EXHIBIT 13



<PAGE>
                           WHG BANCSHARES CORPORATION

                          PORTIONS OF THE ANNUAL REPORT
                            For the Fiscal Year Ended
                               September 30, 1997
     -----------------------------------------------------------------------





<PAGE>



                           WHG BANCSHARES CORPORATION


Stock Market Information

The Company's  common stock has been traded on the Nasdaq  SmallCap Market under
the trading  symbol of "WHGB"  since it  commenced  trading in April  1996.  The
following  table  reflects high and low bid  quotations as published by The Wall
Street  Journal.  The quotations  reflect  inter-dealer  prices,  without retail
mark-up, markdown, or commission, and may not represent actual transactions.

                                                                       Dividends
                     Date                 High                Low       Declared
                     ----                 ----                ---       --------

April 1, 1996 to June 30, 1996           $11.75             $10.75          $0

July 1, 1996 to September 30, 1996        13.00              11.00           0

October 1, 1996 to December 31, 1996      13.75              12.50         .05

January 1, 1997 to March 31, 1997         14.75              12.75         .05

April 1, 1997 to June 30, 1997            15.38              13.63         .05

July 1, 1997 to September 30, 1997        16.50              15.00         .05



                                       -2-

<PAGE>




The number of  shareholders  of record of common  stock as of the record date of
December 5, 1997,  was  approximately  262.  This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage firms. At December 5, 1997,  there were 1,389,002 shares  outstanding.
The Company's  ability to pay dividends to  stockholders  is dependent  upon the
dividends it receives from the Savings Bank. The Savings Bank may not declare or
pay a cash  dividend on any of its stock if the effect  thereof  would cause the
Savings Bank's  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 OTS.


Selected Financial Ratios and Other Data


                                                          For the Years Ended
                                                             September 30,
                                                       -------------------------
                                                          1997           1996
                                                          ----           ----

Return on average assets..........................         .77%           .49%

Return on average equity..........................        3.49           2.68

Average equity to average assets ratios...........       22.03          18.45

Equity to assets at period end....................       20.12          24.08

Net interest rate spread..........................        2.89           2.70

Net yield on average interest-earnings assets.....        3.82           3.59

Non-performing loans to total assets..............         .85            .50

Allowance for loan loss to total loans............         .32            .26

Dividend payout ratio.............................         .38              -

                                       -3-

<PAGE>



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


General

     WHG Bancshares  Corporation  (the  "Company") was formed in March,  1996 by
Heritage Savings Bank, F.S.B. (the "Savings Bank") to become the holding company
of the Savings Bank  following the stock  conversion.  The Company's  results of
operations  are  primarily  dependent on its net interest  income,  which is the
difference between the interest income earned on its assets, primarily loans and
investments, and the interest expense on its 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
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.

Market Risk

     Market risk is defined as the risk of loss due to adverse changes in market
rates and prices. The Savings Bank's net interest income is sensitive to changes
in  interest  rates,  as the  rates  paid  on its  interest-bearing  liabilities
generally change faster than the rates earned on  interest-earning  assets. As a
result,  net  interest  income  will  frequently  decline  in  periods of rising
interest rates and increase in periods of falling interest rates.

     To  mitigate  the impact of  changing  interest  rates on its net  interest
income,  the Savings Bank manages its interest  sensitivity and  asset/liability
products  through a committee  which  meets  weekly and  consists of  department
supervisors,  overseen by the  President and Chairman of the Board of Directors.
The Chairman  reports to the Board of Directors of the Savings Bank on behalf of
the Committee.

     In an effort to reduce  interest  rate  risk and  protect  itself  from the
negative  effects of rapid or prolonged  changes in interest rates,  the Savings
Bank has instituted certain asset and liability management  measures,  including
the following measures:

     .    Maintains a large base of adjustable rate residential  mortgage loans.
          Such loans have been  emphasized  by Heritage.  However,  recently the
          Savings Bank has begun to offer fixed rate residential  mortgage loans
          in addition to ARMs to balance the loan portfolio.

     .    Maintains moderate levels of interest-bearing  deposits, federal funds
          and U.S.  Government  securities with short to  intermediate  terms to
          maturities.

     .    Maintains a high proportion of lower-costing, non-certificate accounts
          in the deposit portfolio. At September 30, 1997, such deposits totaled
          $27.0 million or 36.2% of total deposits.

     The  Committee  manages the interest rate  sensitivity  of the Savings Bank
through the  determination  and adjustment of  asset/liability  composition  and
pricing strategies.  The Committee then monitors the impact of the interest rate
risk and earnings  consequences  of such  strategies  for  consistency  with the
Savings Bank's liquidity needs, growth and capital adequacy.  The Savings Bank's
principal   strategies   to  reduce  the  interest  rate   sensitivity   of  its
interest-earning  assets are the origination of  adjustable-rate  mortgage loans
("ARMs")  and the Savings  Bank's  objective  is to maintain 75% of its mortgage
loan  portfolio in ARMs.  However,  this  objective may become more difficult to
achieve during periods when consumers  perceive interest rates are declining and
consumer demand shifts towards fixed rate mortgage loans and away from ARMs. The
interest rates on the Savings Bank's  liabilities  generally  change faster than
rates earned on assets,  because the Savings Bank's deposit  liabilities consist
primarily  of  demand,   money  market  and  passbook  savings   accounts,   and
certificates  of deposit that mature in one year or less. The Savings Bank seeks
to mitigate the interest rate sensitivity of its liabilities

                                       -4-

<PAGE>



by  offering  higher  rates  on  longer  term  certificate  accounts.   However,
depositors have not sought such longer terms during recent periods.  The Savings
Bank does not currently engage in, or intend to engage in, trading activities or
use derivative instruments to control interest rate risk.

Net Portfolio Value

     In order to encourage  savings  associations  to reduce their interest rate
risk,  the OTS  adopted  a rule,  that is not yet in  effect,  incorporating  an
interest rate risk ("IRR") component into the risk-based  capital rules. The IRR
component is a dollar  amount that will be deducted  from total  capital for the
purpose of calculating an institution's  risk-based  capital  requirement and is
measured  in terms of the  sensitivity  of its net  portfolio  value  ("NPV") to
changes in interest rates.  NPV is the difference  between incoming and outgoing
discounted cash flows from assets, liabilities, and off-balance sheet contracts.
An  institution's  IRR is  measured  as the  change  to its NPV as a result of a
hypothetical 200 basis point ("bp") change in market interest rates. A resulting
change in NPV of more than 2% of the  estimated  market value of its assets will
require the  institution  to deduct from its capital 50% of that excess  change.
The rules provide that the OTS will  calculate  the IRR component  quarterly for
each institution.  The Savings Bank, based on asset size and risk-based capital,
has been informed by the OTS that it is exempt from this rule. Nevertheless, the
following  table  presents  the Savings  Bank's NPV at September  30,  1997,  as
calculated by the OTS, based on  information  provided to the OTS by the Savings
Bank.

               Changes                NPV
               in Rate              Ratio(1)             Change(2)
               -------              --------             ---------
               +400 bp               11.93%               -576 bp
               +300 bp               13.65%               -403 bp
               +200 bp               15.23%               -246 bp
               +100 bp               16.59%               -109 bp
                  0 bp               17.68%
               -100 bp               18.44%                +75 bp
               -200 bp               18.94%               +126 bp
               -300 bp               19.35%               +166 bp
               -400 bp               19.96%               +228 bp


----------------
(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.

        Certain  shortcomings are inherent in the preceding NPV tables since the
data reflect  hypothetical changes in NPV based upon assumptions used by the OTS
to evaluate the Savings  Bank as well as other  institutions.  Nonetheless,  the
experience of the Savings Bank has been that net interest  income  declines with
increases  in  interest  rates  and  that net  interest  income  increases  with
decreases in interest rates.  Generally,  during periods of increasing  interest
rates,  the Savings  Bank's  interest rate sensitive  liabilities  would reprice
faster than its interest rate sensitive  assets causing a decline in the Savings
Bank's  interest  rate spread and margin.  This would result from an increase in
the  Savings  Bank's  cost of funds that would not be  immediately  offset by an
increase  in its  yield on  earning  assets.  An  increase  in the cost of funds
without an  equivalent  increase  in the yield on earning  assets  would tend to
reduce net interest income. As a result of the decrease in market interest rates
of  certificates  of  deposit,  the  Savings  Bank's net  interest  rate  spread
increased to 2.89% in fiscal 1997 from 2.70% in fiscal 1996.

        In times of increasing  interest rates, fixed rate assets could decrease
in value and the lag in repricing  of interest  rate  sensitive  assets could be
expected to have a negative effect on the Savings Bank.


                                       -5-

<PAGE>
Average Balance Sheet
<TABLE>
<CAPTION>
                                                                               Year Ended September 30,
                                                  ----------------------------------------------------------------------------
                                                                   1997                                   1996
                                                  ------------------------------------    ------------------------------------
                                                  Average                     Average     Average                     Average
                                                  Balance        Interest   Yield/Cost    Balance       Interest    Yield/Cost
                                                  -------        --------   ----------    -------       --------    ----------
                                                                                  (Dollars in Thousands)
<S>                <C>                            <C>            <C>             <C>      <C>           <C>              <C>  
Interest-earnings assets:
   Loans receivable(1).........................   $78,643        $ 5,912         7.52%    $73,581       $ 5,573          7.57%
   Mortgage-backed securities..................     2,937            199         6.78%      2,305           149          6.47%
   Investment securities(2)....................     4,995            392         7.85%      2,854           196          6.87%
   Other interest-earning assets(3)............     9,292            547         5.89%     12,316           756          6.14%
                                                   ------         ------                   ------        ------
      Total interest-earning assets............   $95,867        $ 7,050         7.35%    $91,056       $ 6,674          7.33%
                                                   ======         ======                   ======        ======

Non-interest-earning assets....................     2,124                                   1,804
                                                   ------                                  ------

      Total assets.............................   $97,991                                 $92,860
                                                   ======                                  ======

Interest-bearing liabilities:
   Demand deposits.............................   $27,661        $   766         2.77%    $27,863       $   794          2.85%
   Time deposits...............................    44,639          2,454         5.50%     44,924         2,582          5.75%
   Other liabilities(4)........................     3,651            168         4.60%        712            30          4.23%
                                                   ------         ------                   ------        ------
      Total interest-bearing liabilities.......    75,951        $ 3,388         4.46%     73,499       $ 3,406          4.63%
                                                                  ======                                 ======

Non-interest bearing liabilities...............       454                                   2,232
                                                   ------                                  ------
      Total liabilities........................    76,405                                  75,731

Stockholders' equity...........................    21,586                                  17,129
                                                   ------                                  ------
      Total liabilities and stockholders' equity  $97,991                                 $92,860
                                                   ======                                  ======
Net interest income............................                  $ 3,662                                $ 3,268
                                                                  ======                                 ======
Interest rate spread(5)........................                                  2.89%                                   2.70%
                                                                               ======                                  ======

Net yield on interest-earning assets(6)........                                  3.82%                                   3.59%
                                                                               ======                                  ======
Ratio of average interest-earning assets
 to average interest-bearing liabilities.......                                126.22%                                 123.89%
                                                                               ======                                  ======
</TABLE>


--------------
(1)  Average balances include non-accrual loans.
(2)  Includes investment securities, ground rents and FHLB stock.
(3)  Includes  Federal  Funds,  interest-bearing  deposits  in  other  financial
     institutions and interest on 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.

                                       -6-

<PAGE>



Rate/Volume Analysis

<TABLE>
<CAPTION>
                                                             Year Ended September 30,
                                                 -----------------------------------------------
                                                                 1997 vs. 1996
                                                 -----------------------------------------------
                                                                Increase (Decrease)
                                                 -----------------------------------------------
                                                                      Due to
                                                 -----------------------------------------------
                                                                             Rate/
                                                  Volume       Rate         Volume        Net
                                                  ------       ----         ------        ---
                                                                (Dollars in Thousands)
<S>                                               <C>          <C>          <C>         <C>   
Interest income:
   Loans receivable ..................            $  378       $  (36)      $   (3)     $  339
   Investment securities..............               147           28           21         196
   Mortgage-backed securities.........                41            7            2          50
   Other interest earning assets......              (186)         (31)           8        (209)
                                                   -----        -----        -----       -----
      Total interest-earning assets...               380          (32)          28         376


Interest expense:
   Deposits...........................               (22)        (134)           1        (155)
   Other liabilities(1)...............               124            2           11         137
                                                   -----        -----        -----       -----
      Total interest-bearing
       liabilities....................               102         (132)          12         (18)
                                                   -----        -----        -----       -----


Net change in net interest income.....            $  278       $  100       $   16      $  394
                                                   =====        =====        =====       =====
</TABLE>


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

Financial Condition

         Total  assets  increased  by $2.1  million to $98.6  million or 2.2% at
September 30, 1997 from $96.5 million at September 30, 1996, primarily due to an
increase in loans receivable of $2.7 million, federal funds sold of $1.1 million
and other investments of $1.2 million.  These increases were partially offset by
a decrease in securities  purchased under  agreements to resell of $2.0 million.
New loan  originations  exceeded  loan  payments and  repayments by $2.6 million
during the fiscal year,  because of agressive  loan  marketing and  solicitation
even though loan demand decreased during the year.

         The  Company's  deposits  increased  by $2.1  million  or 2.9% to $74.2
million at  September  30, 1997 from $72.1  million at September  30, 1996.  The
increase was a result of a $3.2 million increase in certificates of deposit, due
to an advertising  campaign by management  focusing on two and five year step-up
certificates  of  deposit.  The  increase  was  slightly  off-set by declines in
transaction and passbook accounts.

         The Company's  net worth  decreased by $3.3 million to $19.9 million at
September  30, 1997 from $23.2  million at September  30, 1996.  The decline was
primarily due to the Company repurchasing $3.4 million of its own stock.


                                       -7-

<PAGE>



Results of Operations

Net Income

         Net income  increased by $295,000 for the fiscal 1997 to $754,000  from
$459,000 for fiscal 1996. During fiscal 1996, net income was reduced by $310,000
(net of tax) due to a one-time  FDIC  assessment  being  imposed on the  Savings
Bank. (See "--Non-Interest Expenses").

Net Interest Income

         Net interest income increased by approximately $394,000 to $3.7 million
for fiscal 1997 from $3.3 million for fiscal  1996.  The increase was the result
of an  increase  in the  amount of  average  interest-earning  assets  exceeding
average interest-bearing liabilities (see Rate/Volume Analysis Table on page 7).

         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,  increased in fiscal 1997 to 2.89% from 2.70% for
fiscal 1996.  The increase in interest  rate spread is primarily the result of a
decline in the average cost of certificates of deposit.

Interest Income

         Interest  income on loans increased by  approximately  $339,000 to $5.9
million for fiscal 1997 from $5.6 million for fiscal 1996.  The increase was due
to an increase in the average dollar amount of loans  outstanding in fiscal 1997
over fiscal 1996 of  approximately  $5,062,000.  During fiscal 1997, the average
balance  increased  only slightly over the four quarters but during fiscal 1996,
the average  dollar amount of loans  outstanding  was lower in the first half of
the fiscal year and increased during the second part of the year.

         Interest  and dividend  income on  investment  securities  increased by
$196,000 or 100.0% to $392,000 in fiscal 1997 from $196,000 in fiscal 1996.  The
increase was the result of an increase in the average dollar amount  outstanding
of $2.1  million and an  increase in the average  yield to 7.85% for fiscal 1997
from  6.87%  for  fiscal  1996.  The  increase  in yield  was due in part to the
maturing of lower yielding  investments  and the use of the proceeds to purchase
higher yielding securities.

         Interest income on mortgage backed  securities  increased by $50,000 or
33.6% to $199,000 for fiscal 1997 from  $149,000  for fiscal 1996.  The increase
was due to a slight  increase in average  dollar amount  outstanding of mortgage
backed  securities of $0.6  million,  and by an increase in the average yield to
6.78%  in  fiscal  1997  from  6.47%  in  fiscal  1996.   Management   purchased
approximately  $2.0 million in mortgage backed  securities in the second half of
fiscal  1996.  There were no new  purchases  or  maturities  of mortgage  backed
securities during fiscal 1997.

         Other  interest  income  decreased  by $209,000 or 27.6% to $547,000 in
fiscal 1997 from $756,000 in fiscal 1996. The decline was due to the decrease in
the average  dollar  amount  invested in other  interest-earning  assets of $3.0
million.   Other   interest-earning   assets  consist  of  federal  funds  sold,
interest-bearing  deposits in other banks,  securities purchased under agreement
to resell,  FHLB stock and a loan to  affiliated  corporation.  Most of the $3.0
million decline was due to $2.0 million in securities purchased under agreements
to resell maturing.  The average yield on these investments,  which decreased to
5.89% for fiscal  1997 from  6.14% for  fiscal  1996,  also  contributed  to the
decrease in other interest income.

         The yield on the average balance of  interest-earning  assets increased
to 7.35% for fiscal 1997 from 7.33% for fiscal 1996.


                                       -8-

<PAGE>



Interest on Deposits

         Interest on deposits  decreased  by $155,000 or 4.6% to  $3,220,000  in
fiscal 1997 from $3,375,000 in fiscal 1996. The decline was due to a decrease in
the  average  cost of these  funds to 4.46% in fiscal  1997 from 4.63% in fiscal
1996. In addition,  the Savings Bank  experienced a small decline in the average
dollar  amount of deposits  outstanding  by  $487,000 or .7% to 72.3  million in
fiscal 1997 from $72.8  million in fiscal  1996.  The  decrease is the result of
depositors  withdrawing  interest-earning  deposits  for  investment  in  higher
yielding stocks.

         Interest on short-term borrowings, which was a less significant portion
of interest expense in prior years,  increased $138,000 or 460.0% to $168,000 in
fiscal 1997 from  $30,000 in fiscal  1996.  The  increase was due to the Savings
Bank using FHLB advances as a funding source during fiscal 1997. The use of this
funding  source  increased the average  amount of  borrowings by $2,939,000  and
rates paid by 37 basis points.

         The  weighted  average  cost  paid  on   interest-bearing   liabilities
decreased to 4.46% for fiscal 1997 from 4.63% for fiscal 1996.

Provision for Loan Losses

         The  Savings  Bank's  management  monitors  and  adjusts  its loan loss
reserves based upon its analysis of the loan  portfolio.  Reserves are increased
by a charge to  income,  the amount of which  depends  upon an  analysis  of the
changing  risks  inherent in the Savings  Bank's loan portfolio and the relative
status of the real estate  market and the economy in general.  The Savings  Bank
has   historically   experienced  a  limited  amount  of  loan  charge-offs  and
delinquencies.  However,  there can be no assurance  that  additions to the loan
loss  allowance  will not be required in future  periods,  or that actual losses
will not exceed estimated  amounts.  The Savings Bank's ratio of  non-performing
loans to total assets was .85% and .50% for fiscal 1997 and 1996.  The provision
for loan losses for fiscal 1997 was a $5,000 increase to $60,000 from the fiscal
1996 provision of $55,000.  The Savings Bank  experienced one $5,000  charge-off
during fiscal 1997 and no charge-offs during fiscal 1996.

Non-Interest Income

         Non-interest  income  decreased  $10,000 or 7.2% to $129,000 for fiscal
1997  from  $139,000  for  fiscal  1996.  Fees and  charges  on  loans  remained
relatively unchanged in fiscal 1997 from fiscal 1996.

         Fees on transaction accounts increased by approximately $5,000 or 10.0%
to $55,000 in fiscal 1997 from  $50,000 in fiscal  1996.  The increase is due to
the Savings Bank's aggressively charging service fees on transaction accounts.

         Other  income  decreased  for fiscal 1997 by  approximately  $17,000 or
29.3% to  $41,000  from  $58,000 in fiscal  1996.  The  decrease  was due to the
decline in rental  income when the Savings  Bank's  second  floor tenant did not
renew their lease.

Non-Interest Expenses

         Non-interest  expenses  decreased  $118,000 or 4.5% to  $2,475,000  for
fiscal 1997 from  $2,593,000  for fiscal  1996.  Salaries  and related  expenses
increased  $361,000 or 30.6% to $1,540,000  for fiscal 1997 from  $1,179,000 for
fiscal 1996.  Salaries and related  expenses  increased as a result of increased
compensation  expense due to the adoption of the Employee  Stock  Ownership Plan
("ESOP") and as a result of the Management Stock Bonus Plan ("MSBP").

         Occupancy expense increased $12,000 or 8.1% to $160,000 for fiscal 1997
from  $148,000 is fiscal  1996.  The  increase was due to an increase in monthly
rentals  for  the  Savings  Bank's  branches  and an  increase  in  repairs  and
maintenance.


                                       -9-

<PAGE>



         The Savings  Association  Insurance  Fund  ("SAIF")  deposit  insurance
premiums  decreased  by  approximately  $612,000 to $68,000 for fiscal 1997 from
$680,000 in fiscal 1996.  During fiscal 1996,  legislation  passed that required
the Savings  Bank to pay a one-time  Federal  Deposit  Insurance  assessment  of
approximately  $506,000  which was .657% of insured  deposits at March 31, 1995.
This amount was accrued as of  September  30,  1996.  In  addition,  the Savings
Bank's  premiums  were  reduced  from .23% of  insured  deposits  to .064% as of
January 1, 1997.

         Depreciation of equipment expense decreased $19,000 or 28.4% to $48,000
for fiscal 1997 from $67,000 for fiscal  1996.  The decrease for fiscal 1997 was
the result of certain equipment becoming fully depreciated in fiscal 1996.

         Advertising expense increased by $14,000 or 36.8% to $52,000 for fiscal
1997 from  $38,000  for fiscal  1996.  During  fiscal  1997,  the  Savings  Bank
conducted an aggressive  advertising campaign for loans and step-up certificates
of deposits.

         Data processing costs increased slightly by $1,000 to $77,000 in fiscal
1997 from $76,000 in fiscal 1996.

         Professional services increased $74,000 or 53.6% to $212,000 for fiscal
1997 from  $138,000 for fiscal 1996.  The increase in  professional  services is
primarily the direct result of the stock conversion which resulted in additional
services being required for filings with the Securities and Exchange  Commission
and also with the implementation of the ESOP and MSBP.

         Other expenses increased by approximately  $50,000 or 18.8% to $316,000
for fiscal 1997 from  $266,000 in fiscal  1996.  The increase in fiscal 1997 was
primarily  due to two  robberies  that  occurred in which the Savings  Bank lost
approximately $15,000 after insurance proceeds.

         A great deal of publicity  has been made about the Computer  Year 2000.
It is feared  that many  computers  can only read the last two  digits of a year
and, therefore, would not be able to distinguish between the year 2000 and 1900.
This would cause inaccurate calculation and processing of payments, interest and
delinquencies.  The Savings  Bank uses a third party  service  bureau to process
these  transactions for them. The service bureau of the Savings Bank has advised
the Bank  that the  problem  is being  resolved  and that the year 2000 will not
affect the Bank's  operations.  However,  if the service bureau fails to resolve
this problem,  the Savings Bank could experience  significant delays,  errors or
failures in their daily  operations.  These occurrences could have a significant
adverse  effect  on the  Savings  Bank's  financial  condition  and  results  of
operations.

Provision for Income Taxes

         Provision for income taxes increased by approximately $200,000 or 66.4%
to $501,000  for fiscal 1997 from  $301,000  for fiscal  1996.  The  increase in
fiscal 1997  compared to fiscal 1996 was  primarily the result of an increase in
pretax income.

         In August of 1996 legislation was passed that eliminated the percentage
of taxable  income method of computing the Savings Bank's bad debt deduction and
requires  the  recapture  over a six year  period of the  excess  balance in the
reserve for bad debts above the December 31, 1987 reserve  balance.  This amount
is  approximately  $339,000 at  September  30, 1996 with an income tax effect of
approximately  $131,000.  The  legislation  will not impact the  Savings  Bank's
provisions  for income  taxes,  nor  materially  impact the Savings  Bank's cash
flows.

Liquidity and Capital Resources

         The  Company is  required  by OTS  regulations  to  maintain,  for each
calendar month, a daily average balance of cash and eligible liquid  investments
of not less than 5% of the average daily balance of its net withdrawable savings
and borrowings  (due in one year or less) during the preceding  calendar  month.
This liquidity requirement

                                      -10-

<PAGE>



may be changed from time to time by the OTS to any amount within the range of 4%
to 10%.  The  Savings  Bank's  average  liquidity  ratio  was 9.79% and 10.5% at
September 30, 1997 and 1996, respectively.

         The Company's  sources of liquidity have  historically  included income
earned from operations, principal and interest payments and prepayments on loans
and  securities,  maturities  of  investment  securities,  deposit  inflows  and
periodically borrowings from the FHLB of Atlanta.

         Net cash provided by operating activities was $724,000 and $980,000 for
fiscal 1997 and 1996.  Cash flows from  operations in fiscal 1997 decreased from
fiscal 1996  because loan fees  collected  in cash but  deferred  for  financial
statement purposes  decreased  significantly as loan originations  declined.  In
addition,  there  was a  decline  in the  changes  in taxes  payable  and  other
liabilities.  The  decreases  were off-set by an increase in earnings for fiscal
1997 and non-cash  compensation  under stock-based  benefit plans established in
fiscal 1997.

         Net cash used by  investment  activities  for fiscal 1997  totaled $1.6
million, a decrease from fiscal 1996 of $11.8 million. The decrease in cash used
was due to a decrease in net loan  originations of $2.9 million,  a reduction of
$4.0 million in securities  purchased under agreement to resell,  and reductions
of $2.6 million in net purchases of mortgage  backed  securities and $700,000 in
net purchases of investment securities.

         The Company  primarily  originates loans for its own portfolio and does
not sell  loans to  secondary  market  participants  such as  Federal  Home Loan
Mortgage  Corporation  ("FHLMC") and the Federal National  Mortgage  Association
("FNMA"), but does occasionally sell loans to other financial institutions.  The
Savings Bank may in the future sell loans to secondary market  participants.  In
fiscal  1997,  the Savings  Bank did not sell new loan  originations  due to the
decline  in loan  demand.  Management  decided  to retain  all new loans for the
Savings Bank's portfolio.

         Net cash provided by financing  activities for fiscal 1997 totaled $1.6
million.  This is a result of a net  increase in deposits  of $2.0  million,  an
increase in FHLB advances of $4.0 million  offset by stock  repurchases  of $3.4
million,  stock  purchased  for  the  MSBP of  $900,000  and  dividends  paid of
$300,000.

         Management  believes it has ample cash flows and  liquidity to meet its
loan commitments of $2.8 million at September 30, 1997. The Savings Bank has 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.

         The Savings Bank is subject to federal  regulations that impose certain
minimum  capital  requirements.  At  September  30,  1997,  the Savings Bank had
risk-based capital of $15.6 million compared to its requirement of $3.8 million,
an excess of $11.8 million. Each of the Savings Bank's tangible and core capital
was $15.3 million at September 30, 1997,  compared to the  requirements  of $1.4
million for tangible  capital and $2.9 million for core capital.  See Note 13 to
the Consolidated Financial Statements.

         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.  Management  monitors  projected
liquidity needs and determines the level desirable, based in part on the Savings
Bank's  commitments  to make loans and  management's  assessment  of the Savings
Bank's ability to generate funds.

                                      -11-

<PAGE>
                            Anderson Associates, LLP

                          Certified Public Accountants
                                7621 Fitch Lane
                           Baltimore, Maryland 21236
                                  410-822-8050



                          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, 1997 and 1996,
and the related  consolidated  statements of operations,  retained  earnings and
cash flows for each of the two years in the two year period ended  September 30,
1997. 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, 1997 and 1996, and the
consolidated  results of its operations and cash flows for each of the two years
in the two year period ended  September 30, 1997, in conformity  with  generally
accepted accounting principles.


                                             /s/Anderson Associates LLP

November 24, 1997
Baltimore, Maryland


                                      -12-
<PAGE>
                   WHG BANCSHARES CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                              Lutherville, Maryland
                              ---------------------

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>

                                                                                             September 30,
                                                                                  ----------------------------------
                                                                                       1997                  1996
                                                                                  -------------         ------------
<S>                                                                                <C>                   <C>        
        Assets
        ------
Cash                                                                               $ 1,003,528           $ 1,583,482
Interest bearing deposits in other banks                                             3,898,946             4,076,776
Federal funds sold                                                                   3,481,833             2,427,851
Securities purchased under agreements to
 resell (Note 2)                                                                        -                  2,000,000
Other investments (Note 3)                                                           3,750,000             2,500,000
Mortgage backed securities (Note 4)                                                  2,845,210             3,021,998
Loans receivable - net (Note 5)                                                     78,450,370            75,736,786
Accrued interest receivable - loans                                                    374,561               373,792
                            - investments                                               69,230                62,755
                            - mortgage backed
                               securities                                               15,998                17,030
Premises and equipment - net (Note 8)                                                  721,932               734,443
Federal Home Loan Bank of Atlanta stock,
 at cost (Note 6)                                                                      753,200               682,800
Investment in and loans to affiliated
 corporation (Note 7)                                                                2,925,000             2,825,000
Deferred income taxes (Note 14)                                                        116,394               278,787
Other assets                                                                           150,517               206,614
                                                                                    ----------            ----------

Total assets                                                                       $98,556,719           $96,528,114
                                                                                    ==========            ==========

     Liabilities and Stockholders' Equity
     ------------------------------------

Liabilities
-----------
   Deposits (Note 9)                                                               $74,186,112           $72,100,572
   Federal Home Loan Bank advances (Note 10)                                         4,000,000                -
   Advance payments by borrowers for taxes
    and insurance                                                                      330,671               322,610
   Income taxes payable (Note 14)                                                       64,284               237,456
   Other liabilities                                                                   146,519               621,419
                                                                                    ----------            ----------
Total liabilities                                                                   78,727,586            73,282,057

Commitments and contingencies (Notes 5, 8 and 11)

Stockholders' Equity (Notes 12 and 13)
--------------------
   Common stock .10 par value; authorized 1,620,062
    shares; issued and outstanding 1,392,415 shares in
    1997 and 1,620,062 shares in 1996                                                  139,241               162,006
   Additional paid-in capital                                                       11,390,312            15,403,857
   Retained earnings (substantially restricted)                                      9,381,773             8,911,434
                                                                                    ----------            ----------
                                                                                    20,911,326            24,477,297
   Employee Stock Ownership Plan                                                    (1,082,193)           (1,231,240)
                                                                                    ----------            ----------
Total stockholders' equity                                                          19,829,133            23,246,057
                                                                                    ----------            ----------

Total liabilities and stockholders' equity                                         $98,556,719           $96,528,114
                                                                                    ==========            ==========

</TABLE>

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

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

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                                       Years Ended September 30,
                                                                                     ------------------------------
                                                                                          1997               1996
                                                                                     -----------         ----------

<S>                              <C>                                                  <C>                <C>       
Interest and fees on loans (Note 5)                                                   $5,911,569         $5,572,411
Interest and dividends on investment securities                                          391,584            196,132
Interest on mortgage backed securities                                                   199,192            149,050
Other interest income                                                                    547,182            756,069
                                                                                       ---------          ---------

Total interest income                                                                  7,049,527          6,673,662

Interest on deposits (Note 9)                                                          3,219,849          3,375,289
Interest on short-term borrowings                                                        167,538             30,138
                                                                                       ---------          ---------
Total interest expense                                                                 3,387,387          3,405,427
                                                                                       ---------          ---------

Net interest income                                                                    3,662,140          3,268,235
Provision for loan losses (Note 5)                                                        60,644             55,161
                                                                                       ---------          ---------
Net interest income after provision for loan losses                                    3,601,496          3,213,074

Non-Interest Income
   Fees and charges on loans                                                              32,173             30,809
   Fees on transaction accounts                                                           55,194             50,222
   Other income                                                                           41,167             57,786
                                                                                       ---------          ---------
Total non-interest income                                                                128,534            138,817

Non-Interest Expenses
   Salaries and related expenses                                                       1,540,065          1,179,072
   Occupancy                                                                             160,616            148,241
   SAIF deposit insurance premium                                                         67,822            679,625
   Depreciation of equipment                                                              48,473             67,379
   Advertising                                                                            52,743             38,452
   Data processing costs                                                                  77,049             75,700
   Professional services                                                                 211,848            138,295
   Other expenses                                                                        316,433            265,994
                                                                                       ---------          ---------
Total non-interest expenses                                                            2,475,049          2,592,758
                                                                                       ---------          ---------

Income before tax provision                                                            1,254,981            759,133

Provision for income taxes (Note 14)                                                     500,834            300,516
                                                                                       ---------          ---------

Net income                                                                            $  754,147         $  458,617
                                                                                       =========          =========

Earnings per share                                                                    $      .53         $   N/A
                                                                                       =========          =========

</TABLE>


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

                                      -14-


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

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
                   FOR YEARS ENDED SEPTEMBER 30, 1997 AND 1996
                   -------------------------------------------
<TABLE>
<CAPTION>

                                                                                    Employee  
                                                    Additional                        Stock           Total
                                        Common       Paid-In         Retained       Ownership     Stockholders'
                                         Stock       Capital         Earnings          Plan           Equity
<S>                               <C>             <C>             <C>             <C>             <C>         
Balance - September 30, 1995      $       --      $       --      $  8,452,817    $       --      $  8,452,817

Issuance of common stock               162,006      15,398,998            --              --        15,561,004

Funds borrowed to purchase
 stock by Employee Stock
 Ownership Plan                           --              --              --        (1,296,040)     (1,296,040)

Compensation under stock-based
 benefit plan                             --             4,859            --            64,800          69,659

Net income                                --              --           458,617            --           458,617
                                  ------------    ------------    ------------    ------------    ------------

Balance - September 30, 1996           162,006      15,403,857       8,911,434      (1,231,240)     23,246,057

Purchase of 227,647 shares of
 common stock                          (22,765)     (3,347,408)           --              --        (3,370,173)

Compensation under Stock-Based
 Benefit Plan                             --            64,572            --           149,047         213,619

Deferred compensation -
 Management Stock Bonus Plan              --          (882,927)           --              --          (882,917)

Compensation under Stock
 Bonus Plan                               --           152,218            --              --           152,218

Dividends paid ($.05 per share)           --              --          (283,808)           --          (283,808)
Net income                                --              --           754,147            --           754,147
                                  ------------    ------------    ------------    ------------    ------------

Balance - September 30, 1997      $    139,241    $ 11,390,312    $  9,381,773    $ (1,082,193)   $ 19,829,133
                                  ============    ============    ============    ============    ============
</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 CASH FLOWS
                      -------------------------------------

<TABLE>
<CAPTION>
                                                                 Years Ended September 30,
                                                                ----------------------------
                                                                      1997           1996
                                                                ------------    ------------
<S>                                                             <C>             <C>         
Operating Activities
   Net income                                                   $    754,147    $    458,617
   Adjustments to Reconcile Net Income to Net
    Cash Provided by Operating Activities
       Amortization of discount of mortgage backed securities           (826)           (592)
       Amortization of deferred loan fees                           (170,241)       (195,680)
       Loan fees deferred                                            105,511         275,956
       Decrease in discount on loans purchased                       (20,560)        (26,579)
       Other amortization                                               --           (57,800)
       Provision for loan losses                                      60,644          55,161
       Non-cash compensation under stock-based benefit plans         365,837          69,659
       Increase in accrued interest receivable                        (6,212)        (77,411)
       Provision for depreciation                                     66,782          80,984
       Loans sold                                                       --           560,000
       Loans originated for sale                                        --          (560,000)
       Decrease (increase) in deferred income taxes                  162,393        (274,939)
       Decrease (increase) in other assets                            56,097         (44,885)
       Decrease in accrued interest payable                           (1,580)         (2,925)
       (Decrease) increase in income taxes payable                  (173,172)        216,491
       (Decrease) increase in other liabilities                     (474,900)        504,097
                                                                ------------    ------------

            Net cash provided by operating activities                723,920         980,154


Cash Flows from Investment Activities
   Proceeds from maturing interest-bearing deposits                  783,000       1,076,000
   Purchases of interest-bearing deposits                           (437,679)       (783,000)
   Purchase of mortgage backed securities                               --        (2,614,902)
   Decrease (increase) in securities purchased under
    agreement to resell                                            2,000,000      (2,000,000)
   Proceeds from maturing other investments                        2,000,000       6,525,000
   Purchase of other investments                                  (3,250,000)     (8,469,375)
   Principal collected on mortgage backed securities                 177,614         133,542
   Net increase in shorter term loans                               (119,079)       (324,572)
   Longer term loans originated or acquired                      (11,963,341)    (21,592,489)
   Principal collected on longer term loans                        9,393,482      16,099,672
   Investment in premises and equipment                              (54,271)         (7,801)
   Purchase of stock in Federal Home Loan Bank of Atlanta            (70,400)         (3,000)
   (Increase) decrease on investment in and
    loans to joint ventures                                         (100,000)        150,000
                                                                ------------    ------------

            Net cash used by investment activities                (1,640,674)    (11,810,925)

</TABLE>


                                      -16-

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                 Years Ended September 30,
                                                             ------------------------------
                                                                  1997            1996
                                                             -------------   --------------
<S>                                                          <C>             <C>          
Cash Flows from Financing Activities
------------------------------------
   Net decrease in demand deposits, money
    market, passbook accounts and advances by
    borrowers for taxes and insurance                        $ (1,130,148)   $   (328,104)
   Net increase (decrease) in certificates of deposit           3,225,329      (3,681,261)
   Federal Home Loan Bank advances                              4,000,000            --
   Sale of common stock                                              --        15,561,004
   Employee Stock Ownership Plan                                     --        (1,296,040)
   Stock repurchase                                            (3,370,173)           --
   Stock purchased for Management Stock Bonus Plan               (882,927)           --
   Dividends                                                     (283,808)           --
                                                             ------------    ------------

            Net cash provided by financing activities           1,558,273      10,255,599
                                                             ------------    ------------

Increase (decrease) in cash and cash equivalents                  641,519        (575,172)
Cash and cash equivalents at beginning of year                  7,305,109       7,880,281
                                                             ------------    ------------

Cash and cash equivalents at end of year                     $  7,946,628    $  7,305,109
                                                             ============    ============

The following is a Summary of Cash and Cash Equivalents:
--------------------------------------------------------

   Cash                                                      $  1,003,528    $  1,583,482
   Interest bearing deposits in other banks                     3,898,946       4,076,776
   Federal funds sold                                           3,481,833       2,427,851
                                                             ------------    ------------
   Balance of cash items reflected on
    Statement of Financial condition                            8,384,307       8,088,109

       Less - certificates  of deposit with original 
               maturities of more than
               three months that are included
               in interest bearing deposits in other banks        437,679         783,000
                                                             ------------    ------------

Cash and cash equivalents reflected on the
 Statement of Cash Flows                                     $  7,946,628    $  7,305,109
                                                             ============    ============

Supplemental Disclosure of Cash Flow Information:
-------------------------------------------------
   Cash paid during the year for:

       Interest                                              $  3,388,967    $  3,408,352
                                                             ============    ============

       Taxes                                                 $    420,714    $    352,466
                                                             ============    ============
</TABLE>

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

                                      -17-


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                               SEPTEMBER 30, 1997
                               ------------------


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  the  Bank's  subsidiary,   Mapleleaf  Mortgage  Corporation.  All
          intercompany  accounts and  transactions  have been  eliminated in the
          accompanying consolidated financial statements.

     B.   Business - The Bank's primary  business  activity 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 G & H 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  and Mortgage Backed  Securities - Non-equity  investments
          and  mortgage  backed   securities  will  be  held  to  maturity  and,
          accordingly,  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,  since  management  had the ability and intention to
          hold them to maturity.

     F.   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.

                                      -18-








<PAGE>




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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

     F.   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, 1997
          and 1996.

          The Savings Bank  services  loans for others and pays the  participant
          its share of Savings 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.

     G.   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.

          For the fiscal year ended September 30, 1996, the Bank implemented the
          provisions of Statement of Financial Accounting Standards ("SFAS") No.
          114,  as  amended  by  SFAS  No.  118.  The  Statement  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.
          The impact of  adoption of SFAS No. 114 and as amended by SFAS No. 118
          was not material.

                                      -19-




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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

     G.   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.

     H.   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 in accordance  with  Statement of
          Financial  Accounting  Standards ("SFAS") No. 121, "Accounting for the
          Impairment  of  Long-Lived  Assets  and for  Long-Lived  Assets  to be
          Disposed of".  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.  Sale of
          the real  estate  acquired  through  foreclosure  is expected to occur
          within the next twelve months.

     I.   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.

     J.   Investment In and Loans To Affiliated Corporation - Investments in and
          loans to  affiliated  corporation  represents  common  stock owned and
          advances  to a company  formed  for the  purpose  of  making  consumer
          installment loans. The Bank has a 33-1/3% interest in this company and
          its  proportionate  share of income or losses has not been recorded on
          the  equity  method,  since  such  amounts  are  not  material  to the
          accompanying consolidated financial statements.  The Bank is using the
          cost method of accounting to record this investment. (See Note 7)

                                      -20-





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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

     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 - In October 1995, FASB issued SFAS No. 123,
          "Accounting  for  Stock-Based  Compensation."  SFAS No. 123  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. (See Note 12)

     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.

     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 a maturity
          date less than ninety days.

     P.   Earnings  Per Share - Earnings  per share for  September  30, 1997 has
          been computed  based on 1,434,660  weighted  average  shares of common
          stock and common  stock  equivalents  outstanding.  Earnings per share
          data is not presented for the year ended September 30, 1996, since the
          Bank converted to stock form in March 1996, and such information would
          not be meaningful.

     Q.   Reclassification - Certain prior years' amounts have been reclassified
          to conform to the current year's method of presentation.

                                      -21-






<PAGE>



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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 2 - Securities Purchased Under Agreements to Resell
         -----------------------------------------------

      The Company  enters into  purchases of mortgage  backed  securities  under
agreements to resell  substantially  identical  securities.  As of September 30,
1997, the Company had no outstanding agreements to resell.  Securities purchased
under  agreements  to resell at September  30, 1996  consist of mortgage  backed
securities.

      The amounts advanced under these agreements represent short-term loans and
are  reflected as a receivable  in the  statement  of financial  condition.  The
securities  underlying  the agreements  are  book-entry  securities.  During the
period,  the securities  were delivered by appropriate  entry into a third-party
custodian's  account  designated  by  the  Company  under  a  written  custodial
agreement that explicitly  recognizes the Company's  interest in the securities.
At September 30, 1996, these  agreements  matured within 90 days and no material
amount of agreements to resell  securities  purchased was  outstanding  with any
individual  dealer.  Securities  purchased  under  agreements to resell averaged
approximately  $2,000,000 and $2,400,000 during the fiscal years ended September
30, 1997 and 1996,  respectively,  and the maximum  amounts  outstanding  at any
month-end  during  the  fiscal  years  ended  September  30,  1997 and 1996 were
$2,000,000 and $6,000,000, respectively.

Note 3 - Other Investments
         -----------------

      The amortized cost and fair values of other investments are as follows:
<TABLE>
<CAPTION>


                                                  September 30, 1997
                                --------------------------------------------------------------------
                                                      Gross              Gross
                                 Amortized          Unrealized         Unrealized           Fair
                                   Cost                Gain              Losses             Value
                                -----------        ------------        ----------         ----------
<S>                              <C>                <C>                <C>                <C>       
Federal National
 Mortgage Association
 Bonds                           $  500,000         $   -              $    8,000         $  492,000
Federal Home Loan
 Bank Bonds                       2,250,000              3,000             21,850          2,231,150
Federal Home Loan
 Mortgage Corporation
 Bonds                            1,000,000              1,000              -              1,001,000
                                  ---------          ---------          ---------          ---------

                                 $3,750,000         $    4,000         $   29,850         $3,724,150
                                  =========          =========          =========          =========

</TABLE>

                                      -22-










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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 3 - Other Investments - Continued
         -----------------
<TABLE>
<CAPTION>

                                                  September 30, 1996
                                  ------------------------------------------------------------------
                                                      Gross              Gross
                                  Amortized          Unrealized         Unrealized           Fair
                                   Cost                Gain              Losses             Value
                                  ---------          ---------          ---------          ---------
<S>                              <C>                <C>                <C>                <C>       
Federal National
 Mortgage Association
 Bonds                           $1,500,000         $   -              $   66,875         $1,433,125
Federal Home Loan
 Bank Bonds                       1,000,000             -                  48,125            951,875
                                  ---------          ---------          ---------          ---------

                                 $2,500,000         $   -              $  115,000         $2,385,000
                                  =========          =========          =========          =========
</TABLE>

      No gains or losses were realized during the years ended September 30, 1997
or 1996.

      The scheduled maturities of other investments at September 30, 1997:

                                       Amortized            Fair
                                          Cost              Value
                                        ---------          ---------
Due after five years through
 ten years                             $2,250,000         $2,246,000
Due after ten years                     1,500,000          1,478,150
                                        ---------          ---------

                                       $3,750,000         $3,724,150
                                        =========          =========

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

      Mortgage backed securities at September 30, consist of the following:


                                            1997               1996
                                         ----------         ----------
GNMA participating certificates          $2,246,061         $2,405,906
FNMA participating certifcates              605,991            623,760
                                          ---------          ---------
                                          2,852,052          3,029,666
   Net - unamortized discounts               (6,842)            (7,668)
                                          ---------          ---------

                                         $2,845,210         $3,021,998
                                          =========          =========

                                      -23-










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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------

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

      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, 1997
                                         -----------------------------------------------------------------  

<S>                                     <C>                <C>                <C>               <C>       
GNMA participating certificates         $2,239,384         $   16,551         $    -            $2,255,935
FNMA participating certifcates             605,826              -                 16,863           588,963
                                         ---------          ---------          ---------         ---------

                                        $2,845,210         $   16,551         $   16,863        $2,844,898
                                         =========          =========          =========         =========
</TABLE>
<TABLE>
<CAPTION>
                                                        September 30, 1996
                                         -----------------------------------------------------------------  

<S>                                     <C>                <C>                <C>                <C>       
GNMA participating certificates         $2,398,423         $    1,754         $  104,736        $2,295,441
FNMA participating certifcates             623,575             -                  34,804           588,771
                                         ---------          ---------          ---------         ---------

                                        $3,021,998         $    1,754         $  139,540        $2,884,212
                                         =========           ========          =========         =========
</TABLE>

      No gains or losses were realized during the years ended September 30, 1997
and 1996.

Note 5 - Loans Receivable
         ----------------
  
      Loans receivable at September 30, 1997 and 1996 consist of the following:
<TABLE>
<CAPTION> 
                                                                         1997                  1996
                                                                         ----                  ----
<S>                                                                   <C>                   <C>        
One to four family residential mortgage loans                         $71,185,272           $69,212,623
Multifamily residential mortgage loans                                     98,855               286,950
Commercial mortgage loans                                               3,292,479             3,026,330
Construction loans                                                      1,462,000             3,277,500
Lines of credit                                                         1,036,125               475,000
Land/lot loans                                                          2,126,751               773,730
Home improvement loans                                                      6,632                 8,586
Share loans                                                               299,795               425,783
Commercial loans secured by lease
 finance receivables                                                    1,075,147               828,126
                                                                       ----------            ----------
                                                                       80,583,056            78,314,628

      Less - undisbursed portion of loans
              in process                                               (1,198,222)           (1,613,088)
           - unamortized discount on loans
              purchased                                                  (146,514)             (167,074)
           - deferred loan origination fees                              (537,950)             (602,680)
           - allowance for loan losses                                   (250,000)             (195,000)
                                                                       ----------            ----------

                                                                      $78,450,370           $75,736,786
                                                                       ==========            ==========
</TABLE>
                                      -24-


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

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

                                               September 30,
                                           ------------------------
                                             1997            1996
                                             ----            ----
      Beginning balance                    $195,000        $139,839
      Provision for loan losses              60,644          55,161
      Charge-offs                            (5,644)            -
                                            -------        --------

      Balance end                          $250,000        $195,000
                                            =======         =======

      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 90% 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.

     Impaired loans as defined by SFAS No. 114 are summarized as follows for the
year ended September 30, 1997.

Recorded investment                                       $76,036
Allowance for loan losses                                    -

      Impaired  loans as defined by SFAS No. 114 for which  interest  income has
been reduced are as follows for the year ended September 30, 1997.

Interest income that would have been recorded             $ 7,095
Interest income recognized                                   -
                                                           ------
    Total income not recognized                           $ 7,095
                                                           ======

      There were no impaired  loans as defined by SFAS No. 114 at September  30,
1996.  There was no interest  income  recognized  on impaired  loans during that
period.

                                      -25-



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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      The Bank was not committed to fund additional amounts on these loans.

      Non-accrual  loans that are not subject to SFAS No. 114 for which interest
has been reduced  totaled  approximately  $761,249 and $480,345 at September 30,
1997 and 1996.

      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:

                                              1997            1996
                                              ----            ----
Interest income that would have
 been recognized                           $ 93,191        $ 57,085
Interest income recognized                   53,151          25,073
                                            -------         -------

   Interest income not recognized          $ 40,040        $ 32,012
                                            =======         =======

      Loans  outstanding  to officers and directors and their  affiliates of the
Bank at September 30, 1997 and 1996:
<TABLE>
<CAPTION>
     Balance At                                         Balance At                                         Balance At
      September          Loans         Principal        September            Loans        Principal        September
      30, 1997           Made          Repayment         30, 1996            Made         Repayment         30, 1995
     ----------          -----         ---------        ----------           -----        ---------        ---------
<S>  <C>                <C>            <C>              <C>                <C>            <C>              <C>       
     $1,377,658         $127,500       $ 29,545         $1,279,703         $186,472       $ 40,343         $1,133,574
</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:

                                                1997                1996
                                                ----                ----
Mortgage loan portfolios serviced for:
   Other investors                          $ 8,601,204         $10,650,449
                                             ==========          ==========

      Custodial Escrow balances maintained in connection with the foregoing loan
servicings  were  approximately  $44,019 and $48,845 at  September  30, 1997 and
1996.

                                      -26-













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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      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,
------------------------------------      ------------------------------
                                            1997                1996
                                            ----                ----
   Standby letters of credit              $   -               $   13,460
   Loan commitments                        2,809,700           1,071,600

      Standby letters of credit are conditional  commitments  issued by the Bank
guaranteeing  performance  by  a  customer  to  various  municipalities.   These
guarantees are issued primarily to support performance arrangements,  limited to
real estate transactions.

      Mortgage  loan  commitments  not reflected in the  accompanying  financial
statements at September 30, 1997 are $1,000,000  for  adjustable  rate mortgages
ranging  from  7.00% to 10.00%  and fixed  rate  mortgages  totaling  $1,809,700
ranging from 7.00% to 9.05%.

      Mortgage  loan  commitments  not reflected in the  accompanying  financial
statements at September 30, 1996 are $325,000 for an adjustable rate mortgage at
10.75% and fixed rate mortgages totaling $746,600 ranging from 7.50% to 8.00%.

      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, 1997 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
         -------------------------------------------------

      Bankers  Affiliate,  Inc.,  formerly "Cash,  Inc.", was organized in April
1983 as a service  corporation.  It is  equally  owned by the Bank and two other
thrift  institutions  and  makes  consumer  loans to their  customers.  Loans to
Bankers Affiliate,  Inc. are due on demand and bear an adjustable interest rate.
The Bank has a 33-1/3% interest in this company and its  proportionate  share of
income or losses has not been recorded on the equity method,  since such amounts
are not material to the accompanying consolidated financial statements. The Bank
is using the cost method of accounting to record this investment.

                                      -27-



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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      The Bank's investment in and loans to an affiliated corporation, Bankers
Affiliate, Inc. (See Note 1) are summarized as follows:

                                            September 30,
                                     -----------------------------
                                        1997               1996
                                        ----               ----
Capital stock, at cost               $   25,000         $   25,000
Loan payable                          2,900,000          2,800,000
                                      ---------          ---------

                                     $2,925,000         $2,825,000
                                      =========          =========

      Summarized financial  information as of June 30, 1997 and 1996 and for the
years ended June 30, 1997 and 1996 for Bankers Affiliate, Inc. are as follows:


                                                 1997                1996
                                                 ----                ----
Cash                                          $  191,991         $  233,189
Finance receivables                            8,319,201          8,035,536
Real estate acquired through foreclosure         101,851            117,729
Other assets                                      46,729            113,667
                                               ---------          ---------

                                              $8,659,772         $8,500,121
                                               =========          =========

Loans payable                                 $8,550,000         $8,400,000
Other liabilities                                 27,670             34,162
                                               ---------          ---------
                                               8,577,670          8,434,162
Stockholders' equity                              82,102             65,959
                                               ---------          ---------

                                              $8,659,772         $8,500,121
                                               =========          =========

                                      -28-


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

                                                1997               1996
                                                ----               ----
Income and Expense

Income:
   Interest                                  $  830,949         $  897,767
   Other income                                  37,865             33,866
                                              ---------          ---------
                                                868,814            931,633
Expenses:
   Interest                                     588,769            686,482
   Provision for losses on loans                 67,788             40,392
   Salaries and related expenses                143,175            135,909
   Other expenses                                60,575             63,101
                                              ---------          ---------
                                                860,307            925,884
                                              ---------          ---------

Income before income tax provision                8,507              5,749

Income tax provision (benefit)                   (7,636)             3,050
                                              ---------          ---------

Net income                                       16,143              2,699
Retained earnings (deficit) at beginning
 of fiscal year                                  (9,041)           (11,740)
                                              ---------          ---------

Retained earnings (deficit) at end of
 fiscal year                                 $    7,102         $   (9,041)
                                              =========          =========

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

      Premises and  equipment at September  30, 1997 and 1996 are  summarized by
major classification as follows:
<TABLE>
<CAPTION>

                                                                                    Useful Life
                                                1997                  1996            in Years
                                                ----                  ----           ---------
<S>                                         <C>                   <C>                     
Land                                        $  224,056            $  224,056             -
Office buildings                               602,549               602,549            5-50
Furniture, fixtures and
 equipment                                     823,253               769,652            3-20
                                             ---------             ---------
                                             1,649,858             1,596,257
   Accumulated depreciation                   (927,926)             (861,814)
                                             ---------             ---------
                                            $  721,932            $  734,443
                                             =========             =========
</TABLE>

      The provision for  depreciation  for the periods ended  September 30, 1997
and 1996 was $66,782 and $80,984, respectively.


                                      -29-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 8 - Premises and Equipment - Continued
         ----------------------
 
      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, 1997 and 1996 was $62,262 and $54,964,  respectively. At September 30, 1997,
the minimum rental commitments under noncancellable leases are as follows:

      Year Ended September 30,                                      Total
      ------------------------                                      -----
             1998                                                  $ 55,818
             1999                                                    55,818
             2000                                                    48,218
             2001                                                    34,129
             2002                                                    29,150
                                                                    -------
                                                                   $223,133
                                                                    =======
Note 9 - Deposits
         --------

      Deposits are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                            1997                                      1996
                                                ---------------------------------          -----------------------------------
                                                                       Weighted-                               Weighted-
Type of Account                                    Amount            Average Rate             Amount          Average Rate
---------------                                    ------            ------------             ------          ----------------
<S>                                             <C>                      <C>               <C>                         <C>  
NOW and money market accounts
 including non-interest bearing
 deposits of $352,330 in 1997
 and $516,213 in 1996                           $11,628,286              1.22%             $12,338,661                 2.59%
Passbook savings                                 15,208,888              3.05%              15,636,722                 3.04%
Certificates of deposit                          47,348,677              5.74%              44,123,348                 5.72%
                                                 ----------                                 ----------
                                                 74,185,851                                 72,098,731
Accrued interest                                        261                                      1,841
                                                 ----------                                 ----------

                                                $74,186,112                                $72,100,572
                                                 ==========                                 ==========
</TABLE>

                   The  aggregate  amount  of  certificates  of  deposit  with a
minimum denomination of $100,000 was approximately  $3,455,658 and $3,394,313 at
September  30, 1997 and 1996.  Deposits in excess of $100,000 are not insured by
the Savings Association Insurance Fund.
<TABLE>
<CAPTION>
                                                                        1997                  1996
                                                                     -----------           -------
                                                                       Amount                Amount
                                                                       ------                ------
<S>                                                                  <C>                   <C>        
Certificates accounts mature as follows:
   One year or less                                                  $28,718,790           $25,337,111
   More than 1 year through 2 years                                    9,654,831            10,948,754
   More than 2 years through
    3 years                                                            3,518,357             4,561,182
   More than 3 years                                                   5,456,699             3,276,301
                                                                      ----------            ----------
                                                                     $47,348,677           $44,123,348
                                                                      ==========            ==========
</TABLE>

                                      -30-


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

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

                                                 1997                 1996
                                                 ----                 ----
Certificates                                  $2,454,305           $2,581,651
NOW and money market                             292,045              315,593
Passbook                                         473,499              478,045
                                               ---------            ---------
                                              $3,219,849           $3,375,289
                                               =========            =========

                   Deposit  Insurance Reform.  Currently,  there are two deposit
insurance  funds  maintained  by  the  Federal  Deposit  Insurance   Corporation
("FDIC"),  the Bank Insurance Fund ("BIF") and the Savings Association Insurance
Fund ("SAIF").  The Bank's deposits are insured by SAIF.  Legislation was passed
concerning the Deposit Insurance Reform that required the Bank to pay a one-time
assessment  of  .657%  of  insured   deposits  at  March  31,  1995,  which  was
approximately  $506,000 and was accrued at September  30, 1996.  The Bank's SAIF
deposit insurance  premiums were reduced to .064% of insured deposits  beginning
January 1, 1997 from the current rate of .23% of insured deposits.
BIF and SAIF may be merged on January 1, 1999.

Note 10- Federal Home Loan Bank Advances
         -------------------------------

                   Federal Home Loan Bank advances at September 30, 1997 consist
of short term fixed rate advances  bearing  interest at 5.72% to 6.19% per annum
and due within one year.

                   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.

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, 1997 and 1996.  The costs of funding this plan were $18,534 and
$37,694 for the years ended September 30, 1997 and 1996, respectively.

                                      -31-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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


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

                                                 1997         1996
                                                 ----         ----
                                           
                Service cost                   $ 21,599    $ 32,075
                Interest cost                    44,363      48,995
                Actual return on plan assets    (44,093)    (39,168)
                Other components                 (3,335)     (4,208)
                                               --------    --------

                Net period pension costs       $ 18,534    $ 37,694
                                               ========    ========

                   The  following  table sets forth the plan's  funded status at
September 30:
<TABLE>
<CAPTION>
                                                                      1997       1996
                                                                      ----       ----
<S>                                                               <C>          <C>      
Accumulated Benefit Obligation
------------------------------
   Vested                                                         $ 444,441    $ 465,738
   Non-vested                                                         3,133        4,200
                                                                  ---------    ---------
                                                                
      Total                                                       $ 447,574    $ 469,038
                                                                  =========    =========
                                                                
   Projected benefit obligation                                   $ 701,623    $ 677,176
   Fair value of plan assets as of September 30                     664,051      657,912
                                                                  ---------    ---------
   Plan assets in deficit of projected                          
    benefit obligation                                              (37,572)     (19,264)
   Unrecognized net loss                                            129,729       89,765
   Unrecognized net transition obligation                             2,227        2,429
                                                                  ---------    ---------
                                                                
      Prepaid pension cost                                        $  94,384    $  72,930
                                                                  =========    =========
                                                                
Reconciliation of Projected Benefit Obligation  
----------------------------------------------
   Projected benefit obligation beginning of year                 $ 677,176    $ 657,849
   Interest cost for the fiscal year                                 44,363       48,995
   Service cost for the fiscal year                                  21,599       32,075
   Benefit payments for the fiscal year                                --         (2,419)
   Actuarial (gain) loss for the fiscal year                         69,301      (59,324)
                                                                  ---------    ---------
   Projected benefit obligation as of September 30
    before settlement                                               812,439      677,176
   Effect of settlement                                            (110,816)        --
                                                                  ---------    ---------
   Projected benefit obligation as of Septemeber
    30 after settlement                                           $ 701,623    $ 677,176
                                                                  =========    =========

</TABLE>

                                      -32-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

                   The  following   interest  rate  assumptions  were  used  for
September 30:

                                                      1997       1996
                                                      ----       ----
                   Weighted-average discount rate     7.25%      7.50%
                   Long term rate of return           8.00%      8.00%
                   Rate of compensation increase      4.00%      4.50%

Note 12- Common Stock and Stock Benefit Plans

                   On March  29,  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,  par value $.10 per share (the "Common  Stock") for gross proceeds
of  $16,200,620  and net  proceeds  of  $15,561,004,  of  which  $6,484,461  was
contributed to the Bank in exchange for all of its outstanding common stock.

                   At the  same  time of  conversion,  the Bank  established  an
Employee  Stock  Ownership  Plan  ("ESOP"),  and acquired  129,604 shares of the
Company's common stock.  Funds used to acquire the shares were borrowed from the
Company  by the  ESOP  with a direct  loan  from the  Company  requiring  annual
payments of $129,604.

                   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, 1997 and 1996 was $213,619 and $69,659, respectively.

                   The ESOP shares as of September 30 were as follows:

                                                    1997               1996
                                                    ----               ----
Allocated shares                                    17,132              4,320
Shares earned, but unallocated                       2,160              2,160
Unearned shares                                    108,220            123,124

Fair value of unearned shares at September 30   $1,785,630         $1,600,612

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 12- Common Stock and Stock Benefit Plans - Continued
         ------------------------------------
 
      On October 8, 1996,  the  Company  established  a Stock  Option  Plan (the
"Plan")  whereby 162,006 shares of common stock were 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.

      Information with respect to options is as follows:

                                                           Weighted
                                                            Average
                                                           Exercise
                                        Shares               Price
                                        ------               -----
Outstanding at beginning of year          -                 $  -
Granted                                 162,006              13.30
Exercised                                 -
Forfeited                                 -
                                        -------
Outstanding at end of year              162,006
                                        =======
Exercisable at end of year                 -
                                        =======

      SFAS No. 123,  "Accounting  for  Stock-Based  Compensation",  requires the
Savings  Bank to  make  certain  disclosures  as if the  fair  value  method  of
accounting  had been  applied to the Savings  Bank's  stock  option  grants made
subsequent to 1994. Accordingly,  the Savings Bank estimated the grant date fair
value  of  each  option   awarded  in  fiscal   1997  using  the   Black-Scholes
Option-Pricing model with the following relevant  assumtions:  dividend yield of
1.3%,  risk-free  interest  rate of 6.67% and  expected  lives of 10 years.  The
assumption for expected  volatility was 18.17%.  Had 1997 compensation cost been
determined including the weighted-average  estimate of fair value of each option
granted of $5.31,  the  Savings  Bank's net income  would be reduced to proforma
amount of $226,125. Proforma earnings per share would be $.16 in fiscal 1997.

      On October 8, 1996, the Company  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 Savings  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 Savings
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.

                                      -34-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      Under  the  regulatory  capital  requirements  of  the  Office  of  Thrift
Supervision  ("OTS"),  savings  banks are required to maintain  minimal  capital
requirements  by  satisfying  three  capital   standards:   a  tangible  capital
requirement,  a leverage ratio requirement and a risk-based capital requirement.
Under the tangible capital requirement,  the Bank's tangible capital (the amount
of stock and retained  earnings  computed under  generally  accepted  accounting
principles)  must be equal to 1.5% of adjusted total assets.  Under the leverage
ratio  requirement,  the Bank's core  capital  must be equal to 3.0% of adjusted
total assets. In addition,  under the risk- based capital requirement,  the Bank
must maintain core and supplemental  capital (core capital plus any general loss
reserves)   equal  to  8%  of  risk-   weighted   assets   (total   assets  plus
off-balance-sheet items multiplied by the appropriate risk weights).

      The Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991
was signed into law on December  19,  1991,  and  regulations  implementing  the
prompt  corrective  action provisions became effective on December 12, 1992. The
prompt corrective action regulations define specific capital categories based on
an institution's capital ratios. The capital categories, in declining order, are
"well capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically  undercapitalized".  Institutions categorized
as "undercapitalized"  or lower are subject to certain  restrictions,  including
the  requirement  to file a capital  plan with its  primary  federal  regulator,
prohibitions  on the payment of dividends and management  fees,  restrictions on
executive  compensation,  and  increased  supervisory  monitoring,  among  other
things. To be considered "well  capitalized," an institution must generally have
a leverage capital ratio of at least 5%, a tier one risk-based  capital ratio of
at  least  6% and a total  risk-based  capital  ratio  of at  least  10%.  As of
September  30,  1997,  the most  recent  notification  from the Office of Thrift
Supervision  categorized  the  Bank as well  capitalized  under  the  regulatory
framework for prompt corrective action.

      The following  table  presents the Bank's  capital  position  based on the
September 30, 1997 financial statements.
<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>                    
Tangible (1)         $15,332,292      16.10%   $ 1,428,818      1.50%   $   N/A           N/A %
Tier I capital (2)   $15,332,292      32.66%   $    N/A          N/A%   $ 2,816,820       6.00%
Core (1)             $15,332,292      16.10%   $ 2,857,676      3.00%   $ 4,762,794       5.00%
Risk-weighted (2)    $15,582,292      33.19%   $ 3,755,760      8.00%   $ 4,694,700      10.00%
</TABLE>
                                                                        
(1)  To adjusted total assets.                                       
(2)  To risk-weighted assets.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      The following  table presents the  calculation  of risk-based  capital and
tangible assets used to determine the Bank's capital position.

                                                   Current Requirements
                                                   --------------------
Total stockholders' equity                           $19,829,133
    Less:  Non-allowable items
Equity of parent company                              (4,495,232)
Intangible assets                                         (1,609)
                                                      ----------
Tangible and core capital                             15,332,292
      General valuation allowance                        250,000
                                                     -----------
Risk-based capital                                   $15,582,292
                                                      ==========

Total assets                                         $98,556,719
    Less: Assets of non-includable subsidiaries       (2,925,000)
          Intangible assets                               (1,609)
          Asset of parent company                       (374,224)
                                                     -----------
Tangible and adjusted tangible assets                $95,255,886
                                                      ==========

Risk-weighted assets                                 $46,947,000
                                                      ==========

      The OTS has adopted an interest rate component to the  regulatory  capital
requirements  effective January 1, 1994. The rule requires additional capital to
be maintained if the Bank's interest rate risk exposure, measured by the decline
in the market value of the Bank's net portfolio value, exceeds 2% of assets as a
result of a 200 basis point shift in interest  rates.  As of September 30, 1997,
the Bank is not subject to the interest rate risk requirement.

      For the purpose of granting to eligible savings account holders a priority
in the event of future  liquidation,  the Bank  established a special account at
the time of  conversion to the stock form of ownership in an amount equal to its
total retained earnings at December 31, 1995. In the event of future liquidation
of the  Bank  (and  only in such an  event),  an  eligible  account  holder  who
continues  to  maintain  his  savings  account  shall be  entitled  to receive a
distribution from the special account. The amount of the special account will be
decreased in an amount proportionately corresponding to decreases in the savings
account  balances  of  eligible  account  holders  on  each  subsequent   annual
determination  date. The balance of the special account at September 30, 1996 is
included in retained  earnings.  No dividends may be paid to the stockholders if
such  dividends  would  reduce  regulatory  capital of the Bank below the amount
required for the special account.

                                      -36-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

      OTS  regulations   limit  the  payment  of  dividends  and  other  capital
distributions  by the Bank. The Bank is able to pay dividends  during a calendar
year without  regulatory  approval to the extent of the greater of (i) an amount
which will reduce by one-half its surplus  capital ratio at the beginning of the
year  plus all its net  income  determined  on the basis of  generally  accepted
accounting  principles  for that calendar year or (ii) 75% of net income for the
last four calendar quarters.

      The Bank is restricted in paying  dividends on its stock to the greater of
the restrictions  described in the preceding paragraph,  or an amount that would
reduce its retained  earnings  below its  regulatory  capital  requirement,  the
accumulated bad debt  deduction,  or the  liquidation  account  described in the
second preceding paragraph.

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

      The income tax provision consists of the following:

                                For Years Ended
                                  September 30,
                            ---------------------------
                              1997               1996
                              ----               ----
Current
-------
   Federal                  $276,262           $467,752
   State                      62,179            102,505
                             -------            -------
                             338,441            570,257
Deferred
--------
   Federal                   133,736           (220,848)
   State                      28,657            (48,893)
                             -------            -------
                             162,393           (269,741)
                             -------            -------
                            $500,834           $300,516
                             =======            =======

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

                                                    Years Ended September 30,
                                     ----------------------------------------------------
                                             1997                       1996             
                                             ----                       ----
                                                   Percent                       Percent
                                                  of Pretax                     of Pretax
                                      Amount       Income       Amount           Income
<S>                                  <C>           <C>         <C>                  <C>  
Tax at statutory rate                $426,693      34.00       $258,105             34.00
Increases (Decreases)                                                          
 Resulting From                                                                
   State income tax net of federal                                             
    income tax benefit                 59,951       4.78         35,384              4.66
   Other                               14,190       1.13          7,027               .93
                                     --------      -----       --------             -----
                                     $500,834      39.91       $300,516             39.59
                                     ========      =====       ========             =====
</TABLE>
                                                                               
                                                                        
                                      -37-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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, 1997 and 1996 are presented below:

                                                 1997       1996
                                                 ----       ----
Deferred Tax Assets:
   Deferred loan origination fees              $207,757   $232,755
   Allowance for loan losses                     96,550     75,309
   Reserve for uncollected interest              13,639     12,363
   SAIF one-time assessment                        --      195,417
   ESOP contribution                              8,331       --
   NOL carryfoward of subsidiary                 14,834      5,198
                                               --------   --------
      Total gross deferred tax assets           341,111    521,042

Deferred Tax Liabilities:
   Tax reserve for bad debts in excess of
    base year amount                            106,098    131,061
   Federal Home Loan Bank of Atlanta stock
    dividends                                    56,965     56,965
   Depreciation                                  25,203     24,426
   Pension plan                                  36,451     29,803
                                               --------   --------
      Total gross deferred tax liabilities      224,717    242,255
                                               --------   --------
                     Net deferred tax assets   $116,394   $278,787
                                               ========   ========

                   One of the Company's  subsidiaries  had a NOL carryforward in
the amount of $18,956 that expires in 2004.

                   The  Company  and its  Subsidiaries  file  their  income  tax
returns on a calendar year basis.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


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

investment  securities  and  estimates  using bid prices  published in financial
newspapers for 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 Savings  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.

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


                                          September 30, 1997
                                        -----------------------
                                        Carrying     Estimated
                                          Value      Fair Value
                                          -----      ----------
Financial Assets
----------------
   Cash, interest-bearing deposits
    in other banks and federal funds   $ 8,384,000   $ 8,384,000
   Investment securities                 3,750,000     3,724,000
   Mortgage backed securities            2,845,000     2,845,000
   Loans receivable                     78,450,000    78,662,000
   Federal Home Loan Bank of Atlanta
    stock                                  753,000       753,000

Financial Liabilities
---------------------
   Deposits                            $74,186,000   $74,339,000
   Commitments                                --       2,854,000

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 16- Condensed Financial Information (Parent Company Only)
         -----------------------------------------------------
 
      Information as to the financial position of WHG Bancshares  Corporation as
of September 30, 1997 and 1996 and results of operations  and cash flows for the
two years ended September 30, 1997 is summarized  below.  During the years ended
September 30, 1997 and 1996,  the parent did not receive any dividends  from its
subsidiary, the Bank.

                                             1997            1996
                                             ----            ----

Statement of Financial Condition
   Cash                                   $    21,465   $    26,254
   Federal funds sold                         206,935       711,001
   Interest-bearing deposits                  145,679          --
   Securities purchased under agreement
    to resell                                    --       2,000,000
   Loans receivable                         4,103,794     5,252,839
   Equity in net assets of subsidiary      15,333,901    15,331,778
   Other assets                                24,554         8,358
                                          -----------   -----------
                                          $19,836,328   $23,330,230
                                          ===========   ===========

Taxes payable                             $     6,195   $    84,173
Other liabilities                               1,000          --
Stockholders' equity                       19,829,133    23,246,057
                                          -----------   -----------
                                          $19,836,328   $23,330,230
                                          ===========   ===========

      For the years ended September 30:

                                             1997          1996
                                          -----------   -----------
Statement of Operations
   Interest Income                        $   428,415   $   233,437
   Equity in net income of subsidiary         519,213       324,841
                                          -----------   -----------
   Total Income                               947,628       558,278
   Non-interest expenses                       57,645        15,488
                                          -----------   -----------
   Net income before income taxes             889,983       542,790
   Provision for income taxes                 135,836        84,173
                                          -----------   -----------
   Net income                             $   754,147   $   458,617
                                          ===========   ===========

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 16- Condensed Financial Information (Parent Company Only) - Continued
         -----------------------------------------------------

      For the years ended September 30:

                                                    1997            1996
                                                 ------------    ------------

Statement of Cash Flows

Cash Flows from Operating Activities:
   Net income                                    $    754,147    $    458,617
   Adjustment to Reconcile Net Income to Net
    Cash Provided by Operating Activities
      Equity in net income of subsidiary             (519,213)       (324,841)
      Amortization of discounts on investments           --           (30,625)
      Increase in other assets                        (16,196)         (8,358)
      (Decrease) increase in taxes payable            (77,978)         84,173
      Increase in other liabilities                     1,000            --
                                                 ------------    ------------
         Net cash provided by operating
          activities                                  141,760         178,966


Cash Flows from Investing Activities:
   Purchase of interest-bearing deposits             (145,679)           --
   Proceeds from maturing other investments              --         6,000,000
   Purchase of other investments                         --        (5,969,375)
   Purchase of stock from subsidiary                     --        (6,484,461)
   Decrease (increase) in securities
    purchased under agreement to resell             2,000,000      (2,000,000)
   Loans originated                                (2,000,000)     (5,796,040)
   Principal collected on loans                     3,149,045         543,201
                                                 ------------    ------------
         Cash provided (used) by investing
          activities                                3,003,366     (13,706,675)

Cash Flows from Financing Activities:
   Proceeds from sale of common stock                    --        15,561,004
   Employee Stock Ownership Plan                         --        (1,296,040)
   Repurchase of common stock                      (3,370,173)           --
   Dividends paid                                    (283,808)           --
                                                 ------------    ------------
         Net cash provided (used) by financing
          activities                               (3,653,981)     14,264,964
                                                 ------------    ------------

                                      -41-

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1997
------------------


Note 16- Condensed Financial Information (Parent Company Only) - Continued
         -----------------------------------------------------

                                                         1997         1996
                                                      ---------    ---------

(Decrease) increase in cash and cash
 equivalents                                          $(508,855)   $ 737,255
Cash and cash equivalents at beginning
 at end of year                                         737,255         --
                                                      ---------    ---------
                                                      $ 228,400    $ 737,255
                                                      =========    =========

Supplemental Disclosures of Cash Flows Information:

   Income taxes                                       $ 121,714    $    --
                                                      =========    =========

      There was no cash paid during the years ended  September 30, 1997 and 1996
for interest.


Note 17- Recent Accounting Pronouncements
         --------------------------------

      FASB  Statement  on  Earnings  per Share - In February  1997,  FASB issued
Statement of Financial Accounting Standards ("SFAS") No. 128, which is effective
for financial statements issued for periods ending after December 15, 1997. This
Statement  establishes standards for computing and presenting earnings per share
("EPS").  It replaces the  presentation  of primary EPS with a  presentation  of
basic EPS.  Management  believes the adoption of this  Statement will not have a
significant effect on the Company's EPS.

      FASB  Statement on  Reporting  Comprehensive  Income - In June 1997,  FASB
issued SFAS No. 130,  which  establishes  standards for reporting and display of
comprehensive income and its components.  This Statement is effective for fiscal
years  beginning  after December 15, 1997.  Management  believes the adoption of
this  Statement  will not have a  material  effect  on the  Company's  financial
statements.

      FASB Statement on Disclosures  About Segments of an Enterprise and Related
Income - In June 1997, FASB issued SFAS No. 131, which establishes standards for
the way public  companies  report  information  about operating  segments in the
annual and interim financial statements.  This Statement is effective for fiscal
years  beginning  after December 15, 1997.  Management  believes the adoption of
this  Statement will not have a material  effect on the financial  statements of
the Company.

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