SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

 ------------------------------------------------------------------------------

                                   FORM 10-QSB

[ X]  QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
      SECURITIES AND EXCHANGE ACT OF 1934

      For the quarterly period ended September 30,2000

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

For the transition period from __________ to _____________.


                         Commission File Number: 0-24926
                                                 -------

                               CECIL BANCORP, INC.
                           ---------------------------
             (Exact name of registrant as specified in its charter)

           Maryland                                            52-1883546
------------------------------                           ---------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification number)

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


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

Indicate  by check mark  whether  the  registrant  (1) has filed all the reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or 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
                                        ------     ------




                  Number of shares outstanding of common stock
                            as of September 30, 2000

$0.01 par value common stock                              620,367  shares
----------------------------                            --------------------
        Class                                                  Outstanding


                                      1

<PAGE>


CECIL BANCORP INC., AND SUBSIDIARIES

CONTENTS

                                                                       PAGE
PART I.    FINANCIAL INFORMATION                                       ----

   ITEM 1.  Financial Statements (unaudited)

       Consolidated Condensed Statements of Financial
       Condition - September 30, 2000 and  December 31, 1999            3-4

       Consolidated Condensed Statements of Income and
       Comprehensive Income for Three Months Ended
             September 30, 2000 and 1999                                5-6

       Consolidated Condensed Statements of Cash Flows for Three
       Months Ended September 30, 2000 and September 30, 1999           7-8

       Notes to Consolidated Condensed Financial Statements             9


   ITEM 2.  Managements Discussion and Analysis of Financial
                  Condition and Results of Operations                   10-20

PART II.    OTHER INFORMATION                                           21

       Signature                                                        22

                                       2
<PAGE>


                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------

                                     ASSETS
                                     ------
<TABLE>
<CAPTION>
                                                     September 30,  December 31,
                                                         2000          1999
                                                     ------------   ------------
                                                     (Unaudited)

<S>                                                  <C>            <C>
Cash                                                 $  1,069,849   $  2,466,580
Cash - Interest bearing                                 4,174,407      3,515,501
Federal funds sold                                                        50,000
Investment securities
     Securities held-to-maturity, at cost               4,505,629      5,479,757
     Securities available-for-sale at estimated
        market value                                    1,229,237      1,328,199
Mortgage-backed securities
     Securities held-to-maturity, at cost                 887,878      1,071,123
     Securities available-for-sale at estimated
         market value                                   1,419,762      1,853,793
Loans receivable, net                                 103,291,697     92,098,839
Real estate owned                                         254,994        371,178
Office properties, equipment and leasehold
     improvements at cost, less accumulated
     depreciation and amortization                      2,508,078      2,008,791
Stock in Federal Home Loan Bank of
     Atlanta - at cost                                    905,000        657,800
Accrued interest receivable                               802,831        618,702
Mortgage servicing rights                                  90,283         98,575
Prepaid expenses                                          132,188        145,243
Deferred taxes                                            318,263        257,337
Goodwill, less accumulated amortization                 2,534,103      2,745,278
Other assets                                               25,585        157,159
                                                     ------------   ------------

         TOTAL ASSETS                                $124,149,784   $114,923,855
                                                     ============   ============
</TABLE>

                                       3
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
<TABLE>
<CAPTION>

                                                                  September 30,      December 31,
                                                                       2000              1999
                                                                  -------------     -------------
                                                                   (Unaudited)
<S>                                                               <C>               <C>
LIABILITIES
     Savings deposits                                             $  95,845,822     $ 101,217,544
     Advance payments by borrowers for
         property taxes and insurance                                   574,379           777,509
     Employee stock ownership debt                                      192,540           192,540
     Other liabilities                                                  597,497           529,802
     Advances from Federal Home Loan Bank
         of Atlanta                                                  15,700,000         1,500,000
                                                                  -------------     -------------

         TOTAL LIABILITIES                                          112,910,238       104,217,395
                                                                  -------------     -------------

COMMITMENTS

STOCKHOLDERS' EQUITY
     Common stock, $.01 par value
         Authorized:  4,000,000 shares
         Issued and outstanding: 620,367 shares
              at September 30, 2000 and 615,742 shares
              at December 31, 1999                                        6,204             6,158
     Additional paid in capital                                       4,986,460         4,898,025
     Employee stock ownership debt                                     (192,540)         (192,540)
     Deferred compensation - Management
         Recognition Plan                                               (22,565)          (45,383)
     Retained earnings, substantially
         restricted                                                   6,479,785         6,063,589
     Accumulated other comprehensive income                             (17,798)          (23,389)
                                                                  -------------     -------------

         TOTAL STOCKHOLDERS' EQUITY                                  11,239,546        10,706,460
                                                                  -------------     -------------

         TOTAL LIABILITIES AND
              STOCKHOLDERS' EQUITY                                $ 124,149,784     $ 114,923,855
                                                                  =============     =============
</TABLE>

                                       4
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
           ----------------------------------------------------------

<TABLE>
<CAPTION>

                                                                  Quarter Ended                         Nine Months Ended
                                                                   September 30,                           September 30,
                                                          ------------------------------         --------------------------------
                                                             2000                1999               2000                  1999
                                                          ----------          ----------         ----------            ----------
                                                          (Unaudited)         (Unaudited)         (Unaudited)         (Unaudited)
<S>                                                       <C>                 <C>                <C>                   <C>
INTEREST INCOME
     Loans receivable                                     $2,187,425          $1,669,432         $6,250,084            $4,947,631
     Mortgage-backed securities                               37,923              28,951            122,216               108,654
     Investment securities                                    84,010              93,702            275,157               289,009
     Other interest-earning assets                            82,162              68,903            211,338               237,502
                                                          ----------          ----------         ----------            ----------
         Total interest income                             2,391,520           1,860,988          6,858,795             5,582,796
                                                          ----------          ----------         ----------            ----------

INTEREST EXPENSE
     Interest expense on deposits                          1,046,172             900,192          3,107,220             2,743,388
     Borrowing                                               267,345              70,325            463,855               131,560
                                                          ----------          ----------         ----------            ----------
         Total interest expense                            1,313,517             970,517          3,571,075             2,874,948
                                                          ----------          ----------         ----------            ----------


         Net interest income                               1,078,003             890,471          3,287,720             2,707,848
     Provision for loan losses                                86,500              22,500            223,500                67,500
                                                          ----------          ----------         ----------            ----------
         Net interest income after
              provision for loan losses                      991,503             867,971          3,064,220             2,640,348
                                                          ----------          ----------         ----------            ----------

NONINTEREST INCOME
     Loan service charges                                     22,214              13,945             60,542                38,561
     Dividends on FHLB stock                                  15,816              12,183             44,435                37,261
     Gain on sale of loans                                                                                                 23,971
     Unrealized loss on loans
         held for sale                                                            47,773
     Commission income                                        21,522              26,222             92,116                77,234
     Checking account fees                                    72,814              49,689            203,257               134,723
     Other                                                    48,249              33,710            126,591                59,661
                                                          ----------          ----------         ----------            ----------
         Total noninterest income                            180,615             183,522            526,941               371,411
                                                          ----------          ----------         ----------            ----------

NONINTEREST EXPENSE
     Compensation and benefits                               444,434             360,421          1,299,276             1,059,192
     Occupancy                                                44,342              33,769            132,334               102,832
     Equipment and data processing
         expense                                             103,958              87,805            319,871               248,125
     SAIF deposit insurance premium                           20,617              21,274             50,418                63,992
     Amortization of goodwill                                 70,392                                211,175
     Other                                                   200,779             220,983            616,643               615,491
                                                          ----------          ----------         ----------            ----------
         Total noninterest expense                           884,522             724,252          2,629,717             2,089,632
                                                          ----------          ----------         ----------            ----------
         Income before income taxes                          287,596             327,241            961,444               922,127
                                                          ----------          ----------         ----------            ----------

INCOME TAXES
     Current                                                 119,174             101,818            430,138               376,574
     Deferred                                                 (9,632)             (1,302)           (64,445)              (55,752)
                                                          ----------          ----------         ----------            ----------
         Total income taxes                                  109,542             100,516            365,693               320,822
                                                          ----------          ----------         ----------            ----------

NET INCOME                                                $  178,054          $  226,725         $  595,751            $  601,305
                                                          ==========          ==========         ==========            ==========
</TABLE>

                                       5
<PAGE>


                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
           ----------------------------------------------------------

                                   (Continued)


<TABLE>
<CAPTION>
                                                                   Quarter Ended                       Nine Months Ended
                                                                    September 30,                           September 30,
                                                          ------------------------------         --------------------------------
                                                             2000                1999               2000                  1999
                                                          ----------          ----------         ----------            ----------
                                                          (Unaudited)         (Unaudited)         (Unaudited)          (Unaudited)
<S>                                                       <C>                 <C>                <C>                   <C>
NET INCOME                                                $  178,054          $  226,725         $  595,751            $  601,305

OTHER COMPREHENSIVE INCOME
     Unrealized gains (losses) on
         investment securities,
         net of deferred taxes                                 8,355              (2,260)             5,591                (2,582)
                                                          ----------          ----------         ----------            ----------

TOTAL COMPREHENSIVE INCOME                                $  186,409          $  224,465         $  601,342            $  578,723
                                                          ==========          ==========         ==========            ==========




Earnings per common share and
     common share equivalent                              $     0.35          $     0.39         $     1.00            $     1.03
                                                          ==========          ==========         ==========            ==========

Earnings per common share -
     assuming full dilution                               $     0.34          $     0.38         $     0.98            $     1.01
                                                          ==========          ==========         ==========            ==========
</TABLE>

                                       6
<PAGE>



                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------

<TABLE>
<CAPTION>
                                                                                              Nine Months Ended
                                                                                                  September 30,
                                                                                     -------------------------------------
                                                                                          2000                    1999
                                                                                     ------------             ------------
                                                                                      (Unaudited)              (Unaudited)
<S>                                                                                    <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Interest and fees received on loans and
         investments                                                                 $  7,162,990             $  5,851,338
     Cash paid to suppliers and employees                                              (1,953,208)              (2,106,873)
     Proceeds from sale of loans                                                                                 1,149,335
     Origination of loans held for sale                                                                         (3,220,300)
     Interest paid                                                                     (3,571,075)              (2,874,948)
     Income taxes paid                                                                   (512,841)                (501,899)
                                                                                     ------------             ------------
         NET CASH PROVIDED (USED) BY OPERATING
              ACTIVITIES                                                                1,125,866               (1,703,347)
                                                                                     ------------             ------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from sale and maturities of investment
         securities                                                                     2,140,684                4,500,000
     Proceeds from maturities of mortgage-backed
         securities                                                                       603,669                1,116,829
     Purchases of investment securities                                                  (997,969)             (14,546,773)
     Loans originated                                                                 (32,487,038)             (29,441,413)
     Principal collected on loans                                                      21,070,680               21,148,652
     Purchases of office properties, equipment and
         leasehold improvements                                                          (615,805)                (146,988)
     Proceeds from sales of real estate owned                                             223,746                   23,425
     Purchase of real estate owned                                                       (107,562)                 (90,677)
     Proceeds from sale of stock in Federal Home
         Loan Bank of Atlanta                                                                                       27,700
     Purchase of stock in Federal Home Loan
         Bank of Atlanta                                                                 (247,200)                 (13,200)
                                                                                     ------------             ------------
         NET CASH USED BY INVESTING ACTIVITIES                                        (10,416,795)             (17,422,445)
                                                                                     ------------             ------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in demand deposits, NOW
         accounts, and savings accounts                                                 5,035,998               22,605,738
     Proceeds from sales of certificates                                               16,429,075                9,845,821
     Payments of maturing certificates of deposits                                    (26,836,795)             (36,535,463)
     Branch acquisition                                                                                         18,417,620
     Decrease in advance payments by borrowers for
         property taxes and insurance                                                    (203,130)                (341,748)
     Proceeds from issuance of common stock                                                47,300                   65,440
     Advances from Federal Home Loan Bank of Atlanta                                   14,200,000
     Dividends paid                                                                      (154,810)                (175,852)
     Funding of MRP Trust                                                                 (14,534)
                                                                                     ------------             ------------
         NET CASH PROVIDED BY FINANCING ACTIVITIES                                      8,503,104               13,881,556
                                                                                     ------------             ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                (787,825)              (5,244,236)

CASH AND CASH EQUIVALENTS
     BEGINNING OF PERIOD                                                                6,032,081               10,062,190
                                                                                     ------------             ------------
     END OF PERIOD                                                                   $  5,244,256             $  4,817,954
                                                                                     ============             ============
</TABLE>

                                       7
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------

                                   (Continued)



<TABLE>
<CAPTION>

                                                                      Nine Months Ended
                                                                          September 30,
                                                                 -------------------------------
                                                                     2000                1999
                                                                 ----------           ----------
                                                                 (Unaudited)          (Unaudited)

<S>                                                              <C>                  <C>
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
     (USED) BY OPERATING ACTIVITIES

Net Income                                                       $  595,751           $  601,305

Adjustments to  reconcile  net income to net
     cash  provided  (used) by operating
     activities:
         Amortization of goodwill                                   211,175
         Depreciation                                               116,519               99,033
         Provision for loan losses                                  223,500               67,500
         Amortization of investment security
            premiums (discounts)                                    (14,430)              16,506
         Stock dividends                                            (32,479)             (22,612)
         Increase in accrued interest receivable                   (184,129)             (59,129)
         Increase in deferred taxes                                 (64,445)             (55,752)
         Decrease in mortgage servicing rights                        8,292               26,643
         (Increase) decrease in prepaid expenses                     13,055             (104,753)
         (Increase) decrease in other assets                        131,574             (137,038)
         Increase (decrease) in other liabilities                    67,695             (100,355)
         Increase in loans held for sale                                              (2,094,936)
         Distribution from MRP Trust                                 53,788               60,241
                                                                 ----------           ----------

                                                                    530,115           (2,304,652)
                                                                 ----------           ----------

                                                                 $1,125,866          ($1,703,347)
                                                                 ==========           ==========

SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
     Cash received in branch acquisition
         Assumption of savings deposits liabilities             $                   $ 22,176,092
         Loans receivable obtained                                                       (71,690)
         Office properties, equipment, and leasehold
              Improvements obtained                                                     (871,113)
         Goodwill obtained                                                            (2,815,669)
                                                                -----------          -----------

     Net cash received in branch acquisition                    $                    $18,417,620
                                                                ===========          ===========

     Cash dividends paid
         Dividends declared                                     $   179,555          $   175,852
         Issuance of common stock under the dividend
              reinvestment plan                                     (24,745)
                                                                -----------          -----------

     Dividends paid                                             $   154,810          $   175,852
                                                                ===========          ===========
</TABLE>

                                       8
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
                      ------------------------------------

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
             ------------------------------------------------------

                               SEPTEMBER 30, 2000
                               ------------------




(1)   BASIS OF PRESENTATION
      ---------------------

      (1)   In  the  opinion  of  the  Company,   the   accompanying   unaudited
            consolidated  condensed financial statements contain all adjustments
            (consisting  of only  normal  recurring  adjustments)  necessary  to
            present  fairly its financial  position as of September 30, 2000 and
            the results of its  operations  for the three months and nine months
            ended September 30, 2000 and 1999 and cash flows for the nine months
            ended  September 30, 2000 and 1999.  These  statements are condensed
            and  therefore do not include all of the  information  and footnotes
            required by generally  accepted  accounting  principles 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-K for the year ended December
            31,  1999.  The  results of  operations  for the nine  months  ended
            September 30, 2000 are not necessarily  indicative of the results to
            be expected for the full year.


      (2)   Earnings  per Share - Earnings  per common  share were  computed  by
            dividing  net  income by the  weighted  average  number of shares of
            common stock  outstanding  during the quarter.  The weighted average
            number of shares of common stock outstanding was 598,155 in 2000 and
            585,499 in 1999.  The  weighted  average  number of shares of common
            stock for  computation  of diluted  earnings  per  common  share was
            606,572 in 2000 and 596,439 in 1999.

                                       9
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


                      BUSINESS OF THE COMPANY AND THE BANK

CECIL BANCORP, INC.

      Cecil Bancorp, Inc. (the "Company") was incorporated under the laws of the
State of Maryland in July 1994 at the  direction  of the Board of  Directors  of
Cecil  Federal  Savings Bank ("Cecil  Federal")  for the purpose of serving as a
savings institution holding company of Cecil Federal upon the acquisition of all
of the capital  stock issued by Cecil Federal in its  conversion  from mutual to
stock form (the "Conversion"). Substantially all of the Company's assets consist
of the  outstanding  capital stock of Cecil Federal.  On September 30, 1998, the
Company  completed its  acquisition  of Columbian  Bank, a Federal  Savings Bank
("Columbian")  through the exchange of 1.7021 shares of Company Common Stock for
each  outstanding  shares of Columbian  Common Stock in a transaction  valued at
approximately $2.8 million.  The Company holds all of the stock of Cecil Federal
and Columbian and operates them as two separate savings institutions.  Together,
Cecil Federal and Columbian are referred to herein as the "Banks". The Company's
principal  business  is the  business  of Cecil  Federal  and its  wholly  owned
subsidiaries, and of Columbian. Therefore, most of the discussion in this report
relates to the business of the Banks rather than the business of the Company.

      The company  provides  shareholders of record of at least 50 shares of the
Company's  common stock with a way to reinvest,  at no cost, all or a portion of
their regular cash dividends and to invest  optional cash  payments,  subject to
minimum and maximum purchase limitations, in additional shares of Company Common
Stock.  A  Registration  Statement and Prospectus on Form S-3 was filed on April
19, 2000 with the Securities  and Exchange  Commission  which  describes in more
detail the terms of the plan.

CECIL FEDERAL SAVINGS BANK

      Cecil  Federal  is  a  community-oriented   financial   institution  which
commenced  operations in 1959 as a Federal mutual savings and loan  association.
It converted  to a Federal  mutual  savings bank in January 1993 and,  effective
November  10,  1994,  Cecil  Federal  converted  from mutual to stock form.  Its
deposits have been federally insured up to applicable  limits, and it has been a
member of the Federal Home Loan Bank ("FHLB") system since 1959. Cecil Federal's
deposits  are  currently  insured  by the  Savings  Association  Insurance  Fund
("SAIF") of the  Federal  Deposit  Insurance  Corporation  ("FDIC")  and it is a
member of the FHLB of Atlanta.

      Cecil  Federal's  primary  business is the  origination  of mortgage loans
secured by  single-family  residential  real estate  located  primarily in Cecil
County,  Maryland,  with funds  obtained  through the  attraction  of  deposits,
primarily certificate accounts with terms of 60 months or less, savings accounts
and transaction  accounts. To a lesser extent, Cecil Federal also makes loans on
commercial  and  multi-family  real  estate,   construction  loans  on  one-  to
four-family  residences,  home equity loans and land loans.  Cecil  Federal also
makes consumer loans including education loans, personal and commercial lines of
credit,  automobile loans and loans secured by deposit  accounts.  Cecil Federal
purchases  mortgage-backed  securities  and invests in other  liquid  investment
securities when warranted by the level of excess funds.

      On  September  27,  1999,  Cecil  Federal  Savings  Bank,  a wholly  owned
subsidiary of Cecil Bancorp,  Inc. closed an agreement with Susquehanna  Bank, a
subsidiary of  Susquehanna  Bancshares,  Inc.,  and acquired  Susquehanna's  two
branch  offices  located in Elkton,  Maryland.  This  acquisition  represents  a
continuation of the growth of our

                                       10
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

existing branch  network,  and is expected to benefit Cecil Federal's net income
in future periods.  We look forward to offering the services of Cecil Federal to
the  customers  of these  branches  and  welcome  them as well as  Susquehanna's
employees to the Cecil Federal  family.  Under the terms of the agreement  Cecil
Federal assumed deposits of  Susquehanna's  two branch offices and certain other
assets.  The deposits of these branch offices totaled $22.2 million at September
27, 1999. The  transaction  resulted in the  acquisition of the 200 North Street
office, which was subsequently closed and the assumption of the lease of the Big
Elk Mall office.

      Cecil Federal has two wholly owned subsidiaries, Cecil Service Corporation
and Cecil Financial Services  Corporation.  Cecil Service  Corporation's primary
business  is acting as leasing  agent for the North East Plaza  Branch and Cecil
Financial Services  Corporation's  primary business is the operation,  through a
partnership  with UVEST  Investment  Services,  of a full range of brokerage and
investment services.

      Cecil Financial Services also has an agreement with the Winstead Agency to
offer a variety of property and casualty and  automobile  insurance  products to
the customers of Cecil Federal and Columbian.  In addition,  the Winstead Agency
is leasing an office in Columbian's new Route 40 office.

      Cecil  Federal's  main  office is  located  at 127 North  Street,  Elkton,
Maryland and its phone number is (410) 398-1650.

COLUMBIAN BANK, A FEDERAL SAVINGS BANK

      Columbian  was  originally  chartered by the State of Maryland in 1893. In
October 1985,  Columbian became a member of the FHLB System and obtained federal
insurance of its deposits.  In January 1989,  Columbian converted to a federally
insured, state chartered capital stock institution through the sale and issuance
of 69,140 shares of common stock. On September 26, 1990,  Columbian  changed its
name to Columbian Bank, A Federal Savings Bank and became a federally  chartered
stock  savings  bank.  Columbian's  deposits are also insured by the SAIF of the
FDIC, and it is a member of the FHLB of Atlanta.

      Columbian's  primary business is the origination of mortgage loans secured
by single-family  residential  real estate located  primarily in Harford County,
Maryland,  with funds  obtained  through the  attraction of deposits,  primarily
certificate accounts with terms of 60 months or less and savings accounts.  To a
lesser extent,  Columbian also makes loans on commercial and  multi-family  real
estate,  construction loans on one- to four-family residences, home equity loans
and land loans.  Columbian purchases  mortgage-backed  securities and invests in
other liquid investment securities when warranted by the level of excess funds.

      Columbian's  main office is located at 303-307 St. John  Street,  Havre de
Grace, Maryland,  and its phone number is (410) 939-2313.  Columbian also opened
its first branch on Route 40 in Havre de Grace in the third quarter.

GENERAL

      Cecil  Federal's  primary  business is the  origination  of mortgage loans
secured by  single-family  residential  real estate  located  primarily in Cecil
County,  Maryland,  with funds  obtained  through the  attraction  of  deposits,
primarily certificate accounts with terms of 60 months or less, savings accounts
and transaction  accounts. To a lesser extent, Cecil Federal also makes loans on
commercial and multi-family real estate,

                                       11
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

construction loans on one- to four-family residences, home equity loans and land
loans.  Cecil  Federal also makes  consumer  loans  including  education  loans,
personal and commercial  lines of credit,  automobile loans and loans secured by
deposit accounts.  Although consumer loans provide Cecil Federal with additional
interest  income,  they also  involve  greater  risk.  Cecil  Federal  purchases
mortgage-backed  securities  and invests in other liquid  investment  securities
when  warranted  by the level of excess  funds.  Cecil  Federal's  revenues  are
derived  principally from interest earned on loans and, to a lesser extent, from
interest earned on investments and mortgage-backed securities.

      The principal  business of Columbian is the acceptance of savings deposits
from the general public and the origination of  conventional  mortgage loans for
the purpose of financing or refinancing one to four family dwellings. Its income
is  derived  largely  from  interest  and fees in  connection  with its  lending
activities.  Its principal  expenses are interest  paid on savings  deposits and
non-interest  expenses.  Columbian's operations are conducted through its office
located at 303-307 St. John Street, Havre de Grace, Maryland.

      The Banks' operations are influenced by general economic conditions and by
policies of financial institution regulatory agencies, including the OTS and the
FDIC.

      The Banks' cost of funds are  influenced  by interest  rates on  competing
investments and general market interest rates.  Lending  activities are affected
by the demand for  financing  of real estate and other types of loans,  which in
turn is affected by the interest rates at which such financing may be offered.

      The Banks' net interest income is dependent  primarily upon the difference
or  spread  between  the  average  yield  earned  on  loans,   investments   and
mortgage-backed  securities and the average rate paid on deposits and borrowings
(if any), as well as the relative  amounts of such assets and  liabilities.  The
Banks, like other thrift institutions,  are subject to interest rate risk to the
degree  that its  interest-bearing  liabilities  mature or reprice at  different
times, or on a different basis, than its interest-earning assets.


FINANCIAL SERVICES
------------------

      Since September 1997, Cecil Financial  Services,  a service corporation of
Cecil Federal Savings Bank, has offered a full range of brokerage and investment
services in all branches,  through a partnership with UVEST Investment Services.
Mr. Roger L. Owens, CLU, serves as investment representative.  Through UVEST, he
provides  comprehensive  investment products tailored to meet current and future
individual financial needs.

      Cecil Financial,  Inc. has partnered in this venture with UVEST Investment
Services, a registered broker-dealer and member of both the National Association
of  Securities   Dealers  (NASD)  and  the  Securities   Investment   Protection
Corporation  (SIPC).  Headquartered  in Charlotte,  NC, UVEST has been providing
bank-based investment services throughout the Southeast since 1982.

      Cecil Financial Services also has an agreement with the Winstead Agency to
offer a variety of property and casualty and  automobile  insurance  products to
the customers of Cecil Federal and Columbian.  In addition,  the Winstead Agency
will be leasing an office in Columbian's new Route 40 office.

                                       12
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

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. Cecil Federal's
asset/liability management policies are designed to reduce the impact of changes
in interest rates on its net interest income by achieving a more favorable match
between the  maturities or repricing  dates of its  interest-earning  assets and
interest-bearing  liabilities.  The  Bank  has  implemented  these  policies  by
generally  emphasizing  the  origination  of one-year,  three-year and five-year
adjustable rate mortgage loans and short-term  consumer  lending.  The bank also
offers an  adjustable  rate product  which remains fixed for the first ten years
and then converts to a one-year adjustable.  Since 1995, Cecil Federal has, from
time to time,  originated fixed rate mortgages for sale in the secondary market.
Presently, the Banks are not originating loans for sale in the secondary market,
but  are  retaining  them in  portfolio.  Management  has  been  monitoring  the
retention of fixed rate loans through its asset/liability management policy.

Management  intends to continue to concentrate on maintaining  its interest rate
spread in a manner consistent with its lending  policies,  which are principally
the  origination of  adjustable-rate  mortgages,  with an  appropriate  blend of
fixed-rate mortgage loans in its primary market area.


FINANCIAL CONDITION
-------------------

Comparison of financial condition at September 30, 2000 and December 31, 1999.

      The Company's  total assets at September 30, 2000 increased  $9,225,929 or
8.0% to  $124,149,784  from  $114,923,855 at December 31, 1999. The increase was
primarily  the result of an  increase  in loans  receivable.  Total  liabilities
increased  $8,692,843  or  8.3% to  $112,910,238  at  September  30,  2000  from
$104,217,395  at December 31, 1999.  This  increase was  primarily the result of
increased  borrowings  from the Federal  Home Loan Bank of Atlanta to offset the
decline in savings  deposits and increased  loan volumes.  Stockholder's  equity
increased $533,086 or 5.0%.

      Cash  decreased  $1,396,731  or 56.6% to  $1,069,849 at September 30, 2000
from $2,466,580 at December 31, 1999.  Interest-bearing  cash increased $658,906
or 18.7% to  $4,174,407  at September  30, 2000 from  $3,515,501 at December 31,
1999.  The net decrease in cash was  primarily due to a decrease in deposits and
increase in loans receivable.

      Investments held to maturity  decreased $974,128 or 17.8% to $4,505,629 at
September 30, 2000 from $5,479,757 at December 31, 1999.  Investments  available
for sale  decreased  $98,962 or 7.5% to  $1,229,237  at September  30, 2000 from
$1,328,199 at December 31, 1999.  Mortgage  backed  securities  held to maturity
decreased $183,245 or 17.1% to $887,878 at September 30, 2000 from $1,071,123 at
December 31, 1999.  Mortgage  backed  securities  available  for sale  decreased
$434,031  or 23.4% to  $1,419,762  at  September  30,  2000 from  $1,853,793  at
December 31, 1999.  Investments  have been  decreasing  as a result of investing
excess cash in loans receivable rather than investment securities.

      Loans  receivable  increased  $11,192,859  or  12.2%  to  $103,291,697  at
September 30, 2000 from  $92,098,838 at December 31, 1999. The increase in loans
receivable was a result

                                       13
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS




of increased loan originations.

      Total savings  deposits  decreased  $5,371,722 or 5.3% to  $95,845,822  at
September  30,  2000 from  $101,217,544  at December  31,  1999.  Decreases  are
attributable  to  conservative  pricing of deposit  rates.  Escrows held for the
payments  of taxes and  insurances  decreased  $203,130  or 26.1% to $574,379 at
September  30,  2000  from   $777,509  at  December  31,  1999.   Decreases  are
attributable to payments of real estate taxes from the mortgage escrow accounts.
Advances  from the Federal Home Loan Bank of Atlanta  increased  $14,200,000  or
946.7% to  $15,700,000  at September  30, 2000 from  $1,500,000  at December 31,
1999.  Increases were due to increases in loan receivables  along with a decline
in savings deposits.

RESULTS OF OPERATIONS
---------------------

Three  Months  Ended  September  30, 2000 Net income for the three month  period
-----------------------------------------
ended  September 30, 2000 decreased  $48,671 or 21.5% to $178,054 as compared to
net income for the same period in 1999 of  $226,725.  The  annualized  return on
average  assets and  annualized  return on average  equity  were 0.57% and 6.35%
respectively, for the three-month period ended September 30, 2000. This compares
to an  annualized  return on  average  assets and  annualized  return on average
equity of 0.89% and 9.04% respectively, for the same period in 1999.

Net interest  income,  the Bank's primary source of income,  increased 21.1%, or
$187,532 for the three months ended  September 30, 2000, over the same period in
1999. The weighted average yield on interest earning assets increased from 7.56%
for the three  months  ended  September  30, 1999 to 8.23% for the three  months
ended  September 30, 2000.  The weighted  average rate paid on interest  bearing
liabilities  increased from 4.25% for the three months ended  September 30, 1999
to 4.67% for the three months ended September 30, 2000.

Total net interest  income after  provisions for loan losses  increased 14.2% or
123,532 over the same period in 1999. Loan loss reserves have increased $64,000,
or 284.4% over the same period in 1999.  Management has determined that reserves
need to increase as a direct result of the increase in loans receivable.

Interest on loans receivable increased by $517,993 or 31.0%, from $1,669,432 for
the three months ended  September  30, 1999 to  $2,187,425  for the three months
ended  September 30, 2000.  The increase is  attributable  to an increase in the
average balance  outstanding and an increase in the weighted  average yield. The
weighted average yield increased from 7.83% for the three months ended September
30, 1999 to 8.45% for the three months ended September 30, 2000.

Interest on mortgage backed  securities  increased $8,972 or 31.0%, from $28,951
for the three  months ended  September  30, 1999 to $37,923 for the three months
ended  September 30, 2000.  The increase is  attributable  to an increase in the
average balance outstanding.  Interest on investment securities decreased $9,692
or 10.3% from $93,702 for the three months ended  September  30, 1999 to $84,010
for the three months ended September 30, 2000. The average  outstanding  balance
decreased  $310,831 for the three months ended September 30, 2000 over the three
months ended September 30, 1999. The weighted average yield increased from 5.18%
for the three  months  ended  September  30, 1999 to 5.78% for the three  months
ended September 30, 2000.

                                       14
<PAGE>


                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Interest on other  interest  earning  assets  increased  $13,259,  or 19.2% from
$68,903 for the three months ended  September  30, 1999 to $82,162 for the three
months ended  September  30, 2000.  The average  outstanding  balance  increased
$375,627  for the three months  ended  September  30, 2000 over the three months
ended  September 30, 1999. The weighted  average yield  increased from 6.85% for
the three  months ended  September  30, 1999 to 7.47% for the three months ended
September 30, 2000.

Interest on savings deposits  increased  $145,980 or 16.2% from $900,192 for the
three months ended  September 30, 1999 to $1,046,172  for the three months ended
September 30, 2000. The average balance outstanding increased $3,596,209 for the
period noted above.  The weighted  average rate paid on deposits  increased from
4.17% for the  three  months  ended  September  30,  1999 to 4.37% for the three
months ended September 30, 2000.  Interest expense paid on borrowings  increased
$197,020,  or 280.2% from $70,325 for the three months ended  September 30, 1999
to $267,345 for the three months ended  September 30, 2000. The average  balance
outstanding  increased  $11,473,407  for the period  noted  above.  The weighted
average yield increased from 5.97% for the three months ended September 30, 1999
from 6.61% for the three months ended September 30, 2000.

Noninterest  income  decreased  1.6%,  down  $2,907 for the three  months  ended
September 30, 1999,  over the same period in 1999. Loan servicing fees increased
59.3%,  up $8,269 for the three  months ended  September  30, 2000 over the same
period in 1999. The Bank  recognized  recovery of loss on loans held for sale of
$47,773  during the three months ended  September 30, 1999,  which did not occur
during the 2000  quarter.  This recovery was the result of  reclassifying  loans
held  for  sale to loans  held to  maturity.  Checking  account  fees  increased
$23,125,  or 46.5%  Increases  in this  area can be  primarily  attributable  to
increased service charges,  as a result of increased charges on demand deposits,
and  the  activity  of  three  ATM  machines,   which  are  primarily   used  by
non-customers.  Commission income decreased $4,700 or 17.9% from $26,222 for the
three  months  ended  September  30, 1999 to $21,522 for the three  months ended
September  30, 2000.  The  decrease is  attributable  to decreased  security and
insurance products sales through the Bank's service corporation, Cecil Financial
Services. Other income increased $14,539 or 43.1% for the period noted.

Noninterest  expense  increased  22.1%,  up $160,270  for the three months ended
September  30,  2000,  over the same period in 1999.  Compensation  and benefits
increased  23.3% for the three  months  ended  September  30, 2000 over the same
period in 1999.  The increase can be attributed to the hiring of six  additional
employees from the Susquehanna  Bancshares  branch  acquisitions,  annual salary
increases and medical premium increases. Occupancy expense increased $10,573, or
31.3% to $44,342 for the three months ended  September 30, 2000 from $33,769 for
the three months ended  September 30, 1999. The increase is associated  with the
lease  expense for the  additional  Big Elk Mall branch  location  acquired from
Susquehanna  Bancshares.  Equipment and data processing expenses increased 18.4%
for the three  months ended  September  30, 2000 over the same period in 1999 as
the  result  of the  Company's  acquisition  of the two  Susquehanna  Bancshares
branches.  The SAIF deposit  premium  remained stable for the three months ended
September  30, 2000 in  comparison  with the same  period in 1999.  Non-interest
expense was also increased by the  amortization of goodwill  associated with the
purchase of the two  Susquehanna  Bancshares  branches in the amount of $70,392.
Other expenses remained stable between the two periods.

Income tax expense for the three-month  period ended September 30, 2000 and 1999
was $109,542 and $100,516,  respectively,  which  equates to effective  rates of
38.1% and 30.7% respectively.

Nine months Ended  September 30, 2000 Net income for the six-month  period ended
-------------------------------------
September

                                       15
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

30,  2000  decreased  $5,554  or 0.9% to  $595,751,  compared  to net  income of
$601,305 for the same period in 1999. The decrease is primarily  attributable to
increases in loan loss  reserves.  The  annualized  return on average assets and
annualized return on average equity were 0.65% and 7.21%  respectively,  for the
six-month period ended September 30, 2000. This compares to an annualized return
on average  assets and  annualized  return on average  equity of 0.78% and 7.72%
respectively, for the same period in 1999.

Net interest  income,  the Bank's primary source of income,  increased  21.4% up
$579,872 for the nine months ended  September 30, 2000,  over the same period in
1999. The weighted average yield on interest earning assets increased from 7.67%
for the nine months ended  September 30, 1999 to 7.98% for the nine months ended
September  30,  2000.  The  weighted  average  rate  paid  on  interest  bearing
liabilities increased from 4.26% for the nine months ended September 30, 1999 to
4.32% for the nine months ended September 30, 2000.

Total net interest  income after  provisions for loan losses  increased 16.1% or
423,872  over the same  period  in  1999.  Loan  loss  reserves  have  increased
$156,000, or 231.1% over the same period in 1999. Management has determined that
reserves  need  to  increase  as a  direct  result  of  the  increase  in  loans
receivable.

Interest on loans receivable  increased by $1,302,453 or 26.3%,  from $4,947,631
for the nine months ended  September 30, 1999 to $6,250,084  for the nine months
ended September 30, 2000. The average balance outstanding  increased $9,741,073.
The  weighted  average  yield  increased  from 8.06% for the nine  months  ended
September 30, 1999 to 8.25% for the nine months ended September 30, 2000.

Interest on mortgage backed securities increased $13,562 or 12.5%, from $108,654
for the nine months  ended  September  30, 1999 to $122,216  for the nine months
ended September 30, 2000. The average outstanding balance increased $566,490, or
25.9%,  from  $2,187,700  for  the  nine  months  ended  September  30,  1999 to
$2,754,190 for the nine months ended  September 30, 2000.  The weighted  average
yield decreased from 6.62% for the nine months ended September 30, 1999 to 5.92%
for the nine months ended September 30, 2000.

Interest on investment  securities  decreased  $13,562 or 4.8% from $289,009 for
the nine months ended  September  30, 1999 to $275,157 for the nine months ended
September 30, 2000. The average  outstanding  balance decreased $380,455 for the
nine months ended  September  30, 2000 over the nine months ended  September 30,
1999. The weighted  average yield increased from 4.71% for the nine months ended
September 30, 1999 to 5.74% for the nine months ended September 30, 2000.

Interest on other interest  earning assets  decreased  $26,164,  or 11.0%,  from
$237,502 for the nine months ended  September  30, 1999 to $211,338 for the same
period in 1999.  The weighted  average yield  decreased  from 6.54% for the nine
months ended September 30, 1999 to 6.31% for the nine months ended September 30,
2000. The average outstanding balance decreased $428,601 from $4,845,641 for the
nine months ended  September  30, 1999 to  $4,417,040  for the nine months ended
September 30, 2000.

Interest on savings deposits  increased  $363,832,  or 13.3% from $2,743,388 for
the nine months ended September 30, 1999 to $3,107,220 for the nine months ended
September 30, 2000. The average balance outstanding increased $9,741,073 for the
period noted above.  The weighted  average rate paid on deposits  decreased from
4.24% for the nine months ended  September 30, 1999 to 4.23% for the nine months
ended  September  30,  2000.  Interest  expense  paid  on  borrowings  increased
$332,295, or 252.6% from $131,560 for the nine months

                                       16
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

ended  September  30, 1999 to $463,855 for the nine months ended  September  30,
2000.  Increases are  attributable to decreases in the weighted  average cost of
funds from 5.91% for the nine months ended  September  30, 1999 to 5.38% for the
nine months ended  September  30, 2000,  which were offset by an increase in the
average balance  outstanding from $2,967,003 for the nine months ended September
30, 1999 to $11,489,434 for the nine months ended September 30, 2000.

Noninterest  income increased  $155,530 or 41.9% to $526,941 for the nine months
ended  September  30,  2000 from  $371,411  for the same  period  in 1999.  Loan
servicing fees increased  57.0%,  up $21,981 for the nine months ended September
30, 2000 over the same period in 1999.  Checking account fees increased $68,534,
or 50.9%.  Increases  in this area can be  primarily  attributable  to increased
service charges,  as a result of increased  charges on demand deposits,  and the
activity  of three ATM  machines,  which are  primarily  used by  non-customers.
Commission  income  increased  $14,882,  or  19.3%  for the  nine  months  ended
September 30, 2000 over the same period in 1999.  The increase was the result of
increased sales of insurance and investments  products.  Other income  increased
$66,930 or 112.2% for the period noted. The increase is due to  reclassification
of ATM fee income from a net expense account  classification  to separate income
and expense classifications.

Noninterest expense increased $540,085 or 25.8% to $2,629,717 for the nine-month
period  ended  September  30, 2000 from  $2,089,632  for the nine  months  ended
September 30, 1999.  Compensation  and benefits  increased 22.7% or $240,084 for
the nine months  ended  September  30,  2000 over the same  period in 1999.  The
increase can be attributed to the hiring of six  additional  employees  from the
Susquehanna Bancshares branch acquisitions,  annual salary increases and medical
premium increases. Occupancy expense increased $29,502, or 28.9% to $132,334 for
the nine months ended September 30, 2000 from $102,832 for the nine months ended
September 30, 1999.  The increase is  associated  with the lease expense for the
additional Big Elk Mall branch location  acquired from  Susquehanna  Bancshares.
Equipment and data processing expenses increased 28.9% for the nine months ended
September  30, 2000 over the same period in 1999 as the result of the  Company's
acquisition of the two Susquehanna Bancshares branches. The SAIF deposit premium
decreased  13,574 or 21.2% for the nine months ended September 30, 2000 over the
same period in 1999. Non-interest expense was also increased by the amortization
of  goodwill  associated  with the  purchase of the two  Susquehanna  Bancshares
branches in the amount of $211,175.  Other expenses  remained stable between the
two periods.

Income tax expense for the  six-month  period ended  September 30, 2000 and 1999
was $365,693 and $320,822  which  equates to effective  rates of 38.0% and 34.8%
respectively.

                                       17
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS, CONTINUED




Nonperforming Assets and Problem Loans
--------------------------------------

Management  reviews  and  identifies  all loans  and  investments  that  require
designation as nonperforming  assets.  These assets include: (i) loans accounted
for on a  nonaccrual  basis,  consisting  of all loans 90 or more days past due;
(ii) troubled  debt  restructuring;  and (iii) assets  acquired in settlement of
loans.  The  following  table sets forth  certain  information  with  respect to
nonperforming assets at September 30, 2000:

                                                 2000                 1999
                                              -----------         --------
Nonperforming loans:

Residential mortgage                         $  644,446          $  796,492
Consumer and other                              200,294             198,884


Assets acquired in settlement of loans:
Real estate held for development and sale
Real estate held for investment and sale
Repossessed assets                              254,994             254,994
                                             ----------          ----------
Total Nonperforming Assets                   $1,099,734          $1,250,370
                                             ==========          ==========


Residential  mortgages  classified  consisted of 13 loans with balances  ranging
from $1,000 to $148,000.  Classified  consumer loans  consisted of 23 loans with
balances ranging from $1,000 to $31,000 as of September 30, 2000.

The provision for losses on loans is determined based on management's  review of
the loan portfolio and analysis of borrower's  ability to repay, past collection
experience, and risk characteristics.

                                       18
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS, CONTINUED


CAPITAL ADEQUACY
----------------

The Company Capital  adequacy refers to the level of capital required to sustain
-----------
asset growth and to absorb  losses.  There are currently no  regulatory  capital
guidelines or requirements for the Company.

The  Banks'  The  Office  of Thrift  Supervision  ("OTS"),  which is the  banks'
-----------
principle regulator,  has established  requirements for tangible,  core and risk
based measures of capital.  As a result,  the three capital  measures  mentioned
above were as follows at September 30, 2000:

CECIL FEDERAL SAVINGS BANK

                                  Tangible           Core          Risk Based
-----------------------------------------------------------------------------
Available capital                  $6,530           $6,530           $6,761
Required capital                    1,376            3,670            5,472
                                   ------           ------           ------
Excess                             $5,154           $2,860           $1,289
                                   ======           ======           ======


Available capital                   7.12%            7.12%             9.88%
Required capital                    1.50%            4.00%             8.00%
                                   ------           ------           -------
Excess                              5.62%            3.12%             1.88%
                                   ======           ======           =======




COLUMBIAN BANK, F.S.B.


                                  Tangible           Core          Risk Based
-----------------------------------------------------------------------------
Available capital                  $2,082           $2,082           $2,218
Required capital                      448            1,196            1,329
                                   ------           ------           ------
Excess                             $1,634           $  886           $  889
                                   ======           ======           ======


Available capital                   6.96%            6.96%            13.35%
Required capital                    1.50%            4.00%             8.00%
                                  -------           ------           -------
Excess                              5.46%            2.96%             5.35%
                                  =======           ======           =======

                                       19
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES
            Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


The Federal Deposit Improvement Act of 1991 ("FDICIA")  established five capital
categories  which are used to determine the rate of deposit  insurance  premiums
paid by insured  institutions,  thus  introducing  the concept of risk  adjusted
premiums.  This act has the  effect  of  requiring  weaker  banks to pay  higher
insurance  premiums while  allowing  healthier , well  capitalized  banks to pay
lower premiums.  The following table summarizes the five capital  categories and
the minimum capital requirements for each of the three capital requirements:


                                  Tangible           Core          Risk-Based
-----------------------------------------------------------------------------
Well capitalized                       5+%              6+%            10+%
Adequately capitalized            4%-4.99%         4%-5.99%        8%-9.99%
Undercapitalized                  3%-3.99%         3%-3.99%        6%-7.99%
Significantly undercapitalized    2%-2.99%         2%-2.99%        0%-5.99%
Critically undercapitalized       0%-1.99%              --              --
-----------------------------------------------------------------------------

On September 30, 2000, the Banks'  capital levels were  sufficient to qualify it
as a well capitalized  institution,  the most favorable  category,  allowing the
Banks' to pay lower deposit insurance premiums.

                                       20
<PAGE>

                      CECIL BANCORP, INC. AND SUBSIDIARIES


PART II. Other Information:                                           PAGE
                                                                      ----

         Item 1.  Legal Proceedings -
                               Not Applicable

         Item 2.  Changes in Securities -
                               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 and Reports on Form 8-K -
                               No  reports  on Form 8-K were  filed  during  the
                               three months ended September 30, 2000

                                       21
<PAGE>
                       CECIL BANCORP INC. AND SUBSIDIARIES




                                   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: November 15, 2000                    By: /s/  Mary Beyer Halsey
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                                               Mary Beyer Halsey
                                               President
                                               Chief Executive Officer