SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549



                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934




For Quarter Ended June 30, 1998                 Commission File Number 0-20378

                              CENIT BANCORP, INC. 
             (Exact name of registrant as specified in its charter)

         Delaware                                        54-1592546           
(State or other jurisdiction of                (I.R.S. Employer Identification
 incorporation or organization)                          Number)

       225 West Olney Road
          Norfolk, Virginia                                  23510            
(Address of principal executive                           (Zip code)
      office)

      Registrant's telephone number, including area code:       (757) 446-6600

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 during the preceding 12 months (or for such shorter period that the
     registrant was required to file such reports),  and (2) has been subject to
     such filing requirements for the past 90 days. 

                                   YES X          NO

     Indicate the number of shares  outstanding of each of the issuer's  classes
     of common stock, as of the latest practicable date.

Common Stock $.01 Par Value                                 5,018,092         
       Title of Class                           Number of Shares Outstanding
                                                      as of August 7, 1998

<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

                                    Contents
------------------------------------------------------------------------------


                                                                            Page
PART I - FINANCIAL INFORMATION

Item 1
   Financial Statements

Consolidated Statement of Financial Condition as of June 30, 1998 (Unaudited)
and December 31, 1997..........................................................1

Unaudited Consolidated Statement of Operations for the Three Months and Six 
Months ended June 30, 1998 and June 30, 1997...................................2

Unaudited Consolidated Statement of Comprehensive Income for the Six
Months Ended June 30, 1998 and June 30, 1997...................................3

Unaudited Consolidated Statement of Changes in Stockholders' Equity for the 
Six Months ended June 30, 1998.................................................4

Unaudited Consolidated Statement of Cash Flows for the Six Months ended 
June 30, 1998 and June 30, 1997................................................5

Notes to Unaudited Consolidated Financial Statements...........................6

Item 2
   Management's Discussion and Analysis of Financial Condition and Results of 
   Operations................................................................. 6

Item 3
   Quantitative and Qualitative Disclosures About Market Risk.................17

PART II - OTHER INFORMATION

Item 1
   Legal Proceedings..........................................................18

Item 2
   Changes in Securities......................................................18

Item 3
   Defaults Upon Senior Securities............................................18

Item 4
   Submission of Matters to a Vote of Security Holders........................18

Item 5
   Other Information..........................................................18

Item 6
   Exhibits and Reports on Form 8-K...........................................18

Signatures....................................................................18

<PAGE>

PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements

                      CENIT BANCORP, INC. AND SUBSIDIARY

                  CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                  (Dollars in thousands, except per share data)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                            (Unaudited)
                                                                           June 30, 1998        December 31, 1997
                                                                           -------------        -----------------
<S>                                                                           <C>                   <C>

Cash                                                                          $  16,963             $  16,993
Federal funds sold                                                               12,876                37,118
Securities available for sale at fair value (adjusted
   cost of $69,499 and $135,861, respectively)                                   70,254               137,188
Loans, net:
   Held for investment                                                          511,917               486,487
   Held for sale                                                                  6,536                 3,167
Interest receivable                                                               4,498                 4,888
Real estate owned, net                                                              487                 1,098
Federal Home Loan Bank and Federal Reserve Bank stock, at cost                    5,850                 8,711
Property and equipment, net                                                      14,599                14,230
Goodwill and other intangibles, net                                               3,828                 4,010
Other assets                                                                      4,049                 4,193
                                                                              ---------             ---------
                                                                              $ 651,857             $ 718,083
                                                                              =========             =========

                                       LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Deposits:
     Noninterest-bearing                                                      $  68,870             $  54,874
     Interest-bearing                                                           430,340               452,796
                                                                              ---------             ---------
        Total deposits                                                          499,210               507,670
   Advances from the Federal Home Loan Bank                                      85,000               145,000
   Other borrowings                                                                 697                 2,575
   Securities sold under agreements to repurchase                                11,508                 9,664
   Advance payments by borrowers for taxes and insurance                          1,122                   720
   Other liabilities                                                              2,745                 2,517
                                                                              ---------             ---------
        Total liabilities                                                       600,282               668,146
                                                                              =========             =========
Stockholders' equity:
   Preferred stock, $.01 par value; authorized 3,000,000
     shares; none outstanding                                                         -                     -
   Common stock, $.01 par value; authorized 7,000,000 shares;
     issued and outstanding 4,996,610 and 4,971,243 shares,
     respectively                                                                    50                    50
   Additional paid-in capital                                                    18,488                18,119
   Retained earnings - substantially restricted                                  36,955                35,416
   Common stock acquired by Employee Stock Ownership Plan (ESOP)                 (4,144)               (4,232)
   Common stock acquired by Management Recognition
     Plan (MRP)                                                                    (242)                 (271)
   Accumulated other comprehensive income,
     net of income taxes                                                            468                   855
                                                                              ---------             ---------
     Total stockholders' equity                                                  51,575                49,937
                                                                              ---------             ---------
                                                                              $ 651,857             $ 718,083
                                                                              =========             =========

<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>

                                                         1
<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                Three months                       Six Months
                                                                    Ended                            Ended
                                                                  June 30,                          June 30,
                                                            1998            1997              1998             1997
                                                            ----            ----              ----             ----
<S>                                                     <C>             <C>              <C>              <C> 

Interest and fees on loans                              $ 10,274        $  9,502         $  20,324        $  18,377
Interest on mortgage-backed certificates                   1,022           2,296             2,505            5,009
Interest on investment securities                            678             698             1,358            1,425
Dividends and other interest income                          343             270               694              505
                                                        --------        --------         ---------        ---------  
     Total interest income                                12,317          12,766            24,881           25,316
                                                        --------        --------         ---------        ---------
Interest on deposits                                       4,994           5,142            10,097           10,198
Interest on borrowings                                     2,020           2,243             4,094            4,408
                                                        --------        --------         ---------        ---------
     Total interest expense                                7,014           7,385            14,191           14,606
                                                        --------        --------         ---------        ---------
     Net interest income                                   5,303           5,381            10,690           10,710
Provision for loan losses                                    136             150               340              300
                                                        --------        --------         ---------        ---------
     Net interest income after provision
                  for loan losses                          5,167           5,231            10,350           10,410
                                                        --------        --------         ---------        ---------
Other income:
     Deposit fees                                            616             493             1,220              976
     Merchant processing fees                                537             327               930              555
     Commercial mortgage brokerage fees                      183             122               364              125
     Gains on sales of loans and securities                  287             206               462              314
     Other                                                   246             211               459              360
                                                        --------        --------         ---------        ---------
                  Total other income                       1,869           1,359             3,435            2,330
                                                        --------        --------         ---------        ---------

Other expenses:
     Salaries and employee benefits                        2,105           1,947             4,193            4,027
     Equipment, data processing and supplies                 773             670             1,478            1,356
     Net occupancy expense of premises                       455             459               928              919
     Merchant processing                                     472             273               832              463
     Expenses, gains/losses on sales and provision
       for losses on real estate owned, net                   11              94                80              141
     Professional fees                                       173             125               367              238
     Expenses related to proxy contest and other matters       -              11                 -              405
     Other                                                   712             615             1,321            1,172
                                                        --------        --------         ---------        ---------
                  Total other expenses                     4,701           4,194             9,199            8,721
                                                        --------        --------         ---------        ---------

Income before income taxes                                 2,335           2,396             4,586            4,019
Provision for income taxes                                   831             848             1,624            1,418
                                                        --------        --------         ---------        ---------

     Net income                                         $  1,504        $  1,548         $   2,962        $   2,601
                                                        ========        ========         =========        =========
Earnings per share
     Basic                                              $    .32        $    .31         $     .62        $     .53
                                                        ========        ========         =========        =========
     Diluted                                            $    .31        $    .31         $     .61        $     .51
                                                        ========        ========         =========        =========

Dividends per common share                              $    .10        $    .08         $     .20        $     .17
                                                        ========        ========         =========        =========

<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>

                                                         2
<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

            UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                             (Dollars in thousands)
<TABLE>
<CAPTION>



                                                                                                Six Months
                                                                                                   Ended

                                                                                                June 30,
                                                                                         1998             1997
                                                                                         ----             ----
<S>                                                                                    <C>               <C>

Net income                                                                             $  2,962          $ 2,601
                                                                                       --------          -------

Other comprehensive income (loss), before income taxes:
   Unrealized gains (losses) on securities available for sale
     Unrealized holding gains (losses) arising during the period                           (500)             358
     Less: reclassification adjustment for gains included in net income                     (72)             (90)
                                                                                       --------          -------

Other comprehensive income (loss), before income taxes                                     (572)             268

Income tax benefit (expense) related to items of other comprehensive income (loss)          185              (96)
                                                                                       --------          -------

Other comprehensive income (loss), net of income taxes                                     (387)             172
                                                                                       --------          -------

Comprehensive income                                                                   $  2,575          $ 2,773
                                                                                       ========          =======





























<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>

                                                           3
<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

       UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         Six Months Ended June 30, 1998
                             (Dollars in thousands)



<TABLE>
<CAPTION>


                                                                                         Common       Accumulated
                                                                                          Stock          Other
                                                  Common      Additional                Acquired     Comprehensive
                                     Common        Stock       Paid-In     Retained     by ESOP     Income, Net of
                                  Stock Shares    Amount       Capital     Earnings     and MRP      Income Taxes       Total 
                                  ------------    ------      ----------   --------     --------    --------------      -----    

<S>                               <C>              <C>         <C>         <C>          <C>           <C>             <C>

Balance, December 31, 1997,
 as originally reported           1,657,081        $ 17        $18,152     $35,416      $(4,503)      $  855          $ 49,937


Common stock issued in
   1998 three-for-one stock split 3,314,162          33            (33)          -           -             -                 -
                                  ---------        ----        -------     -------      ------        ------          --------    

Balance, December 31, 1997,
   as restated                    4,971,243        $ 50        $18,119     $35,416      $(4,503)      $  855          $ 49,937

Comprehensive income                      -           -              -       2,962           -          (387)            2,575


Cash dividends declared                   -           -              -      (1,423)          -             -            (1,423)


Exercise of stock options and
 related tax benefits                25,367           -            284           -           -             -               284


Other                                     -           -             85           -         117             -               202
                                  ---------        ----        -------     -------      ------        ------          --------


Balance, June 30, 1998            4,996,610        $ 50        $18,488     $36,955      $(4,386)      $  468          $ 51,575
                                  =========        ====        =======     =======      =======       ======          ========


























<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>

                                                           4
<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                           Six months ended June 30,
                                                                             1998             1997
                                                                             ----             ----
<S>                                                                       <C>                <C>

Cash flows from operating activities:
   Net income                                                             $  2,962           $  2,601
   Add (deduct) items not affecting cash in the period:
     Provision for loan losses                                                 340                300
     Provision for losses on real estate owned                                  14                 67
     Amortization of loan yield adjustments                                    233                 37
     Depreciation, amortization and accretion, net                           1,108              1,132
     Net (gains) losses on sales/disposals of:
        Securities                                                             (72)               (89)
        Loans                                                                 (390)              (224)
        Real estate, property and equipment                                     51                 13
     Proceeds from sales of loans held for sale                             33,221             15,768
     Originations of loans held for sale                                   (36,211)           (17,183)
     Change in assets/liabilities:
        Decrease in interest receivable and other assets                       670             (1,096)
        Increase in other liabilities                                          124                660
                                                                          --------           --------
        Net cash provided by operating activities                            2,050              1,986
                                                                          --------           --------
Cash flows from investing activities:
   Purchases of securities available for sale                              (37,237)            (8,088)
   Principal repayments on securities available for sale                    25,720             26,676
   Proceeds from maturities of securities available for sale                11,000             10,500
   Proceeds from sales of securities available for sale                     66,660             26,686
   Net increase in loans held for investment                               (25,743)           (58,073)
   Net proceeds on sales of real estate owned                                  302                680
   Additions to real estate owned                                              (12)               (82)
   Purchases of Federal Home Loan Bank stock                                (1,650)            (1,600)
   Redemption of Federal Home Loan Bank stock
     and Federal Reserve Bank stock                                          4,511                  -
   Proceeds from sale of property and equipment                                 59                  6
   Purchases of property and equipment                                      (1,075)            (1,208)
                                                                          --------           --------
     Net cash provided by (used for) investing activities                   42,535             (4,503)
                                                                          --------           --------
Cash flows from financing activities:
   Proceeds from exercise of stock options and warrants                        183                167
   Net increase (decrease) in deposits                                      (8,460)            11,653
   Proceeds from Federal Home Loan Bank advances                           508,000            686,000
   Repayment of Federal Home Loan Bank advances                           (568,000)          (703,000)
   Repayments of other borrowings                                           (1,878)                 -
   Net increase in securities sold under agreement
     to repurchase and federal funds purchased                               1,844              5,016
   Cash dividends paid                                                        (948)            (1,232)
   Other, net                                                                  402                461
                                                                          --------           --------
        Net cash used for financing activities                             (68,857)              (935)
                                                                          --------           --------
Decrease in cash and cash equivalents                                      (24,272)            (3,452)
Cash and cash equivalents, beginning of period                              54,111             23,478
                                                                          --------           --------
Cash and cash equivalents, end of period                                  $ 29,839           $ 20,026
                                                                          ========           ========
Supplemental disclosures of cash flow  information:
Cash paid during the period for interest                                  $  5,583           $  6,097
Cash paid during the period for income taxes                                 1,205                925
Schedule of noncash investing and financing activities:
Real estate acquired in settlement of loans                               $    210           $    868
Loans to facilitate sale of real estate owned                                  470              1,224


<FN>
The notes to unaudited consolidated financial statements are an integral part of this statement.
</FN>
</TABLE>

                                                         5
<PAGE>

                      CENIT BANCORP, INC. AND SUBSIDIARY

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


Note 1 - Basis of Presentation

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include  all of  the  disclosures  and  notes  required  by  generally  accepted
accounting  principles.  In the  opinion  of  the  management,  all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation have been included. The results of operations for the three and six
month  periods  ended June 30, 1998 and 1997 are not  necessarily  indicative of
results that may be expected for the entire year or any interim periods. Certain
previously  reported  amounts have been  reclassified  to agree with the current
presentation.  The interim  financial  statements  should be read in conjunction
with the December 31,  1997 consolidated  financial statements of CENIT Bancorp,
Inc. (the "Company").

Note 2 - Per Share Data

     On March 24, 1998, the Company  declared a three-for-one  stock split.  All
financial  data  included  in this Form 10-Q  reflects  the  effect of the stock
split.

     The Company adopted FAS 128,  Earnings per Share, on December 31, 1997. The
Company  changed the method used to compute  earnings per share and restated all
prior periods.

     Basic  earnings  per share is  calculated  using  weighted  average  shares
outstanding.  For the six month  period and three  month  period  ended June 30,
1998,  weighted  average  shares used to compute  basic  earnings per share were
4,739,667 and 4,750,237, respectively. For the six months and three months ended
June 30, 1997,  weighted average shares used to compute basic earnings per share
were 4,924,572 and 4,934,946, respectively.

     Diluted earnings per share is calculated by adding common stock equivalents
to the weighted average shares  outstanding.  For the six month period and three
month  period  ended June 30,  1998,  weighted  average  shares  used to compute
diluted earnings per share were 4,873,557 and 4,879,072,  respectively.  For the
six months and three months ended June 30, 1997, weighted average shares used to
compute diluted earnings per share were 5,057,855 and 5,063,573, respectively.

     The  unallocated  common  shares  held  by  the  Company's  Employee  Stock
Ownership  Plan are excluded from the weighted  average shares used to calculate
basic and diluted earnings per share.

Note 3 - Comprehensive Income

     On January 1, 1998, the Company  adopted FAS 130,  Reporting  Comprehensive
Income. FAS 130 established standards for reporting and displaying comprehensive
income  and its  components.  The  adoption  of FAS 130 did not have a  material
impact on the Company.  All of the Company's other comprehensive  income relates
to net unrealized gains (losses) on available for sale securities.

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

General

     On June 3, 1998, the Company, as the sole shareholder of its two subsidiary
banks,  merged CENIT Bank  (formerly  Princess Anne Bank) into CENIT Bank,  FSB.
Following the merger,  the Company ceased to be regulated by the Federal Reserve
and became a registered  savings and loan holding company regulated  pursuant to
the  Homeowner's  Loan Act, as amended.  As such,  the Company is subject to the
regulation, examination, supervision and reporting requirements of the Office of
Thrift Supervision  ("OTS").  In July, 1998, CENIT Bank, FSB changed its name to
CENIT Bank (the
"Bank").


                                        6
<PAGE>

     The Company's  business currently consists of the business of the Bank. The
principal  business of the Bank consists of attracting  retail deposits from the
general  public in its market  areas  through a variety of deposit  products and
investing these funds in commercial,  real estate and consumer  loans.  The Bank
also  invests in  mortgage-backed  certificates,  securities  issued by the U.S.
Treasury  and U.S.  Government  agencies  and  other  investments  permitted  by
applicable laws and regulations.

Financial Condition Of The Company

Total Assets

     At June 30, 1998, the Company had total assets of $651.9 million,  compared
to $718.1 million at December 31, 1997, a decrease of $66.2 million or 9.2%. The
decrease  is  primarily  the  result of  proceeds  from the sale,  maturity  and
principal   repayment   of   certain   securities,   primarily   mortgage-backed
certificates,  being used to reduce  advances  from the  Federal  Home Loan Bank
("FHLB") instead of being reinvested in additional securities.

Securities Available for Sale

     Securities  available  for sale totaled  $70.3 million at June 30, 1998 and
are  comprised  of U. S.  Treasury  securities,  other U. S.  Government  agency
securities, and mortgage-backed certificates.  The net decrease of $66.9 million
from the December 31, 1997 balance of $137.2  million  resulted  primarily  from
$25.7  million of  repayments,  $37.2  million of  purchases,  $11.0  million of
proceeds from the maturities of  securities,  and $66.7 million from the sale of
securities.

Loans

     The balance of net loans held for investment  increased from $486.5 million
at December 31, 1997 to $511.9  million at June 30,  1998,  an increase of $25.4
million or 5.2%. During the first half of 1998,  amortizations or prepayments of
conventional  1- to  4-family  residential  loans were  approximately  40% on an
annualized basis.



                                        7
<PAGE>

     The following  table sets forth the  composition of the Company's  loans in
dollar  amounts and as a percentage of the Company's  total gross loans held for
investment at the dates indicated.

<TABLE>
<CAPTION>

                                                           June 30, 1998                    December 31, 1997
                                                           -------------                    -----------------
                                                                        (Dollars in Thousands)
                                                       Amount        Percent              Amount        Percent
                                                       ------        -------              ------        -------
<S>                                                  <C>             <C>                <C>              <C>
Real estate loans:
   Residential permanent 1- to 4-family:
     Adjustable rate                                 $  224,399      40.54%             $  213,682       40.20%
     Fixed rate
       Conventional                                      78,565      14.20                  89,356       16.81
       Guaranteed by VA or insured by FHA                 4,574        .83                   5,487        1.03
                                                     ----------      -----              ----------       -----
     Total permanent 1- to 4-family                     307,538      55.57                 308,525       58.04
   Residential permanent 5 or more family                 6,038       1.09                   6,374        1.20
                                                     ----------      -----              ----------       -----
     Total permanent residential loans                  313,576      56.66                 314,899       59.24
                                                     ----------      -----              ----------       -----
   Commercial real estate loans:
     Hotels                                               9,436       1.70                  10,240        1.93
     Office and warehouse facilities                     30,390       5.48                  26,710        5.02
     Retail facilities                                   18,580       3.36                  18,249        3.43
     Other                                                5,293        .96                   2,714         .51
                                                     ----------      -----              ----------       -----
     Total commercial real estate loans                  63,699      11.50                  57,913       10.89
                                                     ----------      -----              ----------       -----
   Construction loans:
     Residential 1- to 4-family                          44,092       7.97                  44,208        8.32
     Residential 5 or more family                        16,528       2.99                  12,784        2.40
     Nonresidential                                       3,409        .62                   1,420         .27
                                                     ----------      -----              ----------       -----
     Total construction loans                            64,029      11.58                  58,412       10.99
                                                     ----------      -----              ----------       -----

   Land acquisition and development loans:
     Consumer lots                                        4,457        .80                   4,573        0.86
     Acquisition and development                         13,986       2.53                  13,327        2.51
                                                     ----------      -----              ----------       -----
     Total land acquisition and development
       loans                                             18,443       3.33                  17,900        3.37
                                                     ----------      -----              ----------       -----
     Total real estate loans                            459,747      83.07                 449,124       84.49
                                                     ----------      -----              ----------       -----
Consumer loans:
   Boats                                                  4,969        .90                   5,685        1.07
   Home equity and second mortgage                       51,157       9.24                  45,194        8.50
   Mobile homes                                              71        .01                      95         .02
   Other                                                  8,667       1.57                   7,250        1.36
                                                     ----------      -----              ----------       -----
     Total consumer loans                                64,864      11.72                  58,224       10.95
                                                     ----------      -----              ----------       -----
Commercial business loans                                28,842       5.21                  24,222        4.56
                                                     ----------      -----              ----------       -----
     Total loans                                        553,453     100.00%                531,570      100.00%
                                                     ----------      =====              ----------       =====
Less:
   Allowance for loan losses                              3,907                              3,783
   Loans in process                                      38,934                             42,067
   Unearned discounts, premiums, and loan fees, net      (1,305)                              (767)
                                                     ----------                         ----------
                                                         41,536                             45,083
                                                     ----------                         ----------
Total loans, net                                     $  511,917                         $  486,487
                                                     ==========                         ==========
</TABLE>



                                        8
<PAGE>

     The following table sets forth information about  originations,  purchases,
sales,  and  principal  reductions  for  the  Company's  loans  for  the  period
indicated.

                                                             Six Months Ended
                                                               June 30, 1998
                                                            -------------------
                                                          (Dollars in Thousands)
Loans originated:
   Real estate:
      Permanent:
         Residential 1- to 4-family                                $ 44,686
         Residential 5 or more family                                     -
                                                                   --------
            Total                                                    44,686
                                                                   --------
      Commercial real estate                                         10,683
                                                                   --------
      Construction:
         Residential 1- to 4-family                                  12,386
         Residential 5 or more family                                 4,075
         Nonresidential                                               2,430
                                                                   --------
            Total                                                    18,891
                                                                   --------
      Land acquisition:
         Consumer lots                                                  599
         Acquisition and development                                  2,418
                                                                   --------
            Total                                                     3,017
                                                                   --------
            Total real estate loans originated                       77,277
                                                                   --------
   Consumer:
      Home equity and second mortgage                                18,747
      Other                                                           4,055
                                                                   --------
            Total                                                    22,802
                                                                   --------
   Commercial business                                               21,456
                                                                   --------
            Total loans originated                                  121,535
                                                                   --------
   Loans purchased                                                   51,214
                                                                   --------
            Total loans originated and purchased                    172,749
                                                                   --------
Principal reductions:
   Repayments and other principal reductions                        114,822
   Real estate loans sold                                            32,697
                                                                   --------
            Total principal reductions                              147,519
                                                                   --------
Net increase in total loans                                        $ 25,230
                                                                   ========
Net increase in loans held for sale                                $  3,347
Net increase in gross loans held for investment                      21,883
                                                                   --------
                                                                   $ 25,230
                                                                   ========



                                        9
<PAGE>

Deposits

     The balance of deposits decreased from $507.7 million at December 31, 1997,
to $499.2 million at June 30, 1998. During this period,  certificates of deposit
decreased  from  $328.2  million  at  December 31,  1997,  to $290.1  million at
June 30,  1998,  as the Company  did not seek to match the  highest  certificate
rates within its market. All other interest- bearing deposits increased by 12.5%
from $124.6  million at December  31, 1997 to $140.2  million at June 30,  1998.
Noninterest-bearing  deposits increased 25.5% from $54.9 million at December 31,
1997 to $68.9 million at June 30, 1998.

Capital

     The Company's and the Bank's capital ratios exceeded applicable  regulatory
requirements at June 30, 1998.

     In June 1998,  the Board of  Directors  of the Company  gave the  Company's
management  the discretion to initiate a repurchase of up to five percent of the
Company's  shares.  The Company is not obligated to conduct such a repurchase at
all,  and  the  Company's  decision  to do so,  as  well  as the  timing  of any
purchases, will depend on a variety of factors.

Asset Quality

     Nonperforming Assets.  Nonperforming assets consist of nonperforming loans,
real estate  acquired in  settlement  of loans  ("REO"),  and other  repossessed
assets. Generally the Company does not accrue interest on loans that are 90 days
or more past due,  with the  exception of certain  VA-guaranteed  or FHA insured
one- to four-family  permanent  mortgage loans,  certain credit card loans,  and
matured loans for which the borrowers are still making required monthly payments
of interest,  or principal and  interest,  and with respect to which the Bank is
negotiating extensions or refinancings with the borrowers.


                                       10
<PAGE>

     The   following   table  sets  forth   information   about  the   Company's
nonperforming loans, REO, and other repossessed assets at the dates indicated.

                                                       June 30,    December 31,
                                                         1998         1997
                                                       --------    ------------
                                                        (Dollars in Thousands)
Nonperforming loans:
   Real estate loans:
     Permanent residential 1- to 4-family
       Nonaccrual                                        $  386      $  528
       Accruing loans 90 days or more past due               86          53
                                                         ------      ------
       Total                                                472         581
                                                         ------      ------

     Land acquisition and development
       Nonaccrual                                           100         200
       Accruing loans 90 days or more pasts due               -           -
                                                         ------      ------

       Total                                                100         200
                                                         ------      ------

   Consumer loans:
     Mobile homes (nonaccrual)                               27          48
     Credit cards (accruing loans 90 days or
       more pasts due)                                        1           5
     Other (nonaccrual)                                      26          24
                                                         ------      ------

       Total                                                 54          77
                                                         ------      ------

   Commercial business loans:
     Nonaccrual                                              73         240
     Accruing loans 90 days or more past due                 49           5
                                                         ------      ------

       Total                                                122         245
                                                         ------      ------

Total nonperforming loans:
   Nonaccrual                                               612       1,040
   Accruing loans 90 or more days past due                  136          63
                                                         ------      ------

       Total                                                748       1,103

Real estate owned, net                                      487       1,098
Other repossessed assets, net                                 1         228
                                                         ------      ------

   Total nonperforming assets, net                       $1,236     $ 2,429
                                                         ======      ======

   Total nonperforming assets, net, to total assets         .19%        .34%
                                                         ======      ======

     The  decrease in  nonperforming  assets from  December 31, 1997 to June 30,
1998 of $1.2 million  related  primarily to both the net decrease in  nonaccrual
loans  of  $428,000  and the  net  decrease  in  real  estate  owned  and  other
repossessed assets of $838,000, which offset an increase in accruing loans 90 or
more days past due of $73,000.


                                       11
<PAGE>

     Allowance for Loan Losses.  The following  table sets forth activity of the
allowance for loan losses for the periods indicated.

                                                   Six months ended June 30,
                                                   -------------------------
                                                   1998                 1997
                                                   ----                 ----
                                                     (Dollars in Thousands)

Balance at beginning of period                    $ 3,783              $ 3,806
Provision for loan losses                             340                  300
Losses charged to allowance                          (286)                (452)
Recovery of prior losses                               70                   56
                                                  -------              -------
Balance at end of period                          $ 3,907              $ 3,710
                                                  =======              =======

     The Company's  provision for loan losses  increased to $340,000 for the six
months ended June 30,  1998, as compared to $300,000 in the same period in 1997.
At June 30,  1998,  the  Company's  coverage  ratio  was  522%  based on a total
allowance  for loan  losses of $3.9  million  and total  nonperforming  loans of
$748,000. This compares to a coverage ratio of 343% at December 31, 1997.

Average Balance Sheets

     The  following  tables set forth,  for the periods  indicated,  information
regarding: (i) the total dollar amounts of interest income from interest-earning
assets  and the  resulting  average  yields;  (ii) the total  dollar  amounts of
interest  expense from  interest-bearing  liabilities and the resulting  average
costs;  (iii) net interest income;  (iv) interest rate spread;  (v) net interest
position;  (vi) the net yield earned on  interest-earning  assets; and (vii) the
ratio of total interest-earning  assets to total  interest-bearing  liabilities.
Average  balances shown in the following tables have been calculated using daily
average balances.


                                       12
<PAGE>

<TABLE>
<CAPTION>

                                                    For the Three Months                 For the Three Months
                                                            Ended                                Ended
                                                        June 30, 1998                        June 30, 1997
                                                ------------------------------       -----------------------------               
                                                Average               Yield/         Average               Yield/
                                                Balance   Interest     Cost          Balance   Interest     Cost
                                                -------   --------    ------         -------   --------    ------
                                                                     (Dollars in thousands)
<S>                                          <C>           <C>          <C>        <C>          <C>           <C>

Interest-earning assets:
     Loans (1)                               $  520,626    $10,274      7.89%      $  469,859   $  9,502      8.09%
     Mortgage-backed certificates                63,591      1,022      6.43          129,576      2,296      7.09
     U.S. Treasury and other U.S.
        Government agency securities             45,444        678      5.97           44,130        698      6.33
     Federal funds sold                          12,494        173      5.54            7,481        103      5.51
     Federal Home Loan Bank and
        Federal Reserve Bank stock                8,834        170      7.70            9,300        167      7.19
                                             ----------    -------                 ----------   --------
        Total interest-earning assets           650,989     12,317      7.57          660,346     12,766      7.73
                                             ----------    -------                 ----------   --------

Noninterest-earning assets:
     REO                                            600                                 1,828
     Other                                       45,276                                37,897
                                             ----------                            ----------
        Total noninterest-earning assets         45,876                                39,725
                                             ----------                            ----------
             Total assets                    $  696,865                            $  700,071
                                             ==========                            ==========

Interest-bearing liabilities:
     Passbook and statement savings          $   40,937        341      3.33%      $   45,604        385      3.38%
     Checking accounts                           35,512        162      1.82           29,141        149      2.04
     Money market deposit accounts               61,777        587      3.80           45,223        370      3.27
     Certificates of deposit                    297,437      3,904      5.25          325,511      4,238      5.21
                                             ----------    -------                 ----------   --------
        Total interest-bearing deposits         435,663      4,994      4.59          445,479      5,142      4.62
                                             ----------    -------                 ----------   --------
     Advances from the Federal Home
        Loan Bank                               135,484      1,857      5.48          149,154      2,127      5.70
     Securities sold under agreements
        to repurchase                            11,901        138      4.64           10,024        116      4.62
     Other borrowings                             1,311         25      7.63                -          -      -
                                             ----------    -------                 ----------   --------
        Total borrowings                        148,696      2,020      5.43          159,178      2,243      5.64
                                             ----------    -------                 ----------   --------
        Total interest-bearing liabilities      584,359      7,014      4.80          604,657      7,385      4.89
                                             ----------    -------                 ----------   --------

Noninterest-bearing liabilities:
     Deposits                                    55,192                                40,913
     Other liabilities                            6,144                                 3,819
                                             ----------                            ----------
        Total noninterest-bearing liabilities    61,336                                44,732
                                             ----------                            ----------
             Total liabilities                  645,695                               649,389

Stockholders' equity                             51,170                                50,682
                                             ----------                            ----------
Total liabilities and stockholders' equity   $  696,865                            $  700,071
                                             ==========                            ==========

Net interest income/interest rate spread                   $ 5,303      2.77%                   $  5,381      2.84%
                                                           =======      ====                    ========      ====

Net interest position/net interest margin    $   66,630                 3.26%      $   55,689                 3.26%
                                             ==========                 ====       ==========                 ====

Ratio of average interest-earning assets to
     average interest-bearing liabilities        111.40%                               109.21%
                                             ==========                            ==========

<FN>

(1) Includes nonaccrual loans and loans held for sale.
</FN>

</TABLE>

                                       13
<PAGE>

<TABLE>
<CAPTION>

                                                     For the Six Months                   For the Six Months
                                                            Ended                                Ended
                                                        June 30, 1998                        June 30, 1997
                                                ----------------------------         ----------------------------
                                                                                                                
                                                Average               Yield/         Average               Yield/
                                                Balance   Interest     Cost          Balance   Interest     Cost
                                                -------   --------    ------         -------   --------    ------
                                                                     (Dollars in thousands)
<S>                                          <C>          <C>           <C>        <C>         <C>          <C>

Interest-earning assets:
     Loans (1)                               $  512,752   $ 20,324      7.93%      $  452,583  $  18,377    8.12%
     Mortgage-backed certificates                75,784      2,505      6.61          145,395      5,009    6.89
     U.S. Treasury and other U.S.
        Government agency securities             45,224      1,358      6.00           45,218      1,425    6.30
     Federal funds sold                          12,830        352      5.48            6,789        187    5.50
     Federal Home Loan Bank and
        Federal Reserve Bank stock                9,115        342      7.50            8,915        318    7.13
                                             ----------   --------                 ----------  ---------
        Total interest-earning assets           655,705     24,881      7.59          658,900     25,316    7.68
                                             ----------   --------                 ----------  ---------

Noninterest-earning assets:
     REO                                            811                                 2,100
     Other                                       43,712                                39,131
                                             ----------                            ----------
        Total noninterest-earning assets         44,523                                41,231
                                             ----------                            ----------
             Total assets                    $  700,228                            $  700,131
                                             ==========                            ==========

Interest-bearing liabilities:
     Passbook and statement savings              42,038        694      3.30%      $   46,294        777    3.36%
     Checking accounts                           33,711        309      1.83           29,052        302    2.08
     Money market deposit accounts               58,743      1,086      3.70           45,508        745    3.27
     Certificates of deposit                    306,242      8,008      5.23          325,196      8,374    5.15
                                             ----------   --------                 ----------  ---------
        Total interest-bearing deposits         440,734     10,097      4.58          446,050     10,198    4.57
                                             ----------   --------                 ----------  ---------
     Advances from the Federal Home
        Loan Bank                               138,575      3,781      5.46          152,950      4,222    5.52
     Securities sold under agreements
        to repurchase                            10,572        243      4.59            8,266        186    4.50
     Other borrowings                             1,865         70      7.51                -          -       -
                                             ----------   --------                 ----------  ---------
        Total borrowings                        151,012      4,094      5.42          161,216      4,408    5.47
                                             ----------   --------                 ----------  ---------
        Total interest-bearing liabilities      591,746     14,191      4.80          607,266     14,606    4.81
                                             ----------   --------                 ----------  ---------

Noninterest-bearing liabilities:
     Deposits                                    51,578                                39,295
     Other liabilities                            6,153                                 3,283
                                             ----------                            ----------
        Total noninterest-bearing liabilities    57,731                                42,578
                                             ----------                            ----------
             Total liabilities                  649,477                               649,844

Stockholders' equity                             50,751                                50,287
                                             ----------                            ----------
Total liabilities and stockholders' equity   $  700,228                            $  700,131
                                             ==========                            ==========

Net interest income/interest rate spread                  $ 10,690      2.79%                  $  10,710    2.87%
                                                          ========      ====                   =========    ====

Net interest position/net interest margin    $   63,959                 3.26%      $   51,634               3.25%
                                             ==========                 ====       ==========               ====

Ratio of average interest-earning assets to
     average interest-bearing liabilities        110.81%                           108.50%
                                             ==========                            ======

<FN>
(1) Includes nonaccrual loans and loans held for sale.
</FN>
</TABLE>

                                       14
<PAGE>

Comparison  of  Operating  Results for the Three  Months Ended June 30, 1998 and
June 30, 1997.  

General 

     The Company's  pre-tax income for the three months ended June 30, 1998, was
$2.3 million  compared to $2.4 million during the same period in the prior year.
This decrease is primarily  attributable to a $510,000 increase in other income,
the  effect of which  was more  than  offset  by a  $507,000  increase  in other
expenses and a $64,000  decrease in net interest income after provision for loan
losses.

Net Interest Income

     The  Company's  net  interest  income  before  provision  for  loan  losses
decreased by $78,000,  or 1.4%, for the quarter ended June 30, 1998, as compared
to that of the previous year. This decrease  resulted  primarily from a $449,000
decrease  in  interest  income  which  exceeded a $371,000  decrease in interest
expense.  The  decrease  in  interest  income was  primarily  attributable  to a
decrease in the average balance of mortgage-backed certificates. The decrease in
interest  expense was  primarily  due to a decrease  in the  average  balance of
certificates of deposit.

     Interest  on  the  Company's  portfolio  of  mortgage-backed   certificates
decreased by approximately  $1.3 million from $2.3 million for the quarter ended
June 30, 1997,  to $1.0 million for the  comparable  1998 period.  This decrease
resulted from a $66.0 million  decrease in the average  balance of the portfolio
during the second quarter of 1998 compared to 1997 and a decrease in the average
yield of the  portfolio  from 7.09% in the quarter ended June 30, 1997, to 6.43%
in  the  comparable  1998  period.  The  decrease  in  the  average  balance  of
mortgage-backed certificates was due to sales and repayments.

     Interest on loans increased by $772,000 in the quarter ended June 30, 1998,
compared to the comparable 1997 period. This increase was primarily attributable
to a $50.8 million  increase in the average  balance of loans.  The yield on the
Company's  loan  portfolio  decreased  from 8.09% in the quarter  ended June 30,
1997, to 7.89% in the comparable 1998 period  primarily as a result of purchased
loans with lower yields being added to the loan portfolio during 1998.

     Interest on  investment  securities  for the quarter  ended June 30,  1998,
decreased  by $20,000  compared  to the same  period in 1997.  The yield on this
portfolio  decreased  from 6.33% in the quarter ended June 30, 1997 to 5.97% for
the quarter ended June 30, 1998.

     Interest on deposits  decreased  by $148,000 in the quarter  ended June 30,
1998,  compared to the  comparable  1997 period.  This  decrease  was  primarily
attributable to a $28.1 million  decrease in the average balance of certificates
of deposit in the quarter ended June 30, 1998,  compared to the comparable  1997
period.

     The Company's net interest  margin remained at 3.26% for the quarters ended
June 30, 1997 and June 30, 1998.  The Company's  interest rate spread  decreased
from 2.84% in the quarter ended June 30, 1997, to 2.77% in the  comparable  1998
period. The Company's calculations of interest rate spread and net interest rate
margin include nonaccrual loans as interest-earning assets.

Provision for Loan Losses

     The Company's  provision  for loan losses  decreased by $14,000 to $136,000
for the three months ended June 30,  1998,  compared to the same period in 1997.
Net loans  charged  off during the quarter  ended June 30,  1998,  were  $27,000
compared to $339,000 in the comparable 1997 period.

Other Income

     Total  other  income  increased  from $1.4  million  in the  quarter  ended
June 30,  1997, to $1.9 million in the  comparable  1998 period,  an increase of
$510,000 or 37.5%.

     Deposit fees increased by $123,000, primarily as the result of increases in
usage fees from the Company's automated teller network and increases in checking
account fees. Merchant processing fees increased by $210,000,  gains on sales of
loans and securities  increased by $81,000,  and commercial  mortgage  brokerage
fees  increased by $61,000,  all of which were primarily the result of increases
in the volume of transactions.


                                       15
<PAGE>

Other Expenses

     Total other  expenses  increased by $507,000 for the quarter ended June 30,
1998, compared to the comparable 1997 period.

     An increase of $99,000 in commercial  mortgage  brokerage  compensation was
primarily  responsible  for  increases  in  salaries  and  employee  benefits of
$158,000.  Equipment,  data processing and supply expense increased by $103,000.
Merchant  processing  expenses increased by $199,000 due to increases in volume.
Professional  fees increased by $48,000 which includes $23,000 of legal expenses
related to the merger of the Company's two subsidiary banks. Expenses associated
with REO decreased by $83,000  consistent with lower levels of REO in the second
quarter of 1998 compared to the same period in 1997. Other expense  increased by
$97,000 which includes $63,000 related to the merger of the Company's banks.

Comparison of Operating  Results for the Six Months Ended June 30, 1998 and June
30, 1997.

General

     The Company's  pre-tax  income for the six months ended June 30, 1998,  was
$4.6 million  compared to $4.0 million during the same period in the prior year.
This  increase is primarily  attributable  to a $1.1  million  increase in other
income,  the  effects of which more than  offset a  $478,000  increase  in other
expenses and a $40,000 increase in provision for loan losses.

Net Interest Income

     The  Company's  net  interest  income  before  provision  for  loan  losses
decreased by $20,000 during the six month period ended June 30, 1998 compared to
the same period in 1997.  Interest  income  decreased by $435,000 while interest
expense  decreased by $415,000  during the six month periods of 1998 compared to
1997.

     Interest  on  the  Company's  portfolio  of  mortgage-backed   certificates
decreased  by  approximately  $2.5  million from $5.0 million for the six months
ended June 30,  1997,  to $2.5  million for the  comparable  1998  period.  This
decrease  resulted from a $69.6 million  decrease in the average  balance of the
portfolio and a decrease in the average yield on the portfolio from 6.89% in the
six months  ended June 30, 1997,  to 6.61% in the  comparable  1998 period.  The
decrease in the average balance of mortgage-backed certificates was due to sales
and repayments.

     Interest on loans  increased  by $1.9  million in the six months ended June
30, 1998,  compared to the comparable  1997 period.  This increase was primarily
attributable to a $60.2 million  increase in the average  balance of loans.  The
yield on the Company's  loan  portfolio  decreased  from 8.12% in the six months
ended June 30,  1997,  to 7.93% in the  comparable  1998 period  primarily  as a
result of purchased loans with lower yields being added to the loan portfolio.

     Interest on  investment  securities  for the six months ended June 30, 1998
decreased  by $67,000  compared  to the same period in 1997  primarily  due to a
decrease in the portfolio's yield from 6.30% in 1997 to 6.00% in 1998.

     Interest on deposits decreased by $101,000 in the six months ended June 30,
1998,  compared to the  comparable  1997 period.  This  decrease  was  primarily
attributable to a $19.0 million  decrease in the average balance of certificates
of deposit in the six months ended June 30, 1998.

     The Company's net interest  margin  increased from 3.25% for the six months
ended June 30,  1997,  to 3.26% for the six  months  ended  June 30,  1998.  The
Company's interest rate spread decreased from 2.87% in the six months ended June
30, 1997, to 2.79% in the comparable 1998 period. The Company's  calculations of
interest rate spread and net interest rate margin  include  nonaccrual  loans as
interest-earning assets.

Provision for Loan Losses

     The Company's  provision  for loan losses  increased by $40,000 to $340,000
for the six months ended June 30, 1998, compared to the same period in 1997. Net
loans  charged  off during the six months  ended June 30,  1998,  were  $216,000
compared to $396,000 in the comparable 1997 period.



                                       16
<PAGE>

Other Income

     Total other  income  increased  from $2.3  million in the six months  ended
June 30,  1997, to $3.4 million in the  comparable  1998 period,  an increase of
$1.1 million or 47.4%.

     Deposit fees increased by $244,000, primarily as the result of increases in
usage fees from the Company's automated teller network and increases in checking
account fees.  Merchant  processing  fees increased by $375,000,  and commercial
mortgage  brokerage fees  increased by $239,000,  the result of increases in the
volume of  transactions.  Gains on sales of loans and  securities  increased  by
$148,000.

Other Expenses

     Total other  expenses  increased  by $478,000 for the six months ended June
30, 1998, compared to the comparable 1997 period.

     Salaries  and employee  benefits  increased  by  $166,000,  or 4.1%,  which
includes a $184,000  increase in  commercial  mortgage  brokerage  compensation.
Equipment,  data processing and supply expense by $122,000.  Merchant processing
expenses  increased by $369,000 due to  increases in volume.  Professional  fees
increased  by $129,000  due, in part,  to $37,000 of legal  expenses  during the
first six months of 1998 related to the merger of the Company's  two  subsidiary
banks.  REO  expense  decreased  by $61,000 as a result of the  decrease  in REO
outstanding during the first half of 1998 compared to 1997. In the first half of
1997,  the  Company  incurred  $405,000  of  expenses  related to the 1997 proxy
contest and other  matters.  Other expense  increased by $149,000 which includes
$63,000 related to the merger of the Company's banks.

Liquidity

     The  principal  sources of funds for the Company  for the six months  ended
June 30, 1998  included  $508.0  million in proceeds from FHLB  advances,  $25.7
million in principal  repayments of securities available for sale, $66.7 million
in proceeds  from sales of securities  available for sale,  and $33.2 million in
proceeds  from the sale of  loans.  Funds  were  used  primarily  to repay  FHLB
advances  totaling $568.0 million,  $25.7 million net increase in loans held for
investment,  to fund  purchases  of  investment  securities  available  for sale
totaling $37.2 million, and to originate loans held for sale of $36.2 million.

     The Company's  liquidity could be impacted by a decrease in the renewals of
deposits  or general  deposit  runoff.  However,  the Company has the ability to
raise  deposits  by  conducting  deposit  promotions.  In the event the  Company
requires funds beyond its ability to generate them internally, the Company could
obtain  additional  advances from the FHLB.  The Company could also obtain funds
through the sale of investment securities from its available for sale portfolio.

     All savings institutions, including CENIT Bank, are required to maintain an
average daily balance of liquid assets equal to a certain  percentage of the sum
of its average daily balance of net withdrawable deposit accounts and borrowings
payable in one year or less.  The  liquidity  requirement  may vary from time to
time (between 4% and 10%) depending  upon economic  conditions and savings flows
of all savings  institutions.  At the present  time,  the required  liquid asset
ratio is 4.0%.  CENIT  Bank's  liquid  asset ratio was 9.7% and 8.8% at June 30,
1998 and December 31, 1997, respectively.

Item 3 - Quantitative and Qualitative Disclosure About Market Risk

Market Risk Management

     The  Company's   primary  market  risk  exposure  is  interest  rate  risk.
Fluctuations in interest rates will impact both the level of interest income and
interest expense and the market value of the Company's  interest-earning  assets
and  interest-  bearing  liabilities.  There  were no  material  changes  in the
Company's  market risk  management  strategy,  as stated in the  Company's  1997
annual report, during the first half of 1998.



                                       17
<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings - Inapplicable

Item 2 - Changes in Securities - Inapplicable

Item 3 - Defaults Upon Senior Securities - Inapplicable

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

     At  the  Company's  annual  meeting  held  on May  20,  1998  (the  "Annual
Meeting"),  the Company's  stockholders reelected four directors of the Company,
John F. Harris, William H. Hodges, Roger C. Reinhold, and Anne B. Shumadine. The
voting results in the election for directors were as follows:

                                              FOR              WITHHELD

                John F. Harris             1,463,463            58,839
                William H. Hodges          1,462,911            59,391
                Roger C. Reinhold          1,464,006            58,296
                Anne B. Shumadine          1,463,956            58,346
 
The  terms of office of each of the other  directors  of the  Company  continued
following the Annual  Meeting.  These  directors are David L. Bernd,  Patrick E.
Corbin, William J. Davenport,  III, Michael S. Ives, C. L. Kaufman, Jr., Charles
R. Malbon, Jr., John A. Tilhou, and David R. Tynch.

Item 5 - Other Information - None

Item 6 - Exhibits and Reports on Form 8-K - None

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                           CENIT BANCORP, INC.


DATE:  August 12, 1998                     /S/Michael S. Ives
                                           Michael S. Ives
                                           President and Chief Executive Officer



DATE: August 12, 1998                      /S/ John O. Guthrie
                                           John O. Guthrie
                                           Senior Vice President and
                                           Chief Financial Officer

                                       18
<PAGE>