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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---

FORM 10-QSB



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

| | For the quarterly period ended March 31, 2006.
| | ----------------------------------------------

OR

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | ----------------------------------------------------------------------------------------

| | For the transition period from __________ to __________
| | -------------------------------------------------------

Commission File Number   0-24926



CECIL BANCORP, INC.

(Exact name of registrant as specified in its charter)



| | Maryland(State or other jurisdiction ofincorporation or organization) |  | 52-1883546(I.R.S. EmployerIdentification Number) | 
| | --------------------------------------------------------------------- |  | ------------------------------------------------ | 

| |  |  |  | 
| |  |  |  | 

| | 127 North Street, Elkton, Maryland(Address of principal executive office) |  | 21921-5547(Zip Code) | 
| | ------------------------------------------------------------------------- |  | -------------------- | 

Registrants telephone number, including area code:  (410) 398-1650

Indicate
  by check mark whether the issuer (1) has filed all reports required to be filed
  by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.

| |  |  | YESNO
| |  |  | -----



Indicate by check mark whether the registrant is a shell company ( as defined in Rule 12b-2 of the Exchange Act).

| |  |  | YESNO
| |  |  | -----

APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

1,803,298




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CECIL
  BANCORP, INC. AND SUBSIDIARIES

CONTENTS



|                 |  |                               |    |                                                                                                                               | PAGE 
|---------------- |  | ----------------------------- | -- | ----------------------------------------------------------------------------------------------------------------------------- | -----
|                 |  |                               |    |                                                                                                                               |      
|PART
        I.  |  | FINANCIAL
        INFORMATION |   
|                 |  |                               |    |                                                                                                                               |      
|                 |  | ITEM
        1.               |    | Financial
        Statements (unaudited)                                                                                      |      
|                 |  |                               |    |                                                                                                                               |      
|                 |  |                               |    | Consolidated
        Balance Sheets - March 31, 2006 and December 31, 2005                                                    | 3-4  
|                 |  |                               |    |                                                                                                                               |      
|                 |  |                               |    | Consolidated
        Statements of Income and Comprehensive Income
        for the Three Months Ended March 31, 2006 and 2005 | 5-6  
|                 |  |                               |    |                                                                                                                               |      
|                 |  |                               |    | Consolidated
        Statements of Cash Flows
        for the Three Months Ended March 31, 2006 and 2005                      | 7    
|                 |  |                               |    |                                                                                                                               |      
|                 |  |                               |    | Notes
        to Consolidated Financial Statements                                                                            | 8-9  
|                 |  |                               |    |                                                                                                                               |      
|                 |  | ITEM
        2.               |    | Managements
        Discussion and Analysis of Financial Condition
        and Results of Operations                         | 10-16
|                 |  |                               |    |                                                                                                                               |      
|                 |  | ITEM
        3.               |    | Controls
        and Procedures                                                                                               | 16   
|                 |  |                               |    |                                                                                                                               |      
|PART
        II. |  | OTHER
        INFORMATION     | 17
|                 |  |                               |    |                                                                                                                               |      
|SIGNATURES       |  |                               | 18
|                 |  |                               |    |                                                                                                                               |      
|CERTIFICATIONS   |  |                               | 19



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|PART
        I. | Financial
        Information
|--------------- | -----------------------------

CECIL BANCORP, INC. AND SUBSIDIARIES

ITEM 1: FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)



ASSETS



|                                                                 |  | March
        31,2006 |         | December
        31,2005 |  
|---------------------------------------------------------------- |  | --------------------- | ------- | ------------------------ | -
|                                                                 |  |                       |         |                          |  
|                                                                 |  | (unaudited)           |         |                          |  
|Cash
        and due from banks                                  |  | $                     | 1,198   |                          | $
|Interest
        bearing deposits with banks                     |  |                       | 3,759   |                          |  
|Investment
        securities:                                   |  |                       |         |                          |  
|Securities
        available-for-sale at fair value              |  |                       | 2,191   |                          |  
|Securities
        held-to-maturity (fair value of $3,693        |  |                       |         |                          |  
|in
        2006 and $3,735 in 2005)                              |  |                       | 3,693   |                          |  
|Restricted
        investment securities  at cost               |  |                       | 2,037   |                          |  
|Loans
        receivable                                         |  |                       | 249,043 |                          |  
|Less:
        Allowance for loan losses                          |  |                       | (1,782  | )                        |  
|                                                                 |  |                       |         |                          |  
|Net
        loans receivable                                     |  |                       | 247,261 |                          |  
|                                                                 |  |                       |         |                          |  
|Other
        real estate owned                                  |  |                       | 385     |                          |  
|Premises
        and equipment  net of accumulated depreciation |  |                       | 9,308   |                          |  
|Accrued
        interest receivable                              |  |                       | 1,143   |                          |  
|Goodwill                                                         |  |                       | 2,182   |                          |  
|Other
        intangible assets                                  |  |                       | 168     |                          |  
|Bank
        owned life insurance                                |  |                       | 5,072   |                          |  
|Other
        assets                                             |  |                       | 1,646   |                          |  
|                                                                 |  |                       |         |                          |  
|TOTAL
        ASSETS                                             |  | $                     | 280,043 |                          | $
|                                                                 |  |                       |         |                          |  

See accompanying notes to consolidated financial statements.

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LIABILITIES AND STOCKHOLDERS EQUITY





|                                                                                                                                                        |  | March
        31,2006 |         | December 31,2005 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | ---------------- | -
|                                                                                                                                                        |  |                       |         |                  |  
|                                                                                                                                                        |  | (unaudited)           |         |                  |  
|LIABILITIES:                                                                                                                                            |  |                       |         |                  |  
|Deposits                                                                                                                                                |  | $                     | 218,527 |                  | $
|Other
        liabilities                                                                                                                               |  |                       | 2,183   |                  |  
|Guaranteed
        preferred beneficial interest in junior subordinated debentures                                                                      |  |                       | 10,000  |                  |  
|Advances
        from Federal Home Loan Bank of Atlanta                                                                                                 |  |                       | 26,939  |                  |  
|                                                                                                                                                        |  |                       |         |                  |  
|Total
        liabilities                                                                                                                               |  |                       | 257,649 |                  |  
|                                                                                                                                                        |  |                       |         |                  |  
|STOCKHOLDERS
        EQUITY:                                                                                                                           |  |                       |         |                  |  
|Common
        stock, $.01 par value; authorized 4,000,000 shares, issued and outstanding
        1,785,616 shares in 2006 and 1,768,082 shares in 2005 |  |                       | 18      |                  |  
|Additional
        paid in capital                                                                                                                      |  |                       | 10,871  |                  |  
|Retained
        earnings                                                                                                                               |  |                       | 11,538  |                  |  
|Accumulated
        other comprehensive loss, net                                                                                                       |  |                       | (33     | )                |  
|                                                                                                                                                        |  |                       |         |                  |  
|Total
        stockholders equity                                                                                                                      |  |                       | 22,394  |                  |  
|                                                                                                                                                        |  |                       |         |                  |  
|TOTAL
        LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                      |  | $                     | 280,043 |                  | $
|                                                                                                                                                        |  |                       |         |                  |  

See accompanying notes to consolidated financial statements.

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CECIL
  BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(dollars in thousands, except per share data)



|                                                                                   |  | For
        the Three Months Ended March 31, |      
|---------------------------------------------------------------------------------- |  | -------------------------------------------- | -----
|                                                                                   |  |                                              |      
|                                                                                   |  | 2006                                         |      
|                                                                                   |  |                                              |      
|                                                                                   |  |                                              |      
|INTEREST
        INCOME:                                                           |  |                                              |      
|Interest
        and fees on loans                                                 |  | $                                            | 4,522
|Interest
        on investment securities                                          |  |                                              | 61   
|Dividends
        on FHLB and FRB stock                                            |  |                                              | 31   
|Other
        interest-earning assets                                              |  |                                              | 13   
|                                                                                   |  |                                              |      
|Total
        interest income                                                      |  |                                              | 4,627
|                                                                                   |  |                                              |      
|                                                                                   |  |                                              |      
|INTEREST
        EXPENSE:                                                          |  |                                              |      
|Interest
        expense on deposits                                               |  |                                              | 1,603
|Guaranteed
        preferred beneficial interest in junior subordinated debentures |  |                                              | 13   
|Interest
        expense on advances from FHLB                                     |  |                                              | 418  
|                                                                                   |  |                                              |      
|Total
        interest expense                                                     |  |                                              | 2,034
|                                                                                   |  |                                              |      
|NET
        INTEREST INCOME                                                        |  |                                              | 2,593
|PROVISION
        FOR LOAN LOSSES                                                  |  |                                              | 60   
|                                                                                   |  |                                              |      
|NET
        INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                        |  |                                              | 2,533
|                                                                                   |  |                                              |      
|NONINTEREST
        INCOME:                                                        |  |                                              |      
|Checking
        account fees                                                      |  |                                              | 118  
|ATM
        fees                                                                   |  |                                              | 19   
|Commission
        income                                                          |  |                                              | 2    
|Gain
        on sale of loans                                                      |  |                                              | 35   
|Income
        from bank owned life insurance                                      |  |                                              | 42   
|Other                                                                              |  |                                              | 62   
|                                                                                   |  |                                              |      
|Total
        noninterest income                                                   |  |                                              | 278  
|                                                                                   |  |                                              |      
|NONINTEREST
        EXPENSE:                                                       |  |                                              |      
|Salaries
        and employee benefits                                             |  |                                              | 1,167
|Occupancy
        expense                                                          |  |                                              | 165  
|Equipment
        and data processing expense                                      |  |                                              | 212  
|Other                                                                              |  |                                              | 387  
|                                                                                   |  |                                              |      
|Total
        noninterest expense                                                  |  |                                              | 1,931
|                                                                                   |  |                                              |      
|INCOME
        BEFORE INCOME TAXES                                                 |  |                                              | 880  
|INCOME
        TAX EXPENSE                                                         |  |                                              | 328  
|                                                                                   |  |                                              |      
|NET
        INCOME                                                                 |  | $                                            | 552  
|                                                                                   |  |                                              |      

See accompanying notes to consolidated financial statements.

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CECIL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(dollars in thousands, except per share data)

(Continued)



|                                                                            |  | For
        the Three Months Ended March 31, |     
|--------------------------------------------------------------------------- |  | -------------------------------------------- | ----
|                                                                            |  |                                              |     
|                                                                            |  | 2006                                         |     
|                                                                            |  |                                              |     
|NET
        INCOME                                                          |  | $                                            | 552 
|OTHER
        COMPREHENSIVE INCOME                                          |  |                                              |     
|Unrealized
        (losses) on investment securities, net of deferred taxes |  |                                              | (7  
|                                                                            |  |                                              |     
|TOTAL
        COMPREHENSIVE INCOME                                          |  | $                                            | 545 
|                                                                            |  |                                              |     
|Earnings
        per common share - basic                                   |  | $                                            | 0.31
|                                                                            |  |                                              |     
|Earnings
        per common share - diluted                                 |  | $                                            | 0.31
|                                                                            |  |                                              |     
|Dividends
        paid per common share                                     |  | $                                            | 0.05
|                                                                            |  |                                              |     

See accompanying notes to consolidated financial statements.

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CECIL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)



|                                                                                                                          |  | Three
        Months Ended March 31, |        
|------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | -------
|                                                                                                                          |  |                                      |        
|                                                                                                                          |  | 2006                                 |        
|                                                                                                                          |  |                                      |        
|CASH
        FLOWS FROM OPERATING ACTIVITIES:                                                                             |  |                                      |        
|Net
        income                                                                                                        |  | $                                    | 552    
|Adjustments
        to reconcile net income to net cash provided by operating activities:                                 |  |                                      |        
|Depreciation
        and amortization                                                                                     |  |                                      | 85     
|Provision
        for loan losses                                                                                         |  |                                      | 60     
|Gain
        on sale of loans                                                                                             |  |                                      | (35    
|Loss
        on disposal of premises and equipment                                                                        |  |                                      | 1      
|Increase
        in cash surrender value of bank owned life insurance                                                     |  |                                      | (42    
|Excess
        servicing rights                                                                                           |  |                                      | (22    
|Reinvested
        dividends on investments                                                                               |  |                                      | (22    
|Origination
        of loans held for sale                                                                                |  |                                      | (1,643 
|Proceeds
        from sales of loans held for sale                                                                        |  |                                      | 1,660  
|Net
        change in:                                                                                                    |  |                                      |        
|Accrued
        interest receivable and other assets                                                                      |  |                                      | (193   
|Other
        liabilities                                                                                                 |  |                                      | 121    
|                                                                                                                          |  |                                      |        
|Net
        cash provided by operating activities                                                                         |  |                                      | 522    
|                                                                                                                          |  |                                      |        
|CASH
        FLOWS FROM INVESTING ACTIVITIES:                                                                             |  |                                      |        
|Purchases
        of investment securities available-for-sale                                                             |  |                                      |       
|Purchases
        of investment securities held-to-maturity                                                               |  |                                      | (3,670 
|Net
        redemption of stock in Federal Home Loan Bank of Atlanta                                                      |  |                                      | 570    
|Proceeds
        from sales, maturities, calls and principal payments of investment securities
        available-for-sale |  |                                      | 6      
|Proceeds
        from maturities, calls and principal payments of investment securities
        held-to-maturity          |  |                                      | 3,750  
|Net
        increase in loans                                                                                             |  |                                      | (13,996
|Purchases
        of premises and equipment  net                                                                         |  |                                      | (172   
|                                                                                                                          |  |                                      |        
|Net
        cash used in investing activities                                                                             |  |                                      | (13,512
|                                                                                                                          |  |                                      |        
|CASH
        FLOWS FROM FINANCING ACTIVITIES:                                                                             |  |                                      |        
|Net
        increase in deposits                                                                                          |  |                                      | 20,320 
|Net
        increase in guaranteed preferred beneficial interest in junior subordinated
        debentures                |  |                                      | 10,000 
|Net
        decrease in advances from Federal Home Loan Bank                                                              |  |                                      | (17,975
|Payments
        of cash dividends                                                                                        |  |                                      | (93    
|                                                                                                                          |  |                                      |        
|Net
        cash provided by financing activities                                                                         |  |                                      | 12,252 
|                                                                                                                          |  |                                      |        
|DECREASE
        IN CASH AND CASH EQUIVALENTS                                                                             |  |                                      | (738   
|CASH
        AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                  |  |                                      | 5,695  
|                                                                                                                          |  |                                      |        
|CASH
        AND CASH EQUIVALENTS AT END OF PERIOD                                                                        |  | $                                    | 4,957  
|                                                                                                                          |  |                                      |        
|SUPPLEMENTAL
        DISCLOSURE OF CASH FLOWS INFORMATION:                                                                |  |                                      |        
|Cash
        paid for income taxes                                                                                        |  | $                                    | 330    
|                                                                                                                          |  |                                      |        
|Cash
        paid for interest                                                                                            |  | $                                    | 2,097  
|                                                                                                                          |  |                                      |        

See accompanying notes to consolidated financial statements.



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CECIL
  BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

|1. | GENERAL
|-- | -------

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2006 and the results of its operations and cash flows for the three months ended March 31, 2006 and 2005. These statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The statements should be read in conjunction with the consolidated financial statements and footnotes included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2005. The results of operations for the three months ended March 31, 2006 are not necessarily indicative of the results to be expected for the full year.

|2. | FINANCIAL STATEMENT PREPARATION
|-- | -------------------------------

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Estimates are used when accounting for uncollectible loans, depreciation and amortization, intangible assets, employee benefit plans and contingencies, among others. Actual results could differ from those estimates.

|3. | EARNINGS PER SHARE
|-- | ------------------

Basic
    earnings per common share are computed by dividing net income available to
    common stockholders by the weighted average number of shares of common stock
    outstanding during the quarter. Diluted earnings per share are computed by
    adjusting the denominator of the basic earnings per share computation for
    the effects of all dilutive potential common shares outstanding during the
    period. The dilutive effects of options, warrants, and their equivalents
    are computed using the treasury stock method. For the three months ended
	March 31, 2006 and 2005, there were no options excluded from the diluted
	earnings per share calculation because their effect was antidilutive.
	 All earnings per share calculations
    have been adjusted to give retroactive effect to the 1% stock dividend approved
    by the Board of Directors on December 20, 2005 and the 1% stock dividend
approved by the Board of Directors on March 14, 2006.



|                                              |  | Three Months Ended March 31, |          
|--------------------------------------------- |  | ---------------------------- | ---------
|                                              |  |                              |          
|                                              |  | 2006                         |          
|                                              |  |                              |          
|Basic:                                        |  |                              |          
|Net income available to common stockholders   |  | $                            | 552,000  
|                                              |  |                              |          
|Average common shares outstanding             |  |                              | 1,803,298
|                                              |  |                              |          
|Basic
            earnings per common share   |  | $                            | 0.31     
|                                              |  |                              |          
|Diluted:                                      |  |                              |          
|Net income available to common stockholders   |  | $                            | 552,000  
|                                              |  |                              |          
|Average common shares outstanding             |  |                              | 1,803,298
|Stock option adjustment                       |  |                              | 2,997    
|                                              |  |                              |          
|Average common shares outstanding  diluted   |  |                              | 1,806,295
|                                              |  |                              |          
|Diluted
            earnings per common share |  | $                            | 0.31     
|                                              |  |                              |          



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|4. | FAIR VALUE ACCOUNTING FOR STOCK PLANS
|-- | -------------------------------------

The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 123(R),Share-Based Payment, under the prospective method on January 1, 2006. Among other things, SFAS 123(R) eliminates the ability to account for stock-based compensation using Accounting Principles Board (APB) No. 25 and requires such transactions to be recognized as compensation cost in the income statement based on their fair value on the date of grant.

Prior to January 1, 2006, the Company accounted for its stock-based compensation plan based on the intrinsic value method set forth in APB Opinion No. 25,Accounting for Stock Issued to Employees, and related interpretations. Compensation expense for stock options is generally not recognized if the exercise price of the option equals or exceeds the fair market value of the stock on the date of the grant. The exercise price for all options granted was equal to the market price of the common stock at the date of the grant, and accordingly, no compensation expense related to options was recognized.

The
    Company has not granted any options during the three months ended March 31,
    2006 and 2005. All outstanding options have been fully vested since January
    1, 2005. A summary	of the Companys stock option activity, and related
    information
for the periods indicated is as follows:

|                                               |  | Three
            months endedMarch 31, 2006 |        | Year
            endedDecember 31, 2005                  |  
|---------------------------------------------- |  | -------------------------------------------- | ------ | -------------------------------------------------------- | -
|                                               |  |                                              |        |                                                          |  
|                                               |  | Shares                                       |        | Weighted-
        Average
        Exercise
        Price |  
|                                               |  |                                              |        |                                                          |  
|Outstanding at beginning of period             |  |                                              | 10,075 |                                                          | $
|Granted                                        |  |                                              |       |                                                          |  
|Exercised                                      |  |                                              |       |                                                          |  
|Canceled/expired                               |  |                                              | (1,685 | )                                                        |  
|                                               |  |                                              |        |                                                          |  
|                                               |  |                                              |        |                                                          |  
|Outstanding
      at end of period             |  |                                              | 8,390  |                                                          | $
|                                               |  |                                              |        |                                                          |  
|                                               |  |                                              |        |                                                          |  
|Options
          exercisable at end of period |  |                                              | 8,390  |                                                          | $
|                                               |  |                                              |        |                                                          |  

The
    following table summarizes information about stock options outstanding at
    March 31, 2006::

| |  |                                     |  |                          |  |                    | 
| |  | ----------------------------------- |  | ------------------------ |  | ------------------ | 
| |  | Options Outstanding and Exercisable | 
| |  |                                     | 
| |  | Exercise
      Price                |  | Number
      Outstanding |  | Life
      (Years) | 
| |  |                                     |  |                          |  |                    | 
| |  | 5.39                                |  | 534                      |  | 0.5                | 
| |  | 12.25                               |  | 7,856                    |  | 3.1                | 
| |  |                                     |  |                          |  |                    | 

|5. | GUARANTEED PREFERRED BENEFICIAL INTEREST IN JUNIOR SUBORDINATED DEBENTURES
|-- | --------------------------------------------------------------------------

In March 2006, the Company formed a wholly-owned subsidiary, Cecil Bancorp Capital Trust I (the Trust). On March 23, 2006, the Trust sold $10.0 million of trust preferred securities in a private placement. The Trust used the proceeds to purchase $10.3 million of the Companys 30-year junior subordinated debentures. The trust preferred securities and the junior subordinated debentures bear interest at a fixed rate of 6.51% for five years and then at a variable rate, which resets quarterly, of 3-month LIBOR plus 1.38%. Interest is cumulative and payable quarterly in arrears. The trust preferred securities and the junior subordinated debentures mature March 23, 2036 and are callable at par after five years. The trust preferred securities, classified on the balance sheet as guaranteed preferred beneficial interest in junior subordinated debentures, qualify as Tier 1
capital for regulatory purposes, subject to applicable limits. The Company used the proceeds to increase the regulatory capital of the Bank and for other corporate purposes.

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CECIL BANCORP, INC. AND SUBSIDIARIES

ITEM
  2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION
  AND RESULTS OF OPERATIONS

Forward-Looking Statements. This Managements Discussion and Analysis of financial condition and results of operations and other portions of this report include forward-looking statements such as: statements of the Companys goals, intentions, and expectations; estimates of risks and of future costs and benefits; assessments of loan quality and of possible loan losses; and statements of the Companys ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon: future interest rates, market behavior, and other economic conditions; future laws and regulations; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, the Companys past
growth and performance do not necessarily indicate its future results.

You should read this Managements Discussion and Analysis of the Companys consolidated financial condition and results of operations in conjunction with the Companys unaudited consolidated financial statements and the accompanying notes.

General

Cecil Bancorp, Inc. (the Company) is the bank holding company for Cecil Federal Bank (Cecil Federal or the Bank). The Company is a bank holding company subject to regulation by the Federal Reserve System. The Bank is a community-oriented Maryland chartered commercial bank, is a member of the Federal Reserve System and the Federal Home Loan Bank (FHLB) of Atlanta, and is an Equal Housing Lender. Its deposits are insured by the Savings Association Insurance Fund (SAIF) of the Federal Deposit Insurance Corporation (FDIC). The Bank commenced operations in 1959 as a Federal savings and loan association. On October 1, 2002, the Bank converted from a stock federal savings bank to a commercial bank. Its deposits have been federally insured up to applicable limits, and it has been a member of the FHLB system since 1959.

Cecil Federal conducts it business through its main office in Elkton, Maryland, and branches in Elkton, North East, Rising Sun, Cecilton, Aberdeen, Conowingo, and Havre de Grace, Maryland.

Cecil Federals business strategy is to operate as an independent community-oriented commercial bank dedicated to real estate, commercial, and consumer lending, funded primarily by retail deposits. Cecil Federal has sought to implement this strategy by (1) continuing to emphasize residential mortgage lending through the origination of adjustable-rate mortgage loans while increasing its commercial and consumer lending portfolios; (2) investing in adjustable-rate and short-term liquid investments; (3) controlling interest rate risk exposure; (4) maintaining asset quality; (5) containing operating expenses; and (6) maintaining well capitalized status. Cecil Federal offers a full range of brokerage and investment services through a relationship with Community Bankers Securities, LLC.

Asset/Liability Management

The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread (the difference between the weighted average interest yields earned on interest-earning assets and the weighted average interest rates paid on interest-bearing liabilities) that can be sustained during fluctuations in prevailing interest rates. The Companys asset/liability management policies are designed to reduce the impact of changes in interest rates on its net interest income by achieving a favorable relationship between the maturities or repricing dates of its interest-earning assets and interest-bearing liabilities. The Banks lending policy emphasizes the origination of one-year, three-year, or five-year adjustable rate mortgage loans, adjustable rate commercial loans and lines of credit, and short-term consumer loans. The Bank is currently originating
residential mortgage loans for sale in the secondary market through the Federal Home Loan Mortgage Corporation. Management has been monitoring the retention of fixed rate loans through its asset/liability management policy.

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Comparison of Financial Condition at March 31, 2006 and December 31, 2005

The Companys assets increased by $12.9 million, or 4.8%, to $280.0 million at March 31, 2006 from $267.1 million at December 31, 2005, primarily as a result of increases in the loans receivable portfolio, partially offset by decreases in cash and cash equivalents and restricted investment securities. The increase in the loan portfolio was funded by increases in deposits and the guaranteed preferred beneficial interest in junior subordinated debentures, partially offset by a decrease in advances from the Federal Home Loan Bank of Atlanta.

Cash
    and due from banks decreased by $119,000, or 9.0%, to $1.2 million at March
    31, 2006 from $1.3 million at December 31, 2005. Interest-bearing cash decreased
    by $619,000, or 14.1%, to $3.8 million at March 31, 2006 from $4.4 million
    at December 31, 2005 primarily to fund growth in the loan portfolio and repay
    advances from the Federal Home Loan Bank of Atlanta. Investment securities
    held to maturity remained consistent at $3.7 million at March 31, 2006 and
    December 31, 2005. Restricted investment securities, which consist of Federal
    Home Loan and Federal Reserve Bank stock, decreased $570,000, or 21.9%, during
    this period as a result of the significant decrease in advances from the
Federal Home Loan Bank of Atlanta.

The loans receivable portfolio increased by $14.0 million, or 6.0%, to $249.0 million at March 31, 2006 from $235.0 million at December 31, 2005, primarily as a result of growth in construction loans (up $5.4 million, or 32.9%) and commercial real estate loans (up $13.9 million, or 30.6%), offset in part by declines in one- to four-family residential and home equity loans (down $3.7 million, or 4.3%) and consumer loans (down $809,000, or 9.0%). The allowance for loan losses increased $44,000, or 2.5%, during the period (see analysis of allowance for loan losses below).

Other
    assets increased $202,000, or 14.0%, to $1.6 million at March 31, 2006 from
    $1.4 million at December 31, 2005. This increase is primarily due to the
    payment of the final capital call for the Companys investment in Triangle
    Capital Partners, as well as an increase in prepaid expenses due to the prepayment
    of FDIC insurance premiums and various maintenance contracts.

The Companys liabilities increased $12.5 million, or 5.1%, to $257.6 million at March 31, 2006 from $245.2 million at December 31, 2005. The increase in deposits of $20.3 million, or 10.3%, to $218.5 million at March 31, 2006 from $198.2 million at December 31, 2005, was mainly due to an increase in certificates of deposit (up $22.2 million, or 18.0%), partially offset by decreases in money market certificates (down $1.1 million, or 13.8%) and NOW accounts (down $818,000, or 6.3%). The guaranteed preferred beneficial interest in junior subordinated debentures increased 100% to $10.0 million at March 31, 2006 following completion of the issuance of trust preferred securities (see note 5 to the consolidated financial statements). Advances from the Federal Home Loan Bank of Atlanta decreased $18.0 million, or 40.0%, to $26.9 million at March 31, 2006 from $44.9 million at December 31,
2005. The Company was able to significantly reduce its advances as a result of the increase in deposits and the issuance of the trust preferred securities. Other liabilities increased $121,000, or 5.9%, to $2.2 million at March 31, 2006 from $2.1 million at December 31, 2005, primarily due to an increase in the Companys supplemental executive retirement plan liability, partially offset by the payment of the Companys contribution to the 401(k) profit sharing plan.

The Companys stockholders equity increased by $452,000, or 2.1%, to $22.4 million at March 31, 2006 from $21.9 million December 31, 2005. This increase is primarily the result of net income of $552,000, offset in part by the Companys regular cash dividend of $0.05 per share, or $93,000, for the quarter ended March 31, 2006.

Comparison of Results of Operations for the Three Months Ended March 31, 2006 and 2005

Net
    income for the three-month period ended March 31, 2006 decreased $14,000,
    or 2.5%, to $552,000 as compared to net income for the same period in 2005
    of $566,000. This decrease was primarily the result of increases in noninterest
    expense and the provision for loan losses, partially offset by increases
    in net interest income and noninterest income. Diluted net income per share
    decreased 8.8% to $0.31 for the three-month period ended March 31, 2006 as
    compared to $0.34 for the same period in 2005. The net income per share calculations
    have been adjusted to give retroactive effect to the 1% stock dividend approved
    by the Board of Directors on December 20, 2005 and the 1% stock dividend
    approved by the Board of Directors on March 14, 2006. The annualized return
    on average assets and annualized return on average equity were 0.82% and
    9.93% respectively, for the three-month period ended March 31, 2006. This
    compares to an annualized return on average assets and annualized return
    on average equity of 1.10% and 12.15%, respectively, for the same period
    in
2005.

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Net interest income, the Companys
    primary source of income, increased 23.4%, or $492,000, to $2.6 million for
    the three months ended March 31, 2006, from $2.1 million over the same period
    in 2005. The weighted average yield on interest earning assets increased
    to 7.41% for the three months ended March 31, 2006 from 6.61% for the three
    months ended March 31, 2005. The weighted average rate paid on interest bearing
    liabilities increased to 3.56% for the three months ended March 31, 2006
    from 2.48% for the three months ended March 31, 2005. The weighted average
    yield earned and weighted average rate paid increased in the first quarter
    of 2006 due to the increase in general market rates. The weighted average
    rate paid on interest bearing liabilities has increased more rapidly, as
    the Company has increased rates on deposits to gain market share. As a result,
    the net interest spread decreased to 3.85% from 4.13% and the net interest
    margin decreased to 4.15% for the three months ended March 31, 2006 as compared
to 4.38% for the three months ended March 31, 2005.

Interest and fees on loans increased by $1.4 million, or 45.7%, to $4.5 million for the three months ended March 31, 2006 from $3.1 million for the three months ended March 31, 2005. The increase is attributable to increases in the average balance outstanding and the weighted-average yield. The average balance outstanding increased by $57.5 million, or 31.9%, to $237.7 million for the three months ended March 31, 2006 from $180.2 million for the three months ended March 31, 2005. The weighted-average yield increased to 7.61% for the three months ended March 31, 2006 from 6.89% for the three months ended March 31, 2005.

Interest
    on investment securities increased $24,000, or 64.9%, to $61,000 for the
    three months ended March 31, 2006 from $37,000 for the three months ended
    March
    31, 2005. The average outstanding balance increased $152,000, or 2.6%, to
    $5.9 million for the three months ended March 31, 2006 from $5.7 million
    for the three months ended March 31, 2005. The weighted-average yield increased
    to 4.15% for the three months ended March 31, 2006 from 2.56% for the three
months ended March 31, 2005.

Dividends
    on Federal Reserve and Federal Home Loan Bank stock increased $8,000, or
    34.8%, to $31,000 for the three months ended March 31, 2006 from $23,000
    for the three months ended March 31, 2005. The average outstanding balance
    increased
    $179,000, or 8.4%, to $2.3 million for the three months ended March 31, 2006
    from $2.1 million for the three months ended March 31, 2005. The weighted-average
    yield increased to 5.37% for the three months ended March 31, 2006 from 4.30%
for the three months ended March 31, 2005.

Interest
    on other interest earning assets increased $4,000, or 44.4%, to $13,000 for
    the three months ended March 31, 2006 from $9,000 for the three months ended
    March 31, 2005. The average outstanding balance decreased $56,000, or 1.5%,
    to $3.7 million for the three months ended March 31, 2006 from $3.8 million
    for the three months ended March 31, 2005. The weighted-average yield increased
    to 1.39% for the three months ended March 31, 2006 from 0.93% for the three
months ended March 31, 2005.

Interest
    on deposits increased $822,000, or 105.2%, to $1.6 million for the three
    months ended March 31, 2006 from $781,000 for the three months ended March
    31, 2005. The average balance outstanding increased $59.6 million, or 39.7%,
    to $209.7 million for the three months ended March 31, 2006 from $150.1 million
    for the same period in 2005. The weighted-average rate paid on interest bearing
    deposits increased to 3.34% for the three months ended March 31, 2006 from
    2.29% for the three months ended March 31, 2005. Interest on guaranteed preferred
    beneficial interest in junior subordinated debentures increased 100% to $13,000
    for the three months ended March 31, 2006. The Company is currently paying
    a rate of 6.51% on the debt. Interest expense on advances from the Federal
    Home Loan Bank of Atlanta increased $127,000, or 43.6%, to $418,000 for the
    three months ended March 31, 2006 from $291,000 for the three months ended
    March 31, 2005. The average balance outstanding increased $372,000, or 1.0%,
    for the period noted above. The weighted average rate increased to 4.58%
    for the three months ended March 31, 2006 from 3.21% for the three months
ended March 31, 2005.

Noninterest
    income increased 24.7%, or $55,000, for the three months ended March 31,
    2006, over the same period in 2005. Checking account fees increased $16,000,
    or 15.7%, to $118,000 for the three months ended March 31, 2006 from $102,000
    for the three months ended March 31, 2005, primarily due to growth in the
    deposit portfolio. Commission income decreased $12,000, or 85.7%, to $2,000
    for the three months ended March 31, 2006 from $14,000 for the three months
    ended March 31, 2005. Income from bank owned life insurance decreased $5,000,
    or 10.6%, to $42,000 for the three months ended March 31, 2006 from $47,000
    over the same period in 2005. Other income increased $51,000 to $62,000 for
    the three months ended March 31, 2006 from $11,000 for the three months ended
    March 31, 2005. This increase is primarily due to an increase in income from
    the Companys investment in Triangle Capital
Partners, as well as an increase in rental income after the purchase of a commercial property in July 2005 that is used as a loan and operations facility.

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Noninterest
    expense increased 38.4%, or $536,000, for the three months ended March 31,
    2006, over the same period in 2005. Salary and employee benefits increased
    $321,000, or 37.9%, for the three months ended March 31, 2006 over the same
    period in 2005. This increase is attributable to the hiring of additional
    employees to staff the new branches, as well as increased sales and administrative
    staff, annual merit increases, and an increase in the supplemental executive
    retirement plan expense. Occupancy expense increased $48,000, or 41.0%, to
    $165,000 for the three months ended March 31, 2006 from $117,000 for the
    three months ended March 31, 2005 due to the increased depreciation, maintenance
    and utilities expenses for the new branches and the operations facility that
    were placed in service during the second and fourth quarters of 2005. Equipment
    and data processing expense increased $44,000, or 26.2%, to $212,000 for
    the three months ended March 31, 2006 from $168,000 for the same period in
    2005. This increase is attributed to the purchases of equipment to fill the
    new branches and the depreciation of this equipment, as well as an increase
in fees for the Companys data service provider. Other expenses increased
$123,000, or 46.6%, to $387,000 for the three months ended March 31, 2006 compared
to $264,000 during the same period in 2005, primarily due to increases in legal
fees, audit services, and loan collection expense.

Income tax expense for the three-month periods ended March 31, 2006 and 2005 was $328,000 and $333,000, respectively, which equates to effective rates of 37.3% and 37.0% respectively.

Loans Receivable

The Companys lending activities are predominantly conducted in Cecil and Harford Counties in the State of Maryland. The following table shows the composition of the loan portfolio at the indicated dates.



|                                                |  | March 31,2006          |         | December 31,2005 |       
|----------------------------------------------- |  | ---------------------- | ------- | ---------------- | ------
|                                                |  |                        |         |                  |       
|                                                |  | Amount                 |         | %                |       
|                                                |  |                        |         |                  |       
|                                                |  | (Dollars in thousands) |        
|Type of Loan                                    |  |                        |         |                  |       
|Real estate loans:                              |  |                        |         |                  |       
|Construction loans                              |  | $                      | 21,806  |                  | 8.75  
|One- to four-family residential and home equity |  |                        | 82,593  |                  | 33.16 
|Multi-family residential                        |  |                        | 4,587   |                  | 1.84  
|Land                                            |  |                        | 3,154   |                  | 1.27  
|Commercial                                      |  |                        | 59,213  |                  | 23.78 
|Commercial business loans*                      |  |                        | 66,698  |                  | 26.78 
|Consumer loans:                                 |  |                        |         |                  |       
|Automobile loans                                |  |                        | 1,374   |                  | 0.55  
|Deposit account loans                           |  |                        | 1,457   |                  | 0.59  
|Personal loans                                  |  |                        | 8,161   |                  | 3.28  
|                                                |  |                        |         |                  |       
|Gross loans                                     |  |                        | 249,043 |                  | 100.00
|                                                |  |                        |         |                  |       
|Less: allowance for loan losses                 |  |                        | (1,782  | )                |       
|                                                |  |                        |         |                  |       
|Total loans                                     |  | $                      | 247,261 |                  |       
|                                                |  |                        |         |                  |       

* Commercial business loans above include loans primarily for business purposes that are secured by real estate.

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Nonperforming Assets

Management reviews and identifies loans and investments that require designation as nonperforming assets. Nonperforming assets are: loans accounted for on a non-accrual basis, loans past due by 90 days or more but still accruing, restructured loans, and other real estate (assets acquired in settlement of loans). The following table sets forth certain information with respect to nonperforming assets.



|(Dollars
        in thousands)                               |  | March 31,2006 |       | December 31,2005 |  
|------------------------------------------------------------ |  | ------------- | ----- | ---------------- | -
|                                                             |  |               |       |                  |  
|Non-accrual loans and leases                                 |  | $             | 3,036 |                  | $
|Loans and leases 90 days or more past due                    |  |               | 18    |                  |  
|Restructured loans and leases                                |  |               | 0     |                  |  
|                                                             |  |               |       |                  |  
|Total nonperforming loans and leases                         |  |               | 3,054 |                  |  
|Other real estate owned, net                                 |  |               | 385   |                  |  
|                                                             |  |               |       |                  |  
|Total nonperforming assets                                   |  | $             | 3,439 |                  | $
|                                                             |  |               |       |                  |  
|Nonperforming loans and leases to total loans                |  |               | 1.23  | %                |  
|Nonperforming assets to total assets                         |  |               | 1.23  |                  |  
|Allowance for loan losses to non-performing loans and leases |  |               | 58.35 |                  |  

Analysis of Allowance for Loan Losses

The Bank records provisions for loan losses in amounts necessary to maintain the allowance for loan losses at the level deemed appropriate. The allowance for loan losses is provided through charges to income in an amount that management believes will be adequate to absorb losses on existing loans that may become uncollectible, based upon evaluations of the collectibility of loans and prior loan loss experience. The allowance is based on careful, continuous review and evaluation of the credit portfolio and ongoing, quarterly assessments of the probable losses inherent in the loan portfolio. The Bank employs a systematic methodology for assessing the appropriateness of the allowance, which includes determination of a specific allowance, a formula allowance, and an unallocated allowance.

Specific allowances are established in cases where management has identified significant conditions or circumstances related to a credit that management believes indicate the probability that a loss may be incurred in an amount different from the amount determined by application of the formula allowance.

The formula allowance is calculated by applying loss factors to corresponding categories of outstanding loans, excluding loans for which specific allocations have been made. Allowances are established for credits that do not have specific allowances according to the application of these credit loss factors to groups of loans based upon (a) their credit risk rating, for loans categorized as substandard or doubtful either by the Bank in its ongoing reviews or by bank examiners in their periodic examinations, or (b) by type of loans, for other credits without specific allowances. These factors are set by management to reflect its assessment of the relative level of risk inherent in each category of loans, based primarily on the credit risk factors employed by bank examiners at their most recent periodic examination of the Bank. Bank regulatory examinations usually occur each year. In these
examinations, the examiners review the credit portfolio, establish credit risk ratings for loans, identify charge offs, and perform their own calculation of the allowance for loan losses. The use of these credit risk factors based primarily upon periodic examinations is intended to provide a self-correcting mechanism to reduce differences between estimated and actual observed losses.

The unallocated allowance is based upon managements evaluation of various conditions that are not directly measured in the determination of the specific and formula allowances. These conditions may include the nature and volume of the loan portfolio, overall portfolio quality, and current economic conditions that may affect the borrowers ability to pay. In addition to these conditions, management has identified land acquisition and development loans, as well as construction speculation loans, as higher risk due to economic factors. Additionally, management has identified commercial business loans as higher risk based on the change in the nature and the volume of the portfolio over the last several periods. Therefore, management has allocated additional reserves to these two pools of loans over and above the specific and formula allowances.

Determining
  the amount of the allowance for loan losses requires the use of estimates and
  assumptions, which is permitted under accounting principles generally accepted
  in the United States of America. Actual results could differ significantly from
  those estimates. While management uses available information to estimate losses
  on loans, future additions to the allowance may be necessary based on changes
  in economic conditions. In addition, as noted above, federal and state financial
  institution examiners, as an integral part of their examination process, periodically review the Banks allowance for loan losses, and may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

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Management determined that the appropriate allowance for loan losses at March 31, 2006 was $1.8 million, (0.72% of total loans), an increase of $44,000 from the $1.7 million allowance (0.74% of total loans) at December 31, 2005. Annualized net charge-offs for the first three months of 2006 were 0.03% of average loans, while net charge-offs were 0.04% of average loans for the year 2005. The provision for loans losses required for the first three months of 2006 and 2005 was $60,000 and $30,000, respectively.

A summary of activity in the allowance is shown below.



|                                                                                    |  | 3
        Months EndedMarch 31, 2006 |       | 12
        Months EndedDecember 31, 2005 |  
|----------------------------------------------------------------------------------- |  | ------------------------------------ | ----- | ---------------------------------------- | -
|                                                                                    |  |                                      |       |                                          |  
|                                                                                    |  | (In
        thousands)               |      
|Balance
        at beginning of period                                              |  | $                                    | 1,738 |                                          | $
|                                                                                    |  |                                      |       |                                          |  
|                                                                                    |  |                                      |       |                                          |  
|Charge-offs:                                                                        |  |                                      |       |                                          |  
|Residential
        real estate                                                     |  |                                      | (35   | )                                        |  
|Commercial                                                                          |  |                                      | 0     |                                          |  
|Consumer                                                                            |  |                                      | (6    | )                                        |  
|                                                                                    |  |                                      |       |                                          |  
|Total
        charge-offs                                                           |  |                                      | (41   | )                                        |  
|                                                                                    |  |                                      |       |                                          |  
|Recoveries:                                                                         |  |                                      |       |                                          |  
|Residential
        real estate                                                     |  |                                      | 0     |                                          |  
|Commercial                                                                          |  |                                      | 0     |                                          |  
|Consumer                                                                            |  |                                      | 25    |                                          |  
|                                                                                    |  |                                      |       |                                          |  
|Total
        recoveries                                                            |  |                                      | 25    |                                          |  
|                                                                                    |  |                                      |       |                                          |  
|Net
        charge-offs                                                             |  |                                      | (16   | )                                        |  
|                                                                                    |  |                                      |       |                                          |  
|Provision
        for loan losses                                                   |  |                                      | 60    |                                          |  
|                                                                                    |  |                                      |       |                                          |  
|Balance
        at end of period                                                    |  | $                                    | 1,782 |                                          | $
|                                                                                    |  |                                      |       |                                          |  
|Net
        charge-offs to average loans outstanding during the period (annualized) |  |                                      | 0.03  | %                                        |  
|Allowance
        for loan losses to loans                                          |  |                                      | 0.72  |                                          |  
|Allowance
        for loan losses to nonperforming loans                            |  |                                      | 58.35 |                                          |  

Analysis of Deposits

The following table sets forth the dollar amount of deposits in the various types of accounts offered by Cecil Federal at the dates indicated.



|                            |  | Balance atMarch 31,2006 |         | %Deposits |        | Balance atDecember 31,2005 |   | %Deposits | 
|--------------------------- |  | ----------------------- | ------- | --------- | ------ | -------------------------- | - | --------- | 
|                            |  |                         |         |           |        |                            |   |           | 
|                            |  | (Dollars in thousands)  |        
|Regular checking            |  | $                       | 16,823  |           | 7.70   | %                          | $ | 17,133    | 
|NOW accounts                |  |                         | 12,221  |           | 5.59   |                            |   | 13,039    | 
|Passbook                    |  |                         | 11,335  |           | 5.19   |                            |   | 11,361    | 
|Statement savings           |  |                         | 7,811   |           | 3.57   |                            |   | 7,764     | 
|Money market                |  |                         | 6,203   |           | 2.84   |                            |   | 6,295     | 
|Holiday club                |  |                         | 155     |           | 0.07   |                            |   | 59        | 
|Certificates of Deposit     |  |                         | 145,833 |           | 66.74  |                            |   | 123,610   | 
|IRA Certificates of Deposit |  |                         | 11,480  |           | 5.25   |                            |   | 11,215    | 
|Money Market Certificates   |  |                         | 6,666   |           | 3.05   |                            |   | 7,731     | 
|                            |  |                         |         |           |        |                            |   |           | 
|Total Deposits              |  | $                       | 218,527 |           | 100.00 | %                          | $ | 198,207   | 
|                            |  |                         |         |           |        |                            |   |           | 

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Capital Adequacy

Capital adequacy refers to the level of capital required to sustain asset growth and to absorb losses. The Board of Governors of the Federal Reserve System (Federal Reserve), which is the Companys principal federal regulator, has established requirements for total and tier 1 (core) risk-based capital and tangible capital. The following table sets forth applicable capital ratios of the Bank as of March 31, 2006 and 2005 and the capital ratios of the Company as of March 31, 2005. As of March 31, 2006, since the Company has assets that total less than $500 million, the capital adequacy requirements do not apply on a consolidated basis.



|                                 |  |            |   |            |   | Regulatory Minimums |  
|-------------------------------- |  | ---------- | - | ---------- | - | ------------------- | -
|                                 |  |            |   |            |   |                     |  
|                                 |  | 2006Actual |   | 2005Actual |   | WellCapitalized     |  
|                                 |  |            |   |            |   |                     |  
|Total risk-based capital ratio:  |  |            |   |            |   |                     |  
|Consolidated                     |  |            |   | 11.25      | % | N/A                 |  
|The Bank                         |  | 13.74      | % | 11.07      | % | 10.00               | %
|Tier 1 risk-based capital ratio: |  |            |   |            |   |                     |  
|Consolidated                     |  |            |   | 10.50      | % | N/A                 |  
|The Bank                         |  | 9.02       | % | 10.32      | % | 6.00                | %
|Tangible capital ratio:          |  |            |   |            |   |                     |  
|Consolidated                     |  |            |   | 8.07       | % | N/A                 |  
|The Bank                         |  | 7.35       | % | 8.06       | % | 5.00                | %

As of March 31, 2006 and 2005, the Bank exceeded all applicable capital requirements to be classified as a well capitalized institution under the rules promulgated by the Board of Governors of the Federal Reserve System. Designation as a well capitalized institution under these regulations does not constitute a recommendation or endorsement of the Banks regulators.

Item 3. Controls and Procedures

Cecil Bancorps management, under the supervision and with the participation of its Chief Executive Officer and its Chief Financial Officer, evaluated as of the last day of the period covered by this report, the effectiveness of the design and operation of the Companys disclosure controls and procedures, as defined in Rule 13a-15 under the Securities Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures were adequate. There were no significant changes in the Companys internal controls over financial reporting (as defined in Rule 13a-15 under the Securities Act of 1934) during the quarter ended March 31, 2006, that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

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|PART
        II. | Other Information:
|---------------- | ------------------



| |  | Item
        1. |  | Legal
        Proceedings -                                                         | 
| |  | --------------- |  | ----------------------------------------------------------------------------------- | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Not
        Applicable                                                              | 
| |  |                 |  |                                                                                     | 
| |  | Item
        2. |  | Unregistered
        Sale of Equity Securities and Use of Proceeds -                | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Not
        Applicable                                                              | 
| |  |                 |  |                                                                                     | 
| |  | Item
        3. |  | Defaults
        Upon Senior Securities -                                           | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Not
        Applicable                                                              | 
| |  |                 |  |                                                                                     | 
| |  | Item
        4. |  | Submission
        of Matters to a Vote of Security Holders -                       | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Not
        Applicable                                                              | 
| |  |                 |  |                                                                                     | 
| |  | Item
        5. |  | Other
        Information -                                                         | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Not
        Applicable                                                              | 
| |  |                 |  |                                                                                     | 
| |  | Item
        6. |  | Exhibits
        -                                                                  | 
| |  |                 |  |                                                                                     | 
| |  |                 |  | Exhibit
        31(a),(b)            Rule
        13a-14(a)/15d-14(a) Certification | 
| |  |                 |  | Exhibit
        32(a),(b)            18
        U.S.C. Section 1350 Certification   | 
| |  |                 |  |                                                                                     | 



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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 hereunto duly authorized.



CECIL
          BANCORP, INC.Date: May 12, 2006
      
      by:
      /s/ Mary B. HalseyMary
          B. HalseyPresident and Chief Executive Officer




Date: May 12, 2006
        
        by:
        /s/ Robert Lee WhiteheadRobert Lee WhiteheadVice President and Chief Financial Officer




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