EXHIBIT 13


<PAGE>

                           WHG BANCSHARES CORPORATION

Corporate Profile

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

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

Stock Market Information

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


                                                         Dividends
          Date                            High    Low    Declared
          ----                            ----    ---    --------
October 1, 1997 to December 31, 1997     18.88   15.00      .08
January 1, 1998 to March 31, 1998        19.00   17.75      .08
April 1, 1998 to June 30, 1998           19.75   15.75      .08
July 1, 1998 to September 30, 1998       16.75   11.00      .08
October 1, 1998 to December 31, 1998     12.06   10.13      .09
January 1, 1999 to March 31, 1999        12.25   10.75      .09
April 1, 1999 to June 30, 1999           11.25    8.44      .09
July 1, 1999 to September 30, 1999        9.25    8.63      .09


The number of  shareholders  of record of common  stock as of the record date of
December 3, 1998,  was  approximately  241.  This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage firms. At December 3, 1999,  there were 1,285,609 shares  outstanding.
Our ability to pay dividends to  stockholders is dependent upon the dividends we
receive from Heritage  Savings.  Heritage  Savings may not declare or pay a cash
dividend  on any of its stock if the  effect of the  declaration  or  payment of
dividends  would  cause  their  regulatory  capital to be reduced  below (1) the
amount required for the liquidation  account  established in connection with the
conversion,  or (2) the regulatory capital requirements imposed by the Office of
Thrift Supervision.

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<PAGE>

Selected Financial Ratios and Other Data


                                                  For the Years Ended
                                                      September 30,
                                                  --------------------
                                                   1999         1998
                                                   ----         ----

Return on average assets .....................      .50%         .57%

Return on average equity .....................     4.66         3.46

Average equity to average assets ratios ......    10.69        16.53

Equity to assets at period end ...............     9.63        12.22

Dividend payout ratio ........................    60.00        58.18

Net interest rate spread .....................     2.24         2.58

Net yield on average interest-
  earnings assets ............................     2.66         3.27

Non-performing loans to total assets .........      .13          .29

Allowance for loan loss to total loans .......      .38          .40

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

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

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

Overview

We are the holding company for Heritage Savings.  We principally operate through
five  branch  offices  located  throughout  Baltimore  and Howard  counties  and
Baltimore City, Maryland. During the 1999 fiscal year, we acquired the assets of
our minority owned service corporation,  Banker's Affiliate,  Inc.and closed the
operations of our subsidiary, Mapleleaf Mortgage Corporation.

Management of Interest Rate Risk and Market Risk

Because the majority of our assets and  liabilities  are sensitive to changes in
interest rates,  our most significant form of market risk is interest rate risk,
or changes in interest rates. We are vulnerable to an increase in interest rates
to the extent  that our  interest-bearing  liabilities  mature or  reprice  more
rapidly  than  our   interest-earning   assets.   Our  lending  activities  have
historically emphasized the origination of long-term,  adjustable rate and fixed
rate loans secured by single-family residences.  The primary source of funds has
been   deposits   with   substantially   shorter   maturities.    While   having
interest-bearing  liabilities that reprice more frequently than interest-earning
assets  is  generally  beneficial  to net  interest  income  during a period  of
declining interest rates, this type of an asset/liability  mismatch is generally
detrimental during periods of rising interest rates.

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

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<PAGE>

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

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

-    lengthen the maturities of our liabilities  when it would be cost effective
     through the pricing and  promotion of higher rate  certificates  of deposit
     and utilization of FHLB advances;

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

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

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

We have made a  significant  effort to maintain our level of lower cost deposits
as a method of enhancing  profitability.  In the past year,  our level of demand
deposits  has   increased   significantly.   At  September   30,  1999,  we  had
approximately  $27.3  million,  or 24%, of our  deposits  in  low-cost  savings,
checking and money market accounts.  These deposits have traditionally  remained
relatively stable and are expected to be only moderately affected in a period of
rising  interest  rates.  This  stability has enabled us to offset the impact of
rising rates in other deposit accounts.

Net Portfolio Value

Exposure to interest  rate risk is actively  monitored  by our  management.  Our
objective is to maintain a consistent level of profitability  within  acceptable
risk tolerances across a broad range of potential interest rate environments. We
use the OTS Net  Portfolio  Value  ("NPV")  Model to  monitor  our  exposure  to
interest rate risk,  which calculates  changes in net portfolio  value.  Reports
generated from  assumptions  provided and modified by management are reviewed by
the Asset/Liability  Management Committee and reported to the Board of Directors
quarterly. The Interest Rate Sensitivity of Net Portfolio Value Report shows the
degree to which balance sheet line items and net portfolio value are potentially
affected by a 100 to 300 basis point (1/100th of a percentage  point) upward and
downward parallel shift (shock) in the Treasury yield curve.

                                       5
<PAGE>

     The following  table  represents our NPV at September 30, 1999. The NPV was
calculated by the OTS, based upon information we provided to the OTS.


      Changes               NPV
      in Rate            Ratio(1)         Change(2)
      -------            --------         ---------
      +300 bp              3.10%           -918 bp
      +200 bp              6.22%           -606 bp
      +100 bp              9.32%           -297 bp
         0 bp             12.28%              0 bp
      -100 bp             14.92%           +264 bp
      -200 bp             17.24%           +495 bp
      -300 bp             19.52%           +724 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.

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

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

                                       6
<PAGE>

Analysis of Net Interest Income

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

 Average Balance Sheet

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

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<PAGE>
<TABLE>
<CAPTION>
                                                                            Year Ended September 30,
                                                         ----------------------------------------------------------
                                                                      1999                       1998
                                                         ---------------------------- -----------------------------
                                                                             Average                      Average
                                                          Average             Yield/  Average             Yield/
                                                          Balance   Interest   Cost   Balance   Interest    Cost
                                                          -------   --------   ----   -------   --------   -------
Interest-earnings assets:
<S>                                                     <C>        <C>        <C>    <C>         <C>       <C>
  Loans receivable(1)................................    $ 83,094   $ 6,272    7.55%  $ 77,911    $ 6,012   7.72%
  Investment securities(2)...........................      34,956     2,369    6.78%    22,247      1,440   6.47%
  Mortgage-backed securities.........................      16,693     1,036    6.21%     5,091        342   6.72%
  Other interest-earning assets(3)...................       8,620       495    5.74%    10,726        645   6.01%
                                                          -------    ------            -------     ------
      Total interest-earning assets..................    $143,363   $10,172    7.10%  $115,975    $ 8,439   7.28%
                                                                     ======                        ======
Non-interest-earning assets..........................       3,560                        3,086
                                                          -------                      -------
      Total assets...................................    $146,923                     $119,061
                                                          =======                      =======
Interest-bearing liabilities:
  Demand deposits....................................    $ 27,121     $ 732    2.70%  $ 26,764      $ 738   2.76%
  Time deposits......................................      80,886     4,428    5.47%    58,046      3,201   5.52%
  Other liabilities(4)...............................      22,687     1,193    5.26%    14,234        713   5.01%
                                                          -------    ------            -------     ------
      Total interest-bearing assets..................     130,694   $ 6,353    4.86%    99,044    $ 4,652   4.70%
                                                                     ======                        ======
Non-interest bearing liabilities.....................         528                          333
                                                          -------                      -------
      Total liabilities..............................     131,222                       99,377
Stockholders' equity.................................      15,701                       19,684
                                                          -------                      -------
      Total liabilities and stockholders' equity.....    $146,923                     $119,061
                                                          =======                      =======
Net interest income..................................               $ 3,819                       $ 3,787
                                                                    =======                       =======
Interest rate spread(5)..............................                          2.24%                        2.58%
                    ==                                                         ====                         ====
Net yield on interest-earning assets(6)..............                          2.66%                        3.27%
                                    ==                                         ====                         ====
Ratio of average interest-earning assets to average
    interest-bearing liabilities.....................                        109.69%                      117.09%
                                                                             ======                       ======
</TABLE>

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

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<PAGE>

Rate/Volume Analysis

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

                                                    Year Ended September 30,
                                           -------------------------------------
                                                      1999 vs. 1998
                                           -------------------------------------
                                                   Increase (Decrease)
                                                         Due to
                                           -------------------------------------
                                                                Rate/
                                            Volume    Rate     Volume       Net
                                            ------    ----     ------       ---
                                                   (Dollars in Thousands)
Interest income:
  Loans receivable........................ $   400 $  (131)  $    (9)   $   260
  Investment securities...................     822      68        39        929
  Mortgage-backed securities..............     779     (26)      (59)       694
  Other interest-earning assets...........    (127)    (29)        6       (150)
                                           ------- -------   -------    -------
      Total interest-earning assets.......   1,874    (118)      (23)     1,733

Interest expense:
  Deposits................................   1,072     117        32      1,221
  Other liabilities(1)....................     423      36        21        480
                                           ------- -------   -------    -------
      Total interest-bearing liabilities..   1,495     153        53      1,701
                                           ------- -------   -------    -------
Net change in net interest income......... $   379 $  (271)  $   (76)   $    32
                                           ======= =======   =======    =======

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


Financial Condition

     At September 30, 1999, our assets  increased  $22.0 million,  or 16.6%,  to
$154.9  million from $132.9  million at September  30, 1998.  This  increase was
primarily due to increases in investments  securities available for sale of $4.5
million,  mortgage backed securities of $10.7 million, loans receivable of $14.5
million. These increases were partially off-set by decreases in interest-bearing
deposits in other banks of $6.1 million and

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<PAGE>

investment  in and  loans  to  affiliated  corporation  of  $2.6  million.  This
affiliated loan was redeemed when we purchased the assets of Banker's Affiliate,
Inc.

     New loan  originations and loan purchases  outpaced loan repayments by $7.2
million.  In addition,  we purchased the assets  (predominantly  consumer  loans
totaling  $7.3  million) of Banker's  Affiliate,  Inc.  for $4.8  million.  Loan
repayments  decreased  during  the 1999  fiscal  year,  due to  rising  mortgage
interest rates which reduced  refinance-related  loan repayments  experienced in
prior years.

     At September 30, 1999, our deposits increased by $20.2 million, or 21.2% to
$115.3  million  from $95.1  million at September  30, 1998.  The increase was a
result of a $19.2  million  increase  in  certificates  of  deposit,  due to the
continued  promotion of our  certificates of deposit  products.  Our increase in
deposits was also  augmented by a $1.0  million  increase in passbook  accounts.
Borrowings  increased by $3.1 million in order to fund the acquisition of assets
of Bankers Affiliate, Inc.

     Our net worth  decreased by $1.3 million to $14.9  million at September 30,
1999 from $16.2  million at  September  30,  1998.  The  decrease  reflects  the
repurchase of 103,393  shares of our stock  totaling $1.0 million and a $900,000
increase in accumulated  other  comprehensive  loss. The increase in accumulated
loss  resulted  from  the  fluctuation  in  market  value of our  investment  in
available for sale securities. Because of interest rate volatility,  accumulated
other comprehensive loss and stockholders' equity could materially fluctuate for
each  interim  period and year-end  period.  The decrease in market value of the
investment  securities  available for sale is considered temporary in nature and
will not affect our net income until the  securities  are sold.  We plan to hold
these  securities  until maturity or until the market values of these securities
increase.  Accordingly, we do not expect, though there is no assurance, that our
investment in these securities will affect net income in future periods.

Results of Operations

Net Income

     For September 30, 1999, net interest income increased $51,000,  to $732,000
from $681,000 for the 1998 fiscal year. The increase was the result of decreases
in the  provision  for loan  losses of  $125,000  and  non-interest  expense  of
$77,000.  This was off-set by a decrease in non-interest  income of $153,000 and
an increase in the provision for income taxes of $29,000.

Net Interest Income

     Net  interest  income  remained  steady at $3.8 million for the 1999 fiscal
year and 1998 fiscal year.  The interest  rate spread,  which is the  difference
between the yield on average  interest-earning assets and the percentage cost of
average interest-bearing

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<PAGE>

liabilities,  decreased in fiscal 1999 to 2.24% from 2.58% for fiscal 1998.  The
decrease in interest  rate  spread is  primarily  the result of a decline in the
average yield on loans and mortgage-backed  securities combined with an increase
in the average cost of borrowings.

Interest Income

     Total interest income increased $1.8 million, or 21.4%, to $10.2 million in
fiscal 1999 from $8.4 million in fiscal 1998. Interest income on loans increased
by approximately  $300,000 to $6.3 million for fiscal 1999 from $6.0 million for
fiscal 1998. The increase was due to an increase in the average dollar amount of
loans outstanding in fiscal 1999 over fiscal 1998 of approximately $5.2 million.
This was off-set  partially  by a decrease  in the average  yield on loans of 17
basis points to 7.55% for fiscal 1999 compared to 7.72% for fiscal 1998.

     Interest and dividend income on investment securities increased by $928,000
to  $2,369,000 in fiscal 1999 from  $1,441,000 in fiscal 1998.  The increase was
the result of an increase in the average dollar amount of investment  securities
outstanding of $12.7 million coupled with an increase in the average yield of 31
basis points to 6.78% for fiscal 1999 from 6.47% for fiscal 1998.

     Interest  income on mortgage  backed  securities  increased  by $694,000 to
$1,036,000 for fiscal 1999 from $342,000 for fiscal 1998. The increase  resulted
from an increase of $11.6  million,  or 227.5%,  in the  average  dollar  amount
invested,  partially  off-set by a decrease  of 51 basis  points in the  average
yield to 6.21% in fiscal 1999 from 6.72% in fiscal 1998.

Interest Expense

     Total interest expense  increased $1.7 million or 36.2%, to $6.4 million in
fiscal 1999 from $4.7 million in fiscal 1998.  Interest on deposits increased by
$1,220,000  to $5,160,000  in fiscal 1999 from  $3,940,000  in fiscal 1998.  The
increase was primarily due to an increase of $22.8 million in the average dollar
amount  outstanding  of time  deposits  combined with an increase in the average
cost of total  deposits.  Lower costing demand  deposits  comprised 23.7% of the
total  deposit  balance as of September  30,  1999,  as compared to 27.7% of the
total deposit balance as of September 30, 1998. As a result, the average cost of
total deposits increased to 4.78% in fiscal 1999 from 4.64% in fiscal 1998.

     Interest on short-term  borrowings decreased $152,000 or 29.0%, to $373,000
in fiscal 1999 from  $525,000 in fiscal 1998.  During  fiscal 1999,  in order to
take advantage of the lower  interest rate  environment,  we utilized  long-term
borrowings  to  support  our asset  growth and  manage  our  interest  rate risk
strategies. This increased the average amount of total borrowings by $10,583,000
and rates paid by 41 basis points. As a result, interest on long-term borrowings
increased $633,000 to $820,000 in fiscal 1999 from $187,000 in fiscal 1998.

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<PAGE>

Provision for Loan Losses

     The provision for loan losses for fiscal 1999 decreased $125,000 to $70,000
from  $195,000 for fiscal 1998.  During fiscal 1998,  two borrowers  experienced
financial  difficulties  that required the  properties to be sold at foreclosure
sales. This resulted in our experiencing net charge-offs of $144,000 as compared
to $26,500  during  fiscal  1999.  We  continually  evaluate the adequacy of the
allowance for loan losses,which  encompasses the overall risk characteristics of
the various  portfolio  segments,  past  experience  with losses,  the impact of
economic conditions on borrowers and other relevant  conditions.  Based upon the
additions to the  allowance for loan losses,  management  believes the allowance
for loan  losses  is  adequate.  However,  there  can be no  assurance  that the
allowance for loan losses will be adequate to cover significant  losses, if any,
that we might incur in the future.

Non-Interest Income and Non-Interest Expenses

     Non-interest income decreased $153,000 or 36.9% to $262,000 for fiscal 1999
from  $415,000  for fiscal  1998.  Non-interest  expenses  decreased  $78,000 to
$2,789,000  for fiscal 1999 from  $2,867,000  for fiscal  1998.  The decrease in
non-interest  income and  non-interest  expense  result was primarily due to the
closing of operations of our subsidiary, Mapleleaf Mortgage Corporation.

Provision for Income Taxes

     Provision for income taxes  increased by  approximately  $29,000 or 6.3% to
$489,000  for fiscal  1999 from  $460,000  for fiscal  1998.  The  increase  was
primarily  the result of an increase in pretax  income.  The  effective tax rate
fell slightly to 40.0% for fiscal 1999 from 40.3% for fiscal 1998.

Year 2000

     During  fiscal  1998,  in order to prepare us for the new  millennium  , we
adopted a Year 2000  Compliance  Plan (the "Plan") and  established  a Year 2000
Compliance Committee (the "Committee").  As recommended by the Federal Financial
Institutions  Examination  Council,  the Plan  included  the  following  phases:
Awareness, Assessment,  Renovation, Validation and Implementation.  These phases
enabled us to identify risks,  develop an action plan,  perform adequate testing
and complete  certification  that our processing systems will be Year 2000 ready
("Y2k").  We have completed all phases of our Plan.  After a thorough review and
assessment of our computer  operations,  all of our computers were replaced with
Y2K  compliant  equipment and necessary  software  upgrades were made.  All such
equipment and software  packages have been tested and found to be Y2K compliant.
We also  coordinated  with our  vendors and service  providers  to assure  their
readiness for Y2K. All testing in this area has been completed.

                                       12
<PAGE>

     We currently estimate that our total cost (including capital  expenditures)
for  the Y2K  issue  will be  $215,000,  employee  time  not  included.  Through
September 30, 1999, we have incurred  charges of $192,000 related to Y2K issues.
Charges include costs necessary to modify our computer information systems, both
internal and vendor  maintained,  to enable proper  processing  of  transactions
relative  to  the  year  2000  and  beyond.  Additionally,   we  also  purchased
equipment,and  incurred  costs in  connection  with  training of  employees  and
customer  communications  necessary  to  adequately  our  Y2K  requirements  and
readiness.

     Our  contingency  plan has been developed,  approved,  and tested to assure
uninterrupted  service to our  customers.  This plan addresses  perceived  risks
associated  with the year 2000 problem.  These  activities  include  remediation
contingency  planning  intended to mitigate any risks associated with unforeseen
system  glitches,  system  failure,  increased  demands for cash,  or  processes
outside of our control.  The remainder of 1999 will be used to further  validate
the plan.

     While this plan was designed to significantly  address our Y2K issues,  the
occurrence of the following could negatively impact us :

     (a)  utility  service  companies  may be unable to  provide  the  necessary
          service to drive the our data systems or provide  sufficient  sanitary
          conditions for our offices;

     (b)  our primary  software  provider could have a major  malfunction in its
          system  or  their  service  could  be  disrupted  due to  its  utility
          providers, or some combination of the two; or

     (c)  we may have to transact its business manually.

     We will attempt to monitor these  uncertainties by continuing to request an
update on all critical and important  vendors  through the remainder of 1999. If
we  identify  any  concern  related to any  critical or  important  vendor,  the
contingency plan will be implemented  immediately to assure continued service to
our customers.

     We continue to focus on the  awareness  phase with its efforts on providing
customers,  our  shareholders  and employees with up-to-date  information on our
state of  preparedness  for the year 2000.  For the  remainder of 1999,  we will
focus on employee training to insure continued,  uninterrupted  customer service
in the new year.

     Despite our best efforts to address this issue, the vast number of external
entities that have direct and indirect business  relationships  with us, such as
customers,  vendors,  payment systems providers,  utility  companies,  and other
financial institutions,  makes it impossible to assure that a failure to achieve
compliance by one or more of these entities would not have a material  impact on
our financial statements .


                                       13
<PAGE>

Liquidity and Capital Resources

     Management  believes it has ample cash flows and liquidity to meet its loan
commitments  of $1.6  million  and  unused  lines of credit of $2.8  million  at
September 30, 1999. We have the ability to reduce its  commitments  for new loan
originations,  adjust other cash outflows,  and borrow from the FHLB of Atlanta,
or others,  should the need arise. As of September 30, 1999, such borrowed funds
totaled $24.0 million.

     We are required  under federal  regulations  to monitor  certain  levels of
liquid assets,  which include certain United States  government  obligations and
other approved  investments.  Current  regulatory  regulations  require that our
subsidiary,  Heritage  Savings maintain liquid assets of not less than 4%. As of
September 30, 1999,  Heritage Savings regulatory  liquidity was 5.53%.  Heritage
Savings is also  subject to federal  regulations  that  impose  certain  minimum
capital requirements. See Note 13 to our consolidated financial statements.

     Net cash provided by operating  activities  was $1,160,000 and $563,000 for
fiscal 1999 and 1998.  Cash flows from  operations in fiscal 1999 increased from
fiscal  1998  primarily  due to a  substantially  smaller  increase  in  accrued
interest  receivable  and decreases in prepaid and  refundable  income taxes and
other assets as compared to  increases in fiscal 1998.  This was off-set in part
by an decrease in the provision for loan losses.

     Net cash used by  investment  activities  for  fiscal  1999  totaled  $30.2
million,  an increase of $2.9  million from $27.3  million for fiscal 1998.  The
increase  in cash used was due to the $4.8  million  purchase  of the  assets of
Bankers  Affiliate,  Inc. and stronger loan  origination  activity that exceeded
principal  repayments  as  compared  to the reverse  trend in fiscal  1998.  The
increase  was  partially  offset by smaller  net  purchases  of  investment  and
mortgage-backed securities.

     Net cash  provided by financing  activities  for fiscal 1999 totaled  $21.8
million  compared to $33.2  million in fiscal  1998.  During  fiscal  1999,  the
increase  resulted from an increase in deposits of $20.2 million and an increase
in borrowings of $3.1 million.  This was partially  offset by stock  repurchases
totaling $1.0 million and dividends  paid of $452,000.  The fiscal 1998 increase
was due to an  increase  in net  deposits  of $20.9  million  and an increase in
borrowings of $16.9 million,  offset in part by a $4.2 million return of capital
and dividends paid of $410,000.

     We monitor projected liquidity needs and determine the levels desired based
upon our commitments to make loans and our ability to generate funds.  Liquidity
may be adversely  affected by unexpected  deposit outflows,  excessive  interest
rates paid by competitors,  adverse  publicity  relating to the savings and loan
industry  and  similar  matters.  Additionally,  Y2K  issues  could  affect  our
liquidity if customer  withdrawals in  anticipation of the year 2000 are greater
than expected or if lenders are unable to provide us with funds when needed .

                                       14
<PAGE>
                            ANDERSON ASSOCIATES, LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                                7621 FITCH LANE
                           BALTIMORE, MARYLAND 21236
                                  410-882-8050


                          INDEPENDENT AUDITOR'S REPORT



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

        We have audited the  consolidated  statements of financial  condition of
WHG Bancshares  Corporation and  Subsidiaries as of September 30, 1999 and 1998,
and the related consolidated statements of operations,  stockholders' equity and
cash flows for each of the two years in the two year period ended  September 30,
1999. 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, 1999 and 1998, and the
consolidated  results of its operations and cash flows for each of the two years
in the two year period ended  September 30, 1999, in conformity  with  generally
accepted accounting principles.


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


December 2, 1999
Baltimore, Maryland

                                       15

<PAGE>

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

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                                                          September 30,
                                                              --------------------------------
                                                                      1999            1998
                                                              ---------------   --------------
<S>                                                          <C>               <C>
        Assets
        ------
Cash                                                          $     1,312,324   $    1,179,349
Interest bearing deposits in other banks                            3,689,305        9,849,431
Federal funds sold                                                  2,290,000        3,394,000
Investments available for sale (Note 2)                            19,700,713       15,191,491
Other investments held to maturity (Note 3)                        15,650,000       14,600,000
Mortgage backed securities (Note 4)                                17,983,370        7,275,803
Loans receivable - net (Note 5)                                    89,931,326       75,357,978
Foreclosed real estate                                                 13,103                -
Accrued interest receivable - loans                                   389,587          365,022
                      - investments                                   647,790          581,865
                      - mortgage backed securities                     96,914           40,979
Premises and equipment - net (Note 8)                                 838,527          876,926
Federal Home Loan Bank of Atlanta stock, at cost (Note 6)           1,200,000        1,000,000
Investment in and loans to affiliated corporation (Note 7)                  -        2,575,000
Deferred income taxes (Note 14)                                       852,384          170,695
Prepaid and refundable income taxes                                    68,590          131,353
Other assets                                                          258,632          286,580
                                                                 ------------     ------------

Total assets                                                     $154,922,565     $132,876,472
                                                                 ============     ============

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

Liabilities
   Deposits (Note 9)                                             $115,302,487     $ 95,065,922
   Checks outstanding in excess of bank balance                             -           11,077
   Borrowings (Note 10)                                            24,000,000       20,937,168
   Advance payments by borrowers for taxes and insurance              315,463          314,125
   Income taxes payable (Note 14)                                      49,289           16,780
   Other liabilities                                                  338,661          288,684
                                                                 ------------     ------------
Total liabilities                                                 140,005,900      116,633,756

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

Stockholders' Equity (Notes 12 and 13)
--------------------
   Common stock .10 par value; authorized 1,620,062
    shares; issued and outstanding 1,285,609 shares in
    1999 and 1,389,002 shares in 1998                                 128,561          138,900
   Additional paid-in capital                                       6,561,355        7,392,663
   Retained earnings (substantially restricted)                     9,932,078        9,651,860
   Accumulated other comprehensive income                            (973,504)         (25,140)
   Employee Stock Ownership Plan                                     (731,825)        (915,567)
                                                                 ------------     ------------
Total stockholders' equity                                         14,916,665       16,242,716
                                                                 ------------     ------------

Total liabilities and stockholders' equity                       $154,922,565     $132,876,472
                                                                 ============     ============
</TABLE>


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

                                       16

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

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------


                                                       Years Ended September 30,
                                                       -------------------------
                                                          1999           1998
                                                          ----           ----
Interest and fees on loans (Note 5)                   $ 6,271,546   $ 6,011,855
Interest and dividends on investment securities         2,369,493     1,440,571
Interest on mortgage backed securities                  1,036,267       342,341
Other interest income                                     495,105       644,730
                                                      -----------   -----------

Total interest income                                  10,172,411     8,439,497

Interest on deposits (Note 9)                           5,159,849     3,939,755
Interest on short-term borrowings                         373,213       525,449
Interest on long-term borrowings                          820,123       187,171
                                                      -----------   -----------
Total interest expense                                  6,353,185     4,652,375
                                                      -----------   -----------

Net interest income                                     3,819,226     3,787,122
Provision for loan losses (Note 5)                         70,000       195,000
                                                      -----------   -----------
Net interest income after provision for loan losses     3,749,226     3,592,122

Non-Interest Income
   Gain on sale of investments                              4,372         7,325
   Other commissions and fees                             126,712       282,704
   Fees and charges on loans                               36,319        27,591
   Fees on transaction accounts                            54,977        63,003
   Other income                                            39,711        34,764
                                                      -----------   -----------
Total non-interest income                                 262,091       415,387

Non-Interest Expenses
   Salaries and related expenses                        1,782,354     1,816,659
   Occupancy                                              136,662       140,648
   SAIF deposit insurance premium                          58,473        48,159
   Depreciation of equipment                               86,908        62,915
   Advertising                                             72,827       107,476
   Data processing costs                                  104,454        88,248
   Professional services                                  177,625       216,559
   Loss on sale of repossessed assets                       2,612            --
   Other expenses                                         367,821       386,374
                                                      -----------   -----------
Total non-interest expenses                             2,789,736     2,867,038
                                                      -----------   -----------

Income before tax provision                             1,221,581     1,140,471
Provision for income taxes (Note 14)                      489,462       459,892
                                                      -----------   -----------

Net income                                            $   732,119   $   680,579
                                                      ===========   ===========
Basic earnings per share                              $       .60   $       .55
                                                      ===========   ===========
Diluted earnings per share                            $       .60   $       .51
                                                      ===========   ===========

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


                                       17

<PAGE>

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

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
                   FOR YEARS ENDED SEPTEMBER 30, 1999 AND 1998
                   -------------------------------------------

<TABLE>
<CAPTION>
                                                                                                        Employee
                                                               Additional                Accumulated      Stock           Total
                                                    Common      Paid-In      Retained   Comprehensive   Ownership     Stockholders'
                                                    Stock       Capital      Earnings       Income        Plan            Equity
                                                    -----       -------      --------       ------        ----            ------
<S>                                              <C>        <C>           <C>          <C>           <C>             <C>
Balance - September 30, 1997                      $ 139,241  $ 11,390,312  $  9,381,773 $       --    $ (1,082,193)   $ 19,829,133
Comprehensive Income
     Net income                                        --            --         680,579         --            --
     Unrealized holding losses on available for
      sale securities net of taxes of $15,818          --            --            --        (25,140)         --
     Total comprehensive income                                                                                            655,439
  Purchase of 3,413 shares of common stock             (341)      (53,413)         --           --            --           (53,754)
  Compensation under Stock Bonus Plan                  --         158,477          --           --            --           158,477
  Compensation under Stock-Based Benefit Plan          --          64,293          --           --         166,626         230,919
  Dividends paid ($.32 per share)                      --            --        (410,492)        --            --          (410,492)
  Special distribution ($3.00 per share)               --      (4,167,006)         --           --            --        (4,167,006)
                                                  ---------  ------------  ------------ ------------  ------------    ------------
Balance - September 30, 1998                        138,900     7,392,663     9,651,860      (25,140)     (915,567)     16,242,716
Comprehensive Income
     Net Income                                        --            --         732,119         --            --
     Unrealized holding losses on available for
      sale securities net of taxes of $596,706         --            --            --       (948,364)         --              --
     Total comprehensive income                                                                                           (216,245)
Purchase of 103,393 shares of common stock          (10,339)   (1,006,667)         --           --            --        (1,017,006)
Compensation under Stock Bonus Plan                    --         140,036          --           --            --           140,036
Compensation under Stock-Based Benefit Plan            --          35,323          --           --         183,742         219,065
Dividends paid ($.36 per share)                        --            --        (451,901)        --            --          (451,901)
                                                  ---------  ------------  ------------ ------------  ------------    ------------
Balance - September 30, 1999                      $ 128,561  $  6,561,355  $  9,932,078 $   (973,504) $   (731,825)   $ 14,916,665
                                                  =========  ============  ============ ============  ============    ============
</TABLE>

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


                                       18


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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                         Years Ended September 30,
                                                                         -------------------------
                                                                            1999           1998
                                                                            ----           ----
Operating Activities
--------------------
<S>                                                                  <C>             <C>
     Net income before other comprehensive income                     $    732,119    $    680,579
     Gain on sale of investment available for sale                          (4,372)         (7,325)
     Adjustments to Reconcile Net Income to Net
      Cash Provided by Operating Activities
      -------------------------------------
         Net accretion/amortization of premiums and discounts
          of mortgage backed securities                                      5,629             371
         Amortization of deferred loan fees                               (159,153)       (183,240)
         Loan fees deferred                                                158,084         165,963
         Decrease in discount on loans purchased                           (60,164)        (21,177)
         Provision for loan losses                                          70,000         195,000
         Non-cash compensation under stock-based
          benefit plans                                                    359,101         389,396
         Increase in accrued interest receivable                          (146,425)       (528,077)
         Provision for depreciation                                        115,158          82,404
         Increase in deferred income taxes                                 (84,983)        (38,483)
         Decrease (increase) in prepaid and refundable income taxes         62,763        (131,353)
         Decrease (increase) in other assets                                32,812        (136,063)
         Decrease in accrued interest payable                                   (5)            (77)
         Increase (decrease) in income taxes payable                        32,509         (47,504)
         Increase in other liabilities                                      47,141         142,165
                                                                      ------------    ------------
              Net cash provided by operating activities                  1,160,214         562,579

Cash Flows from Investment Activities
-------------------------------------
     Proceeds from maturing interest-bearing deposits                         --           437,679
     Purchases of interest-bearing deposits                                (95,000)           --
     Proceeds from sales and maturities of investments
      available for sale                                                 3,437,496      11,434,712
     Purchase of investments available for sale                         (9,487,272)    (26,659,836)
     Proceeds from maturing other investments - held
      to maturity                                                        7,250,000      11,600,000
     Purchase of other investments - held to maturity                   (8,300,000)    (22,450,000)
     Purchase of mortgage backed securities                            (12,474,599)     (4,936,300)
     Principal collected on mortgage backed securities                   1,761,259         505,336
     Net decrease (increase) in shorter term loans                        (129,098)         40,194
     Loans purchased                                                    (1,920,000)       (224,480)
     Longer term loans originated or acquired                          (24,558,609)    (13,530,622)
     Principal collected on longer term loans                           19,345,632      16,650,754
     Purchase of Bankers Affiliate, Inc.'s net assets                   (4,811,311)           --
     Investment in premises and equipment                                  (75,619)       (237,398)
     Purchase of stock in Federal Home Loan Bank of Atlanta               (200,000)       (246,800)
     Decrease in investment in and loans to joint ventures                  50,000         350,000
                                                                      ------------    ------------
              Net cash used by investment activities                   (30,207,121)    (27,266,761)
</TABLE>

                                       19

<PAGE>

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                     Years Ended September 30,
                                                                     -------------------------
                                                                        1999            1998
                                                                        ----            ----
<S>                                                               <C>             <C>
Cash Flows from Financing Activities
------------------------------------
     Net increase (decrease) in demand deposits, money
      market, passbook accounts and advances by
      borrowers for taxes and insurance                            $  1,028,806    $   (540,191)
     Net increase in certificates of deposit                         19,209,102      21,403,532
     (Decrease) increase in checks outstanding in excess
      of bank balance                                                   (11,077)         11,077
     Increase in borrowings                                           3,062,832      16,937,168
     Special distribution                                                  --        (4,167,006)
     Stock repurchase                                                (1,017,006)        (53,754)
     Dividends                                                         (451,901)       (410,492)
                                                                   ------------    ------------

              Net cash provided by financing activities              21,820,756      33,180,334
                                                                   ------------    ------------

(Decrease) increase in cash and cash equivalents                     (7,226,151)      6,476,152
Cash and cash equivalents at beginning of year                       14,422,780       7,946,628
                                                                   ------------    ------------

Cash and cash equivalents at end of year                           $  7,196,629    $ 14,422,780
                                                                   ============    ============

The following is a Summary of Cash and Cash Equivalents:
--------------------------------------------------------
     Cash                                                          $  1,312,324    $  1,179,349
     Interest bearing deposits in other banks                         3,689,305       9,849,431
     Federal funds sold                                               2,290,000       3,394,000
                                                                   ------------    ------------
     Balance of cash items reflected on
      Statement of Financial condition                                7,291,629      14,422,780

         Less - certificates of deposit with original
                maturities of more than three months
                that are included in interest bearing
                deposits in other banks                                 (95,000)           --
                                                                   ------------    ------------
Cash and cash equivalents reflected on the
 Statement of Cash Flows                                           $  7,196,629    $ 14,422,780
                                                                   ============    ============
Supplemental Disclosure of Cash Flow Information:
-------------------------------------------------
     Cash paid during the year for:

         Interest                                                  $  6,325,998    $  3,388,967
                                                                   ============    ============
         Taxes                                                     $    654,300    $    420,714
                                                                   ============    ============
         Purchase of Bankers Affiliate, Inc.'s net assets funded
           by retirement of note payable and capital stock         $  2,525,000    $       --
                                                                   ============    ============
</TABLE>

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

                                       20

<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                               SEPTEMBER 30, 1999
                               ------------------


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

          A.   Principles  of   Consolidation  -  The   consolidated   financial
               statements  include the  accounts of WHG  Bancshares  Corporation
               ("the Company") and its wholly-owned subsidiary, Heritage Savings
               Bank, FSB ("the Bank") and for the year ended  September 30, 1998
               the Bank's subsidiary,  Mapleleaf Mortgage  Corporation  ("MMC").
               All intercompany  accounts and transactions  have been eliminated
               in the accompanying consolidated financial statements. During the
               year ended September 30, 1999 the Bank's subsidiary  discontinued
               its operations. MMC's operations were not material to the Company
               and no separate disclosure has been made.

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

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

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

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

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


                                       21
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------



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

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

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

               Loans held for sale are carried at the lower of cost or estimated
               market value,  determined in the  aggregate.  In computing  cost,
               deferred  loan  origination  fees are deducted from the principal
               balances of the related loans.  There were no loans held for sale
               at September 30, 1999 and 1998.

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

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

                                       22
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

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

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

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

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


                                       23
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

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

          L.   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).

          M.   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)

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



                                       24
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

          O.   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.

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

          Q.   Basic  and  Diluted  Earnings  Per  Share - The  Company  adopted
               Statement of Financial  Accounting  Standards No. 128,  "Earnings
               Per Share" in 1998. This Standard  establishes  revised standards
               for computing and presenting  earnings per share data ("EPS"). It
               requires  dual  presentation  of "basic" and "diluted" EPS on the
               face of the  statements  of income  and a  reconciliation  of the
               numerators  and  denominations  used  in the  calculation  of the
               "basic" and "diluted" EPS.

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

                                                       1999           1998
                                                    ---------    -----------
               Net income                         $   732,119    $   680,579
                                                    =========     ==========
               Weighted Average Shares
                  Outstanding basic EPS             1,210,570      1,233,797
               Dilutive Items
                  Stock options                             -         57,983
                  Unvested stock awards                 4,508         53,750
                                                    ---------    -----------
               Adjusted weighted average shares
                used for dilutive EPS               1,215,078      1,345,530
                                                    =========       ========


                                       25
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------

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

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

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

September 30, 1998
------------------
Equity investments      $   727,448   $      --     $   165,823   $   561,625
Federal Home Loan
 Bank Bonds              14,505,000       124,886          --      14,629,866
                        -----------   -----------   -----------   -----------
                        $15,232,448   $   124,866   $   165,823   $15,191,491
                        ===========   ===========   ===========   ===========

     During the year ended September 30, 1999, the Company received  proceeds of
$127,495  from the sale of  investments  that resulted in gross gains of $4,372.
During the year ended  September  30,  1998,  the Company  received  proceeds of
$5,184,712 from the sale of investments  that resulted in gross gains of $13,718
and gross losses of $6,393.

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

                                       26

<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

     The amortized cost and fair values of other investments are as follows:
<TABLE>
<CAPTION>
                                                     Gross          Gross
                                     Amortized     Unrealized     Unrealized      Fair
                                        Cost         Gains          Losses        Value
                                        ----         -----          ------        -----
                                                         September 30, 1999
                                     -----------------------------------------------------
<S>                                 <C>           <C>           <C>           <C>
Federal National Mortgage
 Association  Bonds                  $ 2,750,000   $      --     $   180,620   $ 2,569,380
Federal Home Loan
 Bank Bonds                           11,300,000          --         711,934    10,588,066
Federal Home Loan
 Mortgage Corporation
 Bonds                                 1,600,000          --         106,968     1,493,032
                                     -----------   -----------   -----------   -----------

                                     $15,650,000   $      --     $   999,522   $14,650,478
                                     ===========   ===========   ===========   ===========

                                                         September 30, 1998
                                     -----------------------------------------------------
Federal National Mortgage
 Association  Bonds                  $ 3,750,000   $    37,304   $     3,611   $ 3,783,693
Federal Home Loan
 Bank Bonds                           10,850,000        74,169         1,000    10,923,169
                                     -----------   -----------   -----------   -----------

                                     $14,600,000   $   111,473   $     4,611   $14,706,862
                                     ===========   ===========   ===========   ===========
</TABLE>

     No gains or losses were realized  during the years ended September 30, 1999
or 1998.

     The scheduled maturities of other investments at September 30, 1999:

                                                   Amortized          Fair
                                                     Cost            Value
                                                  ----------      ----------
     Due after five years through ten years    $     350,000   $     345,453
     Due after ten years                          15,300,000      14,305,025
                                                  ----------      ----------

                                               $  15,650,000   $  14,650,478
                                                  ==========      ==========

                                       27

<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

                   The  amortized  cost  and  fair  value  of  mortgage   backed
securities are as follows:
<TABLE>
<CAPTION>
                                                       Gross           Gross
                                       Amortized     Unrealized     Unrealized      Fair
                                         Cost          Gains         Losses        Value
                                         ----          -----         ------        -----
                                                        September 30, 1999
                                       -----------------------------------------------------
<S>                                   <C>           <C>           <C>           <C>
FHLMC participating certificates       $ 1,786,228   $      --     $    67,727   $ 1,718,501
GNMA participating certificates         15,402,200         4,982       698,741    14,708,441
FNMA participating certificates            794,942          --          30,345       764,597
                                       -----------   -----------   -----------   -----------

                                       $17,983,370   $     4,982   $   796,813   $17,191,539
                                       ===========   ===========   ===========   ===========

                                                        September 30, 1998
                                       -----------------------------------------------------
GNMA participating certificates        $ 6,823,137   $   174,119   $      --     $ 6,997,256
FNMA participating certificates            452,666         9,369          --         462,035
                                       -----------   -----------   -----------   -----------

                                       $ 7,275,803   $   183,488   $      --     $ 7,459,291
                                       ===========   ===========   ===========   ===========
</TABLE>

     No gains or losses were realized  during the years ended September 30, 1999
and 1998.

                                       28


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

     Loans receivable at September 30, 1999 and 1998 consist of the following:

                                                    1999             1998
                                                ------------    ------------
One to four family residential mortgage loans   $ 71,041,820    $ 67,057,267
Multifamily residential mortgage loans             2,352,325          92,008
Commercial mortgage loans                          6,772,077       4,799,463
Construction loans                                 5,183,370       1,967,500
Lines of credit                                    1,174,432       2,031,161
Home equity lines of credit                        3,500,846            --
Land/lot loans                                       832,531         952,173
Home improvement loans                                 4,608           5,668
Consumer loans                                     3,401,338            --
Share loans                                          390,723         260,565
Commercial loans secured by lease
 finance receivables                                 438,089         853,408
                                                ------------    ------------
                                                  95,092,159      78,019,213

Less - undisbursed portion of loans
             in process                           (3,568,811)     (1,713,800)
         - unamortized discount                     (725,393)       (125,337)
         - deferred loan origination fees           (519,604)       (520,673)
         - unearned insurance commissions             (2,118)           --
         - allowance for loan losses                (344,907)       (301,425)
                                                ------------    ------------

                                                $ 89,931,326    $ 75,357,978
                                                ============    ============


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

                                 September 30,
                           ------------------------

Beginning balance           $ 301,425    $ 250,000
Provision for loan losses      70,000      195,000
Charge-offs                   (26,518)    (143,575)
                            ---------    ---------

Balance end                 $ 344,907    $ 301,425
                            =========    =========



                                       29
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1998
------------------


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

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

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

               There  were no  impaired  loans as  defined  by SFAS  No.  114 at
          September 30, 1999 and 1998.  There was no interest income  recognized
          on impaired loans during those periods.

               Non-accrual  loans that are not subject to SFAS No. 114 for which
          interest has been reduced totaled approximately  $177,199 and $382,725
          at September 30, 1999 and 1998.

               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:

                                     1999      1998
                                     ----      ----
Interest income that would have
 been recognized                    $24,119   $30,781
Interest income recognized            8,621     5,390
                                    -------   -------

   Interest income not recognized   $15,498   $25,391
                                    =======   =======

                                       30


<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

               Loans  outstanding to officers and directors and their affiliates
          of the Bank at September 30, 1999 and 1998:

 Balance At           Balance At                       Balance At
 September    Loans   Principal   September    Loans   Principal     September
  30, 1999    Made    Repayment    30, 1998    Made    Repayment      30, 1997
 ----------  -----   ---------  ----------   -------- ---------    ------------
$1,517,263  $330,325  $355,278   $1,542,216   $213,104  $48,546     $1,377,658

               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:

                                             1999                 1998
                                          ----------           ----------
 Mortgage loan portfolios serviced for:
    Other investors                       $5,717,050           $7,038,699
                                          ==========           ==========

               Custodial  Escrow  balances  maintained  in  connection  with the
          foregoing loan  servicings were  approximately  $40,466 and $36,799 at
          September 30, 1999 and 1998.

               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,
 -----------------------------------       -------------------------
                                              1999           1998
                                              ----           ----
    Loan commitments                       $1,648,250    $1,084,750
    Unused lines of credit                  2,792,468     1,646,339

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

               Mortgage  loan  commitments  not  reflected  in the  accompanying
          financial  statements  at  September  30,  1998  are  for  fixed  rate
          mortgages totaling $1,084,750 ranging from 6.75% to 7.75%.


                                       31
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

               The  credit  risk  involved  in these  financial  instruments  is
          essentially  the same as that involved in extending loan facilities to
          customers. No amount has been recognized in the statement of financial
          condition at September 30, 1999 as a liability for credit loss.

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

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

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

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

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


                                       32
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------

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,
                                              -------------
                                                  1998
                                                  ----
              Capital stock, at cost        $     25,000
              Loan payable                     2,550,000
                                               ---------
                                            $  2,575,000
                                               =========

               Summarized financial  information as of June 30, 1998 and for the
          year then ended for Bankers Affiliate, Inc. is as follows:

                                              1998
                                           ----------
Cash                                       $   24,587
Finance receivables                         8,153,347
Real estate acquired through foreclosure       31,103
Other assets                                   42,571
                                           ----------

                                           $8,251,608
                                           ==========

Loans payable                              $8,150,000
Other liabilities                              21,596
                                           ----------
                                            8,171,596
Stockholders' equity                           80,012
                                           ----------
                                           $8,251,608
                                           ==========


                                       33
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

                                                  1998
                                                  ----
              Income and Expense
              ------------------

Income:
   Interest                                     $ 857,925
   Other income                                    32,330
                                                ---------
                                                  890,255

Expenses:
   Interest                                       636,195
   Provision for losses on loans                   32,515
   Salaries and related expenses                  149,744
   Other expenses                                  79,249
                                                ---------
                                                  897,703
                                                ---------
Loss before income tax benefit                     (7,448)

Income tax benefit                                 (5,358)
                                                ---------
Net loss                                           (2,090)
Retained earnings at beginning of fiscal year       7,102
                                                ---------

Retained earnings at end of fiscal year         $   5,012
                                                =========

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

               Premises  and  equipment  at  September  30,  1999  and  1998 are
          summarized by major classification as follows:
                                                                    Useful Life
                                                1999         1998     in Years
                                           -----------   ---------- -----------
         Land                              $   224,056   $  224,056     -
         Office buildings                      602,549      602,549    5-50
         Furniture, fixtures and equipment     919,593      862,980    3-20
                                            ----------    ---------
                                             1,746,198    1,689,585
            Accumulated depreciation          (907,671)    (812,659)
                                            ----------    ---------
                                           $   838,527   $  876,926
                                            ==========    =========



                                       34
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

               The provision for  depreciation  for the periods ended  September
          30, 1999 and 1998 was $115,158 and $82,404, respectively.

               The  Bank has  entered  into  several  operating  leases  for the
          premises of its branch offices.  Rental expense under these leases for
          the years ended  September  30, 1999 and 1998 was $59,221 and $60,523,
          respectively.  At September 30, 1999, the minimum  rental  commitments
          under noncancellable leases are as follows:

                         Year Ended September 30,     Total
                         ------------------------    -------
                                  2000               $51,903
                                  2001                27,856
                                  2002                 3,600
                                                     -------
                                                     $83,359
                                                     =======

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

               Deposits are summarized as follows at September 30:
<TABLE>
<CAPTION>
                                                     1999                      1998
                                             ------------------------   ------------------------
                                                          Weighted-                    Weighted-
                                                           Average                      Average
         Type of Account                     Amount         Rate        Amount           Rate
         ---------------                     ------      ------------   ------        ----------
<S>                                        <C>           <C>          <C>               <C>
         NOW and money market
          accounts including
          non-interest bearing deposits
          of $981,921 in 1999 and
          $981,343 in 1998                  $ 11,523,206  1.05%        $11,586,661       2.33%
         Passbook savings                     15,817,791  3.05%         14,726,868       3.05%
         Certificates of deposit              87,961,311  5.46%         68,752,209       5.82%
                                            ------------                ----------
                                             115,302,308                95,065,738
         Accrued interest                            179                       184
                                            ------------               -----------
                                            $115,302,487               $95,065,922
                                            ============               ===========
</TABLE>

                                       35
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

               The aggregate  amount of  certificates  of deposit with a minimum
          denomination of $100,000 was  approximately  $7,384,506 and $5,883,859
          at September 30, 1999 and 1998. Deposits in excess of $100,000 are not
          insured by the Savings Association Insurance Fund.
<TABLE>
<CAPTION>
                                                               1999            1998
                                                           -----------    ------------
                                                              Amount         Amount
                                                              ------         ------
<S>                                                       <C>            <C>
              Certificates accounts mature as follows:
                 One year or less                          $34,938,382    $32,396,930
                 More than 1 year through 2 years           24,070,423     14,801,388
                 More than 2 years through 3 years           7,926,915      6,384,738
                 More than 3 years                          21,025,591     15,169,153
                                                            ----------     ----------
                                                           $87,961,311    $68,752,209
                                                            ==========     ==========

               Interest  expense on  deposits is  summarized  as follows for the
          years ended September 30:
                                            1999            1998
                                            ----            ----
              Certificates               $ 4,429,927    $ 3,201,106
              NOW and money market           268,188        294,378
              Passbook                       461,734        444,271
                                         -----------    -----------
                                         $ 5,159,849    $ 3,939,755
                                         ===========    ===========
</TABLE>

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

               The Company's borrowings at September 30 are as follows:
<TABLE>
<CAPTION>
                                                                1999             1998
                                                                ----             ----
<S>                                                        <C>           <C>
             Short-term Federal Home Loan Bank advances     $  4,000,000  $  9,000,000
             Long-term Federal Home Loan Bank advances        20,000,000    11,000,000
             Other                                                  -          937,168
                                                             -----------   -----------
             Total                                           $24,000,000   $20,937,168
                                                             ===========   ===========
</TABLE>


                                       36
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

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

               At September 30, 1998, other borrowings  consisted of a long-term
          note  that bore  interest  of 8.5%.  The  interest  rate was  adjusted
          quarterly  and was based on the  commercial  prime rate.  The note was
          repurchased in February 1999.

               Aggregate  maturities required on Federal Home Loan Bank advances
          at September 30, 1999 are as follows:

                   September 30, 2000               $ 4,000,000
                   September 30, 2003                 5,000,000
                   After September 30, 2003          15,000,000
                                                    -----------
                         Total                      $24,000,000
                                                    ===========

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

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

               Substantially  all  employees  of  the  Bank  are  included  in a
          non-contributory defined benefit pension plan. The Bank's policy is to
          fund  pension  costs  accrued.  There were no unfunded or  unamortized
          prior  service  costs at  September  30,  1999 and 1998.  The costs of
          funding  this plan  were  $25,191  and  $21,240  for the  years  ended
          September 30, 1999 and 1998, respectively.


                                       37
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

                                                 1999         1998
                                              ---------     --------
              Service cost                    $  24,512    $  20,479
              Interest cost                      53,123       48,224
              Actual return on plan assets      (58,419)     (37,216)
              Other components                    5,975      (10,247)
                                              ---------     --------
              Net period pension costs        $  25,191    $  21,240
                                              =========     ========

               The  following  table  sets  forth the  plan's  funded  status at
          September 30:
<TABLE>
<CAPTION>
                                                                   1999        1998
                                                                ---------   ---------
<S>                                                             <C>         <C>
              Accumulated Benefit Obligation
              ------------------------------
                 Vested                                          $584,421    $509,795
                 Non-vested                                         6,945       4,522
                                                                ---------   ---------

                    Total                                        $591,366    $514,317
                                                                =========   =========

              Projected benefit obligation                       $882,248    $762,500
              Fair value of plan assets as of September 30        819,527     722,564
                                                                  -------     -------
              Plan assets in deficit of projected
               benefit obligation                                 (62,721)    (39,936)
              Unrecognized net loss                               234,038     168,620
              Unrecognized net transition obligation                1,823       2,025
                                                                ---------   ---------

                     Prepaid pension cost                        $173,140    $130,709
                                                                =========   =========
</TABLE>


                                       38
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


Note 11- Pension Plan - Continued
         ------------
                                                       1999         1998
                                                     ---------    ---------
Reconciliation of Projected Benefit Obligation
   Projected benefit obligation beginning of year    $ 762,500    $ 701,623
   Interest cost for the fiscal year                    53,123       48,224
   Service cost for the fiscal year                     24,512       20,479
   Benefit payments for the fiscal year                 (6,817)     (36,268)
   Actuarial (gain) loss for the fiscal year            48,930       28,442
                                                     ---------    ---------
   Projected benefit obligation as of September 30
    before settlement                                  882,248      762,500
   Effect of settlement                                   --           --
                                                     ---------    ---------
   Projected benefit obligation as of September 30
    after settlement                                 $ 882,248    $ 762,500
                                                     =========    =========

               The following  interest rate  assumptions were used for September
          30:

                                                          1999      1998
                                                          ----      ----
                 Weighted-average discount rate           7.50%     7.00%
                 Long term rate of return                 8.00%     8.00%
                 Rate of compensation increase            5.00%     4.50%

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

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

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


                                       39
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

               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, 1999 and 1998 was
          $219,065 and $230,919, respectively.

               The ESOP shares as of September 30 were as follows:
<TABLE>
<CAPTION>
                                                                 1999         1998
                                                                 ----         ----
<S>                                                           <C>        <C>
              Allocated shares                                   64,826       35,887
              Shares earned, but unallocated                      4,092        2,160
              Unearned shares                                    94,243       91,557

              Fair value of unearned shares at September 30    $854,124   $1,064,350
</TABLE>

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

                                       40
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

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

              Outstanding at September 30, 1997         183,058      $11.77
                                                        -------

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

              Outstanding at September 30, 1999         180,752       11.77
                                                        =======

              Exercisable at September 30, 1999          80,756
                                                        =======

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

               During fiscal 1998, the Company  declared a special  distribution
          of $3.00 per common stock share from funds  retained by the Company in
          the conversion.  Management  obtained a Private Letter Ruling from the
          Internal  Revenue  Service  which states that the  Company's  dividend
          payments in excess of accumulated  earnings and profits are considered
          a tax-free  return of capital for federal  income tax  purposes.  As a
          result,  management  believes the entire  distribution  constitutes  a
          tax-free  return of  capital.  Accordingly,  the  Company  charged the
          return of capital distribution to additional paid-in-capital.


                                       41
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

               Quantitative measures established by regulation to ensure capital
          adequacy  require the Bank to maintain minimum amounts and ratios (set
          forth in the table  below) of total and Tier I capital  (as defined in
          the regulations) and risk-weighted assets (as defined),  and of Tier I
          capital  (as  defined)  to  average  assets (as  defined).  Management
          believes,  as of September  30, 1999,  that the Bank meets all capital
          adequacy requirements to which it is subject.

               As of September 30, 1999, the most recent  notification  from the
          Office of Thrift Supervision  categorized the Bank as well capitalized
          under the regulatory  framework for prompt  corrective  action.  To be
          categorized as well  capitalized the Bank must maintain  minimum total
          risk-based, Tier I risk-based, and Tier I leverage ratios as set forth
          in  the  table.   There  are  no   conditions  or  events  since  that
          notification   that  management   believes  have  changed  the  Bank's
          category.  The  Bank's  actual  capital  amounts  and  ratios are also
          presented in the table.
<TABLE>
<CAPTION>
                                                                                  To Be Well
                                                                               Capitalized Under
                                                            For Capital        Prompt Corrective
                                       Actual            Adequacy Purposes     Action Provisions
                               --------------------  ----------------------  ---------------------
                                 Amount        %        Amount         %       Amount         %
                               -----------  -------  -------------   ------  -----------   -------
<S>                            <C>           <C>    <C>              <C>   <C>            <C>
       September 30, 1999
       Tangible (1)            $15,572,000    9.9%   $  2,355,435     1.5%  $   N/A         N/A%
       Tier I capital (2)       15,572,000   23.1%         N/A        N/A%    4,038,120     6.0%
       Core (1)                 15,572,000    9.9%      4,710,810     3.0%    7,851,450     5.0%
       Risk-weighted (2)        15,793,000   23.5%      5,384,160     8.0%    6,730,200    10.0%
</TABLE>


                                       42
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


Note 13- Retained Earnings - Continued
         -----------------
<TABLE>
<CAPTION>
                                                                                    To Be Well
                                                                                 Capitalized Under
                                                            For Capital         Prompt Corrective
                                     Actual              Adequacy Purposes       Action Provisions
                              ---------------------     --------------------     --------------------
                                Amount         %         Amount          %        Amount          %
                              -----------    ------     -----------    -----     ----------    ------
<S>                          <C>             <C>       <C>             <C>      <C>            <C>
       September 30, 1998
       Tangible (1)           $16,374,614     12.3%     $ 1,994,442     1.5%     $    N/A        N/A%
       Tier I capital (2)      16,374,614     28.8%          N/A        N/A%       3,411,420     6.0%
       Core (1)                16,374,614     12.3%       3,988,884     3.0%       6,648,140     5.0%
       Risk-weighted (2)       16,626,614     29.2%       4,548,560     8.0%       5,685,700    10.0%
</TABLE>
              (1)  To adjusted total assets.
              (2)  To risk-weighted assets.

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

               The income tax provision consists of the following:

                                                     For Years Ended
                                                       September 30,
                                                 ----------------------
                                                    1999         1998
Current
-------
   Federal                                       $ 506,606    $ 432,533
   State                                           108,303       93,712
                                                 ---------    ---------
                                                   614,909      526,245
Deferred
--------
   Federal                                         (69,580)     (31,343)
   State                                           (15,403)      (7,140)
                                                 ---------    ---------
                                                   (84,983)     (38,483)
Other
-----
   Market value adjustments for Employee Stock
     Ownership Plan and Management Stock
     Bonus Plan
   Federal                                         (33,555)     (23,112)
   State                                            (6,909)      (4,758)
                                                 ---------    ---------
                                                   (40,464)     (27,870)
                                                 ---------    ---------
                                                 $ 489,462    $ 459,892
                                                 =========    =========




                                       43
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

                                            Years Ended September 30,
                                 -------------------------------------------
                                        1999                   1998
                                 ---------------------  --------------------
                                             Percent                Percent
                                            of Pretax              of Pretax
                                  Amount     Income    Amount       Income
                                  ------     ------    ------       ------
Tax at statutory rate            $415,338      34.00   $387,760      34.00
Increases (Decreases)
 Resulting From
 -----------------------------
   State income tax net of
    federal income tax benefit     56,754       4.65     53,997       4.73
   Other                           17,370       1.42     18,135       1.59
                                 --------     ------   --------     ------
                                 $489,462      40.07   $459,892      40.32
                                 ========     ======   ========     ======

               The tax  effects  of  temporary  differences  that  give  rise to
          significant  portions  of the  deferred  tax assets and  deferred  tax
          liabilities at September 30, 1999 and 1998 are presented below:

                                                           1999         1998
                                                       -----------  -----------
              Deferred Tax Assets:
                 Deferred loan origination fees        $   200,671   $  201,084
                 Allowance for loan losses                 133,203      116,411
                 Reserve for uncollected interest            4,944        9,806
                 ESOP contribution                           8,331        8,331
                 Net unrealized holding losses             612,524       15,818
                 Other                                      93,621       20,101
                 NOL carryforward of subsidiary                  -        5,566
                                                       -----------  -----------
                    Total gross deferred tax assets      1,053,294      377,117


                                       44
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


Note 14- Income Taxes - Continued
         ------------
<TABLE>
<CAPTION>
                                                                  1999            1998
                                                              ------------   ------------
<S>                                                          <C>            <C>
              Deferred Tax Liabilities:
                 Tax reserve for bad debts in excess of
                  base year amount                            $     56,169   $     81,134
                 Federal Home Loan Bank of Atlanta stock
                  dividends                                         56,965         56,965
                 Depreciation                                       20,909         17,843
                 Pension plan                                       66,867         50,480
                                                               -----------    -----------
                    Total gross deferred tax liabilities           200,910        206,422
                                                               -----------    -----------
                          Net deferred tax assets             $    852,384   $    170,695
                                                               ===========    ===========

</TABLE>

               Qualified  thrift  lenders  such as the Bank are not  required to
          provide  a  deferred  tax  liability  for bad  debt  reserves  for tax
          purposes  that arose in fiscal  years  beginning  before  December 31,
          1987.  Such bad debt  reserve for the Bank  amounted to  approximately
          $2,022,261  with an income tax  effect of  approximately  $780,997  at
          September  30,  1999.  This bad debt reserve  would become  taxable if
          certain conditions are met by the Bank.

               The Company and its Subsidiary 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  investment  securities  and  mortgage  backed
          securities.  The carrying  amount of Federal Home Loan Bank of Atlanta
          stock is a reasonable  estimate of fair value.  Loans  receivable were
          discounted using a single


                                       45
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

          discount  rate,  comparing  the current  rates at which  similar loans
          would be made to  borrowers  with similar  credit  ratings and for the
          same remaining maturities,  except for adjustable rate mortgages which
          were considered to be at market rates.  These rates were used for each
          aggregated  category  of loans as  reported  on the  Office  of Thrift
          Supervision  Quarterly  Report.  The fair  value of  demand  deposits,
          savings  accounts and money market  deposits is the amount  payable on
          demand  at the  reporting  date.  The  fair  value  of  fixed-maturity
          certificates of deposit is estimated using the rates currently offered
          on deposits of similar remaining maturities.

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

               The estimated fair values of the Bank's financial instruments are
          as follows:
<TABLE>
<CAPTION>
                                      September 30, 1999            September 30, 1998
                                 ---------------------------    -------------------------
                                    Carrying       Estimated     Carrying        Estimated
                                     Value        Fair Value      Value         Fair Value
                                     -----        ----------      -----         ----------
<S>                             <C>            <C>            <C>            <C>
   Financial Assets
   Cash, interest-bearing
    deposits in other banks
    and federal funds            $  7,291,629   $  7,291,629   $ 14,422,780   $ 14,422,780
   Investments available
    for sale                       19,700,713     19,700,713     15,191,491     15,191,491
   Other investment securities
    held to maturity               15,650,000     14,650,478     14,600,000     14,706,862
   Mortgage backed securities      17,983,370     17,191,539      7,275,803      7,459,291
   Loans receivable                89,931,326     86,230,000     75,357,978     77,370,000
   Federal Home Loan Bank
    of Atlanta stock                1,200,000      1,200,000      1,000,000      1,000,000

Financial Liabilities
   Deposits                      $115,302,487   $115,492,000   $ 95,065,922   $ 95,448,000
   Commitments                           --        1,648,250           --        1,084,750
   Borrowings                      24,000,000     22,942,000     20,937,168     20,896,000
</TABLE>


                                       46
<PAGE>

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
SEPTEMBER 30, 1999
------------------


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

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

               Statement of Position  ("SOP")  98-5,  "Reporting on the Costs of
          Start-Up   Activities".   This  Statement  provides  guidance  on  the
          financial  reporting  of  start-up  cost  and  organization  cost.  It
          requires  costs of start-up  activities  and  organization  cost to be
          expensed as incurred.  The "SOP" also requires the initial application
          to be  reported  as a  cumulative  effect  of a change  in  accounting
          principle.  This "SOP" which is effective  for fiscal years  beginning
          after  December  15,  1998 will not  affect  the  Company's  financial
          position or results of operations.






                                       47