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 June 30, 2001


[ ]  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 of                (IRS Employer Identification
 incorporation  or organization)                            No.)


                 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 June 30, 2001,  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>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                        HCNB BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                       June 30,         December 31,
                                                                         2001                2000
                                                                    ------------         ------------
                                                                         (unaudited)       (audited)
<S>                                                                 <C>                  <C>
                                     ASSETS
Cash and cash equivalents:
     On-hand and due from banks                                     $    997,992         $    997,669
     Federal Funds sold                                                8,261,458            5,276,180
Investment securities, held to maturity                                3,109,850            1,600,575
Loans receivable (net of allowance for credit
     losses of $412,650 and $412,650, and deferred loan fees
     of $16,762 and $15,566)                                           9,560,388            8,634,181
Investment in Federal Reserve Board stock, at cost                       180,000              180,000
Accrued interest receivable                                              103,091              125,696
Property and equipment, net                                              464,418              435,074
Other assets, net                                                         93,640               83,433
                                                                    ------------         ------------

         Total assets                                               $ 22,770,837         $ 17,332,808
                                                                    ------------         ------------


                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
     Deposits
         Non-interest bearing                                       $  2,440,518         $    840,859
         Interest bearing                                             15,398,780           11,214,242
     Accounts payable and accrued expenses                                96,060              133,765
                                                                    ------------         ------------

         Total liabilities                                            17,935,358           12,188,866
                                                                    ------------         ------------

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                                              (2,166,651)          (1,858,188)
                                                                    ------------         ------------

         Total stockholders' equity                                    4,835,479            5,143,942
                                                                    ------------         ------------

         Total liabilities and stockholders' equity                 $ 22,770,837         $ 17,332,808
                                                                    ------------         ------------
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>

                        HCNB BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
        FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000
                                   (unaudited)

<TABLE>
<CAPTION>
                                                      Six months ended June 30,           Three  month  ended June 30,
                                                       2001              2000               2001             2000
                                                     ---------         ---------         ---------         ---------
<S>                                                  <C>               <C>               <C>                  <C>
INTEREST INCOME
     Interest income on loans                        $ 494,416         $ 103,124         $ 235,577            82,875
     Interest income on investment securities          211,732           215,878           106,221           118,783
                                                     ---------         ---------         ---------         ---------
         Total interest income                         706,148           319,002           341,798           201,658

INTEREST EXPENSE ON DEPOSITS                           332,673            72,923           169,539            50,977
                                                     ---------         ---------         ---------         ---------
         Net interest income                           373,475           246,079           172,259           150,681

PROVISION FOR LOAN LOSSES                                    0            56,154                 0            37,296
                                                     ---------         ---------         ---------         ---------
         Net interest income after
           provision for loan losses                   373,475           189,925           172,259           113,385

SERVICE FEES AND CHARGES                                12,103             6,711             5,860             4,120
                                                     ---------         ---------         ---------         ---------
         Net interest income with service
           fees and charges                            385,578           196,636           178,119           117,505
                                                     ---------         ---------         ---------         ---------



OTHER OPERATING EXPENSES
      Salaries and benefits                            330,299           288,864           179,805           156,666
     Depreciation and amortization                      26,524            23,331            14,241            11,978
     Occupancy expense, data processing
        and supplies                                   126,436           105,100            60,499            55,042
     Marketing                                          14,168            25,194             7,591            12,924
     Professional fees                                 150,223           107,831            80,141            46,475
     Other operating expenses                           46,372            62,035            26,887            42,625
                                                     ---------         ---------         ---------         ---------
         Total other operating expenses                694,022           612,355           369,164           325,710
                                                     ---------         ---------         ---------         ---------
         Loss before provision for
           income taxes                               (308,444)         (415,719)         (191,045)         (208,205)

PROVISION FOR INCOME TAXES                                   0                 0                 0                 0
                                                     ---------         ---------         ---------         ---------

Net Loss                                             $(308,444)        $(415,719)        $(191,045)        $(208.205)
                                                     ---------         ---------         ---------         ---------

NET LOSS PER SHARE -
       BOTH BASIC AND DILUTED                        ($   .441)        ($   .594)        ($   .273)        ($   .297)

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

See accompanying notes to consolidated financial statements.

<PAGE>

                        HCNB BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2001 AND 2000
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   2001                2000
                                                               -----------         -----------

<S>                                                            <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Cash Inflows
     Interest income                                           $   706,149         $   319,002
     Fees and service charges                                       12,103               6,711
                                                               -----------         -----------
                                                                   718,252             325,713
Cash Outflows
     General and administrative expenses                           694,022             612,355
     Interest on deposits                                          332,673              72,923
     Change in accrued interest receivable                         (22,605)             18,633
     Decrease in other assets                                       10,208              77,767
     Decrease in accounts payable and other liabilities             37,725               5,219
                                                               -----------         -----------
                                                                 1,052,023             786,897
                                                               -----------         -----------
         Net cash used in operating activities                    (337,771)           (461,184)

CASH FLOWS FROM INVESTING ACTIVITIES

Cash Inflows
      Securities held to maturity                                                    2,998,081
      Depreciation and amortization                                 26,281              23,331
Cash Outflows
     Purchase of securities held to maturity                    (1,509,275)                  0
     Net Loan disbursements                                       (926,207)         (4,876,396)
     Purchase of property and equipment                            (55,624)            (24,693)
                                                               -----------         -----------

         Net cash used in investing activities                  (2,464,825)         (1,879,677)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash Inflows
     Net increase in deposits                                    5,784,197           5,296,746
                                                               -----------         -----------
         Net cash provided by financing activities               5,784,197           5,296,746
                                                               -----------         -----------

Net decrease in cash and cash equivalents                        2,985,601           2,955,885

Cash and cash equivalents, beginning of period                   6,273,849           2,340,296
                                                               -----------         -----------
Cash and cash equivalents, end of period                       $ 9,259,450         $ 5,296,181
</TABLE>



See accompanying notes to consolidated financial statements.

<PAGE>

                        HCNB BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2001 AND 2000
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   2001              2000
                                                                ---------         ---------

<S>                                                             <C>               <C>
Reconciliation of net income to net cash
  provided by operating activities
         Net loss                                               $(308,444)        $(415,719)
         Adjustments to reconcile net loss to
           net cash from operating activities
                  Provision for loan losses                             0            56,154
                  Depreciation and amortization                    26,524            23,331
         Effects of changes in operating assets
           and liabilities
                  Accrued interest receivable                      22,605           (18,633)
                  Other assets                                    (10,208)          (77,767)
                  Accounts payable and other liabilities          (37,725)           (5,219)
                                                                ---------         ---------

Net cash used in operating activities                           $(307,248)        $(437,853)
                                                                ---------         ---------
</TABLE>


See accompanying notes to consolidated financial statements.
<PAGE>

                        HCNB BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

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 of 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, Harbor Capital National Bank (the Bank) received authority
from the Office of the  Comptroller  of the  Currency  and the  Federal  Deposit
Insurance Corporation to begin banking operations.

From  February 24, 1998 until  December 14, 1999,  the Company was  considered a
development stage enterprise.

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 attracting  deposits and investing in commercial and consumer loans. 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 in
operations  will be necessary  for the Company to be able to cover  overhead and
other operational costs.


2.       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 June 30, 2001 and for the
three and six month  periods  ended June 30, 2001 and 2000 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, 2000,
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, 2000 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 June 30, 2001 and the results of its  operations for the three and
six month  periods  ended June 30,  2001 and 2000 and the cash flows for the six
month periods ended June 30, 2001 and 2000.  The results of interim  periods are
not necessarily indicative of the results expected for the full fiscal year.


3.       RELATED PARTY TRANSACTIONS

The officers and directors of the Company and the Bank have deposits in the Bank
approximating $2,169,298 at June 30, 2001.

<PAGE>

The  officers  and  directors  of the Company and the Bank have loans due to the
Bank  approximating  $657,408 at June 30,  2001.  All loans made to officers and
directors are made on substantially the same terms, including interest rates and
collateral,  as those  prevailing at the time for comparable  transactions  with
unaffiliated  third  parties  and do not  involve  more than the normal  risk of
repayment or present other unfavorable features.


4.       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. Management believes, as
of June 30, 2001 that the Bank meets all capital adequacy  requirements to which
it is subject.

The Bank  has  been  categorized  under  the  regulatory  framework  for  prompt
corrective action as "well capitalized".  To be categorized as well capitalized,
the Bank must maintain minimum total risk-based,  Tier I risk-based,  and Tier I
leverage ratios.


5.       INCOME TAXES

The Company uses the liability method of accounting for income taxes as required
by SFAS No. 119,  "Accounting  for Income  Taxes".  Under the liability  method,
deferred-tax  assets and liabilities are determined based on differences between
the financial  statement  carrying  amounts and the tax basis of existing assets
and  liabilities  and are  measured at the enacted  rates that will be in effect
when the differences  reverse.  Deferred income taxes will be recognized when it
is deemed more likely than not that the benefits of such  deferred  income taxes
will be realized;  accordingly,  no deferred income taxes or income tax benefits
have been recorded by the Company.

<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 June 30, 2001 and for the three month and six month
periods ended June 30, 2001 and 2000.

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, 2000.  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 sole  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 June 30,  2001,  assets  were  $22,770,837.  This  represents  a growth of
$5,438,029  or 31.37% since  December  31, 2000.  Deposits at June 30, 2001 were
$17,839,298,  an increase since year-end 2000 of $5,784,197 or 47.98%. Net loans
outstanding  at June 30,  2001  were  $9,560,388  as  compared  to  $8,634,181at
December 31, 2000, which reflects as increase of 10.73%. This growth in business
activity was mostly  attributable  to increased  calling  activities  within the
Bank's market area. In addition,  the Bank has developed a growing niche in home
equity  lending.  Management  has set the interest  rates paid on deposits to be
competitive  in the market and has seen an increase in the business  development
activities of its directors and officers. The Bank has no brokered funds.


Funds not  extended in loans are held in the  investment  portfolio  and Federal
funds  sold.  At June 30,  2001,  the Bank had  investment  securities  totaling
$3,109,850  which were  short-term  obligations  of  government  agencies  and a
$100,000  certificate  of deposit which are all held to maturity.  Federal funds
sold totaled  $8,261,458 and other  investments  included  Federal  Reserve Bank
stock.  Since the rate of return on Federal Funds has declined due to actions by
the Federal Reserve, the Bank has decided to invest more of its short-term funds
into investment  securities.  The investment portfolio increased from $1,600,575
at the start of the year to $3,109,850 as of June 30, 2001. The Bank anticipates
this action  will  increase  its yield above the Federal  Funds rate by over 100
bases points.  The bank plans to continue to increase its  investment  portfolio
for the balance of the year. The increase in deposits is the direct result of an
increase marketing campaigns target to the Rockville Chinese American Community.
The  success  of this  marketing  program  has been to  increase  the  amount of
certificate of deposit under $100,000.

Total capital at June 30, 2001 was $4,835,479.  Management believes this capital
will be adequate to fund the Company and Bank's operations.

<PAGE>

Results of Operations
On a consolidated basis for the three and six month periods ended June 30, 2001,
the Company  recorded a net loss of $191,045  and  $308,444  respectively.  This
compares  to a net loss of $208,205  and  $415,719  for the three and  six-month
periods ended June 30, 2000.  The reduction is due mostly to growth  realized by
the bank which provided a greater coverage of overhead expenses.

Operating results for the year ending December 31, 2001 are projected to reflect
losses as loan and deposit  growth is not  expected  to be produce net  interest
income sufficient to cover operating  expenses,  however it is expected that the
Bank will continue to reduce its losses in subsequent periods.


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 after  provision for loan loses for the three-month and
six-month  periods  ended June 30, 2001 was $172,259 and $373,475 as compared to
$113,385 and $189,925 for the same period in 2000.  Most of the growth came as a
result of an increase in the loan  portfolio  whereby  interest on loans totaled
$235,577 and $494,416 for the three and  six-month  periods ended June 30, 2001.
This compares to $82,875 and $103,124 for the three and six-month  periods ended
June 30, 2000.

Growth in the loan  portfolio  resulted  in greater  contributions  to  interest
income in the second  quarter of 2001,  because the yields on loans are normally
2% to 5% higher than yields on investment securities.  At June 30, 2001, the six
month  weighted  average yield on the loan  portfolio  was 9.52%;  the six month
weighted average yield on the investment portfolio was 5.04%.

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 upper  one-quarter of those depository
institutions competing with it for deposits,  however the Bank has chosen not to
aggressively  compete for jumbo  certificates  of deposits which are highly rate
sensitive.  At June 30, 2001, the Bank's  weighted  average cost of deposits was
4.16%.  It is  anticipated  that both the volume of  deposits  and the  interest
expense will increase during the next  twelve-month  period based upon increased
marketing activities.


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 are generally defined by regulatory directives and include lending
policies and procedures,  local economic and business conditions, the nature and
volume of the loan portfolio,  the Bank's lending management and staff, past-due
history,  the Bank's loan review system,  concentrations  of credit and external
factors which may  adversely  affect the credit risk of the loan  portfolio.  In
addition to the overall  analysis of the portfolio,  management  evaluates every
major credit and may assign a risk adjustment, based upon the specific credit.

Based upon  management's  analysis of the loan  portfolio  as of June 30,  2001,
management did not increase the provision for loan and lease losses.  As of June
30, 2001,  the  provision for credit losses  totaled  $412,650.  This amount was
deemed adequate by management and the Board of Directors based upon the analysis
methodology used by the Bank and as suggested by regulatory directives.  At June
30, 2001, the provision for credit losses was 4.14% of total loans  outstanding.
Through June 30, 2001,  no loans have been charges off. The number and amount of
overdue loans is not considered significant.

<PAGE>

The level of the provision for credit losses  reflects a higher than normal risk
exposure.  This exposure is mostly due to loan underwriting and structure issues
as well as credit administration concerns.  Management is committed to improving
its lending  practices and operations.  During the second  quarter,  two lending
professionals with extensive backgrounds in community bank lending and the local
markets have been employed and are addressing the regulatory concerns.

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
and six month periods ended June 30, 2001, the Bank realized non-interest income
in the amount of $5,860 and $12,103.  This compares to $4,120 and $6,711 for the
three and six month periods  realized in the second quarter of 2000.  These fees
are volume driven, based mostly on the deposit customer base and should increase
as the customer base increases. The Bank has seen increased use of its automated
teller machine  especially by consumers  holding debit/ATM cards issued by other
financial institutions.


Non-Interest Expense
Non-interest  expense  for the three and six month  periods  ended June 30, 2001
were  $369,164  and  $694,022.  This  compares to $325,710  and $612,355 for the
corresponding  second  quarter  periods of 2000.  The  largest  portion of these
operating  expenses was salaries  and employee  benefits.  For the three and six
month periods ended June 30, 2001, the salary and employee benefits expenses are
$179,805  and  $330,299.  This  represents  49% and 48% of all  other  operating
expenses.  For the three and six month periods  ending June 30, 2000, the salary
and employee benefits  expenses were $156,666 and $288,864.  This represents 48%
and 47% of all other operating expenses.

It is  anticipated  that  operating  expenses  will  increase  but  it  is  also
anticipated that net interest income will increase in subsequent periods.

Liquidity and Capital Resources
Stockholders'  equity at June 30, 2001 was $4,835,479  compared to $5,143,942 at
December  31,  2000.  The decline in  stockholders'  equity is due mostly to the
operating  results of the Bank.  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 and is
considered to be "well capitalized", under regulatory standards.

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  mostly  influenced  by  deposit  flows and loan
activity.  At June 30, 2001,  the Bank held cash and cash  equivalents  totaling
$997,992 and Federal  funds sold of  $8,261,458.  Management  believes that this
liquidity level is adequate to meet the anticipated needs of the Bank.

<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

          The  Annual  Meeting  of the  stockholders  of HCNB  Bancorp,  Inc,  a
          Maryland  Corporation,  was held on May 23,  2001 at 4:00 p.m.  at the
          Manor Country Club, Rockville, Maryland to consider and vote upon:

          1.  The  election of Class A Directors  to serve for a period of three
              years:

              Name                           For               Withheld
              Michael J. Burke               340,191           184,522
              Li-Min Lee                     435,008             89,705
              William J. Olsen               351,558           173,125

              The  election  of Class B  Director  to serve  for a period of two
              years

              Name                           For               Withheld
              Marc L. Meisel                 503,813             20,900
              James F. Whalen                503,480             21,233

              The election of Class C Director to serve for a period of one year

              Name                           For               Withheld
              Edward R. Kuan                 510,313             14,400



          2.  A proposal to ratify the  selection of Rowles and Company,  LLP to
              serve as the  company's  and Banks  independent  certified  public
              accountants for the 2001 fiscal year.

                                             For               Withheld
                                             468,663             96,050
<PAGE>

          3.  To  approve  the HCNB  Bancorp,  Inc stock  plan for  non-employee
              directors.

                                             For               Withheld
                                             355,191           169,522



Item 5    Other Information

          On March 8, 2001, the Bank entered into a Memorandum of  Understanding
          ("Memorandum") with the Office of the Comptroller of the Currency, the
          Bank's primary regulator,  as a result of the OCC's examination of the
          Bank in December,  2000. The Memorandum is an informal  agreement with
          the OCC that is not  enforceable by the OCC; entry into the Memorandum
          was a voluntary act by the Bank. The Bank agreed,  among other things,
          to take the following actions:
          o   Retain a senior lending officer with appropriate qualifications;
          o   Review and revise the Bank's loan policy,  so that the policy more
              clearly  identifies  acceptable  levels  of  risk,  administrative
              responsibilities  and acceptable  underwriting  and  documentation
              standards;
          o   Correct  certain  credit and  collateral  exceptions on loans that
              have  such  deficiencies,  and  make  future  grants,  extensions,
              renewals or  restructuring  of credit  only after a formal  credit
              analysis is performed  and all  necessary  credit  information  is
              obtained;
          o   Retain an  independent  person or firm to  perform  on-going  loan
              review and develop a loan review system that will contain  certain
              information requested by the OCC; and,
          o   Develop  and  adhere  to  written  programs,  including  an  asset
              diversification  program,  a program  regarding  maintenance of an
              adequate allowance for loan and lease losses, a program to improve
              construction loan underwriting standards and a consumer compliance
              program.

          The  Bank has  established  a  Compliance  Committee  of the  Board of
          Directors  to  address  the  issues in the  Memorandum,  to ensure the
          compliance  of all  regulatory  issues and to report  findings  to the
          Board of Directors on a quarterly  basis.  Management  is committed to
          complying with the terms of the Memorandum as quickly as possible.

          The Bank has retained an experienced community bank lender to serve as
          its Senior  Lending  Officer and as an  executive  officer of the Bank
          subject to approval of the OCC. This  individual  does have sufficient
          authority  to ensure  the Bank's  compliance  with the  Memorandum  of
          Understanding  and the safe and sound  operation of the Bank's lending
          function. As is required by regulation,  this individual's  background
          and experience in light of the executive management position held in a
          de novo bank and the  requirements of the Memorandum of  Understanding
          are being evaluated by the Bank's primary regulator, The Office of the
          Comptroller of the Currency.

          The Bank's Senior Lending Officer is actively  involved in a review of
          the Bank's lending policies and practices and has made recommendations
          to  specifically  address the  regulatory  concerns  expressed  in the
          Report of Examination  and  Memorandum  and to effectively  manage the
          risks associated with the extensions of credit.

          The Bank has  retained  an  outside  vendor  to  provide  loan  review
          services,  as is required by the  Memorandum,  and the formal external
          loan review process has begun.

          An  Allowance  for Loan and Lease  Losses  Program was  developed  and
          approved  by the Board of  Directors  of the Bank in  April,  as was a
          Consumer Compliance Program


Item 6    Exhibits

          (a) None
<PAGE>

          (b) 1) On April 19, 2001,  the Company filed a current  report on Form
              8-K under  item 4,  announcing  that  Jameson &  Associates,  P.A.
              notified  the Audit  Committee  of its  decision  to resign as the
              Company's independent public accountant.

              2) On April 24, 2001 the Company filed  amendment  number 1 to the
              current  report on Form 8-K  originally  filed on April 19,  2001.
              Under  Item 7, the  Company  filed  Exhibit  number 16 which was a
              letter  from  Jameson &  Associates,  P.A. to the  Securities  and
              Exchange Commission confirming the statements made in the Form 8-K
              filed on April 19, 2001.

              3) On May 17, 2001,  the Company filed  amendment  number 2 to the
              current report 8-K originally  filed on April 19, 2001. Under Item
              4 , the Company  announced  that  effective  April 25,  2001,  the
              Company had engaged the firm of Rowles & Company,  LLP to serve as
              its'  independent  public  accountants  and to audit the Company's
              financial statements for the year ending December 31, 2001.





<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 August 14, 2001                        /s/ Michael J. Burke
     ----------------------------           -----------------------------------
                                            Michael J. Burke, Chairman/President
                                           (Principal Executive Officer)

Date August 14, 2001                        /s/ Li-Min Lee
     ----------------------------           -----------------------------------
                                            Li-Min Lee, Treasurer
                                            (Principal Accounting and
                                            Financial Officer)