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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2002

[  ]  Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from ______________________ to _____________________

Commission file number 0-32867

MADISON BANCSHARES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-3720289                          
|                                                               |  |                                     
|(State or Other Jurisdiction
of Incorporation or Organization) |  | (I.R.S. Employer
Identification No.)

35388 U.S. Highway 19, NorthPalm Harbor, Florida 34684(Address of Principal Executive Offices)

(727) 786-3888(Issuers Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)

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

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date;

|                                       |  |                              
|-------------------------------------- |  | -----------------------------
|Common stock, par value $.01 per share |  | 1,498,971 shares             
|                                       |  |                              
|(class)                                |  | Outstanding at April 10, 2002



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TABLE OF CONTENTS



|                              |                                                                    |                                                                                 |  |  |  |  |  | 
|----------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                      
|                              |                                                                    | Condensed Consolidated Balance Sheets                                          
|                              |                                                                    | Condensed Consolidated Statements of Earnings (Unaudited)                      
|                              |                                                                    | Condensed Consolidated Statement of Changes in Stockholders Equity (Unaudited)
|                              |                                                                    | Condensed Consolidated Statements of Cash Flows (Unaudited)                    
|                              |                                                                    | Notes to Condensed Consolidated Financial Statements (Unaudited)               
|                              |                                                                    | Review by Independent Certified Public Accountants                             
|                              |                                                                    | Report on Review by Independent Certified Public Accountants                   
|                              | Item 2. Managements Discussion and Analysis Or Plan of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk
|PART II. OTHER INFORMATION   
|                              | Item 6. Exhibits and Reports on Form 8-K                          
|SIGNATURES                   



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##### Table of Contents



MADISON BANCSHARES, INC.

INDEX

PART I. FINANCIAL INFORMATION

|                           |                                                                                                                   |  |      |       | 
|-------------------------- | ----------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | 
|                           | Item 1. Financial Statements                                                                                      |  | Page
|                           |                                                                                                                   | 
|                           | Condensed Consolidated Balance Sheets -
At March 31, 2002 (unaudited) and At December 31, 2001                    |  |      | 2     | 
|                           | Condensed Consolidated Statements of Earnings -
Three Months ended March 31, 2002 and 2001 (unaudited)            |  |      | 3     | 
|                           | Condensed Consolidated Statement of Changes in Stockholders Equity
Three Months Ended March 31, 2002 (unaudited) |  |      | 4     | 
|                           | Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2002 and 2001 (unaudited)          |  |      | 5     | 
|                           | Notes to Condensed Consolidated Financial Statements (unaudited)                                                  |  |      | 6-8   | 
|                           | Review by Independent Certified Public Accountants                                                                |  |      | 9     | 
|                           | Report on Review by Independent Certified Public Accountants                                                      |  |      | 10    | 
|                           | Item 2.
Managements Discussion and Analysis or Plan of Operations                                                |  |      | 11-13 | 
|                           | Item 3. Quantitative and Qualitative Disclosure about Market Risk                                                 |  |      | 14    | 
|PART II. OTHER INFORMATION |                                                                                                                   |  |      |      
|                           | Item 6. Exhibits and Reports on Form 8-K                                                                          |  |      | 15    | 
|SIGNATURES                 |                                                                                                                   |  | 16   |      

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##### Table of Contents



MADISON BANCSHARES, INC.




PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




Condensed Consolidated Balance Sheets
(Dollars in thousands, except share amounts)

|                                                                             |                                                                                                                             |                            |         |             |         |              |         |        |         | 
|---------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----------- | ------- | ------------ | ------- | ------ | ------- | 
|                                                                             |                                                                                                                             |                            |         | March 31,   |         | December 31,
|                                                                             |                                                                                                                             |                            |         |             |         |             
|                                                                             | Assets                                                                                                                      |                            | 2002    |             | 2001   
|                                                                             |                                                                                                                             |                            |         |            
|                                                                             |                                                                                                                             |                            |         | (unaudited) |         |              |         |       
|Cash and due from banks                                                      |                                                                                                                             | $                          | 2,709   |             |         |              | 2,440   |       
|Interest-bearing deposits with banks                                         |                                                                                                                             |                            | 3,480   |             |         |              | 33      |       
|Federal funds sold                                                           |                                                                                                                             |                            | 7,080   |             |         |              | 328     |       
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             | Cash and cash equivalents                                                                                                   |                            |         | 13,269      |         |              |         | 2,801  |        
|Securities available for sale                                                |                                                                                                                             |                            | 27,130  |             |         |              | 20,882  |       
|Loans, net of allowance for loan losses of $1,571 in 2002
and $1,477 in 2001 |                                                                                                                             |                            | 135,880 |             |         |              | 137,601 |       
|Accrued interest receivable                                                  |                                                                                                                             |                            | 688     |             |         |              | 712     |       
|Premises and equipment, net                                                  |                                                                                                                             |                            | 2,948   |             |         |              | 2,888   |       
|Federal Home Loan Bank of Atlanta stock, at cost                             |                                                                                                                             |                            | 618     |             |         |              | 618     |       
|Deferred tax asset                                                           |                                                                                                                             |                            | 118     |             |         |              | 250     |       
|Other assets                                                                 |                                                                                                                             |                            | 1,069   |             |         |              | 779     |       
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             |                                                                                                                             | $                          | 181,720 |             |         |              | 166,531 |       
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             | Liabilities and Stockholders Equity                                                                                        |                            |         |             |         |              |         |        |        
|Liabilities:                                                                 |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             | Noninterest-bearing demand deposits                                                                                         |                            |         | 13,944      |         |              |         | 11,164 |        
|                                                                             | Savings, NOW and money-market deposits                                                                                      |                            |         | 60,943      |         |              |         | 53,727 |        
|                                                                             | Time deposits                                                                                                               |                            |         | 80,265      |         |              |         | 72,193 |        
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             |                                                                                                                             | Total deposits             |         |             | 155,152 |              |         |        | 137,084 | 
|                                                                             | Federal Home Loan Bank advances                                                                                             |                            |         | 10,000      |         |              |         | 12,200 |        
|                                                                             | Other borrowings                                                                                                            |                            |         | 1,524       |         |              |         | 1,801  |        
|                                                                             | Official checks                                                                                                             |                            |         | 1,296       |         |              |         | 1,736  |        
|                                                                             | Accrued expenses and other liabilities                                                                                      |                            |         | 1,181       |         |              |         | 1,457  |        
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             |                                                                                                                             | Total liabilities          |         |             | 169,153 |              |         |        | 154,278 | 
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|Stockholders equity:                                                        |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             | Preferred stock, $0.01 par value, authorized 1,000,000 shares;
none issued or outstanding                                   |                            |         |            |         |              |         |       |        
|                                                                             | Common stock, $0.01 par value, authorized 4,000,000 shares;
issued and outstanding 1,498,971 and 1,493,971 in 2002 and 2001 |                            |         | 15          |         |              |         | 15     |        
|                                                                             | Additional paid-in capital                                                                                                  |                            |         | 12,705      |         |              |         | 12,653 |        
|                                                                             | Accumulated deficit                                                                                                         |                            |         | (2          | )       |              |         | (355   | )      
|                                                                             | Accumulated other comprehensive income (loss)                                                                               |                            |         | (151        | )       |              |         | (60    | )      
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             |                                                                                                                             | Total stockholders equity |         |             | 12,567  |              |         |        | 12,253  | 
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       
|                                                                             |                                                                                                                             | $                          | 181,720 |             |         |              | 166,531 |       
|                                                                             |                                                                                                                             |                            |         |             |         |              |         |       

See Accompanying Notes to Condensed Consolidated Financial Statements.

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MADISON BANCSHARES, INC.




Condensed Consolidated Statements of Earnings (Unaudited)
(In thousands, except per share amounts)

|                          |                                     |                                                     |     |                    |       |      |     |       |       | 
|------------------------- | ----------------------------------- | --------------------------------------------------- | --- | ------------------ | ----- | ---- | --- | ----- | ----- | 
|                          |                                     |                                                     |     | Three Months Ended
|                          |                                     |                                                     |     | March 31,         
|                          |                                     |                                                     |     |                   
|                          |                                     |                                                     |     | 2002               |       | 2001
|                          |                                     |                                                     |     |                    |       |     
|Interest income:          |                                     |                                                     |     |                    |       |      |     |      
|                          | Loans                               |                                                     | $   | 2,615              |       |      |     | 2,615 |      
|                          | Securities available for sale       |                                                     |     | 250                |       |      |     | 186   |      
|                          | Securities held to maturity         |                                                     |     |                   |       |      |     | 96    |      
|                          | Other interest-earning assets       |                                                     |     | 44                 |       |      |     | 77    |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Total interest income                               |     |                    | 2,909 |      |     |       | 2,974 | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|Interest expense:         |                                     |                                                     |     |                    |       |      |     |      
|                          | Deposits                            |                                                     |     | 1,050              |       |      |     | 1,591 |      
|                          | Borrowed funds                      |                                                     |     | 126                |       |      |     | 35    |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Total interest expense                              |     |                    | 1,176 |      |     |       | 1,626 | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Net interest income                                 |     |                    | 1,733 |      |     |       | 1,348 | 
|Provision for loan losses |                                     |                                                     | 109 |                    |       |      | 79  |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Net interest income after provision for loan losses |     |                    | 1,624 |      |     |       | 1,269 | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|Noninterest income:       |                                     |                                                     |     |                    |       |      |     |      
|                          | Service charges on deposit accounts |                                                     |     | 113                |       |      |     | 118   |      
|                          | Other service charges and fees      |                                                     |     | 34                 |       |      |     | 34    |      
|                          | Gain on sale of securities          |                                                     |     |                   |       |      |     | 23    |      
|                          | Other                               |                                                     |     | 16                 |       |      |     | 29    |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Total noninterest income                            |     |                    | 163   |      |     |       | 204   | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|Noninterest expenses:     |                                     |                                                     |     |                    |       |      |     |      
|                          | Employee compensation and benefits  |                                                     |     | 709                |       |      |     | 587   |      
|                          | Occupancy and equipment             |                                                     |     | 172                |       |      |     | 155   |      
|                          | Data processing expense             |                                                     |     | 65                 |       |      |     | 61    |      
|                          | Professional fees                   |                                                     |     | 31                 |       |      |     | 24    |      
|                          | Federal deposit insurance premium   |                                                     |     | 6                  |       |      |     | 6     |      
|                          | Other expense                       |                                                     |     | 239                |       |      |     | 220   |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Total noninterest expenses                          |     |                    | 1,222 |      |     |       | 1,053 | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Earnings before income taxes                        |     |                    | 565   |      |     |       | 420   | 
|Income taxes              |                                     |                                                     | 212 |                    |       |      | 157 |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          |                                     | Net earnings                                        |     | $                  | 353   |      |     |       | 263   | 
|                          |                                     |                                                     |     |                    |       |      |     |      
|Earnings per share:       |                                     |                                                     |     |                    |       |      |     |      
|                          | Basic earnings per share            |                                                     | $   | 0.24               |       |      |     | 0.18  |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|                          | Diluted earnings per share          |                                                     | $   | 0.23               |       |      |     | 0.17  |      
|                          |                                     |                                                     |     |                    |       |      |     |      
|Dividends per share       |                                     | $                                                   |    |                    |       |      |    |      
|                          |                                     |                                                     |     |                    |       |      |     |      

See Accompanying Notes to Condensed Consolidated Financial Statements.

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MADISON BANCSHARES, INC.




Condensed Consolidated Statement of Changes in Stockholders Equity (Unaudited)

Three Months Ended March 31, 2002
(In thousands)

|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |     |  
|------------------------------------- | ----------------------------------------------------------------------------------------------- | - | ------ | - | ------- |  | ----------- | - | ------ |  | ----- | --- | ------- |  | ----------- | --- | - |  | ------ | --- | -
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  | Accumulated |     |   |  |       
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  | Other       |     |   |  |       
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  | Compre-     |     |   |  |       
|                                      |                                                                                                 |   |        |   |         |  | Additional  |   |        |  |       |     | hensive |  |             |     |  
|                                      |                                                                                                 |   | Common |   | Paid-in |  | Accumulated |   | Income |  |       |     |        
|                                      |                                                                                                 |   | Stock  |   | Capital |  | Deficit     |   | (Loss) |  | Total
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |      
|Balance at December 31, 2001          |                                                                                                 | $ | 15     |   |         |  | 12,653      |   |        |  | (355  | )   |         |  | (60         | )   |   |  | 12,253 |    
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    
|Comprehensive income:                 |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    
|                                      | Net earnings (unaudited)                                                                        |   |        |  |         |  |             |  |        |  |       | 353 |         |  |             |    |   |  |        | 353 |  
|                                      | Net change in unrealized loss on
securities available for sale, net of
taxes of $56 (unaudited) |   |        |  |         |  |             |  |        |  |       |    |         |  |             | (91 | ) |  |        | (91 | )
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    
|Comprehensive income (unaudited)      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  | 262    |    
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    
|Sale of common stock (unaudited)      |                                                                                                 |   |       |   |         |  | 52          |   |        |  |      |     |         |  |            |     |   |  | 52     |    
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    
|Balance at March 31, 2002 (unaudited) |                                                                                                 | $ | 15     |   |         |  | 12,705      |   |        |  | (2    | )   |         |  | (151        | )   |   |  | 12,567 |    
|                                      |                                                                                                 |   |        |   |         |  |             |   |        |  |       |     |         |  |             |     |   |  |        |    

See Accompanying Notes to Condensed Consolidated Financial Statements.

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MADISON BANCSHARES, INC.




Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |        |    |       |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------ | -------------------------------------------------------------------------------- | --------------------------------------------------- | --- | ------------------ | ------ | ------ | -- | ----- | ------ | -
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     | Three Months Ended
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     | March 31,         
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                   
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     | 2002               |        | 2001  
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|Cash flows from operating activities:                                                                                                          |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               | Net earnings                                                                                  |              | $                                                                                | 353                                                 |     |                    |        | 263    |   
|                                                                                                                                               | Adjustments to reconcile net earnings to net cash (used in) provided by
operating activities: |              |                                                                                  |                                                     |     |                    |        |        |   
|                                                                                                                                               |                                                                                               |              | Provision for loan losses                                                        |                                                     |     | 109                |        |        |    | 79    |       
|                                                                                                                                               |                                                                                               |              | Depreciation and amortization                                                    |                                                     |     | 96                 |        |        |    | 85    |       
|                                                                                                                                               |                                                                                               |              | Amortization of discounts and premiums on securities and deferred loan
fees, net |                                                     |     | 5                  |        |        |    | (18   | )     
|                                                                                                                                               |                                                                                               |              | Decrease in accrued interest receivable                                          |                                                     |     | 24                 |        |        |    | 121   |       
|                                                                                                                                               |                                                                                               |              | Provision for deferred taxes                                                     |                                                     |     | 188                |        |        |    |      |       
|                                                                                                                                               |                                                                                               |              | Increase in other assets                                                         |                                                     |     | (290               | )      |        |    | (323  | )     
|                                                                                                                                               |                                                                                               |              | (Decrease) increase in official checks, accrual expenses and other liabilities   |                                                     |     | (716               | )      |        |    | 342   |       
|                                                                                                                                               |                                                                                               |              | Gain on sale of securities                                                       |                                                     |     |                   |        |        |    | (23   | )     
|                                                                                                                                               |                                                                                               |              | Gain on sale of loans                                                            |                                                     |     |                   |        |        |    | (2    | )     
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               |                                                                                               |              |                                                                                  | Net cash (used in) provided by operating activities |     |                    | (231   | )      |    |       | 524    |  
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|Cash flows from investing activities:                                                                                                          |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               | Net decrease (increase) in loans                                                              |              |                                                                                  | 1,615                                               |     |                    |        | (3,756 | ) 
|                                                                                                                                               | Securities held to maturity principle repayments                                              |              |                                                                                  |                                                    |     |                    |        | 15     |   
|                                                                                                                                               | Net purchase of securities available for sale                                                 |              |                                                                                  | (8,066                                              | )   |                    |        |       |   
|                                                                                                                                               | Securities available for sale principle repayments                                            |              |                                                                                  | 1,663                                               |     |                    |        | 257    |   
|                                                                                                                                               | Net proceeds from sales of securities available for sale                                      |              |                                                                                  |                                                    |     |                    |        | 2,427  |   
|                                                                                                                                               | Net purchase of premises and equipment                                                        |              |                                                                                  | (156                                                | )   |                    |        | (47    | ) 
|                                                                                                                                               | Net increase in Federal Home Loan Bank stock                                                  |              |                                                                                  |                                                    |     |                    |        | (26    | ) 
|                                                                                                                                               | Proceeds from sale of loans                                                                   |              |                                                                                  |                                                    |     |                    |        | 154    |   
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               |                                                                                               |              |                                                                                  | Net cash used in investing activities               |     |                    | (4,944 | )      |    |       | (976   | )
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|Cash flows from financing activities:                                                                                                          |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               | Net increase in deposits                                                                      |              |                                                                                  | 18,068                                              |     |                    |        | 6,051  |   
|                                                                                                                                               | Net decrease in other borrowings                                                              |              |                                                                                  | (277                                                | )   |                    |        |       |   
|                                                                                                                                               | Net (decrease) increase in Federal Home Loan Bank advances                                    |              |                                                                                  | (2,200                                              | )   |                    |        | 9,750  |   
|                                                                                                                                               | Proceeds from sale of stock                                                                   |              |                                                                                  | 52                                                  |     |                    |        |       |   
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               |                                                                                               |              |                                                                                  | Net cash provided by financing activities           |     |                    | 15,643 |        |    |       | 15,801 |  
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               |                                                                                               |              |                                                                                  | Net increase in cash and cash equivalents           |     |                    | 10,468 |        |    |       | 15,349 |  
|Cash and cash equivalents at beginning of period                                                                                               |                                                                                               |              | 2,801                                                                            |                                                     |     |                    | 2,672  |       
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|Cash and cash equivalents at end of period                                                                                                     |                                                                                               | $            | 13,269                                                                           |                                                     |     |                    | 18,021 |       
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|Supplemental disclosure of cash flow information:                                                                                              |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               | Cash paid during the period for:                                                              |              |                                                                                  |                                                     |     |                    |        |        |   
|                                                                                                                                               |                                                                                               |              | Interest                                                                         |                                                     | $   | 1,060              |        |        |    | 1,570 |       
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       
|                                                                                                                                               |                                                                                               | Income taxes |                                                                                  | $                                                   | 165 |                    |        |        | 13 |      
|Noncash transaction-
Accumulated other comprehensive (loss) income, net change in
unrealized loss on securities available for sale, net of tax |                                                                                               | $            | (91                                                                              | )                                                   |     |                    | 185    |       
|                                                                                                                                               |                                                                                               |              |                                                                                  |                                                     |     |                    |        |       

See Accompanying Notes to Condensed Consolidated Financial Statements.

5



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##### Table of Contents



MADISON BANCSHARES, INC.




Notes to Condensed Consolidated Financial Statements (Unaudited)



|1. |  | General.On June 19, 2001, the shareholders of Madison Bank (the Bank)
approved a plan of corporate reorganization under which the Bank would
become a wholly-owned subsidiary of Madison BancShares, Inc. (the Holding
Company) (collectively, the Company). This transaction became
effective on September 4, 2001. Initially, the only activity of the
Holding Company is the operation of the Bank. This corporate
reorganization was accounted for similar to a pooling of interests. All
previously issued $1.10 par value common shares of the Bank were exchanged
on a one for one basis for $.01 par value common shares of the Holding
Company. The Bank is a state-chartered commercial bank incorporated under
the laws of the State of Florida. The deposits of the Bank are insured by
the Federal Deposit Insurance Corporation. The Bank currently provides a
variety of banking services to small and middle-market businesses and
individuals through its three banking offices located in Pinellas County,
Florida and one banking office in Pasco County, Florida.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In the opinion of the management of the Company, the accompanying
condensed consolidated financial statements contain all adjustments
(consisting principally of normal recurring accruals) necessary to
present fairly the financial position at March 31, 2002 and the results
of operations and cash flows for the three-month periods ended March 31,
2002 and 2001. The results of operations for the three months ended
March 31, 2002 are not necessarily indicative of the results to be
expected for the year ending December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|2. |  | Loan Impairment and Loan Losses.Loans identified as impaired during the
three-months ended March 31, 2002 are as follows. There were no loans
identified as impaired during the three months ended March 31, 2001 (in
thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                                                                        |  |                    |       | 
|----------------------------------------------------------------------- |  | ------------------ | ----- | 
|                                                                        |  | Three Months Ended
|                                                                        |  | March 31,         
|                                                                        |  | 2002              
|                                                                        |  |                   
|Gross loan with related allowance for losses recorded, at end of period |  | $                  | 1,415 | 
|Less: Allowance on this loan                                            |  |                    | 142   | 
|                                                                        |  |                    |       | 
|Net investment in impaired loan                                         |  | $                  | 1,273 | 
|                                                                        |  |                    |       | 
|Average net investment in impaired loans                                |  | $                  | 1,481 | 
|                                                                        |  |                    |       | 
|Interest income recognized on impaired loans                            |  | $                  | 3     | 
|                                                                        |  |                    |       | 
|Interest income received on impaired loans                              |  | $                  | 3     | 
|                                                                        |  |                    |       | 

(continued)

6



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##### Table of Contents



MADISON BANCSHARES, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|2. |  | Loan Impairment and Loan Losses, Continued.The activity in the
allowance for loan losses is as follows (in thousands):
|-- |  | ----------------------------------------------------------------------------------------------------------------------

|                               |  |                    |       |      |  |  |       | 
|------------------------------ |  | ------------------ | ----- | ---- |  |  | ----- | 
|                               |  | Three Months Ended
|                               |  | March 31,         
|                               |  |                   
|                               |  | 2002               |       | 2001
|                               |  |                    |       |     
|Balance at beginning of period |  | $                  | 1,477 |      |  |  | 966   | 
|Provision for loan losses      |  |                    | 109   |      |  |  | 79    | 
|Charge-offs                    |  |                    | (21   | )    |  |  |      | 
|Recoveries                     |  |                    | 6     |      |  |  | 54    | 
|                               |  |                    |       |      |  |  |       | 
|Balance at end of period       |  | $                  | 1,571 |      |  |  | 1,099 | 
|                               |  |                    |       |      |  |  |       | 



|3. |  | Earnings Per Share (EPS).Earnings per share (EPS) of common stock
has been computed on the basis of the weighted-average number of shares of
common stock outstanding. For 2002 and 2001, outstanding stock options
are considered dilutive securities for purposes of calculating diluted EPS
which is computed using the treasury stock method. All per share amounts
reflect the 5% stock dividends declared on May 15, 2001. The following
tables present the calculations of EPS (dollars in thousands, except per
share amounts).
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                      |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |     | 
|----------------------------------------------------- | --------------------------------------------------------------------- |  | ---------------------------- | --- | ------ |  | --------- | --------- | -------- |  | ------ | --- | ------ |  | ------------ | --- | ----- |  | ------ | --------- |  |  | - | --- | 
|                                                      |                                                                       |  | Three Months Ended March 31,
|                                                      |                                                                       |  |                             
|                                                      |                                                                       |  | 2002                         |     | 2001  
|                                                      |                                                                       |  |                              |     |       
|                                                      |                                                                       |  |                              |     |        |  | Weighted- |           | Per      |  |        |     |        |  | Weighted-Per |     |       |  |       
|                                                      |                                                                       |  |                              |     |        |  | Average   |           | Share    |  |        |     |        |  | Average      |     | Share
|                                                      |                                                                       |  | Earnings                     |     | Shares |  | Amount    |           | Earnings |  | Shares |     | Amount
|                                                      |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |       
|Basic EPS:                                            |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    
|                                                      | Net earnings available to
common stockholders                         |  | $                            | 353 |        |  |           | 1,495,749 |          |  | $      | .24 |        |  | $            | 263 |       |  |        | 1,491,731 |  |  | $ | .18 | 
|                                                      |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    
|Effect of dilutive securities-                        |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    
|Incremental shares from assumed
conversion of options |                                                                       |  |                             |     |        |  | 68,247    |           |          |  |        |     |        |  |             |     |       |  | 35,212 |           |  |  |   |    
|                                                      |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    
|Diluted EPS:                                          |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    
|                                                      | Net earnings available to
common stockholders
and assumed conversions |  | $                            | 353 |        |  |           | 1,563,996 |          |  | $      | .23 |        |  | $            | 263 |       |  |        | 1,526,943 |  |  | $ | .17 | 
|                                                      |                                                                       |  |                              |     |        |  |           |           |          |  |        |     |        |  |              |     |       |  |        |           |  |  |   |    

(continued)

7



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##### Table of Contents



MADISON BANCSHARES, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|4. |  | Regulatory Capital.The Bank is required to maintain certain minimum
regulatory capital requirements. The following is a summary at March 31,
2002 of the regulatory capital requirements and the Banks actual capital
on a percentage basis:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                              |  |        |       |             |  |            |      |  
|--------------------------------------------- |  | ------ | ----- | ----------- |  | ---------- | ---- | -
|                                              |  |        |       |             |  | Regulatory
|                                              |  | Actual |       | Requirement
|                                              |  |        |       |            
|Total capital to risk-weighted assets         |  |        | 10.19 | %           |  |            | 8.00 | %
|Tier I capital to risk-weighted assets        |  |        | 9.13  | %           |  |            | 4.00 | %
|Tier I capital to total assets-leverage ratio |  |        | 7.81  | %           |  |            | 4.00 | %

8



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##### Table of Contents



MADISON BANCSHARES, INC.




Review by Independent Certified Public Accountants

Hacker, Johnson & Smith PA, independent certified public accountants, has made
a limited review of the financial data as of March 31, 2002, and for the
three-month periods ended March 31, 2002 and 2001 presented in this document,
in accordance with standards established by the American Institute of Certified
Public Accountants.

Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.

9



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##### Table of Contents






Report on Review by Independent Certified Public Accountants

The Board of Directors
Madison BancShares, Inc.
Palm Harbor, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of
Madison BancShares, Inc. and Subsidiary (the Company) as of March 31, 2002,
and the related condensed consolidated statements of earnings and cash flows
for the three-month periods ended March 31, 2002 and 2001, and the condensed
consolidated statement of changes in stockholders equity for the three-month
period ended March 31, 2002. These financial statements are the responsibility
of the Companys management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, 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 reviews, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet as of December 31, 2001, and the related consolidated statements of
earnings, changes in stockholders equity and cash flows for the year then
ended (not presented herein); and in our report dated January 25, 2002 we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2001, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.

HACKER, JOHNSON & SMITH PA
Tampa, Florida
April 12, 2002

10



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##### Table of Contents



MADISON BANCSHARES, INC.




Item 2. Managements Discussion and Analysis
Or Plan of Operations

General



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 19, 2001, the shareholders of Madison Bank (the Bank) approved a
plan of corporate reorganization under which the Bank would become a
wholly-owned subsidiary of Madison BancShares, Inc. (the Holding Company)
(collectively, the Company). This transaction became effective on
September 4, 2001. Initially, the only activity of the Holding Company is the
operations of the Bank. This corporate reorganization was accounted for
similar to a pooling of interests. All previously issued $1.10 par value
common shares of the Bank were exchanged on a one for one basis for $.01 par
value common shares of the Holding Company. The Bank is a state-chartered
commercial bank incorporated under the laws of the State of Florida. The
deposits of the Bank are insured by the Federal Deposit Insurance
Corporation. The Bank currently provides a variety of banking services to
small and middle-market businesses and individuals through its three banking
offices located in Pinellas County, Florida and one banking office in Pasco
County, Florida.

Liquidity and Capital Resources



| |                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys primary source of cash during the three months ended March 31,
2002 was from net deposit inflows of $18.1 million. Cash was used primarily
to purchase securities of $8.1 million. At March 31, 2002, the Company had
outstanding commitments to originate loans totaling $9.1 million. At March
31, 2002, the Bank exceeded its regulatory liquidity requirements.

The following rates are presented for the dates and periods indicated:

|                                                                                                |  |              |       |              |  |           |      |              |  |   |      |  
|----------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | --------- | ---- | ------------ |  | - | ---- | -
|                                                                                                |  | Three Months |       |              |  |           |      | Three Months
|                                                                                                |  | Ended        |       | Year Ended   |  | Ended    
|                                                                                                |  | March 31,    |       | December 31, |  | March 31,
|                                                                                                |  | 2002         |       | 2001         |  | 2001     
|                                                                                                |  |              |       |              |  |          
|Average equity as a percentage
of average assets                                                |  |              | 7.13  | %            |  |           | 7.37 | %            |  |   | 7.36 | %
|Equity to total assets at end of period                                                         |  |              | 6.92  | %            |  |           | 7.36 | %            |  |   | 6.96 | %
|Book value per share (2)                                                                        |  | $            | 8.38  |              |  | $         | 8.20 |              |  | $ | 7.63 |  
|Return on average assets (1)                                                                    |  |              | 0.81  | %            |  |           | 0.67 | %            |  |   | 0.69 | %
|Return on average equity (1)                                                                    |  |              | 11.38 | %            |  |           | 9.11 | %            |  |   | 9.42 | %
|Noninterest expenses to average assets (1)                                                      |  |              | 2.81  | %            |  |           | 2.70 | %            |  |   | 2.78 | %
|Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period |  |              | 0.70  | %            |  |           | 0.85 | %            |  |   |     | %



---

|(1) |  | Annualized for the three months ended March 31.
|--- |  | -----------------------------------------------
|   
|(2) |  | Adjusted for stock dividends.                  

11



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##### Table of Contents



MADISON BANCSHARES, INC.

Results of Operations

The following table sets forth, for the periods indicated, information
regarding (i) the total dollar amount of interest and dividend income of the
Company from interest-earning assets and the resultant average yields; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average cost; (iii) net interest income; (iv) interest-rate spread;
and (v) net interest margin.

|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |      |      | 
|-------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------ | ------ | ---------------------------- | ------- | --------- | ----- | -------- | ----- | ------- | ---- | --------- | ---- | ------ | ------ | -------- | ------- | ------- | ----- | ----- | ----- |  | ---- | ---- | ---- | 
|                                                                                 |                                             |                                            |        | Three Months Ended March 31,
|                                                                                 |                                             |                                            |        |                             
|                                                                                 |                                             |                                            |        | 2002                         |         | 2001     
|                                                                                 |                                             |                                            |        |                              |         |          
|                                                                                 |                                             |                                            |        |                              |         |           |       | Interest |       | Average |      |           |      |        |        | Interest |         | Average
|                                                                                 |                                             |                                            |        | Average                      |         | and       |       | Yield/   |       | Average |      | and       |      | Yield/
|                                                                                 |                                             |                                            |        | Balance                      |         | Dividends |       | Rate     |       | Balance |      | Dividends |      | Rate  
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |       
|                                                                                 |                                             |                                            |        | (Dollars in thousands)      
|Interest-earning assets:                                                         |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 | Loans (1)                                   |                                            | $      | 136,656                      |         |           |       | 2,615    |       |         |      | 7.65      | %    |        | $      | 116,277  |         |         |       | 2,615 |       |  |      | 9.00 | %   
|                                                                                 | Securities                                  |                                            |        | 21,386                       |         |           |       | 250      |       |         |      | 4.68      |      |        |        | 23,043   |         |         |       | 282   |       |  |      | 4.90 |     
|                                                                                 | Other interest-earning assets (2)           |                                            |        | 8,284                        |         |           |       | 44       |       |         |      | 2.12      |      |        |        | 5,393    |         |         |       | 77    |       |  |      | 5.71 |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             | Total interest-earning assets              |        |                              | 166,326 |           |       |          | 2,909 |         |      |           | 7.00 |        |        |          | 144,713 |         |       |       | 2,974 |  |      |      | 8.22 | 
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Noninterest-earning assets                                                       |                                             |                                            | 7,843  |                              |         |           |       |          |       |         |      |           |      |        | 6,917  |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             | Total assets                               |        | $                            | 174,169 |           |       |          |       |         |      |           |      |        |        | $        | 151,630 |         |       |       |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Interest-bearing liabilities:                                                    |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 | Savings, NOW, money-market
deposit accounts |                                            |        | 56,583                       |         |           |       | 208      |       |         |      | 1.47      |      |        |        | 44,338   |         |         |       | 334   |       |  |      | 3.01 |     
|                                                                                 | Time deposits                               |                                            |        | 77,514                       |         |           |       | 842      |       |         |      | 4.35      |      |        |        | 80,417   |         |         |       | 1,257 |       |  |      | 6.25 |     
|                                                                                 | Other borrowings (3)                        |                                            |        | 12,349                       |         |           |       | 126      |       |         |      | 4.08      |      |        |        | 3,093    |         |         |       | 35    |       |  |      | 4.53 |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             | Total interest-bearing liabilities         |        |                              | 146,446 |           |       |          | 1,176 |         |      |           | 3.21 |        |        |          | 127,848 |         |       |       | 1,626 |  |      |      | 5.09 | 
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Noninterest-bearing liabilities                                                  |                                             |                                            | 15,313 |                              |         |           |       |          |       |         |      |           |      |        | 12,619 |          |         |         |       |       |       |  |      |     
|Stockholders equity                                                             |                                             |                                            | 12,410 |                              |         |           |       |          |       |         |      |           |      |        | 11,163 |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             | Total liabilities and
stockholders equity |        | $                            | 174,169 |           |       |          |       |         |      |           |      |        |        | $        | 151,630 |         |       |       |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Net interest income                                                              |                                             |                                            |        |                              |         | $         | 1,733 |          |       |         |      |           |      |        |        |          |         | $       | 1,348 |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Interest-rate spread (4)                                                         |                                             |                                            |        |                              |         |           |       |          |       |         | 3.79 | %         |      |        |        |          |         |         |       |       |       |  | 3.13 | %   
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Net interest margin (5)                                                          |                                             |                                            |        |                              |         |           |       |          |       |         | 4.17 | %         |      |        |        |          |         |         |       |       |       |  | 3.73 | %   
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     
|Ratio of average interest-earning assets to
average interest-bearing liabilities |                                             |                                            | 1.14   |                              |         |           |       |          |       |         |      |           |      |        | 1.13   |          |         |         |       |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |       |          |       |         |      |           |      |        |        |          |         |         |       |       |       |  |      |     



---

|(1) |  | Includes loans on nonaccrual status.                                                                                                                     
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes Federal Home Loan Bank stock, federal funds sold and
interest-bearing deposits.                                                                 
|   
|(3) |  | Includes securities sold under agreements to repurchase, Federal Home
Loan Bank advances and other borrowings.                                           
|   
|(4) |  | Interest-rate spread represents the difference between the average yield
on interest-earning assets and the average rate of interest-bearing
liabilities.
|   
|(5) |  | Net interest margin is net interest income divided by average
interest-earning assets.                                                                   

12



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##### Table of Contents



MADISON BANCSHARES, INC.

Comparison of the Three-Month Periods Ended March 31, 2002 and 2001



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | General.Net earnings for the three-months ended March 31, 2002 were
$353,000 or $.24 per basic and $.23 per diluted share compared to
$263,000 or $.18 per basic and $.17 per diluted share for 2001. The
increase in net earnings was due to an increase in net interest income,
partially offset by an increase in noninterest expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Interest Income and Expense.Interest income decreased by $65,000 to
$2,909,000 for the three-month period ended March 31, 2002 from
$2,974,000 for the three months ended March 31, 2001. Interest on loans
remained the same at $2.6 million for the three-months ended March 31,
2002 and 2001 due to an increase in the average loan portfolio balance to
$136.7 million from $116.3 million, offset by a decrease in the
weighted-average yield earned in 2002 to 7.65% from 9.00% in 2001.
Interest on securities decreased for the three months ended March 31,
2002 to $250,000 from $282,000 in 2001. The decrease was due to a
decrease in the average balance to $21.4 million in 2002 from $23.0
million in 2001 and a decrease in the weighted-average yield earned in
2002 to 4.68% from 4.90% in 2001.                                                                                                                                                             
|
| | Interest expense on deposits decreased $541,000 to $1,050,000 million for
the three-months ended March 31, 2002 from $1,591,000 in 2001. The
decrease is due to a decrease in the average rate paid on interest-bearing
deposits in 2002 to 3.13% from 5.10% in 2001, partially offset by an
increase in the average deposits in 2002 to $134.1 million compared to
$124.8 million in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Interest expense on other borrowings increased to $126,000 for the
three-months ended March 31, 2002 from $35,000 for the three-months ended
March 31, 2001. The increase is due to an increase in average other
borrowings to $12.3 million in 2002 from $3.1 million in 2001, partially
offset by a decrease in the weighted rate paid to 4.08% in 2002 from 4.53%
in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Provision for Loan Losses.The provision for loan losses is charged to
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type
of lending conducted by the Bank, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Banks market areas, and other factors related to the
collectibility of the Banks loan portfolio. The provision for loan
losses was $109,000 for the three-month period ended March 31, 2002
compared to $79,000 for the same period in 2001. The allowance for loan
losses is $1,571,000 at March 31, 2002. While management believes that
its allowance for loan losses is adequate as of March 31, 2002, future
adjustments to the Banks allowance for loan losses may be necessary if
economic conditions differ substantially from the assumptions used in
making the initial determination.
|
| | Noninterest Income.Noninterest income decreased to $163,000 in 2002 from
$204,000 for the three- months ended March 31, 2001. The decrease is
primarily due to gains realized on the sale of securities in 2001 of
$23,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Noninterest Expense.Total noninterest expense increased to $1,222,000 for
the three-months ended March 31, 2002 from $1,053,000 for the comparable
period ended March 31, 2001, primarily due to an increase in employee
compensation and benefits and occupancy expense both relating to the
opening of one new office in the fourth quarter of 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | Income Taxes.The income tax provision for the three months ended March 31,
2002 was $212,000 or 37.5% of earnings before income taxes compared to
$157,000 or 37.4% for the period ended March 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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MADISON BANCSHARES, INC.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and
rates. The Banks market risk arises primarily from interest rate risk
inherent in its lending and deposit taking activities. The Bank has no risk
related to trading accounts, commodities or foreign exchange.

Management actively monitors and manages its interest rate risk exposure. The
primary objective in managing interest-rate risk is to limit, within
established guidelines, the adverse impact of changes in interest rates on the
Banks net interest income and capital, while adjusting the Banks
asset-liability structure to obtain the maximum yield-cost spread on that
structure. Management relies primarily on its asset-liability structure to
control interest rate risk. However, a sudden and substantial increase in
interest rates could adversely impact the Banks earnings, to the extent that
the interest rates borne by assets and liabilities do not change at the same
speed, to the same extent, or on the same basis. There have been no
significant changes in the Banks market risk exposure since December 31, 2001.

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MADISON BANCSHARES, INC.




PART II. OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K

|    |  |                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------
|(a) |  | Exhibits. The following exhibits are filed with or incorporated by
reference into this report.

|            |      |  |                        |                                                                                                                        |  | 
|----------- | ---- |  | ---------------------- | ---------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit No. |      |  | Description of Exhibit
|            |      |  |                       
|*           | 2    |  |                        | Plan of acquisition, reorganization,
arrangement, liquidation, or succession                                          
|*           | 3.1  |  |                        | Articles of Incorporation of Madison BancShares, Inc.                                                                 
|*           | 3.2  |  |                        | Bylaws of Madison BancShares, Inc.                                                                                    
|*           | 4    |  |                        | Sample Stock Certificate for Madison BancShares, Inc.                                                                 
|*           | 10.1 |  |                        | Employment Agreement of Henry Speight                                                                                 
|*           | 10.2 |  |                        | Employment Agreement of Robert McGivney                                                                               
|*           | 10.3 |  |                        | Employment Agreement of David Paetzold                                                                                
|**          | 10.4 |  |                        | Employment Agreement of Judith Gaffney                                                                                
|*           | 10.5 |  |                        | Madison Bank Amended and Restated 1998 Key
Employee Stock Compensation Program                                        
|*           | 10.6 |  |                        | Madison Bank Amended and Restated 1998
Directors Stock Option Plan                                                   
|            | 11   |  |                        | Statement regarding Computation of Per Share Earnings at
Footnote 3 of the Condensed Consolidated Financial Statements
|**          | 23.1 |  |                        | Consent of Accountants                                                                                                
|*           | 23.2 |  |                        | Consent of Counsel                                                                                                    
|*           | 99.1 |  |                        | Plan of Reorganization of Madison Bank                                                                                
|*           | 99.2 |  |                        | Proxy of Madison Bank                                                                                                 



---

|*  |  | These exhibits were filed with Madisons BancShares Form 10-SB on June 6, 2001.                
|-- |  | ------------------------------------------------------------------------------------------------
|  
|** |  | These exhibits were filed with Madison BancShares Amendment One to Form
10-SB on July 17, 2001.

|    |  |                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------
|(b) |  | Reports on Form 8-K. There were no reports on Form 8-K filed during the
three months ended March 31, 2002.

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MADISON BANCSHARES, INC.




SIGNATURES

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

|                     |  |                                          |  |                                                                                
|-------------------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------
|                     |  | MADISON BANCSHARES, INC.
   (Registrant)
|                    
|Date: April 19, 2002 |  | By:                                      |  | /s/ Robert B. McGivneyRobert B. McGivney, President and Chief
Executive Officer
|                    
|Date: April 19, 2002 |  | By:                                      |  | /s/ Henry O. SpeightHenry O. Speight, Chief Financial Officer and
Treasurer    

16