UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

(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, 2003

     OR

[ ]  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 Registrant 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)

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

Indicate by check mark |X| whether the  registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes      No  X
                                               -----   -----

     As of July 31, 2003, the issuer had 5,874,218 shares of Common Stock issued
and outstanding.
<PAGE>

                                    CONTENTS

                                                                            PAGE
                                                                            ----

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

Item 1.  Financial Statements

         Consolidated Statements of Financial Condition as of
             June 30, 2003 (unaudited) and September 30, 2002..................2

         Consolidated Statements of Operations for the Nine Months
             and Three Months Ended June 30, 2003 and 2002  (unaudited)........3

         Consolidated Statement of Comprehensive Income for the
             Nine Months and Three Months Ended June 30, 2003
             and 2002 (unaudited)..............................................4

         Consolidated Statements of Cash Flows for the Nine
             Months Ended June 30, 2003 and 2002 (unaudited)...................5

     Notes to Consolidated Financial Statements................................8

Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operation...............................11

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........24

Item 4.  Controls and Procedures..............................................24


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

Item 1.  Legal Proceedings....................................................25

Item 2.  Changes in Securities and Use of Proceeds............................25

Item 3.  Defaults Upon Senior Securities......................................25

Item 4.  Submission of Matters to a Vote of Security Holders..................25

Item 5.  Other Information....................................................25

Item 6.  Exhibits and Reports on Form 8-K.....................................25


SIGNATURES....................................................................26

CERTIFICATIONS................................................................27

                                       1
<PAGE>

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

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------

<TABLE>
<CAPTION>
                                                                            JUNE  30,        SEPTEMBER 30,
                                                                              2003               2002
                                                                         --------------      --------------
                                                                          (Unaudited)
                                      Assets
                                      ------
<S>                                                                           <C>                <C>
Cash                                                                     $   10,642,180      $    6,467,598
Interest bearing deposits in other banks                                      9,380,636          15,808,342
Federal funds sold                                                            5,007,695           3,527,387
Investment securities, held to maturity                                       2,500,000           4,495,986
Investment securities, available for sale                                   117,839,411          45,083,287
Loans receivable, net                                                       373,291,239         396,616,729
Loans held for sale                                                             572,919                  --
Mortgage backed securities, held to maturity                                 20,210,945          33,691,430
Mortgage backed securities, available for sale                               80,776,555          60,411,132
Premises and equipment, net                                                   8,614,397           8,630,812
Federal Home Loan Bank of Atlanta stock                                       3,304,900           3,939,700
Accrued interest receivable                                                   1,882,830           2,190,458
Prepaid and deferred income taxes                                             1,046,303           1,268,370
Goodwill                                                                      2,294,327           2,294,327
Core deposit intangible                                                         438,000             542,000
Other assets                                                                  1,942,109           2,097,791
                                                                         --------------      --------------
Total assets                                                             $  639,744,446      $  587,065,349
                                                                         ==============      ==============
                Liabilities and Stockholders' Equity
                ------------------------------------
Liabilities
-----------
  Checks outstanding in excess of bank balance                           $           --             390,799
  Deposits                                                                  547,482,688         498,785,268
  Advances from the Federal Home Loan Bank of Atlanta                        23,818,335          26,968,099
  Trust Preferred Securities                                                 12,500,000          12,500,000
  Advance payments by borrowers for taxes and insurance                       2,861,968           1,194,371
  Income taxes payable                                                          143,451              58,226
  Dividends payable                                                             264,891             264,891
  Other liabilities                                                           6,626,610           1,598,132
                                                                         --------------      --------------
Total liabilities                                                           593,697,943         541,759,786

Commitments and contingencies
Stockholders' Equity
--------------------
  Common stock (Par value $.01 - 13,500,000 authorized,
    5,874,082 issued and outstanding at June 30, 2003
    and September 30, 2002 )                                                     58,751              58,741
  Additional paid-in capital                                                 20,361,030          20,302,518
  Obligation under Rabbi Trust                                                1,186,220           1,156,870
  Retained earnings (substantially restricted)                               25,760,120          25,279,752
  Accumulated Other Comperhensive Income (net of taxes)                         700,058             664,554
  Employee Stock Ownership Plan                                                (823,176)           (960,372)
  Stock held by Rabbi Trust                                                  (1,196,500)         (1,196,500)
                                                                         ---------------     ---------------
  Total Stockholders' Equity                                                 46,046,503          45,305,563
                                                                         --------------      --------------
Total liabilities and Stockholders' Equity                               $  639,744,446      $  587,065,349
                                                                         ==============      ==============
</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,
                                                    ----------------------------   ----------------------------
                                                        2003             2002          2003            2002
                                                    ------------    ------------   ------------    ------------
<S>                                                 <C>             <C>            <C>             <C>
Interest Income
---------------
  Interest and fees on loans                        $ 20,157,718    $ 15,222,940   $  6,240,920    $  5,104,245
  Interest on mortgage backed securities               3,061,049       2,556,694        995,680         904,721
  Interest and dividends on investment securities      2,043,325       2,214,813        865,696         811,745
  Other interest income                                  267,263         149,338         90,654          43,909
                                                    ------------    ------------   ------------    ------------
Total interest income                                 25,529,355      20,143,785      8,192,950       6,864,620

Interest Expense
----------------
  Interest on deposits                                10,770,764      10,358,778      3,530,442       3,324,849
  Interest on borrowings - short term                    162,643         557,466         51,989         238,451
  Interest on borrowings-long term                       791,249              --        251,632           8,051
  Other Interest Expense                                 501,285           9,051        160,851              --
                                                    ------------    ------------   ------------    ------------
Total interest expense                                12,225,941      10,925,295      3,994,914       3,571,351
                                                    ------------    ------------   ------------    ------------

  Net interest income                                 13,303,414       9,218,490      4,198,036       3,293,269
  Provision for losses on loans                        1,198,713         209,251        786,348         139,881
                                                    ------------    ------------   ------------    ------------
  Net interest income after provision
  for losses on loans                                 12,104,701       9,009,239      3,411,688       3,153,388

Other Income
------------
  Gain on Sale of Loans                                  340,109         132,440         68,751          22,982
  Provision for Losses on Loans held for sale                 --              --             --          10,761
  Servicing fee income                                    (5,493)         13,652        (11,336)          4,188
  Fees and charges on loans                              165,547         127,120         53,219          40,946
  Fees on transaction accounts                           379,349         304,713        133,142         113,115
  Rental income                                           93,321          69,410         32,999          18,151
  Gain from sale of investments                           40,652          44,026         15,652          26,516
  Gain on sale of Mortgage Backed Securities             232,900           5,595         79,290           4,519
  Miscellaneous income                                    97,916          24,131         20,774          18,887
                                                    ------------    ------------   ------------    ------------
  Net other income                                     1,344,301         721,087        392,491         260,065
Non-Interest Expenses
---------------------
  Salaries and related expense                         6,268,066       4,240,699      2,171,688       1,441,972
  Occupancy expense                                    1,204,969         907,756        419,859         300,357
  Deposit insurance premiums                             151,811         113,681         50,996          37,062
  Data processing expense                              1,140,083         665,139        335,594         215,772
  Property and equipment expense                         973,579         703,406        340,901         230,428
  Professional fees                                      186,127         141,031         49,081          43,114
  Advertising                                            598,271         631,015        176,888         154,570
  Telephone, postage and office supplies                 488,030         333,542        163,262         108,973
  Other expenses                                         415,319         323,313         63,065          97,913
                                                    ------------    ------------   ------------    ------------
Total non-interest expenses                           11,426,255       8,059,582      3,771,334       2,630,165
                                                    ------------    ------------   ------------    ------------

Income before tax provision                            2,022,747       1,670,744         32,845         783,288
Income tax provision                                     769,810         647,059         11,000         303,120
                                                    ------------    ------------   ------------    ------------
Net income                                          $  1,252,937    $  1,023,685   $     21,845    $    480,168
                                                    ============    ============   ============    ============

Basic earnings per share                            $        .22    $        .18   $        .00    $        .09
                                                    ============    ============   ============    ============
Diluted earnings per share                          $        .22    $        .18   $        .00    $        .08
                                                    ============    ============   ============    ============
</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 COMPREHENSIVE INCOME
                 -----------------------------------------------
                                   (UNAUDITED)
                                   -----------


                                               FOR NINE MONTHS ENDED
                                                      JUNE 30
                                                2003             2002
                                             --------------------------

Net Income                                   $ 1,252,937    $ 1,023,685
Other comprehensive income, net of tax:
 Unrealized net holding gains/ (losses) on
  available-for-sale portfolios                  203,410        (37,126)
Reclassification adjustment for gains
  included in net income, net of tax            (167,906)       (30,457)
                                             -----------    -----------

Comprehensive income                         $ 1,288,441    $   956,102
                                             ===========    ===========


                                              FOR THREE  MONTHS ENDED
                                                      JUNE 30,
                                             --------------------------
                                                2003            2002
                                             -----------    -----------

Net Income                                   $    21,845    $   480,168
Other comprehensive income, net of tax:
 Unrealized net holding gains on
  available-for-sale portfolios                  364,859        694,868
Reclassification adjustment for gains
  included in net income, net of tax             (58,275)       (19,049)
                                             -----------    -----------

Comprehensive income                         $   328,429    $ 1,155,987
                                             ===========    ===========

See accompanying notes to financial statements.

                                       4
<PAGE>

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

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------



<TABLE>
<CAPTION>
                                                               FOR NINE MONTHS ENDED
                                                                       JUNE 30,
                                                             ----------------------------
                                                                 2003            2002
                                                             ------------    ------------
<S>                                                          <C>             <C>
Operating Activities
--------------------
 Net Income                                                  $  1,252,937    $  1,023,685
Adjustments to Reconcile Net Income to Net
Cash Used by Operating Activities
---------------------------------
  Accretion of discount on investments                            (57,900)         (9,019)
  Dividends on Investment Securities                             (723,316)       (723,784)
  Gain on sale of investments                                     (40,652)        (44,026)
  Loans originated for sale                                   (10,526,862)     (8,193,455)
  Loans sold                                                   10,294,052       8,325,895
  Gain on sale of loans                                          (340,109)       (132,440)
  Loan fees and costs deferred, net                               274,798          88,768
  Amortization of deferred loan cost, net                        (506,871)       (124,998)
  Provision for losses on loans                                 1,198,713         209,251
  Non-cash compensation under Stock-Based Benefit Plan            187,718         137,196
  Amortization of premium on mortgage backed securities           398,032         175,818
  Amortization of purchase premiums and discounts, net           (452,083)             --
  Gain on sale of mortgaged backed securities                    (232,900)         (5,595)
  Provision for depreciation                                      737,259         608,062
  Decrease in accrued interest receivable                         307,628         154,065
  Decrease (increase) in prepaid income taxes                     198,092         (83,661)
  Decrease (increase) in other assets                             155,682        (635,346)
  Decrease in accrued interest payable on deposits                (29,331)       (123,784)
  Increase in income taxes payable                                 85,225          39,783
  Increase (decrease) in other liabilities and payables to
        disbursing agents                                       5,028,478        (296,135)
  Increase in obligation under Rabbi-Trust                         29,350              --
                                                             ------------    ------------
      Net cash provided by operating activities                 7,237,940         390,280
</TABLE>


                                       5
<PAGE>

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

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------



<TABLE>
<CAPTION>
                                                                                 FOR NINE MONTHS ENDED
                                                                                       MARCH  31,
                                                                             ------------------------------
                                                                                  2003             2002
                                                                             -------------    -------------
<S>                                                                          <C>              <C>
Cash Flows from Investing Activities
------------------------------------
    Proceeds from maturing interest bearing deposits                         $          --    $   2,154,000
    Purchases of investment securities - available for sale                   (133,076,372)     (51,353,090)
    Proceeds from maturities of investment securities - available for sale      56,185,019        4,912,000
    Proceeds from sale of investment securities- available for sale              5,040,652       13,013,875
    Purchases of investment securities - held to maturity                         (500,000)        (500,000)
    Proceeds from maturities of investment securities - held to maturity         2,500,000       15,000,000
    Longer term loans originated                                               (52,531,646)     (33,305,411)
    Principal collected on longer term loans                                    82,462,075       31,317,443
    Net increase in short-term loans                                            (7,937,955)      (9,852,244)
    Principal collected on mortgage backed securities - available for sale      19,211,814        8,433,556
    Purchase of mortgage backed securities - available for sale                (57,820,305)     (36,990,376)
    Proceeds from sale of mortgaged backed securities- available for sale       18,038,332        2,935,234
    Purchase of mortgage backed securities- held to maturity                    (1,038,404)      (6,113,580)
    Principal collected on mortgage backed securities - held to maturity        14,384,179       11,864,292
    Proceeds from sales of foreclosed real estate                                       --           80,569
    Investment in premises and equipment                                          (720,844)        (289,834)
    Purchase of Federal Home Loan Bank of Atlanta stock                                 --         (655,300)
    Proceeds from sale of Federal Home Loan Bank of Atlanta stock                  634,800               --
                                                                             -------------    -------------
        Net cash used by investing activities                                  (55,168,655)     (49,348,866)

Cash Flows from Financing Activities
------------------------------------
Decrease in checks written in excess of bank balance                              (390,799)              --
Net increase in demand deposits, money market, passbook
      accounts and advances by borrowers for taxes and
      insurance                                                                 18,679,105       23,731,221
    Net increase  in certificates of deposit                                    32,634,162       24,836,330
    Increase in Federal Home Loan Bank of Atlanta advances                              --        6,900,000
    Repayment of Federal Home Loan Bank of Atlanta advances                     (3,000,000)     (12,400,000)
    Acquisition of stock for Rabbi Trust                                                --          (57,000)
    Trust Preferred Securities                                                          --       12,500,000
    Exercised Stock Options                                                          8,000           40,000
    Increase in Dividends Payable                                                       --              626
    Dividends paid on stock                                                       (772,569)        (792,763)
                                                                             -------------    -------------
        Net cash provided by financing activities                               47,157,899       54,758,414
                                                                             -------------    -------------

Decrease (increase) in cash and cash equivalents                                  (772,816)       5,799,828
Cash and cash equivalents at beginning of period                                25,703,327       12,968,998
                                                                             -------------    -------------
Cash and cash equivalents at end of period                                   $  24,930,511    $  18,768,826
                                                                             =============    =============
</TABLE>


                                       6
<PAGE>

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

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------



<TABLE>
<CAPTION>
                                                                                  FOR NINE MONTH PERIOD
                                                                                      ENDED JUNE 30,
                                                                            --------------------------------
                                                                                2003                2002
                                                                            -----------         ------------
<S>                                                                        <C>                 <C>
The following is a summary of cash and cash equivalents:
    Cash                                                                   $  10,642,180       $   6,903,960
    Interest bearing deposits in other banks                                   9,380,636           6,786,480
    Federal funds sold                                                         5,007,695           5,277,386
                                                                           -------------       -------------
    Balance of cash items reflected on Statement of
      Financial Condition                                                     25,030,511          18,967,826
        Less - certificate of deposit with an original maturity of
          more than ninety days                                                  100,000             199,000
                                                                           -------------       -------------

Cash and cash equivalents reflected on the
    Statement of Cash Flows                                                $  24,930,511       $  18,768,826
                                                                           =============       =============

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

    Interest                                                               $  12,286,181       $  10,937,143
                                                                           =============       =============

    Income taxes                                                           $     826,700       $     643,100
                                                                           =============       =============

</TABLE>

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

                                       7
<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 BCSB Bankcorp Capital
          Trust I and Baltimore  County Savings Bank,  F.S.B.  and  subsidiaries
          (the "Bank") 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.

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

          The accompanying  consolidated financial statements have been prepared
          in accordance with  accounting  principles  generally  accepted in the
          United  States  of  America  and  the   instructions   to  Form  10-Q.
          Accordingly,  they do not include all of the  disclosures  required by
          accounting  principles  generally  accepted  in the  United  States of
          America  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 nine
          months  ended  June 30,  2003 are not  necessarily  indicative  of the
          results  of  operations  that  may be  expected  for  the  year  ended
          September 30, 2003. 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, 2002.

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 - Pro-Forma Income
         ----------------

          Merger  Agreement  - On  July  24,  2002,  the  Company  acquired  WHG
          Bancshares Corporation, the holding company for Heritage Savings Bank,
          a federally  chartered savings bank.  Holders of outstanding shares of
          WHG Bancshares received $14.25 in cash.

          The  combination  was  accounted  for  under  the  purchase  method of
          accounting,  and  accordingly,  the net assets were  recorded at their
          estimated fair values at the date of  acquisition,  July 24, 2002. The
          Company  recorded net premiums of $2,779,968 on assets and  $2,981,701
          on  liabilities.  A core  deposit  intangible  of  $630,000  was  also
          recorded.  Fair  value  adjustments  on  the  assets  and  liabilities
          purchased are being  amortized over the estimated lives of the related
          assets  and  liabilities.  The  excess  of  purchase  price  over  the
          estimated  fair value of the  underlying  net assets of $2,294,327 was
          allocated  to  goodwill.  Goodwill is assessed  for  impairment  on an
          annual basis.

          The following  unaudited pro forma  condensed  consolidated  financial
          information  reflects the results of operations of the Company for the
          nine months ended June 30, 2002 as if the  transaction had occurred at
          the beginning of the period presented. These pro forma results are not
          necessarily  indicative  of what the  Company's  results of operations
          would  have  been  had the  acquisition  actually  taken  place at the
          beginning of each period presented.

                                       8
<PAGE>

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


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


Note 4-  Pro-Forma Income (Continued)
         ----------------------------

                                                     For the nine months ended
                                                     -------------------------
                                                         June 30, 2002
                                                         -------------

         Net Interest Income                            $   12,705,623
         Net Income                                          1,968,505
         Diluted net income per share                             0.34

Note 5 - 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 nine and three months ended June 30, 2003 is as follows:

         <TABLE>
         <CAPTION>
                                                For the Nine Months Ended June 30, 2003
                                                ---------------------------------------
                                                   Income       Shares      Per Share
       Basic EPS                                (Numerator)  (Denominator)   Amount
       ---------                                -----------  -------------   ------
       <S>                                       <C>           <C>         <C>
       Income available to shareholders          $1,252,937    5,723,135   $   0.22

       Effect of dilutive shares                         --       45,683         --
                                                 ----------   ----------   --------

       Diluted EPS
       -----------

       Income available to common stockholders
           plus assumed conversions              $1,252,937    5,768,818   $   0.22
                                                 ==========   ==========   ========
       </TABLE>


       <TABLE>
       <CAPTION>
                                               For the Three Months Ended June 30, 2003
                                               ----------------------------------------
                                                   Income       Shares      Per Share
       Basic EPS                                (Numerator)  (Denominator)   Amount
       ---------                                -----------  -------------   ------
       <S>                                       <C>           <C>         <C>
       Income available to shareholders          $   21,845    5,723,085   $   0.00



       Effect of dilutive shares                         --       59,739         --
                                                 ----------   ----------   --------

       Diluted EPS
       -----------

       Income available to common stockholders
           plus assumed conversions              $   21,845   $5,782,824   $   0.00
                                                 ==========   ==========   ========
</TABLE>

                                       9
<PAGE>

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


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

Note 6 - Regulatory Capital
         ------------------

          The following table sets forth the Bank's capital position at June 30,
          2003.

<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)                     $ 46,854,930       7.44%  $ 9,443,551         1.50%          N/A           N/A
Tier 1 capital (2)                 46,854,930      13.16           N/A          N/A     21,356,156         6.00%
Core (1)                           46,854,930       7.44    25,182,802         4.00     31,478,502         5.00
Risk-weighted (2)                  48,945,605      13.75    28,474,875         8.00     35,593,594        10.00
------------
</TABLE>

(1) To adjusted total assets.
(2) To risk-weighted assets.

Note 7- Stock Option Plan
        -----------------

               The Company has a Stock Option Plan (the "Plan")  whereby 228,660
          shares of common stock have been reserved for issuance under the Plan.
          Options  granted under the Plan may be Incentive  Stock Options within
          the meaning of Section  422 of the  Internal  Revenue  Code of 1986 as
          amended or  Non-Incentive  Stock Options.  Options are  exercisable in
          four annual  installments  at the market  price of common stock at the
          date of grant. The Options must be exercised within ten years from the
          date of grant.  An additional  74,500  options were granted during the
          year ended September 30, 2002.

               SFAS No. 123, "Accounting for Stock-Based Compensation", requires
          the Company to make certain disclosures as if the fair value method of
          accounting had been applied to the Company's  stock option grants made
          subsequent to 1994. Accordingly,  the Company estimated the grant date
          fair  value  of  each   option   awarded  in  fiscal  1999  using  the
          Black-Scholes   Option-Pricing   model  with  the  following  relevant
          assumptions: dividend yield of 6.25%, risk-free interest rate of 5.72%
          and expected lives of 10 years. The assumption for expected volatility
          was 31.55%. The estimated fair value of each option granted was $1.62.

               The  Company  estimated  the grant date fair value of each option
          awarded in fiscal 2002 using the  Black-Scholes  Option-Pricing  model
          with the  following  relevant  assumptions:  dividend  yield of 4.08%,
          risk-free  interest rate of 4.49% and expected lives of 10 years.  The
          assumption  for expected  volatility  was 32.63%.  The estimated  fair
          value of each option granted was $2.80.

               Had  compensation  cost been determined for the nine months ended
          June 30, 2003 and 2002  including  the weighted-  average  estimate of
          fair value of each option  granted the  Company's  proforma net income
          would be $1,214,014 and $ 1,008,770,  respectively, reduced by $38,923
          and $14,915.  Proforma  earnings,  basic and diluted,  per share would
          have been $.21 for the nine month period ending June 30, 2003 and $.18
          and $.17,  respectively,  for the nine month  period  ending  June 30,
          2002.

               Had compensation  cost been determined for the three months ended
          June 30, 2003 and 2002 including the weighted-average estimate of fair
          value of each option granted,  the Company's proforma net income would
          be $8,871 and $475,196,  respectively,  reduced by $12,974 and $4,972.
          Proforma earnings,  basic and diluted,  per share would have been $.00
          for the three month period ending June 30, 2003 and $.08

                                       10
<PAGE>

          for the three month period ending June 30, 2002.

Note 8- Recent Accounting Pronouncements
        --------------------------------

               In April 2003, FASB issued SFAS No. 149,  "Amendment of Statement
          133 on Derivative  Instruments and Hedging Activities." This Statement
          improves   financial   reporting  by  requiring  that  contracts  with
          comparable  characteristics be accounted for similarly. In particular,
          this Statement (1) clarifies under what  circumstances a contract with
          an initial net  investment  meets the  characteristic  of a derivative
          discussed in paragraph  6(b) of Statement  133, (2)  clarifies  when a
          derivative contains a financing  component,  (3) amends the definition
          of an underlying to conform it to language used in FASB Interpretation
          No.  45,  "Guarantor's  Accounting  and  Disclosure  Requirements  for
          Guarantees,  Including Indirect Guarantees of Indebtedness of Others",
          and (4) amends  certain other existing  pronouncements.  Those changes
          will  result  in more  consistent  reporting  on  contracts  as either
          derivatives  or hybrid  instruments.  This  Statement is effective for
          contracts  and hedging  relationships  entered into or modified  after
          June 30, 2003.

               In May 2003,  FASB issued SFAS No. 150 "  Accounting  for Certain
          Financial  Instruments  with  Characteristics  of both Liabilities and
          Equity." This Statement  requires that an issuer  classify a financial
          instrument  that is within  its scope as a  liability  (or an asset in
          some  circumstances).   This  Statement  is  effective  for  financial
          instruments entered into or modified after May 31, 2003.

               The  above  accounting  pronouncements  will not have a  material
          impact on the consolidate financial statements.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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-Q,  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

                                       11
<PAGE>

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 and the Bank completed the acquisition of WHG
Bancshares  Corporation  ("WHG  Bancshares")  and its wholly  owned  subsidiary,
Heritage Savings Bank, F.S.B. ("Heritage Bank").  Stockholders of WHG Bancshares
received $14.25 per share in cash for each of the 1,285,050  outstanding  shares
of WHG  Bancshares's  common  stock.  As a result of the merger,  Heritage  Bank
merged into the Bank and its five  locations  became branch offices of the Bank.
The aggregate  purchase price was approximately  $18.3 million.  The transaction
was accounted for using the purchase method.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2003 AND SEPTEMBER 30, 2002

     During the nine months ended June 30, 2003, the Company's  assets increased
by $52.6  million,  or 9.0% from $587.1  million at September 30, 2002 to $639.7
million at June 30, 2003. Loans receivable,  net decreased by $23.3 million,  or
5.9%,  from $396.6  million at September 30, 2002 to $373.3  million at June 30,
2003. The Company's  mortgage-backed  securities available for sale increased by
$20.4  million,  or 33.7%,  from $60.4  million at  September  30, 2002 to $80.8
million at June 30,  2003.  The  Company's  mortgage-backed  securities  held to
maturity decreased by $13.5 million or 40.0% from $33.7 million at September 30,
2002 to $20.2  million at June 30,  2003.  The  Company's  investment  portfolio
available  for sale  increased  $72.7  million or 161.4%,  from $45.1 million at
September 30, 2002 to $117.8 million at June 30, 2003. The Company's  investment
portfolio held to maturity  decreased by $2.0 million or 44.4% from $4.5 million
at  September  30, 2002 to $2.5  million at June 30, 2003.  The  preceeding  was
accomplished in an effort to reduce interest rate risk in the balance sheet. The
bank was  reluctant  to make long term low rate loans in the low  interest  rate
environment  that  prevailed  during the nine month  period ended June 30, 2003.
Emphasis  has been  placed on short term loans such as  automobile  loans,  home
equity loans and short term mortgages. The Company's deposits increased by $48.7
million, or 9.8%, from $498.8 million at September 30, 2002 to $547.5 million at
June 30, 2003. The increase in deposits was achieved  through  normal  marketing
efforts and the acquisition of WHG Bancshares.  The growth in deposits helped to
fund security  purchases.  The security  purchases  have been short term balloon
type products and adjustable mortgage products.

COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED JUNE 30, 2003 AND 2002

     Net Income.  Net income increased by $229,000,  or 22.4%, from $1.0 million
for the nine  months  ended June 30,  2002 to $1.2  million  for the nine months
ended June 30, 2003.  The increase in net income was partially  attributable  to
increased  net  interest  income,  due to an increase in the average  balance of
loans.  The  average  balance of loans  increased  $117.8  million,  from $271.0
million at June 30, 2002 to $388.8  million at June 30,  2003,  of which  $116.8
million was a result of the merger with WHG  Bancshares.  The average balance of
deposits increased $167.7 million from $355.9 million at June 30, 2002 to $523.6
million at June 30,  2003.  Increase  in other  income also  contributed  to the
increase in net income.  The increase in net income was  partially  offset by an
increase  in the  provision  for loan  losses,  and  increases  in  non-interest
expenses. The provision for loan losses increased $989,000 from $209,000 for the
nine months  ended June 30, 2002 to $1.2  million for the nine months ended June
30, 2003. Non-interest expenses increased $3.4 million from $8.0 million for the
nine months ended June 30, 2002 to $11.4  million for the nine months ended June
30, 2003.

     Net Interest  Income.  Net interest  income was $13.3  million for the nine
months ended June 30,  2003,  compared to $9.2 million for the nine months ended
June 30, 2002,  representing an increase of $4.1 million, or 44.3%. The increase
was primarily due to the increase in the volume of interest-earning  assets. The
increase  in volume of  interest  earning

                                       12
<PAGE>

assets was primarily a result of the merger with WHG Bancshares. The Company was
able to increase  interest  rate spread from 2.83% at June 30, 2002, to 2.94% at
June 30, 2003 due to declining interest rates and re-pricing of deposits.

     Interest Income.  Interest income increased by $5.4 million,  or 26.7% from
$20.1  million for the nine months ended June 30, 2002 to $25.5  million for the
nine months  ended June 30, 2003.  Interest and fees on loans  increased by $4.9
million, or 32.4%, from $15.2 million for the nine months ended June 30, 2002 to
$20.1 million for the nine months ended June 30, 2003. This was primarily due to
a $117.8 million  increase in the average balance of loans receivable which more
than  offset a decrease in the  average  yield on loans of 58 basis  points from
7.49% at June 30, 2002 to 6.91% at June 30,  2003.  The  increase in the average
balance of loans was primarily  attributable  to the merger with WHG  Bancshares
which  consisted  of $116.8  million in loans  receivable.  The  decrease in the
average  yield was  attributed  to the  prevailing  market rates in the economy.
Interest on mortgage-backed  securities increased by $504,000 or 19.7% from $2.6
million  for the nine months  ended June 30,  2002 to $3.1  million for the nine
months ended June 30, 2003.  This  increase was primarily due to the increase in
the average balance of mortgage-backed securities from $62.3 million at June 30,
2002 to $94.0  million at June 30, 2003.  Interest and  dividends on  investment
securities  decreased  by $172,000 or 7.8% from $2.2 million for the nine months
ended June 30, 2002 to $2.0  million for the nine  months  ended June 30,  2003.
This was primarily due to a decrease in the average rate received on investments
from 5.1% at June 30, 2002 to 3.6% at June 30, 2003.

     Interest Expense. Interest expense, which consists of interest on deposits,
interest on  borrowed  money and other  interest  expense  increased  from $10.9
million  for the nine months  ended June 30, 2002 to $12.2  million for the nine
months  ended  June 30,  2003 a change of $1.3  million  or 11.9%.  Interest  on
deposits increased $412,000 due to an increase in the average volume of deposits
by $167.7 million from $355.9 million at June 30, 2002 to $523.6 million at June
30, 2003. The average yield on deposits decreased by 114 basis points from 3.88%
at June 30, 2002 to 2.74% at June 30, 2003. The Company was able to increase its
deposits  through its use of advertising  and the acquisition of WHG Bancshares.
Interest on  short-term  borrowings  decreased  by $395,000  for the nine months
ended June 30, 2003, and interest on long-term borrowings increased by $791,000.
This  increase was  primarily  due to an increase of $9.2 million in the average
balances of advances from the Federal Home Loan Bank of Atlanta  during the nine
months ended June 30, 2003. Also  contributing to interest  expense was interest
on the Trust Preferred  Securities  which was $501,000 for the nine month period
ending June 30,2003.

                                       13
<PAGE>

     Average Balance Sheet.  The following table 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  yields and costs are  derived by dividing
income or  expense  by the  average  daily  balance  of  assets or  liabilities,
respectively, for the period ended June 30, 2003. The period ended June 30, 2002
average  balances  were  computed  using  month-end  balances,  except for Other
Investments  which were computed using daily 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
                                              -----------------------------------------------------------------------------
                                                               2003                                  2002
                                              -------------------------------------   -------------------------------------
                                               AVERAGE                   AVERAGE       AVERAGE                     AVERAGE
                                               BALANCE      INTEREST      RATE         BALANCE       INTEREST       RATE
                                               -------      --------      ----         -------       --------       ----
                                                                       (DOLLARS IN THOUSANDS)
Interest-earning assets:
<S>                                            <C>          <C>              <C>       <C>           <C>              <C>
   Loans....................................   $ 388,859    $  20,158        6.91%     $  271,028    $ 15,223         7.49%
   Mortgage-backed securities...............      93,963        3,061        4.34          62,336       2,557         5.47
   Dividends and investment securities......      75,506        2,043        3.61          57,700       2,215         5.12
   Other Investments........................      25,456          267        1.40           8,673         149         2.29
                                               ---------    ---------                  ----------    --------
       Total interest-earning assets........     583,784       25,529        5.83         399,737      20,144         6.72
Noninterest-earning assets..................      32,219                                   22,600
                                               ---------                               ----------
       Total assets.........................   $ 616,003                               $  422,337
                                               =========                               ==========

Interest-bearing liabilities:
   Deposits.................................   $ 523,584       10,771        2.74         355,888      10,359         3.88
   FHLB Advances............................      25,442          953        4.99          16,242         558         4.58
   Trust Preferred Securities...............      12,500          501        5.34             183           8         5.83
   Other liabilities........................       1,853            1        0.07           1,946           1         0.07
                                               ---------    ---------                  ----------    --------
Total interest-bearing liabilities..........     563,379       12,226        2.89         374,259      10,926         3.89
                                                            ---------    --------                    --------      -------
Noninterest-bearing liabilities.............       7,845                                    5,435
                                               ---------                               ----------
       Total liabilities....................     571,224                                  379,694
Stockholders' equity .......................      44,779                                   42,643
                                               ---------                               ----------
       Total liabilities and stockholders'
            equity..........................   $ 616,003                               $  422,337
                                               =========                               ==========

Net interest income.........................                $  13,303                                $  9,218
                                                            =========                                ========
Interest rate spread........................                                 2.94%                                    2.83%
                                                                          =======                                  =======
Net interest margin.........................                                 3.04%                                    3.07%
                                                                          =======                                  =======
Ratio average interest earning assets/
    interest bearing liabilities............                               103.62%                                  106.81%
                                                                          =======                                  =======
</TABLE>

                                       14
<PAGE>

     Rate/Volume  Analysis.  The table  below  sets  forth  certain  information
regarding  changes in interest  income and interest  expense of the Bank for the
periods   indicated.   For  each   category   of   interest-earning   asset  and
interest-bearing liability,  information is provided on changes attributable to:
(i) changes in volume (changes in volume  multiplied by old rate);  (ii) changes
in rates  (change  in rate  multiplied  by old  volume);  and (iii)  changes  in
rate/volume (changes in rate multiplied by the changes in volume).


                                        For Nine Months Ended June 30,
                                    -----------------------------------------
                                          2003        vs.         2002
                                    -----------------------------------------
                                               Increase (Decrease)
                                                     Due to
                                    -----------------------------------------
                                                            Rate/
                                      Volume    Rate       Volume      Total
                                      ------    ----       ------      -----
                                                   (In thousands)
Interest income:
  Loans receivable ................ $ 6,646   $(1,193)   $  (518)   $ 4,935
  Mortgage-backed securities ......   1,294      (524)      (266)       504
  Investment securities and
      FHLB Stock ..................     681      (652)      (201)      (172)
  Other interest-earning assets ...     288       (58)      (112)       118
                                    -------   -------    -------    -------
    Total interest-earning assets..   8,909    (2,427)    (1,097)     5,385

Interest expense:
  Deposits ........................   4,881    (3,038)    (1,431)       412
  FHLB advances ...................     316        50         29        395
  Trust Preferred Securities ......     539        (1)       (45)       493
  Other liabilities ...............       0         0          0          0
                                    -------   -------    -------    -------
     Total interest-bearing
       liabilities ................   5,736    (2,989)    (1,447)     1,300
                                    -------   -------    -------    -------

Change in net interest income ..... $ 3,173   $   562    $   350    $ 4,085
                                    =======   =======    =======    =======

     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 $1.2
million for the nine months ended June 30, 2003, as compared to $209,000 for the
nine months ended June 30, 2002,  representing an increase of $1.0 million.  The
provision increased due to the increased  chargeoffs and the increased volume of
loans. Loan chargeoffs for the nine months ended June 30, 2003 were $1.5 million
as compared to $320,000  for the nine months  ended June 30, 2002 an increase of
$1.2 million.  The increase in loan  chargeoffs  was caused by the charge off of
$569,000 for a commercial loan  arrangement and related  transactions  for which
collectibility  is in doubt.  In addition loan  chargeoffs  increased due to the
increased volume of loans and adverse economic conditions.  Loan recoveries were
$267,000  for the nine months  ended June 30, 2003  compared to $247,000 for the
nine months  ended June 30,  2002.  Non  performing  loans at June 30, 2003 were
$348,000 as compared to  $362,000  at June 30,  2002.  The total loss  allowance
allocated to domestic loans is $2.2 million.  In establishing  such  provisions,
management considered an analysis of the risk inherent in the loan portfolio.

     Other Income.  Other income  increased by $623,000,  or 86.4% from $721,000
for the nine  months  ended June 30,  2002 to $1.3  million  for the nine months
ended June 30, 2003. The increase in other income for the nine months ended June
30 2002 was partially attributable to gains on the sale of loans of $340,000 for
the nine  months  ended June 30, 2003  compared to $132,000  for the nine months
ended  June 30,  2002.  There  was also a gain on the sale of  Mortgaged  Backed
Securities  of $233,000 for the nine months  ended June 30, 2003,  compared to a
gain of $6,000 for the nine months ended June 30,  2002,  and a gain on the sale
of  investments  of $41,000 for the nine months ended June 30, 2003  compared to
$44,000  for the nine months  ended June 30,  2002.

                                       15
<PAGE>

These gains were achieved through the Company's  implementation of a strategy to
mitigate  interest  rate risk.  These  gains may not be  achieved  in the future
should market  conditions  change.  Fees on  transaction  accounts  increased by
$75,000 due to the increase in the volume of transaction accounts. Servicing fee
income decreased $19,000 from $14,000 for the nine months ended June 30, 2002 to
$(5,000) for the nine months ended June 30, 2003. This decrease was attributable
to adjustments to the servicing premium on loans sold due to payoffs.

     Non-interest  Expenses.  Total  non-interest  expenses  increased  by  $3.3
million,  or 41.8%, from $8.1 million for the nine months ended June 30, 2002 to
$11.4  million  for the  nine  months  ended  June 30,  2003.  The  increase  in
non-interest  expenses was due to increases in salaries and related  expenses of
$2.0  million,  or 47.8%.  The  increase in salaries  was  partially  due to the
increased  personnel due to the merger with WHG  Bancshares  and increased  loan
personnel as the Company  attempts to diversify into the commercial loan market.
The increase in  non-interest  expenses also was due in part to the absence of a
credit to  compensation  expense of $169,000  for the nine months ended June 30,
2002 for the directors retirement plan due to the decline of value of the shares
held in 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  was  classified  as a liability  and  adjusted  with a
corresponding  charge (or credit) to compensation cost by multiplying the number
of shares  owned by the Rabbi  Trust by the change in the fair  market  value of
each  share,  to  reflect  changes  of the  amount  owed  to the  directors.  No
adjustments  to  compensation  expense for the Rabbi Trust were required for the
quarter ended June 30, 2003 as a result of stockholder  approval of an amendment
to the Directors' Retirement Plan at the 2002 annual meeting of stockholders.

     The  Company  also  experienced  increases  of  $475,000,  or 71.4% in data
processing expenses,  from $665,000 at June 30, 2002 to $1.1 million at June 30,
2003.  This  increase was primarily  due to an increased  number of  transaction
accounts due to the merger with WHG Bancshares  and a rate  increase.  Occupancy
expense  increased  by $297,000 or 32.7% from  $908,000 at June 30, 2002 to $1.2
million at June 30, 2003. The Company also experienced increases of $270,000, or
38.4% in property and equipment expense and an increase of $155,000, or 46.3% in
telephone,  postage and office supplies. These increases were due to the cost of
the additional branch offices acquired in the WHG Bancshares merger.

     Income Taxes.  The  Company's  income tax expense was $770,000 and $647,000
for the nine months ended June 30, 2003 and 2002,  respectively.  The  Company's
effective tax rates were 38.0% and 38.7% for the nine months ended June 30, 2003
and 2002, respectively.

                                       16
<PAGE>

COMPARISON  OF  OPERATING  RESULTS FOR THE THREE  MONTHS ENDED JUNE 30, 2003 AND
2002

     Net Income.  Net income decreased by $458,000,  or 95.5%, from $480,000 for
the three  months ended June 30, 2002 to $22,000 for the three months ended June
30, 2003.  The  decrease in net income was due to the increase in the  provision
caused by the  establishment  of a provision of $569,000  for a commercial  loan
arrangement and related  transactions for which collectibility is in doubt. This
decrease was  partially  offset by increases in other income and  increased  net
interest income due to an increase in the average balance of loans.  The average
balance of loans increased $102.2 million,  from $273.8 million at June 30, 2002
to $376.0  million at June 30, 2003, of which $116.8 million was a result of the
merger with WHG  Bancshares.  The average balance of deposits  increased  $171.6
million from, $372.4 million at June 30, 2002 to $544.0 million at June 30, 2003
of which $118.2 million was a result of the merger with WHG Bancshares.

     Net Interest  Income.  Net  interest  income was $4.2 million for the three
months ended June 30, 2003,  compared to $3.3 million for the three months ended
June 30, 2002,  representing an increase of $905,000, or 27.5%. The increase was
primarily  due to the  increase in the volume of  interest-earning  assets.  The
increase in the volume of interest  earning assets was primarily a result of the
merger with WHG  Bancshares.  The interest rate spread  decreased  from 2.93% at
June 30,  2002 to 2.71% at June 30,  2003 due to  declining  interest  rates and
re-pricing of deposits.

     Interest Income.  Interest income increased by $1.3 million,  or 19.3% from
$6.9  million for the three  months  ended June 30, 2002 to $8.2 million for the
three months ended June 30, 2003.  Interest and fees on loans  increased by $1.1
million, or 22.3%, from $5.1 million for the three months ended June 30, 2002 to
$6.2 million for the three months ended June 30, 2003. This was primarily due to
a $102.2 million  increase in the average balance of loans receivable which more
than  offset a decrease in the  average  yield on loans of 82 basis  points from
7.46% at June 30, 2002 to 6.64% at June 30,  2003.  The  increase in the average
balance of loans was primarily  attributable  to the merger with WHG  Bancshares
which  consisted  of $116.8  million in loans  receivable.  The  decrease in the
average  yield was  attributed  to the  prevailing  market rates in the economy.
Interest  on  mortgage-backed  securities  increased  by  $91,000  or 10.1% from
$905,000  for the three  months  ended June 30, 2002 to  $996,000  for the three
months ended June 30, 2003.  This  increase was primarily due to the increase in
the average balance of mortgage-backed securities from $67.2 million at June 30,
2002 to $97.5  million at June 30, 2003.  Interest and  dividends on  investment
securities increased by $54,000 or 6.7% from $812,000 for the three months ended
June 30, 2002 to $865,000 for the three  months  ended June 30,  2003.  This was
primarily due to an increase in the average balance of  investments,  from $65.5
million at June 30, 2002 to $101.9 million at June 30, 2003.  This increase more
than offset a decrease in the rates received on  investments  from 4.96% at June
30, 2002 to 3.40% at June 30, 2003.

     Interest Expense. Interest expense, which consists of interest on deposits,
interest  on  borrowed  money and other  interest  expense  increased  from $3.6
million for the three  months  ended June 30, 2002 to $4.0 million for the three
months  ended June 30, 2003 a change of $424,000 or 11.9%.  Interest on deposits
increased  $205,000  due to an  increase  in the  average  volume of deposits by
$171.6  million from $372.4  million at June 30, 2002 to $544.0  million at June
30, 2003. The average yield on deposits  decreased by 97 basis points from 3.57%
at June 30, 2002 to 2.60% at June 30, 2003. The Company was able to increase its
deposits  through its use of advertising  and the acquisition of WHG Bancshares.
Interest on  short-term  borrowings  decreased  by $186,000 for the three months
ended June 30, 2003, and interest on long-term borrowings increased by $244,000.
This  increase was  primarily due to an increase of $10.1 million in the average
balances  of  advances  from the  Federal  Home Loan Bank of Atlanta  during the
quarter ended June 30, 2003. Also  contributing to interest expense was interest
on the Trust Preferred  Securities which was $161,000 for the three month period
ending June 30, 2003.

                                       17
<PAGE>

     Average Balance Sheet.  The following table 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  yields 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, 2003.  The three months ended
June 30, 2002 average  balances were computed using  month-end  balances.  Total
average assets are computed using month-end balance.

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED JUNE 30,
                                               ----------------------------------------------------------------------------
                                                              2003                                     2002
                                               ----------------------------------      ------------------------------------
                                               AVERAGE                    AVERAGE      AVERAGE                      AVERAGE
                                               BALANCE      INTEREST       RATE        BALANCE       INTEREST        RATE
                                               -------      --------       ----        -------       --------        ----
                                                                            (DOLLARS IN THOUSANDS)
Interest-earning assets:
<S>                                           <C>           <C>           <C>         <C>            <C>            <C>
   Loans                                      $376,016      $ 6,241       6.64%       $ 273,795      $ 5,104        7.46%
   Mortgage-backed securities                   97,489          996       4.09           67,195          905        5.39
   Investment securities and FHLB stock        101,913          865       3.40           65,511          812        4.96
   Interest bearing deposits in other banks
      and Federal Funds sold                    25,657           91       1.42            9,980           44        1.76
                                              --------      -------                   ---------      -------
     Total interest-earning assets             601,075        8,193       5.45          416,481        6,865        6.59
                                                            -------                                  -------
Noninterest-earning assets                      34,364                                   23,350
                                              --------                                ---------
        Total assets                          $635,439                                 $439,831
                                              ========                                 ========

Interest-bearing liabilities:
    Deposits                                  $544,011        3,530       2.60         $372,449        3,324        3.57
    FHLB Advances                               24,992          303       4.85           14,923          239        6.41
    Trust Preferred Securities                  12,500          161       5.15              549            8        5.83
    Other liabilities                            2,462            1        .16            2,515            1        0.16
                                              --------      -------                   ---------      -------
Total interest-bearing liabilities             583,965        3,995       2.74          390,436        3,572        3.66
                                                            -------       ----                       -------        ----
Noninterest-bearing liabilities                  7,457                                    6,468
                                              --------                                ---------
      Total liabilities                        591,422                                  389,073
Stockholders' equity                            44,017                                   42,927
                                              --------                                ---------
   Total liabilities and stockholders'
            Equity                            $635,439                                 $439,831
                                              ========                                 ========

Net interest income                                          $4,198                                   $3,293
                                                             ======                                   ======
Interest rate spread                                                      2.71%                                     2.93%
                                                                        ======                                    ======
Net interest margin                                                       2.79%                                     3.16%
                                                                        ======                                    ======
Ratio average interest earning assets/
    interest bearing liabilities                                        102.93%                                   106.67%
                                                                        ======                                    ======
</TABLE>

                                       18
<PAGE>

     Rate/Volume  Analysis.  The table  below  sets  forth  certain  information
regarding  changes in interest  income and interest  expense of the Bank for the
periods   indicated.   For  each   category   of   interest-earning   asset  and
interest-bearing liability,  information is provided on changes attributable to:
(i) changes in volume (changes in volume  multiplied by old rate);  (ii) changes
in rates  (change  in rate  multiplied  by old  volume);  and (iii)  changes  in
rate/volume (changes in rate multiplied by the changes in volume).


<TABLE>
<CAPTION>
                                               For Three Months  Ended June 30,
                                         ---------------------------------------
                                                2003        vs.          2002
                                         ---------------------------------------
                                                     Increase (Decrease)
                                                         Due to
                                         ---------------------------------------
                                                                 Rate/
                                          Volume     Rate       Volume     Total
                                          ------     ----       ------     -----
                                                     (In thousands)
Interest income:
<S>                                      <C>       <C>        <C>        <C>
  Loans receivable ....................  $ 1,876   $  (535)   $  (204)   $ 1,137
  Mortgage-backed securities ..........      413      (222)      (100)        91
  Investment securities and
      FHLB Stock ......................      448      (253)      (142)        53
  Other interest-earning assets .......       70        (9)       (14)        47
                                         -------   -------    -------    -------
    Total interest-earning assets .....    2,807    (1,019)      (460)     1,328

Interest expense:
  Deposits ............................    1,531      (907)      (418)       206
  FHLB advances .......................      161       (58)       (39)        64
  Trust Preferred Securities ..........      174        (1)       (20)       153
  Other liabilities ...................        0         0          0          0
                                         -------   -------    -------    -------
     Total interest-bearing
       liabilities ....................    1,866      (966)      (477)       423
                                         -------   -------    -------    -------

Change in net interest income .........  $   941   $   (53)   $    17    $   905
                                         =======   =======    =======    =======

</TABLE>

                                       19
<PAGE>

     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.  The Company  increased
the  provision  for losses by $786,000 for the three months ended June 30, 2003.
This increases the loss allowance to $2.2 million, which the Company believes is
sufficient based on past experience.  Loan chargeoffs for the three months ended
June 30, 2003 were  $886,000 as compared to $132,000  for the three months ended
June 30, 2002. The provision  increased due to the increased volume of loans and
increased chargeoffs. The increase in chargeoffs was caused by the charge-off of
$569,000 for a commercial loan  arrangement and related  transactions  for which
collectibility is in doubt and current economic conditions. Loan recoveries were
$110,000  for the three  months  ended June 30, 2003 as compared to $117,000 for
the three months ended June 30, 2002. Non performing loans at June 30, 2003 were
$348,000  as  compared  to  $362,000  at June 30,  2002.  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 $132,000,  or 50.8% from $260,000
for the three  months ended June 30, 2002 to $392,000 for the three months ended
June 30, 2003.  The increase in other income for the three months ended June 30,
2003 was  partially  attributable  to increases on gains on the sale of loans of
$46,000.  There was also an  increase  on gain on the sale of  Mortgaged  Backed
Securities  of  $75,000.   These  gains  were  achieved  through  the  Company's
implementation of a strategy to mitigate interest rate risk. These gains may not
be achieved in the future should market conditions  change.  Fees on transaction
accounts increased by $20,000,  and loan fees increased  $12,000.  Servicing fee
income decreased $15,000 from $4,000 for the three months ended June 30, 2002 to
$(11,000)  for the  three  months  ended  June  30,  2003.  This  decreasee  was
attributable  to  adjustments  to the  servicing  premium  on loans  sold due to
payoffs.

     Non-interest  Expenses.  Total  non-interest  expenses  increased  by  $1.2
million, or 43.4%, from $2.6 million for the three months ended June 30, 2002 to
$3.8  million  for the  three  months  ended  June 30,  2003.  The  increase  in
non-interest  expenses was due to increases in salaries and related  expenses of
$730,000,  or 50.6%.  The increase in salaries was partialy due to the increased
personnel due to the merger with WHG  Bancshares and increased loan personnel as
the Company attempts to diversify into the commercial loan market.  The increase
in  non-interest  expenses  also was due in part to the  absence  of a credit to
compensation  expense of $45,000  for the  quarter  ended June 30,  2002 for the
directors  retirement plan due to the decline of value of the shares held in 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  was  classified  as a liability  and  adjusted  with a
corresponding  charge (or credit) to compensation cost by multiplying the number
of shares  owned by the Rabbi  Trust by the change in the fair  market  value of
each  share,  to  reflect  changes  of the  amount  owed  to the  directors.  No
adjustments  to  compensation  expense for the Rabbi Trust were required for the
quarter ended June 30, 2003 as a result of stockholder  approval of an amendment
to the Directors' Retirement Plan at the 2002 annual meeting of stockholders.

     The  Company  also  experienced  increases  of  $120,000,  or 55.5% in data
processing  expenses,  from  $216,000  at June 30,  2002 to $336,000 at June 30,
2003.  This  increase was primarily  due to an increased  number of  transaction
accounts due to the merger with WHG Bancshares  and a rate  increase.  Occupancy
expense  increased  by  $120,000  or 39.8%  from  $300,000  at June 30,  2002 to
$420,000 at June 30, 2003. The Company also  experienced  increases of $110,000,
or 47.9% in property and equipment expense and an increase of $54,000,  or 49.8%
in telephone,  postage and office supplies. These increases were due to the cost
of the additional branch offices acquired in the WHG Bancshares merger.

     Income Taxes. The Company's income tax expense was $11,000 and $303,000 for
the three  months  ended June 30,  2003 and 2002,  respectively.  The  Company's
effective  tax rates  were 33.5% and 38.7% for the three  months  ended June 30,
2003 and 2002, respectively.

                                       20
<PAGE>

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET RISK

     The Company is a party to financial instruments with off-balance sheet risk
including  commitments  to extend  credit  under  existing  lines of credit  and
commitments  to sell  loans.  These  instruments  involve,  to varying  degrees,
elements of credit and interest rate risk in excess of the amount  recognized in
the consolidated balance sheets.

     Off-balance  sheet financial  instruments  whose contract amounts represent
credit and interest rate risk are summarized as follows:


<TABLE>
<CAPTION>
                                                           June 30, 2003   September 30, 2002
                                                           -------------   ------------------
                                                              (dollars in thousands)

<S>                                                            <C>            <C>
        Commitments to originate new loans                     $21,124        $12,900
        Commitments to originate new loans held for sale            --             --
        Unfunded commitments to extend credit under existing
             equity line and commercial lines of credit         17,172         20,800
        Commercial letters of credit                               317            431
        Commitments to sell loans held for sale                     --             --
</TABLE>


The Company does not have any  unconsolidated  special purpose entities or other
similar forms of off-balance sheet financing arrangements.

     Commitments  to originate new loans or to extend  credit are  agreements to
lend to a customer as long as there is no violation of any condition established
in the contract.  Loan  commitments  generally expire within 30 to 45 days. Most
equity line  commitments for the unfunded portion of equity lines are for a term
of 20 years, and commercial lines of credit are generally renewable on an annual
basis.  Commitments  generally have fixed expiration dates or other  termination
clauses  and may require  payment of a fee.  Since many of the  commitments  are
expected to expire without being drawn upon, the total commitment amounts do not
necessarily  represent  future cash  requirements.  The Company  evaluates  each
customer's  creditworthiness  on a case-by-case basis. The amounts of collateral
obtained,  if deemed necessary by the Company upon extension of credit, is based
on management's credit evaluation of the borrower.

     Commitments  to sell loans held for sale are  agreements to sell loans to a
third party at an agreed upon price.  At June 30, 2003, the aggregate fair value
of these commitments exceeded the book value of the loans to be sold.

CONTRACTUAL OBLIGATIONS

As of June 30, 2003

                                        Payments due by period
                                        ----------------------
                                        (Dollars in thousands)
                         Less than
                          1 year   1-3 years  4-5 years Over 5 years  Total
                         --------  ---------  --------- ------------  -----
Deposits                 $194,965    109,061     68,878         --    372,904
Long-term borrowings        2,500      2,250      9,000      9,000     22,750
Lease obligations             849      2,495      1,229      3,431      8,004
                         --------   --------   --------   --------   --------


Total contractual cash
    obligations          $198,314    113,806     79,107     12,431    403,658
                         ========   ========   ========   ========   ========



                                       21
<PAGE>

CRITICAL ACCOUNTING POLICIES

     The Company's  significant  accounting  policies are set forth in note 1 of
the consolidated  financial  statements as of September 30, 2002 which was filed
on Form 10-KSB. Of these significant  accounting policies, the Company considers
its policy  regarding  the  allowance  for loan  losses to be its most  critical
accounting policy,  because it requires management's most subjective and complex
judgments.  In addition,  changes in economic  conditions can have a significant
impact on the  allowance  for loan losses and  therefore  the provision for loan
losses and results of operations. The Company has developed appropriate policies
and  procedures  for  assessing  the adequacy of the  allowance for loan losses,
recognizing  that this process  requires a number of  assumptions  and estimates
with respect to its loan portfolio. The Company's assessments may be impacted in
future  periods by  changes in  economic  conditions,  the impact of  regulatory
examinations, and the discovery of information with respect to borrowers that is
not  known  to  management  at the  time  of the  issuance  of the  consolidated
financial statements.

ASSET QUALITY

     At June 30, 2003, the Company had approximately  $680,000 in non-performing
assets (nonaccrual  loans,  repossessed assets and real estate owned) or .11% of
total assets. At September 30, 2002,  non-performing assets were $1.6 million or
..28% of total assets.  The Bank's net charge-offs for the nine months ended June
30,  2003 were $1.2  million.  The  Bank's  allowance  for loan  losses was $2.2
million at June 30, 2003 and September 30, 2002.  The ratio of the allowance for
loan  losses to total  loans,  net of loans in process  and  deferred  loan fees
increased to .59% at June 30, 2003, compared to .58% at September 30, 2002.


         The following table presents an analysis of the Company's
non-performing assets:

                                                   At          At
                                                 June 30,  September 30,
                                                   2003        2002
                                                   ----        ----
Nonperforming loans:
Nonaccrual loans                                  $  348      $1,391
Loans 90 days past due and accruing                   --          --
Restructured loans                                    --          --
                                                  ------      ------
Total nonperforming loans                            348       1,391
Other non-performing assets                          332         229
                                                  ------      ------
Total nonperforming assets                        $  680      $1,620
                                                  ======      ======

Nonperforming loans to loans receivable, net         .18%        .35%
Nonperforming assets as a percentage
 of loans and other real estate owned                .18%        .41%
Nonperforming assets to total assets                 .11%        .28%

                                       22
<PAGE>

The following table sets forth an analysis of the Bank's allowance for loan
losses for the periods indicated.
                                           For the Nine        For the Three
                                           Months Ended        Months Ended
                                               June 30,           June 30,
                                          2003       2002      2003      2002
                                          ----       ----      ----      ----

Balance at beginning of period .......  $ 2,199    $ 1,563    $ 2,153   $ 1,574
                                        ---------------------------------------
Loans charged-off:
  Real estate mortgage:
    Single-family residential ........       --         --         --        --
    Multi-family residential .........       --         --         --        --
    Commercial .......................       --         --         --        --

  Construction .......................       --         --         --        --
  Commercial loans ...................      569         --        569        --
  Consumer ...........................      932        320        316       132
                                        -------    -------    -------   -------
Total charge-offs ....................    1,501        320        885       132

Recoveries:
  Real estate mortgage:
    Single-family residential ........       --         --         --        --
    Multi-family residential .........       --         --         --        --
    Commercial .......................       --         --         --        --
    Construction .....................       --         --         --        --
  Commercial loans secured ...........       --         --         --        --
  Consumer ...........................      267        247        110       117
                                        -------    -------    -------   -------
Total recoveries .....................      267        247        110       117
Net loans charged off ................   (1,234)       (73)       775        15
Provision for loan  losses ...........    1,199        209        786       140
Allowance assumed in the provision ...       --         --         --        --
                                        ---------------------------------------
Balance at end of period .............  $ 2,164    $ 1,699    $ 2,164   $ 1,699
                                        =======================================


Ratio of net charge-offs
  to average loans outstanding
  during the period...................      .39%       .12%       .24%      .05%
                                        =======================================

     Regulations  require  that the  Company  classify  its  assets on a regular
basis. There are three classifications for problem assets: substandard, doubtful
and loss.  The Company  regularly  reviews its assets to  determine  whether any
assets  require  classification  or  re-classification.  At June 30,  2003,  the
Company had $680,000 in classified assets, consisting of $348,000 in substandard
and loss  loans,  $0 in real  estate  owned and $ 332,000  in other  repossessed
assets.  At  September  30, 2002,  the Company had $2.0  million in  substandard
assets,  consisting  of $1.8  million  in  loans,  $0 in real  estate  owned and
$214,000 in other repossessed assets.

     In addition to regulatory  classifications,  the Company also classifies as
"special mention" assets that are currently  performing in accordance with their
contractual  terms but may become  classified  or  non-performing  assets in the
future. At June 30, 2003, the Company has identified  approximately $2.7 million
in assets classified as special mention.






LIQUIDITY AND CAPITAL RESOURCES

     At June  30,  2003,  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.

                                       23
<PAGE>

     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,  2003 and 2002,  the  Company  had $52.5
million and $33.3 million,  respectively, of loan originations.  During the nine
months ended June 30, 2003 and 2002, the Company purchased investment securities
in  the  amounts  of  $133.6  million  and  $51.8  million,   respectively,  and
mortgage-backed  securities in the amounts of $58.8  million and $43.1  million,
respectively. 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  short-term  borrowings.  The Bank's  average  daily
liquidity ratio for the month of June was approximately  25.05%,  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 nine 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, 2003,  cash,  interest-bearing  deposits in other banks and
federal  funds  sold  were  $10.6  million,   $9.4.million   and  $5.0  million,
respectively.

     The Company  anticipates  that it will have  sufficient  funds available to
meet its current  commitments.  Certificates  of deposit  which are scheduled to
mature in less than one year at June 30, 2003 totaled $194.9  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, 2003, the
Company had commitments  under standby letters of credit and lines of credit and
commitments  to originate  mortgage  loans of $317,000,  $17.2 million and $21.1
million respectively.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market  risk is the  possible  chance of loss from  unfavorable  changes in
market prices and rates.  These changes may result in a reduction of current and
future period net interest income, which is the favorable spread earned from the
excess of interest income on  interest-earning  assets over interest  expense on
interest-bearing liabilities.

     The Company considers  interest rate risk to be its most significant market
risk, which could  potentially  have the greatest impact on operating  earnings.
The  structure  of the  Company's  loan and  deposit  portfolios  is such that a
significant  change in interest rates may adversely impact net market values and
net interest income.

                                       24
<PAGE>

     The Company  monitors whether material changes in market risk have occurred
since September 30, 2002. The Company does not believe that any material adverse
changes in market risk exposures occurred since September 30, 2002.




ITEM 4. CONTROLS AND PROCEDURES

     As of the end of the  period  covered  by this  report,  management  of the
Company  carried  out  an  evaluation,   under  the  supervision  and  with  the
participation  of  the  Company's  principal  executive  officer  and  principal
financial officer, of the effectiveness of the Company's disclosure controls and
procedures.  Based on this evaluation, the Company's principal executive officer
and principal financial officer concluded that the Company's disclosure controls
and  procedures  are  effective  in  ensuring  that  information  required to be
disclosed  by the  Company  in  reports  that it  files  or  submits  under  the
Securities Exchange Act of 1934, as amended, is recorded, processed,  summarized
and reported,  within the time periods  specified in the Securities and Exchange
Commission's  rules  and  forms.  It  should  be noted  that the  design  of the
Company's  disclosure  controls  and  procedures  is based in part upon  certain
reasonable  assumptions about the likelihood of future events,  and there can be
no reasonable  assurance  that any design of disclosure  controls and procedures
will  succeed  in  achieving  its  stated  goals  under  all  potential   future
conditions,  regardless of how remote, but the Company's principal executive and
financial  officers have  concluded that the Company's  disclosure  controls and
procedures are, in fact, effective at a reasonable assurance level.

     In addition,  there have been no changes in the Company's  internal control
over financial  reporting (to the extent that elements of internal  control over
financial  reporting are subsumed  within  disclosure  controls and  procedures)
identified in connection  with the evaluation  described in the above  paragraph
that occurred  during the Company's  last fiscal  quarter,  that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

                                       25
<PAGE>

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)       List of Exhibits

          The following exhibit is filed herewith:

          Exhibit
          Number                             Title
          ------                             -----

          31.1      Rule #13a-14(a) Certification of Chief Executive Officer

          31.2      Rule #13a-14(a) Certification of Chief Financial Officer

          32        Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

          (b)       Form 8-K

                    On April 29, 2003 the Company filed a Current Report on Form
                    8-K reporting under Item 7 and Item 12.

                                       26
<PAGE>

                                   SIGNATURES

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

                                                BCSB BANKCORP, INC.



Date: August 13, 2003                           /s/ Gary C. Loraditch
                                                --------------------------------
                                                Gary C. Loraditch
                                                President
                                                (Principal Executive Officer)



Date: August 13, 2003                           /s/ Bonnie M. Klein
                                                --------------------------------
                                                Bonnie M. Klein
                                                Vice President and Treasurer
                                                (Principal Financial and
                                                Accounting Officer)


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