EXHIBIT 13
<PAGE>



                           WHG BANCSHARES CORPORATION

Corporate Profile

We are the holding  company for Heritage  Savings Bank,  F.S.B.  (the  "Heritage
Savings").  Heritage  Savings is a federally  chartered stock savings bank which
conducts  business  through  five full  service  offices  located  in Howard and
Baltimore counties and Baltimore City, Maryland.

Heritage Savings was founded in 1902 as West Baltimore Building Association. The
Bank is, and continues to be, a community  -oriented  institution whose business
consists of  accepting  deposits  from  customers  and  investing  those  funds,
together  with  borrowings,  primarily in  residential  loans,  including  those
secured by single-family residential properties.  Heritage Savings is subject to
examination and comprehensive regulation by the Office of Thrift Supervision and
its deposits are insured by the Savings Association Insurance Fund.

Stock Market Information

Our  common  stock is traded on the Nasdaq  SmallCap  Market  under the  trading
symbol of  "WHGB",  We began  trading  in April  1996,  upon  completion  of the
conversion of Heritage  Savings.  The following  table reflects high and low bid
quotations.  The quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission, and may not represent actual transactions.

                                                                  Dividends
             Date                              High       Low      Declared
             ----                              ----       ---      --------
October 1, 1998 to December 31, 1998          12.06      10.13        .09
January 1, 1999 to March 31, 1999             12.25      10.75        .09
April 1, 1999 to June 30, 1999                11.25       8.44        .09
July 1, 1999 to September 30, 1999             9.25       8.63        .09
October 1, 1999 to December 31, 1999           9.03       7.13        .09
January 1, 2000 to March 31, 2000              7.87       6.37        .09
April 1, 2000 to June 30, 2000                 8.37       6.75        .09
July 1, 2000 to September 30, 2000             8.62       7.75        .09

The number of  shareholders  of record of common  stock as of the record date of
November 30, 2000,  was  approximately  216. This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage firms. At November 30, 2000, there were 1,285,609 shares  outstanding.
Our ability to pay dividends to  stockholders is dependent upon the dividends we
receive from Heritage  Savings.  Heritage  Savings may not declare or pay a cash
dividend  on any of its stock if the  effect of the  declaration  or  payment of
dividends  would  cause  their  regulatory  capital to be reduced  below (1) the
amount required for the liquidation  account  established in connection with the
conversion,  or (2) the regulatory capital requirements imposed by the Office of
Thrift Supervision.

                                       2
<PAGE>



Selected Financial Ratios and Other Data


                                                        For the Years Ended
                                                           September 30,
                                                       ----------------------
                                                         2000           1999
                                                       -------        -------

Return on average assets .......................          .51%           .50%

Return on average equity .......................         5.30           4.66

Average equity to average assets ratios ........         9.61          10.69

Equity to assets at period end .................         9.66           9.63

Dividend payout ratio ..........................        52.94          60.00

Net interest rate spread .......................         2.27           2.24

Net yield on average interest-
  earnings assets ..............................         2.68           2.66

Non-performing loans to total assets ...........          .16            .13

Allowance for loan loss to total loans .........          .41            .38


                                       3
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


Forward-Looking Statements

         The Private  Securities  Litigation  Reform Act of 1995  contains  safe
harbor  provisions  regarding  forward-looking  statements.  When  used  in this
discussion, the words "believes", "anticipates",  "contemplates", "expects", and
similar expressions are intended to identify  forward-looking  statements.  Such
statements  are  subject to certain  risks and  uncertainties  which could cause
actual  results to differ  materially  from  those  projected.  Those  risks and
uncertainties  include changes in interest  rates,  the ability to control costs
and expenses,  year 2000 issues and general economic conditions.  WHG Bancshares
Corporation  undertakes  no  obligation  to publicly  release the results of any
revisions  to those  forward-looking  statements  which  may be made to  reflect
events or  circumstances  after the date hereof or to reflect the  occurrence of
unanticipated events.

         Since we conduct no  significant  business other than owning all of the
common stock of Heritage Savings Bank, F.S.B.  ("Heritage Savings"),  references
in  this  discussion  to  "we,"  "us,"  and  "our,"  refer  collectively  to WHG
Bancshares Corporation and Heritage Savings.

Overview

         We are a unitary  savings and loan  holding  company and own all of the
stock of Heritage  Savings Bank,  F.S.B.  ("Heritage  Savings").  We principally
operate  through  five  branch  offices  located  throughout  Baltimore  County,
Baltimore City and Howard County, Maryland.

         Despite  the rise in interest  rates by the  Federal  Reserve in fiscal
2000,  we were able to  increase  net income by 9.3%.  For the fiscal year ended
September 30, 2000, we earned  $800,000 or $.68 per diluted share as compared to
$732,000,  or $.60 per  diluted  share for the fiscal year ended  September  30,
1999.  Additionally,  assets  increased $5.0 million to $159.9 million over last
year. Our net loans  outstanding grew by 7.8% reflecting  strong  performance by
our loan production staff.  Asset quality continues to remain excellent.  During
the year, in order to accommodate the growing demands of customers, we relocated
the Ellicott City branch to a larger building with a drive-through  facility and
installed an ATM machine at our Woodlawn branch. Additionally,  we hired two new
business development officers with commercial lending backgrounds.  Beginning in
January  2001,  our  Lutherville  branch  will  also have an ATM  machine  and a
drive-through  facility.  We currently estimate that we will spend approximately
$120,000 on these capital improvements.

Management of Interest Rate Risk and Market Risk

          Because the majority of our assets and  liabilities  are  sensitive to
changes in interest rates,  our most significant form of market risk is interest
rate risk,  or changes in interest  rates.  We are  vulnerable to an increase in
interest  rates to the extent that our  interest-bearing  liabilities  mature or
reprice more rapidly than our  interest-earning  assets.  Our lending activities
have historically  emphasized the origination of long-term,  adjustable rate and
fixed rate loans  secured by  single-family  residences.  The primary  source of
funds has been

                                       4
<PAGE>

deposits with substantially  shorter maturities.  While having  interest-bearing
liabilities  that  reprice  more  frequently  than  interest-earning  assets  is
generally  beneficial  to net  interest  income  during  a period  of  declining
interest  rates,  this  type  of  an   asset/liability   mismatch  is  generally
detrimental during periods of rising interest rates.

         We have established an asset/liability  committee which consists of our
department supervisors, our President and the Chairman of our Board of Directors
and one outside Director.  The committee meets on a monthly basis to review loan
and  deposit  pricing  and  production  volumes,  interest  rate risk  analysis,
liquidity  and  borrowing  needs,  and a variety of other  assets and  liability
management topics. On behalf of the committee, the Chairman reports to our Board
of Directors.

         To reduce the effect of interest  rate changes on net interest  income,
we have  adopted  various  strategies  to enable us to improve  the  matching of
interest-earning asset maturities to interest-bearing  liability maturities. The
principal elements of these strategies include seeking to:

o    originate  one-to four  residential  mortgage  loans with  adjustable  rate
     features or fixed rate loans with short maturities;

o    lengthen the maturities of our liabilities  when it would be cost effective
     through the pricing and  promotion of longer term  certificates  of deposit
     and utilization of FHLB advances;

o    attract low cost checking and  transaction  accounts  which tend to be less
     interest rate sensitive when interest rates rise;

o    maintain  interest-  bearing  deposits,  federal funds and U.S.  government
     securities with short to intermediate terms to maturities; and

o    maintain an investment  portfolio that provides a stable cash flow, thereby
     providing investable funds in varying interest rate cycles.

         We have made a  significant  effort to maintain our level of lower cost
deposits as a method of enhancing profitability.  In the past year, our level of
demand  deposits has  increased  significantly.  At September  30, 2000,  we had
approximately  $26.8  million,  or 22%, of our  deposits  in  low-cost  savings,
checking and money market accounts.  These deposits have traditionally  remained
relatively stable and are expected to be only moderately affected in a period of
rising  interest  rates.  This  stability has enabled us to offset the impact of
rising rates in other deposit accounts.

Net Portfolio Value

          Exposure  to  interest   rate  risk  is  actively   monitored  by  our
management.  Our  objective is to maintain a consistent  level of  profitability
within  acceptable  risk tolerances  across a broad range of potential  interest
rate  environments.  We use the OTS Net Portfolio Value ("NPV") Model to monitor
our exposure to interest rate risk,  which  calculates  changes in net portfolio
value.  Reports  generated from assumptions  provided and modified by management
are reviewed by the  Asset/Liability  Management  Committee  and reported to the
Board of Directors monthly. The Interest Rate Sensitivity of Net Portfolio Value
Report shows the

                                       5
<PAGE>

degree to which balance sheet line items and net portfolio value are potentially
affected by a 100 to 300 basis point (1/100th of a percentage  point) upward and
downward parallel shift (shock) in the Treasury yield curve.

         The following  table  represents our NPV at September 30, 2000. The NPV
was calculated by the OTS, based upon information we provided to the OTS.


            Changes               NPV
             in Rate              Ratio(1)         Change(2)
            ---------             --------         ---------

            +300 bp                   .72%             -771

            +200 bp                  3.14%             -528

            +100 bp                  5.74%             -269

               0 bp                  8.42%             0 bp

            -100 bp                 11.00%              258

            -200 bp                 13.21%              479

            -300 bp                 15.17%              675

(1)      Calculated as the estimated NPV divided by present value of assets.
(2)      Calculated  as the excess  (deficiency)  of the NPV ratio  assuming the
         indicated  change  in  interest  rates  over the  estimated  NPV  ratio
         assuming no change in interest rates.


         These calculations indicate that our NPV could be adversely affected by
increases  in interest  rates but could be  favorably  affected by  decreases in
interest rates.  In addition,  we may be deemed to have more than a normal level
of interest rate risk under applicable regulatory capital requirements.

         Computations  of  prospective  effects of  hypothetical  interest  rate
changes are based on numerous  assumptions,  including relative levels of market
interest rates,  prepayments and deposit  run-offs and should not be relied upon
as  indicative  of actual  results.  Certain  shortcomings  are inherent in such
computations.  Although certain assets and liabilities may have similar maturity
or periods  of  repricing  they may react at  different  times and in  different
degrees to changes in the market interest  rates.  The interest rates on certain
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while rates on other types of assets and  liabilities  may lag
behind changes in market interest rates. Certain assets, such as adjustable rate
mortgages, generally have features which restrict changes in interest rates on a
short  term  basis and over the life of the  asset.  In the event of a change in
interest  rates,   prepayments  and  early   withdrawal   levels  could  deviate
significantly  from  those  assumed  in making  calculations  set  forth  above.
Additionally,  an  increased  credit  risk may  result  as the  ability  of many
borrowers to service  their debt may  decrease in the event of an interest  rate
increase.

                                       6
<PAGE>

Analysis of Net Interest Income

         Our results of operations  are primarily  dependent on our net interest
income,  which is the  difference  between  the  interest  income  earned on our
assets,  primarily  loans  and  investments,  and the  interest  expense  on our
liabilities,  primarily  deposits and  borrowings.  Net  interest  income may be
affected  significantly  by general  economic  and  competitive  conditions  and
policies  of  regulatory  agencies,  particularly  those with  respect to market
interest  rates.  The results of our operations are also influenced by the level
of  non-interest  expenses,  such as employee  salaries  and  benefits and other
income, such as loan-related fees and fees on deposit-related services.

Average Balance Sheet

         The following table sets forth information relating to our consolidated
average balance sheet and reflects the average yield on assets and average costs
of  liabilities  at and for the  periods  indicated.  Such  yields and costs are
derived  by  dividing  income or  expense  by the  average  balance of assets or
liabilities,  respectively,  for the periods  presented.  Average  balances  are
derived from  month-end  balances.  Management  does not believe that the use of
month-end  balances  instead of daily  average  balances has caused any material
differences in the information presented.

                                       7
<PAGE>
<TABLE>
<CAPTION>
                                                                  Year Ended September 30,
                                         -------------------------------------------------------------------------------------
                                                         2000                                            1999
                                         ---------------------------------------      ----------------------------------------
                                                                       Average                                        Average
                                          Average                       Yield/          Average                        Yield/
                                          Balance      Interest         Cost            Balance        Interest         Cost
                                          -------      --------         ----            -------        --------         ----
<S>                                     <C>           <C>              <C>            <C>             <C>             <C>
Interest-earnings assets:
  Loans receivable(1).................... $94,549       $ 7,242          7.66%          $83,094         $6,272          7.55%
  Investment securities(2)...............  38,025         2,568          6.75%           34,956          2,369          6.78%
  Mortgage-backed securities.............  17,198         1,110          6.45%           16,693          1,036          6.21%
  Other interest-earning assets(3).......   4,020           270          6.71%            8,620            495          5.74%
                                         --------       -------                        --------        -------
      Total interest-earning assets......$153,792       $11,190          7.28%         $143,363        $10,172          7.10%
                                                        =======                                        =======
Non-interest-earning assets..............   3,208                                         3,560
                                         --------                                      --------
      Total assets.......................$157,000                                      $146,923
                                          =======                                       =======

Interest-bearing liabilities:
  Demand deposits........................$ 27,113       $   739          2.73%         $ 27,121        $   732          2.70%
  Time deposits..........................  90,955         5,035          5.54%           80,886          4,428          5.47%
  Other liabilities(4)...................  23,166         1,296          5.59%           22,687          1,193          5.26%
                                         --------       -------                        --------        -------
      Total interest-bearing
        liabilities...................... 141,234       $ 7,070          5.01%          130,694        $ 6,353          4.86%
                                                         ======                                          =====
Non-interest bearing liabilities.........     685                                           528
                                         --------                                      --------
      Total liabilities.................. 141,919                                       131,222

Stockholders' equity.....................  15,081                                        15,701
                                           ------                                       -------
      Total liabilities and
        stockholders' equity.............$157,000                                      $146,923
                                          =======                                       =======
Net interest income......................                $4,120                                         $3,819
                                                          =====                                          =====
Interest rate spread(5)..................                                2.27%                                          2.24%
                                                                         ====                                           ====
Net yield on interest-earning assets(6)..                                2.68%                                          2.66%
                                                                         ====                                           ====

Ratio of  average  interest-earning
  assets to average interest-bearing
  liabilities............................                              108.89%                                        109.69%
                                                                       =======                                        ======
</TABLE>
(1)  Average balances include non-accrual loans.
(2)  Includes available for sale securities, other investments held to maturity,
     ground rents and FHLB stock.
(3)  Includes  Federal  Funds,  interest-bearing  deposits  in  other  financial
     institutions and interest-earning loans to affiliated corporations.
(4)  Includes FHLB advances and  interest-earning  advance payments by borrowers
     for taxes and insurance.
(5)  Interest rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(6)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                       8
<PAGE>

Rate/Volume Analysis

         The following  table  analyzes the dollar amount of changes in interest
income and interest expense for major components of our interest-earning  assets
and interest-bearing liabilities. The table distinguishes between (i) changes in
net income  attributable  to volume  (changes in volume  multiplied by the prior
period's  interest rate),  (ii) changes in net interest  income  attributable to
rate (changes in interest rates  multiplied by the prior period's  volume),  and
(iii) changes in volume multiplied by changes in rates.

<TABLE>
<CAPTION>

                                                  Year Ended September 30,
                                          ------------------------------------------
                                                        2000 vs. 1999
                                                     Increase (Decrease)
                                                            Due to
                                          ------------------------------------------
                                                                  Rate/
                                            Volume      Rate     Volume       Net
                                           -------    -------    -------    -------
                                                     (Dollars in Thousands)
<S>                                       <C>        <C>        <C>        <C>
Interest income:
  Loans receivable .....................   $   866    $    91    $    13    $   970
  Investment securities ................       209         (9)        (1)       199
  Mortgage-backed securities ...........        32         40          2         74
  Other interest-earning assets ........      (264)        84        (45)      (225)
                                           -------    -------    -------    -------
      Total interest-earning assets ....       843        206        (31)     1,018

Interest expense:
  Deposits .............................       546         62          6        614
  Other liabilities(1) .................        25         76          2        103
                                           -------    -------    -------    -------
      Total interest-bearing liabilities       571        138          8        717
                                           -------    -------    -------    -------

Net change in net interest income ......   $   272    $    68    $   (39)   $   301
                                           =======    =======    =======    =======
</TABLE>

(1)  Includes interest on advances from the FHLB of Atlanta and advance payments
     by borrowers for taxes and insurance.

                                       9
<PAGE>

Financial Condition

         At September 30, 2000, our assets  increased $5.0 million,  or 3.2%, to
$159.9  million from $154.9  million at September  30, 1999.  This  increase was
primarily  due to an increase in loans  receivable  of $7.0  million,  partially
off-set  by a  decrease  in  interest-bearing  deposits  in other  banks of $3.2
million.

         New loan  originations  outpaced loan repayments by $7.0 million due to
rising  mortgage  interest  rates  during the 2000  fiscal  year  which  reduced
refinance-related loan repayments experienced in prior years.

         At September 30, 2000, our deposits increased by $4.7 million,  or 4.1%
to $120.0  million from $115.3 million at September 30, 1999. The increase was a
result  of a $5.3  million  increase  in  certificates  of  deposit,  due to the
continued promotion of our certificates of deposit products.  This was partially
offset by a $400,000 decrease in passbook accounts.

         Our net worth increased by  approximately  $600,000 to $15.5 million at
September  30, 2000 from $14.9  million at  September  30,  1999.  The  increase
reflects  fiscal 2000's net income and non-cash  compensation  from  stock-based
bonus and  benefit  plans,  partially  offset by common  stock  dividends  and a
$160,000  increase in  accumulated  other  comprehensive  loss.  The increase in
accumulated loss resulted from the fluctuation in market value of our investment
in  available  for  sale  securities.   Because  of  interest  rate  volatility,
accumulated other  comprehensive loss and stockholders'  equity could materially
fluctuate for each interim  period and year-end  period.  The decrease in market
value of the investment securities available for sale is considered temporary in
nature and will not affect our net income until the securities are sold. We plan
to hold these  securities  until  maturity  or until the market  values of these
securities  increase.  Accordingly,  we  do  not  expect,  though  there  is  no
assurance,  that our  investment in these  securities  will affect net income in
future periods.

Results of Operations

Net Income

         For September 30, 2000, net income increased $68,000,  to $800,000 from
$732,000 for the 1999 fiscal year. The increase was the result of an increase in
net interest income of $301,000.  This was off-set by a $50,000  increase in the
provision for loan loss, a $117,000  decrease in non-interest  income, a $35,000
increase in non-interest  expenses,  and a $31,000 increase in the provision for
income taxes.

Net Interest Income

         Net interest income increased by approximately $301,000 to $4.1 million
for fiscal 2000 from $3.8 for fiscal 1999.  The interest  rate spread,  which is
the  difference  between  the yield on average  interest-earning  assets and the
percentage cost of average interest-bearing liabilities, rose slightly in fiscal
2000 to 2.27% from 2.24% for fiscal 1999.  The increase in interest  rate spread
is primarily the result of the utilization of  lower-yielding  interest  bearing
deposits to fund higher-  yielding  loans and federal  funds  investments.  This
increase was partially  offset by increases in the average cost of funds paid on
certificates of deposit and FHLB advances.

                                       9
<PAGE>

Interest Income

         Total interest income increased $1.0 million, or 9.8%, to $11.2 million
in fiscal  2000 from $10.2  million  in fiscal  1999.  Interest  income on loans
increased  by  approximately  $970,000 to $7.2 million for fiscal 2000 from $6.3
million  for fiscal  1999.  The  increase  was due to an increase in the average
dollar  amount  of  loans  outstanding  in  fiscal  2000  over  fiscal  1999  of
approximately  $11.4  million  coupled with an increase in the average  yield on
loans of 11 basis  points to 7.66% for fiscal 2000  compared to 7.55% for fiscal
1999.  The yield  increase can be  attributed  to two factors.  First,  our loan
portfolio mix shifted  modestly to higher yielding  multifamily  residential and
commercial  mortgage loans. As of September 30, 2000,  those two loan categories
comprised 14.2% of the net loan balance as compared to 10.1% as of September 30,
1999.  Secondly,  during  fiscal 2000,  market  interest  rates rose on all loan
products offered.

         Interest  and dividend  income on  investment  securities  increased by
$199,000  to  $2,568,000  in fiscal 2000 from  $2,369,000  in fiscal  1999.  The
increase  was  the  result  of an  increase  in the  average  dollar  amount  of
investment securities outstanding of $3.1 million.

         Interest income on mortgage backed  securities  increased by $74,000 to
$1,110,000  for fiscal  2000 from  $1,036,000  for  fiscal  1999.  The  increase
resulted  from an increase of 24 basis  points in the average  yield to 6.45% in
fiscal 2000 from 6.21% in fiscal  1999,  augmented by an increase of $500,000 in
the average dollar amount invested.

         Other interest income decreased by $225,000 to $270,000 for fiscal 2000
from $495,000 for fiscal 1999. The decrease was due to a decrease in the average
dollar amount of other interest- earning assets, predominantly  interest-bearing
deposits in other banks and federal funds sold, of $4.6 million.  We reduced the
average daily balance of our interest  -bearing deposits to fund higher yielding
loans  and  federal  funds  investments.  As a result  the  yield  on our  other
interest-earning  assets  increased 97 basis points to 6.71% in fiscal 2000 from
5.74% in fiscal 1999.  This  partially  offset the  decreased  income from lower
total average other interest-earning balances.

Interest Expense

         Total interest  expense  increased  approximately  $700,000 or 10.9% to
$7.1  million in fiscal  2000 from $6.4  million  in fiscal  1999.  Interest  on
deposits  increased by $614,000 to $5,774,000 in fiscal 2000 from  $5,160,000 in
fiscal 1999.  The increase was  primarily due to an increase of $10.1 million in
the average dollar amount outstanding of time deposits combined with an increase
in the average cost of time deposits. The rate paid on time deposits increased 7
basis points to 5.54% in fiscal 2000 from 5.47% in fiscal 1999.

         Interest on  short-term  borrowings  decreased  $335,000  or 89.8%,  to
$38,000 in fiscal 2000 from  $373,000 in fiscal  1999.  During  fiscal  2000,  a
period of rising  interest  rates,  we converted our short-term  borrowings into
long-term  borrowings to manage our interest rate risk. This increased the rates
paid on total  borrowings  by 33 basis points to 5.59% in fiscal 2000 from 5.26%
in fiscal 1999. This was  supplemented  by a $479,000  increase in total average
borrowings outstanding.  As a result, interest on long-term borrowings increased
$438,000 to $1,258,000 in fiscal 2000 from $820,000 in fiscal 1999.

                                       10
<PAGE>

Provision for Loan Losses

         The  provision  for loan  losses for fiscal 2000  increased  $50,000 to
$120,000  from $70,000 for fiscal 1999.  The increase was  primarily  due to the
overall  change in the loan  portfolio mix resulting in an increase in high risk
loans.  We  continually  evaluate the adequacy of the allowance for loan losses,
which  encompasses  the overall risk  characteristics  of the various  portfolio
segments,  past  experience  with losses,  the impact of economic  conditions on
borrowers and other relevant  conditions.  Management continues to offer a wider
variety of loan products coupled with the continued  success of changing the mix
of the products offered in the loan portfolio - from lower yielding loans (i.e.,
one-  to four  family  loans)  to  higher  yielding  loans  (i.e.,  multifamily,
non-residential  commercial,  construction,  and consumer loans). Based upon the
additions to the  allowance for loan losses,  management  believes the allowance
for loan  losses  is  adequate.  However,  there  can be no  assurance  that the
allowance for loan losses will be adequate to cover significant  losses, if any,
that we might  incur in the future due to the higher  degree of risk which might
result from the change in the mix of the loan portfolio.

Non-Interest Income

         Total non-interest income for fiscal 2000 decreased $117,000, or 44.7%,
to $145,000 from $262,000 for fiscal 1999.  Excluding other commissions and fees
of $127,000 from  Mapleleaf  Mortgage  Corporation,  which closed in March 1999,
total  non-interest  income for fiscal 1999 totaled $135,000.  Such exclusion of
other  commissions  and fees  reflects an  increase  of $10,000 in  non-interest
income in fiscal 2000 compared to fiscal 1999. The increase  primarily  reflects
an  increase in other  income  offset by a decrease in fees and charges on loans
and gain on sale of investments.  Other income in fiscal 2000 increased  $18,000
primarily  due to an increase in ATM fee income and  proceeds of $5,000 from the
mutual to stock conversion of the Company's life insurance provider.

Non-Interest Expense

         Total non-interest  expense for fiscal 2000 totaled $2,825,000 compared
to  $2,790,000.  While  total  non-interest  expense  in  fiscal  2000  remained
relatively  unchanged from fiscal 1999, the components of  non-interest  expense
changed.  Beginning in January 2000, the FDIC reduced deposit  insurance premium
assessments  for all SAIF  insured  banks.  Additionally,  the most  significant
increases  in  non-interest  expense  in  fiscal  2000 were  occupancy  expense,
professional  services,  and other expense.  Occupancy expense increased $30,000
due to the lease  commencement  in January 2000 of the new Ellicott  City branch
location.  Professional  services increased $8,000 primarily due to the business
development  planning in the second  quarter of fiscal 2000.  Other  expenses in
fiscal 2000  increased  $37,000  primarily due to the relocation of the Ellicott
City branch, increased ATM fees and software costs in regard to the Year 2000.

                                       11
<PAGE>

Provision for Income Taxes

         Provision for income taxes increased by  approximately  $31,000 or 6.3%
to $520,000  for fiscal 2000 from  $489,000  for fiscal  1999.  The increase was
primarily  the result of an increase in pretax  income.  The  effective tax rate
fell slightly to 39.4% for fiscal 2000 from 40.0% for fiscal 1999.  The decrease
was the  result  of the  write-off  of the  deferred  tax  asset  of MMC and the
non-recognition  of income tax  benefit  from the net  operation  loss of MMC in
fiscal 1999.

Liquidity and Capital Resources

          Management  believes it has ample cash flows and liquidity to meet its
loan  commitments  of  $230,000  and unused  lines of credit of $2.2  million at
September 30, 2000. We have the ability to reduce its  commitments  for new loan
originations,  adjust other cash outflows,  and borrow from the FHLB of Atlanta,
or others,  should the need arise. As of September 30, 2000, such borrowed funds
totaled $24.0 million.

          We are required under federal regulations to monitor certain levels of
liquid assets , which include certain United States  government  obligations and
other approved  investments.  Current  regulatory  regulations  require that our
subsidiary,  Heritage  Savings maintain liquid assets of not less than 4%. As of
September 30, 2000, Heritage Savings' regulatory liquidity was 48.42%.  Heritage
Savings is also  subject to federal  regulations  that  impose  certain  minimum
capital requirements. See Note 13 to our consolidated financial statements.

          Net cash provided by operating  activities was $822,000 and $1,160,000
for fiscal 2000 and 1999.  Cash flows from  operations in fiscal 2000  decreased
from  fiscal  1999   primarily  due  to  an  increase  in  other  assets  and  a
substantially lower increase in deferred loan fees.

          Net cash used by  investment  activities  for fiscal 2000 totaled $6.1
million,  a decrease of $24.1 million from $30.2 million for fiscal 1999. During
fiscal  1999,  we  made  net  purchases  of  $21.5  million  of  investment  and
mortgage-backed  securities  and loans.  In addition,  cash was used to fund the
$4.8  million  purchase  of the assets of  Bankers  Affiliate,  Inc.  We made no
similar  purchases in fiscal 2000.  The decrease in net cash used was  partially
offset by continued  strong loan  origination  activity that exceeded  principal
repayments in fiscal 2000.

          Net cash provided by financing activities for fiscal 2000 totaled $4.1
million  compared to $21.8  million in fiscal  1999.  Net cash  provided  during
fiscal 2000 resulted from an increase of net deposits of $4.5 million, partially
offset by  dividends  paid of  $431,000.  The net cash  provided  in fiscal 1999
resulted  from an  increase  in  deposits  of $20.2  million  and an increase in
borrowings  of $3.1  million.  This was  partially  offset by stock  repurchases
totaling $1.0 million and dividends paid of $452,000.

          We monitor projected  liquidity needs and determine the levels desired
based upon our  commitments  to make loans and our  ability to  generate  funds.
Liquidity may be adversely  affected by unexpected  deposit outflows,  excessive
interest rates paid by competitors,  adverse  publicity  relating to the savings
and loan industry and similar matters.

                                       12
<PAGE>
                            ANDERSON ASSOCIATES, LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                                7621 FITCH LANE
                           BALTIMORE, MARYLAND 21236
                                  410-882-8050

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



To the Stockholders and Board of Directors
WHG Bancshares Corporation
Lutherville, Maryland

        We have audited the  consolidated  statements of financial  condition of
WHG Bancshares  Corporation and  Subsidiaries as of September 30, 2000 and 1999,
and the related consolidated statements of operations,  stockholders' equity and
cash flows for each of the two years in the two year period ended  September 30,
2000. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated 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 audits to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  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 WHG
Bancshares  Corporation and Subsidiaries at September 30, 2000 and 1999, and the
consolidated  results of its operations and cash flows for each of the two years
in the two year period ended  September 30, 2000, in conformity  with  generally
accepted accounting principles.


                                             /s/Anderson Associates LLP
                                             -----------------------------------
                                             Anderson Associates LLP



November 14, 2000
Baltimore, Maryland

                                       13
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                                                                                 September 30,
                                                                                                 -------------
                                                                                          2000                1999
                                                                                          ----                ----
<S>                                                                               <C>                 <C>
        Assets
        ------
Cash                                                                               $    1,720,707      $     1,312,324
Interest bearing deposits in other banks                                                  509,570            3,689,305
Federal funds sold                                                                      3,764,000            2,290,000
Investments available for sale (Note 2)                                                19,439,212           19,700,713
Other investments held to maturity (Note 3)                                            15,650,000           15,650,000
Mortgage backed securities (Note 4)                                                    16,451,148           17,983,370
Loans receivable - net (Note 5)                                                        96,909,448           89,931,326
Foreclosed real estate                                                                          -               13,103
Accrued interest receivable - loans                                                       446,343              389,587
                            - investments                                                 773,864              647,790
                            - mortgage backed securities                                   88,548               96,914
Premises and equipment - net (Note 8)                                                   1,253,765              838,527
Federal Home Loan Bank of Atlanta stock, at cost (Note 6)                               1,450,000            1,200,000
Deferred income taxes (Note 14)                                                           936,589              852,384
Prepaid and refundable income taxes                                                       107,471               68,590
Other assets                                                                              415,037              258,632
                                                                                     ------------         ------------
Total assets                                                                         $159,915,702         $154,922,565
                                                                                     ============         ============
     Liabilities and Stockholders' Equity
     ------------------------------------

Liabilities
-----------
   Deposits (Note 9)                                                                 $120,044,864         $115,302,487
   Borrowings (Note 10)                                                                24,000,000           24,000,000
   Advance payments by borrowers for taxes and insurance                                   70,711              315,463
   Income taxes payable (Note 14)                                                          31,874               49,289
   Other liabilities                                                                      317,623              338,661
                                                                                     ------------         ------------
Total liabilities                                                                     144,465,072          140,005,900

Commitments and contingencies (Notes 5, 8, 10 and 11)

Stockholders' Equity (Notes 12 and 13)
--------------------
   Common stock .10 par value; authorized 1,620,062
    shares; issued and outstanding 1,285,609 shares in
    2000 and in 1999                                                                      128,561              128,561
   Additional paid-in capital                                                           6,701,437            6,561,355
   Retained earnings (substantially restricted)                                        10,301,365            9,932,078
   Accumulated other comprehensive income                                              (1,134,125)            (973,504)
   Employee Stock Ownership Plan                                                         (546,608)            (731,825)
                                                                                     ------------         ------------
Total stockholders' equity                                                             15,450,630           14,916,665
                                                                                     ------------         ------------
Total liabilities and stockholders' equity                                           $159,915,702         $154,922,565
                                                                                     ============         ============
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

                                       15
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                                  Years Ended September 30,
                                                                                  -------------------------
                                                                                      2000           1999
                                                                                      ----           ----
<S>                                                                               <C>           <C>
Interest and fees on loans (Note 5)                                                $ 7,241,831   $ 6,271,546
Interest and dividends on investment securities                                      2,568,055     2,369,493
Interest on mortgage backed securities                                               1,110,107     1,036,267
Other interest income                                                                  269,772       495,105
                                                                                   -----------   -----------

Total interest income                                                               11,189,765    10,172,411

Interest on deposits (Note 9)                                                        5,774,005     5,159,849
Interest on short-term borrowings                                                       37,731       373,213
Interest on long-term borrowings                                                     1,258,205       820,123
                                                                                   -----------   -----------
Total interest expense                                                               7,069,941     6,353,185
                                                                                   -----------   -----------

Net interest income                                                                  4,119,824     3,819,226
Provision for loan losses (Note 5)                                                     120,000        70,000
                                                                                   -----------   -----------
Net interest income after provision for loan losses                                  3,999,824     3,749,226

Non-Interest Income
-------------------
   Gain on sale of investments                                                               -         4,372
   Other commissions and fees                                                                -       126,712
   Fees and charges on loans                                                            31,853        36,319
   Fees on transaction accounts                                                         55,455        54,977
   Other income                                                                         57,998        39,711
                                                                                   -----------   -----------
Total non-interest income                                                              145,306       262,091

Non-Interest Expenses
---------------------
   Salaries and related expenses                                                     1,724,099     1,782,354
   Occupancy                                                                           166,762       136,662
   SAIF deposit insurance premium                                                       34,952        58,473
   Depreciation of equipment                                                            99,553        86,908
   Advertising                                                                          79,629        72,827
   Data processing costs                                                               112,226       104,454
   Professional services                                                               202,171       177,625
   Loss on sale of repossessed assets                                                      786         2,612
   Other expenses                                                                      404,518       367,821
                                                                                   -----------   -----------
Total non-interest expenses                                                          2,824,696     2,789,736
                                                                                   -----------   -----------

Income before tax provision                                                          1,320,434     1,221,581
Provision for income taxes (Note 14)                                                   520,110       489,462
                                                                                   -----------   -----------

Net income                                                                         $   800,324   $   732,119
                                                                                   ===========   ===========
Basic earnings per share                                                           $       .68   $       .60
                                                                                   ===========   ===========
Diluted earnings per share                                                         $       .68   $       .60
                                                                                   ===========   ===========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
 of these statements.
                                       16
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
                   FOR YEARS ENDED SEPTEMBER 30, 2000 AND 1999
                   -------------------------------------------
<TABLE>
<CAPTION>
                                                                                                  Employee
                                                   Additional                     Accumulated      Stock          Total
                                      Common         Paid-In        Retained     Comprehensive   Ownership    Stockholders'
                                       Stock         Capital        Earnings         Income         Plan          Equity
                                       -----         -------        --------         ------         ----          ------
<S>                            <C>             <C>             <C>             <C>             <C>          <C>
Balance - September 30, 1998     $    138,900    $  7,392,663    $  9,651,860    $    (25,140)   $(915,567)   $ 16,242,716
Comprehensive Income
     Net Income                             -               -         732,119               -            -
     Unrealized holding losses
      on available for sale
      securities net of taxes
      of $596,706                           -               -               -        (948,364)           -
     Total comprehensive income                                                                                   (216,245)
Purchase of 103,393 shares of
  common stock                        (10,339)     (1,006,667)              -               -            -      (1,017,006)
Compensation under Stock
  Bonus Plan                                -         140,036               -               -            -         140,036
Compensation under Stock-Based
  Benefit Plan                              -          35,323               -               -      183,742         219,065
Dividends paid ($.36 per share)             -               -        (451,901)              -            -        (451,901)
                                 ------------    ------------    ------------    ------------    ---------    ------------

Balance - September 30, 1999          128,561       6,561,355       9,932,078        (973,504)    (731,825)     14,916,665
Comprehensive Income
     Net Income                             -               -         800,324               -            -
     Unrealized holding losses
       on available for sale
       securities net of taxes
       of $101,062                          -               -               -        (160,621)           -
     Total comprehensive income                                                                                    639,703
Compensation under Stock
  Bonus Plan                                -         136,072               -               -            -         136,072
Compensation under Stock-Based
  Benefit Plan                              -           4,010               -               -      185,217         189,227
Dividends paid ($.36 per share)             -               -        (431,037)              -            -        (431,037)
                                 ------------    ------------    ------------    ------------    ---------    ------------

Balance - September 30, 2000     $    128,561    $  6,701,437    $ 10,301,365    $ (1,134,125)   $(546,608)   $ 15,450,630
                                 ============    ============    ============    ============    =========    ============
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
 of these statements.
                                       17
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>

                                                                         Years Ended September 30,
                                                                         -------------------------
                                                                            2000            1999
                                                                       ------------    ------------
<S>                                                                   <C>             <C>
Operating Activities
--------------------
     Net income before other comprehensive income                      $    800,324    $    732,119
     Gain on sale of investment available for sale                                -          (4,372)
     Adjustments to Reconcile Net Income to Net
     Cash Provided by Operating Activities
     -------------------------------------
         Net accretion/amortization of premiums and discounts
          of mortgage backed securities                                       1,321           5,629
         Amortization of deferred loan fees                                (109,467)       (159,153)
         Loan fees deferred                                                  62,447         158,084
         Decrease in discount on loans purchased                           (125,305)        (60,164)
         Amortization of discounts on investments available for sale           (183)              -
         Provision for loan losses                                          120,000          70,000
         Loss on sale of foreclosed real estate                                 786               -
         Non-cash compensation under stock-based
          benefit plans                                                     325,299         359,101
         Increase in accrued interest receivable                           (174,464)       (146,425)
         Provision for depreciation                                         138,291         115,158
         Decrease (increase) in deferred income taxes                        16,856         (84,983)
         (Increase) decrease in prepaid and refundable income taxes         (38,881)         62,763
         (Increase) decrease in other assets                               (156,405)         32,812
         Increase (decrease) in accrued interest payable                        246              (5)
         (Decrease) increase in income taxes payable                        (17,415)         32,509
         (Decrease) increase in other liabilities                           (21,038)         47,141
                                                                       ------------    ------------
              Net cash provided by operating activities                     822,412       1,160,214

Cash Flows from Investment Activities
-------------------------------------
     Proceeds from maturing interest-bearing deposits                        95,000               -
     Purchases of interest-bearing deposits                                       -         (95,000)
     Proceeds from sales and maturities of investments
      available for sale                                                          -       3,437,496
     Purchase of investments available for sale                                   -      (9,487,272)
     Proceeds from maturing other investments - held
      to maturity                                                                 -       7,250,000
     Purchase of other investments - held to maturity                             -      (8,300,000)
     Purchase of mortgage backed securities                                       -     (12,474,599)
     Principal collected on mortgage backed securities                    1,530,903       1,761,259
     Proceeds from sale of foreclosed real estate                            12,317               -
     Net increase in shorter term loans                                      (7,324)       (129,098)
     Loans purchased                                                              -      (1,920,000)
     Longer term loans originated or acquired                           (22,459,738)    (24,558,609)
     Principal collected on longer term loans                            15,541,265      19,345,632
     Purchase of Bankers Affiliate, Inc.'s net assets                             -      (4,811,311)
     Investment in premises and equipment                                  (553,529)        (75,619)
     Purchase of stock in Federal Home Loan Bank of Atlanta                (250,000)       (200,000)
     Decrease in investment in and loans to joint ventures                        -          50,000
                                                                       ------------    ------------
              Net cash used by investment activities                     (6,091,106)    (30,207,121)

</TABLE>
                                       18
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                    Years Ended September 30,
                                                                    -------------------------
                                                                        2000            1999
                                                                        ----            ----
<S>                                                              <C>             <C>
Cash Flows from Financing Activities
------------------------------------
     Net (decrease) increase in demand deposits, money
      market, passbook accounts and advances by
      borrowers for taxes and insurance                            $   (822,461)   $  1,028,806
     Net increase in certificates of deposit                          5,319,840      19,209,102
     Decrease in checks outstanding in excess
      of bank balance                                                         -         (11,077)
     Increase in borrowings                                                   -       3,062,832
     Stock repurchase                                                         -      (1,017,006)
     Dividends                                                         (431,037)       (451,901)
                                                                   ------------    ------------

              Net cash provided by financing activities               4,066,342      21,820,756
                                                                   ------------    ------------

Decrease in cash and cash equivalents                                (1,202,352)     (7,226,151)
Cash and cash equivalents at beginning of year                        7,196,629      14,422,780
                                                                   ------------    ------------

Cash and cash equivalents at end of year                           $  5,994,277    $  7,196,629
                                                                   ============    ============

The following is a Summary of Cash and Cash Equivalents:
--------------------------------------------------------
     Cash                                                          $  1,720,707    $  1,312,324
     Interest bearing deposits in other banks                           509,570       3,689,305
     Federal funds sold                                               3,764,000       2,290,000
                                                                   ------------    ------------
     Balance of cash items reflected on
      Statement of Financial condition                                5,994,277       7,291,629

         Less - certificates of deposit with original
           maturities of more than three months that
           are included in interest bearing deposits
           in other banks                                                     -         (95,000)
                                                                   ------------    ------------
Cash and cash equivalents reflected on the
 Statement of Cash Flows                                           $  5,994,277    $  7,196,629
                                                                   ============    ============
Supplemental Disclosure of Cash Flow Information:
-------------------------------------------------
     Cash paid during the year for:

         Interest                                                  $  7,096,982    $  6,325,998
                                                                   ============    ============
         Taxes                                                     $    561,250    $    654,300
                                                                   ============    ============
         Purchase of Bankers Affiliate, Inc.'s net assets funded
           by retirement of note payable and capital stock         $          -    $  2,525,000
                                                                   ============    ============
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

                                       19

<PAGE>

                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                               SEPTEMBER 30, 2000



Note 1 - Summary of Significant Accounting Policies
         ------------------------------------------

           A.   Principles  of  Consolidation  -  The   consolidated   financial
                statements  include the accounts of WHG  Bancshares  Corporation
                ("the  Company")  and  its  wholly-owned  subsidiary,   Heritage
                Savings Bank, FSB ("the Bank") and for the year ended  September
                30, 1999 the Bank's subsidiary,  Mapleleaf Mortgage  Corporation
                ("MMC").  All intercompany  accounts and transactions  have been
                eliminated   in   the   accompanying    consolidated   financial
                statements.  During the year ended September 30, 1999 the Bank's
                subsidiary  discontinued  its operations.  MMC's operations were
                not material to the Company and no separate  disclosure has been
                made.

           B.   Business - The Bank's primary business activity, centered in the
                Baltimore  metropolitan area, is the acceptance of deposits from
                the general  public and using the proceeds for  investments  and
                loan originations. The Bank is subject to competition from other
                financial  institutions.  The Bank is subject to the regulations
                of certain federal agencies and undergoes periodic  examinations
                by those regulatory authorities.

           C.   Basis of Financial  Statement  Presentation  - The  consolidated
                financial  statements  have been  prepared  in  conformity  with
                generally  accepted  accounting  principles.  In  preparing  the
                financial  statements,  management is required to make estimates
                and assumptions  that affect the reported  amounts of assets and
                liabilities  as of  the  date  of  the  statement  of  financial
                condition  and  revenues  and  expenses  for the period.  Actual
                results  could  differ   significantly   from  those  estimates.
                Material   estimates  that  are   particularly   susceptible  to
                significant  change in the near-term relate to the determination
                of the allowance for loan losses and the valuation of foreclosed
                real  estate.  See  Note H & I  below  for a  discussion  of the
                determination of that estimate.

           D.   Federal Funds - Federal funds sold are  carried  at  cost  which
                approximates market.

           E.   Investments -  Investments  classified as available for sale are
                carried  at  fair  value.  Investments  classified  as  held  to
                maturity are carried at amortized cost since  management has the
                ability  and intent to hold them to  maturity.  Amortization  of
                premiums and accretion of discounts on all investment  purchases
                are  computed  using the  straight-line  method over the life of
                debt instrument.

                Gains and losses on available for sale securities are determined
                using the specific identification method.

                                       20
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 1 - Summary of Significant Accounting Policies - Continued
         ------------------------------------------

           F.   Mortgage  Backed  Securities - Mortgage  backed  securities  are
                carried at amortized  cost since  management has the ability and
                intention to hold them to maturity. Amortization of premiums and
                accretion  of  discounts  on  purchases  is  computed  using the
                interest method.

           G.   Loans  Receivable - Net - Loans  receivable are stated at unpaid
                principal  balances,   less  undisbursed  portion  of  loans  in
                process, unamortized discounts on loans purchased, deferred loan
                origination  fees  and the  allowance  for  loan  losses,  since
                management  has  the  ability  and  intention  to  hold  them to
                maturity.

                Loans  held  for  sale  are  carried  at the  lower  of  cost or
                estimated  market  value,   determined  in  the  aggregate.   In
                computing cost, deferred loan origination fees are deducted from
                the principal balances of the related loans. There were no loans
                held for sale at September 30, 2000 and 1999.

                The Bank services loans for others and pays the  participant its
                share of the Bank's collections,  net of a stipulated  servicing
                fee. Loan  servicing fees are credited to income when earned and
                servicing costs are charged to expense as incurred.

           H.   Allowance  for Loan  Losses - An  allowance  for loan  losses is
                provided  through charges to income in an amount that management
                believes  will be  adequate to absorb  losses on existing  loans
                that  may  become  uncollectible,  based on  evaluations  of the
                collectibility  of loans and prior  loan  loss  experience.  The
                evaluations take into  consideration  such factors as changes in
                the nature and volume of the loan portfolio,  overall  portfolio
                quality,  review of specific problem loans, and current economic
                conditions  that  may  affect  the  borrowers'  ability  to pay.
                Determining the amount of the allowance for loan losses requires
                the use of estimates and  assumptions,  which is permitted under
                generally accepted accounting  principles.  Actual results could
                differ  significantly from those estimates.  Management believes
                the allowance for losses on loans is adequate.  While management
                uses available  information to estimate losses on loans,  future
                additions to the allowances may be necessary based on changes in
                economic conditions,  particularly in the State of Maryland.  In
                addition,  various regulatory  agencies,  as an integral part of
                their  examination  process,   periodically  review  the  Bank's
                allowances  for losses on loans.  Such  agencies may require the
                Bank to  recognize  additions to the  allowances  based on their
                judgments  about  information  available  to them at the time of
                their examination.

                                       21
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 1 - Summary of Significant Accounting Policies - Continued
         ------------------------------------------

           H.   Statement of Financial Accounting Standards ("SFAS") No. 114, as
                amended by SFAS No. 118,  addresses the  accounting by creditors
                for impairment of certain loans. It is generally  applicable for
                all loans  except large  groups of smaller  balance  homogeneous
                loans that are collectively evaluated for impairment,  including
                residential  mortgage loans and consumer  installment  loans. It
                also  applies to all loans that are  restructured  in a troubled
                debt  restructuring  involving a modification of terms. SFAS No.
                114  requires  that  impaired  loans  be  measured  based on the
                present  value of expected  future cash flows  discounted at the
                loan's  effective  interest  rate,  or at the loan's  observable
                market price or the fair value of the  collateral if the loan is
                collateral dependent.  A loan is considered impaired when, based
                on  current  information  and  events,  it is  probable  that  a
                creditor  will be unable to collect all amounts due according to
                the contractual terms of the loan agreement.

                Accrual of interest is discontinued on a  loan  when  management
                believes, after  considering  economic and  business  conditions
                and collection efforts, that the borrower's financial  condition
                is such that collection of interest is doubtful.  When a payment
                is  received  on  a  loan  on  non-accrual  status,  the  amount
                received is allocated to  principal and  interest in  accordance
                with the contractual terms of the loan.

                 Loan origination fees and certain direct loan origination costs
                 are deferred and are recognized by the interest method over the
                 contractual life of the related loan as an adjustment of yield.

                 Premiums and  discounts on loans  purchased  are  recognized in
                 income over the  estimated  life of the related loans using the
                 level yield method.

           I.    Foreclosed Real Estate - Real estate acquired through or in the
                 process of foreclosure is recorded at the lower of cost or fair
                 value.  Management periodically evaluates the recoverability of
                 the  carrying  value  of  the  real  estate  acquired   through
                 foreclosure  using  estimates  as  described  under the caption
                 "Allowance  for Loan  Losses".  In the  event  of a  subsequent
                 decline,  management provides an additional allowance to reduce
                 real estate  acquired  through  foreclosure  to fair value less
                 estimated  disposal cost.  Expenses incurred on foreclosed real
                 estate prior to  disposition  are charged to expense.  Gains on
                 the  sale  of  foreclosed   real  estate  are  recognized  upon
                 disposition of the property.

                                       22
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 1 - Summary of Significant Accounting Policies - Continued
         ------------------------------------------

           J.  Premises and  Equipment - Premises and  equipment  are carried at
               cost less accumulated depreciation. Depreciation and amortization
               of  premises  and  equipment  are  accumulated  by the use of the
               straight-line  method  over  the  estimated  useful  lives of the
               assets.  Additions and improvements are capitalized,  and charges
               for repairs and  maintenance  are  expensed  when  incurred.  The
               related cost and accumulated depreciation are eliminated from the
               accounts when an asset is sold or retired and the resultant  gain
               or loss is credited or charged to income.

           K.  Defined Benefit  Pension Plan - The Bank accounts for its Pension
               Plan  in  accordance  with  Statement  of  Financial   Accounting
               Standards No. 87.Funding is limited to amounts that are available
               for deduction under the Internal Revenue Code (See Note 11).

           L.  Employee  Stock  Ownership  Plan - The  Company  accounts for its
               Employee  Stock  Ownership   Plan  ("ESOP")  in  accordance  with
               Statement of Position 93-6 of the Accounting  Standards  Division
               of the American  Institute  of Certified Public Accountants. (See
               Note 12)

           M.  Stock-Based   Compensation  -  SFAS  No.  123,  "Accounting   for
               Stock-Based Compensation" defines a "fair value based method"  of
               accounting  for  an employee  stock option  whereby  compensation
               cost is  measured  at  the grant  date  based on the value of the
               award and is recognized  over the service period. FASB encourages
               all entities to adopt the  fair value based method,  however,  it
               will allow entities to continue  the use of the "intrinsic  value
               based method" prescribed by  Accounting  Principles Board ("APB")
               Opinion  No.  25.  Management  decided  to  continue  using   the
               "intrinsic  value based method" as prescribed by APB Opinion  No.
               25.

           N.  Income  Taxes  -  Deferred   income  taxes  are  recognized   for
               temporary  differences between the financial reporting basis  and
               income tax basis of assets and liabilities  based on enacted  tax
               rates expected to be in effect when such amounts are realized  or
               settled.  Deferred tax assets are recognized  only to the  extent
               that is more likely than not that such  amounts will be  realized
               based on  consideration  of  available  evidence.  The effect  on
               deferred tax assets and  liabilities of a change in tax rates  is
               recognized  in income in the period that  includes the  enactment
               date.

                                       23
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 1 - Summary of Significant Accounting Policies - Continued
         ------------------------------------------

           O.   Statement of Cash Flows - In the  statement of cash flows,  cash
                and equivalents  include cash, Federal Home Loan Bank of Atlanta
                overnight  deposits,  federal funds and  certificates of deposit
                with an original maturity date less than ninety days.

           P.   Basic EPS is  computed by  dividing  net income by the  weighted
                average number of common shares  outstanding for the appropriate
                period.  Unearned  ESOP shares are not  included in  outstanding
                shares.  Diluted EPS is  computed by dividing  net income by the
                weighted average shares outstanding as adjusted for the dilutive
                effect of stock  options and unvested  stock awards based on the
                "treasury stock" method. Information relating to the calculation
                of net income per share of common  stock is  summarized  for the
                years ended September 30, as follows:

                                                        2000           1999
                                                        ----           ----
               Net income                          $    800,324    $   732,119
                                                       ========       ========
               Weighted Average Shares
                  Outstanding basic EPS               1,169,120      1,210,570
               Dilutive Items
                  Stock options                               -              -
                  Unvested stock awards                       -          4,508
                                                    -----------    -----------
               Adjusted weighted average shares
                used for dilutive EPS                 1,169,120      1,215,078
                                                    ===========    ===========



                                      24
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 2 - Investments Available for Sale
         ------------------------------

     The amortized cost and fair values of investments available for sale at are
as follows:

                                                      Gross           Gross
                          Amortized    Unrealized   Unrealized        Fair
                            Cost         Gains        Losses          Value
                            ----         -----        ------          -----
September 30, 2000
Equity investments      $   544,324      $     -   $   190,690   $   353,634
Federal Home Loan
 Bank Bonds              17,493,485            -     1,400,174    16,093,311
Federal Home Loan
 Mortgage Corporation
 Bonds                    3,249,114            -       256,847     2,992,267
                        -----------      -------   -----------   -----------
                        $21,286,923      $     -   $ 1,847,711   $19,439,212
                        ===========      =======   ===========   ===========

September 30, 1999
Equity investments      $   544,324      $     -   $   192,136   $   352,188
Federal Home Loan
 Bank Bonds              17,493,370            -     1,171,721    16,321,649
Federal Home Loan
 Mortgage Corporation
  Bonds                   3,249,047            -       222,171     3,026,876
                        -----------      -------   -----------   -----------
                        $21,286,741      $     -   $ 1,586,028   $19,700,713
                        ===========      =======   ===========   ===========

     During the year ended  September  30,  2000,  the  Company did not sell any
investments.  During the year ended  September  30, 1999,  the Company  received
proceeds of $127,495 from the sale of  investments  that resulted in gross gains
of $4,372.

     The equity  investments have no stated maturity and all of the Federal Home
Loan  Bank and  Federal  Home  Loan  Mortgage  Corporation  Bonds  have a stated
maturity date of ten years or more.

                                       25
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 3 - Other Investments - Held to Maturity
         ------------------------------------

     The amortized cost and fair values of other investments are as follows:
<TABLE>
<CAPTION>
                                               Gross        Gross
                               Amortized    Unrealized    Unrealized      Fair
                                 Cost          Gains        Losses        Value
                            --------------  -----------   ----------   ------------
                                           September 30, 2000
                            -------------------------------------------------------
<S>                         <C>           <C>           <C>           <C>
Federal National Mortgage
 Association  Bonds          $ 2,750,000   $      --     $   199,337   $ 2,550,663
Federal Home Loan
 Bank Bonds                   11,300,000          --         835,326    10,464,674
Federal Home Loan Mortgage
  Corporation Bonds            1,600,000          --         129,206     1,470,794
                             -----------   -----------   -----------   -----------

                             $15,650,000   $      --     $ 1,163,869   $14,486,131
                             ===========   ===========   ===========   ===========

</TABLE>

<TABLE>
<CAPTION>
                                             September 30, 1999
                             -----------------------------------------------------

<S>                         <C>           <C>           <C>           <C>
Federal National Mortgage
 Association  Bonds          $ 2,750,000   $         -   $   180,620   $ 2,569,380
Federal Home Loan
 Bank Bonds                   11,300,000             -       711,934    10,588,066
Federal Home Loan Mortgage
 Corporation Bonds             1,600,000             -       106,968    _1,493,032
                             -----------   -----------   -----------   -----------

                             $15,650,000   $         -   $   999,522   $14,650,478
                             ===========   ===========   ===========   ===========
</TABLE>

     No gains or losses were realized  during the years ended September 30, 2000
or 1999.

     The scheduled maturities of other investments at September 30, 2000:

                                                Amortized              Fair
                                                  Cost                 Value
                                                ----------           ----------
Due after five years through ten years         $   350,000        $     340,719
Due after ten years                             15,300,000           14,145,412
                                                ----------           ----------
                                               $15,650,000          $14,486,131
                                               ===========          ===========


                                      26
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------

Note 4 - Mortgage Backed Securities
         --------------------------

     The  amortized  cost and fair value of mortgage  backed  securities  are as
follows:
<TABLE>
<CAPTION>
                                                    Gross         Gross
                                    Amortized     Unrealized    Unrealized      Fair
                                       Cost         Gains         Losses        Value
                                   -----------   -----------   -----------   -----------
                                                    September 30, 2000
                                   -----------------------------------------------------
<S>                                <C>           <C>           <C>           <C>
FHLMC participating certificates   $ 1,615,533   $         -   $    57,779   $ 1,557,754
GNMA participating certificates     14,087,170         2,868       555,278    13,534,760
FNMA participating certificates        748,445             -        26,550       721,895
                                   -----------   -----------   -----------   -----------
                                   $16,451,148   $     2,868   $   639,607   $15,814,409
                                   ===========   ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                        September 30, 1999
                                  ------------------------------------------------------
<S>                               <C>           <C>           <C>           <C>
FHLMC participating certificates   $ 1,786,228   $         -   $    67,727   $ 1,718,501
GNMA participating certificates     15,402,200         4,982       698,741    14,708,441
FNMA participating certificates        794,942             -        30,345       764,597
                                   -----------   -----------   -----------   -----------

                                   $17,983,370   $     4,982   $   796,813   $17,191,539
                                   ===========   ===========   ===========   ===========
</TABLE>

     No gains or losses were realized  during the years ended September 30, 2000
and 1999.

                                       27
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 5 - Loans Receivable
         ----------------

     Loans receivable at September 30, 2000 and 1999 consist of the following:

                                                     2000             1999
                                                -------------    -------------
One to four family residential mortgage loans   $  72,225,058    $  71,041,820
Multifamily residential mortgage loans              3,832,379        2,352,325
Commercial mortgage loans                           9,915,566        6,772,077
Construction loans                                  6,592,205        5,183,370
Lines of credit                                     1,596,872        1,174,432
Home equity lines of credit                         2,868,228        3,500,846
Land/lot loans                                        210,302          832,531
Home improvement loans                                  3,443            4,608
Consumer loans                                      2,689,749        3,401,338
Share loans                                           399,212          390,723
Commercial loans secured by lease
 finance receivables                                  171,059          438,089
                                                -------------    -------------
                                                  100,504,073       95,092,159

Less - undisbursed portion of loans
             in process                            (2,124,623)      (3,568,811)
         - unamortized discount                      (601,230)        (725,393)
         - deferred loan origination fees            (472,584)        (519,604)
         - unearned insurance commissions                (976)          (2,118)
         - allowance for loan losses                 (395,212)        (344,907)
                                                -------------    -------------

                                                $  96,909,448    $  89,931,326
                                                =============    =============

     The following is a summary of the allowance for loan losses:

                                                          September 30,
                                                   -----------------------------
                                                       2000            1999
                                                    ---------        ---------
Beginning balance                                   $ 344,907        $ 301,425
Provision for loan losses                             120,000           70,000
Charge-offs                                           (69,695)         (26,518)
                                                    ---------        ---------

Balance end                                         $ 395,212        $ 344,907
                                                    =========        =========

                                       28
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 5 - Loans Receivable - Continued
         ----------------

     Residential lending is generally considered to involve less risk than other
forms of lending,  although  payment  experience  on these loans is dependent to
some  extent on  economic  and market  conditions  in the Bank's  lending  area.
Multifamily residential,  commercial, construction and other loan repayments are
generally dependent on the operations of the related properties or the financial
condition of its borrower or guarantor. Accordingly, repayment of such loans can
be more  susceptible  to adverse  conditions  in the real estate  market and the
regional economy.

     Substantially all of the Bank's loans receivable are mortgage loans secured
by residential  and commercial  real estate  properties  located in the State of
Maryland.  Loans are extended only after  evaluation by management of customers'
creditworthiness  and other relevant  factors on a case-by-case  basis. The Bank
generally  does not lend more than 95% of the appraised  value of a property and
requires private mortgage insurance on residential  mortgages with loan-to-value
ratios  in excess of 80%.  In  addition,  the Bank  generally  obtains  personal
guarantees  of  repayment   from   borrowers   and/or  others  for   multifamily
residential,  commercial  and  construction  loans and disburses the proceeds of
construction and similar loans only as work progresses on the related projects.

     There were no impaired  loans as defined by SFAS No. 114 at  September  30,
2000 and 1999. There was no interest income  recognized on impaired loans during
those periods.

     Non-accrual  loans that are not subject to SFAS No. 114 for which  interest
has been reduced  totaled  approximately  $243,797 and $177,199 at September 30,
2000 and 1999.

     Interest  income that would have been recorded  under the original terms of
such loans and the interest  actually  recognized for the years ended  September
30, are summarized below:

                                                    2000                 1999
                                                    ----                 ----
Interest income that would have
 been recognized                                   $21,530              $24,119
Interest income recognized                          13,477                8,621
                                                   -------              -------

   Interest income not recognized                  $ 8,053              $15,498
                                                   =======              =======

                                       29
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 5 - Loans Receivable - Continued
         ----------------

     Loans  outstanding  to officers and directors  and their  affiliates of the
Bank at September 30, 2000 and 1999:

<TABLE>
<CAPTION>
Balance At               Balance At                                Balance At
September       Loans       Principal    September       Loans     Principal        September
 30, 2000       Made     Repayment       30, 1999        Made      Repayment        30, 1998
-----------     -----    ---------     ------------      -----     ---------       ----------
<S>          <C>         <C>           <C>            <C>         <C>             <C>
$1,534,075    $138,089    $121,277      $1,517,263     $330,325    $355,278        $1,542,216
</TABLE>

     Mortgage  loans  serviced for others are not  included in the  accompanying
statements of financial condition.  The unpaid principal balances of these loans
at September 30, are summarized as follows:

                                                 2000                1999
                                                 ----                ----
Mortgage loan portfolios serviced for:
  Other investors                             $5,238,440           $5,717,050
                                              ==========           ==========

     Custodial Escrow balances  maintained in connection with the foregoing loan
servicings  were  approximately  $17,544 and $40,466 at  September  30, 2000 and
1999.

     Unless otherwise  noted, the Bank requires  collateral or other security to
support financial instruments with off-balance-sheet credit risk.

 Financial Instruments Whose Contract              Contract Amount
  Amounts Represent Credit Risk                    At September 30,
 ----------------------------------------     ----------------------------------
                                                  2000                  1999
                                                  ----                  ----
    Loan commitments                          $   230,000           $1,648,250
    Unused lines of credit                      2,225,534            2,792,468

     Mortgage  loan  commitments  not  reflected in the  accompanying  financial
statements at September 30, 2000 are for a fixed rate mortgage  totaling $50,000
at 9.0% and  variable  rate  mortgages  totaling  $180,000  ranging from 9.5% to
10.5%.

     Mortgage  loan  commitments  not  reflected in the  accompanying  financial
statements  at  September  30,  1999  are  for  fixed  rate  mortgages  totaling
$1,648,250 ranging from 7.125% to 8.375%.

                                      30
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 5 - Loans Receivable - Continued
         ----------------

     Lines of credit are loan  commitments to individuals and companies and have
fixed  expiration  dates  as long as  there  is no  violation  of any  condition
established  in  the  contract.   The  Bank  evaluates  each  customer's  credit
worthiness on a case-by-case basis.

     The credit risk involved in these financial  instruments is essentially the
same as that involved in extending loan  facilities to customers.  No amount has
been recognized in the statement of financial condition at September 30, 2000 as
a liability for credit loss.

Note 6 - Investment in Federal Home Loan Bank of Atlanta Stock
         -----------------------------------------------------

     The Bank is required to maintain an  investment in the stock of the Federal
Home  Loan Bank of  Atlanta  ("FHLB")  in an amount  equal to at least 1% of the
unpaid principal  balances of the Bank's  residential  mortgage loans or 1/20 of
its  outstanding  advances  from the FHLB,  whichever is greater.  Purchases and
sales of stock are made directly with the FHLB at par value.

Note 7 - Investment in and Loans to Affiliated Corporation
         -------------------------------------------------

     On April 1,  1999,  the Bank  purchased  substantially  all the  assets and
liabilities of Bankers Affiliate, Inc. for $5 million in cash ($4,811,311 net of
cash  received) and the retirement of a $2.5 million note and $25,000 of Bankers
Affiliate, Inc. stock. The purchase consisted primarily of automobile,  boat and
home equity loans.

     Bankers Affiliate,  Inc. was equally owned by the Bank and two other thrift
institutions  and  made  consumer  loans to their  customers.  Loans to  Bankers
Affiliate,  Inc. were due on demand and bore an adjustable  interest  rate.  The
Bank had a 33-1/3%  interest  in this  company  and its  proportionate  share of
income or losses was not recorded on the equity method,  since such amounts were
not material to the accompanying consolidated financial statements. The Bank was
using the cost method of accounting to record this investment.

                                      31
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 8 - Premises and Equipment
         ----------------------

     Premises and  equipment at September  30, 2000 and 1999 are  summarized  by
major classification as follows:

                                                                     Useful Life
                                      2000              1999           in Years
                                      ----              ----         -----------
Land                                 $  224,056      $   224,056         -
Office buildings                        602,549          602,549        5-50
Leasehold improvements                  375,728                -         20
Furniture, fixtures and equipment     1,097,057          919,593        3-20
                                     ----------      -----------
                                      2,299,390        1,746,198
   Accumulated depreciation          (1,045,625)        (907,671)
                                     ----------      -----------
                                     $1,253,765      $   838,527
                                     ==========      ===========

     The provision for depreciation for the periods ended September 30, 2000 and
1999 was $138,291 and $115,158, respectively.

     The Bank has entered into several  operating leases for the premises of its
branch offices.  Rental expense under these leases for the years ended September
30, 2000 and 1999 was $88,430 and $59,221,  respectively. At September 30, 2000,
the minimum rental commitments under noncancellable leases are as follows:

                   Year Ended September 30,                   Total
                   ------------------------                ----------
                            2001                           $   76,056
                            2002                               54,200
                            2003                               53,000
                            2004                               55,400
                            2005                               59,180
                            Thereafter                      1,260,700
                                                           ----------
                                                           $1,558,536
                                                           ==========

                                       32
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 9 - Deposits
         --------

     Deposits are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                          2000                              1999
                                          ----------------------------------  -------------------------------
                                                            Weighted-                         Weighted-
                                                             Average                           Average
Type of Account                              Amount             Rate             Amount           Rate  _
---------------                              ------         -------------        ------      ----------------
<S>                                       <C>                <C>             <C>                 <C>
NOW and money market
 accounts including
 non-interest bearing deposits
 of $570,669 in 2000 and
 $981,921 in 1999                           $ 11,333,337      2.85%            $ 11,523,206       1.05%
Passbook savings                              15,429,951      3.04%              15,817,791       3.05%
Certificates of deposit                       93,281,151      6.00%              87,961,311       5.46%
                                            ------------                       ------------
                                             120,044,439                        115,302,308
Accrued interest                                     425                                179
                                            ------------                       ------------
                                            $120,044,864                       $115,302,487
                                            ============                       ============
</TABLE>

     The aggregate amount of certificates of deposit with a minimum denomination
of $100,000 was  approximately  $10,139,329 and $7,384,506 at September 30, 2000
and  1999.  Deposits  in excess  of  $100,000  are not  insured  by the  Savings
Association Insurance Fund.

                                               2000                  1999
                                             ------------      --------------
                                              Amount               Amount
                                              ------               ------
Certificates accounts mature as follows:
   One year or less                           $43,312,986          $34,938,382
   More than 1 year through 2 years            21,121,405           24,070,423
   More than 2 years through 3 years           18,282,972            7,926,915
   More than 3 years through 4 years            8,834,257           21,025,591
   More than 4 years                            1,729,531                    -
                                              -----------          -----------
                                              $93,281,151          $87,961,311
                                              ===========          ===========

                                       33
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 9 - Deposits - Continued
         --------

     Interest  expense on deposits is  summarized as follows for the years ended
September 30:

                                            2000                 1999
                                            ----                 ----
Certificates                             $  5,035,598         $  4,429,927
NOW and money market                          270,743              268,188
Passbook                                      467,664              461,734
                                         ------------         ------------

                                         $  5,774,005         $  5,159,849
                                         ============         ============

Note 10- Borrowings
         ----------

     The Company's borrowings at September 30 are as follows:

                                                 2000                 1999
                                                 ----                 ----
Short-term Federal Home Loan Bank advances   $        -         $  4,000,000
Long-term Federal Home Loan Bank advances    24,000,000           20,000,000
                                             ----------           ----------

Total                                        $24,000,000         $24,000,000
                                             ===========         ===========

     Federal  Home Loan Bank  advances at  September  30, 2000 consist of a long
term adjustable  rate advance bearing  interest at 6.78% per annum and long term
fixed rate advances bearing interest at 4.89% to 6.33% per annum.

     Federal Home Loan Bank advances at September 30, 1999 consist of short term
fixed and adjustable rate advances  bearing interest at 5.11% to 5.75% per annum
and long term fixed rate advances bearing interest at 4.89% to 5.52% per annum.

     The  Bank's  stock in the  Federal  Home Loan Bank of Atlanta is pledged as
security for the loan and under a blanket floating lien security  agreement with
the  Federal  Home Loan Bank of  Atlanta,  the Bank is  required  to maintain as
collateral for its advances, qualified home mortgage loans in an amount equal to
175% of the advances.

                                       34
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 10- Borrowings - Continued
         ----------

     Aggregate  maturities  required  on  Federal  Home  Loan Bank  advances  at
September 30, 2000 are as follows:

     September 30, 2003                               $ 3,000,000
     September 30, 2004                                 3,000,000
     After September 30, 2004                          18,000,000
                                                       ----------
           Total                                      $24,000,000
                                                      ===========

     At September  30, 2000 and 1999,  the Bank had a $5.0 million  secured bank
line of credit  that is subject to  termination  at either  party's  discretion.
There were no borrowings  outstanding under this agreement at September 30, 2000
and 1999.

Note 11- Pension Plan
         ------------

     Substantially all employees of the Bank are included in a  non-contributory
defined  benefit  pension  plan.  The  Bank's  policy is to fund  pension  costs
accrued.  There were no unfunded or unamortized prior service costs at September
30, 2000 and 1999.  The costs of funding  this plan were $35,585 and $25,191 for
the years ended September 30, 2000 and 1999, respectively.

     The following table sets forth the plan's related costs at September 30:

                                               2000                 1999
                                               ----                 ----
Service cost                                  $29,253              $24,512
Interest cost                                  66,023               53,123
Actual return on plan assets                  (67,994)             (58,419)
Other components                                8,303                5,975
                                              -------              -------

Net period pension costs                      $35,585              $25,191
                                              =======              =======


                                       35
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 11- Pension Plan - Continued
         ------------

     The following table sets forth the plan's funded status at September 30:

                                                        2000         1999
                                                     ---------    ---------
Accumulated benefit obligation                       $ 644,250    $ 591,366
                                                     =========    =========

Projected benefit obligation                         $ 901,668    $ 882,248
Fair value of plan assets as of September 30           863,662      819,527
                                                     ---------    ---------
Plan assets in deficit of projected
 benefit obligation                                    (38,006)     (62,721)
Unrecognized net loss                                  244,507      234,038
Unrecognized net transition obligation                   1,621        1,823
                                                     ---------    ---------

       Prepaid pension cost                          $ 208,122    $ 173,140
                                                     =========    =========

Reconciliation of Projected Benefit Obligation
   Projected benefit obligation beginning of year    $ 882,248    $ 762,500
   Interest cost for the fiscal year                    66,023       53,123
   Service cost for the fiscal year                     29,253       24,512
   Benefit payments for the fiscal year                (71,375)      (6,817)
   Actuarial (gain) loss for the fiscal year            (4,481)      48,930
                                                     ---------    ---------
   Projected benefit obligation as of September 30
    before settlement                                  901,668      882,248
   Effect of settlement                                      -            -
                                                     ---------    ---------
   Projected benefit obligation as of September 30
    after settlement                                 $ 901,668    $ 882,248
                                                     =========    =========

     The following interest rate assumptions were used for September 30:

                                           2000                    1999
                                           ----                    ----
Weighted-average discount rate             7.75%                   7.50%
Long term rate of return                   8.00%                   8.00%
Rate of compensation increase              5.00%                   5.00%

                                       36
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 12- Common Stock and Stock Benefit Plans
         ------------------------------------

     In 1996, the Bank converted from a federally  chartered mutual savings bank
to  a  federally  chartered  stock  savings  bank.   Simultaneously,   the  Bank
consummated the formation of a new holding company, WHG Bancshares  Corporation,
of  which  the  Bank  is a  wholly-owned  subsidiary.  In  connection  with  the
conversion, the Company issued 1,620,062 shares of its common stock.

     The Bank has  established  an Employee Stock  Ownership Plan ("ESOP"),  and
acquired  129,604  shares of the  Company's  common  stock.  The Employee  Stock
Ownership Plan  purchased  30,616  additional  shares with the proceeds from the
special  distribution.  Funds used to acquire the initial  shares were  borrowed
from the  Company  by the ESOP  with a direct  loan from the  Company  requiring
annual payments of $129,604. During the fiscal year ended September 30, 1998 the
Company  assigned the loan to a third party.  During  February 1999, the Company
exercised its option to repurchase the loan.

     The  ESOP  holds  the  common  stock  in  a  Trust  for  allocation   among
participating employees.

     All  employees  of the Bank  who have  completed  one year of  service  and
attained the age of 21 are  eligible to  participate.  Participants  will become
100%  vested in their  accounts  after five  years of  service  with the Bank or
earlier upon death, disability or retirement.

     The ESOP is  funded  by  contributions  made by the Bank in cash or  common
stock  and  dividends  on the  shares  held in the  Trust.  The Bank  recognizes
compensation  expense as shares are  committed  for release from  collateral  at
their  current  market  price.  Dividends on allocated  shares are recorded as a
reduction of retained earnings and dividends on unallocated  shares are recorded
as a reduction of debt.  Compensation cost for the year ended September 30, 2000
and 1999 was $165,638 and $219,065, respectively.


                                       37
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 12- Common Stock and Stock Benefit Plans - Continued
         ------------------------------------

     The ESOP shares as of September 30 were as follows:

                                                        2000             1999
                                                        ----             ----
Allocated shares                                       90,360           64,826
Shares earned, but unallocated                          2,832            4,092
Unearned shares                                        69,969           94,243

Fair value of unearned shares at September 30        $572,906         $854,124

     The Company has a Stock Option Plan (the "Plan")  whereby 183,058 shares of
common stock have been  reserved for issuance  under the Plan.  Options  granted
under the Plan may be Incentive  Stock Options within the meaning of Section 422
of the Internal Revenue Code of 1986 as amended or Non-Incentive  Stock Options.
Options are  exercisable  in five  annual  installments  at the market  price of
common  stock at the date of grant.  The Options  must be  exercised  within ten
years from the date of grant.  During the year ended  September  30,  1997,  the
Company granted options to purchase  162,006 shares at a weighted  average price
of $13.30 per share.  Such  shares and fair value have been  adjusted to 183,058
shares  at a  weighted  average  price of  $11.77  for the  effect  of a special
distribution.

     The following  table  summarizes the status of and changes in the Company's
stock option plan during the past two years, as  retroactively  adjusted for the
Company's special distribution.

                                                            Weighted
                                                            Average
                                                            Exercise
                                           Shares            Price
                                           ------           --------

Outstanding at September 30, 1998          183,058            11.77
Forfeited options                           (2,306)           11.89
                                           -------

Outstanding at September 30, 1999          180,752            11.78
Forfeited options                           (4,282)           11.71
                                           -------

Outstanding at September 30, 2000          176,470            11.78
                                           =======
Exercisable at September 30, 2000          111,622
                                           =======

                                       38
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 12- Common Stock and Stock Benefit Plans - Continued
         ------------------------------------

     The Company has established a Management Stock Bonus Plan (the "Stock Bonus
Plan" or "MSBP") to encourage directors, officers and key employees to remain in
the  service  of the Bank.  Up to 64,802  shares of common  stock may be awarded
under the terms of the Stock Bonus Plan.  Shares of common stock  awarded  under
the plan vest in five annual  installments  at a rate of 20% each year following
the date of grant.  On October 8, 1996,  awards of 55,860 shares of common stock
were  granted.  On November  22,  1996,  the Bank funded the  purchase of 64,802
shares  of its  common  stock  at a  price  of  $13.62  to  provide  shares  for
distribution under the Stock Bonus Plan.

Note 13- Retained Earnings
         -----------------

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

     Quantitative  measures established by regulation to ensure capital adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  total  and  Tier I  capital  (as  defined  in the  regulations)  and
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined).  Management  believes,  as of September 30, 2000,  that the
Bank meets all capital adequacy requirements to which it is subject.

                                       39
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 13- Retained Earnings - Continued
         -----------------

     As of September 30, 2000, the most recent  notification  from the Office of
Thrift Supervision categorized the Bank as well capitalized under the regulatory
framework for prompt  corrective  action.  To be categorized as well capitalized
the Bank must maintain minimum total risk-based,  Tier I risk-based,  and Tier I
leverage  ratios as set forth in the table.  There are no  conditions  or events
since  that  notification  that  management  believes  have  changed  the Bank's
category. The Bank's actual capital amounts and ratios are also presented in the
table.
<TABLE>
<CAPTION>
                                                                              To Be Well
                                                                           Capitalized Under
                                                      For Capital          Prompt Corrective
                                Actual             Adequacy Purposes       Action Provisions
                     -------------------------   --------------------     --------------------
                         Amount         %          Amount        %         Amount        %
                      -----------    ------      ----------    ------     ------      -------
<S>                <C>              <C>       <C>            <C>      <C>             <C>
September 30, 2000
Tangible (1)          $14,770,000      9.2%      $2,410,410     1.5%     $      N/A     N/A%
Tier I capital (2)     14,770,000     20.3%             N/A     N/A%      4,374,300     6.0%
Core (1)               14,770,000      9.2%       6,427,760     4.0%      8,034,700     5.0%
Risk-weighted (2)      15,089,000     20.7%       5,832,400     8.0%      7,290,500    10.0%

September 30, 1999
Tangible (1)          $15,572,000      9.9%      $2,355,435     1.5%     $      N/A     N/A%
Tier I capital (2)     15,572,000     23.1%             N/A     N/A%      4,038,120     6.0%
Core (1)               15,572,000      9.9%       4,710,810     3.0%      7,851,450     5.0%
Risk-weighted (2)      15,793,000     23.5%       5,384,160     8.0%      6,730,200    10.0%
</TABLE>

       (1)  To adjusted total assets.
       (2)  To risk-weighted assets.


                                       40
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 14- Income Taxes
         ------------

     The income tax provision consists of the following:

                                         For Years Ended
                                           September 30,
                                  ------------------------------
                                     2000                 1999
                                   --------             --------
Current
-------
   Federal                         $400,469             $473,051
   State                            102,785              101,394
                                    -------              -------
                                    503,254              574,445
Deferred
--------
   Federal                           13,802              (69,580)
   State                              3,054              (15,403)
                                   --------             --------
                                     16,856              (84,983)
                                   --------             --------

                                   $520,110             $489,462
                                   ========             ========

     The amount  computed by applying the statutory  federal  income tax rate to
income before taxes differs from the taxes provided for the following reasons:

                                             Years Ended September 30,
                               -------------------------------------------------
                                       2000                      1999
                               -------------------------------------------------
                                             Percent                   Percent
                                            of Pretax                 of Pretax
                                Amount         Income      Amount      Income
                               --------       --------    --------     -------
Tax at statutory rate          $448,948        34.00      $415,338      34.00
Increases (Decreases)
 Resulting From
---------------------------
   State income tax net of
    federal income tax benefit   69,854         5.29        56,754       4.65
   Other                          1,308          .10        17,370       1.42
                               --------        -----      --------      -----
                               $520,110        39.39      $489,462      40.07
                               ========        =====      ========      =====


                                       41
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 14- Income Taxes - Continued
         ------------

     The tax  effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets and  deferred tax  liabilities  at September
30, 2000 and 1999 are presented below:

                                                 2000         1999
                                             ----------   ----------
Deferred Tax Assets:
   Deferred loan origination fees            $  182,512   $  200,671
   Allowance for loan losses                    152,631      133,203
   Reserve for uncollected interest               1,948        4,944
   ESOP contribution                              8,331        8,331
   Net unrealized holding losses                713,586      612,524
   Other                                         64,752       93,621
                                             ----------   ----------
      Total gross deferred tax assets         1,123,760    1,053,294

Deferred Tax Liabilities:
   Tax reserve for bad debts in excess of
    base year amount                         $   24,964   $   56,169
   Federal Home Loan Bank of Atlanta stock
    dividends                                    56,965       56,965
   Depreciation                                  24,865       20,909
   Pension plan                                  80,377       66,867
                                             ----------   ----------
      Total gross deferred tax liabilities      187,171      200,910
                                             ----------   ----------
            Net deferred tax assets          $  936,589   $  852,384
                                             ==========   ==========

     Qualified  thrift  lenders  such as the Bank are not  required to provide a
deferred tax  liability  for bad debt  reserves  for tax purposes  that arose in
fiscal years  beginning  before December 31, 1987. Such bad debt reserve for the
Bank  amounted  to  approximately  $2,022,261  with  an  income  tax  effect  of
approximately $780,997 at September 30, 2000. This bad debt reserve would become
taxable if certain conditions are met by the Bank.

     As of September 30, 2000, the Company and its Subsidiary  file their income
tax returns on a fiscal year basis.


                                       42
<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 15- Disclosure About Fair Value of Financial Instruments
         ----------------------------------------------------

     The  estimated  fair  values  of  the  Bank'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.
Also, 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.

     The  carrying  amount  is a  reasonable  estimate  of fair  value for cash,
federal funds, interest-bearing deposits in other banks and securities purchased
under  agreements to resell due to the short-term  nature of these  investments.
Fair  value is based  upon  market  prices  quoted  by  dealers  for  investment
securities and mortgage backed  securities.  The carrying amount of Federal Home
Loan  Bank of  Atlanta  stock is a  reasonable  estimate  of fair  value.  Loans
receivable were discounted  using a single discount rate,  comparing the current
rates at which  similar  loans would be made to borrowers  with  similar  credit
ratings  and for the same  remaining  maturities,  except  for  adjustable  rate
mortgages which were considered to be at market rates. These rates were used for
each  aggregated  category  of  loans  as  reported  on  the  Office  of  Thrift
Supervision  Quarterly  Report.  The fair  value  of  demand  deposits,  savings
accounts  and money  market  deposits  is the  amount  payable  on demand at the
reporting  date.  The fair value of  fixed-maturity  certificates  of deposit is
estimated  using the rates  currently  offered on deposits of similar  remaining
maturities.

     The Bank is a party to financial instruments with off-balance sheet risk in
the normal course of business,  including loan commitments. The loan commitments
were a blended rate based on the relative  risk of the  properties  involved and
the lines of credit are at adjustable rates.


                                       43

<PAGE>
WHG BANCSHARES CORPORATION AND SUBSIDIARIES
-------------------------------------------
Lutherville, Maryland
---------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 2000
------------------


Note 15- Disclosure About Fair Value of Financial Instruments - Continued
         ----------------------------------------------------

     The  estimated  fair  values of the  Bank's  financial  instruments  are as
follows:

<TABLE>
<CAPTION>
                                  September 30, 2000            September 30, 1999
                              ---------------------------   ---------------------------
                                Carrying      Estimated       Carrying      Estimated
                                 Value        Fair Value       Value          Fair
                              ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>            <C>
Value
Financial Assets
   Cash, interest-bearing
    deposits in other banks
    and federal funds         $  5,994,277   $  5,994,277   $  7,291,629   $  7,291,629
   Investments available
    for sale                    19,439,212     19,439,212     19,700,713     19,700,713
   Other investment
    securities held to
    maturity                    15,650,000     14,486,131     15,650,000     14,650,478
   Mortgage backed
    securities                  16,451,148     15,814,409     17,983,370     17,191,539
   Loans receivable - net       96,909,448     91,809,000     89,931,326     86,230,000
   Federal Home Loan
    Bank of Atlanta stock        1,450,000      1,450,000      1,200,000      1,200,000

Financial Liabilities
   Deposits                   $120,044,864   $120,114,000   $115,302,487   $115,492,000
   Commitments                           -        230,000              -      1,648,250
   Borrowings                   24,000,000     22,994,000     24,000,000     22,942,000
</TABLE>

Note 16- Recent Accounting Pronouncements
         --------------------------------

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities" was issued in June 1998. This Statement  standardizes the accounting
for derivative  instruments including certain derivative instruments embedded in
other contracts,  by requiring that an entity recognize these items as assets or
liabilities  in the  statement  of  financial  position and measure them at fair
value. This Statement generally provides for matching the timing of gain or loss
recognition on the hedging instrument with the recognition of the changes in the
fair value of the hedged asset or liability that are  attributable to the hedged
risk or the earnings effect of the hedged forecasted transaction. The Statement,
which is effective for all fiscal  quarters of all fiscal years  beginning after
June 15, 2000, will not affect the Company's  financial  position or its results
of operations.

                                       44