U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

                                   (Mark One)


[X]  Quarterly  Report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

         For the quarterly period ended June 30, 2002

[ ]  Transition Report under Section 13 or 15(d) of the Exchange Act

For the transition period from ______ to ______

                         Commission File Number: 0-24589

                               BCSB BANKCORP, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)

          UNITED STATES                                     52-2108333
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                           (I.R.S. Employer
 Incorporation or Organization)                           Identification No.)

            4111 E. JOPPA ROAD, SUITE 300, BALTIMORE, MARYLAND 21236
            --------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (410) 256-5000
                 -----------------------------------------------
                 Issuer's Telephone Number, Including Area Code)

                                       N/A
              ----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes  X   No
                                                              ---     ---

     As of July 25, 2002, the issuer had 5,872,322 shares of Common Stock issued
and outstanding.

Traditional Small Business Disclosure Format (check one):

Yes               No    X
    ---------        -------
<PAGE>

         CONTENTS

                                                                            PAGE
                                                                            ----

PART I.  FINANCIAL INFORMATION
         ---------------------

Item 1.  Financial Statements

         Consolidated Statements of Financial Condition as of
             June 30, 2002 (unaudited) and September 30, 2001................2

         Consolidated Statements of Operations for the Nine Months
             and Three Months Ended June 30, 2002 and 2001 (unaudited).......3

         Consolidated Statements of Cash Flows for the Nine Months
             Ended June 30, 2002 and 2001 (unaudited)....................... 4

     Notes to Consolidated Financial Statements..............................7

Item 2.  Management's Discussion and Analysis or Plan of Operation...........9


PART II.  OTHER INFORMATION
          -----------------

Item 1.  Legal Proceedings...................................................17

Item 2.  Changes in Securities and Use of Proceeds...........................17

Item 3.  Defaults Upon Senior Securities.....................................17

Item 4.  Submission of Matters to a Vote of Security Holders.................17

Item 5.  Other Information...................................................17

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


SIGNATURES...................................................................19

CERTIFICATION................................................................21

                                       1
<PAGE>

                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                                                             JUNE 30,        SEPTEMBER 30,
                                                                              2002                2001
                                                                         --------------      --------------
                                                                          (Unaudited)
<S>                                                                      <C>                 <C>
                                      Assets
                                      ------
Cash                                                                     $    6,903,960      $    4,055,985
Interest bearing deposits in other banks                                      6,786,480           7,952,621
Federal funds sold                                                            5,277,386           3,313,392
Investment securities, held to maturity                                       4,000,000          18,494,349
Investment securities, available for sale                                    57,940,620          23,968,640
Loans receivable, net                                                       279,689,652         268,010,050
Mortgage backed securities, held to maturity                                 35,772,257          41,655,039
Mortgage backed securities, available for sale                               37,142,522          11,441,785
Foreclosed real estate, net                                                          --              80,569
Premises and equipment, net                                                   6,656,587           6,974,815
Federal Home Loan Bank of Atlanta stock                                       2,489,700           1,834,400
Accrued interest receivable  - loans                                            911,587             930,784
                             - investments                                      400,295             609,585
                             - mortgage backed securities                       378,516             304,094
Deferred and prepaid income taxes                                               319,546             195,544
Other assets                                                                  1,697,018           1,061,672
                                                                         --------------      --------------
Total assets                                                             $  446,366,126      $  390,883,324
                                                                         ==============      ==============
                Liabilities and Stockholders' Equity
                ------------------------------------
Liabilities
-----------
  Deposits                                                               $  372,469,182      $  325,785,538
  Advances from the Federal Home Loan Bank of Atlanta                        12,300,000          17,800,000
  Advance payments by borrowers for taxes and insurance                       2,907,244           1,147,121
  Income taxes payable                                                           45,684               5,901
  Payables to disbursing agents                                                 642,885             109,259
  Dividends payable                                                             264,671             264,045
  Other liabilities                                                             936,665           3,041,070
  Trust Preferred Securities                                                 12,500,000                  --
                                                                         --------------      --------------
Total liabilities                                                           402,066,331         348,152,934

Commitments and contingencies

Stockholders' Equity
--------------------
  Common stock (Par value $.01 - 13,500,000 authorized,
    5,872,322 outstanding at June 30, 2002 and 5,867,322
    at September 30, 2001)                                                       58,723              58,673
  Additional paid-in capital                                                 20,167,643          20,116,467
  Retained earnings (substantially restricted)                               24,787,048          24,556,126
   Accumulated Other Comprehensive Income                                       214,341             281,924
  Employee Stock Ownership Plan                                              (1,006,104)         (1,143,300)
  Stock held by Rabbi Trust                                                  (1,196,500)         (1,139,500)
   Obligation under Rabbi-Trust                                               1,274,644                  --
                                                                         --------------      --------------
                                                                             44,299,795          42,730,390
                                                                         --------------      --------------
Total liabilities and retained earnings                                  $  446,366,126      $  390,883,324
                                                                         ==============      ==============
</TABLE>

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

                                       2
<PAGE>
                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                -------------------------------------------------
<TABLE>
<CAPTION>
                                                                 FOR NINE MONTHS ENDED          FOR THREE MONTHS ENDED
                                                                        JUNE 30,                       JUNE 30,
                                                            ------------------------------    ----------------------------
                                                                2002              2001            2002            2001
                                                              --------          -------        ---------       ---------
<S>                                                         <C>                <C>            <C>             <C>
Interest Income
---------------
  Interest and fees on loans                                $  15,222,940      $13,880,587    $  5,104,245    $  4,668,556
  Interest on mortgage-backed securities                        2,556,694        1,222,214         904,721         554,313
  Interest and dividends on investment securities               2,214,813        2,035,533         811,745         611,518
  Other interest income                                           149,338          619,429          43,909         230,988
                                                            -------------      -----------    ------------    ------------
Total interest income                                          20,143,785       17,757,763       6,864,620       6,065,375

Interest Expense
----------------
  Interest on deposits                                         10,358,778       10,190,931       3,324,849       3,485,154
  Interest on borrowings - short term                             557,466          203,576         238,451          62,218
  Other interest expense                                            9,051            3,374           8,051           1,438
                                                            -------------      -----------    ------------    ------------
Total interest expense                                         10,925,295       10,397,881       3,571,351       3,548,810
                                                            -------------      -----------    ------------    ------------

  Net interest income                                           9,218,490        7,359,882       3,293,269       2,516,565
  Provision for losses on loans                                   209,251          223,289         139,881         153,825
                                                            -------------      -----------    ------------    ------------
  Net interest income after provision
     for losses on loans                                        9,009,239        7,136,593       3,153,388       2,362,740

Other Income (Loss)
------------------
  Gain (loss) on sale of foreclosed real estate                        --           15,751              --              --
  Gain on sale of loans                                           132,440           27,293          22,982              --
  Provision for losses on loans held for sale                          --               --          10,761              --
  Servicing fee income                                             13,652            9,354           4,188           2,550
  Fees and charges on loans                                       127,120          113,593          40,946          38,170
  Fees on transaction accounts                                    304,713          207,110         113,115          80,978
  Rental income                                                    69,410           73,607          18,151          24,334
  Gain from sale of investments                                    44,026               --          26,516              --
  Gain from sale of mortgage backed securities                      5,595               --           4,519              --
  Miscellaneous income                                             24,131           79,424          18,887          24,910
                                                            -------------      -----------    ------------    ------------
Net other income (loss)                                           721,087          526,132         260,065         170,942

Non-Interest Expenses
---------------------
  Salaries and related expense                                  4,240,699        4,307,554       1,441,972       1,426,934
  Occupancy expense                                               907,756          823,655         300,357         282,615
  Deposit insurance premiums                                      113,681           93,634          37,066          31,704
  Data processing expense                                         665,139          469,319         215,772         137,502
  Property and equipment expense                                  703,406          641,483         230,428         230,931
  Professional fees                                               141,031          135,180          43,114          57,160
  Advertising                                                     631,015          703,558         154,570         202,095
  Telephone, postage and office supplies                          333,542          331,072         108,973         108,483
  Other expenses                                                  323,313          219,643          97,913          84,887
                                                            -------------      -----------    ------------    ------------
Total non-interest expenses                                     8,059,582        7,725,098       2,630,165       2,562,311
                                                            -------------      -----------    ------------    ------------

Income (loss) before tax provision                              1,670,744          (62,373)        783,288         (28,629)
Income tax provision (benefit)                                    647,059          (16,176)        303,120          (7,155)
                                                            -------------      -----------    ------------    -------------
Net income (loss)                                           $   1,023,685      $   (46,197)   $    480,168    $    (21,474)
                                                            =============      ===========    ============    =============

Basic earnings (loss) per share                             $        0.18      $     (0.01)   $        0.09   $        0.00
                                                            =============      ===========    =============   =============
Diluted earnings (loss) per share                           $        0.18      $     (0.01)   $        0.08   $        0.00
                                                            =============      ===========    =============   =============
</TABLE>
The accompanying notes to the consolidated  financial statements are an integral
part of these statements.
                                       3
<PAGE>
                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND
                               -------------------

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------
<TABLE>
<CAPTION>
                                                                                 FOR NINE MONTHS ENDED
                                                                                       JUNE 30,
                                                                                2002               2001
                                                                            ------------        ----------
<S>                                                                        <C>                 <C>
Operating Activities
--------------------
   Net Income (Loss)                                                       $ 1,023,685         $   (46,197)
  Adjustments to Reconcile Net Income (Loss) to Net
  Cash Provided by Operating Activities
  -------------------------------------
    Amortization/ (accreation) of discounts and premiums on investments         (9,019)             15,388
    Dividends on Investment Securities                                        (723,784)            (81,427)
    Gain on sale of Investment Securities                                      (44,026)                 --
    Loans originated for sale                                               (8,193,455)                 --
    Loans sold                                                               8,325,895                  --
    Gain on Sale of Loans                                                     (132,440)            (27,293)
    Loan fees (costs) deferred, net                                             88,768              56,856
    Amortization of deferred loan fees, net                                   (124,998)            (70,386)
    Provision for losses on loans                                              209,251             223,289
    Non-cash compensation under Stock-Based Benefit Plan                       137,196             105,709
    Amortization of premium on mortgage backed securities                      175,818              14,347
    Gain on sale of mortgage backed securities                                  (5,595)                 --
    Gain loss on sale of foreclosed real estate                                     --             (15,751)
    Provision for depreciation                                                 608,062             553,763
    Decrease in accrued interest receivable on loans                            19,197              79,941
    Decrease in accrued interest receivable on investments                     209,290              69,184
    Increase in accrued interest receivable on mortgage
         backed securities                                                     (74,422)           (188,587)
    Increase in prepaid income taxes                                           (83,661)           (251,698)
    Increase in other assets                                                  (635,346)           (305,669)
    Decrease in accrued interest payable on deposits                          (123,784)           (451,246)
    Increase (decrease) in income taxes payable                                 39,783              (5,813)
    Decrease (increase)in other liabilities and payables to
          disbursing agents                                                   (296,135)             10,760
                                                                           ------------        -----------
        Net cash provided by (used) operating activities                       390,280            (314,830)
</TABLE>

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

                                       4
<PAGE>
                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND
                               -------------------

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------
<TABLE>
<CAPTION>
                                                                                 FOR NINE MONTHS ENDED
                                                                                        JUNE 30,
                                                                           ---------------------------------
                                                                               2002                 2001
                                                                           ------------         ------------
<S>                                                                        <C>                 <C>
Cash Flows from Investing Activities
------------------------------------
    Proceeds from maturing interest bearing deposits                       $   2,154,000       $   2,660,000
    Purchase of interest bearing deposits                                             --            (792,000)
    Purchases of investment securities - available for sale                  (51,353,390)        (13,993,199)
    Proceeds from maturities of investment securities - available for sale     4,912,000                  --
    Proceeds from sale of investment securities - available for sale          13,013,875                  --
    Purchases of investment securities -  held to maturity                      (500,000)        (28,640,000)
    Proceeds from maturities of investment securities - held to maturity      15,000,000          37,225,000
    Longer term loans originated                                             (33,305,411)        (30,228,695)
    Principal collected on longer term loans                                  31,317,443          21,387,997
    Net increase in short-term loans                                          (9,852,244)         (1,680,915)
    Purchase of mortgage backed securities- available for sale               (36,990,376)         (5,058,921)
    Principal collected on mortgage backed securities- available for sale      8,433,556                  --
    Proceeds from sale of mortgage backed securities- available for sale       2,935,234                  --
    Purchase of mortgage backed securities- held to maturity                  (6,113,580)        (36,353,304)
    Principal collected on mortgage backed securities- held to maturity       11,864,292          10,813,091
    Proceeds from sales of foreclosed real estate                                 80,569              94,603
    Investment in premises and equipment                                        (289,834)           (784,421)
    Purchase of Federal Home Loan Bank of Atlanta stock                         (655,300)                 --
                                                                           --------------      -------------
        Net cash used by investing activities                                (49,348,866)        (45,360,764)

Cash Flows from Financing Activities
------------------------------------
    Net increase in demand deposits, money market, passbook
      accounts and advances by borrowers for taxes and
      insurance                                                               23,731,221           6,012,585
    Increase in Federal Home Loan Bank of Atlanta advances                     6,900,000          16,400,000
    Repayment of Federal Home Loan Bank of Atlanta advances                  (12,400,000)        (11,400,000)
    Net increase in certificates of deposit                                   24,836,330          37,680,789
    Acquisition of stock for Rabbi Trust                                         (57,000)            (87,974)
    Treasury stock purchase                                                           --            (158,695)
    Trust Preferred Securities                                                12,500,000                  --
    Exercised Stock Options                                                       40,000                  --
    Increase (decrease) in dividends payable                                         626              (2,373)
    Dividends declared on stock                                                 (792,763)           (794,791)
                                                                           -------------       --------------
        Net cash provided by financing activities                             54,758,414          47,649,539
                                                                           -------------       -------------

Increase in cash and cash equivalents                                          5,799,828           1,973,945
Cash and cash equivalents at beginning of period                              12,968,998           7,961,710
                                                                           -------------       -------------
Cash and cash equivalents at end of period                                 $  18,768,826       $   9,935,655
                                                                           =============       =============
</TABLE>

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

                                       5
<PAGE>

                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND
                               -------------------

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------
<TABLE>
<CAPTION>
                                                                                  FOR NINE MONTHS ENDED
                                                                                        JUNE 30,
                                                                           ---------------------------------
                                                                               2002                 2001
                                                                           ------------         ------------
<S>                                                                        <C>                 <C>
The following is a summary of cash and cash equivalents:
    Cash                                                                   $   6,903,960       $   7,042,901
    Interest bearing deposits in other banks                                   6,786,480           5,105,811
    Federal funds sold                                                         5,277,386             238,943
                                                                           -------------       -------------
    Balance of cash items reflected on Statement of
      Financial Condition                                                     18,967,826          12,387,655

        Less - certificate of deposit with an original maturity of
          more than three months                                                 199,000           2,452,000
                                                                           -------------       -------------

Cash and cash equivalents reflected on the
    Statement of Cash Flows                                                $  18,768,826       $   9,935,655
                                                                           =============       =============

Supplemental Disclosures of Cash Flows Information:
    Cash paid during the period for:

    Interest                                                               $  10,937,143       $  10,893,722
                                                                           =============       =============

    Income taxes                                                           $     643,100       $     263,250
                                                                           =============       =============

Transfer from loans to real estate acquired through foreclosure            $          --       $     109,421
                                                                           =============       =============
</TABLE>

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

                                       6
<PAGE>
                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
             ------------------------------------------------------

Note 1 -  Principals of Consolidation
          ---------------------------
          BCSB  Bankcorp,  Inc. (the  "Company")  owns 100% of Baltimore  County
          Savings  Bank,  F.S.B.  (the "Bank") and  subsidiaries,  BCSB Bankcorp
          Trust I which was formed  June 2002 for the  purpose  of  holding  the
          Trust  Preferred  Securities,  and also invests in federal funds sold,
          interest-bearing  deposits in other banks and U.S.  Agency bonds.  The
          Bank owns 100% of Baltimore  County Service  Corporation  and Ebenezer
          Road, Inc. The accompanying  consolidated financial statements include
          the accounts and  transactions  of these  companies on a  consolidated
          basis since the date of  acquisition.  All  intercompany  transactions
          have  been  eliminated  in  the  consolidated   financial  statements.
          Ebenezer Road, Inc. sells insurance products. Baltimore County Service
          Corporation  has  invested in several  joint  ventures  formed for the
          purpose  of  developing  real  estate.  These  investments  have  been
          accounted for on the equity method and separate summary statements are
          not  presented  since the data  contained  therein is not  material in
          relation to the consolidated financial statements.

Note 2 -  Basis for Financial Statement Presentation
          ------------------------------------------

          The accompanying  consolidated financial statements have been prepared
          in accordance with generally  accepted  accounting  principles and the
          instructions to Form 10-QSB.  Accordingly,  they do not include all of
          the disclosures  required by generally accepted accounting  principles
          for complete financial statements.  In the opinion of management,  all
          adjustments (none of which were other than normal recurring  accruals)
          necessary  for a fair  presentation  of  the  financial  position  and
          results of operations  for the periods  presented  have been included.
          The   financial   statements   of  the  Company  are  presented  on  a
          consolidated  basis with those of the Bank.  The results for the three
          months  and  nine  months  ended  June 30,  2002  are not  necessarily
          indicative of the results of  operations  that may be expected for the
          year ended September 30, 2002. The consolidated  financial  statements
          should  be  read  in  conjunction  with  the  consolidated   financial
          statements  and related notes which are  incorporated  by reference in
          the  Company's  Annual  Report  on  Form  10-KSB  for the  year  ended
          September 30, 2001.

Note 3 -  Cash Flow Presentation
          ----------------------

          For  purposes  of  the  statements  of  cash  flows,   cash  and  cash
          equivalents include cash and amounts due from depository institutions,
          investments  in  federal  funds,  and  certificates  of  deposit  with
          original maturities of 90 days or less.

Note 4 -  Earnings Per Share
          ------------------

          Basic per share  amounts are based on the weighted  average  shares of
          common  stock  outstanding.  Diluted  earnings  per share  assume  the
          conversion,  exercise  or  issuance  of  all  potential  common  stock
          instruments  such as options,  warrants  and  convertible  securities,
          unless the effect is to reduce a loss or increase  earnings per share.
          No  adjustments  were made to net income  (numerator)  for all periods
          presented.  The basic and diluted weighted average shares  outstanding
          for the  three  months  and nine  months  ended  June 30,  2002 are as
          follows:
                                       7
<PAGE>
                      BCSB BANKCORP, INC. AND SUBSIDIARIES
                      ------------------------------------
                               BALTIMORE, MARYLAND
                               -------------------

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
             ------------------------------------------------------

Note 4 - Earnings Per Share (Continued)
         ------------------
<TABLE>
<CAPTION>
                                                                For the Nine months Ended June 30, 2002
                                                              ------------------------------------------
                                                                Income             Shares        Per Share
         Basic EPS                                            (Numerator)       (Denominator)     Amount
         ---------                                            -----------       -------------    ---------
         <S>                                                  <C>                <C>             <C>
         Income available to shareholders                     $ 1,023,685        5,563,663       $    .18

         Effect of dilutive shares                                     --          146,138             --
                                                              -----------       ----------       --------
         Diluted EPS
         -----------

         Income available to common stockholders
             plus assumed conversions                         $ 1,023,685        5,709,801       $    .18
                                                              ===========       ==========       ========
<CAPTION>

                                                               For the Three Months Ended June 30, 2002
                                                              -------------------------------------------
                                                                Income             Shares        Per Share
         Basic EPS                                            (Numerator)       (Denominator)     Amount
         ---------                                            -----------       -------------    ----------
         <S>                                                  <C>               <C>              <C>
         Income available to shareholders                     $   480,168       $5,566,109       $    0.09

         Effect of dilutive shares                                     --          156,325              --
                                                              -----------       ----------       ---------
         Diluted EPS
         -----------

         Income available to common stockholders
             plus assumed conversions                         $   480,168        5,722,434       $    0.08
                                                              ===========       ==========       =========
</TABLE>

Note 5 -  Regulatory Capital
          ------------------

          The following table sets forth the Bank's capital position at June 30,
          2002.
<TABLE>
<CAPTION>
                                                                                                To Be Well
                                                                                             Capitalized Under
                                                                   For Capital               Prompt Corrective
                                            Actual               Adequacy Purposes           Action Provision
                                    -----------------------   -----------------------   -------------------------
                                    Actual           % of     Required         % of     Required          % of
                                    Amount           Assets   Amount          Assets     Amount            Assets
                                    ------           ------   ------          ------    --------          ------
                                                                          (unaudited)
<S>                              <C>                 <C>     <C>               <C>      <C>               <C>
Tangible (1)                     $ 45,812,611        10.44%  $ 6,581,834       1.50%     N/A               N/A
Tier 1 capital (2)                 45,812,611        18.66           N/A        N/A     14,730,218         6.00%
Core (1)                           45,812,611        10.44    17,551,557       4.00     21,939,446         5.00
Risk-weighted (2)                  47,511,454        19.35    19,640,291       8.00     24,550,364        10.00
<FN>
------------
(1)      To adjusted total assets.
(2)      To risk-weighted assets.
</FN>
</TABLE>

                                       8
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL

     The  Company  was formed by the Bank to become the  holding  company of the
Bank following the Bank's  reorganization  to the mutual holding company form of
organization (the "Reorganization").  The Reorganization was consummated on July
8, 1998.

     The Company's net income is dependent primarily on its net interest income,
which is the difference  between interest income earned on its loan,  investment
securities  and  mortgage-backed  securities  portfolio  and  interest  paid  on
interest-bearing  liabilities.  Net  interest  income is  determined  by (i) the
difference  between yields earned on  interest-earning  assets and rates paid on
interest-bearing  liabilities  ("interest  rate  spread")  and (ii) the relative
amounts  of  interest-earning  assets  and  interest-bearing   liabilities.  The
Company's  interest  rate  spread  is  affected  by  regulatory,   economic  and
competitive  factors  that  influence  interest  rates,  loan demand and deposit
flows.  To a lesser  extent,  the  Company's  net income also is affected by the
level of other income,  which primarily consists of fees and charges, and levels
of non-interest expenses such as salaries and related expenses.

     The  operations  of the Company are  significantly  affected by  prevailing
economic  conditions,  competition  and  the  monetary,  fiscal  and  regulatory
policies of  governmental  agencies.  Lending  activities  are influenced by the
demand  for and  supply of  housing,  competition  among  lenders,  the level of
interest rates and the  availability of funds.  Deposit flows and costs of funds
are  influenced by prevailing  market rates of interest,  primarily on competing
investments, account maturities and the levels of personal income and savings in
the Company's market area.

FORWARD-LOOKING STATEMENTS

     When used in this Form 10-QSB,  the words or phrases "will likely  result,"
"are expected to," "will continue," "is anticipated,"  "estimate,"  "project" or
similar expressions are intended to identify "forward-looking statements" within
the  meaning of the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements are subject to certain risks and  uncertainties  including changes in
economic  conditions  in the  Company's  market  area,  changes in  policies  by
regulatory  agencies,  fluctuations in interest  rates,  demand for loans in the
Company's market area, and competition that could cause actual results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company wishes to caution readers not to place undue reliance on
any such forward-looking  statements,  which speak only as of the date made. The
Company  wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with respect to future periods in any current statements.

     The Company does not undertake,  and specifically disclaims any obligation,
to  publicly  release  the  result  of any  revisions  which  may be made to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

RECENT ACQUISITION

     On July 24, 2002, The Company  completed the  acquisition of WHG Bancshares
Corporation ("WHG Bancshares") and its wholly-owned subsidiary, Heritage Savings
Bank, F.S.B.  ("Heritage Bank"). The Bank paid $14.25 per share in cash for each
of the 1,285,050  outstanding shares of WHG Bancshares's common stock. Under the
terms of the Agreement all shares of WHG Bancshares were cancelled.  Each option
outstanding  to purchase WHG  Bancshares'  common stock was  converted  into the
right to receive in cash an amount equal the difference  (if a positive  number)
between $14.25 and the exercise price of the option.  As a result of the merger,
Heritage Bank merges into The Bank. WHG Bancshares' five locations became branch
offices  of  Baltimore  County  Bank.  The  aggregate  purchase  price  for  the
transactions  (including  cash  payments  for the  cancellation  of options) was
approximately  $18.3  million.  The  transaction  was  accounted  for  using the
purchase  method.  Consummation  of the merger was  approved by WHG  Bancshares'
shareholders  on June 25, 2002 and all required  regulatory  approvals have been
received.  At June 30, 2002, WHG Bancshares had total assets of $153.8  million,
total deposits of $116.5

                                       9
<PAGE>

million and total equity of $17.2 million.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND SEPTEMBER 30, 2001

During the nine months ended June 30, 2002,  the Company's  assets  increased by
$55.5  million,  or 14.2%,  from $390.9  million at September 30, 2001 to $446.4
million at June 30, 2002. Loans receivable,  net increased by $11.7 million,  or
4.4%,  from $268.0  million at September 30, 2001 to $279.7  million at June 30,
2002. The Company's  mortgage-backed  securities available for sale increased by
$25.7  million,  or 224.6%,  from $11.4  million at September  30, 2001 to $37.1
million at June 30,  2002.  The  Company's  mortgage-backed  securities  held to
maturity  decreased by $5.9 million or 14.1% from $41.6 million at September 30,
2001 to $35.8  million at June 30,  2002.  The  Company's  investment  portfolio
available  for sale  increased  $33.9  million or 141.7%,  from $24.0 million at
September 30, 2001 to $57.9 million at June 30, 2002.  The Company's  investment
portfolio held to maturity  decreased  $14.5million or 78.4%, from $18.5 million
at  September  30, 2001 to $4.0  million at June 30, 2002.  The  Company's  FHLB
advances deceased $5.5 million from $17.8 million at September 30, 2001 to $12.3
million at June 30, 2002. The Company's deposits increased by $46.7 million,  or
14.3%,  from $325.8  million at September 30, 2001 to $372.5 million at June 30,
2002. The increase in deposits was achieved  through  advertising  and promotion
activities.  The  growth  in  deposits  helped  to fund  loan  growth,  security
purchases  and  repayment  of the FHLB  advances.  This  strategy was used in an
effort to diversify  the balance  sheet and  mitigate  interest  rate risk.  The
Company issued $12.5 million of Trust Preferred Securities on June 27, 2002. The
securities  have a  floating  rate of  3.65%  over  the 3 month  LIBOR  adjusted
quarterly.  The rate for the quarter ended June 30, 2002 was 5.51%.  The Company
issued the Trust Preferred Securities to increase capital in anticipation of the
upcoming merger with Heritage Savings Bank.

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001

     Net  Income.  Net income for the nine  months  ended June 30, 2002 was $1.0
million  compared to a net loss of $46,000  for the nine  months  ended June 30,
2001.  This resulted in an increase in net income of $1.0 million.  The increase
was  attributable  primarily to an increase in net  interest  income and to only
small increases in non-interest expenses.

     Net  Interest  Income.  Net  interest  income was $9.2 million for the nine
months ended June 30,  2002,  compared to $7.3 million for the nine months ended
June 30, 2001,  representing an increase of $1.8 million,  or 25.3%.  The Bank's
overall growth has contributed to the increase in net income.  The Bank was able
to offset the  decrease in the average  yield on  interest-earning  assets of 50
basis points by re-pricing  deposits and paying a lower yield on FHLB  advances.
The average yield paid on deposits  decreased 80 basis points from 4.68% for the
nine months  ended June 30,  2001,  to 3.88% for the nine months  ended June 30,
2002.  The average yield paid on FHLB  advances  decreased 34 basis points from,
4.92% at June 30, 2001 to 4.58% at June 30, 2002. As a result, the Bank was able
to  increase  the  interest  rate spread from 2.56% at June 30, 2001 to 2.83% at
June 30, 2002.

     Interest Income.  Interest income increased by $2.4 million, or 13.4%, from
$17.8  million for the nine months ended June 30, 2001 to $20.1  million for the
nine months ended June 30, 2002.  This  increase was due to a $1.3  million,  or
9.7%,  increase  in interest  and fees on loans from $13.9  million for the nine
months  ended June 30, 2001 to $15.2  million for the nine months ended June 30,
2002.  The increase in interest and fees on loans was  primarily  due to a $27.6
million increase in the average balance of loans receivable. The increase in the
average  balance of loans  receivable was achieved  through an increased  market
presence due to the additional  branch  locations.  Interest on  mortgage-backed
securities  increased by $1.3 million, or 109.2%, from $1.2 million for the nine
months  ended June 30, 2001 to $2.5  million for the nine months  ended June 30,
2002. The increase was primarily due to a $35.7 million  increase in the average
balance of mortgage-backed securities. The Bank has used a strategy of investing
in adjustable  rate mortgage  backed  securities in an effort to reposition  the
balance  sheet and mitigate  interest  rate risk.  Other  interest  income which
consists  of  interest  earned on  deposits  in banks and  Federal  Funds  sold,
decreased by $470,000,  or 75.9%,  from  $619,000 for the nine months ended June
30, 2001 to $149,000 for the nine months  ended June 30,  2002.  This was due to
the  decrease in the average  balance of interest  bearing  deposits and Federal
Funds sold, as the liquid funds were used to

                                       10
<PAGE>

purchase  adjustable rate mortgage backed securities.  Interest and dividends on
investment  securities  increased  $179,000,  or 8.8%, from $2.0 million for the
nine months  ended June 30, 2001 to $2.2  million for the nine months ended June
30, 2002. This increase was primarily due to the increase in the average balance
of investment securities from $42.6 million at June 30, 2001 to $57.7 million at
June 30, 2002.

     Interest Expense. Interest expense, which consists of interest on deposits,
and interest on borrowed money  increased from $10.4 million for the nine months
ended June 30, 2001 to $10.9  million for the nine months  ended June 30, 2002 a
change of $528,000 or 5.1%.  Interest on deposits  increased  $168,000 due to an
increase in the average  volume of deposits by $65.6 million from $290.3 million
at June 30, 2001 to $355.9 million at June 30, 2002. The increase in the average
volume of  deposits  was  achieved  through an  increased  market  presence  and
offering of competitive rates on deposit accounts.  The average cost of deposits
decreased  by 80 basis  points  from 4.68% at June 30, 2001 to 3.88% at June 30,
2002. Interest on FHLB advances increased by $354,000 or 173.8% from $204,000 at
June 30, 2001 to $558,000 at June 30, 2002.  This  increase was primarily due to
an increase of $10.7 million in the average  balance of short- term  borrowings.
The average  balance for the nine months  ended June 30, 2002 was $16.2  million
compared to $5.5 million for the nine months  ended June 30,  2001.  Interest on
Trust  Preferred  Securities  for the nine month period ending June 30, 2002 was
$8,000.


                                       11
<PAGE>

     Average Balance Sheet. The following tables sets forth certain  information
relating to the Company's  average  balance sheet and reflects the average yield
on assets and cost of  liabilities  for the  periods  indicated  and the average
yields  earned  and rates  paid.  Such yield and costs are  derived by  dividing
income or  expense  by the  average  daily  balance  of  assets or  liabilities,
respectively,  for the nine months  ended June 30,  2002.  The nine months ended
June 30, 2001 average  balances were computed using  month-end  balances.  Total
average assets are computed using month-end balances.

     The table also presents  information for the periods indicated with respect
to the differences between the average yield earned on  interest-earning  assets
and  average  rate  paid on  interest-bearing  liabilities,  or  "interest  rate
spread," which banks have  traditionally  used as an indicator of profitability.
Another  indicator of net interest income is "net interest margin," which is its
net interest income divided by the average balance of interest-earning assets.
<TABLE>
<CAPTION>
                                                                         NINE MONTHS ENDED JUNE 30,
                                               ---------------------------------------------------------------------------
                                                             2002                                       2001
                                               ---------------------------------       -----------------------------------
                                               AVERAGE                   AVERAGE       AVERAGE                     AVERAGE
                                               BALANCE      INTEREST      RATE         BALANCE       INTEREST       RATE
                                               -------      --------     ------        -------       --------      ------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>              <C>       <C>           <C>            <C>
Interest-earning assets:
   Loans....................................   $ 271,028    $  15,223        7.49%     $  243,462    $ 13,881       7.60%
   Mortgage-backed securities...............      62,336        2,557        5.47          26,604       1,222       6.12
   Dividends and investment securities......      57,700        2,215        5.12          42,591       2,036       6.37
   Other Investments........................       8,673          149        2.29          15,378         619       5.37
                                               ---------    ---------                  ----------    --------
       Total interest-earning assets........     399,737       20,144        6.72         328,035      17,758       7.22
Noninterest-earning assets..................      22,600                                   18,172
                                               ---------                               ----------
       Total assets.........................   $ 422,337                               $  346,207
                                               =========                               ==========

Interest-bearing liabilities:
   Deposits.................................   $ 355,888       10,359        3.88      $  290,277      10,191       4.68
   Borrowings-short term....................      16,242          558        4.58           5,533         204       4.92
   Trust Preferred Securities...............         183            8        5.83              --          --     ------
   Other liabilities........................       1,946            1        0.07           1,834           3       0.22
                                               ---------    ---------                  ----------    --------
Total interest-bearing liabilities..........     374,259       10,926        3.89         297,644      10,398       4.66
                                                            ---------      ------                    --------     ------
Noninterest-bearing liabilities.............       5,435                                    5,609
                                               ---------                               ----------
       Total liabilities....................     379,694                                  303,253
Stockholders' equity .......................      42,643                                   42,954
                                               ---------                               ----------
       Total liabilities and stockholders'
            equity..........................   $ 422,337                               $  346,207
                                               =========                               ==========

Net interest income.........................                $   9,218                                $  7,360
                                                            =========                                ========
Interest rate spread........................                                 2.83%                                  2.56%
                                                                           ======                                 =======
Net interest margin.........................                                 3.07%                                  2.99%
                                                                           ======                                 =======
Ratio average interest earning assets/
    interest bearing liabilities............                               106.81%                                110.21%
                                                                           ======                                 =======
</TABLE>

     Provision for Loan Losses.  The Company charges  provisions for loan losses
to  earnings  to  maintain  the  total  allowance  for  loan  losses  at a level
management  considers  adequate to provide for probable  future loan losses.  In
determining the provision,  management considers prior loss experience,  current
economic  conditions and the probability of these  conditions  affecting  future
loan  performance.  The Company  established  provisions  for losses on loans of
$209,000 for the nine months  ended June 30,  2002,  as compared to $223,000 for
the nine months ended June 30, 2001.  Loan  chargeoffs for the nine months ended
June 30, 2002 were  $320,000 as compared to $295,000  for the nine months  ended
June 30, 2001.  Loan recoveries were $247,000 for the nine months ended June 30,
2002  compared  to  $154,000  for the  nine  months  ended  June 30,  2001.  Non
performing  loans at June 30, 2002 were $362,000 as compared to $309,000


                                       12
<PAGE>

at June 30, 2001. At June 30, 2002, the Bank had a $1.6 million  commercial loan
that is considered non-accrual. The $1.6 million is collateralized by automobile
leases and automobiles. The Bank has worked out an arrangement with the borrower
to receive  lease  payments on the  underlying  leases  directly form the lessee
beginning with the May payment. The Bank expects losses to be minimal. The total
loss allowance allocated to domestic loans is $1.7 million. In establishing such
provisions,  management  considered an analysis of the risk inherent in the loan
portfolio.

     Other Income.  Other income increased by $195,000,  or 37.1%, from $526,000
for the nine months  ended June 30, 2001 to $721,000  for the nine months  ended
June 30,  2002.  The increase in other income for the nine months ended June 30,
2002  was  attributable  partly  to a  $132,000  gain  on  the  sale  of  loans.
Additionally,  the increase in other  income  reflected a $98,000  increase,  or
47.1% in  transaction  account fees for the nine months ended June 30, 2002 from
$207,000 for the nine months  ended June 30, 2001,  compared to $305,000 for the
nine months ended June 30, 2002. The increase was primarily due to the increased
volume of transaction accounts.

     Non-interest  Expenses.  Total non-interest expenses increased by $335,000,
or 4.3%,  from $7.7  million  for the nine  months  ended June 30,  2001 to $8.0
million for the nine months  ended June 30, 2002.  The increase in  non-interest
expenses was due to increases in data processing expenses and occupancy expense.
Data processing  expense  increased  $196,000 or 41.7% from $469,000 at June 30,
2001 to $665,000 at June 30, 2002. The Company's  salaries and related  expenses
decreased by $67,000, or 1.6%, primarily due to the change in the adjustment for
the market value of the Rabbi-Trust.  The Company established the Rabbi-Trust to
hold shares of Company Common Stock in connection with the Company's  obligation
to pay deferred  compensation under the Directors'  Retirement Plan. The related
deferred  compensation  obligation is classified  as an equity  instrument.  The
compensation  expense for the market value  adjustment for the Rabbi-Trust was a
credit of  $169,000  for the nine  months  ended June 30,  2002,  compared to an
expense of $309,000 for the nine months ended June 30, 2001.  Occupancy  expense
increased by $84,000,  or 10.2% due to a change in the way Bank's are taxed. The
Bank now pays  personal  property  tax in lieu of  franchise  taxes.  During the
quarter  ended  December  31, 2001 the Company  wrote off,  against a previously
established allowance, $51,000 of EPIC loans included in foreclosed real estate.
EPIC loans  represented  the balance due on an investment in a pool of mortgages
which was  foreclosed  by the trustees for the holders of the security  interest
due to  nonperformance.  An allowance for losses was established  based upon the
original  foreclosure and analysis of the collectibility of the loans granted to
the purchasers of the foreclosed property.

     Income Taxes. The Company's income tax  expense/(benefit)  was $647,000 and
$(16,000)  for the nine months ended June 30, 2002 and 2001,  respectively.  The
Company's  effective  tax rates were 38.7% and 25.9% for the nine  months  ended
June 30, 2002 and 2001, respectively.


COMPARISON  OF  OPERATING  RESULTS FOR THE THREE  MONTHS ENDED JUNE 30, 2002 AND
2001

     Net Income.  Net income  increased by $501,000,  from a loss of $21,000 for
the three  months ended June 30, 2001 to income of $480,000 for the three months
ended June 30, 2002.  The increase in net income was primarily  attributable  to
increased net interest income of $776,000.

     Net Interest  Income.  Net  interest  income was $3.3 million for the three
months ended June 30, 2002,  compared to $2.5 million for the three months ended
June 30, 2001,  representing an increase of $776,000 or 30.9%. This increase was
primarily due to the increase in the volume of interest-earning assets.

     Interest Income. Interest income increased by $800,000, or 13.2%, from $6.1
million for the three  months  ended June 30, 2001 to $6.9 million for the three
months ended June 30, 2002.  Interest and fees on loans increased by $436,000 or
9.3%, from $4.7 million for the three months ended June 30, 2001 to $5.1 million
for the three  months  ended  June 30,  2002  primarily  due to a $25.8  million
increase in the  average  balance of loans  receivable  which more than offset a
decrease in the average  yield on loans of 7 basis points from 7.53% at June 30,
2001 to 7.46% at June 30, 2002. This


                                       13
<PAGE>

increase in the average  balance of loans  receivable was a direct result of the
Company  implementing its strategy of increasing loan originations.  Interest on
mortgage backed securities increased by $351,000, or 63.4% from $554,000 for the
three months ended June 30, 2001 to $905,000 for the three months ended June 30,
2002.  This increase was primarily due to the increase in the average balance of
mortgage backed  securities from $40.0 million at June 30, 2001 to $67.2 million
at June 30, 2002. Interest and dividends on investment  securities  increased by
$201,000  or 32.7%  from  $611,000  for the three  months  end June 30,  2001 to
$812,000 for the three months ended June 30, 2002.  This was primarily due to an
increase in the average balance of investment  securities of $23.0 million, from
$42.5 million at June 30, 2001 to $65.5 million at June 30, 2002.

     Interest Expense.  Interest expense, which consists of interest on deposits
and interest on borrowed  money remained  relatively  stable at $3.5 million for
the three  months  ended June 30, 2001 and June 30,  2002.  Interest on deposits
decreased  $160,000 for the three months ended June 30, 2002,  from $3.5 million
at June 30, 2001 to $3.3 million at June 30, 2002. The average yield on deposits
decreased  101 basis  points  from  4.58% at June 30,  2001 to 3.57% at June 30,
2002.  Interest on FHLB advances  increased  $177,000 from $62,000 for the three
months end June 30, 2001 to $ 239,000 for the three  months ended June 30, 2002.
This  increase  was  primarily  due to the an  increase  of $9.7  million in the
average  balance of advances from the Federal Home Loan Bank.  Interest on Trust
Preferred Securities for the three month period ending June 30, 2002 was $8,000.


                                       14
<PAGE>

     Average Balance Sheet. The following tables sets forth certain  information
relating to the Company's  average  balance sheet and reflects the average yield
on assets and cost of  liabilities  for the  periods  indicated  and the average
yields  earned  and rates  paid.  Such yield and costs are  derived by  dividing
income or  expense  by the  average  daily  balance  of  assets or  liabilities,
respectively,  for the three months ended June 30, 2002.  The three months ended
June 30,  2001average  balances were computed using  month-end  balances.  Total
average assets are computed using month-end balances.
<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED JUNE 30,
                                               ---------------------------------------------------------------------------
                                                             2002                                       2001
                                               ---------------------------------       -----------------------------------
                                               AVERAGE                   AVERAGE       AVERAGE                     AVERAGE
                                               BALANCE      INTEREST      RATE         BALANCE       INTEREST       RATE
                                               -------      --------     ------        -------       --------      ------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>              <C>       <C>           <C>            <C>
Interest-earning assets:
   Loans....................................   $ 273,795    $   5,104      7.46%       $  247,999    $  4,669       7.53%
   Mortgage-backed securities...............      67,195          905      5.39            40,020         554       5.54
   Investment Securities and FHLB stock.....      65,511          812      4.96            42,487         611       5.75
   Other Investments........................       9,980           44      1.76            19,417         231       4.76
                                               ---------    ---------                  ----------    --------
       Total interest-earning assets........     416,481        6,865      6.59           349,923       6,065       6.93
Noninterest-earning assets..................      23,350                                   10,198
                                               ---------                               ----------
       Total assets.........................   $ 439,831                               $  360,121
                                               =========                               ==========

Interest-bearing liabilities:
   Deposits.................................   $ 372,449        3,324      3.57           304,634       3,485       4.58
   Borrowings-short term....................      14,923          239      6.41             5,221          62       4.75
   Trust Preferred Securities...............         549            8      5.83
   Other liabilities........................       2,515            1      0.16             2,504           2       0.32
                                               ---------    ---------                  ----------    --------
Total interest-bearing liabilities..........     390,436        3,572      3.66           312,359       3,549       4.54
                                                            ---------    ------                      --------     ------
Noninterest-bearing liabilities.............       6,468                                    5,230
                                               ---------                               ----------
       Total liabilities....................     396,904                                  317,589
Stockholders' equity .......................      42,927                                   42,532
                                               ---------                               ----------
       Total liabilities and stockholders'
            equity..........................   $ 439,831                               $  360,121
                                               =========                               ==========

Net interest income.........................                $   3,293                                $  2,516
                                                            =========                                ========
Interest rate spread........................                               2.93%                                    2.39%
                                                                         ======                                   ======
Net interest margin.........................                               3.16%                                    2.88%
                                                                         ======                                   ======
Ratio average interest earning assets/
    interest bearing liabilities............                             106.67%                                  112.03%
                                                                         ======                                   ======
</TABLE>

     Provision for Loan Losses.  The Company charges  provisions for loan losses
to earnings to maintain a total allowance for loan losses at a level  management
considers  adequate to provide for  probable  loan  losses,  based on prior loss
experience.  The Company  established a provision for losses of $140,000 for the
three months  ended June 30, 2002.  This  increases  the loss  allowance to $1.7
million, which the Company believes is sufficient based on past experience. Loan
chargeoffs for the three months ended June 30, 2002 were $132,000 as compared to
$122,000 for the three months ended June 30, 2001. Loan recoveries were $117,000
for the three  months  ended June 30,  2002 as compared to $14,000 for the three
months ended June 30, 2001. Non performing  loans at June 30, 2002 were $362,000
as compared  to $309,000 at June 30,  2001.  In  establishing  such  provisions,
management  considered  the analysis of the risk inherent in the loan  portfolio
and the increased emphasis on home equity loans,  automobile loans, and consumer
loans which entail higher credit risks than residential mortgage loans.

     Other Income.  Other income increased by $89,000,  or 52.1%,  from $171,000
for the three  months ended June 30, 2001 to $260,000 for the three months ended
June 30, 2002.  The increase in other income for the three months ended June 30,
2002 was attributable  primarily to a $23,000 increase in gain on sales of loans
and a $32,000  increase in fees on

                                       15
<PAGE>

transaction  accounts,  from $81,000 for the three months ended June 30, 2001 to
$113,000 for the three months ended June 30, 2002.

     Non-interest Expenses.  Total non-interest expenses remained stable at $2.6
million for the three  months ended June 30, 2001 and for the three months ended
June 30,  2002.  Data  processing  expenses  increased  by $78,000 for the three
months ended June 30, 2002. This increase was partially  offset by a decrease in
advertising expense of $47,000.

     Income Taxes. The Company's income tax  expense/(benefit)  was $303,000 and
$(7,000) for the three months  ended June 30, 2002 and 2001,  respectively.  The
Company's  effective  tax rates were 38.7% and 24.9% for the three  months ended
June 30, 2002 and 2001, respectively.

LIQUIDITY AND CAPITAL RESOURCES

     At June  30,  2002,  the  Bank  exceeded  all  regulatory  minimum  capital
requirements. For information comparing the Bank's tangible, core and risk-based
capital  levels  to  the  regulatory  requirements,  see  Note  5  of  Notes  to
Consolidated Financial Statements.

     The  Company's  primary  sources of funds are deposits  and  proceeds  from
maturing investment securities and mortgage-backed  securities and principal and
interest  payments on loans.  While  maturities  and scheduled  amortization  of
mortgage-backed  securities and loans are a predictable source of funds, deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions, competition and other factors.

     The primary  investing  activities  of the Company are the  origination  of
loans and the purchase of investment securities and mortgage-backed  securities.
During the nine  months  ended June 30,  2002 and 2001,  the  Company  had $91.0
million  and  $68.7  million,   respectively,  of  mortgage  and  consumer  loan
originations.  During the nine months ended June 30, 2002 and 2001,  the Company
purchased  investment  securities  in the  amounts  of $52.0  million  and $42.6
million,  respectively,  and mortgage-backed  securities in the amounts of $43.1
million  and $41.4  million,  respectively.  The  purchase  of  interest-bearing
deposits  decreased  from $792,000 for the nine months ended June 30, 2001 to $0
for the nine months ended June 30, 2002. The primary  financing  activity of the
Company is the attraction of savings deposits.

     The Company has other  sources of  liquidity  if there is a need for funds.
The Bank has the  ability  to  obtain  advances  from  the FHLB of  Atlanta.  In
addition, the Company maintains a portion of its investments in interest-bearing
deposits at other financial institutions that will be available, if needed.

     The Bank is required to maintain minimum levels of liquid assets as defined
by OTS regulations.  This requirement,  which may be changed at the direction of
the OTS depending upon economic  conditions  and deposit flows,  is based upon a
percentage of deposits and FHLB  advances.  The Bank's  average daily  liquidity
ratio for the month of June was approximately 33.7%, which exceeded the required
level for such period.  Management  seeks to maintain a relatively high level of
liquidity in order to retain  flexibility  in terms of investment  opportunities
and deposit pricing.  Because liquid assets generally provide for lower rates of
return,  the Bank's relatively high liquidity will, to a certain extent,  result
in lower rates of return on assets.

     The  Company's  most liquid assets are cash,  interest-bearing  deposits in
other  banks and  federal  funds  sold,  which  are  short-term,  highly  liquid
investments with original  maturities of less than three months that are readily
convertible  to known amounts of cash.  The levels of these assets are dependent
on the Company's operating,  financing and investing activities during any given
period.  At June 30, 2002,  cash,  interest-bearing  deposits in other banks and
federal  funds  sold  were  $6.9   million,   $6.8  million  and  $5.3  million,
respectively.

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<PAGE>

     The Company  anticipates  that it will have  sufficient  funds available to
meet its current  commitments.  Certificates  of deposit  which are scheduled to
mature in one year or less at June 30, 2002  totaled  $223.1  million.  Based on
past experience, management believes that a significant portion of such deposits
will remain with the Bank.  The Bank is a party to  financial  instruments  with
off-balance-sheet  risk  made in the  normal  course  of  business  to meet  the
financing  needs of its  customers.  These  financial  instruments  are  standby
letters of credit,  lines of credit and  commitments  to fund mortgage loans and
involve  to  varying  degrees  elements  of credit  risk in excess of the amount
recognized in the statement of financial position. The contract amounts of those
instruments  express the extent of involvement  the Company has in this class of
financial  instruments and represents the Company's exposure to credit loss from
nonperformance by the other party.

     The Company  generally  requires  collateral  or other  security to support
financial instruments with off-balance-sheet  credit risk. At June 30, 2002, the
Company had commitments  under standby letters of credit and lines of credit and
commitments  to originate  mortgage  loans of $450,000,  $14.0  million and $3.2
million, respectively.

PART II.  OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS

         None.

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

         None.

         ITEM 5.  OTHER INFORMATION

         None.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Form 8-K

                  No Reports on Form 8-K were filed during the quarter ended
                  June 30, 2002.

         (b)      Exhibits

                  (99)     Certification


                                       17
<PAGE>
                                   SIGNATURES



     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                  BCSB BANKCORP, INC.



Date: August 14, 2002            /s/ Gary C. Loraditch
                                 ----------------------------------------------
                                 Gary C. Loraditch
                                 President
                                 (Principal Executive Officer)



Date: August 14, 2002            /s/ Bonnie M. Klein
                                 ----------------------------------------------
                                 Bonnie M. Klein
                                 Vice President and Treasurer
                                 (Principal Financial and Accounting Officer)


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