##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended March 31, 2005



OR



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------



For the transition period from  to



Commission File Number: 0-24589



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BCSB BANKCORP, INC.

(Exact Name of Registrant as Specified in its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|United States                                                  |  | 52-2108333                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer 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)



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



As of March 31, 2005, the issuer had 5,901,048 shares of Common Stock issued
and outstanding.



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##### Table of Contents

CONTENTS



|                                           |  |                                                                                                                       |  |   
|------------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------- |  | --
|                                           |  | PAGE                                                                                                                 
|PART I. FINANCIAL INFORMATION             
|                                           |  |                                                                                                                      
|Item 1.                                    |  | Financial Statements                                                                                                  |  |   
|                                           |  |                                                                                                                      
|                                           |  | Consolidated Statements of Financial Condition as ofMarch 31, 2005 (unaudited) and September 30, 2004                 |  | 2 
|                                           |  |                                                                                                                      
|                                           |  | Consolidated Statements of Operations for the Six and Three Months EndedMarch 31, 2005 and 2004 (unaudited)           |  | 3 
|                                           |  |                                                                                                                      
|                                           |  | Consolidated Statements of Comprehensive Income for the Six and Three Months EndedMarch 31, 2005 and 2004 (unaudited) |  | 4 
|                                           |  |                                                                                                                      
|                                           |  | Consolidated Statements of Cash Flows for the Six Months EndedMarch 31, 2005 and 2004 (unaudited)                     |  | 5 
|                                           | 
|Notes to Consolidated Financial Statements |  | 7                                                                                                                    
|                                           |  |                                                                                                                      
|Item 2.                                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 11
|                                           |  |                                                                                                                      
|Item 3.                                    |  | Quantitative and Qualitative Disclosures About Market Risk                                                            |  | 25
|                                           |  |                                                                                                                      
|Item 4.                                    |  | Controls and Procedures                                                                                               |  | 26
|                                          
|PART II.
OTHER INFORMATION                
|                                           |  |                                                                                                                      
|Item 1.                                    |  | Legal Proceedings                                                                                                     |  | 26
|                                           |  |                                                                                                                      
|Item 2.                                    |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities                                      |  | 26
|                                           |  |                                                                                                                      
|Item 3.                                    |  | Defaults Upon Senior Securities                                                                                       |  | 26
|                                           |  |                                                                                                                      
|Item 4.                                    |  | Submission of Matters to a Vote of Security Holders                                                                   |  | 26
|                                           |  |                                                                                                                      
|Item 5.                                    |  | Other Information                                                                                                     |  | 27
|                                           |  |                                                                                                                      
|Item 6.                                    |  | Exhibits                                                                                                              |  | 27
|                                          
|SIGNATURES                                



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                                                     |  | March 31,2005          |         |   | September 30,2004 |  
|                                                                                                                                                                     |  | (unaudited)            |         |   |                   |  
|                                                                                                                                                                     |  | (dollars in thousands) |        
|Assets                                                                                                                                                               |  |                        |         |   |                   |   |         |  
|Cash                                                                                                                                                                 |  | $                      | 17,067  |   |                   | $ | 14,852  |  
|Interest bearing deposits in other banks                                                                                                                             |  |                        | 1,546   |   |                   |   | 2,579   |  
|Federal funds sold                                                                                                                                                   |  |                        | 296     |   |                   |   | 384     |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Cash and Cash Equivalents                                                                                                                                            |  |                        | 18,909  |   |                   |   | 17,815  |  
|                                                                                                                                                                     |  |                       
|Interest bearing time deposits                                                                                                                                       |  |                        | 100     |   |                   |   | 100     |  
|Investment securities, available for sale                                                                                                                            |  |                        | 153,047 |   |                   |   | 158,948 |  
|Investment securities, held to maturity                                                                                                                              |  |                        | 2,497   |   |                   |   | 2,497   |  
|Loans receivable, net                                                                                                                                                |  |                        | 407,608 |   |                   |   | 386,136 |  
|Mortgage backed securities, available for sale                                                                                                                       |  |                        | 136,589 |   |                   |   | 144,260 |  
|Mortgage backed securities, held to maturity                                                                                                                         |  |                        | 29,272  |   |                   |   | 26,631  |  
|Premises and equipment, net                                                                                                                                          |  |                        | 10,563  |   |                   |   | 9,240   |  
|Federal Home Loan Bank of Atlanta stock, at cost                                                                                                                     |  |                        | 7,603   |   |                   |   | 6,105   |  
|Bank owned life insurance                                                                                                                                            |  |                        | 12,386  |   |                   |   | 11,912  |  
|Goodwill                                                                                                                                                             |  |                        | 2,294   |   |                   |   | 2,294   |  
|Accrued interest and other assets                                                                                                                                    |  |                        | 9,499   |   |                   |   | 7,680   |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Total assets                                                                                                                                                         |  | $                      | 790,367 |   |                   | $ | 773,618 |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Liabilities and Stockholders Equity                                                                                                                                 |  |                        |         |   |                   |   |         |  
|Liabilities                                                                                                                                                          |  |                        |         |   |                   |   |         |  
|Deposits:                                                                                                                                                            |  |                        |         |   |                   |   |         |  
|Non-interest bearing                                                                                                                                                 |  | $                      | 23,290  |   |                   | $ | 19,309  |  
|Interest-bearing                                                                                                                                                     |  |                        | 563,148 |   |                   |   | 561,313 |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Total Deposits                                                                                                                                                       |  |                        | 586,438 |   |                   |   | 580,622 |  
|                                                                                                                                                                     |  |                       
|Short Term Advances from the Federal Home Loan Bank of Atlanta                                                                                                       |  |                        | 55,000  |   |                   |   | 43,000  |  
|Long Term Advances from the Federal Home Loan Bank of Atlanta                                                                                                        |  |                        | 78,734  |   |                   |   | 77,920  |  
|Junior Subordinated Debentures                                                                                                                                       |  |                        | 23,197  |   |                   |   | 23,197  |  
|Other liabilities                                                                                                                                                    |  |                        | 5,428   |   |                   |   | 4,750   |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Total liabilities                                                                                                                                                    |  |                        | 748,797 |   |                   |   | 729,489 |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Commitments and contingencies                                                                                                                                        |  |                        |         |   |                   |   |         |  
|Stockholders Equity                                                                                                                                                 |  |                        |         |   |                   |   |         |  
|Common stock (par value $.01  13,500,000 authorized, 5,901,048 and 5,899,173 shares issued and outstanding At March 31, 2005 and
September 30, 2004 , respectively) |  |                        | 59      |   |                   |   | 59      |  
|Additional paid-in capital                                                                                                                                           |  |                        | 21,048  |   |                   |   | 20,969  |  
|Obligation under Rabbi Trust                                                                                                                                         |  |                        | 1,242   |   |                   |   | 1,222   |  
|Retained earnings (substantially restricted)                                                                                                                         |  |                        | 25,068  |   |                   |   | 25,407  |  
|Accumulated other comprehensive loss (net of taxes)                                                                                                                  |  |                        | (4,155  | ) |                   |   | (1,755  | )
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|                                                                                                                                                                     |  |                        | 43,262  |   |                   |   | 45,902  |  
|Employee Stock Ownership Plan                                                                                                                                        |  |                        | (502    | ) |                   |   | (593    | )
|Stock held by Rabbi Trust                                                                                                                                            |  |                        | (1,190  | ) |                   |   | (1,180  | )
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Total stockholders equity                                                                                                                                           |  |                        | 41,570  |   |                   |   | 44,129  |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  
|Total liabilities and stockholders equity                                                                                                                           |  | $                      | 790,367 |   |                   | $ | 773,618 |  
|                                                                                                                                                                     |  |                        |         |   |                   |   |         |  



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



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|------------------------------------------------------------------- |  | -------------------------------------------- | ------ | ----------------------------------- | ---- | - | ------ |  | - | ----- | - |  | - | -----
|                                                                    |  | For the Six Months EndedMarch 31,            |        | For the Three MonthsEnded March 31,
|                                                                    |  | 2005                                         |        |                                     | 2004 |   | 2005   |  |   | 2004 
|                                                                    |  | (Dollars in thousands except per share data)
|Interest Income                                                     |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Interest and fees on loans                                          |  | $                                            | 11,539 |                                     |      | $ | 11,064 |  | $ | 5,882 |   |  | $ | 5,412
|Interest on mortgage backed securities                              |  |                                              | 3,239  |                                     |      |   | 2,471  |  |   | 1,602 |   |  |   | 1,270
|Interest and dividends on investment securities                     |  |                                              | 2,737  |                                     |      |   | 1,871  |  |   | 1,427 |   |  |   | 928  
|Other interest income                                               |  |                                              | 36     |                                     |      |   | 64     |  |   | 7     |   |  |   | 50   
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Total interest income                                               |  |                                              | 17,551 |                                     |      |   | 15,470 |  |   | 8,918 |   |  |   | 7,660
|                                                                    |  |                                              |        |                                    
|Interest Expense                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Interest on deposits                                                |  |                                              | 7,065  |                                     |      |   | 6,699  |  |   | 3,537 |   |  |   | 3,328
|Interest on borrowings  short term                                 |  |                                              | 530    |                                     |      |   | 73     |  |   | 288   |   |  |   | 29   
|Interest on borrowings  long term                                  |  |                                              | 1,193  |                                     |      |   | 554    |  |   | 660   |   |  |   | 294  
|Other interest expense - debentures                                 |  |                                              | 672    |                                     |      |   | 530    |  |   | 351   |   |  |   | 261  
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Total interest expense                                              |  |                                              | 9,460  |                                     |      |   | 7,856  |  |   | 4,836 |   |  |   | 3,912
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Net interest income                                                 |  |                                              | 8,091  |                                     |      |   | 7,614  |  |   | 4,082 |   |  |   | 3,748
|Provision for losses on loans                                       |  |                                              | 120    |                                     |      |   | 267    |  |   | 0     |   |  |   | 86   
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Net interest income after provision for losses on loans             |  |                                              | 7,971  |                                     |      |   | 7,347  |  |   | 4,082 |   |  |   | 3,662
|                                                                    |  |                                              |        |                                    
|Other Income                                                        |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|(Loss) Gain on repossessed assets                                   |  |                                              | (248   | )                                   |      |   | 79     |  |   | (113  | ) |  |   | 2    
|Mortgage Banking Operations                                         |  |                                              | 5      |                                     |      |   | 42     |  |   | 2     |   |  |   | 17   
|Fees on transaction accounts                                        |  |                                              | 334    |                                     |      |   | 396    |  |   | 146   |   |  |   | 185  
|(Loss) Gain from sale of investments and mortgage backed securities |  |                                              | (11    | )                                   |      |   | 15     |  |   |      |   |  |   | 21   
|Income from bank owned life insurance                               |  |                                              | 221    |                                     |      |   | 243    |  |   | 108   |   |  |   | 121  
|Miscellaneous income                                                |  |                                              | 212    |                                     |      |   | 199    |  |   | 72    |   |  |   | 102  
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Other income, net                                                   |  |                                              | 513    |                                     |      |   | 974    |  |   | 215   |   |  |   | 448  
|                                                                    |  |                                              |        |                                    
|Non-Interest Expenses                                               |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Salaries and related expense                                        |  |                                              | 4,673  |                                     |      |   | 4,296  |  |   | 2,347 |   |  |   | 2,120
|Occupancy expense                                                   |  |                                              | 862    |                                     |      |   | 967    |  |   | 462   |   |  |   | 480  
|Data processing expense                                             |  |                                              | 1,060  |                                     |      |   | 757    |  |   | 524   |   |  |   | 370  
|Property and equipment expense                                      |  |                                              | 588    |                                     |      |   | 600    |  |   | 279   |   |  |   | 299  
|Advertising                                                         |  |                                              | 263    |                                     |      |   | 481    |  |   | 105   |   |  |   | 239  
|Telephone, postage and office supplies                              |  |                                              | 313    |                                     |      |   | 300    |  |   | 173   |   |  |   | 154  
|Other expenses                                                      |  |                                              | 563    |                                     |      |   | 456    |  |   | 318   |   |  |   | 264  
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Total non-interest expenses                                         |  |                                              | 8,322  |                                     |      |   | 7,857  |  |   | 4,208 |   |  |   | 3,926
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Income before tax (benefit) / provision                             |  |                                              | 162    |                                     |      |   | 464    |  |   | 89    |   |  |   | 184  
|Income tax (benefit) / provision                                    |  |                                              | (20    | )                                   |      |   | 76     |  |   | (7    | ) |  |   | 23   
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Net income                                                          |  | $                                            | 182    |                                     |      | $ | 388    |  | $ | 96    |   |  | $ | 161  
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Net Income Per Share of Common Stock                                |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Basic and diluted earnings per share                                |  | $                                            | .03    |                                     |      | $ | .07    |  | $ | .02   |   |  | $ | .03  
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      
|Dividends per share                                                 |  | $                                            | .25    |                                     |      | $ | .25    |  | $ | .125  |   |  | $ | .125 
|                                                                    |  |                                              |        |                                     |      |   |        |  |   |       |   |  |   |      





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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)



|                                                             |  |                                   |        |   |      |   |       |  
|------------------------------------------------------------ |  | --------------------------------- | ------ | - | ---- | - | ----- | -
|                                                             |  | For the Six Months EndedMarch 31, |       
|                                                             |  | 2005                              |        |   | 2004 |  
|                                                             |  | ( in thousands)                   |       
|Net Income                                                   |  | $                                 | 182    |   |      | $ | 388   |  
|Other comprehensive income, net of tax:                      |  |                                   |        |   |      |   |       |  
|Unrealized net holdings losses on                            |  |                                   |        |   |      |   |       |  
|Available-for-sale portfolios, net of tax $(1,509), and $566 |  |                                   | (2,407 | ) |      |   | 900   |  
|Reclassification adjustment for (gains) losses               |  |                                   |        |   |      |   |       |  
|Included in net income, net of tax $4, and $(6)              |  |                                   | 7      |   |      |   | (9    | )
|                                                             |  |                                   |        |   |      |   |       |  
|Comprehensive Income (loss)                                  |  | $                                 | (2,218 | ) |      | $ | 1,279 |  
|                                                             |  |                                   |        |   |      |   |       |  



|                                                             |  |                                     |        |   |      |   |       |  
|------------------------------------------------------------ |  | ----------------------------------- | ------ | - | ---- | - | ----- | -
|                                                             |  | For the Three Months EndedMarch 31, |       
|                                                             |  | 2005                                |        |   | 2004 |  
|                                                             |  | ( in thousands)                     |       
|Net Income                                                   |  | $                                   | 96     |   |      | $ | 161   |  
|Other comprehensive income, net of tax:                      |  |                                     |        |   |      |   |       |  
|Unrealized net holdings losses on                            |  |                                     |        |   |      |   |       |  
|Available-for-sale portfolios, net of tax $(1,312), and $960 |  |                                     | (2,090 | ) |      |   | 1,529 |  
|Reclassification adjustment for (gains) losses               |  |                                     |        |   |      |   |       |  
|Included in net income, net of tax $0, and $(8)              |  |                                     | 0      |   |      |   | (13   | )
|                                                             |  |                                     |        |   |      |   |       |  
|Comprehensive Income (loss)                                  |  | $                                   | (1,996 | ) |      | $ | 1,677 |  
|                                                             |  |                                     |        |   |      |   |       |  



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



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                                       |  |                               |         |   |      |   |         |  
|---------------------------------------------------------------------- |  | ----------------------------- | ------- | - | ---- | - | ------- | -
|                                                                       |  | For Six Months EndedMarch 31, |        
|                                                                       |  | 2005                          |         |   | 2004 |  
|                                                                       |  | (dollars in thousands)        |        
|Operating Activities                                                   |  |                               |         |   |      |   |         |  
|Net income                                                             |  | $                             | 182     |   |      | $ | 388     |  
|Adjustments to Reconcile Net Income to                                 |  |                               |         |   |      |   |         |  
|Net Cash Provided by Operating Activities                              |  |                               |         |   |      |   |         |  
|Loss (Gain) on sale of investments and mortgage backed securities      |  |                               | 11      |   |      |   | (15     | )
|Loans originated for sale                                              |  |                               |        |   |      |   | (3,202  | )
|Loans sold                                                             |  |                               |        |   |      |   | 3,491   |  
|Gain on sale of loans                                                  |  |                               |        |   |      |   | (42     | )
|Amortization of deferred loan fees and cost, net                       |  |                               | (57     | ) |      |   | (132    | )
|Provision for losses on loans                                          |  |                               | 120     |   |      |   | 267     |  
|Non-cash compensation under Stock-based Benefit Plan                   |  |                               | 153     |   |      |   | 170     |  
|Amortization of purchase premiums and discounts, net                   |  |                               | 220     |   |      |   | 126     |  
|Provision for depreciation                                             |  |                               | 426     |   |      |   | 470     |  
|Loss (gain) on sale of repossessed assets                              |  |                               | 248     |   |      |   | (79     | )
|Increase in cash surrender value of bank owned life insurance          |  |                               | (221    | ) |      |   | (242    | )
|(Increase) Decrease increase in accrued interest and other assets      |  |                               | (347    | ) |      |   | 80      |  
|(Decrease) Increase in other liabilities                               |  |                               | (451    | ) |      |   | 844     |  
|Decrease in obligation under Rabbi-Trust                               |  |                               | 19      |   |      |   | 12      |  
|                                                                       |  |                               |         |   |      |   |         |  
|Net cash provided by operating activities                              |  |                               | 303     |   |      |   | 2,136   |  
|                                                                       |  |                              
|Cash Flows from Investing Activities                                   |  |                               |         |   |      |   |         |  
|Purchase of bank owned life insurance                                  |  |                               | (253    | ) |      |   | (11,425 | )
|Purchase of investment securities  available for sale                 |  |                               | (10,723 | ) |      |   | (63,875 | )
|Proceeds from maturities of investment securities  available for sale |  |                               | 1,500   |   |      |   | 19,130  |  
|Proceeds from sale of investment securities  available for sale       |  |                               | 12,653  |   |      |   | 10,461  |  
|Purchases of investment securities  held to maturity                  |  |                               |        |   |      |   | (2,498  | )
|Proceeds from maturities of investment securities  held to maturity   |  |                               |        |   |      |   | 1,500   |  
|Net increase (decrease) in loans                                       |  |                               | (22,121 | ) |      |   | 4,673   |  
|Purchase of mortgage backed securities  available for sale            |  |                               | (10,484 | ) |      |   | (37,263 | )
|Principal collected on mortgage backed securities                      |  |                               | 17,737  |   |      |   | 13,197  |  
|Proceeds from sale of mortgage backed securities- available for sale   |  |                               | 1,446   |   |      |   | 1,447   |  
|Purchase of mortgage backed securities  held to maturity              |  |                               | (5,271  | ) |      |   | (4,254  | )
|Proceeds from sales of repossessed assets                              |  |                               | 181     |   |      |   | 79      |  
|Investment in premises and equipment                                   |  |                               | (1,749  | ) |      |   | (298    | )
|Purchase of Federal Home Loan Bank of Atlanta Stock, net               |  |                               | (1,498  | ) |      |   | (112    | )
|Decrease in accounts payable Trade Date Securities                     |  |                               |        |   |      |   | 16,939  |  
|                                                                       |  |                               |         |   |      |   |         |  
|Net cash used by investing activities                                  |  |                               | (18,582 | ) |      |   | (52,299 | )





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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                              |  |                               |          |   |      |   |         |  
|------------------------------------------------------------- |  | ----------------------------- | -------- | - | ---- | - | ------- | -
|                                                              |  | For Six Months EndedMarch 31, |         
|                                                              |  | 2005                          |          |   | 2004 |  
|                                                              |  | (dollars in thousands)        |         
|Cash Flows from Financing Activities                          |  |                               |          |   |      |   |         |  
|Net increase in deposits                                      |  | $                             | 5,856    |   |      | $ | 25,867  |  
|Net increase in advances by borrowers for taxes and insurance |  |                               | 1,129    |   |      |   | 905     |  
|Proceeds from Federal Home Loan Bank of Atlanta advances      |  |                               | 150,750  |   |      |   | 46,350  |  
|Repayment of Federal Home Loan Bank of Atlanta advances       |  |                               | (137,850 | ) |      |   | (29,800 | )
|Acquisition of stock for Rabbi Trust                          |  |                               | (10      | ) |      |   |        |  
|Exercised Stock Options                                       |  |                               | 18       |   |      |   | 113     |  
|Increase in dividends payable                                 |  |                               |         |   |      |   | 2       |  
|Dividends on stock                                            |  |                               | (520     | ) |      |   | (518    | )
|                                                              |  |                               |          |   |      |   |         |  
|Net cash provided by financing activities                     |  |                               | 19,373   |   |      |   | 42,919  |  
|                                                              |  |                               |          |   |      |   |         |  
|Increase (Decrease) in cash equivalents                       |  |                               | 1,094    |   |      |   | (7,244  | )
|Cash and cash equivalents at beginning of period              |  |                               | 17,815   |   |      |   | 23,208  |  
|                                                              |  |                               |          |   |      |   |         |  
|Cash and cash equivalents at end of period                    |  | $                             | 18,909   |   |      | $ | 15,964  |  
|                                                              |  |                               |          |   |      |   |         |  
|Supplemental Disclosures of Cash Flows Information:           |  |                               |          |   |      |   |         |  
|Cash paid during the period for:                              |  |                               |          |   |      |   |         |  
|                                                              |  |                              
|Interest                                                      |  | $                             | 9,414    |   |      | $ | 7,842   |  
|                                                              |  |                               |          |   |      |   |         |  
|Income taxes                                                  |  | $                             | 110      |   |      | $ | 162     |  
|                                                              |  |                               |          |   |      |   |         |  



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



6



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



Note 1 - Principles of Consolidation



BCSB Bankcorp, Inc. (the Company) owns 100% of 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. All intercompany transactions have been eliminated in the consolidated financial statements. Ebenezer Road, Inc.
sells insurance products. Its operations are not material to the consolidated financial statements.



The Company owns 100% of the common stock of BCSB Capital Trust I and BCSB Capital Trust II and in accordance with FASB Interpretation Number
46 these entities have not been consolidated in the accompanying consolidated financial statements.



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 six months ended March 31, 2005 are not necessarily indicative of the results of operations that may be expected for the year ending September 30, 2005. 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-K for the year ended September 30, 2004.



The preparation of the financial statements in conformity with accounting principles generally accepted in the United Sates
of America requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near-term related to the determination of the allowance for loan
losses (the Allowance), other-than-temporary impairment of investment securities and deferred tax assets.



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.



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



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



Basic per share amounts are based on the weighted average shares of common stock outstanding. Diluted earnings per share assume the conversion, exercise
or issuance of all potential common stock instruments such as options, 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 six and three months ended March 31, 2005 and 2004 is as follows:



|                                                          |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|--------------------------------------------------------- |  | -------------------------------------------- | --- | ------ | ----- | --------- | - | ------ |  | ------ | --- | --------- | ----- |  | - | ---
|                                                          |  | For the Six Months Ended March 31,          
|                                                          |  | 2005                                         |     | 2004  
|                                                          |  | (dollars in thousands except per share data)
|                                                          |  | Income                                       |     | Shares |       | Per Share |   | Income |  | Shares |     | Per Share
|Basic EPS                                                 |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Income available to share holders                         |  | $                                            | 182 |        | 5,921 |           | $ | .03    |  | $      | 388 |           | 5,783 |  | $ | .07
|Diluted EPS                                               |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Effect of dilutive shares                                 |  |                                              |     |        | 48    |           |   |        |  |        |    |           | 54    |  |   |   
|                                                          |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Income available to shareholders plus assumed conversions |  | $                                            | 182 |        | 5,969 |           | $ | .03    |  | $      | 388 |           | 5,837 |  | $ | .07
|                                                          |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|                                                          | 
|                                                          |  | For the Three Months March 31,              
|                                                          |  | 2005                                         |     | 2004  
|                                                          |  | (dollars in thousands except per share data)
|                                                          |  | Income                                       |     | Shares |       | Per Share |   | Income |  | Shares |     | Per Share
|Basic EPS                                                 |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Income available to share holders                         |  | $                                            | 96  |        | 5,815 |           | $ | .02    |  | $      | 161 |           | 5,787 |  | $ | .03
|Diluted EPS                                               |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Effect of dilutive shares                                 |  |                                              |    |        | 48    |           |   |       |  |        |    |           | 61    |  |   |   
|                                                          |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    
|Income available to shareholders plus assumed conversions |  | $                                            | 96  |        | 5,863 |           | $ | .02    |  | $      | 161 |           | 5,848 |  | $ | .03
|                                                          |  |                                              |     |        |       |           |   |        |  |        |     |           |       |  |   |    



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##### Table of Contents

BCSB BANKCORP, INC. AND SUBSIDIARIES

Baltimore, Maryland



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



Note 5 - Regulatory Capital



The following table sets forth the Banks capital position at March 31, 2005.



|                   |  |                                   |        |            |                              |   |                |                                                               |            |  |      |                |  |            |        |  |       |  
|------------------ |  | --------------------------------- | ------ | ---------- | ---------------------------- | - | -------------- | ------------------------------------------------------------- | ---------- |  | ---- | -------------- |  | ---------- | ------ |  | ----- | -
|                   |  | Actual                            |        |            | For Capital AdequacyPurposes |   |                | To Be WellCapitalized UnderPrompt CorrectiveAction Provisions |           
|                   |  | ActualAmount                      |        | % ofAssets |                              |   | RequiredAmount |                                                               | % ofAssets |  |      | RequiredAmount |  | % ofAssets |       
|                   |  | (Unaudited)(dollars in thousands) |       
|Tangible (1)       |  | $                                 | 54,332 |            | 6.99                         | % |                | $                                                             | 11,663     |  | 1.50 | %              |  | $          | N/A    |  | N/A   | %
|Tier I capital (2) |  |                                   | 54,332 |            | 13.50                        |   |                |                                                               | N/A        |  | N/A  |                |  |            | 24,150 |  | 6.00  |  
|Core (1)           |  |                                   | 54,332 |            | 6.99                         |   |                |                                                               | 31,100     |  | 4.00 |                |  |            | 38,875 |  | 5.00  |  
|Risk-weighted (2)  |  |                                   | 56,509 |            | 14.04                        |   |                |                                                               | 32,199     |  | 8.00 |                |  |            | 40,249 |  | 10.00 |  

---

|(1) | To adjust total assets
|--- | ----------------------

|(2) | To risk-weighted assets
|--- | -----------------------



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##### Table of Contents

Note 6 - Stock Option Plan



Stock-Based Employee Compensation- At March 31, 2005 and 2004 the Company has four stock-based employee compensation plans,
which are described more fully in the 2004 Annual Report. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No
compensation cost is reflected in income for the granted options as all granted options had an exercise price equal to the market value of the underlying common stock on the date of grant. Compensation cost is recorded for the value of shares of
common stock granted to certain employees and directors under the Banks Management Recognition Plan. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition
provisions of FASB Statement No. 123,Accounting for Stock-Based Compensation, to stock-based employee compensation.



|                                                                                                             |  |                                             |      |   |      |   |      |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------- | ---- | - | ---- | - | ---- | -
|                                                                                                             |  | For the Six Months Ended March 31,          |     
|                                                                                                             |  | 2005                                        |      |   | 2004 |  
|                                                                                                             |  | (dollars in thousandsexcept per share data) |     
|Net Income, as reported                                                                                      |  | $                                           | 182  |   |      | $ | 388  |  
|Add: Stock-based Compensation Included in the determination of net income as reported, net of tax            |  |                                             | 137  |   |      |   | 140  |  
|Deduct: Total stock-based compensation Expense determined under fair value method for all awards, net of tax |  |                                             | (153 | ) |      |   | (167 | )
|                                                                                                             |  |                                             |      |   |      |   |      |  
|Pro forma net income                                                                                         |  | $                                           | 166  |   |      | $ | 361  |  
|                                                                                                             |  |                                             |      |   |      |   |      |  
|Earnings per share:                                                                                          |  |                                             |      |   |      |   |      |  
|Basic-as reported                                                                                            |  | $                                           | .03  |   |      | $ | .07  |  
|                                                                                                             |  |                                             |      |   |      |   |      |  
|Basic-pro forma                                                                                              |  | $                                           | .03  |   |      | $ | .06  |  
|                                                                                                             |  |                                             |      |   |      |   |      |  
|Diluted-as reported                                                                                          |  | $                                           | .03  |   |      | $ | .07  |  
|                                                                                                             |  |                                             |      |   |      |   |      |  
|Diluted-pro forma                                                                                            |  | $                                           | .03  |   |      | $ | .06  |  
|                                                                                                             |  |                                             |      |   |      |   |      |  



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Note 7 - Recent Accounting Pronouncements



In November 2004, the Emerging Issues Task Force (EITF) of the FASB issued EITF Abstract 03-01, The
Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments (EITF) 03-1) effective for fiscal years ending after March 15, 2004. This abstract provides guidelines on the meaning of
other-than-temporary impairment and its application to investments. Declines in fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized
losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the
intent and ability of the Company to retain its investment in the issue for a period of time sufficient to allow for any anticipated recovery in fair value.



In December 2004, the Financial Accounting Standards Board issued Statement No. 123(R) (SFAS 123(R)), Share-Based Payment. This
statement replaces Statement of Financial Accounting Standards No. 123(SFAS 123), Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123(R)
will require compensation costs related to share-based payment transactions to be recognized in the financial statements (with limited exceptions). The amount of compensation cost will be measured based on the grant-date fair value of the equity or
liability instruments issued. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. This statement is effective for the Company beginning the first interim or annual reporting period that
begins after October 1, 2005.



Note 8- Guarantees



The Company does not issue any guarantees that would require liability
recognition or disclosure, other than its standby letters of credit. Standby letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Generally, all letters of credit,
when issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as those that are involved in extending loans facilities to customers. The Company, generally holds collateral and/or
personal guarantees supporting these commitments. The Company has $680,000 of standby letters of credit as of March 31, 2005. Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would
be sufficient to cover the potential amount of future payment required under the corresponding guarantees. The current amount of the liability as of March 31, 2005 for guarantees under standby letters of credit issued is not considered to be
material.



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



General



BCSB Bankcorp is a growing company headquartered in Baltimore, Maryland. The Company provides general consumer and commercial banking services in the greater Baltimore Metropolitan area. The Company opened two
new branches this quarter, one in the Honeygo area of Baltimore, Maryland and another in Sparks, Maryland. The Company has also signed a contract to open a branch in the Owings Mills area. The anticipated opening is the second half of calendar 2005.



The Companys net income is dependent primarily on its
net interest income, which is the difference between interest income earned on its interest earning assets 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.



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##### Table of Contents

Critical Accounting Policies



Managements discussion and analysis of the Companys financial condition is based on the consolidated financial
statements, which are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of such financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to the allowance for loan losses.



Management believes the allowance for loan losses is a critical accounting
policy that requires the most significant estimates and assumptions used in the preparation of the consolidated financial statements. The allowance for loan losses is based on managements evaluation of the level of the allowance required in
relation to the estimated loss exposure in the loan portfolio. Management believes the allowance for loan losses is a significant estimated loss and therefore regularly evaluates it for adequacy by taking into consideration factors such as prior
loan loss experience, the character and size of the loan portfolio, business and economic conditions and managements estimation of losses. The use of different estimates or assumptions could produce different provisions for loan losses.



The Company adopted the disclosure only provisions of FASB
Statement No. 123, see note 6 to the consolidated financial statements. The Company does not expect to expense the fair market value of stock options until required for reporting periods beginning after September 30, 2005.



Forward-Looking Statements



When used in this Annual Report, 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, competition and information provided by third-party vendors 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.



Comparison of Financial Condition at March 31, 2005 and September 30, 2004



During the six months ended March 31, 2005, the Companys assets
increased by $16.8 million, or 2.2% from $773.6 million at September 30, 2004 to $790.4 million at March 31, 2005. The Companys interest bearing deposits in other banks decreased $1.1 million, or 40.0% from $2.6 million at September 30, 2004
to $1.5 million at March 31, 2005. The Companys investment portfolio available for sale decreased $5.9 million or 3.7%, from $158.9 million at September 30, 2004 to $153.0 million at March 31, 2005. The Companys investment portfolio held
to maturity remained stable at $2.5 million at September 30, 2004 and March 31, 2005. Net loans receivable, increased $21.5 million, or 5.6%, from $386.1 million at September 30, 2004 to $407.6 million at March 31, 2005. The Companys
mortgage-backed securities available for sale decreased by $7.7 million, or 5.3%, from $144.3 million at September 30, 2004 to $136.6 million at March 31, 2005. The Companys mortgage-backed securities held to maturity increased $2.7 million,
or



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##### Table of Contents

10.2% from $26.6 million at September 30, 2004 to $29.3 million at March 31, 2005. The cash surrender value on the Bank Owned Life Insurance increased
$474,000, or 4.0% from $11.9 million at September 30, 2004 to $12.4 million at March 31, 2005. All of the preceding was accomplished in an effort to reduce interest rate risk in the balance sheet. In anticipating a rising rate environment the
Company is attempting to restructure the balance sheet to reduce exposure to long term assets which would not re-price quickly when interest rates rise. In addition the Company is increasing long term funding in anticipation of rising interest
rates.



Deposits increased by $5.8 million, or 1.0%, from
$580.6 million at September 30, 2004 to $586.4 million at March 31, 2005. The increase in deposits was achieved through normal marketing efforts. The growth in deposits helped to fund loan demand. The Company uses both short-term and long-term
borrowings to fund growth of earnings assets in excess of deposit growth. Short-term advances from the Federal Home Loan Bank of Atlanta increased by $12.0 million, or 27.9% from $43.0 million at September 30, 2004 to $55.0 million at March 31,
2005. Long-term advances from the Federal Home Loan Bank of Atlanta increased by $814,000, or 1.0% from $77.9 million at September 30, 2004 to $78.7 million at March 31, 2005.



Stockholders equity decreased by $2.5 million, or 5.7% from $44.1 million at September 30, 2004 to $41.6 million at
March 31, 2005, which was primarily attributable to the increase in accumulated other comprehensive loss of $2.4 million from, a negative $1.8 million at September 30, 2004 to a negative $4.2 million at March 31, 2005. These unrealized losses are
considered temporary as they reflect market values on March 31, 2005 and are subject to change daily as interest rates fluctuate. This decrease is due to the effect rising interest rates have on the available for sale securities recorded at fair
value. This decline in value has no impact on the Banks regulatory capital.



Comparison of Operating Results for the Six Months Ended March 31, 2005 and 2004



Net Income. Net income decreased by $206,000, or 53.1%, from $388,000 for the six months ended March 31, 2004 to $182,000 for the six months ended
March 31, 2005. The decrease in net income was primarily attributable to an increase in non-interest expenses of $465,000 and a decrease in other income of $461,000. This was partially offset by an increase in net interest income, and decreases in
the provision for loan losses and income taxes.



Net
Interest Income. Net interest income was $8.1 million for the six months ended March 31, 2005, compared to $7.6 million for the six months ended March 31, 2004, representing an increase of $500,000, or 6.6%. The increase was primarily due to the
increase in the average balance of interest-earning assets. The average balance of interest-earning assets increased $116.4 million, or 19.1% from $610.7 million for the six months ended March 31, 2004 to $727.1 million at March 31, 2005. The
increase in the average balance of interest earning-assets more than offset the decrease in the average rate on interest-earning assets of 24 basis points from, 5.07% for the six months ended March 31, 2004 to 4.83% for the six months ended March
31, 2005. Despite recent increases in interest rates, higher yielding assets within the portfolio continue to re-price faster and are being replaced with lower yielding assets which resulted in a decrease in the interest rate spread of 21 basis
points from, 2.52% for the six months ended March 31, 2004 to 2.31% for the six months ended March 31, 2005. The Company has elected to sacrifice some interest rate spread in the short term in order to reduce interest rate risk and to position it
self to respond to changes in market rates. The Companys ratio of average interest-earning assets to average interest-bearing liabilities increased from 98.82% for the six months ended March 31, 2004 to 100.51% for the six months ended March
31, 2005. The Companys spread has decreased because the cost of liabilities has increased, whereas the interest rates for assets have not changed as much due to their longer term nature. In an effort to avoid long term fixed assets, the
Companys investment strategy is to emphasis short-term loans and adjustable, callable or step-up mortgage backed and investment securities.



Interest Income. Interest income increased by $2.1 million, or 13.5% from $15.5 million for the six months ended March 31, 2004 to $17.6 million
for the six months ended March 31, 2005. Interest and fees on loans increased by $475,000, or 4.3% from $11.1 million for the six months ended March 31, 2004 to $11.5 million for the six months ended March 31, 2005. This was primarily due to an
increase in the average balance of loans receivable of $34.0 million, or 9.5% from $358.9 million at March 31, 2004 to $392.9 million at March 31, 2005. The increase in the average balance of loans offset the decrease in the average yield on loans
of 30 basis points from 6.17% for the six months ended March 31, 2004 to 5.87% for the six months ended March 31, 2005. The decrease in the average yield was attributed to the prevailing market rates in the economy. Interest on mortgage-backed
securities increased by $768,000 or 31.0% from $2.5 million for the six months ended March 31, 2004 to $3.2 million for the six months ended March 31, 2005. This



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##### Table of Contents

increase was primarily due to the increase in the average balance of mortgage-backed securities from $121.4 million at March 31, 2004 to $168.7 million at
March 31, 2005. Interest and dividends on investment securities increased by $866,000 or 46.3% from $1.9 million for the six months ended March 31, 2004 to $2.7 million for the six months ended March 31, 2005. This was primarily due to an increase
in the average balance of investments of $42.1 million from, $120.0 million at March 31, 2004 to $162.1 million at March 31, 2005, and an increase in the average yield of 26 basis points from, 3.12 % for the six months ended March 31, 2004 to 3.38%
for the six months ended March 31, 2005.



Interest
Expense. Interest expense, which consists of interest on deposits, interest on borrowed money and other interest expense increased from $7.9 million for the six months ended March 31, 2004 to $9.5 million for the six months ended March 31, 2005
an increase of $1.6 million or 20.3%. Interest on deposits increased $366,000 due to an increase in the average volume of deposits of $25.0 million, or 4.5% from $560.4 million at March 31, 2004 to $585.4 million at March 31, 2005. The average yield
on deposits increased 2 basis points from 2.39% at March 31, 2004 to 2.41% at March 31, 2005. The Company was able to increase its deposits through normal marketing efforts. Interest on short-term borrowings increased by $457,000 for the six months
ended March 31, 2005, and interest on long-term borrowings increased by $639,000 for the six months ended March 31, 2005. This increase was primarily due to an increase of $31.5 million in the average balance of short term advances from the Federal
Home Loan Bank of Atlanta, from $15.9 million at March 31, 2004 to $47.4 million at March 31, 2005. The average balance of long-term advances (advances with maturities greater than one year) from the FHLB of Atlanta also increased by $47.9 million
from, $18.0 million at March 31, 2004 to $65.9 million at March 31, 2005. The Company has $55.0 million in short term advances and $78.7 million in long term advances with the Federal Home Loan Bank of Atlanta. Proceeds of these advances were used
to fund loans and purchase mortgage backed securities and investments that conform to the Banks strategy. Mitigation of interest rate risk and the ability to have funds available for re-pricing in a rising rate environment are important
elements of the Banks investment strategy. Also contributing to interest expense was interest on the Junior Subordinated Debentures which was $672,000 for the six month period ending March 31, 2005, compared to $530,000 for the six month
period ending March 31, 2004.



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##### Table of Contents

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 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 six month periods ended March 31, 2005 and 2004. 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.



|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|------------------------------------------------------------------ |  | ---------------------------------- | ------- | -------- | ---- | ----------- |  | ------ | -------------- |  | -------- | ------- | ----------- | - | ------ |  | ----- | -
|                                                                   |  | For the Six Months Ended March 31, |        
|                                                                   |  | 2005                               |         |          | 2004 |            
|                                                                   |  | AverageBalance                     |         | Interest |      | AverageRate |  |        | AverageBalance |  | Interest |         | AverageRate |  
|                                                                   |  | (Dollars in thousands)             |        
|Interest-earning assets:                                           |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Loans receivable, net                                              |  | $                                  | 392,856 |          | $    | 11,539      |  | 5.87   | %              |  | $        | 358,834 |             | $ | 11,064 |  | 6.17  | %
|Mortgage-backed securities                                         |  |                                    | 168,667 |          |      | 3,239       |  | 3.84   |                |  |          | 121,436 |             |   | 2,471  |  | 4.07  |  
|Investment securities                                              |  |                                    | 162,139 |          |      | 2,737       |  | 3.38   |                |  |          | 119,998 |             |   | 1,871  |  | 3.12  |  
|Other interest earning assets                                      |  |                                    | 3,446   |          |      | 36          |  | 2.09   |                |  |          | 10,479  |             |   | 64     |  | 1.22  |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Total Interest-earning assets                                      |  |                                    | 727,108 |          |      | 17,551      |  | 4.83   |                |  |          | 610,747 |             |   | 15,470 |  | 5.07  |  
|Bank Owned Life Insurance                                          |  |                                    | 12,350  |          |      |             |  |        |                |  |          | 11,635  |             |   |        |  |       |  
|Noninterest-earning assets                                         |  |                                    | 38,135  |          |      |             |  |        |                |  |          | 50,160  |             |   |        |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Total assets                                                       |  | $                                  | 777,593 |          |      |             |  |        |                |  | $        | 672,542 |             |   |        |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Interest-bearing liabilities:                                      |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Deposits                                                           |  | $                                  | 585,407 |          | $    | 7,065       |  | 2.41   | %              |  | $        | 560,402 |             | $ | 6,699  |  | 2.39  | %
|Short-term FHLB Advances                                           |  |                                    | 47,436  |          |      | 530         |  | 2.23   |                |  |          | 15,929  |             |   | 73     |  | .92   |  
|Long-term FHLB Advances                                            |  |                                    | 65,946  |          |      | 1,193       |  | 3.62   |                |  |          | 18,000  |             |   | 554    |  | 6.16  |  
|Junior Subordinated Debentures                                     |  |                                    | 23,197  |          |      | 671         |  | 5.79   |                |  |          | 23,197  |             |   | 529    |  | 4.70  |  
|Other liabilities                                                  |  |                                    | 1,468   |          |      | 1           |  | .14    |                |  |          | 501     |             |   | 1      |  | .17   |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Total interest-bearing liabilities                                 |  |                                    | 723,454 |          |      | 9,460       |  | 2.62   |                |  |          | 618,029 |             |   | 7,856  |  | 2.54  |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Noninterest-bearing liabilities                                    |  |                                    | 10,757  |          |      |             |  |        |                |  |          | 9,769   |             |   |        |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Total liabilities                                                  |  |                                    | 734,211 |          |      |             |  |        |                |  |          | 627,798 |             |   |        |  |       |  
|Stockholders Equity                                               |  |                                    | 43,382  |          |      |             |  |        |                |  |          | 44,744  |             |   |        |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Total liabilities and stockholders equity                         |  | $                                  | 777,593 |          |      |             |  |        |                |  | $        | 672,542 |             |   |        |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Net interest income                                                |  |                                    |         |          | $    | 8,091       |  |        |                |  |          |         |             | $ | 7,614  |  |       |  
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Interest rate spread                                               |  |                                    |         |          |      |             |  | 2.21   | %              |  |          |         |             |   |        |  | 2.52  | %
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Net interest margin                                                |  |                                    |         |          |      |             |  | 2.23   | %              |  |          |         |             |   |        |  | 2.49  | %
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  
|Ratio average interest earning assets/interest bearing liabilities |  |                                    |         |          |      |             |  | 100.51 | %              |  |          |         |             |   |        |  | 98.82 | %
|                                                                   |  |                                    |         |          |      |             |  |        |                |  |          |         |             |   |        |  |       |  



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##### Table of Contents

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 Six Months Ended March 31,                       |      
|                                     |  | 2005                    vs.                 
   2004 |      
|                                     |  | Increase (Decrease) Due to                           |      
|                                     |  | Volume                                               |       |   | Rate |   |      | Rate/Volume |  |   | Total |  
|                                     |  | (In Thousands)                                       |      
|Interest income:                     |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Loans receivable, net                |  | $                                                    | 1,025 |   |      | $ | (502 | )           |  | $ | (48   | ) |  | $ | 475   |  
|Mortgage-backed securities           |  |                                                      | 954   |   |      |   | (134 | )           |  |   | (52   | ) |  |   | 768   |  
|Investment securities and FHLB Stock |  |                                                      | 655   |   |      |   | 156  |             |  |   | 55    |   |  |   | 866   |  
|Other interest-earning assets        |  |                                                      | (43   | ) |      |   | 45   |             |  |   | (30   | ) |  |   | (28   | )
|                                     |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Total interest-earning assets        |  |                                                      | 2,591 |   |      |   | (435 | )           |  |   | (75   | ) |  |   | 2,081 |  
|                                     |  |                                                      |       |  
|Interest expense:                    |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Deposits                             |  |                                                      | 299   |   |      |   | 64   |             |  |   | 3     |   |  |   | 366   |  
|Short-term FHLB advances             |  |                                                      | 144   |   |      |   | 105  |             |  |   | 208   |   |  |   | 457   |  
|Long-term FHLB advances              |  |                                                      | 1,475 |   |      |   | (228 | )           |  |   | (608  | ) |  |   | 639   |  
|Junior Subordinated Debentures       |  |                                                      | 16    |   |      |   | 122  |             |  |   | 4     |   |  |   | 142   |  
|Other liabilities                    |  |                                                      | 0     |   |      |   | 0    |             |  |   | 0     |   |  |   | 0     |  
|                                     |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Total interest-bearing liabilities   |  |                                                      | 1,934 |   |      |   | 63   |             |  |   | (393  | ) |  |   | 1,604 |  
|                                     |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Change in net interest income        |  | $                                                    | 657   |   |      | $ | 498  |             |  | $ | 318   |   |  | $ | 477   |  
|                                     |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  



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 losses inherent in the loan portfolio as of the balance sheet date. In
determining the provision, management considers a number of factors such as existing loan levels, prior loss experience, current economic conditions and the probability of these conditions affecting existing loans. The Company established provisions
for losses on loans of $120,000 for the six months ended March 31, 2005, as compared to $267,000 for the six months ended March 31, 2004, representing a decrease of $147,000. Loan chargeoffs for the six months ended March 31, 2005 were $206,000 as
compared to $682,000 for the six months ended March 31, 2004 a decrease of $476,000. The decrease in loan chargeoffs was partially due to prevailing low loan delinquency which affects consumer loans and a decrease in actual losses in the Banks
consumer loan portfolio. Loan recoveries were $217,000 for the six months ended March 31, 2005 compared to $156,000 for the six months ended March 31, 2004. Non performing loans at March 31, 2005 were $1.5 million as compared to $1.0 million at
March 31, 2004. The total loss allowance allocated to loans is $2.7 million. In establishing such provisions, management considered an analysis of the risk inherent in the loan portfolio. For additional information see Asset Quality.



Other Income.Other income decreased by $461,000, or 47.3% from
$974,000 for the six months ended March 31, 2004 to $513,000 for the six months ended March 31, 2005. The decrease in other income for the six months ended March 31 2004 was partially attributable to actual losses on repossessed assets of $248,000
for the six months ended March 31, 2005 compared to a gain of $79,000 for the six months ended March 31, 2004. Mortgage banking operations also decreased $37,000 for the six months ended March 31, 2005. There were no loan sales during the six months
ended March 31, 2005. Fees on transaction accounts also decreased $62,000 from $396,000 for the six months ended March 31, 2004 to $334,000 for the six months ended March 31, 2005, as the Company eliminated or reduced fees on certain products in an
effort to compete in the market and increase our transaction accounts which are our lowest cost source of funding. Income from Bank Owned Life Insurance (BOLI ) decreased $22,000 for the six months ended March 31, 2005 from $243,000 for the six
months ended March 31, 2004, to $221,000 for the six months ended March 31, 2005. This decrease was due to an adjustment in the rate of dividends paid on the BOLI investment.



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##### Table of Contents

Non-interest Expenses. Total non-interest expenses increased by $465,000, or 5.92% from $7.9
million for the six months ended March 31, 2004 to $8.3 million for the six months ended March 31, 2005. The Company experienced increases of $377,000 in salaries and related expenses, from $4.3 million for the six months ended March 31, 2004 to
$4.7 million for the six months ended March 31, 2005. Salaries and related expenses increased as the Company hired new personnel to staff the new offices. Data processing expense increased $303,000, from $757,000 for the six months ended March 31,
2004 to $1.1 million for the six months ended March 31, 2005. The increase in data processing expenses was primarily due to the Banks decision not to renew its contracts with Intrieve and to convert its data processing system to Fiserv. The
several contracts with Intrieve did not have early termination provisions an early termination penalty of $273,000 was recognized. This was partially offset by a credit of $150,000 from Fiserv. Other expenses increased by $107,000, or 23.5% from
$456,000 for the six months ended March 31, 2004 to $563,000 for the six months ended March 31, 2005. These increases were partially offset by a decrease in occupancy expense by $105,000, from $967,000 for the six months ended March 31, 2004 to
$862,000 for the six months ended March 31, 2005. Advertising expense also decreased $218,000, or 45.32% from $481,000 for the six months ended March 31, 2004 to $263,000 for the six months ended March 31, 2005. During the next quarter, non-interest
expenses will likely increase due to the opening of two new offices. However, the offices are strategically placed to eventually increase the overall performance of the Company.



Income Taxes. The Companys income tax (benefit)/expense was $(20,000) and $76,000 for the six months ended
March 31, 2005 and 2004, respectively. The Companys effective tax rates were (12.3) % and 16.4% for the six months ended March 31, 2005 and 2004, respectively. The Companys effective tax rate decreased for the six months ended March 31,
2005 as compared to the same quarter in the prior year as the Company earned non-taxable income from investments that eliminated the state tax liability and $221,000 in non-taxable income form the Bank Owned Life Insurance during the six months
ended March 31, 2005.



Comparison of Operating Results for the Three Months
Ended March 31, 2005 and 2004



Net Income. Net
income decreased by $65,000, or 40.4%, from $161,000 for the three months ended March 31, 2004 to $96,000 for the three months ended March 31, 2005. The decrease in net income was primarily attributable to an increase in non-interest expenses of
$282,000 and a decrease in other income of $233,000. This was partially offset by an increase in net interest income of $420,000 and decreases in the provision for loan losses and income taxes.



Net Interest Income. Net interest income was $4.1 million for the
three months ended March 31, 2005, compared to $3.7 million for the three months ended March 31, 2004, representing an increase of $418,000, or 11.4%. The increase was primarily due to the increase in the average balance of interest-earning assets.
The average balance of interest-earning assets increased $100.5 million, or 16.0% from $628.4 million for the three months ended March 31, 2004 to $728.9 million at March 31, 2005. The average rate on interest earning assets remained relatively
stable at 4.88% for the three months ended March 31, 2004 and 4.89% for the three months ended March 31, 2005. Despite recent increases in interest rates, higher yielding assets within the portfolio continue to re-price faster and are being replaced
with low yielding assets which resulted in a decrease in the interest rate spread of 15 basis points from, 2.37% for the three months ended March 31, 2004 to 2.22% for the three months ended March 31, 2005. The Companys ratio of average
interest-earning assets to average interest-bearing liabilities increased from 100.86% for the three months ended March 31, 2004 to 100.89% for the three months ended March 31, 2005. The Companys has elected to sacrifice some interest rate
spread in the short term in order to reduce interest rate risk and position itself to respond to changes in market rates. In an effort to avoid long term fixed rate assets in the current interest rate environment, the Companys investment
strategy was to purchase securities that were short term in nature or had step-up provisions. Likewise, investments in mortgage-backed securities were primarily in adjustable loan products or maturities of ten years or less. Short term loans were
also emphasized. Improvements in spread should occur as interest rates rise and the Company has the benefits from re-pricing assets and new funds received.



17



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##### Table of Contents

Interest Income. Interest income increased by $1.2 million, or 16.4% from $7.7 million for the
three months ended March 31, 2004 to $8.9 million for the three months ended March 31, 2005. Interest and fees on loans increased by $469,000, or 8.67% from $5.4 million for the three months ended March 31, 2004 to $5.9 million for the three months
ended March 31, 2005. This was primarily due to an increase in the average balance of loans receivable of $42.2 million, or 11.9% from $356.1 million at March 31, 2004 to $398.3 million at March 31, 2005. The increase in the average balance of loans
offset the decrease in the average yield on loans of 17 basis points from 6.08% for the three months ended March 31, 2004 to 5.91% for the three months ended March 31, 2005. The decrease in the average yield was attributed to the prevailing market
rates in the economy. Interest on mortgage-backed securities increased by $332,000 or 26.1% from $1.3 million for the three months ended March 31, 2004 to $1.6 million for the three months ended March 31, 2005. This increase was primarily due to the
increase in the average balance of mortgage-backed securities from $134.7 million at March 31, 2004 to $165.7 million at March 31, 2005. Interest and dividends on investment securities increased by $499,000 or 53.8% from $928,000 for the three
months ended March 31, 2004 to $1.4 million for the three months ended March 31, 2005. This was primarily due to an increase in the average balance of investments of $41.5 million from, $120.4 million at March 31, 2004 to $161.9 million at March 31,
2005, and an increase in the average yield of 45 basis points from, 3.08 % for the three months ended March 31, 2004 to 3.53% for the three months ended March 31, 2005.



Interest Expense. Interest expense, which consists of interest on deposits, interest on borrowed money and other
interest expense increased from $3.9 million for the three months ended March 31, 2004 to $4.8 million for the three months ended March 31, 2005 an increase of $925,000 or 23.6%. Interest on deposits increased $210,000 due to an increase in the
average volume of deposits of $18.4 million, or 3.3% from $565.6 million at March 31, 2004 to $584.0 million at March 31, 2005. The average yield on deposits increases 7 basis points from 2.35% at March 31, 2004 to 2.42% at March 31, 2005. The
Company was able to increase its deposits through normal marketing efforts. Interest on short-term borrowings increased by $259,000 for the three months ended March 31, 2005, and interest on long-term borrowings increased by $366,000 for the three
months ended March 31, 2005. This increase was primarily due to an increase of $34.2 million in the average balance of short term advances from the Federal Home Loan Bank of Atlanta, from $16.0 million at March 31, 2004 to $49.8 million at March 31,
2005. The average balance of long-term advances from the FHLB of Atlanta also increased by $45.9 million from, $18.0 million at March 31, 2004 to $63.9 million at March 31, 2005. The funds from these advances were used to purchase short term
investment securities, mortgage backed securities, and to fund loans in an effort to mitigate interest rate risk and have funds available to reinvest as interest rates rise. Also contributing to interest expense was interest on the Junior
Subordinated Debentures which was $351,000 for the three month period ending March 31, 2005, compared to $261,000 for the three month period ending March 31, 2004.



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 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 month periods ended March 31, 2005 and 2004. Total average assets are computed using month-end balances.



18



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##### Table of Contents

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.



|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|------------------------------------------------------------------ |  | ------------------------------------ | ------- | -------- | ---- | ----------- |  | ------ | -------------- |  | -------- | ------- | ----------- | - | ----- |  | ------ | -
|                                                                   |  | For the Three Months Ended March 31, |        
|                                                                   |  | 2005                                 |         |          | 2004 |            
|                                                                   |  | AverageBalance                       |         | Interest |      | AverageRate |  |        | AverageBalance |  | Interest |         | AverageRate |  
|                                                                   |  | (Dollars in thousands)               |        
|Interest-earning assets:                                           |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Loans receivable, net                                              |  | $                                    | 398,273 |          | $    | 5,882       |  | 5.91   | %              |  | $        | 356,069 |             | $ | 5,411 |  | 6.08   | %
|Mortgage-backed securities                                         |  |                                      | 165,721 |          |      | 1,602       |  | 3.87   |                |  |          | 134,722 |             |   | 1,271 |  | 3.77   |  
|Investment securities                                              |  |                                      | 161,915 |          |      | 1,427       |  | 3.53   |                |  |          | 120,420 |             |   | 928   |  | 3.08   |  
|Other interest earning assets                                      |  |                                      | 2,999   |          |      | 7           |  | .93    |                |  |          | 17,157  |             |   | 50    |  | 1.17   |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Total Interest-earning assets                                      |  |                                      | 728,908 |          |      | 8,918       |  | 4.89   |                |  |          | 628,368 |             |   | 7,660 |  | 4.88   |  
|Bank Owned Life Insurance                                          |  |                                      | 11,953  |          |      |             |  |        |                |  |          | 11,775  |             |   |       |  |        |  
|Noninterest-earning assets                                         |  |                                      | 39,873  |          |      |             |  |        |                |  |          | 43,034  |             |   |       |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Total assets                                                       |  | $                                    | 780,734 |          |      |             |  |        |                |  | $        | 683,177 |             |   |       |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Interest-bearing liabilities:                                      |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Deposits                                                           |  | $                                    | 584,005 |          | $    | 3,537       |  | 2.42   | %              |  | $        | 565,611 |             | $ | 3,328 |  | 2.35   | %
|Short-term FHLB Advances                                           |  |                                      | 49,783  |          |      | 288         |  | 2.31   |                |  |          | 15,599  |             |   | 29    |  | .74    |  
|Long-term FHLB Advances                                            |  |                                      | 63,892  |          |      | 660         |  | 4.13   |                |  |          | 18,000  |             |   | 294   |  | 6.53   |  
|Junior Subordinated Debentures                                     |  |                                      | 23,197  |          |      | 350         |  | 6.04   |                |  |          | 23,197  |             |   | 261   |  | 4.64   |  
|Other liabilities                                                  |  |                                      | 1,619   |          |      | 1           |  | .25    |                |  |          | 605     |             |   | 0     |  | .00    |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Total interest-bearing liabilities                                 |  |                                      | 722,496 |          |      | 4,836       |  | 2.68   |                |  |          | 623,012 |             |   | 3,912 |  | 2.51   |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Noninterest-bearing liabilities                                    |  |                                      | 15,624  |          |      |             |  |        |                |  |          | 14,790  |             |   |       |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Total liabilities                                                  |  |                                      | 738,120 |          |      |             |  |        |                |  |          | 637,802 |             |   |       |  |        |  
|Stockholders Equity                                               |  |                                      | 42,614  |          |      |             |  |        |                |  |          | 45,375  |             |   |       |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Total liabilities and stockholders equity                         |  | $                                    | 780,734 |          |      |             |  |        |                |  | $        | 683,177 |             |   |       |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Net interest income                                                |  |                                      |         |          | $    | 4,082       |  |        |                |  |          |         |             | $ | 3,748 |  |        |  
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Interest rate spread                                               |  |                                      |         |          |      |             |  | 2.22   | %              |  |          |         |             |   |       |  | 2.37   | %
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Net interest margin                                                |  |                                      |         |          |      |             |  | 2.24   | %              |  |          |         |             |   |       |  | 2.39   | %
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  
|Ratio average interest earning assets/interest bearing liabilities |  |                                      |         |          |      |             |  | 100.89 | %              |  |          |         |             |   |       |  | 100.86 | %
|                                                                   |  |                                      |         |          |      |             |  |        |                |  |          |         |             |   |       |  |        |  



19



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##### Table of Contents

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 Three Months Ended March 31,                     |      
|                                   |  | 2005                    vs.                 
   2004 |      
|                                   |  | Increase (Decrease) Due to                           |      
|                                   |  | Volume                                               |       |   | Rate |   |      | Rate/Volume |  |   | Total |  
|                                   |  | (In Thousands)                                       |      
|Interest income:                   |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Loans receivable, net              |  | $                                                    | 630   |   |      | $ | (142 | )           |  | $ | (17   | ) |  | $ | 471   |  
|Mortgage-backed securities         |  |                                                      | 282   |   |      |   | 40   |             |  |   | 9     |   |  |   | 331   |  
|Investment securities              |  |                                                      | 321   |   |      |   | 132  |             |  |   | 46    |   |  |   | 499   |  
|Other interest-earning assets      |  |                                                      | (42   | ) |      |   | (9   | )           |  |   | 8     |   |  |   | (43   | )
|                                   |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Total interest-earning assets      |  |                                                      | 1,191 |   |      |   | 21   |             |  |   | 46    |   |  |   | 1,258 |  
|                                   |  |                                                      |       |  
|Interest expense:                  |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Deposits                           |  |                                                      | 108   |   |      |   | 98   |             |  |   | 3     |   |  |   | 209   |  
|Short-term FHLB advances           |  |                                                      | 50    |   |      |   | 76   |             |  |   | 133   |   |  |   | 259   |  
|Long- Term FHLB advances           |  |                                                      | 749   |   |      |   | (108 | )           |  |   | (275  | ) |  |   | 366   |  
|Junior Subordinated Debentures     |  |                                                      | 8     |   |      |   | 79   |             |  |   | 2     |   |  |   | 89    |  
|Other liabilities                  |  |                                                      | 0     |   |      |   | 1    |             |  |   | 0     |   |  |   | 1     |  
|                                   |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Total interest-bearing liabilities |  |                                                      | 915   |   |      |   | 146  |             |  |   | (137  | ) |  |   | 924   |  
|                                   |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  
|Change in net interest income      |  | $                                                    | 276   |   |      | $ | (125 | )           |  | $ | 183   |   |  | $ | 334   |  
|                                   |  |                                                      |       |   |      |   |      |             |  |   |       |   |  |   |       |  



20



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##### Table of Contents

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 losses inherent in the loan portfolio as of the balance sheet date. In determining the provision, management considers a number of factors such as existing
loan levels, prior loss experience, current economic conditions and the probability of these conditions affecting existing loans. The Company did not establish any additional provisions for losses on loans for the three months ended March 31, 2005,
as compared to $86,000 for the three months ended March 31, 2004. Loan chargeoffs for the three months ended March 31, 2005 were $142,000 as compared to $353,000 for the three months ended March 31, 2004 a decrease of $211,000. The decrease in loan
chargeoffs was due to prevailing low loan delinquency and a decrease in actual losses in the banks consumer loan portfolio. Loan recoveries were $183,000 for the three months ended March 31, 2005 compared to $130,000 for the three months ended
March 31, 2004. Non performing loans at March 31, 2005 were $1.5 million as compared to $1.0 million at March 31, 2004. The total loss allowance allocated to loans is $2.7 million. In establishing such provisions, management considered an analysis
of the risk inherent in the loan portfolio. For additional information see Asset Quality.



Other Income.Other income decreased by $233,000, or 52.0% from $448,000 for the three months ended March 31, 2004 to $215,000 for the three months ended March 31, 2005. The decrease in other income for
the three months ended March 31, 2005 was partially attributable to actual losses on repossessed assets of $113,000 for the three months ended March 31, 2005 compared to a gain of $79,000 for the three months ended March 31, 2004. Mortgage banking
operations also decreased $15,000 for the three months ended March 31, 2005. There were no loan sales during the three months ended March 31, 2005. Fees on transaction accounts decreased $39,000 from $185,000 for the three months ended March 31,
2004 to $146,000 for the three months ended March 31, 2005, as we eliminated fees on certain products in an effort to compete in the market and increase our transaction accounts which are our lowest cost source of funding. Income from Bank Owned
Life Insurance (BOLI ) decreased $13,000 for the three months ended March 31, 2005 from $121,000 for the three months ended March 31, 2004, to $108,000 for the three months ended March 31, 2004. This decrease was due to an adjustment in the rate of
dividends paid on the BOLI investment. The Company has received a one time gain of approximately $525,000 after tax which will have a positive impact on the third quarter of fiscal year 2005. The one time gain is associated with Harland Financial
Solutions, Inc. cash acquisition of outstanding shares of the common stock of Intrieve Incorporated, which included the shares owned by Baltimore County Savings Bank, F.S.B., the Companys wholly owned subsidiary. The Company could realize
additional gains of up to $60,000 after tax during the year following the closing of the acquisition if certain additional criteria specified in the acquisition agreement are satisfied.



Non-interest Expenses. Total non-interest expenses increased by $281,000, from $3.9 million for the three months
ended March 31, 2004 to $4.2 million for the three months ended March 31, 2005. The Company experienced increases of $226,000 in salaries and related expenses, from $2.1 million for the three months ended March 31, 2004 to $2.3 million for the three
months ended March 31, 2005. Salaries and related expenses increased as the Company hired new personnel to staff the new offices. Data processing expense increased $154,000, from $370,000 for the three months ended March 31, 2004 to $524,000 for the
three months ended March 31, 2005. The increase in data processing expenses was primarily due to the increased number of accounts to service. Other expenses increased by $55,000, from $264,000 for the three months ended March 31, 2004 to $319,000
for the three months ended March 31, 2005. These increases were partially offset by a decrease in occupancy expense by $18,000, from $480,000 for the three months ended March 31, 2004 to $462,000 for the three months ended March 31, 2005.
Advertising expense also decreased $135,000, from $239,000 for the three months ended March 31, 2004 to $104,000 for the three months ended March 31, 2005. During the next quarter, non-interest expenses will likely increase due to the opening of two
new offices. However, the offices are strategically placed to eventually increase the overall performance of the Company.



Income Taxes. The Companys income tax (benefit)/expense was $(7,000) and $23,000 for the three months ended March 31, 2005 and 2004,
respectively. The Companys effective tax rates were (7.9) % and 12.5% for the three months ended March 31, 2005 and 2004, respectively. The Companys effective tax rate decreased for the three months ended March 31, 2005 as compared to
the same quarter in the prior year as the Company earned non-taxable income from investments which eliminated the state tax liability and $108,000 non-taxable income from the Bank Owned Life Insurance during the three months ended March 31, 2005.



21



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##### Table of Contents

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:



|                                                                                                |  |                |        |                   |   |       
|----------------------------------------------------------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                                                                |  | March 31,2005  |        | September 30,2004
|                                                                                                |  | (In thousands)
|Commitments to originate new loans                                                              |  | $              | 19,271 |                   | $ | 7,616 
|Unfunded commitments to extend credit under existing equity line and commercial lines of credit |  |                | 22,233 |                   |   | 24,330
|Commercial letters of credit                                                                    |  |                | 680    |                   |   | 634   



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 amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on managements credit evaluation of the borrower.



22



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##### Table of Contents

Contractual Obligations



As of March 31, 2005



|                                   |  |                        |         |             |   |             |  |              |        |       |   |        |  |   |        
|---------------------------------- |  | ---------------------- | ------- | ----------- | - | ----------- |  | ------------ | ------ | ----- | - | ------ |  | - | -------
|                                   |  | Payments due by period
|                                   |  | (In thousands)        
|                                   |  | Less than 1Year        |         | 1  3 Years |   | 4  5 Years |  | Over 5 Years |        | Total
|Time Deposits                      |  | $                      | 178,977 |             | $ | 148,540     |  | $            | 61,569 |       | $ | 0      |  | $ | 389,086
|Long-term borrowings               |  |                        | 0       |             |   | 60,000      |  |              | 18,734 |       |   | 0      |  |   | 78,734 
|Junior Subordinated Debentures     |  |                        | 0       |             |   | 0           |  |              | 0      |       |   | 23,197 |  |   | 23,197 
|Service contracts                  |  |                        | 1,195   |             |   | 1,529       |  |              | 1,529  |       |   | 1,211  |  |   | 5,464  
|Lease obligations                  |  |                        | 1,062   |             |   | 2,802       |  |              | 1,406  |       |   | 6,057  |  |   | 11,327 
|                                   |  |                        |         |             |   |             |  |              |        |       |   |        |  |   |        
|Total contractual cash obligations |  | $                      | 181,234 |             | $ | 212,871     |  | $            | 83,238 |       | $ | 30,465 |  | $ | 507,808
|                                   |  |                        |         |             |   |             |  |              |        |       |   |        |  |   |        



Asset Quality



At March 31, 2005, the Company had approximately $1.6 million in
non-performing assets (nonaccrual loans, repossessed assets and foreclosed real estate) or .20% of total assets. At September 30, 2004, non-performing assets were $905 000 or .11% of total assets. The Banks net charge-offs for the three months
ended March 31, 2005 were $41,000. The Banks allowance for loan losses was $2.7 million at March 31, 2005 and $2.6 million at September 30, 2004.



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



|                                                                         |  |                  |       |   |                      |   |     |  
|------------------------------------------------------------------------ |  | ---------------- | ----- | - | -------------------- | - | --- | -
|                                                                         |  | At March 31,2005 |       |   | At September 30,2004 |  
|                                                                         |  | (In thousands)   |      
|Nonperforming loans:                                                     |  |                  |       |   |                      |   |     |  
|Nonaccrual loans:                                                        |  |                  |       |   |                      |   |     |  
|Single Family residential                                                |  | $                | 881   |   |                      | $ | 266 |  
|Multi-family residential                                                 |  |                  |      |   |                      |   |    |  
|Commercial Real Estate                                                   |  |                  | 545   |   |                      |   | 606 |  
|Construction                                                             |  |                  |      |   |                      |   |    |  
|Commercial Loans                                                         |  |                  |      |   |                      |   |    |  
|Land                                                                     |  |                  | 70    |   |                      |   |    |  
|Consumer Loans                                                           |  |                  | 12    |   |                      |   |    |  
|                                                                         |  |                  |       |   |                      |   |     |  
|Total Nonaccrual loans                                                   |  |                  | 1,508 |   |                      |   | 872 |  
|Loans 90 days past due and accruing                                      |  |                  |      |   |                      |   |    |  
|Restructured loans                                                       |  |                  |      |   |                      |   |    |  
|                                                                         |  |                  |       |   |                      |   |     |  
|Total nonperforming loans                                                |  |                  | 1,508 |   |                      |   | 872 |  
|Other non-performing assets                                              |  |                  | 67    |   |                      |   | 33  |  
|                                                                         |  |                  |       |   |                      |   |     |  
|Total nonperforming assets                                               |  | $                | 1,575 |   |                      | $ | 905 |  
|                                                                         |  |                  |       |   |                      |   |     |  
|Nonperforming loans to loans receivable, net                             |  |                  | .37   | % |                      |   | .23 | %
|Nonperforming assets as a percentage of loans and foreclosed real estate |  |                  | .39   | % |                      |   | .23 | %
|Nonperforming assets to total assets                                     |  |                  | .20   | % |                      |   | .11 | %



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The following table sets forth an analysis of the Banks allowance for loan losses for the periods indicated.



|                                                                        |  |                                  |       |   |      |   |       |  
|----------------------------------------------------------------------- |  | -------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                        |  | For the Six Months EndedMarch 31 |      
|                                                                        |  | 2005                             |       |   | 2004 |  
|                                                                        |  | (Dollars in thousands)           |      
|Balance at beginning of period                                          |  | $                                | 2,587 |   |      | $ | 2,698 |  
|                                                                        |  |                                 
|Loans charged-off:                                                      |  |                                  |       |   |      |   |       |  
|Real estate mortgages:                                                  |  |                                  |       |   |      |   |       |  
|Single-family residential                                               |  |                                  |      |   |      |   |      |  
|Multi-family residential                                                |  |                                  |      |   |      |   |      |  
|Commercial                                                              |  |                                  |      |   |      |   |      |  
|Construction                                                            |  |                                  |      |   |      |   |      |  
|Commercial Loans                                                        |  |                                  |      |   |      |   |      |  
|Consumer                                                                |  |                                  | 206   |   |      |   | 682   |  
|                                                                        |  |                                  |       |   |      |   |       |  
|Total charge-offs                                                       |  |                                  | 206   |   |      |   | 682   |  
|                                                                        |  |                                 
|Recoveries:                                                             |  |                                  |       |   |      |   |       |  
|Real estate mortgage:                                                   |  |                                  |       |   |      |   |       |  
|Single-family residential                                               |  |                                  |      |   |      |   |      |  
|Multi-family residential                                                |  |                                  |      |   |      |   |      |  
|Commercial                                                              |  |                                  |      |   |      |   |      |  
|Construction                                                            |  |                                  |      |   |      |   |      |  
|Commercial loans secured                                                |  |                                  |      |   |      |   |      |  
|Consumer                                                                |  |                                  | 217   |   |      |   | 156   |  
|                                                                        |  |                                  |       |   |      |   |       |  
|Total recoveries                                                        |  |                                  | 217   |   |      |   | 156   |  
|Net loans charged-off                                                   |  |                                  | 11    |   |      |   | (526  | )
|Provision for loan losses                                               |  |                                  | 120   |   |      |   | 267   |  
|                                                                        |  |                                  |       |   |      |   |       |  
|Balance at end of period                                                |  | $                                | 2,718 |   |      | $ | 2,439 |  
|                                                                        |  |                                  |       |   |      |   |       |  
|Ratio of net charge-offs to average loans outstanding during the period |  |                                  | .01   | % |      |   | .14   | %
|                                                                        |  |                                  |       |   |      |   |       |  



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 March 31, 2005, the Company had $2.2 million in classified assets, consisting of $2.1 million in substandard and loss loans, $0 in foreclosed real estate and $ 67,000 in other repossessed assets. At September 30, 2004, the
Company had $1.6 million in substandard and loss loans, consisting of $1.6 million in loans, $0 in foreclosed real estate and $33,000 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 March 31, 2005, the Company has identified approximately $1.9 million in assets classified as special mention.



Liquidity and Capital Resources



At March 31, 2005, 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.



24



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##### Table of Contents

The primary investing activities of the Company are the origination of loans and the purchase of
investment securities and mortgage-backed securities. During the six months ended March 31, 2005 and 2004, the Company had $80.5 million and $51.2 million, respectively, of loan originations. During the six months ended March 31, 2005 and 2004, the
Company purchased investment securities in the amounts of $10.7 million and $66.3 million, respectively, and mortgage-backed securities in the amounts of $15.8 million and $41.5 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 the amount of $148.7 million as of March 31, 2005. In addition, securities in the available for sale portfolio provide
liquidity and the Company has the immediately liquid resources of cash and cash due from banks, federal funds sold and securities purchased under resale agreements 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 March was approximately
53.2%, 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 March 31, 2005, cash, interest-bearing deposits in other banks and federal funds sold were $17.0 million, $1.5.million and $296,000, 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 March 31, 2005 totaled $179.0 million. Based on past experience, management believes that a significant portion of such deposits will remain with the Bank. The Bank plans on paying competitive rates to retain
certificate deposits. Should the Bank experience significant deposit run off the bank anticipates that it will have sufficient liquidity to meet its needs as outlined above. 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 March 31, 2005, the Company had commitments under standby letters of credit and lines of credit and
commitments to originate mortgage loans of $680,000, $22.2 million and $19.3 million respectively.



I
tem 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.



25



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##### Table of Contents

The Company monitors whether material changes in market risk have occurred since September 30, 2004. The
Company does not believe that any material changes in market risk exposures occurred since September 30, 2004.



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.



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.



PART II. OTHER INFORMATION



Item 1. Legal Proceedings



None.



Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities



None.



Item 3. Defaults Upon Senior Securities



None.



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



The Companys Annual Meeting of Stockholders was held on February 9, 2005. 5,676,276 shares representing 96.2% of the total outstanding shares of the Companys common stock were represented at the Annual
Meeting in person or by proxy.



Stockholders voted in favor of
the election of three nominees for director. The voting results for each nominee were as follows:



|                  |  |                           |  |               
|----------------- |  | ------------------------- |  | --------------
|Nominee           |  | Votes in Favorof Election |  | Votes Withheld
|Henry V. Kahl     |  | 5,628,217                 |  | 18,059        
|P. Louis Rohe Jr. |  | 5,654,581                 |  | 21,695        
|Michael J Klein   |  | 5,649,745                 |  | 26,530        



26



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##### Table of Contents

There were 0 broker nonvotes on the matter.



In addition, stockholders voted in favor of the ratification
of the appointment of Stegman & Company,. as independent registered public accountants of the Company for the fiscal year ending September 30, 2005. 5,661,920 votes were cast in favor of the proposal to ratify the appointment of auditors, 3,230
votes were cast against the proposal, and 11,126 votes abstained. There were 0 broker non-votes on the matter.



Item 5. Other Information



None.



Item 6. Exhibits



The following
exhibits are filed herewith:



|              |  |                                                        
|------------- |  | -------------------------------------------------------
|ExhibitNumber |  | Title                                                  
|31.1          |  | Rule 13a-14(a) Certification of Chief Executive Officer
|              | 
|31.2          |  | Rule 13a-14(a) Certification of Chief Financial Officer
|              | 
|32            |  | Section 1350 Certification                             



27



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SIGNATURES



Pursuant to the
requirements of the Securities and 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: May 16, 2005 |  | /s/ Gary C. Loraditch                       
|                   |  | Gary C. Loraditch                           
|                   |  | President                                   
|                   |  | (Principal Executive Officer)               
|                   | 
|Date: May 16, 2005 |  | /s/ Bonnie M. Klein                         
|                   |  | Bonnie M. Klein                             
|                   |  | Vice President and Treasurer                
|                   |  | (Principal Financial and Accounting Officer)