SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549
Form 10-KSB/A

(Mark One)
  x  	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000

     	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 	[NO FEE REQUIRED]

For the transition period from         to

Commission File No. 33-99762

CALVIN B. TAYLOR BANKSHARES, INC.
(Exact name of registrant as specified in its Charter)

	              Maryland              	      52-1948274

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

	     P. O. Box 5, Berlin, Maryland     	       21811

	(Address of principal executive offices)	     (Zip Code)

Issuer's telephone number, including area code:  (410) 641-1700

Securities registered under Section 12(b) of the Exchange Act:
		                Name of each exchange
Title of each class                    on which registered
         None                                  None

Securities registered under Section 12(g) of the Exchange Act:
                      Common Stock
                      (Title of Class)

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

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of the small business
issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.         [ X ]

State small business issuer's revenues for its most recent fiscal
year:  $20,543,894.

The aggregate market value of the Common Stock held by non-
affiliates of the small business issuer on December 31, 2000, was
$114,168,830.  This calculation is based upon estimation by the
Company's Board of Directors of fair market value of the Common
Stock of $39.25 per share.  There is not an active trading market
for the Common Stock and it is not possible to identify precisely
the market value of the Common Stock.

On February 28, 2001, 3,240,000 shares of the small business
issuer's common stock were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual report to Shareholders for the year ended
December 31, 2000, is incorporated by reference in this Form 10-
KSB in Part II Item 5, Item 6, and Item 7.  The Company's Proxy
Statement for Annual Meeting of Shareholders to be held on May 2,
2001, is incorporated by reference in this Form 10-KSB in Part
III, Item 9, Item 10, Item 11, and Item 12.

REASON FOR AMENDED FILING
This filing amends an earlier submission of Form 10-KSB for the
period ended December 31,2000, which was filed on March 26, 2001.
The primary reason for the amendment is to revise columnar
numerical data so that columns appear adjacent to the appropriate
textual information.



	This Report contains statements which constitute forward-
looking statements within the meaning of Section 27A of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
These statements appear in a number of places in this Report and
include all statements regarding the intent, belief or current
expectations of the Company, its directors, or its officers with
respect to, among other things: (i) the Company's financing plans;
(ii) trends affecting the Company's financial condition or results
of operations; (iii) the Company's growth strategy and operating
strategy; and (iv) the declaration and payment of dividends.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of
various factors discussed herein and those factors discussed in
detail in the Company's filings with the Securities and Exchange
Commission.

PART I

Item 1. Description of Business

General

	Calvin B. Taylor Bankshares, Inc. (the "Company") was
incorporated as a Maryland corporation on October 31, 1995.  The
Company owns all of the stock of two banks.  The Maryland bank is a
commercial bank incorporated under the laws of the State of Maryland
on December 17, 1907.  This bank operates nine banking offices in
Worcester County with the Bank's main office located in Berlin,
Maryland.  It is engaged in a general commercial and retail banking
business serving individuals, businesses, and governmental units in
Worcester County, Maryland and neighboring counties.  The second
bank was incorporated in Delaware in 1997 but opened late in the
second quarter of 1998.  This one-branch Delaware bank offers the
same services as the Maryland bank.

	The Company's holding company structure can assist the banks
in maintaining their required capital ratios because the Company
may, subject to compliance with debt guidelines implemented by the
Board of Governors of the Federal Reserve System (the "Board of
Governors" or the "Federal Reserve"), borrow money and contribute
the proceeds to the banks as primary capital. The holding company
structure also permits greater flexibility in issuing stock for
cash, property, or services and in reorganization transactions.
Moreover, subject to certain regulatory limitations, a holding
company can purchase shares of its own stock, which the banks may
not do without regulatory approval.  A holding company may also
engage in certain non-banking activities which the Board of
Governors has deemed to be closely related to banking and proper
incidents to the business of a bank holding company.  These
activities include making or servicing loans and certain types of
leases; performing certain data processing services; acting as a
fiduciary or investment or financial advisor; acting as a management
consultant for other depository institutions; providing courier,
appraisal, and consumer financial counseling services; providing tax
planning and preparation services; providing check guaranty and
collection agency services; engaging in limited real estate
investment activities; underwriting, brokering, and selling credit
life and disability insurance; engaging in certain other limited
insurance activities; providing discount brokerage services;
underwriting and dealing in certain government obligations and money
market instruments and providing portfolio investment advice; acting
as a futures commission merchant with respect to certain financial
instrument transactions; providing foreign exchange advisory and
transactional services; making investments in certain corporations
for projects designed primarily to promote community welfare; and
owning and operating certain healthy savings and loan associations.
 Although the Company has no present intention of engaging in any of
these services, if circumstances should lead the Company's
management to believe that there is a need for these services in the
banks' marketing areas and that such activities could be profitably
conducted, the management of the Company would have the flexibility
of commencing these activities upon filing notice thereof with the
Board of Governors.

Location and Service Area

	The Company conducts general commercial banking in its primary
service areas, emphasizing the banking needs of individuals and
small- to medium-sized businesses and professional concerns.  The
Maryland bank operates from nine branches located throughout
Worcester County, Maryland while the Delaware bank operates from one
branch located in Sussex County, Delaware.  The Banks draw most of
their customer deposits and conduct most of their lending
transactions from within their primary service areas, which
encompass Worcester County, Maryland, Sussex County, Delaware and
neighboring counties.

	Both Sussex County, Delaware and Worcester County, Maryland
are located along the shores of the Atlantic Ocean and have
experienced population growth in recent years.  The area is growing
as both a resort and a retirement community.

	The principal components of the economy of the counties are
tourism and agriculture.  Berlin has a strong component of health-
care related businesses.  The tourist businesses of Ocean City,
Maryland and Bethany, Delaware and the health-care facilities in
Berlin, Maryland (including Berlin Nursing Home and Atlantic General
Hospital) are the largest employers in the counties.  The largest
industrial employers are Perdue Farms and Hudson Farms.


Banking Services

	The banks offer a full range of deposit services that are
typically available in most banks and savings and loan associations,
including checking accounts, NOW accounts, savings accounts and
other time deposits of various types, ranging from daily money
market accounts to longer-term certificates of deposit.  The
transaction accounts and time certificates are tailored to the
banks' principal market areas at rates competitive to those offered
in the area.  In addition, the banks offer certain retirement
account services, such as Individual Retirements Accounts ("IRAs").
 All deposits are insured by the Federal Deposit Insurance
Corporation (the "FDIC") up to the maximum amount allowed by law
(generally, $100,000 per depositor subject to aggregation rules).
The banks solicit these accounts from individuals, businesses,
associations and organizations, and governmental authorities.

	The Company, through its banks, also offers a full range of
short- to medium-term commercial and personal loans.  Commercial
loans include both secured and unsecured loans for working capital
(including inventory and receivables), business expansion (including
acquisition of real estate and improvements), and purchase of
equipment and machinery.  Consumer loans include secured and
unsecured loans for financing automobiles, home improvements,
education, and personal investments.  The Company also originates
mortgage loans and real estate construction and acquisition loans.
These lending activities are subject to a variety of lending limits
imposed by state and federal law.  Neither bank may make any loans
to any director, officer, or employee (except for commercial loans
to directors who are not officers or employees) unless the loans are
approved by the Board of Directors of the lending bank.  The Board
of Directors must review any such loans every six months.

	Other bank services include cash management services, safe
deposit boxes, travelers checks, direct deposit of payroll and
social security checks, debit cards, and automatic drafts for
various accounts.  The Company is associated with the MAC network of
automated teller machines that may be used by Bank customers
throughout Maryland, Delaware, and other regions.  The Company also
offers credit card services through a correspondent bank.

Competition

	The Company faces strong competition in all areas of its
operations.  The competition comes from entities operating in
Worcester County, Maryland and Sussex County, Delaware and
neighboring counties and includes branches of some of the largest
banks in Maryland, Delaware, and Virginia. Its most direct
competition for deposits historically has come from other commercial
banks, savings banks, savings and loan associations, and credit
unions operating in its service areas.  The banks compete for
deposits with money market mutual funds and corporate and government
securities.  The banks compete for loans with the same banking
entities, as well as mortgage banking companies and other
institutional lenders.  The competition for loans varies from time
to time depending on certain factors.  These factors include, among
others, the general availability of lendable funds and credit,
general and local economic conditions, current interest rate levels,
conditions in the mortgage market, and other factors which are not
readily predictable.

Employees

	As of December 31, 2000, the banks employed 99 full-time
equivalent employees.  The Company's operations are conducted
through the banks.  Consequently, the Company does not have separate
employees.  None of the employees of the banks are represented by
any collective bargaining unit.  The banks consider their relations
with their employees to be good.

SUPERVISION AND REGULATION

	The Company and the banks are subject to state and federal
banking laws and regulations which impose specific requirements or
restrictions on, and provide for general regulatory oversight with
respect to, virtually all aspects of operations. These laws and
regulations are generally intended to protect depositors, not
shareholders.  The following is a brief summary of certain statutes,
rules, and regulations affecting the Company and the banks.  To the
extent that the following summary describes statutory or regulatory
provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions. Any change in
applicable laws or regulations may have a material adverse effect on
the business and prospects of the Company. Legislative changes and
the policies of various regulatory authorities may affect the
operations of the Company and the banks. The Company is unable to
predict the nature or the extent of the effect on its business and
earnings that fiscal or monetary policies, economic control, or new
federal or state legislation may have in the future.

The Company

	Because it owns the outstanding common stock of the banks, the
Company is a bank holding company within the meaning of the federal
Bank Holding Company Act of 1956 (the "BHCA").  Under the BHCA, the
Company is subject to periodic examination by the Federal Reserve
and is required to file periodic reports of its operations and such
additional information as the
Federal Reserve may require.  The Company's and the banks'
activities are limited to banking, managing or controlling banks,
furnishing services to or performing services for its subsidiaries,
or engaging in any other activity that the Federal Reserve
determines to be so closely related to banking or managing and
controlling banks as to be a proper incident thereto.

	Investments, Control, and Activities.  With certain limited
exceptions, the BHCA requires every bank holding company to obtain
the prior approval of the Federal Reserve before (i) acquiring
substantially all the assets of any bank, (ii) acquiring direct or
indirect ownership or control of any voting shares of any bank if
after such acquisition it would own or control more than 5% of the
voting shares of such bank (unless it already owns or controls the
majority of such shares), or (iii) merging or consolidating with
another bank holding company.

	In addition, and subject to certain exceptions, the BHCA and
the Change in Bank Control Act, together with regulations
thereunder, require Federal Reserve approval (or, depending on the
circumstances, no notice of disapproval) prior to any person or
company acquiring "control" of a bank holding company, such as the
Company.  Control is conclusively presumed to exist if an individual
or company acquires 25% or more of any class of voting securities of
the bank holding company.  Because the Company's Common Stock is
registered under the Securities Exchange Act of 1934, under Federal
Reserve regulations, control will be rebuttably presumed to exist if
a person acquires at least 10% of the outstanding shares of any
class of voting securities of the Company.  The regulations provide
a procedure for challenge of the rebuttable control presumption.

	Under the BHCA, the Company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5%
of the voting shares of any company engaged in non-banking
activities, unless the Federal Reserve, by order or regulation, has
found those activities to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.
Some of the activities that the Federal Reserve has determined by
regulation to be proper incidents to the business of banking include
making or servicing loans and certain types of leases, engaging in
certain insurance and discount brokerage activities, performing
certain data processing services, acting in certain circumstances as
a fiduciary or investment or financial advisor, owning savings and
loan associations, and making investments in certain corporations or
projects designed primarily to promote community welfare.

	Source of Strength; Cross-Guarantee.  In accordance with
Federal Reserve policy, the Company is expected to act as a source
of financial strength to its banks and to commit resources to
support the banks in circumstances in which the Company might not
otherwise do so.  Under the BHCA, the Federal Reserve may require a
bank holding company to terminate any activity or relinquish control
of a nonbank subsidiary (other than a nonbank subsidiary of a bank)
upon the Federal Reserve's determination that such activity or
control constitutes a serious risk to the financial soundness or
stability of any subsidiary depository institution of the bank
holding company.  Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest
itself of any bank or nonbank subsidiary if the agency determines
that divestiture may aid the depository institution's financial
condition.  The banks may be required to indemnify, or cross-
guarantee, the FDIC against losses it incurs with respect to any
other bank controlled by the Company, which in effect makes the
Company's equity investments in healthy bank subsidiaries available
to the FDIC to assist any failing or failed bank subsidiary of the
Company.

The Banks

	General.  The banks operate as state nonmember banking
associations incorporated under the laws of the State of Maryland
and the State of Delaware.  They are subject to examination by the
FDIC and the State Bank Commissioners.  Deposits in the banks are
insured by the FDIC up to a maximum amount (generally $100,000 per
depositor, subject to aggregation rules).  The Commissioners and
FDIC regulate or monitor all areas of the banks' operations,
including security devices and procedures, adequacy of
capitalization and loss reserves, loans, investments, borrowings,
deposits, mergers, issuances of securities, payment of dividends,
interest rates payable on deposits, interest rates or fees
chargeable on loans, establishment of branches, corporate
reorganizations, maintenance of books and records, and adequacy of
staff training to carry on safe lending and deposit gathering
practices.  The FDIC requires the banks to maintain certain capital
ratios and imposes limitations on each of the banks' aggregate
investment in real estate, bank premises, and furniture and
fixtures.  The banks are required by the FDIC and the Commissioners
to prepare quarterly reports on the banks' financial condition.

	Under FDICIA, all insured institutions must undergo periodic
on-site examination by their appropriate banking agency.  The cost
of examinations of insured depository institutions and any
affiliates may be assessed by the appropriate agency against each
institution or affiliate as it deems necessary or appropriate.
Insured institutions are required to submit annual reports to the
FDIC and the appropriate agency (and state supervisor when
applicable).  FDICIA also directs the FDIC to develop with other
appropriate agencies a method for insured depository institutions to
provide supplemental disclosure of the estimated fair market value
of assets and liabilities, to the extent feasible and practicable,
in any balance sheet, financial statement, report of condition, or
other report of any insured depository institution.  FDICIA also
requires the federal banking regulatory agencies to prescribe, by
regulation, standards for all insured depository institutions and
depository institution holding companies relating, among other
things, to: (i) internal controls, information systems, and audit
systems; (ii) loan documentation; (iii) credit underwriting; (iv)
interest rate risk exposure; and (v) asset quality.

	State nonmember banks chartered within the past two years, and
state nonmember banks and their holding companies which have
undergone a change in control within the past two years or which
have been deemed by the FDIC to be troubled institutions, must give
30 days notice to the FDIC or the Board of Governors before
appointment of any executive officer or director.  During the 30
days, the FDIC or Board of Governors may disapprove any such
appointment.

	Transactions With Affiliates and Insiders.  The banks are
subject to Section 23A of the Federal Reserve Act, which places
limits on the amount of loans or extensions of credit to, or
investment in, or certain other transactions with, affiliates and on
the amount of advances to third parties collateralized by the
securities or obligations of affiliates.  In addition, most of these
loans and certain other transactions must be secured in prescribed
amounts.  The banks are also subject to Section 23B of the Federal
Reserve Act which, among other things, prohibits an institution from
engaging in certain transactions with certain affiliates unless the
transactions are on terms substantially the same, or at least as
favorable to such institution or its subsidiaries, as those
prevailing at the time for comparable transactions with
nonaffiliated companies.  The banks are subject to certain
restrictions on extensions of credit to executive officers,
directors, certain principal shareholders, and their related
interests.  Such extensions of credit (i) must be made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with third parties, and (ii) must not involve more than
the normal risk of repayment or present other unfavorable features.

	Branching.  Under Maryland law, the Maryland bank may open
branches statewide, subject to the prior approval of the
Commissioner and the FDIC.  Maryland law permits banking
organizations in other states to acquire Maryland banking
organizations, as long as such states grant similar privileges to
banking organizations in Maryland to acquire banking organizations
in their states, by opening a de novo branch, by acquiring an
existing branch from a Maryland depository institution, or as a
result of an interstate merger with a Maryland banking organization.
 Delaware law also allows branches statewide with prior approval of
the Commissioner and the FDIC.  Delaware law is more restrictive
allowing other state banking organizations to branch to Delaware
only through opening a de novo bank, or as the result of an
interstate merger.

	Community Reinvestment Act.  The Community Reinvestment Act
requires that each insured depository institution shall be evaluated
by its primary federal regulator with respect to its record in
meeting the credit needs of its local community, including low and
moderate income neighborhoods, consistent with the safe and sound
operation of those institutions.  These factors are also considered
in evaluating mergers, acquisitions, and applications to open a
branch or facility.  The banks received satisfactory ratings in
their most recent evaluations.

	Other Regulations.  Interest and certain other charges
collected or contracted for by the banks are subject to state usury
laws and certain federal laws concerning interest rates.  Loan
operations are also subject to certain federal laws applicable to
credit transactions, such as the federal Truth-In-Lending Act
governing disclosures of credit terms to consumer borrowers, the
Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and public
officials to determine whether a financial institution is fulfilling
its obligation to help meet the housing needs of the community it
serves, the Equal Credit Opportunity Act prohibiting discrimination
on the basis of race, creed, or other prohibited bases in extending
credit, the Fair Credit Reporting Act of 1978, governing the use and
provision of information to credit reporting agencies, the Fair Debt
Collection Act governing the manner in which consumer debts may be
collected by collection agencies, and the rules and regulations of
the various federal agencies charged with the responsibility of
implementing such federal laws.  The deposit operations of the Bank
are also subject to the Right to Financial Privacy Act, which
imposes a duty to maintain confidentiality of consumer financial
records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer
Act and Regulation E issued by the Federal Reserve Board to
implement that act, which governs automatic deposits to and
withdrawals from deposit accounts and customers' rights and
liabilities arising from the use of automated teller machines and
other electronic banking services.

Deposit Insurance

	The deposits of the banks are currently insured to a maximum
of $100,000 per depositor, subject to certain aggregation rules.
The FDIC establishes rates for the payment of premiums by federally
insured banks and thrifts for deposit insurance.  Separate insurance
funds (BIF and SAIF) are maintained for commercial banks and
thrifts, with insurance premiums from the industry used to offset
losses from insurance payouts when banks and thrifts fail.

	The BIF insurance assessment rate for the first semiannual
assessment period of 2001 is proposed to remain at $.00 to $.27 per
$100 in deposits.  In addition to the FDIC assessment, banks are
assessed an additional amount to service the interest on the bond
obligations of the Financial Corporation.  Any increase in deposit
insurance premiums for the banks will increase the banks' cost of
funds, and there can be no assurance that such costs can be passed
on to the banks' customers.

Dividends

	The principal source of the Company's cash revenues comes from
dividends received from the Maryland bank.  The amount of dividends
that may be paid by the bank to the Company depends on the bank's
earnings and capital position and is limited by federal and state
laws, regulations, and policies.  The Federal Reserve has stated
that bank holding companies should refrain from or limit dividend
increases or reduce or eliminate dividends under circumstances in
which the bank holding company fails to meet minimum capital
requirements or in which earnings are impaired.

	The Company's ability to pay any cash dividends to its
shareholders in the future will depend primarily on the Maryland
bank's ability to pay dividends to the Company.  In order to pay
dividends to the Company, the bank must comply with the requirements
of all applicable laws and regulations.  Under Maryland law, the
bank must pay a cash dividend only from the following, after
providing for due or accrued expenses, losses, interest, and taxes:
 (i) its undivided profits, or (ii) with the prior approval of the
Commissioner, its surplus in excess of 100% of its required capital
stock.  Under FDICIA, the bank may not pay a dividend if, after
paying the dividend, the bank would be undercapitalized.  See
"Capital Regulations" below.  See Item 5 for a discussion of
dividends paid by the bank in the past two years.

	In addition to the availability of funds from the Maryland
bank, the future dividend policy of the Company is subject to the
discretion of the Board of Directors and will depend upon a number
of factors, including future earnings, financial condition, cash
needs, and general business conditions.  The amount of dividends
that might be declared in the future presently cannot be estimated
and it cannot be known whether such dividends would continue for
future periods.

Capital Regulations

	The federal bank regulatory authorities have adopted risk-
based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive
to differences in risk profile among banks and bank holding
companies, account for off-balance sheet exposure, and minimize
disincentives for holding liquid assets.  The resulting capital
ratios represent qualifying capital as a percentage of total risk-
weighted assets and off-balance sheet items.  The guidelines are
minimums, and the regulators have noted that banks and bank holding
companies contemplating significant expansion programs should not
allow expansion to diminish their capital ratios and should maintain
ratios well in excess of the minimums.  The current guidelines
require all bank holding companies and federally regulated banks to
maintain a minimum risk-based total capital ratio equal to 8%, of
which at least 4% must be Tier 1 capital.  Tier 1 capital includes
common shareholders' equity before the unrealized gains and losses
on securities available for sale, qualifying perpetual preferred
stock, and minority interests in equity accounts of consolidated
subsidiaries, but excludes goodwill and most other intangibles, and
excludes the allowance for loan and lease losses.  Tier 2 capital
includes the excess of any preferred stock not included in Tier 1
capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred
stock, and general reserves for loan and lease losses up to 1.25% of
risk-weighted assets.

	Under the guidelines, banks' and bank holding companies'
assets are given risk-weights of 0%, 20%, 50%, and 100%.  In
addition, certain off-balance sheet items are given credit
conversion factors to convert them to asset equivalent amounts to
which an appropriate risk-weight will apply.  These computations
result in the total risk-weighted assets.  Most loans are assigned
to the 100% risk category, except for first mortgage loans fully
secured by residential property and, under certain circumstances,
residential construction loans, both of which carry a 50% rating.
Most investment securities are assigned to the 20% category, except
for municipal or state revenue bonds, which have a 50% rating, and
direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0%
rating.

	The federal bank regulatory authorities have also implemented
a leverage ratio, which is Tier 1 capital as a percentage of average
total assets less intangibles, to be used as a supplement to the
risk-based guidelines.  The principal objective of the leverage
ratio is to place a constraint on the maximum degree to which a bank
holding company may leverage its equity capital base.  The minimum
required leverage ratio for top-rated institutions is 3%, but most
institutions are required to maintain an additional cushion of at
least 100 to 200 basis points.

	FDICIA established a new capital-based regulatory scheme
designed to promote early intervention for troubled banks and
requires the FDIC to choose the least expensive resolution of bank
failures.  The new capital-based regulatory framework contains five
categories for compliance with regulatory capital requirements,
including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and
"critically undercapitalized."  To qualify as a "well capitalized"
institution, a bank must have a leverage ratio of no less than 5%, a
Tier 1 risk-based ratio of no less than 6%, and a total risk-based
capital ratio of no less than 10%, and the bank must not be under
any order or directive from the appropriate regulatory agency to
meet and maintain a specific capital level.  As of December 31,
2000, the Company and its banks were qualified as "well
capitalized."  See "Item 6. Management's Discussion and Analysis or
Plan of Operation - Capital."

	Under the FDICIA regulations, the applicable agency can treat
an institution as if it were in the next lower category if the
agency determines (after notice and an opportunity for hearing) that
the institution is in an unsafe or unsound condition or is engaging
in an unsafe or unsound practice.  The degree of the regulatory
scrutiny of a financial institution will increase, and the
permissible activities of the institution will decrease as it moves
downward through the capital categories.  Bank holding companies
controlling financial institutions can be called upon to boost the
institutions' capital and to partially guarantee the institutions'
performance under their capital restoration plans.

	These capital guidelines can affect the Company in several
ways.  If a bank begins to grow at a rapid pace, capital infusion
may be needed to boost capital.  This could impact the Company's
ability to pay dividends.  The capital levels of the Company and its
banks are more than adequate.  Rapid growth, deterioration of the
loan portfolio performance, poor earnings or a combination of these
factors could change the current capital positions.

	Effective January 1, 1997, the FDIC amended the risk-based
capital guidelines to incorporate a measure for market risk to cover
all positions located in an institution's trading account and
foreign exchange or commodity positions.  Banks and holding
companies with significant exposure to market risk are required to
measure the risk and hold capital commensurate with that risk. These
guidelines have no effect on the banks or the holding company since
the banks do not engage in, or plan to engage in, the activities of
trading accounts, foreign exchange or commodity positions.

Recent Legislative Developments

	Periodically, the federal and state legislatures consider
bills with respect to the regulation of financial institutions.
Some of these proposals could significantly change the regulation of
banks and the financial services industry.  The Company cannot
predict if such proposals will be adopted or the affect to the
Company.

Item 2. Description of Property

	The Company has ten branch locations, all of which are owned
by the Company.  The locations are described as follows:

OFFICE/LOCATION/Square Footage
Main Office, Maryland/24 North Main Street, Berlin, Maryland 21811/
	6,500
East Berlin Office/10524 Old Ocean City Boulevard, Berlin, MD 21811/
	1,500
20th Street Office/100 20th Street, Ocean City, Maryland 21842/
 	3,100
Ocean Pines Office/11003 Cathell Road, Berlin, Maryland 21811/
	2,420
Mid-Ocean City Office/9105 Coastal Highway, Ocean City, MD 21842/
	1,984
North Ocean City Office/14200 Coastal Highway, Ocean City, MD 21842/
	2,545
West Ocean City Office	/9923 Golf Course Road, Ocean City, MD 21842/
	2,496
Pocomoke Office/2140 Old Snow Hill Road, Pocomoke, Maryland 21851/
	2,624
Snow Hill Office/108 West Market Street, Snow Hill, Maryland 21863/
	3,773
Main Office, Delaware/	50 Atlantic Avenue, Ocean View, DE 19970/
	4,900

	The Berlin office is the centralized location for the Company
and for all the Maryland branches; that is to say that all proof and
bookkeeping is performed there.  The Delaware office has its own
proof and bookkeeping functions.

	Each branch has a manager that also serves as its loan
officer, with exception of the East Berlin office which does not
have a loan officer.  All offices participate in normal day-to-day
banking operations.

	Eight Maryland offices offer automated teller machines; all
locations except the East Berlin office.  The Delaware bank has an
automated teller machine on-premise. The Company operates one
automated teller machine which is located at a local hospital.

Item 3. Legal Proceedings

	There are no material pending legal proceedings to which the
Company or the banks or any of their properties are subject.

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

	There were no matters submitted to a vote of the shareholders
of the Company during the fourth quarter of 2000.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

	The Company's Articles of Incorporation, as amended,
authorize it to issue up to 10,000,000 shares of common stock.

	As of February 28, 2001, there were approximately 825
holders of record of the common stock and 3,240,000 shares of
Common Stock issued and outstanding. There is no established
public trading market in the stock, and there is no likelihood
that a trading market will develop in the near future.  The
development of a trading market may be inhibited because a large
portion of the Company's shares is held by insiders.  Transactions
in the common stock are infrequent and are negotiated privately
between the persons involved in those transactions.

	All outstanding shares of common stock of the Company are
entitled to share equally in dividends from funds legally
available, when, as, and if declared by the Board of Directors.
The Company paid dividends of $.61 per share in 2000 and $.60 per
share in 1999, after giving retroactive effect to the 2000 stock
split effected in  the form of a 100% stock dividend.  During both
2000 and 1999, the Company paid special cash dividends of $.25 per
share, after giving retroactive effect to the 2000 stock split,
which are not expected to be an annual event.

Item 6. Management's Discussion and Analysis or Plan of Operation

BUSINESS OF THE COMPANY

	Calvin B. Taylor Bankshares, Inc. (the "Company") was
incorporated as a Maryland corporation on October 31, 1995, to
become a bank holding company by acquiring all of the capital
stock of Calvin B. Taylor Banking Company (the "Maryland Bank").
The Maryland Bank was incorporated under the laws of the State of
Maryland on December 17, 1907. The Maryland Bank was organized as
a nonmember state bank under the laws of the State of Maryland.
Calvin B. Taylor Bank of Delaware (the "DE Bank") was
incorporated under the laws of the State of Delaware on September
18, 1997.  The DE Bank was organized as a nonmember state bank
under the laws of the State of Delaware.  Calvin B. Taylor
Bankshares, Inc. acquired all of the capital stock of Calvin B.
Taylor Bank of Delaware also.  Both banks are engaged in a general
commercial banking business, emphasizing in their marketing the
Company's local management and ownership, from their main offices
located in their primary service areas of Worcester County,
Maryland and Sussex County, Delaware, and their neighboring
counties. The banks offer a full range of deposit services that
are typically available in most banks and savings and loan
associations, including checking accounts, NOW accounts, savings
accounts and other time deposits of various types, ranging from
daily money market accounts to longer-term certificates of
deposit.  In addition, the banks offer certain retirement account
services, such as Individual Retirement Accounts.  The banks also
offer a full range of short- to medium-term commercial and
personal loans.  The banks originate fixed rate mortgage loans and
real estate construction and acquisition loans.  These loans
generally have a demand feature.  Other bank services include cash
management services, safe deposit boxes, travelers' checks, direct
deposit of payroll and social security checks, debit cards, and
automatic drafts for various accounts.


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	The following discussion of the Company's financial condition
and results of operations should be read in conjunction with the
Company's financial statements and related notes and other
statistical information included elsewhere herein.

Overview

	Consolidated income of the Company is derived primarily from
operations of the banks.  The 2000 net income was $5,624,558,
compared to $5,019,660 for 1999.  The Company continued its
history of above average earnings with a return on average equity
of 10.84% and return on average assets of 1.94% for 2000, compared
to returns of 10.47% and 1.78%, respectively for 1999.

Results of Operations

	The Company reported net income of $5,624,558, or $1.74 per
share, for the year ended December 31, 2000, which was an increase
of $604,898, or 12.05%, over the net income of $5,019,660, or
$1.55 per share for the year ended December 31, 1999.  Per share
data for 1999 is restated for the effect of the 100% stock
dividend distributed 2000.  Primarily responsible for this
increase was the growth in net interest income.

	Net interest income increased $1,359,187, or 11.12%, to
$13,580,005 in 2000, from $12,220,818 in 1999.  This increase in
net interest income was the result of an increase in interest
revenue of $1,440,460 while interest expense increased by $81,273.
 Net interest income increased primarily due to growth of
$18,090,114 in the mortgage loan portfolio funded largely by a
decrease of $13,648,377 in the amortized cost of investment
securities held to maturity.  Decreasing deposit balances offset
increased rates, resulting in an increase of $47,198 of deposit
interest expense.  Interest expense on retail repurchase
agreements, which were first offered by the Bank in 2000, was
$23,427.  The yield on interest-earning assets increased to 7.33%
in 2000, from 6.97% in 1999, while the combined yield on deposits
and borrowed funds increased to 2.48% from 2.47% for the same
periods.

	Noninterest income and noninterest expense increased by 5.60%
and 4.54%, respectively, during 2000 compared to 1999.

Net Interest Income

	The primary source of income for the Company is net interest
income, which is the difference between revenue on interest-
earning assets, such as investment securities and loans, and
interest incurred on interest-bearing sources of funds, such as
deposits and borrowings.  The level of net interest income is
determined primarily by the average balance of interest-earning
assets and funding sources and the various rate spreads between
the interest-earning assets and the Company's funding sources.
Changes in net interest income from period to period result from
increases or decreases in the volume of interest-earning assets
and interest-bearing liabilities, and increases or decreases in
the average rates earned and paid on such assets and liabilities.
 The volume of interest-earning assets and interest-bearing
liabilities is affected by the ability to manage the earning-asset
portfolio, which includes loans, and the availability of
particular sources of funds, such as noninterest bearing deposits.

	The key performance measure for net interest income is the
"net margin on interest-earning assets," or net interest income
divided by average interest-earning assets.  The Company's net
interest margin for 2000 was 5.15% compared to 4.77% for 1999.
Because most of the loans of the banks are written with a demand
feature, the income of the banks should not change dramatically as
interest rates change.  Management of the Company expects to
maintain the net margin on interest-earning assets. The net margin
may decline, however, if competition increases, loan demand
decreases, or the cost of funds rises faster than the return on
loans and securities.  Although such expectations are based on
management's judgment, actual results will depend on a number of
factors that cannot be predicted with certainty, and fulfillment
of management's expectations cannot be assured.



<page>
<table>
<caption>
Average Balances, Interest, and Yields

 For the Year Ended  For the Year Ended
 December 31, 2000   December 31, 1999
				Average					Average
				Balance	Interest	Yield		balance	Interest	Yield

				<c>		<c>		<c>		<c>		<c>		<c>
Assets
Federal funds sold and securities sold
  under repurchase agreements
				27,035,284  1,716,303	6.35%	     25,119,944   1,261,883   5.02%
Interest bearing deposits  833,669     46,110   5.53%       1,135,879      59,892   5.27%
Investment securities:
  U. S. Treasury        52,381,568  2,877,623   5.49%      70,035,826   3,744,040   5.35%
  U. S. Agency	      14,102,254    883,398   6.26%       5,202,345     311,991   6.00%
  State and municipal   11,044,697    601,367   5.44%      14,684,452     775,402   5.28%
  Other	             1,466,086     34,935   2.38%         936,104      26,211   2.80%
   Total investment securities
			      78,994,605  4,397,323   5.57%      90,858,727   4,857,644   5.35%
Loans:
  Commercial            16,670,170   1,372,165   8.23%      16,466,323   1,328,643   8.07%
  Mortgage		     142,159,452  11,665,502   8.21%     125,807,308  10,299,329   8.19%
  Consumer     	       5,058,592     491,445   9.72%       5,029,127     480,141   9.55%
   Total loans         163,888,214  13,529,112   8.26%     147,302,758  12,108,113   8.22%
Allowance for credit losses
		             2,091,268		            2,083,668
   Total loans, net of allowance
		           161,796,946  13,529,112   8.36%     145,219,090  12,108,113   8.34%
Total interest-earning assets
		           268,660,504  19,688,848   7.33%     262,333,640  18,287,532   6.97%

Noninterest-bearing cash12,657,560        -                 12,929,195        -
Premises and equipment   5,774,271        -                  5,537,756        -
Other assets             2,155,343        -                  1,898,309        -

       Total assets    289,247,678	19,688,848		     282,698,900  18,287,532

Liabilities and Stockholders' Equity
Interest-bearing Deposits
 Savings and NOW        82,093,427   1,530,693   1.86%	69,549,683   1,410,850   2.03%
 Money market		38,001,007     946,368   2.49%      58,167,683   1,331,935   2.29%
 Other time deposits    69,455,736   3,345,163   4.82%      68,899,821   3,032,241   4.40%
Total interest-bearing deposits
			     189,550,170   5,822,224   3.07%     196,617,187   5,775,026   2.94%
Securities sold under agreements
 to repurchase		 1,610,141	    23,427   1.45%            -           -
Borrowed funds             238,965      14,380   6.02%         122,984       3,732   3.03%
Total interest-bearing liabilities
			     191,399,276   5,860,031   3.06%     196,740,171   5,778,758   2.94%
Noninterest-bearing deposits
				45,144,294        -			37,290,913        -
			     236,543,570   5,860,031   2.48%     234,031,084   5,778,758   2.47%
Other liabilities          840,761        -   		         746,991        -
Stockholders' equity    51,863,347        -			47,920,825        -
 Total liabilities and
 stockholders' equity  289,247,678   5,860,031		     282,698,900   5,778,758

Net interest spread					 4.27%					 4.03%
Net interest income			13,828,817 					12,508,774
Net margin on interest-earning assets		 5.15%					 4.77%

Dividends and interest on tax-exempt securities and loans,
are reported on fully taxable equivalent basis.
</table>
<page>
Analysis of Changes in Net Interest Income
<table>
<caption>
					Year ended December 31,		Year ended December 31,
					2000 compared with 1999		1999 compared with 1998
					variance due to			variance due to
				Total		Rate		Volume	Total		Rate		Volume

				<c>		<c>		<c>		<c>		<c>		<c>
Earning assets
Interest bearing deposits
				 (13,782)	  2,144	(15,926)	 (10,865)    (4,505)      (6,360)
Federal funds sold	 454,420	358,270	 96,150	(149,935)   (83,480)     (66,455)
Investment securities:
  U.S. Treasury		(866,417)	 78,086    (944,503)	 275,529   (294,797)     570,326
  U.S. Government Agency 571,407     37,412     533,995      297,068     27,411      269,657
  State, county, and municipals
			      (174,035)    18,144    (192,179)      65,144    (68,909)     134,053
  Other			   8,724     (6,115)     14,839        2,135    (37,988)      40,123
Loans:
  Commercial		  43,522     27,072      16,450       29,832   (104,936)     134,768
  Mortgage		     1,366,173     26,932   1,339,241 	(286,167)  (162,378)    (123,789)
  Consumer			  11,304      8,490       2,814      (32,571)   (33,552)         981
   Total interest revenue
			     1,401,316    550,435     850,881      190,170   (763,134)     953,304

Interest-bearing liabilities
Savings and NOW		 119,843   (134,795)    254,638      (82,744)  (305,159)     222,415
Money market	      (385,567)    76,250    (461,817)    (198,522)  (205,532)       7,010
Other time deposits      312,922    288,462      24,460     (245,172)  (440,706)	 195,534
Other borrowed funds      34,075      7,134      26,941        3,732      3,732         -
  Total interest expense  81,273    237,051    (155,778)    (522,706)  (947,665)     424,959

Net interest income    1,320,043	313,384    1,006,659	 712,876	184,531	 528,345
</table>
Dividends and interest on tax-exempt securities and loans are
reported on fully taxable equivalent basis.  The variance that is
both rate/volume related is reported with the rate variance.

Composition of Loan Portfolio

	Because loans are expected to produce higher yields than
investment securities and other interest-earning assets (assuming
that loan losses are not excessive), the absolute volume of loans
and the volume as a percentage of total earning assets is an
important determinant of net interest margin.  Average loans, net
of the allowance for credit losses, were $161,796,946 and
$145,219,090 during 2000 and 1999, respectively, which constituted
60.22% and 55.36% of average interest-earning assets for the
periods.  At December 31, 2000, the Company's loan to deposit
ratio was 72.68% compared to 63.67% at December 31, 1999, while
the 2000 average loans to average deposits were 68.94%.  The
Company extends loans primarily to customers located in and near
Worcester County, Maryland and Sussex County, Delaware.  There are
no industry concentrations in the Company's loan portfolio.  The
Company does, however, have a substantial portion of its loans in
real estate and its performance will be influenced by the real
estate market in the region.

	The following table sets forth the composition of the
Company's loan portfolio as of December 31, 2000 and 1999,
respectively.
<table>
<caption>
Composition of Loan Portfolio
						December 31,
					2000				1999
					   Percent 				Percent
				Amount   of total 	Amount	of total

				<c>		<c>		<c>		<c>
Commercial			 15,588,946   9.13%	 17,825,019  11.57%
Real estate			148,468,890	 86.94%	130,378,776	 84.62%
Construction		  1,540,376   0.90%         824,071   0.53%
Consumer			  5,165,742   3.03%       5,054,669   3.28%
      Total loans		170,763,954 100.00%	154,082,535 100.00%
Less allowance for credit losses
			        2,192,755			  2,082,031
      Net loans		168,571,199			152,000,504
</table>
	The following table sets forth the maturity distribution,
classified according to sensitivity to changes in interest rates,
for selected components of the Company's loan portfolio as of
December 31, 2000.

Loan Maturity Schedule and Sensitivity to Changes in Interest
Rates
<table>
<caption>
					December 31, 2000
						Over one
				One year 	through 	Over five
				or less 	five years	years 	Total

				<c>		<c>		<c>		<c>
Commercial			 15,588,946        -           -     15,588,946
Real estate			148,468,890        -           -    148,468,890
Construction		  1,540,376        -           -      1,540,376
Consumer			    361,180 4,206,122   598,440 	  5,165,742
      Total 		165,959,392	4,206,122	598,440	170,763,954

Fixed interest rate	    389,948 4,206,122   598,440	  5,194,510
Variable interest rate
   (or demand)		165,569,444      -         -        165,569,444
      Total			165,959,392 4,206,122   598,440	170,763,954
</table>

	As of December 31, 2000, $165,959,392 or 96.96%, of the total
loans were either variable rate loans or loans written on demand.


	The Company has the following commitments, lines of credit,
and letters of credit outstanding as of December 31, 2000 and
1999, respectively.
<table>
<caption>
					2000 			1999

					<c>			<c>
  Construction loans		2,964,536		 9,486,899
  Other loan commitments	3,192,350		 4,843,120
  Standby letters of credit	1,412,552		 1,504,241
     Total				7,569,438		15,834,260
</table>
	Loan commitments are agreements to lend to a customer as long
as there is no violation of any condition to the contract. Loan
commitments may have interest fixed at current rates, fixed
expiration dates, and may require the payment of a fee. Letters of
credit are commitments issued to guarantee the performance of a
customer to a third party.  Loan commitments and letters of credit
are made on the same terms, including collateral, as outstanding
loans.  The Company's exposure to credit loss in the event of
nonperformance by the borrower is represented by the contract
amount of the commitment.

Loan Quality

	The allowance for credit losses represents a reserve for
potential losses in the loan portfolio.  The adequacy of the
allowance for credit losses is evaluated periodically based on a
review of all significant loans, with a particular emphasis on
non-accruing, past due, and other loans that management believes
require attention.  The determination of the reserve level rests
upon management's judgment about factors affecting loan quality
and assumptions about the economy.  Management considers the year-
end allowance appropriate and adequate to cover possible losses in
the loan portfolio; however, management's judgment is based upon a
number of assumptions about future events, which are believed to
be reasonable, but which may or may not prove valid.  Thus, there
can be no assurance that charge-offs in future periods will not
exceed the allowance for credit loss or that additional increases
in the credit loss allowance will not be required.  The Company
has a history of low loan charge-offs.

	For significant problem loans, management's review consists
of evaluation of the financial strengths of the borrowers and
guarantors, the related collateral, and the effects of economic
conditions.  The overall evaluation of the adequacy of the total
allowance for credit losses is based on an analysis of historical
loan loss ratios, loan charge-offs, delinquency trends, and
previous collection experience, along with an assessment of the
effects of external economic conditions.  It is the Company's
policy to have each bank evaluate loan portfolio risk for the
purpose of establishing an adequate allowance.  The banks' target
levels for their allowances as a percentage of gross loans range
from approximately 1.00% to 1.35%.  This allowance may be
increased for reserves for specific loans identified as
substandard during management's loan review.  Generally, the
Company will not require a negative provision to reduce the
allowance as a result of either net recoveries or a decrease in
loans, even though this may cause the allowance as a percentage of
gross loans to exceed the Company's target.

	The provision for loan losses is a charge to earnings in the
current period to replenish the allowance and maintain it at a
level management has determined to be adequate.  As of December
31, 2000 and 1999, the respective allowances for credit losses
were 1.28% and 1.35% of outstanding loans.

	The provision for loan losses was $174,080 in 2000, an
increase of $168,335 from the $5,745 provision in 1999.  The
increased provision is the result of a $56,295 increase in net
charge-offs for 2000, which totaled $63,356.  Outstanding loans
increased 10.83% during the same period.

<table>
<caption>
Allocation of Allowance for Loan Losses

					2000				1999

				<c>		<c>		<c>		<c>
Commercial			167,626	 7.64		213,549	10.26
Real estate			810,790	36.98		651,894	31.31
Construction		   - 		  -           4,120      0.20
Consumer			174,003	 7.93 	152,313	 7.31
Commitments			   -          -            -          -
General		    1,040,336 	47.45      1,060,155    50.92
   Total		    2,192,755    100.00	     2,082,031   100.00
</table>


<page>
Allowance for Loan Losses
<table>
<caption>
					2000			1999

					<c>			<c>
<c>
Balance at beginning of year	2,082,031		2,080,358

Loan losses:
  Commercial			   56,193 		   13,628
  Mortgages				     -                 -
  Consumer				   10,907 		    8,256
     Total loan losses		   67,100 		   21,884

Recoveries on loans previously charged off
  Commercial		          2,386             6,504
  Consumer			          1,358             8,319
     Total loan recoveries	    3,744 		   14,823

Net loan losses			   63,356 		    7,061
Provision for loan losses
  charged to expense		  174,080 		    5,745
Provision related to commitments   -                2,989
Balance at end of year		2,192,755 		2,082,031



Allowance for loan losses to
 loans outstanding at end of year  1.28%			1.35%

Net charge-offs to average loans   0.04%			0.00%
</table>

		As a result of management's ongoing review of the loan
portfolio, loans are classified as nonaccrual when it is not
reasonable to expect collection of interest under the original
terms.  These loans are classified as nonaccrual even though the
presence of collateral or the borrower's financial strength may be
sufficient to provide for ultimate repayment.  Interest on
nonaccrual loans is recognized only when received. A delinquent
loan is generally placed in nonaccrual status when it becomes 90
days or more past due.  When a loan is placed in nonaccrual
status, all interest that has been accrued on the loan but remains
unpaid is reversed and deducted from earnings as a reduction of
reported interest income.  No additional interest is accrued on
the loan balance until the collection of both principal and
interest becomes reasonably certain.  The Company had no
nonperforming loans at December 31, 2000 or 1999.

		Where real estate acquired by foreclosure and held for sale
is included with nonperforming loans, the result comprises
nonperforming assets.  There were no nonperforming assets at
December 31, 2000 or 1999.  Loans are classified as impaired when
the collection of contractual obligations, including principal and
interest, is doubtful.  Management has identified no significant
impaired loans as of December 31, 2000 or 1999.

Liquidity and Interest Rate Sensitivity

	The primary objective of asset/liability management is to
ensure the steady growth of the Company's primary source of
earnings, net interest income.  Net interest income can fluctuate
with significant interest rate movements.  To lessen the impact of
these margin swings, the balance sheet should be structured so
that repricing opportunities exist for both assets and liabilities
in roughly equivalent amounts at approximately the same time
intervals.  Imbalances in these repricing opportunities at any
point in time constitute interest rate sensitivity.

		Liquidity represents the ability to provide steady sources of
funds for loan commitments and investment activities, as well as
to provide sufficient funds to cover deposit withdrawals and
payment of debt and operating obligations.  These funds can be
obtained by converting assets to cash or by attracting new
deposits.

		Average liquid assets (cash and amounts due from banks,
interest bearing deposits in other banks, federal funds sold, and
investment securities) were 50.93% of average deposits for 2000,
compared to 55.60% for 1999.

	As of December 31, 2000, $45,333,736, or 57.60% of the
investment debt securities mature in one year or less.  The funds
invested in federal funds sold provide liquidity so the banks do
not need a large portfolio of securities classified as
"available-for-sale." Other sources of liquidity include letters
of credit, overnight federal funds, and reverse repurchase
agreements available from correspondent banks.  The total lines of
credit available from correspondent banks at December 31, 2000,
were $19,000,000.

		Interest rate sensitivity refers to the responsiveness of
interest-bearing assets and liabilities to changes in market
interest rates.  The rate-sensitive position, or gap, is the
difference in the volume of rate-sensitive assets and liabilities
at a given time interval.  The general objective of gap management
is to actively manage rate-sensitive assets and liabilities to
reduce the impact of interest rate fluctuations on the net
interest margin.  Management generally attempts to maintain a
balance between rate-sensitive assets and liabilities as the
exposure period is lengthened to minimize the overall interest
rate risk to the Company.

		Interest rate sensitivity may be controlled on either side of
the balance sheet.  On the asset side, management exercises some
control over maturities.  Also, loans are written to provide
repricing opportunities on fixed rate notes.  The Company's
investment portfolio, including federal funds sold, provides the
most flexible and fastest control over rate sensitivity since it
can generally be restructured more quickly than the loan
portfolio.

		On the liability side, deposit products are structured to
offer incentives to attain the maturity distribution desired.
Competitive factors sometimes make control over deposits more
difficult and, therefore, less effective as an interest rate
sensitivity management tool.

		The asset mix of the balance sheet is continually evaluated in
terms of several variables; yield, credit quality, appropriate
funding sources, and liquidity.  Management of the liability mix
of the balance sheet focuses on expanding the various funding
sources.

		The Company was asset-sensitive for all time horizons. For
asset-sensitive institutions, if interest rates should decrease,
the net interest margins should decline.  Since all interest rates
and yields do not adjust at the same velocity, the gap is only a
general indicator of rate sensitivity.

Interest Sensitivity Analysis

<table>
<caption>
							December 31, 2000
						After three
				Within	but within	After one
				three		twelve	but within	After
				months	months	five years	five years	Total

				<c>		<c>		<c>		<c>		<c>
Assets
Earning assets
  Federal funds sold	 18,167,527	        -          -          -	 18,167,527
  Interest-bearing deposits    -   	    487,000	    297,000	      -	    784,000
  Investment securities  18,432,798  26,900,938	 30,939,822	 4,052,934   80,326,492
  Loans			165,596,807     362,585   4,206,122    598,440  170,763,954
Total earning assets	202,197,132  27,750,523  35,442,944  4,651,374  270,041,973

Liabilities
Interest-bearing liabilities
  Money market 		 34,896,077        -           -           -     34,896,077
   Savings and NOW	 73,967,825        -           -           -     73,967,825
   Certificates $100,000
	 and over		  4,423,581   6,795,644   3,961,211        -	 15,180,436
   Certificates under
	 $100,000		 16,640,329  28,982,081  12,584,501 	 -     58,206,911
Securities sold under
 agreements to repurchase 3,113,671 	 -		 -		 -      3,113,671
Note Payable                  3,865      11,950      73,633     142,069     231,517
Total interest-bearing
 liabilities		133,045,348  35,789,675  16,619,345     142,069 185,596,437

Period gap			 69,151,784  (8,039,152) 18,823,599   4,509,305  84,445,536
Cumulative gap		 69,151,784  61,112,635  79,936,231  84,445,536  84,445,536

Ratio of cumulative gap to
 total earning assets		25.61%	22.63%	29.60%	31.27%	31.27%
</table>

		The table "Investment Securities Maturity Distribution and
Yields" shows that as of December 31, 2000, $45,333,735, or 57.60%
of the investment debt securities mature in one year or less.  The
funds invested in federal funds sold provide liquidity so the
banks do not need a large portfolio of securities classified as
"available-for-sale." Other sources of liquidity include letters
of credit, overnight federal funds, and reverse repurchase
agreements available from correspondent banks.  The total lines of
credit available from correspondent banks at December 31, 2000,
were $19,000,000.


Investment Securities Maturity Distribution and Yields
<table>
<caption>
					December 31, 2000		December 31, 1999
					Amount	Percent 	Amount 	Percent

					<c>		<c>		<c>		<c>
U. S. Treasury securities
One year or less			29,941,814  5.34 		43,479,940 	5.29
Over one through five years	17,480,762  6.36 		22,986,692  5.11
Over ten years			 2,428,120 	7.28 		 2,108,760 	7.29
Total U.S. Treasury securities49,850,696  5.78		68,575,392  5.29

U.S. Government Agencies
One year or less			 8,750,177  6.35
Over one through five years	 9,900,000 	6.46		10,649,787 	6.08
Total U.S. Government Agencies18,650,177  6.41 		10,649,787  6.08

State, county, and municipal
 securities
One year or less			 6,641,744  5.67 		 5,267,528 	3.56
Over one through five years	 3,559,061 	6.12 		 7,064,654 	3.61
Over five through ten years	      -   			   100,671  3.71
Over ten years	                  -   		         372,663 	3.45
Total state, county, and
 municipal securities		10,200,805  5.83 		12,805,516  3.59

Total debt securities
One year or less			45,333,735  5.59 		48,747,468  5.10
Over one through five years	30,939,823  6.36 		40,701,133  5.10
Over five through ten years	      -   			   100,671 	3.71
Over ten years			 2,428,120  7.28 		 2,481,423  6.71
Total debt securities		78,701,678  5.94 		92,030,695  5.15

Equity securities			 1,624,814  2.38 		 1,293,336  3.72

Total securities			80,326,492  5.87 		93,324,031  5.13
</table>

Deposits and Other Interest-Bearing Liabilities

	Average interest-bearing liabilities decreased $5,340,895,
or 2.71%, to  $191,399,276 in 2000, from  $196,740,171 in 1999.
Average interest-bearing deposits decreased $7,067,017, or 3.59%,
to  $189,550,170 in 2000, from  $196,617,187 in 1999, while
average demand deposits increased $7,853,381, or 21.06% to
$45,144,294 in 2000, from $37,290,913 in 1999.  At December 31,
2000, total deposits were $231,926,192, compared to $238,725,852
at December 31, 1999, a decrease of 2.85%.

	The following table sets forth the deposits of the Company by
category as of December 31, 2000 and 1999,
respectively.
<table>
<caption>
							December 31,
					2000				1999
						Percent of			Percent of
				Amount	deposits	Amount	deposits

				<c>		<c>		<c>		<c>
Demand deposit accounts	49,674,943  21.42%	39,151,702  16.40%
NOW accounts		39,910,464 	17.21%	41,203,474 	17.26%
Money market accounts	34,896,077  15.04%	52,985,409 	22.19%
Savings accounts		34,057,361 	14.68%	35,254,807 	14.77%
Time deposits less
 than $100,000		58,206,911 	25.10%	57,312,394 	24.01%
Time deposits of
 $100,000 or more		15,180,436   6.55%	12,818,066   5.37%

 Total deposits	     231,926,192 100.00%     238,725,852  100.00%
</table>

	Core deposits, which exclude certificates of deposit of
$100,000 or more, provide a relatively stable funding source for
the Company's loan portfolio and other earning assets.  The
Company's core deposits decreased $9,162,030 during 2000.  This
decrease is partially attributable to a migration of funds from
insured deposits to the Banks' business sweep account product
implemented as retail repurchase agreements.  Retail repurchase
agreements were first offered in 2000 and had a balance of
$3,113,671 at December 31, 2000.  Additional decreases in deposit
balances may have occurred due to the Company's practice of
protecting profitability in an increasing rate environment by
increasing rates on deposits less rapidly than some local
competitors.  Deposits, and particularly core deposits, have been
the Company's primary source of funding and have enabled the
Company to meet both its short-term and long-term liquidity needs.
 Management anticipates that such deposits will continue to be the
Company's primary source of funding in the future.  The maturity
distribution of the Company's time deposits over $100,000 at
December 31, 2000, is shown in the following table.
<table>
<caption>
Maturities of Certificates of Deposit and
 Other Time Deposits of $100,000 or More

							December 31, 2000
								After six
						After three	through
				Within threethrough	twelve	After twelve
				Months	six months	months	months	Total

				<c>		<c>		<c>		<c>		<c>
Certificates of deposit,
 $100,000 or more		4,423,581	1,519,836 	5,275,808 	3,961,211 	15,180,436
</table>

	Large certificate of deposit customers tend to be extremely
sensitive to interest rate levels, making these deposits less
reliable sources of funding for liquidity planning purposes than
core deposits.  Some financial institutions partially fund their
balance sheets using large certificates of deposit obtained
through brokers.  These brokered deposits are generally expensive
and are unreliable as long-term funding sources.  Accordingly, the
Company does not accept brokered deposits.


Noninterest Income

	Noninterest income for 2000 was $1,103,858, compared to
noninterest income in 1999 of $1,045,327, an increase of $58,531,
or 5.60%.  Additional revenues from Credit Card and VISA Check
Card fees contributed $49,710 of this increase.

	The following table presents the principal components of
noninterest income for the years ended December 31, 2000 and 1999,
respectively.
							Noninterest Income
<table>

							<c>		<c>
							2000		1999
Service charges on deposit accounts		  724,845 	  724,067
Other noninterest revenue			  379,013 	  321,260
  Total noninterest income			1,103,858   1,045,327

Noninterest income as a percentage of average total assets
								0.38%		0.37%
</table>

Noninterest Expense

	Noninterest expense increased by $256,594, or 4.54%, from
$5,647,612 in 1999 to $5,904,206 in 2000.  Increased personnel
costs of $162,545 were due to annual raises and the addition of a
fulltime audit position.  Furniture and equipment expense
increased $160,003 of which approximately $110,000 was
attributable to costs associated with the Check Imaging system
installed in 1999.  Included in noninterest expense in 1999 was
property with a book value of $128,806, which was donated to a
Worcester County municipality.  In 1999, costs of stationery and
supplies were above normal due to a branch relocation and costs
associated with potential year 2000 computer problems; in 2000,
stationery and supplies costs decreased $47,994, returning to a
pre-1999 level.


<page>
	The following table presents the principal components of
noninterest expense for the years ended December 31, 2000 and
1999, respectively.
<table>
<caption>
							Noninterest Expense

							<c>		<c>
							2000		1999

Compensation and related expenses		3,238,854 	3,076,309
Occupancy expense					  425,767 	  413,073
Furniture and equipment expense		  671,040 	  511,037
Amortization of intangible assets		   62,005 	   19,721
Advertising						  132,784 	  146,341
Business and product development		   57,055      57,649
Courier service					   99,466      93,968
Deposit insurance					   35,157      37,917
Director fees				         72,575      64,120
Dues, donations, and subscriptions		  107,114      83,105
Donated real property				     -        128,806
Freight						   62,411      57,879
Lliability insurance				   61,649      64,686
Postage						  145,325     155,092
Professional fees					   62,660      61,538
Stationery and supplies				  261,733     309,727
Telephone 						   82,256      82,466
ATM fees					        123,398     110,791
Miscellaneous					  202,957     173,387
  Total noninterest expense			5,904,206   5,647,612

Noninterest expense as a percentage of average total assets
								2.04%		2.00%
</table>

<page>
Capital

	Under the capital guidelines of the Federal Reserve Board and
the FDIC, the Company and its banks are currently required to
maintain a minimum risk-based total capital ratio of 8%, with at
least 4% being Tier 1 capital.  Tier 1 capital consists of common
shareholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated
subsidiaries, less certain intangibles.  In addition, the Company
and the banks must maintain a minimum Tier 1 leverage ratio (Tier
1 capital to total assets) of at least 3%, but this minimum ratio
is increased by 100 to 200 basis points for other than the
highest-rated institutions.

	At December 31, 2000, the Company and the banks exceeded
their regulatory capital ratios, as set forth in the following
table.

Analysis of Capital
<table>
<caption>
							2000
				Required	Consolidated	Maryland	Delaware
				Minimums	Company		MD Bank	Bank

				<c>		<c>			<c>		<c>
Total risk-based
  capital ratio		8.0%		36.6%			34.5%		53.0%
Tier I risk-based
 capital ratio		4.0%		35.4%			33.3%		52.0%
Tier I leverage ratio	3.0%		18.2%			16.6%		29.6%

							1999
Total risk-based
  capital ratio		8.0%		38.4%			35.0%		99.6%
Tier I risk-based
 capital ratio		4.0%		37.1%			33.8%		99.3%
Tier I leverage ratio	3.0%		17.5%			15.4%		30.8%
</table>

Accounting Rule Changes

FASB Statement No. 137, Accounting for Derivative
Instruments and Hedging Activities, Deferral of the Effective
Date of FASB Statement No. 133, delays the effective date of FASB
Statement No. 133 for one year, to fiscal years beginning after
June 15, 2000.  The Company's security portfolio has no
derivative instruments.  The implementation of this statement is
expected to have minimal impact on the Company's financial
statements.

	FASB Statement No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities, is an amendment of
FASB Statement No. 133.  This statement addresses a limited
number of issues causing implementation difficulties for entities
that apply Statement No. 133.  Specifically, it expands the
normal sales and normal purchase exception, redefines the
specific risks that can be identified as a hedge risk, revises
foreign-currency-denominated assets and liabilities, and
discusses intercompany derivatives.  The effective date of the
Statement is the first fiscal quarter of fiscal years beginning
after June 15, 2000.

	FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities,
is a replacement of Statement No. 125.  This statement is
intended to develop standards to aid in resolving existing
financial accounting and reporting issues when transfers of
financial assets occur.  Specifically, the statement addresses
issues where the transferor has a continuing involvement with the
transferred asset or with the transferee, as in transfers with
recourse, servicing rights, agreements to reacquire, options
written or withheld, or pledges of collateral.  The effective
date of the Statement is for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March
31, 2001.

FASB Interpretation No. 44, Accounting for Certain
Transactions involving Stock Compensation, clarifies the
application of APB Opinion No. 25.  The statement addresses
issues such as the definition of an employee, the criteria for
determining if a plan qualifies as a noncompensatory plan, the
consequence of modifications to the terms of a fixed stock option
or award, and the accounting for an exchange of stock
compensation awards in a business combination.  The
interpretation is effective July 1, 2000.


Impact of Inflation

	Unlike most industrial companies, the assets and liabilities
of financial institutions such as the Company and the banks are
primarily monetary in nature.  Therefore, interest rates have a
more significant effect on the Company's performance than do the
effects of changes in the general rate of inflation and change in
prices.  In addition, interest rates do not necessarily move in
the same direction or in the same magnitude as the prices of goods
and services.  As discussed previously, management seeks to manage
the relationships between interest sensitive assets and
liabilities in order to protect against wide interest rate
fluctuations, including those resulting from inflation.   See
"Liquidity and Interest Rate Sensitivity" above.

Item 7. Financial Statements

	In response to this Item, the information included on pages 1
through 22 of the Company's Annual Report to Shareholders for the
year ended December 31, 2000, is incorporated herein by reference.

PART III

Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures

	Not applicable.

Item 9. Directors and Executive Officers; Compliance with Section
16(a) of the Exchange Act

	In response to this item, the information included on pages 2
through 3 of the Company's Proxy Statement for Annual Meeting of
Shareholders To Be Held on May 2, 2001, is incorporated herein by
reference.

Item 10. Executive Compensation

	In response to this item, the information included on page 4
of the Company's Proxy Statement for Annual Meeting of
Shareholders To Be Held on May 2, 2001, is incorporated herein by
reference.

Item 11. Security Ownership of Certain Beneficial Owners and
Management

	In response to this item, the information included on pages 4
through 5 of the Company's Proxy Statement for  Annual Meeting of
Shareholders to be held May 2, 2001, is incorporated herein by
reference.

Item 12. Certain Relationships and Related Transactions

	In response to this item, the information included on page 6
of the Company's Proxy Statement for Annual Meeting of
Shareholders to be held May 2, 2001, is incorporated herein by
reference.

Item 13. Exhibits and Reports on Form 8-K

(a)	Exhibits

	3.1	Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 of Registration Statement Form
		 S-4, File No. 33-99762).

	3.2	Bylaws of the Company (incorporated by reference to Exhibit
3.2 of Registration Statement Form S-4, File No.
		33-99762).

	13	Annual Report to Shareholders for the year ended December
31, 2000.

	21	Subsidiaries of the Company.

(b)	Reports on Form 8-K

		No reports on Form 8-K were filed during the fourth quarter
of the year ended December 31, 2000.






<page>
SIGNATURES
	In accordance with Section 13 or 15(d) 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.

		CALVIN B. TAYLOR BANKSHARES, INC.
		(Registrant)

Date:	                      	By:	 /s/ Reese F. Cropper, Jr.
		Reese F. Cropper, Jr.
		President, Chief Executive Officer

Date:	                      	By:	 /s/ William H. Mitchell
		William H. Mitchell
		Chief Financial Officer



	In accordance with 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.

Date:	                      	By:	 /s/ James R. Bergey, Jr.
					James R. Bergey, Jr.,	Director

Date:	                      	By:	 /s/	James R. Bergey, Sr.
					James R. Bergey, Sr., Director

Date:	                      	By:	 /s/	George H. Bunting, Jr.
					George H. Bunting, Jr., Director

Date:	                      	By:	 /s/	John H. Burbage, Jr.
					John H. Burbage, Jr., Director

Date:	                      	By:	 /s/	Reese F. Cropper, Jr.
					Reese F. Cropper, Jr.,
					President, Chief Executive Officer
					and Director

Date:	                      	By:	 /s/	Reese F. Cropper, III
					Reese F. Cropper, III, Director

Date:	                      	By:	 /s/	Hale Harrison
					Hale Harrison, Director

Date:	                      	By:	 /s/ Gerald T. Mason
					Gerald T. Mason, Director

Date:	                      	By:	 /s/ William H. Mitchell
					William H. Mitchell, Vice President and Director

Date:	                      	By:	 /s/ Joseph E. Moore
					Joseph E. Moore, Director

Date:	                      	By:	 /s/ Michael L. Quillin, Sr.
   					Michael L. Quillin, Sr., Director

Date:	                      	By:	 /s/ D. Bruce Rogers
					D. Bruce Rogers, Director







EXHIBIT 13

ANNUAL REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED DECEMBER 31, 2000

<page>











Calvin B. Taylor Bankshares, Inc.
and subsidiaries

Financial Statements

December 31, 2000




<page>
Calvin B. Taylor Bankshares, Inc.
and subsidiaries

Table of Contents



									Page

Report of independent auditors				1

Consolidated financial statements

  Consolidated balance sheets					2

  Consolidated statements of income			   	3

  Consolidated statements of changes in
	 stockholders' equity					4

  Consolidated statements of cash flows			5-6

  Notes to consolidated financial statements		7-23



<page>







Report of Independent Auditors
The Board of Directors and Stockholders
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Berlin, Maryland


	We have audited the accompanying consolidated balance sheets
of Calvin B. Taylor Bankshares, Inc. and Subsidiaries as of
December 31, 2000, 1999, and 1998, and the related consolidated
statements of income, changes in stockholders' equity, and cash
flows for the years then ended.  These consolidated financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

	We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

	In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of Calvin B. Taylor Bankshares, Inc. and
Subsidiaries as of December 31, 2000, 1999, and 1998, and the
results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting
principles.



								/s/Rowles & Company LLP



Salisbury, Maryland
January 8, 2001



<page>
<table>
<caption>
Calvin B. Taylor Bankshares, Inc. and subsidiaries

Consolidated Balance Sheets

								December 31,
					      2000      	1999		1998
Assets

						<c>		<c>		<c>
Cash and due from banks			 13,332,279  18,546,576  12,157,944
Federal funds sold			 18,167,527  15,877,383  33,337,435
Interest-bearing deposits		    784,000     983,000   1,228,000
Investment securities available
 for sale					  4,052,934   3,402,096   2,997,137
Investment securities held to maturity
 (approximate market value of
 76,610,933, 89,352,513, and
 80,848,955)				 76,273,558  89,921,935  80,275,711
Loans, less allowance for credit
 losses of 2,192,755, 2,082,031,
 and 2,080,358				168,571,199 152,000,504 139,757,463
Premises and equipment			  5,620,478   5,858,928   5,530,566
Accrued interest income			  1,948,199   1,928,735   1,869,686
Intangible assets				     99,574     161,579      10,603
Deferred income taxes			    107,227     222,986      67,354
Other assets				     91,036      17,076     231,351
						289,048,011 288,920,798 277,463,250

Liabilities and Stockholders' Equity
Deposits
  Noninterest-bearing			 49,674,943  39,151,702  36,648,979
  Interest-bearing			182,251,249 199,574,150 193,968,706
						231,926,192 238,725,852 230,617,685
Securities sold under agreements
 to repurchase				  3,113,671        -           -
Accrued interest payable		    503,519     424,042     456,133
Accrued income taxes			    103,818      56,490        -
Mortgage obligation			    231,517     246,413        -
Other liabilities				     84,085     247,667       46,233
						235,962,802 239,700,464 231,120,051
Stockholders' equity
  Common stock, par value $1 per
   share; authorized 2,000,000 shares;
   issued and outstanding  3,240,000
   shares in 2000, 1,620,000 shares
   in 1999 and 1998 			  3,240,000   1,620,000   1,620,000
  Additional paid in capital		 17,290,000  17,290,000  17,290,000
  Retained earnings			 32,058,498  30,030,340  26,954,680
						 52,588,498  48,940,340  45,864,680
  Accumulated other comprehensive
   income					    496,711     279,994     478,519
						 53,085,209  49,220,334  46,343,199
						289,048,011 288,920,798 277,463,250


The accompanying notes are an integral part of these financial statements.
2
</table>


<page>
<table>
<caption>
Calvin B. Taylor Bankshares, Inc. and subsidiaries

Consolidated Statements of Income

				               Years Ended December 31,
      					2000		1999      	1998

						<c>		<c>		<c>
Interest and dividend revenue
  Loans, including fees			 13,480,035  12,070,649  12,383,846
  US Treasury and agency securities   3,761,021   4,056,031   3,483,434
  State and municipal securities	    410,891     531,857     489,430
  Federal funds sold 			  1,716,303   1,261,883   1,411,818
  Time certificates of deposit	     46,110      59,892      70,757
  Equity securities			     25,676      19,264      15,890
  Total interest and dividend revenue19,440,036  17,999,576  17,855,175
Interest expense
  Deposit interest			  5,822,224   5,775,026   6,301,464
  Other					     37,807       3,732        -
   Total interest expense		  5,860,031   5,778,758   6,301,464
     Net interest income		 13,580,005  12,220,818  11,553,711

Provision for credit losses		    174,080       5,745       1,175
    Net interest income after
    provision for credit losses	 13,405,925  12,215,073  11,552,536
Other operating revenue
  Service charges on deposit accounts   724,845     724,067     691,945
  Other noninterest revenue		    379,013     321,260     304,243
   Total other operating revenue	  1,103,858   1,045,327     996,188
Other expenses
  Salaries					  2,723,713   2,554,963   2,468,954
  Employee benefits			    515,141     521,346     583,582
  Occupancy 				    425,767     413,073     351,601
  Furniture and equipment 		    671,040     511,037     483,506
  Other operating				  1,568,545   1,647,193   1,431,860
   Total other expenses			  5,904,206   5,647,612   5,319,503
Income before income taxes and
 cumulative effect of a change
 in accounting method			  8,605,577   7,612,788   7,229,221
Income taxes				  2,981,019   2,593,128   2,472,274
Income before cumulative effect
 of a change in accounting method	  5,624,558   5,019,660   4,756,947
Cumulative effect of a change in the
 method of accounting for organization
 costs, net of taxes of $30,875	       -           -        (59,933)
Net income					  5,624,558   5,019,660   4,697,014

Income before cumulative effect
 of a change in accounting method	       1.74        1.55        1.47
   Cumulative effect of a change in
   the method of accounting for
   organization costs, net of taxes		   -          -         (0.02)
Earnings per common share			 1.74 	 1.55 	 1.45



The accompanying notes are an integral part of these financial statements.
3
</table>


<page>
<table>
<caption>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Statements of Changes in Stockholders' Equity

													Accumulated
													other
					Common stock				Undivided 	comprehensiveComprehensive
					Shares 	Par value 	Surplus 	profits	income	income

					<c>		<c>		<c>		<c>		<c>		<c>
Balance, December 31, 1997	810,000 	810,000 	17,290,000 24,120,666 	356,351
Net income				   -   	   -              -     4,697,014      -   	4,697,014
Stock split effected in the form
  of a 100% stock dividend	810,000 	810,000 	      -   	 (810,000)     -
Unrealized gain on investment
  securities available for sale
  net of income taxes		   -           -              -          -   	122,168 	  122,168
Comprehensive income												4,819,182
Cash dividend, $.33 per share    -           -              -    (1,053,000)     -

Balance, December 31, 1998  1,620,000   1,620,000 	17,290,000 26,954,680 	478,519
Net income				   -   	   -   		-	5,019,660 	   -   	5,019,660
Unrealized gain on investment
  securities available for sale
  net of income taxes		   -           -              -          -   	(198,525)	 (198,525)
Comprehensive income												4,821,135
Cash dividend, $.60 per share    -           -              -    (1,944,000)	    -

Balance, December 31, 1999  1,620,000   1,620,000	17,290,000 30,030,340   279,994
Net income				   -   	   -   		-   	5,624,558 	   -   	5,624,558
Stock split effected in the form
  of a 100% stock dividend  1,620,000   1,620,000 	      -    (1,620,000)	   -
Unrealized gain on investment
  securities available for sale
  net of income taxes		   -   	   -   		-   	     -	216,717 	  216,717
Comprehensive income												5,841,275
Cash dividend, $.61 per share    -   	   -   		-    (1,976,400)	   -
Balance, December 31, 2000  3,240,000   3,240,000 	17,290,000 32,058,498 	496,711





The accompanying notes are an integral part of these financial statements.
4
</table>


<page>
<table>
<caption>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

								Years Ended December 31,
						      2000		1999		1998

							<c>		<c>		<c>
Cash flows from operating activities
  Interest received				19,291,291 17,649,136 17,484,837
  Fees and commissions received		 1,080,633 	1,029,416    996,155
  Interest paid					(5,780,554)(5,810,849)(6,312,142)
  Cash paid to suppliers and employees	(5,371,499)(4,864,057)(4,932,100)
  Income taxes paid				(2,954,290)(2,413,486)(2,556,102)
							 6,265,581  5,590,160  4,680,648

Cash flows from investing activities
  Proceeds from maturities of investment
	 securities					49,458,000 39,025,000 45,815,000
  Purchase of investment securities held
	 to maturity			     (35,978,105)(49,108,227)(62,741,560)
  Certificates of deposits purchased,
	 net of maturities			   199,000     245,000        1,000
  Loans made, net of principal collected (16,744,775)(12,248,786)  7,435,183
  Sale (purchase) of foreclosed real estate     -         39,000     (39,000)
  Purchases of and deposits on premises,
   equipment, software, and other intangibles(443,405)  (776,547) (1,724,341)
  Proceeds from sale of equipment		        423      2,400 	      -
							 (3,508,862)(22,822,160)(11,253,718)

Cash flows from financing activities
  Net increase (decrease) in
     Time deposits				  3,256,887     452,474   6,675,598
     Other deposits				(10,056,547)  7,655,693  17,148,889
     Securities sold under agreements
	 to repurchase				  3,113,671        -           -
  Payments on capital lease and mortgage
	obligations					    (18,483)     (3,587)    (61,720)
  Dividends paid					 (1,976,400) (1,944,000) (1,053,000)
							 (5,680,872)  6,160,580  22,709,767

Net increase (decrease) in cash
	and cash equivalents			 (2,924,153)(11,071,420) 16,136,697
Cash and cash equivalents at beginning
	of year					 34,423,959  45,495,379  29,358,682
Cash and cash equivalents at end of year	 31,499,806  34,423,959  45,495,379


The accompanying notes are an integral part of these financial statements.
5
</table>


<page>
<table>
<caption>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
(Continued)

								Years Ended December 31,
						      2000		1999		1998

							<c>		<c>		<c>
Reconciliation of net income to net cash provided by
   operating activities
    Net income					5,624,558 	5,019,660 	4,697,014

   Adjustments to reconcile net income to net cash
      provided by operating activities
        Depreciation and amortization	  498,612 	  418,403 	  437,177
        Provision for credit losses		  174,080 	    5,745 	    1,175
        Deferred income taxes			  (20,599)	  (30,721)	  (40,160)
        Amortization of premiums and
		accretion of discounts, net	 (129,281)	 (291,392)	 (324,542)
        Charitable donation of property	     -   	  128,806 	     -
        (Gain) loss on disposition of assets  1,564 	   (2,400)	    5,860
        Decrease (increase) in
           Accrued interest receivable	  (19,464)	  (19,464)	  (79,263)
           Other assets				  (73,960)	  135,690 	  (55,313)
        Increase (decrease) in
           Accrued interest payable		   79,477 	  (32,091)	   22,789
           Accrued income taxes		   47,328 	   56,490 	  (21,527)
           Other liabilities			   83,266 	  201,434 	   37,438
							6,265,581 	5,590,160 	4,680,648


Noncash Activity



        Property acquired by issuance of debt  -   	  250,000 	     -



The accompanying notes are an integral part of these financial statements.
6
</table>


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 1.	Summary of Significant Accounting Policies

	The accounting and reporting policies reflected in the
financial statements conform to generally accepted accounting
principles and to general practices within the banking
industry.

	Calvin B. Taylor Bankshares, Inc. is a bank holding
company.  Its principal subsidiary, Calvin B. Taylor Banking
Company, is a financial institution operating primarily in
Worcester County, Maryland. The other subsidiary, Calvin B.
Taylor Bank of Delaware, is a financial institution operating
primarily in Sussex County, Delaware.  The Banks offer
deposit services and loans to individuals, small businesses,
associations and government entities.  Other services include
direct deposit of payroll and social security checks,
automatic drafts from accounts, automated teller machine
services, safe deposit boxes, money orders and travelers
cheques.  The Banks also offer credit card services and
discount brokerage services through correspondents.

	The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements.  These estimates and assumptions may
affect the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from these
estimates.

	Principles of consolidation
	The consolidated financial statements of Calvin B. Taylor
Bankshares, Inc. include the accounts of its wholly owned
subsidiaries, Calvin B. Taylor Banking Company and Calvin B.
Taylor Bank of Delaware.  All significant intercompany
balances and transactions have been eliminated in
consolidation.

	Cash equivalents
	For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks and
federal funds sold.  Federal funds are purchased and sold for
one-day periods.

	Investment securities
	As securities are purchased, management determines if the
securities should be classified as held to maturity or
available for sale.  Securities which management has the
intent and ability to hold to maturity are recorded at
amortized cost which is cost adjusted for amortization of
premiums and accretion of discounts to maturity.  Securities
classified as available-for-sale are recorded at fair value.

	Gains and losses on disposal are determined using the
specific-identification method.

	Premises and equipment
	Premises and equipment are recorded at cost less
accumulated depreciation.  Depreciation is computed under
both straight-line and accelerated methods over the estimated
useful lives of the assets.

	Intangible assets
	In 1998, the Company adopted Statement of Position 98-5 of
the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants, Reporting on the
Costs of Start-up Activities, which requires that start-up
costs and organization costs be expensed as incurred.  During
1998, the Company wrote off organization costs, all of which
were incurred prior to 1998.  Prior to 1998, organization
costs were amortized over five years.

	The Company amortizes software costs over their useful
lives using the straight-line method.

7


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 1.	Summary of Significant Accounting Policies (Continued)

	Loans and allowance for credit losses
	Loans are stated at face value less the allowance for
credit losses.  Interest on loans is credited to income based
on the principal amounts outstanding.  The accrual of
interest is discontinued when any portion of the principal or
interest is ninety days past due and collateral is
insufficient to discharge the debt in full.

	The allowance for credit losses is maintained at a level
deemed appropriate by management to provide adequately for
known and inherent risks in the loan portfolio.  The minimum
range of the allowance for loan losses is calculated by
applying risk-weighted percentages to loans based on their
delinquency and underlying collateral.  The portion of the
allowance that is a result of geographic and industry
concentrations and current economic conditions is not
allocated to specific loans.  At December 31, 2000, the
allowance included approximately $1,040,000 that was not
allocated to specific loans.  Management has historically
maintained the allowance at a level of approximately 1.30% to
1.35% of gross loans.

	If the current economy or real estate market were to
suffer a severe downturn, the estimate for uncollectible
accounts would need to be increased.  Loans which are deemed
to be uncollectible are charged off and deducted from the
allowance.  The provision for credit losses and recoveries on
loans previously charged off are added to the allowance.

	Loans are considered impaired when, based on current
information, management considers it unlikely that collection
of principal and interest payments will be made according to
contractual terms.  Generally, loans are not reviewed for
impairment until the accrual of interest has been
discontinued.

	Advertising
	Advertising costs are expensed as incurred.

	Income taxes
	The provision for income taxes includes taxes payable for
the current year and deferred income taxes.  Deferred income
taxes are provided for the temporary differences between
financial and taxable income.  Tax expense and tax benefits
are allocated to the banks and company based on their
proportional share of taxable income.

	Per share data
	Earnings per common share and dividends per common share
are determined by dividing net income and dividends by the
3,240,000 shares outstanding, giving retroactive effect to
the stock dividends distributed.

2.	Cash and Due From Banks

	The Company normally carries balances with other banks
that exceed the federally insured limit.  The average
balances carried in excess of the limit, including unsecured
federal funds sold to the same banks, were  $27,192,359 for
2000, $25,041,212 for 1999, and $26,371,278 for 1998.

	Banks are required to carry noninterest-bearing cash
reserves at specified percentages of deposit balances. The
Company's normal amount of cash on hand and on deposit with
other banks is sufficient to satisfy the reserve
requirements.


8


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 3.	Investment Securities
	Investment securities are summarized as follows:
<table>
<caption>
					Amortized	Unrealized	Unrealized	Market
					cost      	gains   	losses    	value

					<c>		<c>		<c>		<c>
December 31, 2000
Available for sale
  U.S. Treasury			 1,993,753 	   434,367 	    -   	 2,428,120
  Equity				 1,249,941 	   374,873 	    -   	 1,624,814
					 3,243,694 	   809,240 	    -   	 4,052,934
Held to maturity
  U.S. Treasury			47,422,577 	   285,916 	   37,823 	47,670,670
  U.S. Government agency	18,650,177 	    97,563 	    1,412 	18,746,328
  State and municipal		10,200,804 	    16,051 	   22,920 	10,193,935
					76,273,558 	   399,530     62,155 	76,610,933

December 31, 1999
Available for sale
  U.S. Treasury			 1,993,463 	   115,297       -   	 2,108,760
  Equity				   952,467 	   346,869      6,000    1,293,336
					 2,945,930     462,166 	    6,000 	 3,402,096
Held to maturity
  U.S. Treasury			66,466,632 	     7,153 	   386,382 	66,087,403
  U.S. Government agency	10,649,787 	      -   	   119,085 	10,530,702
  State and municipal		12,805,516 	       785 	    71,893 	12,734,408
					89,921,935 	     7,938 	   577,360 	89,352,513

December 31, 1998
Available for sale
  U.S. Treasury			 1,993,174 	   487,625 	       -   	 2,480,799
  Equity				   224,363 	   291,975 	       -   	   516,338
					 2,217,537 	   779,600 	       -   	 2,997,137
Held to maturity
  U.S. Treasury			64,826,398 	   504,666 	     14,311 65,316,753
  U.S. Government agency	 1,000,000 	       157 	        469    999,688
  State and municipal		14,449,313 	    87,156 	      3,955 14,532,514
					80,275,711 	   591,979 	     18,735 80,848,955
</table>




9


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 3.	Investment Securities (Continued)

	The amortized cost and estimated market value of debt
securities, by contractual maturity and the amount of pledged
securities, follow.  Actual maturities may differ from
contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment
penalties.
<table>
<caption>
			December 31, 2000		December 31, 1999		December 31, 1998
			Amortized	Market	Amortized	Market	Amortized	Market
			cost      	value   	cost      	value   	cost      	value

			<c>		<c>		<c>		<c>		<c>		<c>
Available for sale due
After ten years	 1,993,753 	 2,428,120 	 1,993,463 	 2,108,760 	 1,993,174 	 2,480,799

Held to maturity due
In one year or less45,333,736 45,313,048 	49,004,373 	48,908,330 	33,406,599 	33,531,104
After one year
 through five years30,939,822 31,297,885 	40,917,562 	40,444,183 	46,869,112 	47,317,851
 			76,273,558 	76,610,933 	89,921,935 	89,352,513 	80,275,711 	80,848,955

Pledged securities19,985,861 	20,097,350 	 4,592,597 	 4,562,493 	 5,094,242 	 5,150,876
 </table>
	Investments are pledged to secure deposits of federal and
local governments.  Pledged securities also serve as
collateral for securities sold under agreements to
repurchase.

 4.	Lines of Credit

	The Company has available lines of credit, including
overnight federal funds, reverse repurchase agreements and
letters of credit, totaling $19,000,000 as of December 31,
2000, $19,000,000 as of December 31, 1999, and $15,000,000 as
of December 31, 1998.

 5.	Loans and Allowance for Credit Losses

	Major classifications of loans are as follows:

<table>
<caption>

					2000		1999		1998

					<c>		<c>		<c>
Demand and time			 15,588,946  17,825,019  16,253,621
Mortgage				148,468,890 130,378,776 118,837,336
Construction			  1,540,376     824,071   1,795,952
Installment				  5,165,742   5,054,669   4,950,912
					170,763,954 154,082,535 141,837,821
Allowance for credit losses	  2,192,755   2,082,031   2,080,358
Loans, net				168,571,199 152,000,504 139,757,463
</table>




10


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 5.	Loans and Allowance for Credit Losses (Continued)

	The rate repricing distribution of the loan portfolio
follows:

					2000		1999		1998
Immediately				165,596,389 149,036,842 136,750,569
Within one year			    425,689     302,886     522,434
Over one to five years		  4,114,779   4,258,632   4,223,521
Over five years			    627,097     484,175     341,297
					170,763,954 154,082,535 141,837,821


	Outstanding loan commitments and letters of credit are as
follows:
Loan commitments
  Construction and land
	development			  2,964,536   9,486,899   1,470,375
  Other				  3,192,350   4,843,120   6,012,019
					  6,156,886  14,330,019   7,482,394

Standby letters of credit
  Secured by deposits		  1,229,669   1,380,593   1,200,650
  Other				    182,883     123,648     187,215
					  1,412,552   1,504,241   1,387,865


	Loan commitments are agreements to lend to customers as
long as there is no violation of any conditions of the
contracts.  Loan commitments generally have interest at
current market rates, fixed expiration dates, and may require
payment of a fee.

	Letters of credit are commitments issued to guarantee the
performance of a customer to a third party.

	Loan commitments and letters of credit are made on the
same terms, including collateral, as outstanding loans.  The
Company's exposure to credit loss in the event of
nonperformance by the borrower is represented by the contract
amount of the commitment.

	The Company makes loans to customers located primarily in
the Delmarva region.  Although the loan portfolio is
diversified, its performance will be influenced by the
economy of the region.





11


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 5.	Loans and Allowance for Credit Losses (Continued)

	Transactions in the allowance for credit losses were as
follows:
<table>
<caption>
						2000		1999		1998

						<c>		<c>		<c>
Beginning balance				2,082,031 	2,080,358 	2,080,798
Provision charged to operations	  174,080 	    5,745 	    1,175
Recoveries					    3,744 	   14,823 	   14,479
						2,259,855 	2,100,926 	2,096,452
Loans charged off				   67,100 	   21,884 	   13,105
						2,192,755 	2,079,042 	2,083,347
Change in allowance related to
 loan commitments				     -   	   (2,989)	    2,989
Ending balance				2,192,755 	2,082,031 	2,080,358
</table>
	Amounts past due 90 days or more, and still accruing
interest, are as follows:
<table>

						<c>		<c>		<c>
Demand and time				   39,576 	   50,371 	  303,500
Mortgage					  263,237 	     -   	  194,622
Installment					   18,296 	    1,346 	    6,887
						  321,109 	   51,717 	  505,009
</table>
	Management has identified no impaired or nonaccrual loans
at December 31, 2000, 1999, and 1998.

 6.	Premises and Equipment

	A summary of premises and equipment and the related
depreciation is as follows:
<table>
<caption>
		Estimated useful life		2000     	1999     	1998

				<c>			<c>		<c>		<c>
Land							 1,891,950 	1,891,950 	2,506,475
Premises			5 - 50 years	 4,645,138 	4,602,879 	4,253,722
Furniture and equipment	5 - 40 years	 3,742,681 	3,678,167 	2,875,819
							10,279,769 10,172,996 	9,636,016
Accumulated depreciation			 4,659,291 	4,314,068 	4,105,450
Net premises and equipment			 5,620,478  5,858,928   5,530,566

Depreciation expense				   436,608 	  398,682 	  340,304
</table>

	Real estate with an original cost of $250,000 is pledged
to secure a note payable with balances of $231,517 and
$246,413 as of December 31, 2000 and 1999, respectively.




12


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 7.	Lease Commitments

	The Company leases the land on which the Route 50 branch
is located and the branch office in South Pocomoke.  Lease
obligations will require payments as follows:

								Minimum
					Period 		rentals
					2001			  28,162
					2002			  28,162
					2003			  15,000
					2004			  15,000
					2005			  15,000
					Remaining years	  55,000
								 156,324

	The Route 50 lease expires August 31, 2009.

	The South Pocomoke lease provides for an increase in rent
every five years based on the consumer price index.  The
lease expires January 1, 2003.  The leased branch office in
South Pocomoke has been consolidated into another Pocomoke
branch.  The current leased facilities are being used as
storage until more suitable storage is found.  All costs
associated with the properties, including real estate taxes,
are obligations of the Company.

 8.	Deposits

	Major classifications of interest-bearing deposits are as
follows:
<table>
<caption>

					2000		1999		1998

					<c>		<c>		<c>
Money market			 34,896,077  52,985,409  57,683,937
Savings and NOW			 73,967,825  76,458,281  66,606,783
Other time				 73,387,347  70,130,460  69,677,986
					182,251,249 199,574,150 193,968,706
</table>

	Included in other time deposits are certificates of
deposit of $100,000 or more with the following maturities:
<table>

					<c>		<c>		<c>
Three months or less		  4,423,581   1,394,088   3,962,747
Over three through twelve months6,795,644   9,356,422   9,453,247
Over one through five years	  3,961,211   2,067,556   1,181,142
					 15,180,436  12,818,066  14,597,136
Interest expense			    680,474     550,206     646,110
</table>


13


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


 9.	Mortgage Obligation


	The Company purchased real estate, financing 100% of the
purchase price.  The 6% mortgage has a final maturity of
September, 2011.

	Maturities of this mortgage are as follows:
<table>

			<c>			<c>
			2001			 15,815
			2002			 16,790
			2003			 17,826
			2004			 18,925
			2005			 20,092
			Remaining years	142,069
						231,517
</table>
10.	Securities Sold Under Agreements to Repurchase

	The Bank has repurchase agreements that are collateralized
by government agency securities owned by the Bank.  During
the year ended December 31, 2000, the following applied to
these repurchase agreements:
<table>
<caption>

2000

									<c>
Maximum month-end amount outstanding			4,557,860
Average amount outstanding					1,610,688
Average rate paid during the year				1.45%
Investment securities underlying the agreements
	at year end
  Carrying value							13,988,545
  Estimated fair value						14,105,150
	</table>

11.	Profit Sharing and Pension Plans

	In 1999, the Company adopted a defined contribution profit
sharing plan under Section 401(k) of the Internal Revenue
Code.  The plan covers substantially all of the employees and
allows discretionary Company contributions.  The Board of
Directors approved contributions of 3% of employee salaries
and an additional matching of 50% of employee contributions
to a maximum of 6% of the employee wages.

	The Company terminated its defined benefit pension plan
during 1999.  The plan covered substantially
	all of the employees.  Benefits were based on years of
service and the employee's average rate of earnings for the
final five full years before retirement.  The total cost of
the pension and profit sharing plans for 2000, 1999, and
1998, were $119,307, $155,869, and $115,840, respectively.




14


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


12.	Other Operating Expenses

	The components of other operating expenses follow:
<table>
<caption>
						2000		1999		1998

						<c>		<c>		<c>
Amortization of intangible assets	   62,005 	   19,721 	    6,064
Advertising					  132,784 	  146,341 	  141,736
Business and product development	   57,055 	   57,649 	  118,252
Courier service				   99,466 	   93,968 	   78,900
Deposit insurance				   35,157 	   37,917 	   19,499
Director fees				   72,575 	   64,120 	   71,170
Dues, donations, and subscriptions	  107,114 	   83,105 	   64,451
Donated real property			     -   	  128,806 	     -
Freight					   62,411 	   57,879 	    60,697
Liability insurance			   61,649 	   64,686 	    68,460
Postage					  145,325 	  155,092 	   154,295
Professional fees				   62,660 	   61,538 	    82,128
Stationery and supplies			  261,733 	  309,727 	   266,527
Telephone					   82,256 	   82,466 	    72,682
ATM fees					  123,398 	  110,791 	    84,720
Miscellaneous				  202,957 	  173,387 	   142,279
						1,568,545 	1,647,193 	1,431,860
</table>
13.	Income Taxes

	The components of income tax expense, including taxes
related to the change in accounting method for organization
costs, are as follows:
<table>
<caption>
						2000		1999		1998

						<c>		<c>		<c>
Current
  Federal					2,674,450 	2,369,389 	2,218,578
  State					  327,168 	  254,460 	  262,981
						3,001,618 	2,623,849 	2,481,559
Deferred					  (20,599)	  (30,721)	  (40,160)
						2,981,019 	2,593,128 	2,441,399
</table>

	Components of the deferred tax benefit are as follows:
<table>
<caption>
						2000		1999		1998

						<c>		<c>		<c>
Provision for credit losses		(40,495)	    243 	   (400)
Pension expense				   -   	(13,973)	   -
Depreciation				 13,987 	(35,808)	 (7,511)
Discount accretion			 (1,656)	  2,795 	(12,412)
Health insurance premium deposits	     27 	  8,486 	  4,837
Organization costs			  7,538 	  7,536 	(24,674)
						(20,599)	(30,721)	(40,160)
</table>

	Components of the net deferred tax assets are as follows:
<table>
<caption>
						2000		1999		1998

						<c>		<c>		<c>
Deferred tax asset
  Allowance for credit losses		603,025 	562,530 	562,773
  Health insurance premium deposits	   -   	     27 	  8,513
  Organization costs			  9,600 	 17,138 	 24,674
						612,625 	579,695 	595,960

Deferred tax liabilities
  Depreciation				182,950 	168,963 	204,771
  Pension					   -   	   -   	 13,973
  Discount accretion			  9,920 	 11,576 	  8,781
  Unrealized gain on securities
  available for sale			312,528 	176,170 	301,081
						505,398 	356,709 	528,606

						107,227 	222,986 	 67,354
</table>

	A reconciliation of the provision for taxes on income from
the statutory federal income tax rates to the effective
income tax rates follows:
<table>

						<c>	<c>	<c>	<c>	<c>	<c>
Statutory federal income tax rate	34.0 	%	34.0 	%	34.0 	%
Increase (decrease) in tax rate
  resulting from
  Tax-exempt income			(1.9)		(2.0)		(2.2)
  State income taxes net of
  federal income tax benefit		 2.5 		 2.1 		 2.4
						34.6 	%	34.1 	%	34.2 	%
</table>


16


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


14.	Fair Value of Financial Instruments

	The estimated fair values of the Company's financial
instruments are summarized below.  The fair values of a
significant portion of these financial instruments are
estimates derived using present value techniques prescribed
by the FASB and may not be indicative of the net realizable
or liquidation values.  The calculation of estimated fair
values is based on market conditions at a specific point in
time and may not reflect current or future fair values.
<table>
<caption>
				December 31, 2000		December 31, 1999		December 31, 1998
				Carrying	Fair		Carrying	Fair		Carrying	Fair
				amount	value		amount	value		amount	value

				<c>		<c>		<c>		<c>		<c>		<c>
Financial assets
  Cash and due from
   banks			 13,332,279  13,479,427  18,546,576  18,660,884  12,157,944  12,284,957
  Federal funds sold	 18,167,527  18,167,527  15,877,383  15,877,383  33,337,435  33,337,435
  Interest-bearing
   deposits			    784,000     784,116     983,000     979,200   1,228,000   1,236,676
  Investment securities	 80,326,492	 80,663,867	 93,324,031  92,754,609  83,272,848	 83,846,092
  Loans, net		168,571,199 168,610,107 152,000,504 151,961,767 139,757,463 139,771,766
  Accrued interest
   receivable		  1,948,199	  1,948,199   1,928,735   1,928,735   1,869,686   1,869,686

Financial liabilities
  Noninterest-bearing
   deposits			 49,674,943	 49,674,943  39,151,702  39,151,702  36,648,979  36,648,979
  Interest-bearing
   deposits			182,251,249 182,263,290 199,574,150 199,607,450 193,968,706 194,296,343
  Mortgage obligation	    231,517     210,648     246,413     246,413        -           -
  Accrued interest
   payable			    503,519     503,519     424,042     424,042     456,133     456,133
</table>
	The fair value of silver coin included with cash is
determined based on quoted market prices.

	The fair value of interest-bearing deposits with other
financial institutions is estimated based on quoted interest
rates for certificates of deposit with similar remaining
terms.

	The fair values of equity securities are determined using
market quotations.  The fair values of debt securities are
estimated using a matrix that considers yield to maturity,
credit quality, and marketability.


17


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


14.	Fair Value of Financial Instruments (Continued)

	The fair value of fixed-rate loans is estimated to be the
present value of scheduled payments discounted using interest
rates currently in effect for loans of the same class and
term.  The fair value of variable-rate loans, including loans
with a demand feature, is estimated to equal the carrying
amount.  The valuation of loans is adjusted for possible loan
losses.

	The fair value of interest-bearing checking, savings, and
money market deposit accounts is equal to the carrying
amount.  The fair value of fixed-rate time deposits is
estimated based on interest rates currently offered for
deposits of similar remaining maturities.

	It is not practicable to estimate the fair value of
outstanding loan commitments, unused lines, and letters of
credit.

15.	Related Party Transactions

	The executive officers and directors of the Company enter
into loan transactions with the Banks in the ordinary course
of business.  The terms of these transactions are similar to
the terms provided to other borrowers entering into similar
loan transactions.

	The Company obtains legal services from a law firm in
which one of the principal attorneys is also a member of the
Board of Directors.  Fees charged for these services are at
similar rates charged by unrelated law firms for similar
legal work.  Amounts paid to this related party totaled
$1,805 and $3,746 during the years ended December 31, 2000
and 1999.

<table>
<caption>

					2000		1999		1998

					<c>		<c>		<c>
Beginning balance			 9,231,028	 8,641,536 	 9,466,973
Advances				 5,356,617	 3,095,000 	 3,034,421
					14,587,645	11,736,536 	12,501,394
Repayments				 3,567,151 	 1,624,714   3,836,363
Other changes			(1,272,750)    880,794 	    23,495
Ending balance			12,293,244 	 9,231,028	 8,641,536
</table>




18


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


16.	Capital Standards

	The Federal Reserve Board and the Federal Deposit
Insurance Corporation have adopted risk-based capital
standards for banking organizations.  These standards require
ratios of capital to assets for minimum capital adequacy and
to be classified as well capitalized under prompt corrective
action provisions.  The capital ratios and minimum capital
requirements of the Company are as follows:

<table>
<caption>
								Minimum		To be well
						Actual	capital adequacy	capitalized
(in thousands)			Amount	Ratio	Amount	Ratio	Amount	Ratio

					<c>		<c>	<c>		<c>	<c>		<c>
December 31, 2000
Total capital
  (to risk weighted assets)	54,451 	36.6%	11,897 	8.0%	14,871 	10.0%
Tier 1 capital
  (to risk-weighted assets)	52,588 	35.4%	 5,948 	4.0%	 8,923 	 6.0%
Tier 1 capital
  (to average fourth quarter
	 assets)			52,588 	18.2%	11,806 	4.0%	14,757 	 5.0%

December 31, 1999
Total capital
  (to risk weighted assets)	50,589 	38.4%	10,520 	8.0%	13,150 	10.0%
Tier 1 capital
  (to risk-weighted assets)	48,940 	37.1%	 5,260 	4.0%	 7,890 	 6.0%
Tier 1 capital
  (to average fourth quarter
	 assets)			48,940 	17.5%	11,691 	4.0%	14,614 	 5.0%

December 31, 1998
Total capital
  (to risk weighted assets)	47,413 	38.4%	 9,873 	8.0%	12,342 	10.0%
Tier 1 capital
  (to risk-weighted assets)	45,864 	37.2%	 4,937 	4.0%	 7,405 	 6.0%
Tier 1 capital
  (to average fourth quarter
	 assets)			45,864 	17.5%	10,513 	4.0%	13,142 	 5.0%
</table>

	Tier 1 capital consists of capital stock, additional paid
in capital, and retained earnings.  Total capital includes a
limited amount of the allowance for credit losses.  In
calculating risk-weighted assets, specific risk percentages
are applied to each category of asset and off-balance sheet
items.

	Failure to meet the capital requirements could affect the
Company's ability to pay dividends and accept deposits, and
may significantly affect the operations of the Company.

	In the most recent regulatory report, the Company was
determined to be well capitalized.  Management has no plans
which should change the classification of the capital
adequacy.


19


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


17.	Parent Company Financial Information
<table>
<caption>
								December 31,
Balance Sheets				2000		1999		1998
Assets

						<c>		<c>		<c>
Cash and due from banks			     9,110	   151,751	    57,056
Interest-bearing deposits		    75,505 	   100,000 	   500,000
Securities available for sale		 1,624,814	 1,293,336	   516,338
Investment in subsidiary banks	49,806,120	46,061,690	43,609,263
Premises and equipment			 1,609,939	 1,639,139	 1,668,338
Other assets				    22,445	    18,241	     8,721
   Total assets				53,147,933	49,264,157	46,359,716

Liabilities and Stockholders' Equity
Liabilities
  Deferred income taxes			    62,724	    43,823	    16,517
Stockholders' equity
  Common stock				 3,240,000	 1,620,000	 1,620,000
  Additional paid-in capital		17,290,000	17,290,000	17,290,000
  Retained earnings			32,058,498	30,030,340	26,954,680
  Accumulated other comprehensive
	 income				   496,711	   279,994	   478,519
  Total stockholders' equity		53,085,209	49,220,334	46,343,199
  Total liabilities and
	stockholders' equity		53,147,933	49,264,157	46,359,716
</table>

<table>
<caption>
							Years Ended December 31,
Statements of Income
						2000		1999		1998

						<c>		<c>		<c>
Interest revenue				     3,690	    10,240	    33,467
Dividend revenue				    25,676	    19,264	    15,890
Dividends from subsidiaries		 2,076,400	 2,344,000	 1,803,000
Equity in undistributed income
 of subsidiaries				 3,548,585	 2,680,964	 2,906,079
Rental income				     2,700	     2,925	     2,700
						 5,657,051	 5,057,393	 4,761,136

Expenses
  Occupancy					    24,898	    31,570	     8,027
  Furniture and equipment		     1,904	     3,423	     2,280
  Other					    15,168	    12,418	    65,760
						    41,970	    47,411	    76,067

Income before income taxes		 5,615,081	 5,009,982	 4,685,069
Income taxes (benefit)			    (9,477)	    (9,678)	   (11,945)
Net income					 5,624,558	 5,019,660	 4,697,014
</table>


20


<page>
Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

17.	Parent Company Financial Information (Continued)
<table>
<caption>

							Years Ended December 31,
						2000		1999		1998

						<c>		<c>		<c>
Statements of Cash Flows
Cash flows from operating activities
  Interest and dividends received	 2,105,906	 2,375,011	 1,852,499
  Rental payments received		     2,700	     2,925	     2,700
  Cash paid for operating expenses	   (19,969)	   (18,211)	   (35,660)
  Income taxes refunded			    18,101 	     7,074 	       808
						 2,106,738	 2,366,799	 1,820,347
Cash flows from investing activities
  Organization costs reimbursed	      -   	      -   	    58,912
  Purchase of premises and equipment      -   	      -   	  (800,637)
  Purchase of equity securities	  (297,474)	  (728,104)	  (224,363)
  Redemption of certificate of deposit 100,000 	   400,000 	      -
						  (197,474)	  (328,104)	  (966,088)
Cash flows from financing activities
  Dividends paid				(1,976,400)	(1,944,000)	(1,053,000)
Net increase (decrease) in cash 	   (67,136)	    94,695 	  (198,741)

Cash at beginning of year		   151,751 	    57,056 	   255,797
Cash at end of year			    84,615 	   151,751 	    57,056


Reconciliation of net income to net cash
   provided by operating activities
    Net income				 5,624,558 	 5,019,660 	 4,697,014
    Adjustments to reconcile net
	income to net cash used in
	operating activities
      Undistributed net income
	 of subsidiary			(3,548,585) (2,680,964) (2,906,079)
        Amortization and depreciation   29,200 	    29,200 	    38,320
        Increase (decrease) in
	  deferred income taxes and
	  other liabilities		     5,769 	     8,423 	    (2,784)
        Decrease (increase) in other
	    assets				    (4,204)	    (9,520)	    (6,124)
						 2,106,738	 2,366,799	 1,820,347
</table>




21


<page>

Calvin B. Taylor Bankshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements


18.	Quarterly Results of Operations (Unaudited)
<table>
<caption>
							Three months ended
					December 31,September 30,June 30,	March 31,

					<c>		<c>		<c>		<c>
2000
Interest revenue			5,059,947	5,056,443	4,678,198	4,645,448
Interest expense			1,527,302	1,498,739	1,400,906	1,433,084
Net interest income 		3,532,645 	3,557,704 	3,277,292 	3,212,364
Provision for credit losses	   68,000 	   23,000 	   41,000 	   42,080
Net income				1,438,189 	1,583,917 	1,306,325 	1,296,127
Comprehensive income		1,502,283 	1,665,605 	1,308,822 	1,364,565
Earnings per share		$0.44 	$0.49 	$0.40 	$0.40

1999
Interest revenue			4,607,224 	4,669,910 	4,410,901 	4,311,541
Interest expense			1,439,769 	1,439,279 	1,407,424 	1,492,286
Net interest income 		3,167,455 	3,230,631 	3,003,477 	2,819,255
Provision for credit losses	   (7,980)	    8,670 	    4,355 	      700
Net income				1,273,784 	1,402,034 	1,299,830 	1,044,012
Comprehensive income		1,611,696 	1,200,713 	1,111,686 	  897,040
Earnings per share		$0.39 	$0.43 	$0.40 	$0.32

1998
Interest revenue			4,543,201 	4,622,908 	4,371,535 	4,317,531
Interest expense			1,624,594 	1,660,900 	1,520,731 	1,495,239
Net interest income 		2,918,607 	2,962,008 	2,850,804 	2,822,292
Provision for credit losses	     -   	    1,175 	     -   	     -
Net income				1,117,550 	1,292,315 	1,133,473 	1,153,676
Comprehensive income		1,057,343 	1,424,048 	1,187,829 	1,149,962
Earnings per share		$0.34 	$0.40 	$0.35 	$0.36
</table>








22


<page>




This statement has not been reviewed, or confirmed for accuracy
or relevance,
by the Federal Deposit Insurance Corporation.

23


Calvin B. Taylor Bankshares, Inc.
24 North Main Street, Berlin, Maryland 21811
(410) 641-1700



								July 17, 2001


Mr. John P. Nolan
Senior Staff Accountant
U. S. Securities and Exchange Commission
Division of Corporation Finance
Washington, D.C. 20549

Re:	Calvin B. Taylor Bankshares, Inc.
	Form 10-KSB filed March 26, 2001
	File No. 33-99762

Dear Mr. Nolan:

	In response to your letter dated June 21, 2001, we are
submitting this Form 10-KSB/A as of the date of this letter.
Below are specific responses to your comments:

General
1.	We have followed the instructions of SEC technical support
personnel to revise the presentation of columnar numerical data
so that the columns appear adjacent to the appropriate textual
information.
2.	We understand that you may perform a full review of this or any
other periodic filing which we submit.

Signatures
3.	As Chief Financial Officer, I have signed this filing in that
capacity, as well as in the capacity of Director.

Other
4.	After discussion with SEC technical and file support personnel,
you have agreed to accept this filing without the requested page
number references throughout.

We appreciate your assistance throughout this process.  Please
contact Mrs. Jennifer G. Hawkins at the above address with any
further questions.

								Sincerely,


								/s/ William H. Mitchell
								William H. Mitchell,
								Chief Financial Officer







2