TOTALS
                                             -------------------------------------------------------------------------------------
 <S>                                                      <C>                  <C>                   <C>                 <C>
 CONSTRUCTION                                             $  490               $ 6,097               $ 5,484             $ 12,071
 REAL ESTATE                                               1,487                18,990                23,704               44,181
 COMMERCIAL                                                  551                21,180                27,913               49,644
                                             -------------------------------------------------------------------------------------
 TOTAL                                                    $2,528               $46,267               $57,101             $105,896
                                             =====================================================================================

 INTEREST RATE SENSITIVITY

 VARIABLE RATE                                            $1,619               $33,040               $44,119             $ 78,778
 FIXED RATE                                                  909                13,227                12,982               27,118
                                             -------------------------------------------------------------------------------------
 TOTAL                                                    $2,528               $46,267               $57,101             $105,896
                                             =====================================================================================
</TABLE>


Nonperforming Assets

         Nonperforming assets consist of loans on which interest is no longer
accrued, real estate acquired through foreclosure or insubstance foreclosure,
and real estate on which deeds in lieu of foreclosure have been accepted.
Restructured loans are loans on which the borrower has been granted a
concession as to rate or term as a result of financial difficulty.

         Generally, the accrual of interest on a loan is discontinued when the
full collection of principal or interest is in doubt, or when the payment of
principal or interest has become contractually 90 days past due, unless the
obligation is both well secured and in the process of collection.  Loans may be
placed on nonaccrual status when past due less than 90 days if collection
becomes uncertain based upon an evaluation of the fair value of the collateral
and the financial strength of borrower.  When a loan is placed on nonaccrual
status, interest income in the current period is reduced by the amount of any
accrued and uncollected interest.  Subsequent payments of interest are applied
as a reduction of principal when concern exists as to the ultimate collection
of principal, otherwise such payments are recognized as interest income.  Loans
are removed from nonaccrual status when they have demonstrated a period of
performance and when concern no longer exists as to the collectibility of
principal or interest.

         Foreclosed real estate is recorded at the lower of cost or fair value
at acquisition date.  Subsequent to acquisition, foreclosed real estate is
carried at lower of cost or fair value less estimated selling costs, based upon
periodic evaluation by management.  Costs relating to property improvements are
capitalized to the extent that they are recoverable, and costs relating to
holding property are expensed when incurred.  Gains or losses on the sale of
foreclosed real estate are recognized upon disposition of the property.

         The Company has no obligation to make further extensions of credit
under loans classified as troubled debt restructurings or nonaccrual at
December 31, 1997, 1996 or 1995.  Nonaccrual and restructured loans are
classified as loans in the accompanying schedules and the Consolidated Balance
Sheets.





                                       8
<PAGE>   9
ITEM 1.  Business (continued)

         The table below shows nonperforming assets and troubled debt
restructurings (in thousands):

<TABLE>
<CAPTION>
 December 31,                                                                  1997             1996            1995
----------------------------------------------------------------------------------------------------------------------
 <S>                                                                         <C>              <C>               <C>
 Nonaccrual loans                                                            $1,763           $  771          $1,592
 Foreclosed real estate                                                         349              212           1,152
                                                                              -----            -----           -----

 Total nonperforming assets                                                  $2,112           $  983          $2,744
----------------------------------------------------------------------------------------------------------------------
 Loans classified as nonaccrual but contractually current                      $126           $    1            $105
----------------------------------------------------------------------------------------------------------------------
 Restructured loans classified as nonaccrual above                              824               --              88
 Restructured loans accruing                                                     44            1,088           1,173
                                                                               ----            -----           -----

 Total restructured loans                                                      $868           $1,088          $1,261
----------------------------------------------------------------------------------------------------------------------
</TABLE>

There was one loan of $160,000 past due 90 days and still accruing at December
31, 1997.  There were two loans past due 90 days or more and still accruing at
December 31, 1996 totaling $35,000 and none, in 1995.

         The gross interest income that would have been received during the
year ended December 31, 1997 on nonaccrual and accruing restructured loans had
such loans been current in accordance with their original terms throughout the
year was approximately $260,000 and $2,000, respectively.  Recorded interest
income was approximately $1,700 on troubled debt restructurings.  No interest
income was recorded on loans classified as nonaccrual in 1997.

         The following schedule presents a breakdown by type of property of
foreclosed real estate (in thousands):

<TABLE>
<CAPTION>
         ------------------------------------------------------------------------------------------------
            Years ended December 31,                      1997               1996                 1995
         ------------------------------------------------------------------------------------------------
            <S>                                           <C>               <C>               <C>
            Commercial land                               $ --              $  --             $    546
            Residential land                                --                 --                  254
            Commercial property                            402                265                  567
            1-4 family residential                          --                 --                  147
         ------------------------------------------------------------------------------------------------
            Total                                          402                265                1,514
              Allowance for losses                         (53)               (53)                (362)
         ------------------------------------------------------------------------------------------------
            Total estimated fair value                    $349              $ 212               $1,152
         ================================================================================================
</TABLE>


         Activity in the allowance for losses on foreclosed real estate is as
follows:

<TABLE>
<CAPTION>
         ---------------------------------------------------------------------------------------------------
                                                              1997               1996                 1995
         ---------------------------------------------------------------------------------------------------
            <S>                                               <C>            <C>                    <C>
            Balance at beginning of year                      $ 53           $   362                $ 748
            Provision for losses                                --                --                  231
            Dispositions, net                                   --              (309)                (597)
            Charge-offs, net of recoveries                      --                --                  (20)
         ---------------------------------------------------------------------------------------------------
            Balance at end of year                            $ 53           $    53                $ 362
         ---------------------------------------------------------------------------------------------------
</TABLE>





                                       9
<PAGE>   10
ITEM 1.  Business (continued)

IV.      SUMMARY OF LOAN LOSS EXPERIENCE

         The allowance for loan losses is an estimate of uncollectible loans
and reduces the gross amount of loans outstanding.  Each loan deemed to involve
significant risk of loss is considered individually to determine the possible
amount of such loss and the remaining loans are evaluated in the aggregate.

         The allowance for loan losses is increased through charges to
operations in the form of a provision for loan losses and is reduced by
reversals of previous years' provisions.  Charge-offs are made against the
allowance and subsequent recoveries, if any, are credited to the allowance.
The allowance is maintained at a level that management believes will be
adequate to absorb losses on existing loans that may become uncollectible.
Management's periodic evaluation of the adequacy of the allowance is based on
the Company's past loan loss experience, known and inherent risks in the
portfolio, adverse situations that may affect the borrower's ability to repay
(including the timing of future payments), the estimated value of any
underlying collateral, composition of the loan portfolio, current economic
conditions and other relevant factors.  This evaluation is inherently
subjective as it requires material estimates including the amounts and timing
of future cash flows expected to be received on impaired loans that may be
susceptible to significant change.

         Management believes that the allowances for losses on loans and
foreclosed real estate are adequate given current circumstances and conditions.
While management uses available information to recognize losses on loans and
foreclosed real estate, future additions to the allowances may be necessary
based on changes in economic conditions, the situations of specific borrowers,
or other factors.

         The following table shows activity affecting the allowance for
possible loan losses for the periods indicated (dollars in thousands):

<TABLE>
<CAPTION>
         December 31,                                   1997           1996           1995
                                                        ----           ----           ----
         <S>                                            <C>           <C>              <C>
         Balance at beginning of period                 $1,508        $1,467           $2,750
         Provision for loan losses                         254          (227)            (260)
         Loans charged off:
            Construction                                     0             0                0
            Real Estate                                    377           228              657
            Commercial                                       0           168              639
            Individual                                      41            48               44
            Other                                            0             0                0
                                                       -------        -------         -------
         Total loans charged off                          $418          $444           $1,340
         
         Recoveries:
            Construction                                     0             0                0
            Real Estate                                     58           182               38
            Commercial                                      60           517              243
            Individual                                      11            13               36
            Other                                            0             0                0
                                                        ------         ------           -----
         Total recoveries                                 $129          $712             $317
         
         Total allowance at end of period               $1,473        $1,508           $1,467
                                                    ============    ===========      ==========
         
         Net loans charged off as a % of
        average loans outstanding                        0.36%         -0.36%           1.58%
                                                    ============    ===========      ==========
</TABLE>

         The following is a breakdown of the allowance for loan losses by loan
category (in thousands).  This breakdown represents management's best judgment
as to the allocation of the allowance based on the risk characteristics
associated with each category of loans.  The allowance is allocated to specific
categories of loans for analysis purposes only.





                                       10
<PAGE>   11
ITEM 1.  Business (continued)

<TABLE>
<CAPTION>
                               12/31/97                          12/31/96                            12/31/95
                    -------------------------------------------------------------------------------------------------------
                      Allowance      Distribution      Allowance       Distribution        Allowance        Distribution
                      Allocation       of Loans        Allocation        of Loans          Allocation         of Loans
                    -------------------------------------------------------------------------------------------------------
 <S>                      <C>              <C>             <C>                <C>              <C>                <C>
 Construction              $  134           10.63%          $  150             13.54%          $     62             7.08%
 Real Estate                  764           38.91%             828             47.87%               884            50.93%
 Commercial                   489           43.72%             427             29.87%               432            31.78%
 Individual                    57            4.47%              81              6.87%                64             7.34%
 Other                         29            2.27%              22              1.85%                25             2.87%
                    -------------------------------------------------------------------------------------------------------
                           $1,473          100.00%          $1,508            100.00%            $1,467           100.00%
                    =======================================================================================================
</TABLE>


V.       DEPOSITS

         The following table provides a breakdown by category of deposits of
the Company on a daily average basis at the dates indicated (dollars in
thousands):

<TABLE>
<CAPTION>
 Year ending December 31,                             1997                            1996                          1995
                                           -----------------------------------------------------------------------------------------
                                             Average         Average         Average         Average        Average       Average
                                             Amount            Rate          Amount           Rate          Amount          Rate
                                           -----------------------------------------------------------------------------------------
 <S>                                            <C>               <C>           <C>              <C>          <C>              <C>
 Demand deposits                                 $24,442          0.00%         $19,332          0.00%        $18,612          0.00%
 Money market, savings, and interest
 checking                                         76,276          3.97%          56,186          3.61%         50,455          3.60%

 Time deposits                                    27,111          5.50%          23,499          5.67%         23,416          5.51%
                                           --------------                 --------------                --------------

 TOTAL DEPOSITS                                 $127,829                        $99,017                       $92,483
                                           ==============                 ==============                ============== 
</TABLE>                                                                     

         Maturities of certificates of deposit and other time deposits greater
than $100,000 outstanding at December 31, 1997 are presented below (dollars in
thousands):


<TABLE>
<CAPTION>
                                     Certificates of Deposit              Other Time Deposits
                                  ----------------------------       -----------------------------
 <S>                                                   <C>                              <C>
 Three months or less                                  $   228                          $       0
 Over 3 through 6 months                                   206                                105
 Over 6 through 12 months                                2,011                                  0
 Over 12 months                                          6,814                                906
                                  ----------------------------       -----------------------------
 TOTAL                                                  $9,259                             $1,011
                                  ============================       =============================
</TABLE>

VI.      RETURN ON EQUITY AND ASSETS

         The ratio of net income to average total assets and average
shareholders' equity, and certain other ratios for the periods indicated
follow:





                                       11
<PAGE>   12
ITEM 1.  Business (continued)

<TABLE>
<CAPTION>
 Year ended December 31,                            1997                  1996                  1995
                                               ---------------------------------------------------------
 <S>                                               <C>                   <C>                   <C>
 Return on Average Assets                           0.76%                4.42%                 1.49%

 Return on Average Equity                           6.14%                36.35%                15.29%

 Average Equity to Average Assets                  12.42%                12.15%                9.75%

 Dividend Payout Ratio                               -                     -                     -
</TABLE>

VII.     SHORT-TERM BORROWINGS

         The table below shows balances and rates paid on short-term
borrowings:


<TABLE>
<CAPTION>
                                                                   1997                     1996                    1995
 (in thousands)                                             Amount       Rate        Amount       Rate       Amount        Rate
===================================================================================================================================
 <S>                                                          <C>          <C>         <C>              <C>    <C>          <C>
 At year end:
    Securities sold under repurchase agreements               $3,049       4.15%       $   -            -      $    -           -
-----------------------------------------------------------------------------------------------------------------------------------
 Average for the year:
    Securities sold under repurchase agreements               $1,220       4.08%       $   -            -        $261       4.83%
-----------------------------------------------------------------------------------------------------------------------------------
 Maximum month-end balance:
    Securities sold under repurchase agreements               $4,259                                           $1,321
===================================================================================================================================
</TABLE>

ITEM 2.  Properties

         Suburban Maryland owns and occupies a one-story building located in
Capitol Heights, Maryland and occupies leased office and banking space in its
other six Maryland locations (Greenbelt, Oxon Hill, Clinton, Bethesda,
Rockville and White Flint).  The Greenbelt lease had a five-year initial term
which expired May 31, 1991, and is currently in the first of three five-year
renewal option terms.  The Oxon Hill lease also had a five-year initial term
which expired June 30, 1992 and the first five-year renewal term expired June
30, 1997, at which time the second of three five-year renewal options was
exercised (see "Item 13. Certain Relationships and Related Transactions").  The
Rockville lease is currently in its ten-year initial term which expires April
12, 2000 and contains two five-year renewal options, and the Clinton lease is
currently in its initial term of seven years, expiring January 1, 2003, and has
one five-year renewal option.  The Bethesda lease is currently in its initial
term of six years which expires September 30, 2002 and includes one five-year
renewal option, and the White Flint lease, which commenced January 1, 1998,
expires December 31, 2003 and includes an option to extend the lease for one
period of five years.

ITEM 3.  Legal Proceedings

         As of March 2, 1998, there were no material legal proceedings against
Suburban Bancshares, Inc. or its subsidiary.

ITEM 4.  Submission of Matters to Vote of Security Holders

         There were no matters submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report through the
solicitation of proxies or otherwise.





                                       12
<PAGE>   13
                                   PART II

ITEM 5.  Market for the Registrant's Common Equity and Related Shareholder
Matters

         The information contained under the heading "Market for Common Stock"
in the Company's 1997 Annual Report to Shareholders is incorporated herein by
reference thereto.

ITEM 6.  Selected Financial Data

         The information contained under the heading "Summary Financial
Information" in the Company's 1997 Annual Report to Shareholders is
incorporated herein by reference thereto.

ITEM 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

         The information contained under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Company's
1997 Annual Report to Shareholders is incorporated herein by reference thereto.

ITEM 8.  Financial Statements and Supplementary Data

         The Company's Consolidated Financial Statements together with the
report of Stegman and Company thereon appearing in the Company's 1997 Annual
Report to Shareholders are incorporated herein by reference thereto.  See ITEM
14 for a list of financial statements and notes thereto so incorporated.

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         There were no changes in or disagreements with accountants on matters
of accounting principles or practices or financial statement disclosures in
1997.

                                    PART III

ITEM 10.         Directors and Executive Officers

         The information contained under the heading "Directors and Executive
Officers" in the Company's definitive proxy statement relating to the Company's
1998 meeting of shareholders is incorporated herein by reference thereto.

ITEM 11.         Compensation of Executive Officers and Directors

         The information contained under the heading "Executive Compensation"
in the Company's definitive proxy statement relating to the Company's 1998
meeting of shareholders is incorporated herein by reference thereto.

ITEM 12.         Security Ownership of Certain Beneficial Owners and Management

         The information contained under the heading "Beneficial Ownership of
Common Stock" in the Company's definitive proxy statement relating to the
Company's 1998 meeting of shareholders is incorporated herein by reference
thereto.

ITEM 13.         Certain Relationships and Related Transactions

         The information contained under the heading "Certain Relationships and
Related Transactions" in the Company's definitive proxy statement relating to
the Company's 1998 meeting of shareholders is incorporated herein by reference
thereto.





                                       13
<PAGE>   14
                                    PART IV

ITEM 14.         Exhibits, Financial Statement Schedules and Reports on Form
8-K

         (a)     The following documents are filed as part of this report:

                 1.       Financial Statements

                          As listed in the index to financial statements on
                          page 21 hereof.

                 2.       Financial Statement Schedules

                          Schedule I       Indebtedness of and to Related
                                           Parties - included in Note L to the
                                           Consolidated Financial Statements.

                          Schedule II      Guaranties of Securities and Other
                                           Issuers has been omitted because the
                                           required information is not
                                           applicable.

                 3.       Exhibits

                          As listed in the Index to Exhibits on pages 21 and 22
                          hereof.

         (b)     No reports on Form 8-K were filed during the fourth quarter of
                 1997.

         (c)     See Item 14.(a)3. above

         (d)     See Item 14.(a)2. above





                                       14
<PAGE>   15
Signatures

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

SUBURBAN BANCSHARES, INC.

By:      Winfield M. Kelly, Jr.                     
         -----------------------------
         Winfield M. Kelly, Jr.
         Chairman of the Board/CEO
         Date:  March 18, 1998

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By:      Winfield M. Kelly, Jr.                     
         -----------------------------
         Winfield M. Kelly, Jr.
         Chairman of the Board/CEO
         (Principal Executive Officer and Director)
         Date:  March 18, 1998

By:      Marlin K. Husted                             
         -----------------------------
         Marlin K. Husted
         Vice Chairman of the Board
         Date:  March 18, 1998

By:      Stephen A. Horvath                          
         -----------------------------
         Stephen A. Horvath
         President, Chief Operating Officer, and Director
         Date:  March 18, 1998

By:      Sibyl S. Malatras                              
         -----------------------------
         Sibyl S. Malatras
         Senior Vice President and Chief Financial Officer
         (Principal Financial and Accounting Officer)
         Date:  March 18, 1998

By:      Raymond G. LaPlaca                       
         -----------------------------
         Raymond G. LaPlaca, Director
         Date:  March 18, 1998
 
By:      Barbara M. DiNenna-Corboy           
         -----------------------------
         Barbara M. DiNenna-Corboy, Director
         Date:  March 18, 1998
 
By:      Vincent D. Palumbo                        
         -----------------------------
         Vincent D. Palumbo, Director
         Date:  March 18, 1998





                                       20
<PAGE>   16
                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                                                    <C>
Independent Auditors' Report on 1997 Consolidated Financial Statements                                                 *

Consolidated Balance Sheets at December 31, 1997 and 1996                                                              *

Consolidated Statements of Operations for the Years Ended December 31, 1997, 1996 and 1995                             *

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 1997, 1996 and 1995        *

Consolidated Statements of Cash Flows for the Years Ended December 31, 1997, 1996 and 1995                             *

Notes to Consolidated Financial Statements                                                                             *
</TABLE>
-----------------------


*        Incorporated by reference to the Company's 1997 Annual Report to
Shareholders.  See ITEM 8 of this report on Form 10-K.

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
Exhibit Number                                     Description
-----------------------------------------------------------------------------------------------------------------------------------
 <S>             <C>
 2.1             Agreement and Plan of Reorganization between Bancshares 2000, Inc. and Jefferson Bank and Trust Company dated
                 February 21, 1989 (Incorporated by reference to Exhibit 2.1 of the 1988 Annual Report on Form 10-K)

 2.2             Agreement and Plan of Reorganization and Recapitalization between Suburban Bancshares, Inc. and Winfield M. Kelly,
                 Jr. dated February 19, 1993 (Incorporated by reference to Exhibit 2.2 to Registration Statement No. 33-63286)

 2.3             Amendment to Agreement and Plan of Reorganization and Recapitalization between Suburban Bancshares, Inc. and
                 Winfield M. Kelly, Jr. dated March 31, 1993 (Incorporated by reference to Exhibit 2.3 to Registration Statement No.
                 33-63286)

 2.4             Amendment to Agreement and Plan of Reorganization and Recapitalization between Suburban Bancshares, Inc. and
                 Winfield M. Kelly, Jr., dated November 17, 1993 (Incorporated by reference to Exhibit 2.4 of the 1993 Annual Report
                 on Form 10-K)

 3.0             Restated Certificate of Incorporation of Bancshares 2000, Inc., as amended, dated August 10, 1988 (Incorporated by
                 reference to Exhibit 3.4 of the 1988 Annual Report on Form 10-K)

 3.1             Amendment to Certificate of Incorporation of Bancshares 2000, Inc. as adopted at the Stockholders' Meeting held on
                 October 3, 1989 (Incorporated by reference to Exhibit 3.11 of the 1989 Annual Report on Form 10-K)

 3.2             Amendment to Certificate of Incorporation of Bancshares 2000, Inc. as adopted at the Stockholders' Meeting held on
                 June 26, 1991 (Incorporated by reference to Exhibit 3.2 of the 1992 Annual Report on Form 10-K)

 3.3             Amendment to Certificate of Incorporation of Suburban Bancshares, Inc. as adopted at the Stockholders' Meeting held
                 on June 2, 1993 (Incorporated by reference to Exhibit 3.3a to Registration Statement No. 33-63286)

 3.4             Amended and Restated By-Laws of Suburban Bancshares, Inc. (Incorporated by reference to Exhibit 3.4 to Registration
                 Statement No. 33-63286)

 4.0             Form of Common Stock Certificate of Bancshares 2000, Inc. (Incorporated by reference to Exhibit 4. to Registration
                 Statement No. 33-11380)
</TABLE>





                                       21
<PAGE>   17

<TABLE>
<S>              <C>
 4.1             Form of Common Stock Certificate of Suburban Bancshares, Inc. (Incorporated by reference to Exhibit 4.1 of the 1992
                 Annual Report on Form 10-K)

10.3             Incentive Stock Option Plan, as adopted by the Board of Directors of Bancshares 2000, Inc., on December 18, 1986
                 (Incorporated by reference to Exhibit 10.5 to Registration Statement No. 33-11380)

10.4             Incentive Stock Option Plan, as amended, as adopted at the stockholders' meeting held on October 3, 1989
                 (Incorporated by reference to Exhibit 10.3 to Registration Statement No. 33-30727)

10.4a            Amendment to Incentive Stock Option Plan, as adopted by the Board of Directors of Suburban Bancshares, Inc., on
                 February 14, 1992 (Incorporated by reference to Exhibit 3.13 of the 1991 Annual Report on Form 10-K)

10.5a            Employment Agreement with William R. Johnson dated December 27, 1996 and effective January 1, 1997 (Incorporated by
                 reference to Exhibit 10.5a of the 1996 Annual Report on Form 10-K)

10.5b            Deferred Compensation Agreement with William R. Johnson dated December 27, 1996 (Incorporated by reference to
                 Exhibit 10.5a of the 1996 Annual Report on Form 10-K)

10.5c            Trust Under Deferred Compensation Agreement with William R. Johnson dated December 27, 1996 (Incorporated by
                 reference to Exhibit 10.5a of the 1996 Annual Report on Form 10-K)

10.6             Services Agreement with Winfield M. Kelly, Jr. dated January 29, 1997 and effective January 1, 1997 (Incorporated
                 by reference to Exhibit 10.5a of the 1996 Annual Report on Form 10-K)

10.7             Employment Agreement with Stephen A. Horvath dated December 9, 1996 and effective January 1, 1997 (Incorporated by
                 reference to Exhibit 10.5a of the 1996 Annual Report on Form 10-K)

10.8             1997 Stock Option Plan, as adopted at the stockholders' meeting held on May 22, 1997

10.9a            Severance Agreement with Joseph E. Burnett dated March 2, 1998

10.9b            Severance Agreement with Harold J. Koch dated March 2, 1998

10.9c            Severance Agreement with Sibyl S. Malatras dated March 2, 1998

11.              Computation of per share earnings

13.              Suburban Bancshares, Inc. 1997 Annual Report to Stockholders (furnished for the information of the Securities and
                 Exchange Commission only and not to be deemed filed as part of this Annual Report on Form 10-K except for the
                 portions thereof which are specifically incorporated herein by reference)

21.              List of Subsidiaries of Suburban Bancshares, Inc.

23               Consent of Stegman and Company

27.              Financial Data Schedule
</TABLE>







                                       22