UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

(Mark One)

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

                  For the quarterly period ended March 31, 2000


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

             For the transition period from __________ to __________



                        Commission file number: 333-73385



                               HCNB Bancorp, Inc.
        (Exact name of small business issuer as specified in its charter)

             Maryland                                    52-2083046
 (State or other jurisdiction                (IRS Employer Identification No.)
of incorporation or organization)



                 1776 East Jefferson Street, Rockville, MD 20852
                    (Address of principal executive offices)

                                  301-468-8848
                           (Issuer's telephone number)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the last 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 [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: As of April 30, 2000, 700,213 shares of
the small  business  issuer's  common stock,  par value of $.01 per share,  were
issued and outstanding.


Transitional Small Business Disclosure Format (Check one): Yes [  ]   No [ x ]

<PAGE>
                                TABLE OF CONTENTS
                                                                            Page

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

            Report of Independent Public Accountants...........................1

            Consolidated Balance Sheets........................................2

            Consolidated Statements of Operations..............................3

            Consolidated Statements of Cash Flows..............................4

            Notes to Consolidated Financial Statements.....................5 - 8

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations.................9 - 10

PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings.................................................11

Item 2.     Changes in Securities and Use of Proceeds.........................11

Item 3.     Defaults Upon Senior Securities...................................11

Item 4.     Submission of Matters to a Vote of Security Holders...............11

Item 5.     Other Information.................................................11

Item 6.     Exhibits and Reports on Form 8-K..................................11

SIGNATURES  ..................................................................12




<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of HCNB Bancorp, Inc.
Rockville, Maryland

         We have  reviewed  the  unaudited  consolidated  balance  sheet of HCNB
Bancorp,  Inc. and  subsidiary as of March 31, 2000,  and the related  unaudited
consolidated statements of operations and cash flows for the three month periods
ended  March 31, 2000 and 1999.  All  information  included  in these  financial
statements is the representation of the management of HCNB Bancorp, Inc.

         A review  consists  principally  of inquiries of company  personnel and
analytical  procedures  applied to financial data. It is  substantially  less in
scope  than an  examination  in  accordance  with  generally  accepted  auditing
standards,  the objective of which is the expression of an opinion regarding the
financial  statements taken as a whole.  Accordingly,  we do not express such an
opinion.

         Based on our  review,  we are not aware of any  material  modifications
that should be made to the accompanying  financial  statements in order for them
to be in conformity with generally accepted accounting principles.

         We have previously audited, in accordance with generally accepted audit
standards  the  consolidated  balance  sheet as of December  31,  1999,  and the
related consolidated  statements of operations,  shareholders'  equity, and cash
flows for the year then  ended  (not  presented  herein).  In our  report  dated
January  13,  2000,  we  expressed  an  unqualified  opinion on those  financial
statements.  In our  opinion,  the  information  set  forth in the  accompanying
balance  sheet as of  December  31,  1999,  is fairly  stated,  in all  material
respects,  in relation to the consolidated  balance sheet from which it has been
derived.

/s/ Jameson & Associates, P.A.

Baltimore, Maryland
April 19, 2000


                                       1
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 2000 AND DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                 March 31,          December 31,
                                                                                    2000               1999
                                                                                 ----------         ----------
<S>                                                                              <C>                <C>

                             ASSETS

Cash and cash equivalents:
   On-hand and due from banks                                                     $ 204,843          $ 562,648
   Federal funds sold                                                             1,999,101          1,777,648
Investment securities, held to maturity                                           5,266,764          4,000,000
Loans receivable                                                                  1,503,262             24,800
Investment in Federal Reserve Board stock, at cost                                  180,000            180,000
Accrued interest receivable                                                          35,305             33,141
Property and equipment, net                                                         454,623            449,530
Other assets, net                                                                    75,519             74,293
                                                                                 ----------         ----------

         Total assets                                                            $9,719,417         $7,102,060
                                                                                 ==========         ==========

              LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
   Deposits
     Noninterest-bearing                                                          $ 264,504           $ 81,190
     Interest-bearing                                                             3,410,529            783,146
   Accounts payable and accrued expenses                                            145,310            131,136
                                                                                 ----------         ----------

         Total liabilities                                                        3,820,343            995,472
                                                                                 ----------         ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Preferred stock, par value $0.01 per share, 1,000,000 shares
     authorized, 0 shares issued and outstanding                                          -                  -
   Common stock, par value $0.01 per share, 9,000,000 shares
     authorized, 700,213 shares issued and outstanding                                7,002              7,002
   Additional paid-in capital                                                     6,995,128          6,995,128
   Accumulated deficit                                                           (1,103,056)          (895,542)
                                                                                 ----------         ----------

         Total stockholders' equity                                               5,899,074          6,106,588
                                                                                 ----------         ----------

         Total liabilities and stockholders' equity                              $9,719,417         $7,102,060
                                                                                 ==========         ==========
</TABLE>


                   See independent accountants' review report.
 The accompanying notes are an integral part of this consolidated balance sheet

                                       2
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                           2000             1999
                                                                        ----------        ----------
<S>                                                                     <C>               <C>
INTEREST INCOME
   Interest income on loans                                             $   20,249        $        -
   Interest income on investment securities                                 97,095               415
                                                                        ----------        ----------

     Total interest income                                                 117,344               415
                                                                        ----------        ----------

INTEREST EXPENSE
   On deposits                                                              21,946                 -
   Other                                                                         -                 -
                                                                        ----------        ----------
                                                                            21,946                 -
                                                                        ----------        ----------

     Net interest income                                                    95,398               415

PROVISION FOR LOAN LOSSES                                                   18,858                 -
                                                                        ----------        ----------

   Net interest income after provision for loan losses                      76,540               415

SERVICE FEES AND CHARGES                                                     2,591                 -
                                                                        ----------        ----------

   Net interest income after service fees and charges                       79,131               415
                                                                        ----------        ----------

OTHER OPERATING EXPENSES
   Salaries and benefits                                                   132,198                 -
   Depreciation and amortization                                            11,353                 -
   Occupancy expense, data processing and supplies                          50,058                 -
   Marketing                                                                12,270                 -
   Professional fees                                                        61,356            92,587
   Regulatory expense                                                            -            17,600
   Other operating expenses                                                 19,410           133,383
                                                                        ----------        ----------

     Total other operating expenses                                        286,645           243,570
                                                                        ----------        ----------

     Loss before provision for income taxes                               (207,514)         (243,155)

PROVISION FOR INCOME TAXES                                                       -                 -
                                                                        ----------        ----------

   Net loss                                                             $ (207,514)       $ (243,155)
                                                                        ==========        ==========

NET LOSS PER SHARE - BOTH BASIC AND DILUTIVE

   NET LOSS PER SHARE                                                   $     .297                 -

WEIGHTED AVERAGE SHARES OUTSTANDING                                        700,213                 -
</TABLE>

                   See independent accountants' review report.
 The accompanying notes are an integral part of these consolidated statements.

                                       3
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                                      2000              1999
                                                                                   ----------        ----------
<S>                                                                                <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                                        $ (207,514)       $ (243,155)
   Adjustments to reconcile net loss to net cash from operating activities
     Provision for loan losses                                                         18,858                 -
     Depreciation and amortization                                                     11,353                 -
     Effect of change in
     Accrued interest receivable                                                       (2,164)                -
     Other assets                                                                      (1,226)                -
     Accounts payable and accrued expenses                                             14,174           141,540
                                                                                   ----------        ----------

         Net cash from operating activities                                          (166,519)         (101,615)
                                                                                   ----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of investment securities                                              (1,266,764)                -
   Loan principal disbursements                                                    (1,497,320)                -
   Purchase of property and equipment                                                 (16,446)                -
                                                                                   ----------        ----------

         Net cash from investing activities                                        (2,780,530)                -
                                                                                   ----------        ----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Increase in savings deposits,                                                    2,810,697                 -
   Advance (repayments) of related party advances                                           -           120,000
                                                                                   ----------        ----------

         Net cash from financing activities                                         2,810,697           120,000
                                                                                   ----------        ----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     (136,352)           18,385

CASH AND CASH EQUIVALENTS, beginning of period                                      2,340,296             8,341
                                                                                   ----------        ----------

CASH AND CASH EQUIVALENTS, end of period                                           $2,203,944          $ 26,726
                                                                                   ==========        ==========

Interest paid                                                                      $   18,960          $      -

Income taxes paid                                                                  $        -          $      -
</TABLE>

                   See independent accountants' review report.
 The accompanying notes are an integral part of these consolidated statements.

                                       4
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2000 AND 1999
                              AND DECEMBER 31, 1999
1.   ORGANIZATION

HCNB,  Bancorp,  Inc. (the Company) was incorporated under the laws of the State
of Maryland on February 24, 1998,  primarily to hold all the outstanding  shares
of capital stock of a national bank.

Effective,  October 1999, the Company  completed an initial public offering (the
Offering)  in which it sold  700,213  shares of common  stock for $10 per share.
During 1999, the Company received proceeds from the Offering of $7,002,130.

On December 14,  1999,  the Bank  received  authority  from the Federal  Deposit
Insurance  Corporation  (FDIC) and  Office of the  Comptroller  of the  Currency
(O.C.C.) to begin banking operations.

The Company's  primary  operations are conducted by the Bank, which operates one
branch in Rockville,  Maryland.  The Bank is principally engaged in the business
of investing in commercial and consumer loans and attracting deposits.

As the Bank is a start-up operation, there can be no assurance that the Bank can
attract sufficient  depositors or issue sufficient quality loans to operate at a
profit.  The Bank is subject  to  certain  risks  inherent  in making  loans and
accepting deposits.

In addition to these risks, the Company is currently operating at a loss. Growth
of operations will be necessary for the Company to be able to cover overhead and
other operational costs.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  consolidated financial statements include the activity of HCNB
Bancorp, Inc. and its wholly-owned subsidiary, Harbor Capital National Bank. All
intercompany transactions have been eliminated in consolidation.

The accompanying  consolidated  financial  statements for March 31, 2000 and the
three month  periods  ending  March 31, 2000 and 1999 have been  prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.  However, the Company believes that the disclosures are adequate to
make the information presented not misleading.

These consolidated  financial  statements should be read in conjunction with the
financial  statements  and notes  thereto for the year ended  December 31, 1999,
included in the Company's  Annual Report to Stockholders  on Form 10-KSB,  filed
with the  Securities and Exchange  Commission.  The balance sheet as of December
31, 1999 has been derived from the audited financial statements at that date.

The unaudited  consolidated  financial  statements  included  herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management,  necessary to state fairly the financial  position of the
Company as of March 31,  2000 and the  results of its  operations  for the three
month  period  ended March 31,  2000,  and cash flows for the three month period
ended  March 31,  2000.  The  results of  interim  periods  are not  necessarily
indicative of the results expected for the full fiscal year.

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing  deposits in other banks with
original maturities of less than three months and Federal funds sold. Generally,
Federal funds are purchased and sold for one-day periods.

                                       5
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

Federal Reserve Board Stock

Federal Reserve Bank stock is carried at cost.

Investment Securities

Debt  securities  that the Bank has the  positive  intent and ability to hold to
maturity are classified as held-to-maturity and recorded at amortized cost. Debt
not  classified  as   held-to-maturity   and  equity   securities  with  readily
determinable fair values are classified as trading securities if bought and held
principally for the purpose of selling them in the near term. Trading securities
are  reported  at fair  value,  with  unrealized  gains and losses  included  in
earnings.   Investments  not  classified  as  held-to-maturity  or  trading  are
considered  available-for-sale  and are reported at fair value,  with unrealized
gains and losses excluded from earnings and reported as a separate  component of
stockholders'  equity,  net of tax effects.  A fair value is determined based on
bid prices  published in financial  newspapers or bid  quotations  received from
securities  dealers.  For purposes of computing  realized gains or losses on the
sales of  investments,  cost is determined by using the specific  identification
method.  Gains and losses on sales of securities  are  recognized at the time of
sale.  Premiums and discounts on investment and  mortgage-backed  securities are
amortized  over the term of the  security  using  methods that  approximate  the
interest method.

Loans Receivable and Allowance for Loan Losses

Loans  receivable  are stated at the amount of unpaid  principal,  reduced by an
allowance  for  loan  losses  and  deferred  loan  fees.  Interest  on  loans is
calculated using the  simple-interest  method on principal  amounts  outstanding
each month.

The allowance for losses on loans is determined based on management's  review of
the loan  portfolio  and  analysis  of the  borrowers'  ability  to repay,  past
collection  experience,  risk  characteristics  of individual loans or groups of
similar  loans and  underlying  collateral,  current  and  prospective  economic
conditions  and  status  of  nonperforming  loans.  Loans are  charged  off when
considered, in the opinion of management, uncollectible.

Interest  on  potential  problem  loans is not accrued  when,  in the opinion of
management,  full collection of principal or interest is in doubt, or payment of
principal or interest has become 90 days past due.  Such  interest is considered
in  management's  determination  of the allowance for loan losses.  Any interest
received in excess of the amount previously accrued on such loans is recorded in
income in the period of recovery.

Statement of  Financial  Accounting  Standards  (SFAS) No. 114,  "Accounting  by
Creditors for  Impairment of a Loan" (SFAS No. 114)  addresses the accounting by
creditors for  impairment of certain  loans.  It is generally  applicable to all
loans, except large groups of smaller balance homogeneous loans. It also applies
to loans that are  restructured  in a troubled  debt  restructuring  involving a
modification of terms, with limited exceptions.

A loan is considered  impaired when, based on current information and events, it
is probable  that a creditor will be unable to collect all amounts due according
to the  contractual  terms of the loan  agreement.  SFAS No. 114  requires  that
impaired  loans be measured  based on the present value of expected  future cash
flows  discounted  at the  loans'  effective  interest  rate,  or at the  loans'
observable  market  price or the fair  value  of the  collateral  if the loan is
collateral  dependent.  If the  measure  of the  impaired  loan is less than the
recorded investment in the loan, an impairment is recognized through a valuation
allowance.

Property and equipment

Property and equipment are stated at cost,  less  accumulated  depreciation  and
amortization.  Depreciation is computed using the straight-line  method over the
estimated  useful lives of the respective  assets.  Leasehold  improvements  are
depreciated over 40 years. Furniture and equipment are depreciated over 7 years.
Software is depreciated over 5 years.

                                       6
<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

Organizational Costs

In April 1998,  the  Accounting  Standards  Executive  Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-5 (the
"SOP") regarding financial reporting on the costs of start-up activities.  Under
the SOP, organizational costs are considered start-up costs and, commencing with
fiscal years beginning after December 15, 1998, entities are required to expense
such  costs as they are  incurred.  As a result  of the  SOP,  the  Company  was
required to write off its organizational costs.

Comprehensive Income

During 1997, the Financial  Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 130,  "Reporting  Comprehensive
Income" ("SFAS No. 130"),  which is effective for fiscal years  beginning  after
December 15, 1997.  This  statement  establishes  standards  for  reporting  and
display of  comprehensive  income and its  components.  Comprehensive  income is
defined as the change in equity of a business  enterprise  during a period  from
transactions  and other events and  circumstances  from  nonowner  sources.  The
Company  adopted this standard  effective  January 1, 1999. The Company does not
have any adjustment for comprehensive  income for 1999.  Comprehensive income is
the same as income reported in the accompanying statement of operations.

Segments of an Enterprise

During  1997,  the FASB issued SFAS No. 131,  "Disclosure  About  Segments of an
Enterprise  and Related  Information"  ("SFAS No. 131"),  which is effective for
fiscal years  beginning  after December 15, 1997.  SFAS No. 131 introduces a new
model for segment reporting,  called the "management  approach".  The management
approach  is based  on the way the  chief  operating  decision  maker  organizes
segments  within  a  company  for  making  operating   decisions  and  assessing
performance.  Reportable segments are based on products and services, geography,
legal  structure,  management  structure  --  any  manner  in  which  management
desegregates a company.  The management approach replaces the notion of industry
and  geographic  segments  in  current  FASB  standards.  The  Bank has only one
reportable segment and,  accordingly,  no additional disclosure pursuant to SFAS
No. 131 is necessary.

Derivatives

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities".  SFAS No. 133  established  accounting and
reporting  standards  requiring  that  every  derivative  instrument  (including
certain derivative  instruments  embedded in other contracts) be recorded in the
balance sheet as either an asset or liability  measured at its fair value.  SFAS
No. 133  requires  that  changes in the  derivative's  fair value be  recognized
currently in earnings  unless specific hedge  accounting  criteria are met. SFAS
No. 133 is effective for fiscal years  beginning  after June 15, 1999 and cannot
be applied  retroactively.  The Bank adopted SFAS No. 133  effective  January 1,
2000.  The Bank  anticipates  that the  adoption of SFAS No. 133 will not have a
material effect on its financial condition or results of operations.

Loan Origination Fees

Material loan origination  fees, net of certain direct loan  origination  costs,
are deferred and recognized as an adjustment to interest income over the life of
the loans.

Use of Estimates

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amount  of  assets  and  liabilities  and  disclosure  of
contingent assets and liabilities as of 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.

                                       7

<PAGE>
                        HCNB BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

3.   RELATED PARTY TRANSACTIONS

The insider founding  stockholders  that made advances to the development  stage
company are to be paid  interest in the amount of $14,508.  This  liability  was
accrued at March 31, 2000.

The officers and directors have deposits in the Bank  approximating  $236,400 at
March 31, 2000.

The officers and directors have loans due to the Bank approximating  $706,700 at
March 31, 2000.

4.   DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of cash and cash  equivalents and accounts  payable  approximates
the carrying amount. For investment  securities,  fair value is determined using
quoted market prices.

Fair value of loans  receivable is estimated by  discounting  future cash flows,
taking into  consideration  future loan  losses,  using  current  rates at which
similar  loans would be made to borrowers  with similar  credit  ratings for the
same remaining maturities. For commitments to extend credit, the carrying amount
is a reasonable estimate of fair value.

With respect to deposits, fair value of savings deposits,  money market accounts
and NOW accounts is the amount  payable on demand at the  reporting  date.  Fair
value of fixed  maturity term  accounts and  individual  retirement  accounts is
estimated  using  rates  currently  offered for  accounts  of similar  remaining
maturities.  Management  estimates that the fair value of deposits  approximates
the carrying amount as of March 31, 2000.

5.   REGULATORY MATTERS

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies.  Failure to meet minimum capital  requirements can
initiate certain mandatory - and possibly additional  discretionary - actions by
regulators  that,  if  undertaken,  could have a direct  material  effect on the
Bank's financial  statements.  Under capital action, the Bank must meet specific
capital  guidelines  that involve  quantitative  measures of the Bank's  assets,
liabilities and certain  off-balance  sheet items as calculated under regulatory
accounting  practices.  The Bank's capital amounts and  classification  are also
subject to  qualitative  judgments  by the  regulators  about  components,  risk
weighting and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum  amounts and ratios set forth in the table
below  of  total  and  Tier  I  capital  (as  defined  in  the  regulations)  to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined).  Management  believes,  as of March 31, 2000, that the Bank
meets all capital adequacy requirements to which it is subject.

Due to the Bank's recent  formation,  as of December 14, 1999,  the Bank has not
been categorized by the Office of the Comptroller of the Currency (O.C.C.) under
the  regulatory  framework for prompt  corrective  action.  To be categorized as
well-capitalized,  the Bank  must  maintain  minimum  total  risk-based,  Tier I
Risk-based,  Tier 1  leverage  ratios  as set forth in the  table.  There are no
conditions or events that management  believes would prevent the Bank from being
categorized as well-capitalized.


                                       8
<PAGE>
Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

This discussion and analysis provides an overview of the financial condition and
results of operations  of HCNB  Bancorp,  Inc.  ("Company")  and Harbor  Capital
National Bank ("Bank") as of March 31, 2000 and for the three months ended March
31, 2000.  Comparative  discussion  of the results of  operations  for the three
months ended March 31, 1999 and March 31, 2000 is not  provided,  as the Company
had no  operations  other than  organizational  activity in the first quarter of
1999, and as such, comparisons do not provide accurate or meaningful information
regarding the Company's financial position or results of operations.

Some of the  information  in this  discussion  and  analysis  includes  "forward
looking statements". These statements use words such as "may", "will", "expect",
"anticipate",  "plan",  "estimate" or similar words, and they discuss our future
expectations, projections of financial results or strategies that are subject to
risks and uncertainties.  When you read a forward-looking  statement, you should
keep in mind the risk factors set forth in our Annual Report to  Stockholders on
Form 10-KSB for the year ended  December  31, 1999.  Our actual  results and the
actual outcome of our  expectations  and strategies could be different from what
have been described in this report because of these risks and uncertainties.

General
HCNB Bancorp,  Inc. was incorporated  under the laws of the State of Maryland on
February  24,  1998,  to  serve as a bank  holding  company  for a newly  formed
commercial  bank,  Harbor  Capital  National Bank. The Bank received its charter
from the Office of the  Comptroller  of the  Currency on  December  14, 1999 and
commenced  operations  that day from its some  location  at 1776 East  Jefferson
Street, Rockville,  Maryland. The Bank is a member of the Federal Reserve System
and its deposits are insured by the Federal Deposit Insurance Corporation.

The Company  completed its initial  offering of its shares of common stock ($.01
par value) in October,  1999. In the initial offering,  700,213 shares were sold
at a  price  of  $10.00  per  share;  total  proceeds  from  the  offering  were
$7,002,130.  After  offering  expenses,  the net  proceeds to the  Company  were
$6,828,075.  The Bank was initially  capitalized  by the Company in an amount of
$6,000,000.

Financial Condition
As of March 31,  2000,  assets  were  $9,719,417.  This  represents  a growth of
$2,617,357 or 36.85% since December 31, 1999.  This growth was  attributable  to
demand  for  banking  services  that  had  been  building  during  the  extended
organization  period.  Deposits  at March 31, 2000 were  $3,675,033.  Management
believes  that the timing of the Bank opening  during the holiday  season and in
the  winter  season  had the  effect  of  slowing  growth in  deposit  activity.
Management  has set the interest rates paid on deposits to be competitive in the
market and will increase marketing activities during the second quarter of 2000.
The Bank has no brokered funds.

As of March 31,  2000,  loans  (net of an  allowance  for loan  losses)  totaled
$1,503,262.  In the first full quarter of  operations,  the loan  portfolio  was
composed  mostly of commercial  loans. Of the total portfolio at March 31, 2000,
$706,700  were  loans to  insiders.  Most  were  commercial  loans to  companies
affiliated  with  directors.  All  insider  loans  were made on the same  terms,
including  interest  rates,  maturities  and  collateral  requirements  as those
prevailing at the time for comparable  transactions with non-affiliated  persons
and did not involve more than the normal risk of collectibility or present other
unfavorable  features.  Funds not  extended in loans are held in the  investment
portfolio. At March 31, 2000, the Bank had investments totaling $7,445,865. Most
investments were held in overnight or short term  instruments,  thereby allowing
the Bank to benefit from the rising interest rate environment.

Total  capital at March 31,  2000 was  $5,899,074.  This  amount far exceeds the
Bank's  regulatory  requirements  and  management  believes this capital will be
adequate to fund the Company's and Bank's  operations  for the next twelve month
period.

Results of Operations
On a  consolidated  basis,  the Company  recorded a net loss of $207,514 for the
three month period ending March 31, 2000. Of this amount,  $196,480 was the loss
associated with Bank operations.

Operating results for the year ending December 31, 2000 are projected to reflect
losses.  This  mostly is the  result of  expected  overhead  expenses.  No major
capital  expenditures  are  expected  in the year  2000  and no major  expansion
activities  are  planned.  While  staff  levels are  projected  to increase by 3
persons,  this is not considered  significant  due to the start-up nature of the
Bank.

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<PAGE>

Net Interest Income
Net interest  income is the difference  between income on assets and the cost of
funds  supporting those assets.  Earning assets are composed  primarily of loans
and  investments;   interest  bearing  deposits  make  up  the  cost  of  funds.
Non-interest  bearing deposits and capital are also funding sources.  Changes in
the volume and mix of earning  assets and funding  sources along with changes in
associated interest rates determine changes in net interest income.

The net  interest  income for the three  month  period  ended March 31, 2000 was
$95,398;  $97,095 was income realized from investments,  $20,249 was income from
the loan portfolio and $21,946 was the cost of deposits.

Growth in the loan  portfolio will result in greater  contributions  to interest
income,  because the yields on loans are normally 3% to 5% higher than yields on
investment securities. At March 31, 2000, the weighted average yield on the loan
portfolio was 10.14%; the weighted average yield on the investment portfolio was
5.90%.

The Bank is located in a competitive  environment and the rates of interest paid
on  its  deposits  are  somewhat  driven  by  those  paid  by  other  depository
institutions.  Management  has taken a  position  to be  competitive  within the
market,  normally  placing the Bank in the highest  quartile of those depository
institutions  competing  with it for  deposits.  At March 31,  2000,  the Bank's
weighted  average cost of deposits was 3.82%.  It is  anticipated  that both the
volume of  deposits  and the cost will  increase  during the next  twelve  month
period.  Management  believes  the volume  will  increase  based upon  increased
marketing  activity  and the cost will  increase due to a rising  interest  rate
environment.

Allowance and Provision for Credit Losses
The provision for credit losses  represents an expense to fund the allowance for
credit losses.  These funds are set aside in anticipation of potential of credit
losses in the current  loan  portfolio.  The amount  allocated  is based on many
factors which are considered in  management's  assessment of the loan portfolio.
These factors include economic  conditions and trends, the value and adequacy of
collateral,  the volume and mix of the loan  portfolio,  the  performance of the
portfolio, internal loan processes and capital adequacy of the Bank.

Based upon  management's  analysis of the loan  portfolio  as of March 31, 2000,
management  allocated $18,858 as its provision for credit losses. The amount was
computed  based  upon an  allocation  of 1.25%  of  commercial  loans,  1.50% of
consumer  loans,  1.00% of real estate  loans and 1.375% for  personal  lines of
credit.

Non-Interest Income
Non-interest  income is primarily  deposit  account service charges and fees for
ancillary  services such as ATM access and safe deposit  rentals.  For the three
month period ended March 31, 2000, the Bank realized  non-interest income in the
amount of $2,591.  These fees are volume  driven,  based  mostly on the  deposit
customer base and should increase as the customer base increases.

The Bank  expects to  introduce an internet  banking  program  during the second
quarter of 2000.  Initial  expenses  relating  to the start of the  program  are
minimal due to concessions made by the service  provider.  Monthly expenses will
be based on both a fixed program charge and activity charges,  and are estimated
to be $1,000 to $1,200 per month.  Included  with the internet  banking  program
will be a bill payment  service.  Management  anticipates  that costs associated
with this component service will be borne by the customer.

Non-Interest Expense
Non-interest  expense was  $286,645  for the three month  period ended March 31,
2000.  The largest  component of this amount was salaries and employee  benefits
which was $132,198.

Liquidity and Capital Resources
Stockholders'  equity at March 31, 2000 was  $5,899,074.  No cash dividends have
been declared by the Company since its inception.

Banking  regulatory  authorities  have  implemented  strict  capital  guidelines
directly  related to the credit risk  associated with an  institution's  assets.
Banks and bank holding  companies are required to maintain  capital levels based
on their  "risk  adjusted"  assets  so that  categories  of assets  with  higher
"defined"  credit risks will require more capital support that assets with lower
risks. The Bank has exceeded its capital adequacy requirements to date.

The Bank's liquidity is provided by its cash and cash equivalents, which are its
cash on hand and on deposit with other  financial  institutions  and its federal
funds sold. The levels of such assets are dependent  upon the Bank's  operating,
financing and investment  activities at any given time.  Variations in levels of
cash and cash equivalents are influenced by deposit flows, and loan activity.

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<PAGE>
                           PART II - OTHER INFORMATION

Item 1.        Legal Proceedings

                    None


Item 2.        Changes in Securities and Use of Proceeds

               (a) Not applicable

               (b) Not applicable

               (c) Not applicable

               (d) Not applicable


Item 3         Defaults Upon Senior Securities

                    Not Applicable

Item 4         Submission of Matters to a Vote of Security Holders

                    Not Applicable

Item 5         Other Information

                    None

Item 6         Exhibits

               (a) Exhibit 27 - Financial Data Schedule

               (b) No reports on Form 8-K were filed during the quarter ended
                   March 31, 2000.


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<PAGE>

                                   Signatures

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

                                    HCNB Bancorp, Inc.
                                    (Registrant)

Date May 11, 2000                   /s/ Michael J. Burke
     ------------                   --------------------------------------------
                                    Michael J. Burke, Chairman/President
                                    (Principal Executive Officer)

Date May 11, 2000                   /s/ Li-Min Lee
     ------------                   --------------------------------------------
                                    Li-Min Lee, Treasurer
                                    (Principal Accounting and Financial Officer)



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