BUCS Financial Corp
                               2002 Annual Report


                                Table of Contents


Letter to Stockholders........................................................ 3

Corporate Profile............................................................. 4

Stock Price Information....................................................... 5

Selected Financial Ratios and Other Data...................................... 6

Management's Discussion and Analysis.......................................... 7

Report of Independent Auditors................................................14

Consolidated Financial Statements.............................................15

Notes to Consolidated Financial Statements....................................21

Corporate Information.........................................................42



<PAGE>





Dear Fellow Stockholders:

On behalf of our Board of Directors and employees, we are pleased to present the
2002 Annual Report to the Stockholders of BUCS Financial Corp (the "Company").

2002 proved to be another  successful  year as we continue to grow the  Company,
BUCS Federal Bank ("the Bank") and Armor Insurance Group, Inc.  ("Armor").  Even
though the general economy  remained weak and market interest rates continued to
decline  during  2002,  the  Company  improved   consolidated  net  earnings  to
approximately  $466,000  ($1.34  per  share) as  compared  to 2001 net income of
approximately $417,000 ($1.12 per share).

Growth  trends were  excellent  with total assets at December 31, 2002  reaching
$96.8  million,  as compared to $84.6  million at December  31,  2001.  An 11.7%
growth of loans  receivable,  net was  funded by  increased  deposits.  The loan
growth included a $2.2 million or 243% increase in commercial real estate loans,
a $2.7 million or 15.6% increase in one-to-four  family residential loans, and a
$1.0 million or 150% increase in commercial loans.

During the year the Company  repurchased  10% of its  outstanding  stock (40,500
shares). At year-end,  stockholders' equity was $9.7 million, resulting in total
book value per share and  tangible  book  value per share of $26.52 and  $25.44,
respectively.

During  January  2003,  the Bank  opened a new  full-service  branch  office and
administrative  center in Owings  Mills,  Maryland.  In addition,  as previously
announced,  another  full  service  branch  is under  construction  in  Columbia
Maryland. The Bank anticipates opening that branch in the summer of 2003.

In order to position  itself for expected  future  growth from the new branches,
the Bank added two senior  management  positions,  Vice President of Finance and
Vice President of Lending and Collections, during 2002. In addition, we continue
to focus on improving  non-interest income.  Toward this end, in 2002 Armor, our
wholly-owned  subsidiary,  completed the  acquisition  of one smaller  insurance
agency and has entered into an agreement to acquire  another  during early 2003.
We  anticipate  that these  acquisitions  will improve  Armor's sales volume and
profitability.

With the expanded branch network and excellent  management team and professional
staff we have  assembled,  we are all looking  forward to improvement in growth,
earnings and market share.  We thank you for your  support;  we are committed to
enhancing your investment in the Company.

                                           Sincerely,


                                           /s/Herbert J. Moltzan
                                           -------------------------------------
                                           Herbert J. Moltzan
                                           President and Chief Executive Officer


                                       3
<PAGE>

CORPORATE PROFILE

         BUCS  Financial   Corp  (the   "Company")  was  formed  as  a  Maryland
corporation in October 2000 at the direction of the Bank in connection  with the
Bank's  conversion from mutual to stock form of ownership.  The Company acquired
all of the capital  stock issued by the Bank upon its  conversion.  On March 14,
2001,  the Bank  completed its  conversion  in  connection  with a $4.05 million
initial public offering of the Company's  common stock. The Company is a savings
and loan holding  company which,  under existing laws, is permitted to engage in
financially related activities, beyond those business activities permissible for
the Bank. At the present time, the Company  conducts no significant  business or
operations  of its own other than  holding all of the  outstanding  stock of the
Bank and Armor and investing the Company's  portion of the net proceeds obtained
in the mutual to stock conversion.

         The Bank was originally founded in 1970 as Maryland Blue Cross and Blue
Shield  Employees  Federal Credit Union. In the early 1980s, it changed its name
to BUCS  Federal  Credit  Union.  As a credit  union,  it  initially  served the
employees of  Carefirst  Blue Cross and Blue Shield and its  subsidiaries.  Over
time,  membership grew to include other employee  groups.  However,  as a credit
union, it was legally  restricted to serving only customers who shared a "common
bond" such as a common  employer.  On March 1, 1998, it converted its charter to
federal mutual savings  association and became BUCS Federal.  Upon completion of
the mutual to stock  conversion in March 2001, the Bank changed its name to BUCS
Federal Bank.

         The  Bank  is a  federally  chartered  stock  savings  bank,  providing
traditional retail banking services,  one-to-four  family  residential  mortgage
loans, consumer loan products,  including home equity, auto, and personal loans,
and  commercial  loans to small  businesses  in its market area.  The Bank in an
approved lender for Small Business Administration  guaranteed loans. The Bank is
subject to  examination  and  comprehensive  regulation  by the Office of Thrift
Supervision  (the "OTS") and its deposits are  federally  insured by the Federal
Deposit  Insurance  Corporation  (the  "FDIC")  under  the  Savings  Association
Insurance  Fund (the "SAIF").  The Bank is a member of and owns capital stock in
the Federal Home Loan Bank (the  "FHLB") of Atlanta,  which is one of the twelve
regional banks in the FHLB system.

         Armor  Insurance  Group,  Inc.  ("Armor")  was formed in late 1999 as a
limited liability company and wholly-owned subsidiary of the Bank. Subsequent to
the Bank's mutual-to-stock conversion, Armor was restructured as a subsidiary of
the Company and in December 2001 converted to a Maryland corporation. Armor is a
traditional  multi-line  property  and  casualty  insurance  agency with offices
located in Reisterstown  and Ellicott City,  Maryland.  Armor sells  automobile,
homeowners,  life,  health,  and small business property and casualty  insurance
policies to  individuals  and small business  throughout  central  Maryland.  In
August  2001,  Armor  acquired  in a cash deal two smaller  insurance  agencies,
Comprehensive  Insurance Associates,  Inc. and the Carolyn Brooks Agency Inc. In
another cash deal in June 2002, Armor acquired  another smaller agency,  Scott &
Geiger, Inc., and in February 2003, Armor entered into an agreement to acquire a
fourth agency,

                                       4

<PAGE>

Lentz  Insurance  Agency,  Inc. This  acquisition is expected to be completed in
Spring 2003 and will result in a third Armor office in Timonium, Maryland.

Stock Price Information

         The Company's  common stock has traded on the  OTC-Electronic  Bulletin
Board under the trading  symbol  "BUCS" since it commenced  trading on March 15,
2001.  The following  table  reflects  high and low sale closing  prices for the
calendar quarters indicated. The quotations reflect inter-dealer prices, without
retail   mark-up,   markdown  or  commission   and  may  not  represent   actual
transactions.

         2002                                                  High       Low
         ----                                                  ----       ---

First Quarter ........................................       $19.80    $16.80
Second Quarter .......................................       $21.75    $19.30
Third Quarter ........................................       $21.10    $20.30
Fourth Quarter .......................................       $21.00    $19.25

         2001                                                  High       Low
         ----                                                  ----       ---

First Quarter (beginning March 13, 2001) .............       $14.00    $10.00
Second Quarter .......................................       $15.35    $13.69
Third Quarter ........................................       $17.00    $15.35
Fourth Quarter .......................................       $16.80    $15.25

         The  number  of  shareholders  of  record  as of  March  10,  2003  was
approximately  281.  This does not reflect the number of persons or entities who
held stock in nominee or "street" name through various brokerage firms. At March
10, 2003, there were 364,585 shares of the Company's common stock outstanding.

         As yet, the Company has not paid dividends to stockholders. If and when
it does,  the  ability  to pay  dividends  will be  largely  dependent  upon the
dividends  it  receives  from the Bank.  The Bank may not  declare or pay a cash
dividend  on any of its stock if the  effect  thereof  would  cause  the  Bank's
regulatory  capital  to be  reduced  below  (1)  the  amount  required  for  the
liquidation   account   established  in  connection  with  its   mutual-to-stock
conversion, or (2) the regulatory requirements imposed by the OTS.

                                       5


<PAGE>

Selected Financial Ratios and Other Data

                                                      For the Years Ended
                                                          December 31,
Selected Financial Ratios and Other Data                2002          2001
                                                    ------------------------
Performance Ratios
Return on average assets                               0.50%         0.51%
Return on average equity                               4.86%         4.42%
Net interest rate spread                               3.17%         3.19%
Net interest margin on average  interest-
      earning assets                                   3.36%         3.55%
Average interest-earning assets to
      average interest-bearing liabilities           106.79%       109.87%
Efficiency Ratio  (non-interest expense
      divided by the sum of net interest
      income and noninterest income)                  81.98%        80.58%

Asset Quality Ratios
Non-performing loans to total loans, net               0.08%         0.42%
Non-performing loans to assets                         0.06%         0.30%
Net charge offs to average loans
       outstanding                                     0.48%         0.22%
Allowance for loan losses to total loans               0.87%         1.11%

Capital Ratios
Average equity to average assets                      10.36%        11.58%
Equity to assets at period end                         9.99%        11.49%


                                       6

<PAGE>

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


General

         The Company may from time to time make written or oral  forward-looking
statements,  including  statements  contained in the Company's  filings with the
Securities and Exchange Commission,  in its reports to stockholders and in other
communications  by the  Company,  which  are made in good  faith by the  Company
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of the Company's plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economy in which the Company conducts  operations;
the effects of, and changes in, monetary and fiscal policies and laws, including
interest rate policies of the board of governors of the federal  reserve system,
inflation,  interest  rate,  market  and  monetary  fluctuations;  the impact of
changes in financial  services' laws and regulations  (including laws concerning
taxes, banking, securities and insurance);  competition;  and the success of the
Company at managing the risks involved in the foregoing.

         The Company  cautions that the foregoing  list of important  factors is
not  exclusive.  The Company does not  undertake  to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Company.

         The Company's  results of operations  are primarily  dependent upon net
interest income,  which is the difference  between the interest income earned on
interest-earnings  assets,  primarily  loans,   mortgage-backed  securities  and
investments, and the interest expense on interest-bearing liabilities, primarily
deposits and borrowings.  Net interest income may be affected  significantly  by
general economic and competitive conditions and policies of regulatory agencies,
particularly  those  with  respect  to market  interest  rates.  The  results of
operations  are  also  significantly  influenced  by the  level  of  noninterest
expenses such as employee  salaries and benefits,  noninterest  income,  such as
loan related fees and fees on deposit  related  services,  and the provision for
loan losses.

Management of Interest Rate Risk and Market Risk

         Qualitative  Analysis.  Because the  majority of the Bank's  assets and
liabilities  are  sensitive  to  changes in  interest  rates,  the  Bank's  most
significant form of market risk is

                                       7

<PAGE>

interest rate  risk/changes in interest rates.  The Bank may be vulnerable to an
increase  or decrease  in  interest  rates to the extent  that  interest-bearing
liabilities mature or reprice more rapidly or more slowly than  interest-earning
assets.

         The Board of Directors has  established an asset  liability  management
committee which consists of the Bank's  president and chief  executive  officer,
its senior officers, including two vice-presidents, and a member of the Board of
Directors,  who also serves as treasurer.  The committee  meets  periodically 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.

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

o    originate  loans with  adjustable  rate  features  or fixed rate loans with
     short maturities;

o    lengthen the maturities of its liabilities  when it would be cost effective
     through  the  pricing  and  promotion  of   certificates  of  deposits  and
     utilization of FHLB advances;

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

o    when market  conditions  permit,  to  originate  and hold in its  portfolio
     adjustable  rate  loans  which  have  quarterly  or  annual  interest  rate
     adjustments; and

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

         The Bank has also made a  significant  effort to maintain  its level of
lower costs  deposits as a method of  enhancing  profitability.  At December 31,
2002,  the Bank had  approximately  40% of its deposits in  relatively  low cost
savings  and  non-interest  bearing  checking  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  enables the Bank
to offset the impact of rising rates in other deposit accounts.

                                       8

<PAGE>

         Quantitative  Analysis. The Bank uses the Interest Rate Exposure Report
prepared by the Office of Thrift  Supervision  based on information  provided by
the Bank to monitor its  exposure to interest  rate risk.  The  following  table
presents the effect on the Banks net portfolio  value ("NPV") as of December 31,
2002 of upward and downward shifts (shock) in the Treasury yield curve.

                 Net Portfolio Value ("NPV)  NPV as % of Present Value of Assets
                 --------------------------- -----------------------------------
   Change in                                                  Basis Point
    Rates(1)      $ Amount $ Change % Change       NPV Ratio     Change
 -----------     --------- -------- --------       ---------    -------
                     (Dollars in thousands)
 +300 bp           10,288    -2,302    -18             10.47     -203bp
 +200 bp           11,189    -1,401    -11             11.26     -123bp
 +100 bp           12,126      -463     -4             12.10      -39bp
    0 bp           12,589                              12.49
 -100 bp           12,625        36      0             12.51       +2bp

----------
(1)  Future interest rates or their effect on NPV or net interest income are not
     predictable.  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  this  type  of  computation.   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  rate  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.

Changes in Financial Condition

         The  Company's  total  assets of $96.8  million at December  31,  2002,
reflect an  increase of $12.2  million or 14.5% as compared to $84.6  million at
December 31, 2001.  The increase in assets was  comprised of increases in, loans
receivable,  net, of $7.0 million,  investment  securities of $1.6 million, cash
and cash  equivalents of $1.7 million and property and  equipment,  net, of $1.9
million. The increase in loans receivable was mainly the result of strong demand
for mortgage  loans,  especially  refinances,  home equity lines of credit,  and
small business loans. The increase in property and equipment, net, resulted from
purchase of land for a new branch  office in Columbia,  Maryland  and  leasehold
improvements  at a new  branch  and  administrative  facility  in Owings  Mills,
Maryland.

     The  increase in the  Company's  liabilities  was due  primarily to a $12.2
million  increase  in  deposits.  The strong  deposit  growth is  attributed  to
continued growth at the

                                       9

<PAGE>

Columbia,  Maryland  branch,  especially in small business  deposits,  increased
advertising  by the Bank and the  movement of funds from stocks and mutual funds
as the value of these declined during the year.

     Stockholders'  equity totaled $9.7 million at December 31, 2002,  virtually
unchanged  from December 31, 2001.  Net earnings for the year ended December 31,
2002 of $466,000 and an increase in the unrealized gain on securities  available
for sale of $248,000  contributed to growth of stockholder's  equity,  which was
offset by the Company's use of stockholder's  equity to repurchase 40,500 shares
of common stock during the year ended December 31, 2002

Average Balance Sheet

     The following table sets forth a summary of average  balances of assets and
liabilities  as well as average yield and rate  information.  The average yields
and costs are derived by dividing income and expense by the average  balances of
assets or liabilities, respectively,

<TABLE>
<CAPTION>
                                                         Year Ended December 31
                              ---------------------------------------------------------------------------
                                               2002                                  2001
                              -------------------------------------  ------------------------------------
                                Average                                Average
                              Outstanding    Interest                Outstanding   Interest
                                Balance    Earned/Paid   Yield/Rate    Balance    Earned/Paid  Yield/Rate
                                -------    -----------   ----------    -------    -----------  ----------
<S>                           <C>         <C>           <C>        <C>           <C>          <C>
Interest-earning assets:
Loans receivable (1)             $ 61,885    $ 4,286        6.93%     $ 53,114     $ 4,274        8.05%
Investment securities (2)          26,192      1,209        4.62%       24,143       1,281        5.31%
                                 --------     ------                  --------     -------
    Total interest-
      earning assets               88,077      5,495        6.24%       77,257       5,555        7.19%
Noninterest-earning assets:         4,419     ------                     4,205     -------
                                 --------                             --------
    Total assets                 $ 92,496                             $ 81,462
                                 ========                             ========

Interest-bearing liabilities :
  Savings accounts               $ 24,641        433        1.76%     $ 21,458         559        2.61%
  Money market accounts            13,287        310        2.33%       10,701         395        3.69%
  Certificates of Deposit          23,990      1,188        4.95%       18,671       1,160        6.21%
  Checking                          8,058          -        0.00%        7,499           -        0.00%
                                 --------    -------                  --------     -------
    Total deposits                 69,976      1,931        2.76%       58,329       2,114        3.62%
   Borrowed Funds                  12,500        601        4.81%       11,989         699        5.83%
                                 --------    -------                  --------     -------
    Total interest-
      bearing liabilities          82,476      2,532        3.07%       70,318       2,813        4.00%
Noninterest-bearing liabilities       436    -------                     1,714     -------
                                 --------                             --------
    Total liabilities              82,912                               72,032
Equity                              9,584                                9,430
                                 --------                             --------
    Total liabilities and equity $ 92,496                             $ 81,462
                                 ========                             ========

Net Interest income                          $ 2,963                               $ 2,742
                                             =======                               =======
Interest rate spread (3)                                    3.17%                                 3.19%
                                                          ======                                 ======
Net yield on interest-
  earning assets (4)                                        3.36%                                 3.55%
                                                          ======                                 ======
Ratio of average
  interest-earning assets
  to average interest-
  bearing liabilities                                     106.79%                                109.87%
                                                          ======                                 ======
</TABLE>
-------------------
(1)  Non-accruing  loans have been included in loans receivable,  and the effect
     of such inclusion was not material.
(2)  Includes  government  securities,   mortgage-backed  securities,  overnight
     deposits and FHLB stock.
(3)  Interest rate spread represents the difference between the average yield on
     interest-earnings   assets  and  the  average   cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                       10

<PAGE>

Rate/Volume Analysis

     The   relationship   between   the   volume   and   rates  of  the   bank's
interest-earning  assets and interest-bearing  liabilities  influence the Bank's
net interest income.  The following table reflects the sensitivity of the Bank's
interest  income and  interest  expense  to changes in volume and in  prevailing
interest  rates during the periods  indicated.  Each category  reflects the: (1)
changes in volume (changes in volume multiplied by old rate; (2) changes in rate
(changes in rate multiplied by old volume);  (3) changes in rate/volume (changes
in rate  multiplied  by  changes  in  volume);  (4) net  change.  The net change
attributable  to the  combined  impact  of  volume  and rate has been  allocated
proportionally to the absolute dollar amounts of change in each.

                                               Year Ended December 31
                                        ------------------------------------
                                                 2002 vs. 2001
                                        ------------------------------------
                                                Increase (Decrease)
                                                     Due to
                                        ------------------------------------
                                                           Rate/
                                        Volume   Rate     Volume      Net
Interest income:
 Loans receivable                        $ 706   $ (595)   $  (99)   $   12
 Investment securities and other           109     (167)      (14)      (72)
                                        ------------------------------------
    Total interest-earning assets        $ 815   $ (762)   $ (113)   $  (60)
                                        ====================================

Interest expense:
 Savings accounts                         $ 83   $ (182)    $ (27)   $ (126)
 Money market accounts                      95     (145)      (35)      (85)
 Certificates of deposit                   330     (235)      (67)       28
 Checking accounts                           -        -         -         -
 Borrowed funds                             30     (123)       (5)      (98)
                                        ------------------------------------
    Total interest-bearing liabilities   $ 538   $ (685)   $ (134)   $ (281)
                                        ====================================

Change in net interest income            $ 277    $ (77)     $ 21     $ 221
                                        ====================================


Results of Operations

     Net Income.  The Company recorded net income of $466,000 for the year ended
December  31,  2002,  as  compared  to  $417,000  for the same  period  in 2001,
representing   a  $49,000  or  11.8%   increase.   The  increase  was  primarily
attributable  to a  $221,000  increase  in net  interest  income  and a $757,000
increase in  noninterest  income,  partially  offset by increases of $863,000 in
noninterest  expense,  $36,000  in  provision  for loan  losses  and  $30,000 in
provision for income taxes.

     Net Interest Income. Net interest income is the most significant  component
of our income from  operations.  Net interest  income is the difference  between
interest  the  Bank  receives  on  interest-earning  assets,  mainly  loans  and
mortgage-backed  securities, and interest paid on interest-bearing  liabilities,
primarily deposits and borrowings.  Net interest income depends on the volume of
and rates earned on interest-earning  assets and the volume of and rates paid on
interest-bearing liabilities.

                                       11

<PAGE>

     The Bank's net interest income increased $221,000 or 8.1% to $2,963,000 for
the year ended  December 31, 2002, as compared to $2,742,000 for the same period
in 2001. The average balance of interest-earning  assets increased $10.8 million
or 14.0%, while the average yield thereon decreased 95 basis points. The average
balance of interest-bearing liabilities increased $12.2 million or 17.3% and the
average  rate  paid  thereon   decreased  93  basis  points.   The  increase  in
interest-earning  assets is  attributed  to the  investment  of the  increase in
deposit volume. The average yield on interest-earning assets decreased primarily
due to  interest  rate  reductions  by the  Federal  Reserve  during 2002 as the
general economy slowed and resulting lower yields on loans and investments.  The
average cost of  interest-bearing  liabilities  decreased slightly less than the
average yield of interest-bearing assets because the majority of the increase in
deposits  came in  higher  costing  money  market  and  certificate  of  deposit
accounts.  The  balance of money  market  and  certificate  of deposit  accounts
equaled  56.5% and 52.8% of total  deposits  as of  December  31, 2002 and 2001,
respectively.

     The net interest rate spread,  which is the difference  between the average
yield  on  interest-earning  assets  and the  average  cost of  interest-bearing
liabilities,  decreased  to 3.17% for 2002 from 3.19% for 2001.  The decrease in
the net interest rate spread is primarily due to the fact that as general market
interest  rates  have  fallen,  interest-earning  assets  have  been  re-pricing
slightly faster than interest-bearing liabilities.

     Provision  for Loan  Losses.  During the years ended  December 31, 2002 and
2001,  the  Company  established  provisions  for loan  losses of  $216,000  and
$180,000,  respectively.  The provision is  established to adjust the balance of
the allowance for loan losses to a level management feels is sufficient based on
the risk  characteristics of the loan portfolio.  The increase during the period
ended  December  31, 2002 of $36,000 is the result of  management's  decision to
increase  the  allowance  due to growth in total loans  receivable,  net, and to
provide for probable  losses from a checking  deposit  overdraft  program  begun
during 2002.

     Management  believes  the  allowance  for loan losses is at a level that is
adequate to provide for  estimated  losses.  However,  there can be no assurance
that further  additions  will not be made to the  allowance and that such losses
will not exceed the estimated amount.

     Noninterest Income.  Total noninterest  income,  primarily fees and service
charges,  increased  $757,000 or 47.9% for the year ended  December 31, 2002, as
compared to the same period in 2001.  The $558,000 or 45.5% increase in fees and
service charges reflects an emphasis on charging  appropriate fees for services,
such as ATM fees,  insufficient  funds fees, and interchange income generated by
customers' use of check cards. In addition,  other noninterest income,  which is
comprised mainly of commissions on insurance sales by the Company's wholly-owned
subsidiary,  Armor,  increased to $371,000 for the year ended  December 31, 2002
from $183,000 for the same period in 2001.  Also included in noninterest  income
is the value the Bank derives for  maintaining  a cash facility at the Carefirst
Blue Cross Blue Shield ("Carefirst")  headquarters building.  Under an agreement
with  Carefirst,  the Bank performs  cash related  services for  Carefirst,  its
customers and  associates  in return for office space.  The rental value of this
office  space,  approximately  $120,000  in both 2002 and 2001,  is  reported in
noninterest income.

     Noninterest  Expense.  Total  noninterest  expense increased by $863,000 or
24.8% for the year ended  December 31,  2002,  as compared to the same period in
2001.  This  increase  was  attributable  to  increases  of $636,000 or 40.7% in
compensation  and benefits  resulting from addition of employees,  including two
vice presidents and staff for new branches, at the Bank and additional sales and
support staff at Armor,  increased  cost for employee  insurance  programs,  and
normal cost of living  increases;  $112,000 or 15.2% in office  operations costs
resulting mainly from operating costs associated with the Company's wholly-owned
subsidiary,  Armor; and $98,000 or 23.7% in other noninterest  expenses,  mainly
marketing  costs.  Marketing costs increased as the Bank introduced new products
and began  promoting  new office  locations  during the year ended  December 31,
2002.

                                       12

<PAGE>

     Income Tax Expense. The provision for income taxes totaled $273,000 for the
year ended  December  31,  2002,  as compared to $243,000 for the same period in
2001.  The  $30,000 or 12.3%  increase  is the result of  increased  net taxable
income.

Liquidity and Capital Resources

     The Bank's  primary  sources of funds are deposits,  repayment of loans and
mortgage-backed securities,  maturities of investment securities,  advances from
the FHLB of  Atlanta,  and  funds  provided  from  operations.  While  scheduled
repayments of loans and mortgage-backed  securities and maturities of investment
securities  are  predictable  sources  of  funds,  deposit  flows  and  loan and
mortgage-backed  securities prepayments are greatly influenced by general levels
of  interest  rates,  economic  conditions  and  competition.  The Bank uses its
liquidity  resources  principally to fund existing and future loan  commitments,
maturing  certificates of deposit and demand deposit  withdrawals,  to invest in
other  interest-earning  assets,  to maintain  liquidity,  and to meet operating
expenses.

     Net cash provided by the Bank's  operating  activities (the cash effects of
transactions  that  enter  into the  Bank's  determination  of net  income  e.g.
non-cash items,  amortization and  depreciation,  provision for loan losses) for
the year ended  December 31, 2002 totaled $1.05 million a increase of $26,000 as
compared to 2001.

     Net cash used by the Bank's investing  activities (i.e. cash  disbursement,
primarily   for  the   purchase  of  the  Bank's   investment   securities   and
mortgage-backed  securities and funding the Bank's loan  portfolio) for the year
ended  December  31, 2002  totaled  $10.6  million a decrease of $4.1 million as
compared  to 2001.  The  decrease  in cash used was  primarily  attributable  to
funding net loan growth of $7.2 million in 2002 as compared to $10.0  million in
2001 as well as an increase in securities available for sale of $544,000 in 2002
as compared to an increase  of $4.7  million in 2001.  The  decrease in net cash
uses was partially  offset by an increase in purchases of property and equipment
of $2.2 million in 2002 compared to $157,000 in 2001.

     Net cash provided by the Bank's  financing  activities  (i.e. cash receipts
primarily from net increases in deposits and FHLB borrowings) for the year ended
December 31, 2002 totaled $11.3 million,  an increase of $563,000 as compared to
2001.  The increase is  primarily  attributable  to increased  deposits of $12.2
million partially offset by outflows to pay down notes payable and to repurchase
shares of the Company's common stock of $185,000 and $830,000, respectively.

     Approximately  $15.0 million of the Bank's time deposits  mature within the
next 12 months. The Bank expects such deposits to be renewed at market rates. In
addition to this source of continuing funding, the Bank has additional borrowing
capacity of approximately $11.8 million through the FHLB of Atlanta.

                                       13

<PAGE>

                          INDEPENDENT AUDITORS' REPORT




The Board of Directors and Stockholders
BUCS Financial Corp
Owings Mills, Maryland


     We have  audited  the  accompanying  consolidated  balance  sheets  of BUCS
Financial  Corp and  subsidiaries  as of  December  31,  2002 and 2001,  and the
related consolidated statements of operations,  changes in stockholders' equity,
and cash flows for the years then ended. These consolidated financial statements
are  the   responsibility   of  the  management  of  BUCS  Financial  Corp.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

     In our  opinion the  consolidated  financial  statements  referred to above
present  fairly,  in all  material  respects,  the  financial  position  of BUCS
Financial  Corp  as of  December  31,  2002  and  2001  and the  results  of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.



                                                /s/ Stegman & Company
                                                --------------------------------

Baltimore, Maryland
January 24, 2003

                                       14

<PAGE>

                      BUCS FINANCIAL CORP AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

                                     ASSETS

<TABLE>
<CAPTION>

                                                                         2002                  2001
                                                                      ------------          ------------
<S>                                                                <C>                   <C>

Cash and cash equivalents                                             $  4,094,866          $  2,359,036
Investment securities:
   Available-for-sale - at fair value                                   20,023,154            19,103,091
   Held-to-maturity - at amortized cost - fair value
     of $1,448,835 (2002) and $730,160 (2001)                            1,430,628               722,765
Loans receivable, net of allowance for loan losses
   of $579,627 (2002) and $662,885 (2001)                               66,336,895            59,360,908
Property and equipment, net                                              2,920,855               977,991
Investment in Federal Home Loan Bank
   of Atlanta stock - at cost                                              875,000               930,800
Accrued interest receivable                                                321,214               332,433
Goodwill and other intangible assets                                       395,429               327,240
Prepaid expenses and other assets                                          387,696               445,472
                                                                       -----------           -----------

         TOTAL ASSETS                                                  $96,785,737           $84,559,736
                                                                       ===========           ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
   Deposits                                                           $ 73,654,190           $61,417,093
   Accounts payable and other liabilities                                  794,475               632,116
   Borrowed funds - Federal Home Loan Bank of Atlanta                   12,500,000            12,500,000
   Notes payable                                                           168,000               293,000
                                                                       -----------           ------------

         Total liabilities                                              87,116,665            74,842,209
                                                                       -----------           -----------

STOCKHOLDERS' EQUITY:
   Preferred stock, par value $0.10 per share, 2,000,000 shares
     authorized, 0 shares issued and outstanding                                 -                     -
   Common stock, par value $0.10 per share, 5,000,000 shares
     authorized, 364,585 and 405,085 shares issued and outstanding
     at December 31, 2002 and 2001, respectively                            36,459                40,508
   Additional paid-in capital                                            3,140,377             3,508,708
   Retained earnings                                                     6,486,967             6,443,132
   Unallocated common stock held by employee stock
     ownership plan ("ESOP")                                              (265,762)             (298,172)
   Accumulated other comprehensive income                                  271,031                23,351
                                                                       -----------           -----------

         Total stockholders' equity                                      9,669,072             9,717,527
                                                                       -----------          ------------

         TOTAL LIABILITIES AND STOCKHOLDERS'
            EQUITY                                                     $96,785,737           $84,559,736
                                                                       ===========           ===========
</TABLE>



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


                                       15

<PAGE>


                      BUCS FINANCIAL CORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                   2002                  2001
                                                -----------          ----------

INTEREST INCOME:
   Loans receivable                              $4,286,016          $4,273,998
   Investment securities                          1,209,014           1,281,287
                                                 ----------          ----------

         Total interest income                    5,495,030           5,555,285
                                                 ----------          ----------

INTEREST EXPENSE:
   Deposits                                       1,930,086           2,113,862
   Borrowed funds                                   601,783             699,184
                                                 ----------          ----------

         Total interest expense                   2,531,869           2,813,046
                                                 ----------          ----------

NET INTEREST INCOME                               2,963,161           2,742,239

PROVISION FOR LOAN LOSSES                           216,000             180,000
                                                 ----------          ----------

                                                  2,747,161           2,562,239
                                                 ----------          ----------

NONINTEREST INCOME:
   Fees and service charges                       1,783,586           1,225,310
   Gain on sale of investment securities             60,140               4,375
   Gain on sale of loans                                  -              35,138
   Fee to process and maintain cash facility        120,000             120,000
   Commission income                                371,201             182,822
   Other                                              1,121              11,668
                                                 ----------          ----------

         Total noninterest income                 2,336,048           1,579,313
                                                 ----------          ----------

                                                  5,083,209           4,141,552
                                                 ----------          ----------

NONINTEREST EXPENSE:
   Compensation and benefits                      2,197,388           1,561,818
   Occupancy expense of premises                    590,295             554,531
   Office expense                                   846,661             734,998
   Professional fees                                200,374             218,332
   Advertising and marketing expense                191,335             163,900
   Other operating expenses                         318,155             248,072
                                                 ----------          ----------

         Total noninterest expense                4,344,208           3,481,651
                                                 ----------          ----------

INCOME BEFORE INCOME TAXES                          739,001             659,901

INCOME TAX EXPENSE                                  273,424             243,378
                                                -----------          ----------

NET INCOME                                      $   465,577          $  416,523
                                                ===========          ==========


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

                                       16

<PAGE>



BUCS Financial Corp and Subsidiaries

Consolidated Statements of Operations (Continued)
For the Years Ended December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                   For the Year    For the Period
                                      Ended        March 14, 2001      For the Year Ended
                                   December 31,       Through           December 31, 2001
                                       2002       December 31, 2001         Pro Forma *
                                   -----------    -----------------    ------------------
<S>                               <C>               <C>                  <C>

NET INCOME                           $465,577          $352,933             $416,523
                                     ========          ========             ========

EARNINGS PER SHARE -
   BASIC AND DILUTED                   $1.34            $0.95                 $1.12
                                       =====            =====                 =====

SHARES USED IN COMPUTING BASIC
   AND DILUTED EARNINGS
   PER SHARES                         348,672           372,672              372,672
                                      =======           =======              =======
</TABLE>



* Pro forma information gives effect to the transaction  referred to in Note 1.





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


                                       17

<PAGE>


                      BUCS FINANCIAL CORP AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



<TABLE>
<CAPTION>
                                                                                              Accumulated
                                                                                Unallocated     Other
                                                                                  Common       Compre-         Total
                                                    Additional                     Stock       hensive        Stock-
                                         Common       Paid-in       Retained      Held by       (Loss)       holders'
                                          Stock      Capital        Earnings       ESOP         Income         Equity
                                         -------   -------------   ----------   -----------   -----------   -----------
<S>                                   <C>       <C>             <C>          <C>            <C>           <C>

Balance at January 1, 2001               $     -   $        -      $6,026,609   $       -      $(28,302)     $5,998,307

Comprehensive income:

   Net income                                  -            -        416,523            -             -         416,523

   Unrealized gains on available-
    for-sale securities, net of tax            -            -              -            -        51,653          51,653
                                                                                                            -----------

       Total comprehensive income              -            -              -            -             -         468,176

   Proceeds from sale of common stock     40,508    3,493,636              -     (324,100)            -       3,210,044

   Fair value of ESOP shares allocated         -       15,072              -       25,928             -          41,000
                                         -------   ----------     ----------    ---------       -------     -----------

Balance at December 31, 2001              40,508    3,508,708      6,443,132     (298,172)       23,351       9,717,527

Comprehensive income:

   Net income                                  -            -        465,577            -             -         465,577

   Unrealized gains on available-
    for-sale securities, net of tax            -            -              -            -       247,680         247,680
                                                                                                            -----------

         Total comprehensive income            -            -              -            -             -         713,257

   Repurchase of common stock             (4,049)    (404,321)      (421,742)           -             -        (830,112)

   Fair value of ESOP shares allocated         -       35,990              -       32,410             -          68,400
                                         -------   ----------     ----------    ---------      --------     -----------

Balance at December 31, 2002             $36,459   $3,140,377     $6,486,967    $(265,762)     $271,031     $ 9,669,072
                                         =======   ==========     ==========    =========      ========     ===========

</TABLE>




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


                                       18


<PAGE>

                      BUCS FINANCIAL CORP AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


<TABLE>
<CAPTION>
                                                                                     2002                      2001
                                                                                --------------            ------------
<S>                                                                          <C>                       <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                   $    465,577              $    416,523
   Reconciliation of net income to net cash provided
     by operating activities:
     Gain on sale of investment securities                                           (60,140)                   (4,375)
     Provision for loan losses                                                       216,000                   180,000
     Deferred income taxes                                                            74,325                     8,745
     Depreciation and amortization                                                   338,204                   220,258
   Effects of changes in operating assets and liabilities:
     Accrued interest receivable                                                      11,219                    85,834
     Prepaid expenses and other assets                                                57,776                   150,100
     Accounts payable and other liabilities                                          (57,430)                  (37,655)
                                                                                ------------              ------------

         Net cash provided by operating activities                                 1,045,531                 1,019,430
                                                                                ------------              ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Net increase in loans                                                          (7,191,987)              (10,491,155)
   Proceeds from maturities, redemption and sales
     of securities available-for-sale                                             14,525,126                 9,965,516
   Proceeds from repayments on securities held-to-maturity                           296,009                   234,429
   Proceeds from sale of loans                                                        -                        398,888
   Proceeds from redemption of FHLB stock                                             55,800                         -
   Purchase of securities held-to-maturity                                        (1,005,000)                        -
   Purchase of securities available-for-sale                                     (15,069,464)              (14,660,807)
   Purchase of property and equipment                                             (2,179,670)                 (157,326)
   Acquisition of insurance subsidiaries                                             (30,900)                  (31,000)
                                                                                ------------              ------------

         Net cash used in investing activities                                   (10,600,086)              (14,741,455)
                                                                                ------------              ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repurchase of common stock                                                       (830,112)                        -
   Proceeds from sale of common stock                                                      -                 3,210,044
   Allocated fair value of ESOP shares                                                68,400                    41,000
   Net decreases in borrowed funds from the
   Retirement of Federal Home Loan Bank of
     Atlanta borrowings                                                                    -                (2,500,000)
   Net increase in deposits                                                       12,237,097                 9,976,007
   Repayments of notes payable                                                      (185,000)                        -
                                                                                ------------              ------------

         Net cash provided by financing activities                                11,290,385                10,727,051
                                                                                ------------              ------------
</TABLE>

                                       19

<PAGE>



BUCS Financial Corp and Subsidiaries

Consolidated Statements of Cash Flows (Continued)
For the Years Ended December 31, 2002 and 2001


<TABLE>
<CAPTION>

                                                           2002             2001
                                                       -----------      ------------
<S>                                                   <C>             <C>

NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                   1,735,830       (2,994,974)

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF YEAR                                   2,359,036        5,354,010
                                                         ----------      -----------
CASH AND CASH EQUIVALENTS
   AT END OF YEAR                                        $4,094,866      $ 2,359,036
                                                         ==========      ===========

Supplemental disclosure of cash flow information:
   Cash paid for income taxes                            $  475,102      $    74,720
                                                         ==========      ===========

   Cash paid for interest                                $2,523,433      $ 2,865,296
                                                         ==========      ===========
</TABLE>





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


                                       20

<PAGE>

                      BUCS FINANCIAL CORP AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



1.   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
     ACCOUNTING POLICIES

     Nature of Operations
     --------------------

     BUCS Financial Corp (the  "Company") is a savings and loan holding  company
that  provides its customers  with banking and  non-banking  financial  services
through its wholly-owned  subsidiaries  BUCS Federal Bank (the "Bank") and ARMOR
Insurance Group,  Inc.  ("ARMOR").  Effective March 14, 2001, the Bank converted
from a federal  mutual  thrift to a federal stock  savings bank  exercising  the
powers of a savings  bank.  The Bank  offers  various  loans,  deposit and other
financial  service  products  to its  customers.  The Bank's  customers  include
individuals and commercial enterprises throughout central Maryland;  emphasizing
the areas  surrounding its main office and branch  locations in Owings Mills and
Columbia, Maryland, respectively.

     Principles of Consolidation
     ---------------------------

     The consolidated  financial  statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany transactions and
balances  are  eliminated  in  consolidation.   The  accompanying   consolidated
financial statements have been prepared in accordance with accounting principles
generally  accepted  in the  United  States of  America  and  conform to general
practices within the banking industry.  Certain reclassifications have been made
to amounts previously reported to conform to the classifications made in 2002.

     Use of Estimates in Preparing Financial Statements
     --------------------------------------------------

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

     Cash and Cash Equivalents
     -------------------------

     For  purposes of the  consolidated  statement  of cash  flows,  the Company
considers all highly liquid debt instruments  with original  maturities of three
months or less to be cash equivalents.


                                       21

<PAGE>


     Investment Securities
     ---------------------

     The Company's  investments  in securities  are classified in two categories
and accounted for as follows:

     Investment securities available-for-sale are stated at estimated fair value
based on quoted market prices.  They represent those securities which management
may  sell  as part  of its  asset/liability  strategy  or  which  may be sold in
response to changing interest rates, changes in prepayment risk or other similar
factors.   The  cost  of   securities   sold  is   determined  by  the  specific
identification  method.  Net  unrealized  holding  gains  and  losses  on  these
securities are reported as accumulated  other  comprehensive  income, a separate
component of stockholders' equity, net of related income taxes.

     Investment  securities  held-to-maturity  are stated at cost  adjusted  for
amortization of premiums and accretion of discounts. The Company intends and has
the  ability  to hold  such  securities  until  maturity.  When  securities  are
transferred into the held-to-maturity category from available-for-sale, they are
accounted for at estimated fair value with any  unrealized  holding gain or loss
at the date of the transfer reported as accumulated other comprehensive  income,
net of income taxes, and amortized over the remaining life of the security as an
adjustment of yield.

     Loans Receivable
     ----------------

     Loans  receivable  are  stated  at  unpaid  principal  balances  net of any
deferred fees and costs, less the allowance for loan losses.

     Interest income is accrued at the contractual rate applied to the principal
amount  outstanding.  A loan is placed  on  nonaccrual  when it is  specifically
determined  to be impaired or when  principal or interest is  delinquent  for 90
days or more. Any unpaid interest  previously accrued on those loans is reversed
from income.  Interest income  generally is not recognized on specific  impaired
loans  unless the  likelihood  of  further  loss is  remote.  Interest  payments
received on such loans are applied as a reduction of the loan principal balance.
Interest  income on other  nonaccrual  loans is recognized only to the extent of
interest payments received.

     Certain  direct  origination  costs are deferred  and  amortized as a yield
adjustment  over the lives of the related  loans.  The Bank  generally  does not
charge loan origination fees to customers.

     The Company  identifies  impaired loans and measures  impairment (i) at the
present value of expected cash flows discounted at the loan's effective interest
rate;  (ii) at the  observable  market price,  or (iii) at the fair value of the
collateral if the loan is collateral  dependent.  If the measure of the impaired
loan is less  than  the  recorded  investment  in the  loan,  an  impairment  is
recognized through a valuation  allowance and corresponding  charge to provision
for loan losses. The Company does not apply these provisions to larger groups of
smaller-balance  homogeneous  loans such as  consumer  installment,  residential
first  and  second  mortgage  loans  and  credit  card  loans.  These  loans are
collectively evaluated for impairment.

     A loan is determined to be impaired when, based on current  information and
events,  it is probable  that the Company  will be unable to collect all amounts
due  according to the  contractual  terms of the loan  agreement.  A loan is not
considered  impaired  during a period of delay in payment if the Company expects
to collect all amounts due, including  interest past-due.  The Company generally
considers a period of delay in payment to include delinquency up to 90 days.

                                       22

<PAGE>


     The  Company   identifies  loans  subject  to  impairment  by  individually
reviewing every loan 60 days or more delinquent,  selected  non-delinquent loans
and other loans if there is an indication of a problem.

     Allowance for Loan Losses
     -------------------------

     The allowance for loan losses  represents an amount which,  in management's
judgment, will be adequate to absorb probable losses on existing loans and other
extensions  of credit  that may become  uncollectible.  The  allowance  for loan
losses  consists of an allocated  component and an  unallocated  component.  The
components  of the  allowance  for loan  losses  represent  an  estimation  done
pursuant to either Statement of Financial  Accounting  Standards ("SFAS") No. 5,
Accounting  for  Contingencies  or SFAS No. 114,  Accounting  by  Creditors  for
Impairment  of a  Loan.  The  adequacy  of the  allowance  for  loan  losses  is
determined  through review and evaluation of the loan portfolio and involves the
balancing  of a number of factors to  establish  a prudent  level.  Management's
assessment  includes  the  systematic  evaluation  of several  factors:  current
economic  conditions  and  their  impact  on  specific  borrowers;  the level of
classified and  non-performing  loans;  the historical  loss  experience by loan
type;  the results of  regulatory  examinations;  and, in  specific  cases,  the
estimated value of underlying collateral. Loans deemed uncollectible are charged
against, while recoveries are credited to, the allowance. Management adjusts the
level of the allowance through the provision for loan losses,  which is recorded
as a current period operating expense.  The Company's  methodology for assessing
the  appropriateness  of the allowance  consists of several key elements,  which
include  the  formula  allowance,   specific   allowances  and  the  unallocated
allowance.

     The  formula   allowance  is   calculated   by  applying  loss  factors  to
corresponding  categories of  outstanding  loans.  Loss factors are based on the
Company's historical loss experience.  The use of these loss factors is intended
to reduce the difference  between estimated losses inherent in the portfolio and
observed losses.

     Specific   allowances  are  established  in  cases  where   management  has
identified  significant  conditions  or  circumstances  related  to a loan  that
management  believes  indicate the probability that a loss may be incurred in an
amount  different  from the amount  determined  by  application  of the  formula
allowance.  For  other  problem  graded  credits,   allowances  are  established
according to the  application  of credit risk factors.  These factors are set by
management to reflect its  assessment of the relative  level of risk inherent in
each grade.

     The   unallocated   portion  of  the  allowance  is  determined   based  on
management's  assessment  of general  economic  conditions,  as well as specific
economic factors in the individual  market in which the Company  operates.  This
determination  inherently  involves a higher risk of  uncertainty  and considers
current  risk  factors  that  may not  have  yet  manifested  themselves  in the
Company's  historical loss factors used to determine the allocated  component of
the allowance and it recognizes knowledge of the portfolio may be incomplete.

     Management  believes  that the  allowance  for  loan  losses  is  adequate.
However, the determination of the allowance requires significant  judgment,  and
estimates  of  probable   losses   inherent  in  the  loan  portfolio  can  vary
significantly  from  the  amounts  actually  observed.   While  management  uses
available  information to recognize  probable  losses,  future  additions to the
allowance  may be necessary  based on changes in the loans  comprising  the loan
portfolio  and changes in the  financial  condition  of  borrowers,  such as may
result from  changes in economic  conditions.  In addition,  various  regulatory
agencies, as an integral part of their examination process,  periodically review
the Bank's loan portfolio and allowance for loan losses.  Such review may result
in  recognition  of  additions  to the  allowance  based on their  judgments  of
information available to them at the time of their examination.

                                       23

<PAGE>



     Property and Equipment
     ----------------------

     Property and equipment are stated at cost less accumulated depreciation and
amortization.  Depreciation and amortization are accumulated using straight-line
method over the estimated useful lives of the assets.  Additions and betterments
are  capitalized  and  charges for repairs and  maintenance  are  expensed  when
incurred.  The cost and accumulated  depreciation or amortization are eliminated
from the  accounts  when an asset is sold or retired and the  resultant  gain or
loss is credited or charged to income. Leasehold improvements are amortized over
the  remaining  life  of  the  lease.  Furniture,  fixtures  and  equipment  are
depreciated  over periods of 3 to 12 years.  For tax purposes,  depreciation  is
computed using accelerated methods.

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

     As a member of the Federal Home Loan Bank of Atlanta ("FHLB"),  the Bank is
required  to  maintain  an  investment  in capital  stock of the FHLB in varying
amounts based on balances of outstanding  loans and on amounts borrowed from the
FHLB. This stock is considered to be a non-marketable equity security under SFAS
No. 115 and, accordingly, is reported at cost.

     Goodwill and Other Intangible Assets
     ------------------------------------

     Goodwill and other intangible  assets  (consisting of contracts and related
customer  relationships)  were created with the acquisition of certain insurance
agencies by ARMOR in 2002 and 2001.  Goodwill  represents the excess of the cost
of assets acquired in purchase business  combinations over the fair value of the
net assets and other identifiable intangible assets at the dates of acquisition.
Goodwill and  intangible  assets are  evaluated  regularly  for  impairment.  If
circumstances  suggest that their value may be impaired and the write-down would
be  material,  an  assessment  of  recoverability  is  performed  prior  to  any
write-down of the asset.

     Amortization on contracts and related customer relationships are calculated
using the straight-line method over a ten-year period.

     Income Taxes
     ------------

     Income tax  expense is based on the  results of  operations,  adjusted  for
permanent  differences  between  items of  income  or  expense  reported  in the
financial statements and those reported for tax purposes.  Deferred income taxes
are  recognized  for the  tax  consequences  of  temporary  differences  between
financial   statement   carrying  amounts  and  the  tax  bases  of  assets  and
liabilities. Deferred income taxes are provided on income and expense items when
they are reported for financial statement purposes in periods different from the
periods in which these items are recognized in the income tax returns.  Deferred
tax assets are  recognized  only to the extent  that it is more  likely than not
that such  amounts  will be  realized  based  upon  consideration  of  available
evidence, including tax planning strategies and other factors.

     Comprehensive Income
     --------------------

     Comprehensive  income includes all changes in stockholders' equity during a
period,   except  those  relating  to  investments  by  and   distributions   to
stockholders.  The  Company's  comprehensive  income  consists of net income and
unrealized gains and losses on securities available-for-sale.  Accumulated other
comprehensive  income is  displayed  as a separate  component  of  stockholders'
equity.


                                       24

<PAGE>


     Earnings Per Share
     ------------------

     Under  accounting  principles  generally  accepted in the United  States of
America,  earnings per share is presented  only for periods  since the effective
date of the Bank's  conversion to a federal stock savings bank (March 14, 2001).
In  addition,  on a pro forma  basis,  earnings per share is presented as if the
transaction had occurred as of January 1, 2001. Basic earnings per share for the
period from March 14, 2001  through  December  31, 2001 is based on the weighted
average number of shares outstanding during such period. The unaudited basic pro
forma  earnings  per share for the year ended  December 31, 2001 is based on the
weighted  average number of shares that would have been  outstanding  during the
year had the transaction occurred as of January 1, 2001.

     At December  31, 2002 basic net  earnings  per common  share is computed by
dividing net earnings applicable to common stockholders by the  weighted-average
number of common  shares  outstanding  during the period.  Diluted  earnings per
share  is  determined  using  the  weighted-average   number  of  common  shares
outstanding during the period,  adjusted for the dilutive effect of common stock
equivalents,  consisting  of shares that might be issued upon exercise of common
stock options (Treasury Stock Method).  At December 31, 2002 and 2001 there were
no options  outstanding that are considered in the money.  Accordingly,  options
outstanding had no effect on diluted earnings per share.

     Advertising Costs
     -----------------

     Advertising  costs and marketing costs are expensed as incurred and for the
years  ended  December  31,  2002  and  2001  totaled   $191,335  and  $163,900,
respectively.

2.   RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business  Combinations  (SFAS No. 141) and No. 142 Goodwill and Other Intangible
Assets  (SFAS No.  142).  SFAS No.  141  changes  the  accounting  for  business
combinations,  requiring that all business  combinations  be accounted for using
the purchase  method and that  intangible  assets be  recognized as assets apart
from goodwill if they arise from  contractual or other legal rights,  or if they
are separable or capable of being  separated from the acquired  entity and sold,
transferred,  licensed,  rented or exchanged.  SFAS No. 141 is effective for all
business combinations  initiated after June 30, 2001. SFAS No. 142 specifies the
financial  accounting and reporting for acquired  goodwill and other  intangible
assets.  Goodwill and intangible  assets that have indefinite  useful lives will
not be amortized  but rather will be tested at least  annually  for  impairment.
SFAS No. 142 is effective for fiscal years beginning after December 15, 2001.

     SFAS No. 142 requires that the useful lives of intangible  assets  acquired
on or before June 30, 2001 be reassessed and the remaining  amortization periods
adjusted  accordingly.  Previously  recognized  intangible assets deemed to have
indefinite lives shall be tested for impairment.

     In June 2002, the Financial Accounting Standards Board issued SFAS No. 143,
Accounting for Asset Retirement  Obligations.  SFAS No. 143 addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
intangible  long-lived  assets and the associated  asset retirement costs and is
effective for the fiscal years  beginning  after June 15, 2002.  Management does
not  expect  the  impact  of  SFAS  No.  143 to be  material  to  the  Company's
consolidated financial statements.

                                       25

<PAGE>



     In August 2002, the Financial  Accounting  Standards  Board issued SFAS No.
144,  Accounting for Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144
amends SFAS No. 121,  Accounting for the Impairment of Long-Lived Assets and for
Long-Lived  Assets to be Disposed of, and establishes a single  accounting model
for the impairment or disposal of long-lived  assets.  SFAS No. 144 is effective
for fiscal years beginning after December 15, 2001. The adoption of SFAS No. 144
did  not  have  a  material  effect  on  the  Company's  consolidated  financial
statements.

     In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No.
145,  which  updates,  clarifies,  and simplifies  certain  existing  accounting
pronouncements  beginning  at  various  dates in 2002 and  2003.  The  statement
rescinds SFAS No. 4 and SFAS No. 64, which required net gains or losses from the
extinguishment  of debt to be classified as an extraordinary  item in the income
statement.  These gains and losses will now be classified as extraordinary  only
if they meet the criteria for such classification as outlined in APB Opinion 30,
which  allows  for  extraordinary  treatment  if the item is  material  and both
unusual and  infrequent  in nature.  The  statement  also  rescinds  SFAS No. 44
related to the accounting  for  intangible  assets for motor carriers and amends
SFAS No. 13 to require certain lease  modifications  that have economic  effects
similar to sale-leaseback  transactions to be accounted for as such. The changes
required by SFAS No. 145 are not  expected to have a material  impact on results
of operations, financial position, or liquidity.

     In July 2002, the Financial Accounting Standards Board issued SFAS No. 146,
Accounting for Costs Associated With Exit or Disposal Activities,  which becomes
effective for the Company beginning  January 1, 2003. This statement  requires a
cost  associated  with  an  exit  or  disposal  activity,  such  as the  sale or
termination  of a line of  business,  the  closure of business  activities  in a
particular location,  or a change in management  structure,  to be recorded as a
liability  at fair value when it becomes  probable the cost will be incurred and
no  future  economic  benefit  will be  gained  by the  Company  for such  cost.
Applicable costs include employee  termination  benefits,  contract  termination
costs, and costs to consolidate  facilities or relocate employees.  SFAS No. 146
supersedes  EITF Issue No.  94-3,  Liability  Recognition  for Certain  Employee
Termination  Benefits and Other Costs to Exit an  Activity,  which in some cases
required  certain  costs  to be  recognized  before  a  liability  was  actually
incurred.  The  adoption  of this  standard  is not  expected to have a material
impact on results of operations, financial position, or liquidity.

     On October 1, 2002, the Financial  Accounting  Standards  Board issued SFAS
No. 147,  Acquisitions of Certain Financial  Institutions,  which amends certain
provisions of SFAS No. 72, SFAS No. 144, and FASB Interpretation No. 9. SFAS No.
147 removes acquisitions of financial institutions from the scope of SFAS No. 72
and requires that such acquisitions be accounted for in accordance with SFAS No.
141,  Business  Combinations.  If the  acquisition  meets  the  definition  of a
business  combination,  it shall be  accounted  for by the  purchase  method  in
accordance with the provision of SFAS No. 141. Any goodwill that results will be
accounted  for in  accordance  with  the  provisions  of SFAS  No.  142.  If the
acquisition does not meet the definition of a business combination,  the cost of
the assets  acquired  shall be allocated to the individual  assets  acquired and
liabilities  assumed based on their relative fair values and shall not give rise
to goodwill.

     In addition, this proposed statement would amend SFAS No. 144 to include in
its  scope  long-term  customer-relationship   intangible  assets  of  financial
institutions such as depositor- and borrower-relationship  intangible assets and
credit-cardholder intangible assets. Accordingly,  those intangible assets would
be  subject  to  the  same  undiscounted  cash  flow  recoverability  tests  and
impairment  loss  recognition  and  measurement  provisions  that  SFAS No.  144
requires for long-term tangible assets and other finite-lived  intangible assets
that are held and used.  The  adoption of this  standard did not have a material
effect on the Company's financial statements.

                                       26

<PAGE>



     In December 2002, the Financial  Accounting Standards Board issued SFAS No.
148, Accounting for Stock-Based Compensation - Transition and Disclosure,  which
provides  guidance  on how to  transition  from the  intrinsic  value  method of
accounting for stock-based employee  compensation under APB 25 to SFAS No. 123's
fair value method of  accounting,  if a company so elects.  The Company will not
adopt the fair value method of recording  stock  options under SFAS No. 123 and,
accordingly,  this  standard  will not have a  material  impact  on  results  of
operations, financial position or liquidity.

3.   BUSINESS COMBINATIONS

     During the year ended December 31, 2002, one of the Company's  subsidiaries
acquired an  insurance  agency.  The  transaction  was  accounted  for using the
purchase  method  of  accounting.  Total  acquisition  cost of the  company  was
$90,900,  including  brokers'  commissions  of  $900.  The  purchase  price  was
allocated as follows:

   Contracts and related customer relationships                $60,900
   Goodwill                                                     30,000

     The  amount  due  to  the  entities   acquired  in  this   transaction  and
acquisitions  occurring in previous years is payable over a remaining  period of
two  years.  During  2002  $185,000  has  been  paid  related  to  the  purchase
agreements.  A schedule of future amounts payable under the notes payable are as
follows:

                           2003                               $138,000
                           2004                                 30,000

     The notes do not include an interest factor.

4.   INVESTMENT SECURITIES

     The amortized  cost and estimated  fair value of investment  securities are
summarized as follows:

<TABLE>
<CAPTION>
                                                                         Gross          Gross       Estimated
                                                       Amortized      Unrealized     Unrealized       Fair
                                                          Cost           Gain          Losses        Value
                                                      ------------    -----------    -----------   ------------
<S>                                                 <C>               <C>           <C>         <C>

December 31, 2002:
   Investment securities available-for-sale:
     Obligations of U.S. Government agencies           $ 1,998,896       $ 29,845      $      -    $  2,028,741
     Mortgage-backed securities                         17,594,049        416,218        15,854      17,994,413
                                                       -----------       --------      --------    ------------
                                                        19,592,945        446,063        15,854      20,023,154
   Investment securities held-to-maturity -
     Collateralized mortgage obligations                 1,430,628         18,207             -       1,448,835
                                                       -----------       --------      --------    ------------

                                                       $21,023,573       $464,270      $ 15,854    $ 21,471,989
                                                       ===========       ========      ========    ============
December 31, 2001:
   Investment securities available-for-sale:
     Obligations of U.S. Government agencies           $ 1,000,000       $      -      $ 10,000    $    990,000
     Mortgage-backed securities                         18,066,025        144,677        97,611      18,113,091
                                                       -----------       --------      --------    ------------
                                                        19,066,025        144,677       107,611      19,103,091
   Investment securities held-to-maturity -
     Collateralized mortgage obligations                   722,765          7,395             -         730,160
                                                       -----------       --------      --------    ------------

                                                       $19,788,790       $152,072      $107,611    $ 19,833,251
                                                       ===========       ========      ========    ============

</TABLE>

                                       27

<PAGE>



     The amortized  cost and estimated  fair values of investment  securities by
contractual maturity date at December 31, 2002 are as follows:

                                                                Estimated
                                               Amortized           Fair
                                                 Cost             Value
                                             --------------    ------------
Investment securities available-for-sale:
   Within one year                             $   173,110      $   178,308
   1 -   5 years                                 6,688,198        6,882,583
   6 - 10 years                                  3,300,940        3,437,226
   After 10 years                                9,430,697        9,525,037
                                               -----------      -----------
                                                19,592,945       20,023,154
                                               -----------      -----------

Investment securities held-to-maturity:
   Within one year                                       -                -
   1 -   5 years                                   411,791          419,546
   6 - 10 years                                     57,488           57,959
   After 10 years                                  961,349          971,330
                                               -----------      -----------
                                                 1,430,628        1,448,835
                                               -----------      -----------

         Totals                                $21,023,573      $21,471,989
                                               ===========      ===========

     Expected  maturities  will  differ  from  contractual   maturities  because
borrowers may have the right to call or prepay  obligations with or without call
or prepayment penalties.

     Investments  in  mortgage-backed  securities  with  an  amortized  cost  of
$1,012,849  and an  estimated  fair  value of  $1,028,375  have been  pledged as
collateral for credit extended by the Federal Home Loan Bank of Atlanta ("FHLB")
at December 31, 2002.

     The gross realized gains and losses on debt  securities for the years ended
December 31, 2002 and 2001 are as follows:

                                          2002                   2001
                                  --------------------  ----------------------
                                    Gross     Gross       Gross        Gross
                                  Realized   Realized    Realized    Realized
                                    Gains     Losses       Gains       Losses
                                  ---------  --------    ---------   ---------

Securities available-for-sale      $60,140     $  -        $4,375     $  -
                                   =======     ====        ======     =====

     Proceeds from sales of securities available-for-sale amounted to $5,389,662
and $995,625 for the years ended December 31, 2002 and 2001, respectively.

     Net unrealized  holding gain (loss) on  available-for-sale  securities that
has been included in accumulated other comprehensive income amounted to $247,680
and $51,653 for the years ended  December 31, 2002 and 2001,  respectively.  The
amount of gains (losses)  reclassified  out of accumulated  other  comprehensive
income  amounted to $60,140 and $4,375 for the years ended December 31, 2002 and
2001, respectively.

                                       28


<PAGE>


4.   LOANS RECEIVABLE

     Loans receivable consist of the following at December 31:



                                                   2002              2001
                                                ------------      -----------
     Categories:
       Mortgage loans:
         Residential:
           Permanent 1 - 4 single family        $19,942,010       $17,242,756
           Land                                       4,579             5,301
           Commercial                             3,129,141           912,298
       Consumer loans:
         Home equity loans                       19,506,951        18,652,923
         Secured loans                           17,428,290        17,562,957
         Other                                    4,774,100         4,571,987
       Commercial                                 1,707,180           684,025
                                                -----------       -----------
               Total loans                       66,492,251        59,632,247
       Net deferred loan costs                      424,271           391,546
                                                -----------       -----------
                                                 66,916,522        60,023,793
       Less allowance for loan losses               579,627           662,885
                                                -----------       -----------

               Loans receivable, net            $66,336,895       $59,360,908
                                                ===========       ===========


     Loans aggregating $19,320,357 and $16,808,318 have been pledged to the FHLB
as  collateral  for credit  extended by the FHLB for  short-term  borrowings  at
December 31, 2002 and 2001, respectively.

     Nonperforming  loans amounted to  approximately  $54,000 and $250,000 as of
December  31, 2002 and 2001,  respectively.  The amount of interest  income that
would have been recorded on loans in nonaccrual  status at period-end,  had such
loans performed in accordance with their terms, was immaterial.

     The allowance for loan losses activity at December 31, is as follows:

                                             2002               2001
                                           ---------          ---------

     Balance at beginning of year           $662,885          $599,739
     Provision for loan losses               216,000           180,000
     Recoveries                               67,065            48,850
     Loan loss write-offs                   (366,323)         (165,704)
                                            --------          --------

     Balance at end of year                 $579,627          $662,885
                                            ========          ========

     Impairment of loans having recorded  investments of  approximately  $54,000
and $359,000 at December 31, 2002 and 2001, respectively, has been recognized in
conformity  with SFAS No. 114 as amended by SFAS  Statement No. 118. The average
recorded investments in impaired loans during 2002 and 2001 approximate $122,000
and $296,000,  respectively.  Interest income on impaired loans of approximately
$7,100 and $17,800 was recognized for cash payments  received in the years ended
December  31, 2002 and 2001,  respectively.  The Bank is not  committed  to lend
additional  funds to debtors  whose  loans  have been  modified.  The  valuation
allowance  for impaired  loans was $47,969 and $172,672 at December 31, 2002 and
2001, respectively.


                                     29

<PAGE>


     In the normal  course of banking  business,  loans are made to officers and
directors and their affiliated interests.  These loans are made on substantially
the same terms and  conditions as those  prevailing  at the time for  comparable
transactions  with  outsiders  and are not  considered  to involve more than the
normal  risk of  collectibility.  As of  December  31,  activity  in such  loans
outstanding,  both direct and indirect  (including  guarantees),  to  directors,
their associates and policy-making officers were as follows:


                                                     2002           2001
                                                   --------       ---------

         Balance at beginning of year              $236,000       $ 254,000
         Additional borrowings                      345,716         128,000
         Repayments                                 (33,028)       (146,000)
                                                   --------       ---------

         Balance at end of year                    $548,688       $ 236,000
                                                   ========       =========

5.   PROPERTY AND EQUIPMENT

     Property   and   equipment   at  December  31  are   summarized   by  major
classifications as follows:

                                                   2002              2001
                                                ----------        ----------

      Building                                  $  444,685        $        -
      Leasehold improvements                     1,083,434           627,109
      Furniture, fixtures and equipment          1,273,921         1,038,255
                                                ----------        ----------
                                                 2,802,040         1,665,364
        Less allowance for depreciation            924,179           687,373
                                                ----------        ----------
                                                 1,877,861           977,991
      Land                                       1,042,994                 -
                                                ----------        ----------

                                                $2,920,855        $  977,991
                                                ==========        ==========

     Depreciation  expense  totaled  $236,806  and  $213,759 for the years ended
December 31, 2002 and 2001, respectively.

     The  Company  has  entered  into a  construction  contract  for a branch in
Columbia,  Maryland.  As of December  31, 2002 total  expenditures  for land and
building  have  been   $1,500,000.   The  Company  has  commitments   under  the
construction   contract  for  and  additional  $989,000  for  the  project.  The
construction of the branch is expected to be completed in 2003.

                                       30


<PAGE>




6.   GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill and other  intangible  assets  represent the excess of the cost of
assets acquired in business combinations accounted for under the purchase method
of  accounting  over the fair value of the net assets  acquired  at the dates of
acquisition. The significant components of goodwill and intangible assets are as
follows:

<TABLE>
<CAPTION>

                                    2002                                                 2001
                  ---------------------------------------------    --------------------------------------------------
                                                      Weighted                                             Weighted
                     Gross                    Net     Average         Gross                      Net        Average
                  Carrying   Accumulated   Carrying   Remaining      Carrying   Accumulated    Carrying    Remaining
                   Amount    Amortization    Amount      Life         Amount    Amortization    Amount        Life
                  --------   ------------  ---------  ---------     ---------   ------------   ---------   ---------

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

Goodwill           $165,667     $     -     $165,667      -          $135,667       $  -        $135,667      -
Contracts and
 related customer
 relationships      252,473      22,711      229,762    9.1 years     191,573          -         191,573     10 years
                  ---------     -------     --------                 --------       ----        --------

                   $418,140     $22,711     $395,429                 $327,240       $  -        $327,240
                   ========     =======     ========                 ========       ====        ========
</TABLE>


     Amortization  expense on intangible assets for the years ended December 31,
2002 and 2001 was $22,711 and $0, respectively.

7.   DEPOSITS

     Deposits at December 31, 2002 and 2001 are as follows:

                                                        2002            2001
                                                     ------------   -----------

     Checking                                          7,981,416    $ 6,968,415
     Regular savings                                  21,320,850     19,332,984
     Money markets                                    12,979,421     10,809,203
     IRA's floating rate                               2,716,498      2,653,334
     Certificate of deposits (including IRA CDs)      28,656,005     21,653,157
                                                     -----------    -----------

                                                     $73,654,190    $61,417,093
                                                     ===========    ===========

     Scheduled maturities of certificate of deposits are as follows:

                                           December 31,
                                               2002
                                           ------------

                2003                        $14,950,234
                2004                          4,976,938
                2005                          3,741,612
                2006                          1,370,051
                2007                          3,611,629
                Thereafter                        5,541
                                            -----------

                                            $28,656,005
                                            ===========

     Officers'  and  directors'   savings  accounts  amounted  to  approximately
$912,000 and $877,000 at December 31, 2002 and 2001, respectively.

                                       31

<PAGE>

     Deposits over $100,000 approximated $19,430,000 and $13,587,000 at December
31, 2002 and 2001, respectively.

8.   BORROWINGS

     Borrowings  consist of FHLB  advances at December 31, 2002 and 2001 and are
summarized as follows:

                                    2002                      2001
                          ----------------------    --------------------------
                                        Weighted                    Weighted
                                         Average                     Average
                                        Interest                    Interest
                            Amount        Rate          Amount         Rate
                          ----------    --------     ------------   ----------

   Less than one year     $10,000,000      4.14%      $         -       .00%
   One to two years         1,000,000      4.72        11,000,000      5.28
   Thereafter               1,500,000      4.78         1,500,000      4.78
                          -----------                 -----------

                          $12,500,000      4.26%      $12,500,000      5.22%
                          ===========                 ===========


     The Company has  $11,500,000 in adjustable  rate advances and $1,000,000 in
fixed rate advances from the FHLB at December 31, 2002.

     At December 31, 2002, the Company had line of credit  commitments  with the
FHLB totaling  $24,255,000 of which $12,500,000 was advanced and $11,755,000 was
available at December  2002. As of December 31, 2002,  the Company's  adjustable
rate FHLB advances include  $1,500,000 of advances with a scheduled  maturity of
2011.  The FHLB under certain  circumstances,  has a one time call  provision in
2006 related to this advance.

     The Bank has pledged  various  mortgage-backed  investment  securities  and
residential real estate mortgage loans as collateral for FHLB advances.

9.   INCOME TAXES

     Income  tax  expense  for the years  ended  December  31,  consists  of the
following:

                                                    2002          2001
                                                 ---------     ---------

         Current income taxes:
           Federal                                $147,019      $210,070
           State                                    52,080        46,505
                                                  --------      --------
                                                   199,099       256,575
                                                  --------      --------

         Deferred income taxes:
           Federal                                  60,853       (10,809)
           State                                    13,472        (2,388)
                                                  --------      --------
                                                    74,325       (13,197)
                                                  --------      --------

               Total income tax expense           $273,424      $243,378
                                                  ========      ========

                                       32


<PAGE>


     Temporary  differences  between  the  amounts  reported  in  the  financial
statements and the tax bases of assets and liabilities result in deferred taxes.
Deferred tax assets and  liabilities,  shown as the sum of the  appropriate  tax
effect for each  significant type of temporary  difference,  are presented below
for the years ended December 31:


                                                           2002          2001
                                                        ----------    ---------
   Deferred tax assets:
     Organization expenses                               $  1,884      $ 13,173
     Other                                                  4,632             -
                                                         --------      --------

         Gross deferred tax assets                          6,516        13,173
                                                         --------      --------
   Deferred tax liabilities:
     Allowance for loan losses                             42,265        10,111
     Deferred loan costs                                  105,888        86,713
     Depreciation                                          80,056        63,717
                                                         --------      --------

         Gross deferred tax liabilities                   228,209       160,541
                                                         --------      --------

   Total from operations                                  221,693       147,368

   Unrealized gains on available-for-sale securities      166,147        17,171
                                                         --------      --------

         Net deferred tax liability                      $387,840      $164,539
                                                         ========      ========

     A two-year  reconciliation of the difference  between the statutory federal
income tax rate and the effective tax rate for the Company is as follows:

                                                                2002     2001
                                                               ------   -------

    Federal income tax rate                                     34.0%    34.0%
    Increase (decrease) resulting from:
      State income taxes, net of federal income tax benefit      4.6      4.6
      Other                                                     (1.6)    (1.7)
                                                               -----    -----

          Effective tax rate                                    37.0%    36.9%
                                                                ====     ====

10.  EMPLOYEE BENEFIT PLANS

     401(k) Plan
     -----------

     The Bank has a 401(k) plan for all eligible employees.  The contribution to
the plan is a fixed percentage of the  participants'  compensation.  The cost of
the plan for the years ended December 31, 2002 and 2001 approximated $45,000 and
$44,200, respectively.

     Employee Stock Ownership Plan
     -----------------------------

     The Company sponsors a leveraged  employee stock ownership plan (ESOP) that
covers all employees  who work twenty or more hours per week.  The Company makes
annual  contributions to the ESOP equal to the ESOP's debt service.  ESOP shares
are  pledged  as  collateral  for its debt.  As the debt is  repaid,  shares are
released  from  collateral  and  allocated  to  active  employees  based  on the
proportion of debt service paid in the year.  The Company  accounts for its ESOP
in accordance with

                                       33


<PAGE>





Statement  of Position  93-6.  Accordingly,  the debt of the ESOP is recorded as
debt and the shares  pledged as collateral  are reported as unearned ESOP shares
in the statement of financial position.  As shares are released from collateral,
the Company  reports  compensation  expense equal to the current market price of
the  shares and the  shares  become  outstanding  for  earnings-per-share  (EPS)
computations.  ESOP  compensation  expense was $68,400 and $41,000 for the years
ended  December  31, 2002 and 2001,  respectively.  The ESOP shares for the year
ended December 31, 2002 were as follows:

         Allocated shares                               2,593
         Shares released for allocation                 3,241
         Unreleased shares                             26,576
                                                       ------

             Total ESOP shares                         32,410
                                                       ======

     Fair value of unreleased shares at December 31, 2002 was $544,808.

     Stock Options
     -------------

     The Company has stock  option  award  arrangements,  which  provide for the
granting of options to acquire  common  stock to  directors  and key  employees.
Option  prices  are equal to or  greater  than the  estimated  fair value of the
common  stock at the date of the  grant.  Options  granted  under the 2002 Stock
Option Plan (the "Plan") have a three-year  vesting schedule with the first year
vested upon issuance.  Options do not become  exercisable until six months after
the date of grant. All options expire ten years after the date of grant.

     During the year ended  December  31,  2002 the  Company  granted a total of
10,300  stock  options to  directors  and key  employees.  There were no options
outstanding at December 31, 2001.  Information  with respect to stock options is
as follows for the year ended December 31, 2002:

                                                                    Weighted
                                                                     Average
                                                  Number            Exercise
                                                 of Shares            Price
                                                 ---------          ---------

     Outstanding at beginning of year                   -             $    -
     Granted                                       10,300              21.12
     Exercised                                          -                  -
     Forfeited/cancelled                                -                  -
                                                   ------             ------

     Outstanding at end of year                    10,300             $21.12
                                                   ======             ======

       Options outstanding are summarized as follows at December 31, 2002:


                                    Options Outstanding
                ---------------------------------------------------
                                         Weighted
                                          Average
                                         Remaining        Options
                                        Contractual     Exercisable
                Exercise                    Life        -----------
                  Price       Shares      (Years)         Shares
                --------      ------    ------------    -----------

                 $21.12       10,300        9.3             3,433


                                       34

<PAGE>


     The weighted  average fair value of options  granted during 2002 was $10.69
on the date of the grant.  The fair value of options granted is estimated on the
date  of  the  grant  using  the   Black-Scholes   option  pricing  model.   The
Black-Scholes   option  pricing  model  was  originally  developed  for  use  in
estimating   the  fair   value  of  traded   options,   which   have   different
characteristics from the Company's stock options. The model is also sensitive to
changes in the  subjective  assumptions,  which can  materially  affect the fair
value estimate. As a result, management believes the Black-Scholes model may not
necessarily  provide a reliable  single  measure  of the fair value of  employee
stock options. The following weighted average assumptions were used for the year
ended December 31, 2002:

            Dividend yield                                0.00%
            Expected volatility                          29.17%
            Risk-free interest rate                       4.58%
            Expected lives (in years)                       10

     The option  strike  price was equal to the market price of the common stock
at the date of the grant for all options  granted in 2002 and,  accordingly,  no
compensation  expense  related to options  was  recognized.  If the  Company had
applied a fair value based method to recognize compensation cost for the options
granted,  net  income and  earnings  per share  would  have been  changed to the
following pro forma amounts for the year ended December 31, 2002:


         Net income - as reported                                     $465,577

         Deduct:  Total stock-based employee compensation
           determined under fair value based method for all
           awards, net of related income tax effects                   (22,518)
                                                                      --------

         Pro forma net income                                         $443,059
                                                                      ========

         Earnings per share:
           Basic and diluted - as reported                             $1.34
                                                                       =====
           Basic and diluted - pro forma                               $1.27
                                                                       =====

     For purposes of pro forma  disclosures,  the estimated minimum value of the
options is amortized to expense over the option's vesting period.  Note that the
effects of applying SFAS No. 123 for pro forma  disclosures  in the current year
are not  necessarily  representative  of the effects on pro forma net income for
future years.

11.  REGULATORY CAPITAL

     The Bank is subject to various regulatory capital requirements administered
by  the  Office  of  Thrift   Supervision.   Failure  to  meet  minimum  capital
requirements   can  initiate   certain   mandatory   and   possibly   additional
discretionary  actions by regulators  that, if  undertaken,  could have a direct
material effect on the Company'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 assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices.  The Bank's capital accounts and classification
are also subject to qualitative  judgments by the regulators  about  components,
risk weightings, and other factors.

                                       35


<PAGE>


     Quantitative  measures established by regulation to ensure capital adequacy
require the Bank to maintain  amounts and ratios (set forth in the table  below)
of total and Tier 1 capital (as  defined in the  regulations)  to  risk-weighted
assets (as  defined),  and of Tier 1 capital (as defined) to average  assets (as
defined).  Management  believes as of December 31, 2002, that the Bank meets all
capital adequacy requirements to which they are subject.

     As of December 31, 2002,  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 1 risk-based,  and Tier 1
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.

     Actual  capital  amounts and ratios for the Bank are presented in the table
below:

<TABLE>
<CAPTION>
                                                                                           To be
                                                                                      Well Capitalized
                                                                                         Under Prompt
                                                                    For Capital       Corrective Action
                                                   Actual          Adequacy Purposes      Provision
                                              -----------------   -------------------  -------------------
                                               Amount     Ratio     Amount     Ratio     Amount      Ratio
                                              ----------  -----   ----------   ------  ----------    -----
<S>                                        <C>          <C>    <C>          <C>     <C>           <C>

As of December 31, 2002:
   Total capital (to risk-weighted assets)    $9,166,267   14.3%  $5,132,000   8.0%    $6,415,000    10.0%

   Tier 1 capital (to risk-weighted assets)    8,625,565   13.4    2,566,000   4.0      3,849,000     6.0

   Tier 1 capital (to average assets)          8,625,565    9.5    3,647,000   4.0      4,558,000     5.0

As of December 31, 2001:
   Total capital (to risk-weighted assets)    $8,624,473   14.8%  $4,667,000   8.0%    $5,834,000    10.0%

   Tier 1 capital (to risk-weighted assets)    8,034,886   13.8    2,334,000   4.0      3,500,000     6.0

   Tier 1 capital (to average assets)          8,034,886   10.1    3,191,000   4.0      3,989,000     5.0

</TABLE>


     The following is a  reconciliation  of capital  computed  under  accounting
principles  generally  accepted  in the United  States of America to  regulatory
capital at December 31, 2002:

<TABLE>
<CAPTION>

                                              GAAP        Tangible       Core         Total
                                             Capital       Capital      Capital      Capital
                                            ----------   -----------  -----------   ----------

<S>                                      <C>          <C>          <C>           <C>
GAAP capital                                $8,896,596   $8,896,596   $8,896,596    $8,896,596
                                            ==========


Accumulated losses (gains) on certain
   available-for-sale securities                           (271,031)    (271,031)     (271,031)
Additional capital items - general
  valuation allowance                                             -            -       540,702
                                                         ----------   ----------    ----------

Regulatory capital - computed                            $8,625,565   $8,625,565    $9,166,267
                                                         ==========   ==========    ==========
</TABLE>


                                       36
<PAGE>




     The following is a  reconciliation  of capital  computed  under  accounting
principles  generally  accepted in the United  States to  regulatory  capital at
December 31, 2001:

<TABLE>
<CAPTION>
                                              GAAP        Tangible       Core         Total
                                             Capital       Capital      Capital      Capital
                                            ----------   -----------  -----------   ----------

<S>                                      <C>          <C>          <C>           <C>
GAAP capital                                $8,058,237   $8,058,237   $8,058,237    $8,058,237
                                            ==========

Accumulated losses (gains) on certain
   available-for-sale securities                            (23,351)     (23,351)       (23,351)
Additional capital items -
   General valuation allowance                                    -            -        589,587
                                                         ----------   ----------     ----------

Regulatory capital - computed                            $8,034,886   $8,034,886     $8,624,473
                                                         ==========   ==========     ==========
</TABLE>

     The  conversion  to stock  ownership  provides for the  establishment  of a
liquidation  account  for the benefit of eligible  deposit  account  holders (as
defined). The liquidation account will be maintained for the benefit of eligible
account  holders who continue to maintain their accounts with the Bank after the
conversion.  The  liquidation  account  will be reduced  annually  to the extent
eligible  account  holders have reduced their  qualifying  deposits.  Subsequent
increases  will  not  restore  an  eligible  account  holder's  interest  in the
liquidation  account.  In the event of a  complete  liquidation,  each  eligible
account holder will be entitled to receive a distribution  from the  liquidation
account in an amount  proportionate to the current adjusted  qualifying balances
for accounts then held.

     The Bank may not declare or pay cash  dividends if the effect thereof would
cause  stockholders'  equity to be reduced below applicable  regulatory  capital
maintenance  requirements  or if such  declaration  and  payment  would  violate
regulatory requirements.

12.  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following  methods and assumptions were used to estimate the fair value
of each class of financial  instruments  for which it is practicable to estimate
that value.

     Cash and Cash Equivalents
     -------------------------

     For those  short-term  instruments,  the  carrying  amount is a  reasonable
estimate of fair value.

     Investment Securities
     ---------------------

     For all  investments  in debt  securities,  fair values are based on quoted
market  prices.  If a  quoted  market  price  is not  available,  fair  value is
estimated using quoted market prices for similar securities.

     Loans Receivable
     ----------------

     The fair value of categories of fixed rate loans, such as commercial loans,
residential  mortgage,  and other consumer loans is estimated by discounting the
future cash flows using the current  rates at which  similar loans would be made
to borrowers with similar credit ratings and for the same remaining  maturities.
Other loans,  including  variable rates loans,  are adjusted for  differences in
loan characteristics.


                                       37


<PAGE>


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

     The carrying  amount of Federal Home Loan Bank of Atlanta (FHLB) Stock is a
reasonable  estimate  of fair  value  as FHLB  stock  does  not  have a  readily
available  market and can only be sold back to the FHLB at its par value of $100
per share.

     Deposits
     --------

     The fair value of demand  deposits,  savings  accounts,  and certain  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 for deposits of similar remaining maturities.

     Borrowed Funds
     --------------

     The fair value of borrowed funds was determined  using a cash flow approach
based on market rates.

     Commitments to Extend Credit
     ----------------------------

     The Company's adjustable rate commitments to extend credit move with market
rates and are not subject to interest rate risk.  For the  Company's  fixed rate
commitments  to extend  credit,  fair value  considers  the  difference  between
current levels of interest rates and the committed rates.

     The estimated fair values of the Bank's  financial  instruments,  excluding
goodwill, as of December 31, are as follows:

<TABLE>
<CAPTION>
                                                       2002                       2001
                                           --------------------------   ---------------------------
                                                          Estimated                     Estimated
                                            Carrying         Fair         Carrying         Fair
                                             Amount         Value         Amount          Value
                                            ----------   ------------    ----------    -----------
<S>                                      <C>           <C>            <C>           <C>

       Financial assets:
         Cash and cash equivalents          $ 4,094,866   $ 4,094,866    $ 2,359,036   $ 2,359,036
         Investment securities               21,453,782    21,471,989     19,825,847    19,833,251
         Loans receivable                    66,472,312    66,659,627     60,023,793    60,005,521
         Investment in FHLB stock               875,000       875,000        930,800       930,800

       Financial liabilities:
         Deposits                            73,654,190    72,969,312     61,417,093    60,880,095
         Borrowed funds                      12,500,000    12,300,000     12,500,000    12,248,750

</TABLE>


     Off-Balance Sheet Financial Assets:

<TABLE>
<CAPTION>
                                                       2002                        2001
                                            --------------------------  ---------------------------
                                              Estimated                  Estimated
                                               Contract    Estimated      Contract      Estimated
                                                Amount     Fair Value       Amount      Fair Value
                                            -----------   ------------   ------------  ------------
<S>                                      <C>            <C>            <C>           <C>

       Commitments to extend credit         $16,231,000    $16,222,000    $15,092,000   $15,036,000

</TABLE>

                                       38

<PAGE>


13.  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

     In the normal  course of  business,  the Company  has  various  outstanding
credit commitments which are properly not reflected in the financial statements.
These  commitments  are made to satisfy  the  financing  needs of the  Company's
clients. The associated credit risk is controlled by subjecting such activity to
the same credit and  quality  controls  as exist for the  Company's  lending and
investing  activities.  The commitments  involve  diverse  business and consumer
customers and are generally well collateralized.  Management does not anticipate
that  losses,  if any,  which may occur as a result of these  commitments  would
materially  affect the stockholders'  equity of the Company.  Since a portion of
the commitments have some likelihood of not being exercised,  the amounts do not
necessarily represent future cash requirements.

     Loan and credit line commitments,  totaled $16,231,000 at December 31, 2002
and  $15,092,000 at December 31, 2001.  These  commitments  are contingent  upon
continuing customer compliance with the terms of the agreement.

     Variable rate loan  commitments  were at current  market rates ranging from
4.25% to 9.25% for December 31, 2002 and 2001, respectively.

14.  RENT/RELATED PARTY TRANSACTIONS

     The Bank occupies  administrative  and banking  facilities in Owings Mills,
Maryland.  The Bank does not make rental  payments on these  premises.  However,
BUCS  Federal  has an  agreement  with  CareFirst  (Blue  Cross/Blue  Shield  of
Maryland)  through  March  2009 to  process  and  maintain  a cash  facility  on
premises.   The  estimated   value  of  these  service  fees  for  rent  expense
approximates  $120,000  per annum.  Non-interest  income and  occupancy  expense
include recognition of this agreement.

     In  November  2002  the  Company  entered  into an  agreement  to  sublease
additional  administrative  and  banking  facility  space in Owings  Mills  from
CareFirst  with an initial term through  November 30, 2009. The Bank is required
to pay $18,000 per annum under the sublease during the term of the agreement.

     The Bank occupies a branch  banking  facility in Columbia,  Maryland.  BUCS
Federal prepaid ten (10) years of rent totaling  $327,218 for the period July 1,
1999 to June 30, 2009. BUCS Federal has the option to extend the lease for three
5-year periods at a rent to be determined.  Occupancy  expense is charged $2,750
per month for rent and amortization of the $327,218.

15.  PARENT COMPANY FINANCIAL STATEMENTS

     Condensed  financial  information  for BUCS Financial Corp (parent  company
only) is as follows:


                                       39

<PAGE>


                             CONDENSED BALANCE SHEET
                           DECEMBER 31, 2002 AND 2001

                                     ASSETS

<TABLE>
<CAPTION>
                                                                         2002             2001
                                                                      ----------      -----------
<S>                                                                   <C>               <C>

Cash                                                                  $  161,503        1,169,192
Investment in subsidiaries                                             9,369,368        8,506,786
Notes receivable                                                         298,172          324,100
Other                                                                    105,791           18,155
                                                                      ----------      -----------

         Total assets                                                 $9,934,834      $10,018,233
                                                                      ==========      ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities -
   Other                                                              $        -      $     2,534
                                                                      ----------      -----------

Stockholders' equity:
   Common stock                                                           36,459           40,508
   Additional paid-in capital                                          3,140,377        3,508,708
   Retained earnings                                                   6,486,967        6,443,132
   Accumulated other comprehensive income                                271,031           23,351
                                                                      ----------      -----------

           Total stockholders' equity                                  9,934,834       10,015,699
                                                                      ----------      -----------

           Total liabilities and stockholders' equity                 $9,934,834      $10,018,233
                                                                      ==========      ===========
</TABLE>

                          CONDENSED STATEMENT OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


<TABLE>
<CAPTION>
                                                                         2002         2001
                                                                       ---------    --------
<S>                                                                 <C>          <C>

Interest income                                                        $ 20,880     $ 18,155

Operating expenses                                                       56,149       11,307
                                                                       --------     --------

(Loss) income before income tax expense and equity
   in undistributed income of subsidiaries                              (35,269)       6,848

Income tax (benefit) expense                                            (13,050)       2,534
                                                                       --------     --------

(Loss) income before income in undistributed income of subsidiaries     (22,219)       4,314

Equity in undistributed income of subsidiaries                          487,796      412,210
                                                                       --------     --------

Net income                                                             $465,577     $416,524
                                                                       ========     ========
</TABLE>

                                       40

<PAGE>


                        CONDENSED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


<TABLE>
<CAPTION>
                                                                      2002                2001
                                                                  -----------         -----------
<S>                                                            <C>                 <C>

Cash flows from operating activities:
   Net income                                                     $   465,577         $   416,524
   Adjustments to reconcile net income to cash
     provided by operating activities:
     Equity in undistributed income of subsidiaries                  (487,796)           (412,210)
     Net increase in other assets                                     (84,266)            (18,155)
     Net increase in other liabilities                                 (2,534)              2,534
                                                                  -----------         -----------

           Net cash used in operating activities                     (109,019)            (11,307)
                                                                  -----------         -----------

Cash flows from investing activities:
   Loan to subsidiary                                                       -            (324,100)
   Initial investment in subsidiaries                                (100,000)         (2,029,545)
   Proceeds from notes receivable                                      25,928                   -
                                                                  -----------         -----------

           Net cash used in investing activities                      (74,072)         (2,353,645)
                                                                  -----------         -----------

Cash flows from financing activities:
   Proceeds from issuance of common stock                                   -           3,534,144
   Repurchase of common stock                                        (830,112)                  -
   Liquidating dividend from subsidiary                                 5,514                   -
                                                                  -----------          ----------

           Net cash (used) provided by financing activities          (824,598)          3,534,144
                                                                  -----------          ----------

NET (DECREASE) INCREASE IN CASH                                    (1,007,689)          1,169,192

CASH AT BEGINNING OF YEAR                                           1,169,192                  -
                                                                   ----------          ----------

CASH AT END OF YEAR                                                $  161,503          $1,169,192
                                                                   ==========          ==========
</TABLE>

                                       41


<PAGE>
                              Corporate Information

                               BUCS Financial Corp
                       10455 Mill Run Circle, P.O. Box 625
                             Owings Mills, MD 21117
                                 (410) 998-5304

                                BUCS Federal Bank

10455 Mill Run Circle          10802 Red Run Blvd      8801 Columbia 100 Parkway
Owings Mills, MD 21117       Owings Mills, MD 21117      Columbia, MD  21045

                                 Armor Insurance
100 Owings Court, Suite 3                                3203 Corporate Court
Reisterstown, MD  21136                                 Ellicott City, MD 21042

                               BOARD OF DIRECTORS

                            Allen S. Maier, Chairman
                       Joseph D. Pescrille, Vice Chairman
                           Brian J. Bowers, Treasurer
                          M. Robin Copeland, Secretary
                       Herbert J. Moltzan, President & CEO
                                Thomas K. Markel
                               A. Virginia Wampler
                                    Harry Fox
                                    Peg Ohrt
                                  Dale Summers

                               EXECUTIVE OFFICERS

Herbert J. Moltzan          James E. Shinsky                Debra  J. Vinson
 President & CEO          Senior Vice President          Senior Vice President

                  William H. Howard           Matthew Ford
                Senior Vice President      Vice President & CFO

<TABLE>
<CAPTION>
<S>                                                       <C>
Local Counsel                                                 Independent Auditor
Gordon, Feinblatt, Rothman, Hoffberger, & Hollander, LLC      Stegman & Company
233 E. Redwood St.                                            405 E. Joppa Rd., Ste. 200
Baltimore, MD  21202                                          Baltimore, MD  21286

Special Counsel                                               Transfer Agent and Registrar
Malizia Spidi & Fisch, PC                                     Registrar & Transfer
1100 New York Ave., N.W., Ste. 340 W.                         10 Commerce Dr.
Washington, DC  20005                                         Cranford, NJ  07016

</TABLE>

The Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December
31, 2002 is available  without  charge upon written  request.  For a copy of the
Form 10-KSB,  please write or call Herbert J.  Moltzan,  President & CEO, at the
Company's Mill Run Circle Office.  The Annual  Meeting of  Stockholders  will be
held on April 30, 2003 at 5:00 PM at the BUCS  Federal Bank  Offices,  10802 Red
Run Blvd., Owings Mills, MD 21117.



                                       42