##### Table of Contents

---

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 June 30, 2004



| ̈ | 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.)



2122 Palm Harbor
Boulevard

Palm Harbor, Florida 34683

(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 $.008 per share |  | 2,192,618 shares             
|(class)                                 |  | Outstanding at August 2, 2004



Transitional Small Business Format
(Check One):    YES ̈NO   x



---



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



INDEX



|                              |  |                                                                                                                          |  |      
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | -----
|                              |  |                                                                                                                          |  | Page 
|PART I. FINANCIAL INFORMATION |  |                                                                                                                         
|                              |  |                                                                                                                         
|Item 1.                       |  | Financial Statements                                                                                                     |  |      
|                              |  |                                                                                                                         
|                              |  | Condensed Consolidated Balance Sheets - At June 30, 2004 (unaudited) and At December 31, 2003                            |  | 2    
|                              |  |                                                                                                                         
|                              |  | Condensed Consolidated Statements of Earnings - Three and Six Months ended June 30, 2004 and 2003 (unaudited)            |  | 3    
|                              |  |                                                                                                                         
|                              |  | Condensed Consolidated Statements of Changes in Stockholders Equity Six Months Ended June 30, 2004 and 2003 (unaudited) |  | 4    
|                              |  |                                                                                                                         
|                              |  | Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2004 and 2003 (unaudited)                    |  | 5    
|                              |  |                                                                                                                         
|                              |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                         |  | 6-10 
|                              |  |                                                                                                                         
|                              |  | Review by Independent Registered Public Accounting Firm                                                                  |  | 11   
|                              |  |                                                                                                                         
|                              |  | Report of Independent Registered Public Accounting Firm                                                                  |  | 12   
|                              |  |                                                                                                                         
|Item 2.                       |  | Managements Discussion and Analysis or Plan of Operation                                                                |  | 13-19
|                              |  |                                                                                                                         
|Item 3.                       |  | Controls and Procedures                                                                                                  |  | 20   
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                         
|                              |  |                                                                                                                         
|Item 1.                       |  | Legal Proceedings                                                                                                        |  | 20   
|                              |  |                                                                                                                         
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                      |  | 20-21
|                              |  |                                                                                                                         
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                                                         |  | 22   
|                              | 
|SIGNATURES                    |  | 23                                                                                                                      



1



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



Condensed Consolidated Balance Sheets

(Dollars in thousands, except share amounts)



|                                                                                                                            |  |              |         |                  |        
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ---------------- | -------
|                                                                                                                            |  | June 30,2004 |         | December 31,2003
|                                                                                                                            |  | (Unaudited)  |         |                 
|Assets                                                                                                                      |  |              |         |                  |        
|Cash and due from banks                                                                                                     |  | $            | 3,535   |                  | 5,229  
|Interest-bearing deposits with banks                                                                                        |  |              | 5,055   |                  | 195    
|Federal funds sold                                                                                                          |  |              | 4,165   |                  | 788    
|                                                                                                                            |  |              |         |                  |        
|Cash and cash equivalents                                                                                                   |  |              | 12,755  |                  | 6,212  
|                                                                                                                            |  |             
|Securities available for sale                                                                                               |  |              | 18,924  |                  | 20,454 
|Loans, net of allowance for loan losses of $2,460 in 2004 and $2,449 in 2003                                                |  |              | 184,592 |                  | 169,367
|Accrued interest receivable                                                                                                 |  |              | 700     |                  | 704    
|Premises and equipment, net                                                                                                 |  |              | 5,908   |                  | 5,083  
|Federal Home Loan Bank of Atlanta stock, at cost                                                                            |  |              | 858     |                  | 1,316  
|Deferred tax asset                                                                                                          |  |              | 588     |                  | 510    
|Other assets                                                                                                                |  |              | 1,105   |                  | 1,263  
|                                                                                                                            |  |              |         |                  |        
|                                                                                                                            |  | $            | 225,430 |                  | 204,909
|                                                                                                                            |  |              |         |                  |        
|Liabilities and Stockholders Equity                                                                                        |  |              |         |                  |        
|                                                                                                                            |  |             
|Liabilities:                                                                                                                |  |              |         |                  |        
|Noninterest-bearing demand deposits                                                                                         |  |              | 27,583  |                  | 24,938 
|Savings, NOW and money-market deposits                                                                                      |  |              | 83,685  |                  | 63,437 
|Time deposits                                                                                                               |  |              | 71,775  |                  | 67,870 
|                                                                                                                            |  |              |         |                  |        
|Total deposits                                                                                                              |  |              | 183,043 |                  | 156,245
|                                                                                                                            |  |             
|Federal Home Loan Bank advances                                                                                             |  |              | 17,000  |                  | 26,125 
|Other borrowings                                                                                                            |  |              | 3,650   |                  | 3,030  
|Official checks                                                                                                             |  |              | 1,373   |                  | 1,448  
|Accrued expenses and other liabilities                                                                                      |  |              | 1,919   |                  | 1,335  
|                                                                                                                            |  |              |         |                  |        
|Total liabilities                                                                                                           |  |              | 206,985 |                  | 188,183
|                                                                                                                            |  |              |         |                  |        
|Stockholders equity:                                                                                                       |  |              |         |                  |        
|Preferred stock, $0.01 par value, authorized 1,000,000 shares; none issued or outstanding                                   |  |              |        |                  |       
|Common stock, $.008 par value, authorized 5,000,000 shares; issued and outstanding 2,180,084 and 2,047,865 in 2004 and 2003 |  |              | 17      |                  | 16     
|Additional paid-in capital                                                                                                  |  |              | 15,344  |                  | 14,371 
|Retained earnings                                                                                                           |  |              | 3,063   |                  | 2,196  
|Accumulated other comprehensive income                                                                                      |  |              | 21      |                  | 143    
|                                                                                                                            |  |              |         |                  |        
|Total stockholders equity                                                                                                  |  |              | 18,445  |                  | 16,726 
|                                                                                                                            |  |              |         |                  |        
|                                                                                                                            |  | $            | 225,430 |                  | 204,909
|                                                                                                                            |  |              |         |                  |        



See Accompanying Notes to Condensed
Consolidated Financial Statements.



2



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Earnings (Unaudited)

(In thousands, except per share amounts)



|                                                    |  |                            |       |                          |       |      |       |      |      
|--------------------------------------------------- |  | -------------------------- | ----- | ------------------------ | ----- | ---- | ----- | ---- | -----
|                                                    |  | Three Months EndedJune 30, |       | Six Months EndedJune 30,
|                                                    |  | 2004                       |       | 2003                     |       | 2004 |       | 2003
|Interest income:                                    |  |                            |       |                          |       |      |       |      |      
|Loans                                               |  | $                          | 2,902 |                          | 2,837 |      | 5,591 |      | 5,674
|Securities available for sale                       |  |                            | 196   |                          | 191   |      | 397   |      | 411  
|Other interest-earning assets                       |  |                            | 12    |                          | 18    |      | 28    |      | 37   
|                                                    |  |                            |       |                          |       |      |       |      |      
|Total interest income                               |  |                            | 3,110 |                          | 3,046 |      | 6,016 |      | 6,122
|                                                    |  |                            |       |                          |       |      |       |      |      
|Interest expense:                                   |  |                            |       |                          |       |      |       |      |      
|Deposits                                            |  |                            | 734   |                          | 810   |      | 1,445 |      | 1,685
|Borrowed funds                                      |  |                            | 171   |                          | 148   |      | 350   |      | 293  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Total interest expense                              |  |                            | 905   |                          | 958   |      | 1,795 |      | 1,978
|                                                    |  |                            |       |                          |       |      |       |      |      
|Net interest income                                 |  |                            | 2,205 |                          | 2,088 |      | 4,221 |      | 4,144
|                                                    |  |                            |       |                         
|Provision for loan losses                           |  |                            |      |                          | 121   |      | 18    |      | 243  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Net interest income after provision for loan losses |  |                            | 2,205 |                          | 1,967 |      | 4,203 |      | 3,901
|                                                    |  |                            |       |                          |       |      |       |      |      
|Noninterest income:                                 |  |                            |       |                          |       |      |       |      |      
|Service charges on deposit accounts                 |  |                            | 175   |                          | 176   |      | 335   |      | 356  
|Other service charges and fees                      |  |                            | 65    |                          | 73    |      | 126   |      | 131  
|Loan brokerage fees                                 |  |                            | 28    |                          | 80    |      | 34    |      | 137  
|Gain on sale of deposit accounts                    |  |                            |      |                          |      |      |      |      | 200  
|Other                                               |  |                            | 3     |                          | 9     |      | 11    |      | 16   
|                                                    |  |                            |       |                          |       |      |       |      |      
|Total noninterest income                            |  |                            | 271   |                          | 338   |      | 506   |      | 840  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Noninterest expenses:                               |  |                            |       |                          |       |      |       |      |      
|Employee compensation and benefits                  |  |                            | 856   |                          | 886   |      | 1,678 |      | 1,787
|Occupancy and equipment                             |  |                            | 200   |                          | 265   |      | 415   |      | 468  
|Data processing expense                             |  |                            | 69    |                          | 82    |      | 142   |      | 160  
|Professional fees                                   |  |                            | 55    |                          | 45    |      | 104   |      | 92   
|Advertising                                         |  |                            | 18    |                          | 35    |      | 49    |      | 71   
|Stationery and supplies                             |  |                            | 42    |                          | 35    |      | 83    |      | 76   
|Consulting and outside service fees                 |  |                            | 43    |                          | 37    |      | 75    |      | 78   
|Other expense                                       |  |                            | 203   |                          | 184   |      | 414   |      | 384  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Total noninterest expenses                          |  |                            | 1,486 |                          | 1,569 |      | 2,960 |      | 3,116
|                                                    |  |                            |       |                          |       |      |       |      |      
|Earnings before income taxes                        |  |                            | 990   |                          | 736   |      | 1,749 |      | 1,625
|                                                    |  |                            |       |                         
|Income taxes                                        |  |                            | 376   |                          | 279   |      | 665   |      | 617  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Net earnings                                        |  | $                          | 614   |                          | 457   |      | 1,084 |      | 1,008
|                                                    |  |                            |       |                          |       |      |       |      |      
|Earnings per share:                                 |  |                            |       |                          |       |      |       |      |      
|Basic earnings per share                            |  | $                          | .28   |                          | .22   |      | .51   |      | .50  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Diluted earnings per share                          |  | $                          | .28   |                          | .21   |      | .50   |      | .47  
|                                                    |  |                            |       |                          |       |      |       |      |      
|Dividends per share                                 |  | $                          |      |                          | .06   |      | .10   |      | .06  
|                                                    |  |                            |       |                          |       |      |       |      |      



See Accompanying Notes to Condensed
Consolidated Financial Statements.



3



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Changes in Stockholders Equity



Six Months Ended June 30, 2004 and 2003

(Dollars in thousands)



|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|----------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | ------ | ---------------- | ----- | - | -------------------------------------- | ---- | - | ----- | ------ | -
|                                                                                                |  | CommonStock |    | AdditionalPaid-inCapital |        | RetainedEarnings |       |   | AccumulatedOtherCompre - hensiveIncome |      |   | Total |       
|Balance at December 31, 2002                                                                    |  | $           | 16 |                          | 14,148 |                  | 149   |   |                                        | 245  |   |       | 14,558 |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Comprehensive income:                                                                           |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Net earnings (unaudited)                                                                        |  |             |   |                          |       |                  | 1,008 |   |                                        |     |   |       | 1,008  |  
|Net change in unrealized gain on securities available for sale, net of taxes of $9 (unaudited)  |  |             |   |                          |       |                  |      |   |                                        | 13   |   |       | 13     |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Comprehensive income (unaudited)                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       | 1,021  |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Exercise of common stock options (19,075 shares) (unaudited)                                    |  |             |   |                          | 93     |                  |      |   |                                        |     |   |       | 93     |  
|Common stock issued as compensation (2,000 shares) (unaudited)                                  |  |             |   |                          | 32     |                  |      |   |                                        |     |   |       | 32     |  
|Cash dividend paid (unaudited)                                                                  |  |             |   |                          |       |                  | (123  | ) |                                        |     |   |       | (123   | )
|Stock split five-for-four (cash paid for fractional shares) (unaudited)                         |  |             |   |                          |       |                  | (1    | ) |                                        |     |   |       | (1     | )
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Balance at June 30, 2003 (unaudited)                                                            |  | $           | 16 |                          | 14,273 |                  | 1,033 |   |                                        | 258  |   |       | 15,580 |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Balance at December 31, 2003                                                                    |  | $           | 16 |                          | 14,371 |                  | 2,196 |   |                                        | 143  |   |       | 16,726 |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Comprehensive income:                                                                           |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Net earnings (unaudited)                                                                        |  |             |   |                          |       |                  | 1,084 |   |                                        |     |   |       | 1,084  |  
|Net change in unrealized gain on securities available for sale, net of taxes of $76 (unaudited) |  |             |   |                          |       |                  |      |   |                                        | (122 | ) |       | (122   | )
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Comprehensive income (unaudited)                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       | 962    |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Exercise of common stock options (13,219 shares) (unaudited)                                    |  |             | 1  |                          | 645    |                  |      |   |                                        |     |   |       | 646    |  
|                                                                                                |  |             |    |                          |       
|Tax benefit from stock options exercised                                                        |  |             |   |                          | 296    |                  |      |   |                                        |     |   |       | 296    |  
|Common stock issued as compensation (2,000 shares) (unaudited)                                  |  |             |   |                          | 32     |                  |      |   |                                        |     |   |       | 32     |  
|Cash dividend paid (unaudited)                                                                  |  |             |   |                          |       |                  | (217  | ) |                                        |     |   |       | (217   | )
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  
|Balance at June 30, 2004 (unaudited)                                                            |  | $           | 17 |                          | 15,344 |                  | 3,063 |   |                                        | 21   |   |       | 18,445 |  
|                                                                                                |  |             |    |                          |        |                  |       |   |                                        |      |   |       |        |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



4



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)



|                                                                                                                   |  |                          |         |   |      |         |  
|------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ------- | - | ---- | ------- | -
|                                                                                                                   |  | Six Months EndedJune 30, |        
|                                                                                                                   |  | 2004                     |         |   | 2003 |        
|Cash flows from operating activities:                                                                              |  |                          |         |   |      |         |  
|Net earnings                                                                                                       |  | $                        | 1,084   |   |      | 1,008   |  
|Adjustments to reconcile net earnings to net cash provided by operating activities:                                |  |                          |         |   |      |         |  
|Provision for loan losses                                                                                          |  |                          | 18      |   |      | 243     |  
|Depreciation and amortization                                                                                      |  |                          | 206     |   |      | 201     |  
|Amortization of discounts and premiums on securities and deferred loan fees, net                                   |  |                          | (60     | ) |      | 68      |  
|Common stock issued as compensation                                                                                |  |                          | 32      |   |      | 32      |  
|Gain on sale of deposit accounts                                                                                   |  |                          |        |   |      | (200    | )
|Credit for deferred income taxes                                                                                   |  |                          | (2      | ) |      | (73     | )
|Decrease in accrued interest receivable                                                                            |  |                          | 4       |   |      | 76      |  
|(Decrease) increase in other assets                                                                                |  |                          | 158     |   |      | (144    | )
|Increase in official checks, accrued expenses and other liabilities                                                |  |                          | 805     |   |      | 1,603   |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Net cash provided by operating activities                                                                          |  |                          | 2,245   |   |      | 2,814   |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Cash flows from investing activities:                                                                              |  |                          |         |   |      |         |  
|Net increase in loans                                                                                              |  |                          | (15,184 | ) |      | (13,835 | )
|Purchase of securities available for sale                                                                          |  |                          | (1,933  | ) |      |        |  
|Securities available for sale principle repayments                                                                 |  |                          | 3,266   |   |      | 5,076   |  
|Net purchase of premises and equipment                                                                             |  |                          | (1,031  | ) |      | (1,311  | )
|(Sales) purchase of Federal Home Loan Bank stock                                                                   |  |                          | 458     |   |      | (167    | )
|Capitalized cost to acquire foreclosed real estate                                                                 |  |                          |        |   |      | (321    | )
|                                                                                                                   |  |                          |         |   |      |         |  
|Net cash used in investing activities                                                                              |  |                          | (14,424 | ) |      | (10,558 | )
|                                                                                                                   |  |                          |         |   |      |         |  
|Cash flows from financing activities:                                                                              |  |                          |         |   |      |         |  
|Cash paid in connection with sale of deposit accounts                                                              |  |                          |        |   |      | (11,497 | )
|Net increase in deposits                                                                                           |  |                          | 26,798  |   |      | 2,899   |  
|Net (decrease) increase in Federal Home Loan Bank advances                                                         |  |                          | (9,125  | ) |      | 8,300   |  
|Net increase in other borrowings                                                                                   |  |                          | 620     |   |      | 606     |  
|Proceeds from exercise of common stock options                                                                     |  |                          | 646     |   |      | 93      |  
|Cash dividends paid                                                                                                |  |                          | (217    | ) |      | (123    | )
|Cash paid for fractional shares due to the five-for-four stock split                                               |  |                          |        |   |      | (1      | )
|                                                                                                                   |  |                          |         |   |      |         |  
|Net cash provided by financing activities                                                                          |  |                          | 18,722  |   |      | 277     |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Net increase (decrease) in cash and cash equivalents                                                               |  |                          | 6,543   |   |      | (7,467  | )
|                                                                                                                   |  |                         
|Cash and cash equivalents at beginning of period                                                                   |  |                          | 6,212   |   |      | 10,890  |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Cash and cash equivalents at end of period                                                                         |  | $                        | 12,755  |   |      | 3,423   |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Supplemental disclosure of cash flow information:                                                                  |  |                          |         |   |      |         |  
|Cash paid during the period for:                                                                                   |  |                          |         |   |      |         |  
|Interest                                                                                                           |  | $                        | 1,796   |   |      | 2,005   |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Income taxes                                                                                                       |  | $                        | 648     |   |      | 765     |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Noncash transactions:                                                                                              |  |                          |         |   |      |         |  
|Accumulated other comprehensive income, net change in unrealized gain on securities available for sale, net of tax |  | $                        | (122    | ) |      | 13      |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Transfer of loans to foreclosed real estate                                                                        |  | $                        |        |   |      | 2,732   |  
|                                                                                                                   |  |                          |         |   |      |         |  
|Tax benefit from stock options exercised                                                                           |  | $                        | 296     |   |      |        |  
|                                                                                                                   |  |                          |         |   |      |         |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



5



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited)



|1. | General. Madison BancShares, Inc. (the Holding Company) owns 100% of the outstanding common stock of Madison Bank (the Bank) (collectively, the
Company). The only significant activity of the Holding Company is the operation of the Bank. 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 two banking offices located in Pinellas County, Florida and two 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 June 30, 2004, the results of
operations for the three- and six-month periods ended June 30, 2004 and 2003 and cash flows for the six-month periods ended June 30, 2004 and 2003. The results of operations and other data for the three- and six-month periods ended June 30, 2004 are
not necessarily indicative of results that may be expected for the year ending December 31, 2004.



|2. | Loan Impairment and Loan Losses.There were no loans identified as impaired at June 30, 2003. Loans identified as impaired at June 30, 2004 and for the three- and
six-month periods ended June 30, 2004 and 2003 are as follows (in thousands):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |             |     |      |  
|------------------------------------------------------ |  | ----------- | --- | ---- | -
|                                                       |  | At June 30,
|                                                       |  | 2004        |     | 2003
|Gross loans with related allowance for losses recorded |  | $           | 190 |      | 
|Less: Allowance on these loans                         |  |             | 19  |      | 
|                                                       |  |             |     |      |  
|Net investment in impaired loans                       |  | $           | 171 |      | 
|                                                       |  |             |     |      |  



|                                             |  |                            |     |                          |       |      |     |      |      
|-------------------------------------------- |  | -------------------------- | --- | ------------------------ | ----- | ---- | --- | ---- | -----
|                                             |  | Three Months EndedJune 30, |     | Six Months EndedJune 30,
|                                             |  | 2004                       |     | 2003                     |       | 2004 |     | 2003
|Average net investment in impaired loans     |  | $                          | 190 |                          | 2,555 |      | 192 |      | 2,614
|                                             |  |                            |     |                          |       |      |     |      |      
|Interest income recognized on impaired loans |  | $                          | 1   |                          | 18    |      | 4   |      | 72   
|                                             |  |                            |     |                          |       |      |     |      |      
|Interest income received on impaired loans   |  | $                          | 1   |                          | 18    |      | 4   |      | 72   
|                                             |  |                            |     |                          |       |      |     |      |      



On June 27, 2003, an
impaired loan with a balance of approximately $2.7 million was transferred to foreclosed real estate. On July 24, 2003 this property was sold for a pretax gain of approximately $188,000.



(continued)



6



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



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 EndedJune 30, |       | Six Months EndedJune 30, |      
|                               |  | 2004                       |       | 2003                     |       | 2004 |       |   | 2003 |      
|Balance at beginning of period |  | $                          | 2,460 |                          | 2,185 |      | 2,449 |   |      | 2,058 |  
|Provision for loan losses      |  |                            |      |                          | 121   |      | 18    |   |      | 243   |  
|Charge-offs                    |  |                            |      |                          |      |      | (15   | ) |      | (6    | )
|Recoveries                     |  |                            |      |                          |      |      | 8     |   |      | 11    |  
|                               |  |                            |       |                          |       |      |       |   |      |       |  
|Balance at end of period       |  | $                          | 2,460 |                          | 2,306 |      | 2,460 |   |      | 2,306 |  
|                               |  |                            |       |                          |       |      |       |   |      |       |  



Nonaccrual and past
due loans were as follows (in thousands):



|                                                 |  |             |     |      |  
|------------------------------------------------ |  | ----------- | --- | ---- | -
|                                                 |  | At June 30,
|                                                 |  | 2004        |     | 2003
|Nonaccrual loans                                 |  | $           | 190 |      | 
|Past due ninety days or more, but still accruing |  |             |    |      | 
|                                                 |  |             |     |      |  
|                                                 |  | $           | 190 |      | 
|                                                 |  |             |     |      |  



|3. | Stock Options. The Company has stock option plans for certain officers and directors of the Company. The options vest over a five year period from date of grant and
are then exercisable for up to an eight year period. All per share amounts reflect the five-for-four stock split declared on April 22, 2003. A summary of stock option transactions follows ($in thousands, except per share amounts):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |                 |   |  |                               |             |   |                               |       |   |                      |       |  
|---------------------------------------- |  | --------------- | - |  | ----------------------------- | ----------- | - | ----------------------------- | ----- | - | -------------------- | ----- | -
|                                         |  | Numberof Shares |   |  | Range ofPer ShareOption Price |             |   | WeightedAveragePer SharePrice |       |   | AggregateOptionPrice |      
|Options outstanding at December 31, 2002 |  | 233,554         |   |  | $                             | 3.75-11.09  |   |                               | 5.79  |   |                      | 1,353 |  
|Options granted                          |  | 7,215           |   |  |                               | 12.82-12.92 |   |                               | 12.90 |   |                      | 93    |  
|Options exercised                        |  | (19,075         | ) |  |                               | (6.38       | ) |                               | (4.88 | ) |                      | (93   | )
|                                         |  |                 |   |  |                               |             |   |                               |       |   |                      |       |  
|Options outstanding at June 30, 2003     |  | 221,694         |   |  | $                             | 3.75-12.92  |   |                               | 6.10  |   |                      | 1,353 |  
|                                         |  |                 |   |  |                               |             |   |                               |       |   |                      |       |  
|Options outstanding at December 31, 2003 |  | 190,937         |   |  | $                             | 3.75-13.73  |   |                               | 6.22  |   |                      | 1,187 |  
|Options exercised                        |  | (130,219        | ) |  |                               | (3.75-12.92 | ) |                               | (4.96 | ) |                      | (646  | )
|                                         |  |                 |   |  |                               |             |   |                               |       |   |                      |       |  
|Options outstanding at June 30, 2004     |  | 60,718          |   |  | $                             | 5.27-13.73  |   |                               | 8.91  |   |                      | 541   |  
|                                         |  |                 |   |  |                               |             |   |                               |       |   |                      |       |  



(continued)



7



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|3. | Stock Options, Continued. The Company accounts for their stock option plans under the recognition and measurement principles of APB No. 25. No stock-based employee
compensation cost is reflected in net earnings, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings
if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation
Transition and Disclosure (collectively SFAS No. 123) to stock-based employee compensation ($ in thousands, except per share amounts).
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---- | - | ------------------------ | ---- | - | ---- | ----- | - | ---- | ----- | -
|                                                                                                                                       |  | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |     
|                                                                                                                                       |  | 2004                       |      |   | 2003                     |      |   | 2004 |       |   | 2003 |      
|Net earnings, as reported                                                                                                              |  | $                          | 614  |   |                          | 457  |   |      | 1,084 |   |      | 1,008 |  
|Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax
effect |  |                            | (13  | ) |                          | (15  | ) |      | (26   | ) |      | (34   | )
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Proforma net earnings                                                                                                                  |  | $                          | 601  |   |                          | 442  |   |      | 1,058 |   |      | 974   |  
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Earnings per share:                                                                                                                    |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Basic, as reported                                                                                                                     |  | $                          | 0.28 |   |                          | 0.22 |   |      | 0.51  |   |      | 0.50  |  
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Basic, proforma                                                                                                                        |  | $                          | 0.28 |   |                          | 0.22 |   |      | 0.50  |   |      | 0.48  |  
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Diluted, as reported                                                                                                                   |  | $                          | 0.28 |   |                          | 0.21 |   |      | 0.50  |   |      | 0.47  |  
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  
|Diluted, proforma                                                                                                                      |  | $                          | 0.27 |   |                          | 0.20 |   |      | 0.49  |   |      | 0.45  |  
|                                                                                                                                       |  |                            |      |   |                          |      |   |      |       |   |      |       |  



|The | fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions, there were no options granted during
the three and six months ended June 30, 2004:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                           |  |                            |       |   |                          |   |       |  
|-------------------------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ----- | -
|                                                                           |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |  
|                                                                           |  | 2003                       |       |   | 2003                     |  
|Weighted-average risk-free interest rate                                   |  |                            | 4.33  | % |                          |   | 4.33  | %
|Dividend yield                                                             |  |                            | 2.00  | % |                          |   | 2.00  | %
|Volatility                                                                 |  |                            | 29.00 | % |                          |   | 29.00 | %
|Expected life in years                                                     |  |                            | 10    |   |                          |   | 10    |  
|Weighted-average grant date fair value of options issued during the period |  | $                          | 2.46  |   |                          | $ | 2.46  |  
|                                                                           |  |                            |       |   |                          |   |       |  



(continued)



8



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited), Continued



|4. | 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. 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 five-for-four stock split declared on
April 22, 2003. The following tables present the calculations of EPS (dollars in thousands, except per share amounts).
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|------------------------------------------------------------------------------------ |  | -------- | ----- | ----------------------- | --------- | -------------- | - | -------- |  | ----------------------- | ----- | -------------- | --------- |  | - | ---
|                                                                                     |  | 2004     |       | 2003                   
|                                                                                     |  | Earnings |       | Weighted -AverageShares |           | PerShareAmount |   | Earnings |  | Weighted -AverageShares |       | PerShareAmount
|Three Months Ended June 30:                                                          |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Basic EPS:                                                                           |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Net earnings available to common stockholders                                        |  | $        | 614   |                         | 2,172,037 |                | $ | .28      |  | $                       | 457   |                | 2,036,181 |  | $ | .22
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Effect of dilutive securities- Incremental shares from assumed conversion of options |  |          |      |                         | 42,305    |                |   |          |  |                         |      |                | 122,395   |  |   |    
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Diluted EPS:                                                                         |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Net earnings available to common stockholders and assumed conversions                |  | $        | 614   |                         | 2,214,342 |                | $ | .28      |  | $                       | 457   |                | 2,158,576 |  | $ | .21
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Six Months Ended June 30:                                                            |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Basic EPS:                                                                           |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Net earnings available to common stockholders                                        |  | $        | 1,084 |                         | 2,134,516 |                | $ | .51      |  | $                       | 1,008 |                | 2,030,309 |  | $ | .50
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Effect of dilutive securities- Incremental shares from assumed conversion of options |  |          |      |                         | 38,465    |                |   |          |  |                         |      |                | 116,987   |  |   |    
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Diluted EPS:                                                                         |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    
|Net earnings available to common stockholders and assumed conversions                |  | $        | 1,084 |                         | 2,172,981 |                | $ | .50      |  | $                       | 1,008 |                | 2,147,296 |  | $ | .47
|                                                                                     |  |          |       |                         |           |                |   |          |  |                         |       |                |           |  |   |    



(continued)



9



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (Unaudited),
Continued



|5. | Regulatory Capital. The Bank is required to maintain certain minimum regulatory capital requirements. The following is a summary at June 30, 2004 of the regulatory
capital requirements and the Banks actual capital on a percentage basis:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                |  |        |   |  |                       |  
|----------------------------------------------- |  | ------ | - |  | --------------------- | -
|                                                |  | Actual |   |  | RegulatoryRequirement |  
|Total capital to risk-weighted assets           |  | 10.96  | % |  | 8.00                  | %
|Tier I capital to risk-weighted assets          |  | 9.75   | % |  | 4.00                  | %
|Tier I capital to total assets - leverage ratio |  | 9.20   | % |  | 4.00                  | %



|6. | Sale of Deposit Accounts. On February 7, 2003, the Company sold the deposit accounts at one of the banking offices in Pinellas County. Total deposits at this office
were $11.7 million and the Company realized a net pretax gain of $200,000. The office was closed effective with the closing of this transaction.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7. | Merger/Sale.On March 19, 2004, Madison BancShares entered into an Agreement and Plan of Merger (the Merger Agreement) with Whitney Holding Corporation
(Whitney) pursuant to which Whitney agreed to acquire Madison. Under the terms of the Merger Agreement, each shareholder of Madison BancShares, Inc. will receive $29.89 per share in cash and/or Whitney common stock, but no more than 65%
of the total consideration will be in Whitney stock. Whitney is the parent company of Whitney National Bank which serves the five-state Gulf Coast region stretching from Houston, Texas into the panhandle of Florida. The acquisition is expected to be
completed in the third quarter of 2004. At December 31, 2003, Whitney had total assets of approximately $7.8 billion and stockholders equity of approximately $840 million.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8. | Reclassifications.Certain amounts in the 2003 condensed consolidated financial statements have been reclassified to conform to the 2004 presentation.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------



10



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Review by Independent Registered Public Accounting Firm



Hacker, Johnson & Smith PA, the Companys independent registered public accounting firm, have made a limited review of the financial data as of June 30, 2004, and for the three- and six- month periods ended June 30, 2004 and 2003
presented in this document, in accordance with the standards established by the Public Company Accounting Oversight Board.



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



11



---

##### Table of Contents

Report of Independent Registered Public Accounting Firm



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 June 30,
2004, and the related condensed consolidated statements of earnings for the three- and six- month periods ended June 30, 2004 and 2003, the related condensed consolidated statements of cash flows and stockholders equity for the six-month
periods ended June 30, 2004 and 2003. These interim condensed financial statements are the responsibility of the Companys management.



We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the
Public Company Accounting Oversight Board, 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 accompanying interim condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.



We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the
consolidated balance sheet of the Company as of December 31, 2003, and the related consolidated statements of earnings, stockholders equity and cash flows for the year then ended (not presented herein); and in our report dated January 15, 2004
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, 2003, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been derived.



/s/ Hacker, Johnson & Smith, PA



HACKER, JOHNSON & SMITH PA

Tampa, Florida

July 22, 2004



12



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Item 2. Managements Discussion and Analysis

Or Plan of Operation



Forward Looking Statements



This document contains forward-looking statements as defined by Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve substantial risks and uncertainties. When used in this document, or in the documents incorporated by reference, the words
anticipate, believe, estimate, may, intend and expect and similar expressions are some of the forward-looking statements used in these documents. Actual results, performance, or
achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. Factors which may cause results to change materially include competition, inflation, general economic conditions, changes in
interest rates, and changes in the value of collateral securing loans the Company has made, among other things.



General



Madison BancShares, Inc. (the Holding Company) owns 100% of the outstanding common stock of Madison Bank (the Bank) (collectively, the Company). The only significant activity of the
Holding Company is the operation of the Bank. The Bank is a state-chartered commercial bank incorporated under the laws of the State of Florida. The Bank deposits 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 two banking offices located in Pinellas County, Florida and two banking office in Pasco County, Florida.



Liquidity and Capital Resources



The Companys primary source of cash during the six months ended June
30, 2004, was from net deposit inflows of approximately $26.8 million, principle repayments of securities available for sale of approximately $3.3 million, increase in other borrowings of approximately $.6 million and cash flows from operations of
approximately $2.2 million. Cash was used primarily to originate net loans of approximately $15.2 million and to repay Federal Home Loan Bank advances of approximately $9.1 million. At June 30, 2004, the Bank exceeded its regulatory liquidity
requirements.



Off-Balance Sheet Arrangements and Aggregate Contractual
Obligations



The Company is a party to financial
instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit and construction loans and standby
letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet. The contract amounts of those instruments reflect the extent
of the Companys involvement in particular classes of financial instruments.



The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, unused lines of credit and construction loans and standby
letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.



13



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being
drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customers credit worthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the
Company upon extension of credit, is based on managements credit evaluation of the counter party.



Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.



A summary of the amounts of the Companys financial instruments, which approximates fair value, with off-balance sheet risk at June 30, 2004, follows
(in thousands):



|                                              |  |                |       
|--------------------------------------------- |  | -------------- | ------
|                                              |  | ContractAmount
|Commitments to extend credit                  |  | $              | 18,495
|                                              |  |                |       
|Unused lines of credit and construction loans |  | $              | 31,805
|                                              |  |                |       
|Standby letters of credit                     |  | $              | 534   
|                                              |  |                |       



Management believes
that the Company has adequate resources to fund all of its commitments and that substantially all its existing commitments will be funded within the next twelve months.



14



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Selected Financial Information



The following are presented for the dates and periods indicated:



|                                                                                                |  |                         |       |   |                        |   |       |                         |  |   |       |     
|----------------------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ---------------------- | - | ----- | ----------------------- |  | - | ----- | ----
|                                                                                                |  | Six MonthsEndedJune 30, |       |   | Year EndedDecember 31, |   |       | Six MonthsEndedJune 30, | 
|                                                                                                |  | 2004                    |       |   | 2003                   |   |       | 2003                    | 
|Average equity as a percentage of average assets                                                |  |                         | 8.35  | % |                        |   | 8.02  | %                       |  |   | 7.88  | %   
|Equity to total assets at end of period                                                         |  |                         | 8.18  | % |                        |   | 8.16  | %                       |  |   | 7.91  | %   
|Book value per share (2)                                                                        |  | $                       | 8.46  |   |                        | $ | 8.17  |                         |  | $ | 7.63  |     
|Return on average assets (1)                                                                    |  |                         | 1.03  | % |                        |   | 1.11  | %                       |  |   | 1.05  | %(3)
|Return on average equity (1)                                                                    |  |                         | 12.31 | % |                        |   | 13.82 | %                       |  |   | 13.32 | %(3)
|Noninterest expenses to average assets (1)                                                      |  |                         | 2.81  | % |                        |   | 3.13  | %                       |  |   | 3.24  | %   
|Nonperforming loans and foreclosed real estate as a percentage of total assets at end of period |  |                         | .08   | % |                        |   | .10   | %                       |  |   | 1.55  | %   

---

|(1) | Annualized for the six months ended June 30.
|--- | --------------------------------------------

|(2) | Adjusted for stock dividend and stock split.
|--- | --------------------------------------------

|(3) | Excluding the after tax gain on sale of deposit accounts during the period, return on average assets was .92% and the return of average equity was 11.68%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



15



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



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 June 30, |        
|                                                                                 |  | 2004                        |         |                      | 2003 |                  
|                                                                                 |  | AverageBalance              |         | InterestandDividends |      | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |         | AverageYield/Rate |  
|                                                                                 |  | (Dollars in thousands)      |        
|Interest-earning assets:                                                         |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Loans (1)                                                                        |  | $                           | 180,406 |                      |      | 2,902             |  | 6.43 | %              |  | $                    | 159,177 |                   |   | 2,837 |  | 7.13 | %
|Securities                                                                       |  |                             | 20,597  |                      |      | 196               |  | 3.81 |                |  |                      | 20,518  |                   |   | 191   |  | 3.72 |  
|Other interest-earning assets (2)                                                |  |                             | 2,544   |                      |      | 12                |  | 1.89 |                |  |                      | 3,275   |                   |   | 18    |  | 2.20 |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-earning assets                                                    |  |                             | 203,547 |                      |      | 3,110             |  | 6.11 |                |  |                      | 182,970 |                   |   | 3,046 |  | 6.66 |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Noninterest-earning assets                                                       |  |                             | 12,016  |                      |      |                   |  |      |                |  |                      | 9,672   |                   |   |       |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total assets                                                                     |  | $                           | 215,563 |                      |      |                   |  |      |                |  | $                    | 192,642 |                   |   |       |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Interest-bearing liabilities:                                                    |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Savings, NOW, money-market deposit accounts                                      |  |                             | 74,592  |                      |      | 146               |  | .78  |                |  |                      | 66,094  |                   |   | 161   |  | .97  |  
|Time deposits                                                                    |  |                             | 74,140  |                      |      | 588               |  | 3.17 |                |  |                      | 72,469  |                   |   | 649   |  | 3.58 |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-bearing deposits                                                  |  |                             | 148,732 |                      |      | 734               |  | 1.97 |                |  |                      | 138,563 |                   |   | 810   |  | 2.34 |  
|Other interest-bearing liabilities (3)                                           |  |                             | 23,272  |                      |      | 171               |  | 2.94 |                |  |                      | 16,847  |                   |   | 148   |  | 3.51 |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-bearing liabilities                                               |  |                             | 172,004 |                      |      | 905               |  | 2.10 |                |  |                      | 155,410 |                   |   | 958   |  | 2.47 |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Noninterest-bearing liabilities                                                  |  |                             | 25,633  |                      |      |                   |  |      |                |  |                      | 21,833  |                   |   |       |  |      |  
|Stockholders equity                                                             |  |                             | 17,926  |                      |      |                   |  |      |                |  |                      | 15,399  |                   |   |       |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total liabilities and stockholders equity                                       |  | $                           | 215,563 |                      |      |                   |  |      |                |  | $                    | 192,642 |                   |   |       |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Net interest income                                                              |  |                             |         |                      | $    | 2,205             |  |      |                |  |                      |         |                   | $ | 2,088 |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Interest-rate spread (4)                                                         |  |                             |         |                      |      |                   |  | 4.01 | %              |  |                      |         |                   |   |       |  | 4.19 | %
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Net interest margin (5)                                                          |  |                             |         |                      |      |                   |  | 4.33 | %              |  |                      |         |                   |   |       |  | 4.56 | %
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                             | 1.18    |                      |      |                   |  |      |                |  |                      | 1.18    |                   |   |       |  |      |  
|                                                                                 |  |                             |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  

---

|(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.
|--- | --------------------------------------------------------------------------------------



16



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



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.



|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|-------------------------------------------------------------------------------- |  | ------------------------- | ------- | -------------------- | ---- | ----------------- |  | ---- | -------------- |  | -------------------- | ------- | ----------------- | - | ----- |  | ---- | -
|                                                                                 |  | Six Months Ended June 30, |        
|                                                                                 |  | 2004                      |         |                      | 2003 |                  
|                                                                                 |  | AverageBalance            |         | InterestandDividends |      | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |         | AverageYield/Rate |  
|                                                                                 |  | (Dollars in thousands)    |        
|Interest-earning assets:                                                         |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Loans (1)                                                                        |  | $                         | 175,579 |                      |      | 5,591             |  | 6.37 | %              |  | $                    | 157,728 |                   |   | 5,674 |  | 7.19 | %
|Securities                                                                       |  |                           | 20,466  |                      |      | 397               |  | 3.88 |                |  |                      | 20,486  |                   |   | 411   |  | 4.01 |  
|Other interest-earning assets (2)                                                |  |                           | 3,163   |                      |      | 28                |  | 1.77 |                |  |                      | 3,617   |                   |   | 37    |  | 2.05 |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-earning assets                                                    |  |                           | 199,208 |                      |      | 6,016             |  | 6.04 |                |  |                      | 181,831 |                   |   | 6,122 |  | 6.73 |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Noninterest-earning assets                                                       |  |                           | 11,704  |                      |      |                   |  |      |                |  |                      | 10,301  |                   |   |       |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total assets                                                                     |  | $                         | 210,912 |                      |      |                   |  |      |                |  | $                    | 192,132 |                   |   |       |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Interest-bearing liabilities:                                                    |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Savings, NOW, money-market deposit accounts                                      |  |                           | 71,887  |                      |      | 289               |  | .80  |                |  |                      | 65,888  |                   |   | 349   |  | 1.06 |  
|Time deposits                                                                    |  |                           | 72,252  |                      |      | 1,156             |  | 3.20 |                |  |                      | 73,574  |                   |   | 1,336 |  | 3.63 |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-bearing deposits                                                  |  |                           | 144,139 |                      |      | 1,445             |  | 2.01 |                |  |                      | 139,462 |                   |   | 1,685 |  | 2.42 |  
|Other interest-bearing liabilities (3)                                           |  |                           | 24,187  |                      |      | 350               |  | 2.89 |                |  |                      | 16,886  |                   |   | 293   |  | 3.47 |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total interest-bearing liabilities                                               |  |                           | 168,326 |                      |      | 1,795             |  | 2.13 |                |  |                      | 156,348 |                   |   | 1,978 |  | 2.53 |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Noninterest-bearing liabilities                                                  |  |                           | 24,970  |                      |      |                   |  |      |                |  |                      | 20,645  |                   |   |       |  |      |  
|Stockholders equity                                                             |  |                           | 17,616  |                      |      |                   |  |      |                |  |                      | 15,139  |                   |   |       |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Total liabilities and stockholders equity                                       |  | $                         | 210,912 |                      |      |                   |  |      |                |  | $                    | 192,132 |                   |   |       |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Net interest income                                                              |  |                           |         |                      | $    | 4,221             |  |      |                |  |                      |         |                   | $ | 4,144 |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Interest-rate spread (4)                                                         |  |                           |         |                      |      |                   |  | 3.91 | %              |  |                      |         |                   |   |       |  | 4.20 | %
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Net interest margin (5)                                                          |  |                           |         |                      |      |                   |  | 4.24 | %              |  |                      |         |                   |   |       |  | 4.56 | %
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                           | 1.18    |                      |      |                   |  |      |                |  |                      | 1.16    |                   |   |       |  |      |  
|                                                                                 |  |                           |         |                      |      |                   |  |      |                |  |                      |         |                   |   |       |  |      |  

---

|(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.
|--- | --------------------------------------------------------------------------------------



17



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Comparison of the Three-Month Periods Ended June 30, 2004 and 2003



General. Net earnings for the three-months ended June 30,
2004, were $614,000 or $.28 per basic and $.28 per diluted share compared to $457,000 or $.22 per basic and $.21 per diluted share for 2003. The increase in net earnings was due to an increase in net interest income after provision for loan losses
and a decrease in noninterest expenses, partially offset by a decrease in noninterest income.



Interest Income and Expense. Interest income increased to $3.1 million for the three-month period ended June 30, 2004 from $3.0 million for the three months ended June 30, 2003. Interest on loans
increased to $2.9 million for the three-months ended June 30, 2004 compared to $2.8 million in 2003 due to an increase in the average loan portfolio balance to $180.4 million from $159.2 million which was partially offset by a decrease in the
weighted-average yield earned in 2004 to 6.43% from 7.13% in 2003 due to the lower interest rate environment. Interest on securities increased for the three months ended June 30, 2004 to $196,000 from $191,000 in 2003. The increase was due to an
increase in the weighted-average yield earned in 2004 to 3.81% from 3.72% in 2003 and an increase in the average portfolio balance to $20.6 million in 2004 from $20.5 million in 2003. Interest on other interest-earning assets decreased from $18,000
in 2003 to $12,000 in 2004.



Interest expense on deposits decreased to $734,000
for the three-months ended June 30, 2004 from $810,000 in 2003. The decrease is due to a decrease in the average rate paid on interest-bearing deposits in 2004 to 1.97% from 2.34% in 2003, and partially offset by an increase in the average deposits
in 2004 to $148.7 million compared to $138.6 million in 2003.



Interest expense
on other borrowings increased to $171,000 for the three-months ended June 30, 2004 from $148,000 for the three-months ended June 30, 2003. The increase is due to an increase in average other borrowings to $23.3 million in 2004 from $16.8 million in
2003, partially offset by a decrease in the weighted rate paid to 2.94% in 2004 from 3.51% in 2003.



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 Bank recorded no provision for loan losses for the three-month period ended June 30, 2004 due to the substantial decrease in average impaired loans and no net charge-offs during the quarter compared to a $121,000
provision for the same period in 2003. The allowance for loan losses is $2.46 million at June 30, 2004. While management believes that its allowance for loan losses is adequate as of June 30, 2004, 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 $271,000 in 2004 from $338,000 for the three- months ended June 30, 2003. The decrease is primarily due
to a decrease in loan brokerage fees due to less activity in the residential loan production area.



Noninterest Expense. Total noninterest expense decreased to $1,486,000 for the three months ended June 30, 2004 from $1,569,000 for the comparable period ended June 30, 2003, primarily due to a decrease
in occupancy costs of $65,000.



Income Taxes. Income taxes for
the three months ended June 30, 2004, were $376,000 or 38.0% of earnings before income taxes compared to $279,000 or 37.9% for the period ended June 30, 2003.



18



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Comparison of the Six-Month Periods Ended June 30, 2004 and 2003



General. Net earnings for the six-months ended June 30,
2004, were $1,084,000 or $.51 per basic and $.50 per diluted share compared to $1,008,000 or $.50 per basic and $.47 per diluted share for 2003. Excluding the $124,000 net after tax gain on the sale of deposit accounts, net earnings in 2003 were
$884,000 or $.44 per basic and $.41 per diluted share. The increase in net earnings was due to an increase in net interest income after provision for loan losses and a decrease in noninterest expenses, partially offset by a decrease in noninterest
income.



Interest Income and Expense. Interest income decreased
to $6.0 million for the six-month period ended June 30, 2004 from $6.1 million for the six months ended June 30, 2003. Interest on loans decreased to $5.6 million for the six-months ended June 30, 2004 compared to $5.7 million in 2003 due to a
decrease in the weighted-average yield earned in 2004 to 6.37% from 7.19% in 2003 which was partially offset by an increase in the average loan portfolio balance to $175.6 million from $157.7 million. Interest on securities decreased for the six
months ended June 30, 2004 to $397,000 from $411,000 in 2003. The decrease was due to a decrease in the weighted-average yield earned in 2004 to 3.88% from 4.01% in 2003. Interest on other interest-earning assets decreased from $37,000 in 2003 to
$28,000 in 2004.



Interest expense on deposits decreased to $1,445,000 for the
six-months ended June 30, 2004 from $1,685,000 in 2003. The decrease is due to a decrease in the average rate paid on interest-bearing deposits in 2004 to 2.01% from 2.42% in 2003, which was partially offset by an increase in the average deposits in
2004 to $144.1 million compared to $139.5 million in 2003.



Interest expense on
other borrowings increased to $350,000 for the six-months ended June 30, 2004 from $293,000 for the six-months ended June 30, 2003. The increase is due to an increase in average other borrowings to $24.2 million in 2004 from $16.9 million in 2003,
partially offset by a decrease in the weighted rate paid to 2.89% in 2004 from 3.47% in 2003.



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 $18,000 for the six-month period ended June 30, 2004 compared to $243,000 for the same period in 2003 due to the substantial decrease in average impaired loans. The allowance for loan
losses is $2.46 million at June 30, 2004. While management believes that its allowance for loan losses is adequate as of June 30, 2004, 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 $506,000 in 2004 from $840,000 for the six- months ended June 30, 2003. The decrease is primarily due to a decrease in loan brokerage fees due to less activity in the
residential loan production area and a gain recognized on the sale of deposit accounts of $200,000 in 2003.



Noninterest Expense. Total noninterest expense decreased to $3.0 million for the six months ended June 30, 2004 from $3.1 million for the comparable period ended June 30, 2003, primarily due to decreases
in employee compensation and benefits and occupancy and equipment costs.



Income Taxes. Income taxes for the six months ended June 30, 2004, were $665,000 or 38.0% of earnings before income taxes compared to $617,000 or 38.0% for the period ended June 30, 2003.



19



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



Item 3. Controls and Procedures



|a. | Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports
that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures performed within 90 days of the filing date of this report, the Chief Executive and Chief Financial officers of the Company concluded that the Companys disclosure controls and procedures were
adequate.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. | Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent
to the date of the evaluation of those controls by the Chief Executive and Chief Financial officers.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



PART II. OTHER INFORMATION



Item 1. Legal Proceedings



There are no material
pending legal proceeding to which Madison BancShares, Inc. and Subsidiary is a party or to which any of their property is subject.



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



The Annual Meeting of Shareholders (the Annual Meeting) of Madison BancShares, Inc., was held on June 2, 2004, to consider the election of seven directors with terms expiring at the 2005 Annual Meeting and
the ratification of the independent auditors.



Proposal I



At the Annual Meeting, 1,867,492 shares were present in person or by proxy. Listed below are
the directors that were elected at the Annual Meeting with a summary of the votes cast for each nominee:



|                    |  |      |  |           |  |         
|------------------- |  | ---- |  | --------- |  | --------
|                    |  | Term |  | For       |  | Withhold
|Robert W. Byrd      |  | 2005 |  | 1,864,243 |  | 3,249   
|George M. Cantonis  |  | 2005 |  | 1,864,243 |  | 3,249   
|Thomas A. Castriota |  | 2005 |  | 1,864,243 |  | 3,249   
|Wayne R. Coulter    |  | 2005 |  | 1,863,443 |  | 4,049   
|Melvin S. Cutler    |  | 2005 |  | 1,829,140 |  | 38,352  
|Robert B. McGivney  |  | 2005 |  | 1,829,140 |  | 38,352  
|Paul J. Wikle       |  | 2005 |  | 1,864,243 |  | 3,249   



20



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION, CONTINUED



Item 4. Submission of Matters to a Vote of Security Holders, Continued



Proposal II



The Amendment of the amended and restated 1998 Directors Stock Option Plan to provide
that options issued under the Plan shall vest at the discretion of the Board of Directors:



|          |  |         |  |         |  |          
|--------- |  | ------- |  | ------- |  | ---------
|For       |  | Against |  | Abstain |  | Not Voted
|1,231,218 |  | 35,159  |  | 43,942  |  | 557,173  



Proposal III



Ratification of the appointment of Hacker, Johnson & Smith PA, as the Independent
Auditors for Madison BancShares and its wholly-owned subsidiary, for the fiscal year ending December 31, 2004:



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|1,861,895 |  | 3,200   |  | 2,397  



Proposal IV



The adjournment of the Annual Meeting to solicit additional proxies in the event there are
not sufficient votes to approve either of the foregoing proposals:



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|1,815,175 |  | 48,777  |  | 3,540  



21



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION, CONTINUED



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. and Subsidiary                                                                                            
|            | 
|* 4         |  | Sample Stock Certificate for Madison BancShares, Inc.                                                                                        
|            | 
|* 10.2      |  | Employment Agreement of Robert McGivney                                                                                                      
|            | 
|* 10.3      |  | Employment Agreement of David Paetzold                                                                                                       
|            | 
|* 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                                                                                                                            
|            | 
|** 10.7     |  | Employment Agreement of Otho B. Young, III                                                                                                   
|            | 
|***10.8     |  | Employment Agreement of Martin W. Gladysz                                                                                                    
|            | 
|31.1        |  | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            | 
|31.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            | 
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
|            | 
|32.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

---

|* | These exhibits were filed with Madisons Form 10-SB on June 8, 2001.
|- | --------------------------------------------------------------------

|** | This exhibit was filed with Madisons Form 10-KSB on March 17, 2003.
|-- | --------------------------------------------------------------------

|*** | This exhibit was filed with Madisons Form 10-QSB on August 8, 2003.
|--- | --------------------------------------------------------------------



|(b) | Reports on Form 8-K.There was one Form 8-K filed during the three months ended June 30, 2004.
|--- | ---------------------------------------------------------------------------------------------



On April 22, 2004, Madison BancShares, Inc. released earnings for the three
months ended March 31, 2004.



22



---

##### Table of Contents

MADISON BANCSHARES, INC. AND SUBSIDIARY



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. AND SUBSIDIARY
|                      |  | (Registrant)                           
|                      |  |                                        
|Date: August 12, 2004 |  | By:                                     |  | /s/ Robert B. McGivney               
|                      |  |                                         |  | Robert B. McGivney,                  
|                      |  |                                         |  | President and Chief Executive Officer
|                      |  |                                        
|Date: August 12, 2004 |  | By:                                     |  | /s/ Martin W. Gladysz                
|                      |  |                                         |  | Martin W. Gladysz,                   
|                      |  |                                         |  | Chief Financial Officer and Treasurer



23