U.S. 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 December 31, 2002


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from ______ to ______

                         Commission File Number: 0-24589

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


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

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

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


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

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 January 31,  2002,  the issuer had  5,874,082  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
            December 31, 2002 (unaudited) and September 30, 2002...............2

         Consolidated Statements of Operations for the Three Months
            Ended December 31, 2002 and 2001 (unaudited).......................3

         Consolidated Statement of Comprehensive Income for the Three
            Months Ended December 31, 2002 and 2001 (unaudited)................4

         Consolidated Statements of Cash Flows for the Three  Months
            Ended December 31, 2002 and 2001 (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...........18

Item 4.  Controls and Procedures..............................................18


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

Item 1.  Legal Proceedings....................................................19

Item 2.  Changes in Securities and Use of Proceeds............................19

Item 3.  Defaults Upon Senior Securities......................................19

Item 4.  Submission of Matters to a Vote of Security Holders..................19

Item 5.  Other Information....................................................19

Item 6.  Exhibits and Reports on Form 8-K.....................................19


SIGNATURES....................................................................20

CERTIFICATIONS................................................................21

                                       1
<PAGE>

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

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                                                            DECEMBER 31,     SEPTEMBER 30,
                                                                               2002               2002
                                                                         ---------------     --------------
                                                                             (Unaudited)
<S>                                                                      <C>                 <C>
                     Assets
                     ------
Cash                                                                     $    9,774,030      $    6,467,598
Interest bearing deposits in other banks                                     10,948,650          15,808,342
Federal funds sold                                                            6,096,045           3,527,387
Investment securities, held to maturity                                       3,496,130           4,495,986
Investment securities, available for sale                                    62,914,538          45,083,287
Loans receivable, net                                                       393,831,517         396,616,729
Loans held for sale                                                             252,262                  --
Mortgage backed securities, held to maturity                                 29,055,550          33,691,430
Mortgage backed securities, available for sale                               63,497,888          60,411,132
Premises and equipment, net                                                   8,533,702           8,630,812
Federal Home Loan Bank of Atlanta stock                                       3,673,395           3,939,700
Accrued interest receivable                                                   1,789,187           2,187,458
Prepaid and deferred income taxes                                               992,620           1,268,370
Goodwill                                                                      2,294,327           2,294,327
Core deposit intangible                                                         489,000             542,000
Other assets                                                                  1,843,801           2,097,791
                                                                         --------------      --------------
Total assets                                                             $  599,482,642      $  587,065,349
                                                                         ==============      ==============
             Liabilities and Stockholders' Equity
             ------------------------------------

Liabilities
-----------
  Checks outstanding in excess of bank balance                           $           --             390,799
  Deposits                                                                  510,185,473         498,785,268
  Advances from the Federal Home Loan Bank of Atlanta                        26,918,050          26,968,099
  Trust Preferred Securities                                                 12,500,000          12,500,000
  Advance payments by borrowers for taxes and insurance                       1,263,278           1,194,371
  Income taxes payable                                                           31,835              58,226
  Dividends payable                                                             264,891             264,891
  Other liabilities                                                           2,631,788           1,598,132
                                                                         --------------      --------------
Total liabilities                                                           553,795,315         541,759,786

Commitments and contingencies
Stockholders' Equity
--------------------
  Common stock (Par value $.01 - 13,500,000 authorized,
    5,874,082 issued and outstanding at December 31, 2002
    and September 30, 2002 respectively)                                         58,741              58,741
  Additional paid-in capital                                                 20,314,451          20,302,518
  Obligation under Rabbi Trust                                                1,166,595           1,156,870
  Retained earnings (substantially restricted)                               25,467,370          25,279,752
  Accumulated Other Comperhensive Income (net of taxes)                         791,310             664,554
  Employee Stock Ownership Plan                                                (914,640)           (960,372)
  Stock held by Rabbi Trust                                                  (1,196,500)         (1,196,500)
                                                                         --------------      --------------
                                                                             45,687,237          45,305,563
                                                                         --------------      --------------
Total liabilities and retained earnings                                  $  599,482,642      $  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 THREE MONTHS ENDED
                                                                       DECEMBER 31,
                                                             -----------------------------
                                                                  2002              2001
                                                                -------           --------
<S>                                                          <C>               <C>
Interest Income
---------------
  Interest and fees on loans                                 $  7,007,783      $ 5,104,196
  Interest on mortgage-backed securities                        1,055,779          826,213
  Interest and dividends on investment securities                 527,281          673,072
  Other interest income                                            91,146           59,075
                                                             ------------      -----------
Total interest income                                           8,681,989        6,662,556

Interest Expense
----------------
  Interest on deposits                                          3,675,763        3,629,674
  Interest on borrowings - short term                              56,975          195,423
  Interest on borrowings-long term                                274,773               --
  Other interest expense                                          178,726            1,000
                                                             ------------      -----------
Total interest expense                                          4,186,237        3,826,097
                                                             ------------      -----------

  Net interest income                                           4,495,752        2,836,459
  Provision for losses on loans                                   281,998           63,862
                                                             ------------      -----------
  Net interest income after provision
     for losses on loans                                        4,213,754        2,772,597

Other Income
------------
  Gain on sale of loans                                            66,985           18,265
  Provision for losses on loans held for sale                          --          (47,821)
  Servicing fee income                                                  3            3,759
  Fees and charges on loans                                        50,745           40,364
  Fees on transaction accounts                                    129,290           87,987
  Rental income                                                    37,047           23,730
  Gain from sale of Investments                                    25,000               --
  Gain from sale of Mortgage Backed Securities                     70,010               --
  Miscellaneous income                                             46,674           20,485
                                                             ------------      -----------
  Net other income                                                425,754          146,759

Non-Interest Expenses
---------------------
  Salaries and related expense                                  2,137,591        1,376,051
  Occupancy expense                                               394,983          297,161
  Deposit insurance premiums                                       49,618           33,533
  Data processing expense                                         411,591          231,072
  Property and equipment expense                                  310,508          224,129
  Professional fees                                                58,176           44,917
  Advertising                                                     227,764          268,017
  Telephone, postage and office supplies                          154,650          102,410
  Other expenses                                                  162,900          141,423
                                                             ------------      -----------
  Total non-interest expenses                                   3,907,781        2,718,713
                                                             ------------      -----------
Income before tax provision                                       731,727          200,643
Income tax provision                                              279,218           77,467
                                                             ------------      -----------

Net income                                                   $    452,509      $   123,176
                                                             ============      ===========

Basic and diluted earnings per share                         $       0.08      $      0.02
                                                             ============      ===========
</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)
                                   -----------
<TABLE>
<CAPTION>
                                                         for Three Months Ended
                                                        ------------------------
                                                              December 31,
                                                        ------------------------
                                                          2002           2001
                                                         -------       --------
<S>                                                    <C>               <C>
Net Income                                             $ 452,509      $ 123,176
Other comprehensive income, net of tax:
 Unrealized net holding (losses)/gains on
  available-for-sale portfolios                          185,510       (298,029)
Reclassification adjustment for gains
  included in net income, net of tax                     (58,754)            --
                                                       ---------      ---------
Comprehensive income (loss)                            $ 579,265      $(174,853)
                                                       =========      =========
</TABLE>

See acompanying notes to financial statements.

                                       4
<PAGE>

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

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                -------------------------------------------------
<TABLE>
<CAPTION>
                                                                               FOR THREE MONTHS ENDED
                                                                                    DECEMBER 31,
                                                                           -------------------------------
                                                                               2002                2001
                                                                           -----------         -----------
<S>                                                                        <C>                 <C>
Operating Activities
--------------------
   Net Income                                                              $   452,509         $   123,176
  Adjustments to Reconcile Net Income to Net
  Cash Used by Operating Activities
  ---------------------------------
    Accretion of discount on investments                                        (4,652)             (3,255)
    Dividends on Investment Securities                                        (211,204)           (176,203)
    Gain on sale of investments                                                (25,000)                 --
    Loans originated for sale                                               (2,108,541)         (4,251,759)
    Loans sold                                                               1,923,264             862,241
    Gain on sale of loans                                                      (66,985)            (18,264)
    Loan fees and costs deferred, net                                          (73,142)             59,344
    Amortization of deferred loan cost, net                                    (17,136)            (45,048)
    Provision for losses on loans                                              281,998              63,892
    Provision for loss on loans held for sale                                       --              47,821
    Non-cash compensation under Stock-Based Benefit Plan                        57,665              44,542
    Amortization of premium on mortgage backed securities                      139,569               9,979
    Amortization of purchase premiums and discounts, net                      (260,897)                 --
    Gain on sale of mortgaged backed securities                                (70,010)                 --
    Provision for depreciation                                                 241,983             200,169
    Decrease in accrued interest receivable on loans                           265,212             116,657
    Decrease in accrued interest receivable on investments                      99,191             193,985
    Decrease/ (increase) in accrued interest receivable on mortgage
         backed securities                                                      36,868             (69,242)
    Decrease/ (increase) in prepaid income taxes                               187,556            (311,753)
    Decrease/ (increase) in other assets                                       253,990            (187,409)
    Decrease in accrued interest payable on deposits                           (39,955)            (73,396)
    (Decrease)/ increase in income taxes payable                               (26,391)            125,881
    Increase/ (decrease) in other liabilities and payables to
          disbursing agents                                                  1,033,656            (913,660)
    Increase in obligation under Rabbi-Trust                                     9,725                  --
                                                                           -----------         -----------
        Net cash used by operating activities                                2,079,273          (4,202,332)
</TABLE>

                                       5
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                               FOR THREE MONTHS ENDED
                                                                                    DECEMBER 31,
                                                                           -------------------------------
                                                                               2002                2001
                                                                           -----------         -----------
<S>                                                                        <C>                 <C>
Cash Flows from Investing Activities
------------------------------------
    Proceeds from maturing interest bearing deposits                       $          --       $   2,154,000
    Purchases of investment securities - available for sale                  (24,080,065)        (17,446,000)
    Proceeds from maturities of investment securities - available for sale     5,500,000           1,500,000
    Proceeds from sale of investment securities- available for sale            1,025,000                  --
    Purchases of investment securities - held to maturity                             --            (500,000)
    Proceeds from maturities of investment securities - held to maturity       1,000,000           6,500,000
    Longer term loans originated                                             (16,507,135)        (12,755,432)
    Principal collected on longer term loans                                  21,516,122          22,305,990
    Net increase in short-term loans                                          (2,560,117)        (13,012,473)
    Principal collected on mortgage backed securities - available for sale     6,548,288           3,371,613
    Purchase of mortgage backed securities - available for sale              (16,322,869)        (19,921,432)
    Proceeds from sale of mortgaged backed securities- available for sale      6,782,470
    Principal collected on mortgage backed securities - held to maturity       4,606,048           4,438,351
    Proceeds from sales of foreclosed realestate                                      --              80,569
    Investment in premises and equipment                                        (144,873)           (221,157)
    Proceeds from sale if Federal Home Loan Bank of Atlanta stock                266,305                  --
                                                                            ------------        ------------
        Net cash used by investing activities                                (12,370,826)        (23,505,971)

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                                                                6,057,205           6,378,758
    Net increase  in certificates of deposit                                   5,905,436          15,370,596
    Increase in Federal Home Loan Bank of Atlanta advances                            --           3,000,000
    Repayment of Federal Home Loan Bank of Atlanta advances                           --          (3,000,000)
    Acquisition of stock for Rabbi Trust                                              --             (57,000)
    Increase in Dividends Payable                                                     --                   1
    Dividends paid on stock                                                     (264,891)           (264,046)
                                                                            ------------        ------------
        Net cash provided by financing activities                             11,306,951          21,428,309
                                                                            ------------        ------------

Decrease/ (increase) in cash and cash equivalents                              1,015,398          (6,279,994)
Cash and cash equivalents at beginning of period                              25,703,327          12,968,998
                                                                            ------------        ------------
Cash and cash equivalents at end of period                                  $ 26,718,725        $  6,689,004
                                                                            ============        ============
</TABLE>

                                       6
<PAGE>

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

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


<TABLE>
<CAPTION>
                                                                               FOR THREE MONTHS ENDED
                                                                                    DECEMBER 31,
                                                                           -------------------------------
                                                                               2002                2001
                                                                           -----------         -----------
<S>                                                                        <C>                 <C>
The following is a summary of cash and cash equivalents:
    Cash                                                                   $   9,774,030       $   4,154,535
    Interest bearing deposits in other banks                                  10,948,650           2,169,339
    Federal funds sold                                                         6,096,045             564,130
                                                                           -------------       -------------
    Balance of cash items reflected on Statement of
      Financial Condition                                                     26,818,725           6,888,004
        Less - certificate of deposit with a maturity of
          more than three months                                                 100,000             199,000
                                                                           -------------       -------------
Cash and cash equivalents reflected on the
    Statement of Cash Flows                                                $  26,718,725       $   6,689,004
                                                                           =============       =============
Supplemental Disclosures of Cash Flows Information:
    Cash paid during the period for:

    Interest                                                               $   4,210,016       $   3,872,672
                                                                           =============       =============
    Income taxes                                                           $      50,000       $          --
                                                                           =============       =============
</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 three
          months ended December 31, 2002 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 will be 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
          years  ended  December  31,  2002 and 2001 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>
                                                      For the three months ended
                                                      --------------------------
                                                           December 30, 2001
                                                           -----------------

Net interest income                                         $3,658,370
Net income                                                     213,519
Diluted net income per share                                      0.04

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 three months ended December 31, 2002 and 2001 is as follows:

                                       9
<PAGE>

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

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

Note 5 -  Earnings Per Share (Continued)
          ------------------
<TABLE>
<CAPTION>
                                                               For the Three months Ended December 31, 2002
                                                              ----------------------------------------------
                                                                Income               Shares       Per Share
         Basic EPS                                            (Numerator)       (Denominator)       Amount
         ---------                                            -----------       -------------     ----------

         <S>                                                  <C>                <C>             <C>
         Income available to shareholders                     $   452,509        5,718,212       $       0.08

         Effect of dilutive shares                                     --           33,792                 --
                                                              -----------       ----------       ------------
         Diluted EPS
         -----------

         Income available to common stockholders
             plus assumed conversions                         $   452,509        5,752,004       $       0.08
                                                              ===========       ==========       ============
<CAPTION>
                                                               For the Three months Ended December 31, 2001
                                                              ----------------------------------------------
                                                                Income               Shares       Per Share
         Basic EPS                                            (Numerator)       (Denominator)       Amount
         ---------                                            -----------       -------------     ----------

         <S>                                                  <C>                <C>             <C>
         Income available to shareholders                     $   123,176        5,562,886       $    0.02

         Effect of dilutive shares                                     --          136,585              --
                                                              -----------       ----------       ---------
         Diluted EPS
         -----------

         Income available to common stockholders
             plus assumed conversions                         $   123,176       $5,699,471       $     .02
                                                              ===========       ==========       =========
</TABLE>
Note 6 -  Regulatory Capital
          ------------------

          The following table sets forth the Bank's capital position at December
          31, 2002.
<TABLE>
<CAPTION>
                                                                                              To Be Well
                                                                                           Capitalized Under
                                                                    For Capital            Prompt Corrective
                                           Actual                Adequacy Purposes          Action Provision
                                    ----------------------    ----------------------    ----------------------
                                    Actual           % of     Required         % of     Required       % of
                                    Amount           Assets   Amount          Assets    Amount         Assets
                                    ------           ------   --------        ------    --------       ------
                                                                   (unaudited)
<S>                              <C>                   <C>    <C>             <C>      <C>              <C>
Tangible (1)                     $ 47,245,070          8.01%  $ 8,847,783     1.50%        N/A          N/A
Tier 1 capital (2)                 47,245,070         13.95          N/A       N/A     20,323,556       6.00%
Core (1)                           47,245,070          8.01    23,594,087     4.00     29,492,608       5.00
Risk-weighted (2)                  49,587,170         14.64    27,098,519     8.00     33,873,148      10.00
<FN>
____________
(1)      To adjusted total assets.
(2)      To risk-weighted assets.
</FN>
</TABLE>
                                       10
<PAGE>

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 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 DECEMBER 31, 2002 AND SEPTEMBER 30, 2002

     During the three months  ended  December 31,  2002,  the  Company's  assets
increased by $12.4 million, or 2.1% from $587.1 million at September 30, 2002 to
$599.5  million at December 31, 2002.  Loans  receivable,  net decreased by $2.5
million,  or .6%, from $396.6 million at September 30, 2002 to $394.1 million at
December 31, 2002. The Company's  mortgage-backed  securities available for sale
increased by $3.1 million,  or 5.1%, from $60.4 million at September 30, 2002 to
$63.5  million at December 31, 2002.  The Company's  mortgage-backed  securities
held to  maturity

                                       11
<PAGE>

decreased by $4.6 million or 13.8% from $33.7  million at September  30, 2002 to
$29.1 million at December 31, 2002. The Company's investment portfolio available
for sale increased  $17.8 million or 39.6%,  from $45.1 million at September 30,
2002 to $62.9 million at December 31, 2002. The Company's  investment  portfolio
held to maturity  decreased $1.0 million from $4.5 million at September 30, 2002
to $3.5 million at December 31, 2002. The Company's  deposits increased by $11.4
million, or 2.3%, from $498.8 million at September 30, 2002 to $510.2 million at
December  31,  2002.  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.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND
2001

     Net Income. Net income increased by $329,000,  or 267.3%, from $123,000 for
the three months ended  December  31,2001 to $452,000 for the three months ended
December 31,  2002.  The increase in net income was  primarily  attributable  to
increased  interest income due to an increase in the average balance of loans of
$120.3  million,  from $271.5  million at December 31, 2001 to $391.8 million at
December 31, 2002,  of which $116.8  million was a result of the merger with WHG
Bancshares.

     Net Interest  Income.  Net  interest  income was $4.5 million for the three
months ended  December  31, 2002,  compared to $2.8 million for the three months
ended December 31, 2001, representing an increase of $1.7 million, or 58.5%. The
increase was  primarily  due to the  increase in the volume of  interest-earning
assets.

     Interest Income.  Interest income increased by $2.0 million,  or 30.3% from
$6.7 million for the three  months  ended  December 31, 2001 to $8.7 million for
the three months ended December 31, 2002.  Interest and fees on loans  increased
by $1.9 million, or 37.3%, from $5.1 million for the three months ended December
31, 2001 to $7.0 million for the three months ended December 31, 2002.  This was
primarily  due to a $120.3  million  increase  in the  average  balance of loans
receivable which more than offset a decrease in the average yield on loans of 37
basis points from 7.5% at December  31, 2001 to 7.2% at December  31, 2002.  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
$230,000 or 27.8% from $826,000 for the three months ended  December 31, 2001 to
$1.1  million for the three months ended  December 31, 2002.  This  increase was
primarily  due to  the  increase  in  the  average  balance  of  mortgage-backed
securities  from $61.7 million at December 31, 2001 to $92.8 million at December
31, 2002. Interest and dividends on investment  securities decreased by $146,000
or 21.7% from $673,000 for the three months ended  December 31, 2001 to $527,000
for the three  months  ended  December 31,  2002.  This was  primarily  due to a
decrease in the average rate received on investments  from 6.08% at December 31,
2001 to 3.76% at December 31,2002.

     Interest Expense. Interest expense, which consists of interest on deposits,
interest  on  borrowed  money and other  interest  expense  increased  from $3.8
million for the three  months  ended  December  31, 2001 to $4.2 million for the
three months ended  December 31, 2002 a change of $360,000 or 9.4%.  Interest on
deposits  increased $46,000 due to an increase in the average volume of deposits
by $163.0  million from $341.2 million at December 31, 2001 to $504.2 million at
December 31, 2002.  The average yield on deposits  decreased by 133 basis points
from 4.25% at December 31, 2001 to 2.92% at December  31, 2002.  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 $138,000 for
the three months ended December 31, 2002,  and interest on long-term  borrowings
increased by $274,000.  This  increase was  primarily due to an increase of $7.5
million in the average  balances of advances  from the Federal Home Loan Bank of
Atlanta  during the quarter  ended  December  31,  2002.  Also  contributing  to
interest  expense  was  interest  on the Trust  Preferred  Securities  which was
$178,000 for the period ending December 31, 2002.

                                       12
<PAGE>

     Average Balance Sheet. The following tables sets forth certain  information
relating to the Company's  average  balance sheet and reflects the average yield
on assets and cost of  liabilities  for the  periods  indicated  and the average
yields  earned  and rates  paid.  Such yield and costs are  derived by  dividing
income or  expense  by the  average  daily  balance  of  assets or  liabilities,
respectively,  for the period ended December 31, 2002. The period ended December
31, 2001 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>
                                                               THREE MONTHS ENDED DECEMBER 31
                                               --------------------------------------------------------------------------
                                                            2002                                     2001
                                               ---------------------------------       ----------------------------------
                                               AVERAGE                   AVERAGE       AVERAGE                     AVERAGE
                                               BALANCE      INTEREST      RATE         BALANCE       INTEREST       RATE
                                               -------      --------     -------       -------       --------      -------
                                                                           (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>              <C>       <C>           <C>              <C>
Interest-earning assets:
   Loans....................................   $ 391,822    $   7,008        7.15%     $  271,499    $  5,104         7.52%
   Mortgage-backed securities...............      92,795        1,056        4.55          61,694         826         5.36
   Dividends and investment securities......      56,096          527        3.76          44,298         673         6.08
   Other Investments........................      24,336           91        1.50           8,183          59         2.88
                                               ---------    ---------                  ----------    --------
       Total interest-earning assets........     565,049        8,682        6.15         385,674       6,662         6.91
Noninterest-earning assets..................      30,496                                   19,087
                                               ---------                               ----------
       Total assets.........................   $ 595,545                               $  404,761
                                               =========                               ==========

Interest-bearing liabilities:
   Deposits.................................   $ 504,238        3,676        2.92         341,283       3,630         4.25
   FHLB Advances............................      25,760          332        5.16          18,300         195         4.26
   Trust Preferred Securities...............      12,500          178        5.70              --          --           --
   Other liabilities........................       1,435            1        0.28           1,708           1         0.23
                                               ---------    ---------                  ----------    --------
Total interest-bearing liabilities..........     543,933        4,187        3.08         361,291       3,826         4.24
Noninterest-bearing liabilities.............       5,125    ---------      ------             814    --------        -----
                                               ---------                               ----------
       Total liabilities....................     549,058                                  362,105
Stockholders' equity .......................      46,487                                   42,656
                                               ---------                               ----------
       Total liabilities and stockholders'
            equity..........................   $ 595,545                               $  404,761
                                               =========                               ==========

Net interest income.........................                $   4,495                                $  2,836
                                                            =========                                ========
Interest rate spread........................                                 3.07%                                    2.67%
                                                                           ======                                   ======
Net interest margin.........................                                 3.18%                                    2.94%
                                                                           ======                                   ======
Ratio average interest earning assets/
    interest bearing liabilities............                               103.88%                                  106.75%
                                                                           ======                                   ======
</TABLE>


                                       13
<PAGE>

     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
$282,000 for the three months  ended  December 31, 2002,  as compared to $64,000
for the three  months  ended  December  31,  2001,  representing  an increase of
$218,000.  Loan  chargeoffs  for the three months  ended  December 31, 2002 were
$243,000 as compared to $107,000 for the three  months ended  December 31, 2001.
Loan  recoveries  were  $195,000 for the three  months  ended  December 31, 2002
compared to $72,000 for the three months ended December 31, 2001. Non performing
loans at December 31, 2002 were $759,000 as compared to $693,000 at December 31,
2001. The total loss allowance  allocated to domestic loans is $2.3 million.  In
establishing  such  provisions,  management  considered  an analysis of the risk
inherent in the loan portfolio.

     Other Income.  Other income increased by $271,000,  or 185.0% from $147,000
for the three  months  ended  December 31, 2001 to $418,000 for the three months
ended December 31, 2002. The increase in other income for the three months ended
December  31 2002 was  partially  attributable  to gains on the sale of loans of
$67,000.  There was also a gain on the sale of Mortgaged  Backed  Securities  of
$70,000  and a gain on the sale of  investments  of  $25,000.  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 $41,000.

     Non-interest  Expenses.  Total  non-interest  expenses  increased  by  $1.2
million,  or 43.7%,  from $2.7 million for the three  months ended  December 31,
2001 to $3.9 million for the three months ended  December 31, 2002. The increase
in non-interest  expenses was due to increases in salaries and related  expenses
of $762,000,  or 55.4%.  The increase in  non-interest  expenses also was due in
part to the  absence of a credit to  compensation  expense of  $125,000  for the
quarter  ended  December 31, 2001 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  December  31, 2002 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  $181,000,  or 78.4% in data
processing expenses,  from $231,000 at December 31, 2001 to $412,000 at December
31, 2002. 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 $98,000 or 33.0% from  $297,000 at  December  31, 2001 to
$395,000  at December  31,  2002.  The Company  also  experienced  increases  of
$87,000,  or 38.8% in property  plant and  equipment  expense and an increase of
$53,000, or 52.0% 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 $279,000 and $77,000 for
the three months ended December 31, 2002 and 2001,  respectively.  The Company's
effective tax rates were 38.2% and 38.6% for the three months ended December 31,
2002 and 2001, respectively.

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:

                                       14
<PAGE>
<TABLE>
<CAPTION>
                                                         December 31, 2002       September 30, 2002
                                                         -----------------       ------------------
                                                                 (dollars in thousands)

<S>                                                           <C>                     <C>
Commitments to originate new loans                            $ 8,600                 $12,900
Commitments to originate new loans held for sale                   --                      --
Unfunded commitments to extend credit under existing
    equity line and commercial lines of credit                 17,700                  20,800
Commercial letters of credit                                      350                     431
Commitments to sell loans held for sale                            --                      --
</TABLE>

     The Company  does not have any 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 December 31, 2002,  the aggregate  fair
value of these commitments exceeded the book value of the loans to be sold.

CONTRACTUAL OBLIGATIONS

As of December 31, 2002
<TABLE>
<CAPTION>
                                                  Payments due by period
                                                  ----------------------
                                                  (Dollars in thousands)
                                Less than
                                  1 year      1-3 years     4-5 years    Over 5 years       Total
                                ----------    ---------     ---------    ------------       -----
<S>                             <C>            <C>           <C>           <C>             <C>
Deposits                        $20,439        292,885       32,581            --          345,905
Long-term borrowings                 --          3,250       21,500         9,000           33,750
Lease obligations                   738          2,242        1,187         3,425            7,592
                                -------        -------       ------        ------          -------
Total contractual cash
    obligations                 $21,177        298,377       55,268        12,425          387,247
                                =======        =======       ======        ======          =======
</TABLE>

                                       15
<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  December  31,  2002,   the  Company  had   approximately   $973,000  in
non-performing  assets (nonaccrual loans and real estate owned) or .16% of total
assets. At September 30, 2002,  non-performing  assets were $1.6 million or .28%
of total assets. At December 31, and September 30, 2002,  impaired loans totaled
$671,000 and $0,  respectively,  as defined by Statement of Financial Accounting
Standards  No. 114,  "Accounting  by  Creditors  for  Impairment  of a Loan." At
December 31, 2002, $ 671,000 of impaired  loans was on  nonaccrual  status,  and
their related  reserve for losses  totaled  $73,000.  There was no impact on the
provision  as  management  had already  anticipated  the loans'  performance  in
setting the allowance for loan losses in previous periods.  The average carrying
value of impaired loans was $598,000  during the three months ended December 31,
2002. No interest income has been recorded on impaired loans in the three months
ended December 31, 2002. The Bank's net  charge-offs  for the three months ended
December 31, 2002 were  $48,000.  The Bank's  allowance for loan losses was $2.3
million at December 31, 2002 and $2.2 million at September 30, 2002. As a result
of the Company's continued shift toward commercial,  construction,  consumer and
home equity loans,  and the recent  decrease in residential  mortgage  loans, as
well as the continued  decline in the local and regional  economy,  the ratio of
the  allowance  for loan  losses to total  loans,  net of loans in  process  and
deferred loan fees  increased to .61% at December 31, 2002,  compared  to.58% at
September 30, 2002.

     The following  table  presents an analysis of the Company's  non-performing
assets:
<TABLE>
<CAPTION>
                                                              At           At
                                                          December 31,  September 30,
                                                             2002          2002
                                                          -----------   ------------
<S>                                                         <C>           <C>
Nonperforming loans:
Nonaccrual loans                                            $  759        $1,391
Loans 90 days past due and accruing                             --            --
Restructured loans                                              --            --
                                                            ------        ------
Total nonperforming loans                                      759         1,391
Other non-performing assets                                    214           229
                                                            ------        ------
Total nonperforming assets                                  $  973        $1,620
                                                            ======        ======
Nonperforming loans to loans receivable, net                   .25%          .35%
Nonperforming assets as a percentage
 of loans and other real estate owned                          .25%          .41%
Nonperforming assets to total assets                           .16%          .28%
</TABLE>

     Regulations  require  that the  Company  classify  its  assets on a regular
basis. There are three classifications for

                                       16
<PAGE>
problem assets:  substandard,  doubtful and loss. The Company  regularly reviews
its  assets  to  determine   whether  any  assets  require   classification   or
re-classification.  At  December  31,  2002,  the  Company  had $1.7  million in
classified assets,  consisting of $1.7 million in substandard and loss loans and
$0 in real estate owned.  At September 30, 2002, the Company had $2.0 million in
substandard  assets,  consisting  of $1.8 million in loans and $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 December 31, 2002,  the Company has  identified  approximately  $3.3
million in assets classified as special mention.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2002,  the Bank  exceeded all  regulatory  minimum  capital
requirements. For information comparing the Bank's tangible, core and risk-based
capital  levels  to  the  regulatory  requirements,  see  Note  5  of  Notes  to
Consolidated Financial Statements.

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

     The primary  investing  activities  of the Company are the  origination  of
loans and the purchase of investment securities and mortgage-backed  securities.
During the three months ended  December 31, 2002 and 2001, the Company had $16.5
million and $12.8 million, respectively, of loan originations.  During the three
months  ended  December  31,  2002 and 2001,  the Company  purchased  investment
securities in the amounts of $24.1million and  $17.9million,  respectively,  and
mortgage-backed  securities in the amounts of  $16.3million  and $19.9  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  December  was  approximately  21.4%,  which
exceeded the  required  level for such  period.  Management  seeks to maintain a
relatively  high level of liquidity in order to retain  flexibility  in terms of
investment  opportunities  and deposit pricing.  Because liquid assets generally
provide for lower rates of return, the Bank's relatively high liquidity will, to
a certain extent, result in lower rates of return on assets.

     The  Company's  most liquid assets are cash,  interest-bearing  deposits in
other  banks and  federal  funds  sold,  which  are  short-term,  highly  liquid
investments with original  maturities of less than three months that are readily
convertible  to known amounts of cash.  The levels of these assets are dependent
on the Company's operating,  financing and investing activities during any given
period. At December 31, 2002, cash, interest-bearing deposits in other banks and
federal  funds  sold  were  $9.8  million,   $10.9  million  and  $6.1  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 December 31, 2002 totaled $204.4 million.  Based
on past  experience,  management  believes  that a  significant  portion of such
deposits will remain with the Bank.
                                       17
<PAGE>

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 December 31, 2002,
the Company had commitments  under standby letters of credit and lines of credit
and commitments to originate  mortgage loans of $350,000,  $17.7million and $8.6
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.

     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

     Within 90 days prior to the date of this report, 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 design and operation 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 timely  alerting  them to material
information required to be included in the Company's periodic SEC reports.

     In addition,  and there have been no  significant  changes in the Company's
internal  controls or in other  factors  that could  significantly  affect those
controls subsequent to the date of their last evaluation.

                                       18
<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                  Title
        Number                   -----
        ------
        99             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

                  No Reports on Form 8-K were filed during the quarter ended
                  December 31, 2002.

                                       19
<PAGE>

                                   SIGNATURES



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

                                    BCSB BANKCORP, INC.



Date: February 11, 2003             /s/ Gary C. Loraditch
                                    --------------------------------------------
                                    Gary C. Loraditch
                                    President
                                    (Principal Executive Officer)



Date: February 11, 2003             /s/ Bonnie M. Klein
                                    --------------------------------------------
                                    Bonnie M. Klein
                                    Vice President and Treasurer
                                    (Principal Financial and Accounting Officer)

                                       20
<PAGE>

                                  CERTIFICATION


     I, Gary C. Loraditch, President of BCSB Bankcorp, Inc., certify that:

     1. I have reviewed  this  quarterly  report on Form 10-Q of BCSB  Bankcorp,
Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) Evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  Presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee of the  registrant's  board of directors  (or persons  performing  the
equivalent function):

     a) All  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 11, 2003

                                             /s/ Gary C. Loraditch
                                             -----------------------------------
                                             Gary C. Loraditch
                                             President
                                             (Principal Executive Officer)

                                       21
<PAGE>

                                  CERTIFICATION


     I, Bonnie M. Klein,  Vice President and Treasurer of BCSB  Bankcorp,  Inc.,
certify that:

     1. I have reviewed  this  quarterly  report on Form 10-Q of BCSB  Bankcorp,
Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) Evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  Presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee of the  registrant's  board of directors  (or persons  performing  the
equivalent function):

     a) All  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

     6. The registrant's other certifying  officers and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: February 11, 2003


                                            /s/ Bonnie M. Klein
                                            -----------------------------------
                                            Bonnie M. Klein
                                            Vice President and Treasurer
                                            (Principal Financial Officer)

                                       22