SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549

FORM 10-Q

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

FOR THE QUARTER ENDED SEPTEMBER 30, 2004

Commission File Number:  000-50047

CALVIN B. TAYLOR BANKSHARES, INC.

I.R.S. Employer Identification No.: 52-1948274
State of incorporation: Maryland

Address of principal executive offices: 24 North Main Street, Berlin,
Maryland 21811
Issuer's telephone number: (410) 641-1700


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES    X  	NO

Indicate by check mark whether the registrant is an accelerated filer as
defined in Rule 12b-2 of the Exchange Act.   YES    X  	NO

State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:    The registrant had
3,210,958 shares of common stock ($1.00 par) outstanding as of October
31, 2004.



Calvin B. Taylor Bankshares, Inc. and Subsidiary
Form 10-Q
Index


Part I  -  Financial Information
                                                                         Page
Item 1      Consolidated Financial Statements
            Consolidated Balance Sheets                                   3
            Consolidated Statements of Income                             4-5
            Consolidated Statements of Cash Flows                         6-7
            Notes to Consolidated Financial Statements                    8

Item 2      Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                    9-12

Item 3      Quantitative and Qualitative Disclosures About Market Risks  12

Item 4      Controls and Procedures                                      13

Part II -  Other Information

Item 1      Legal Proceedings                                            14
Item 2      Changes in Securities and Use of Proceeds                    14
Item 3      Defaults Upon Senior Securities                              14
Item 4      Submission of Matters to a Vote of Security Holders          14
Item 5      Other Information                                            14
Item 6      Exhibits and Reports on Form 8-K                             14-17

Signatures                                                               18







Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I - Financial Information
Consolidated Balance Sheets
                                            (unaudited)
                                              September    December
                                                2004         2003
Assets
Cash and due from banks                    $ 22,363,881  $ 20,482,866
Federal funds sold                           47,816,193    29,525,781
Interest-bearing deposits                     2,347,579     2,281,337
Investment securities available for sale      9,732,319     9,265,471
Investment securities held to maturity
  (approximate fair value of $158,412,400
   and $150,075,210)                        158,770,952   149,666,806
Loans, less allowance for loan losses
  of $2,184,884 and $2,187,277              158,288,994   162,243,008
Premises and equipment                        6,817,958     7,064,970
Accrued interest receivable                   1,315,801     1,344,613
Bank owned life insurance                     4,175,362     4,054,035
Other assets                                    526,365       557,514
                                           $412,155,404  $386,486,401



Liabilities and Stockholders' Equity
Deposits
  Noninterest-bearing                      $ 96,783,253  $ 75,601,460
  Interest-bearing                          240,937,425   242,344,593
                                            337,720,678   317,946,053
Securities sold under agreements
  to repurchase                               6,369,302     4,113,154
Note payable                                    166,999       181,087
Accrued interest payable                        125,203       145,044
Deferred income taxes                           431,724       355,632
Other liabilities                                10,347       109,399
                                            344,824,253   322,850,369
Stockholders' equity
  Common stock, par value $1 per share
   authorized 10,000,000 shares,
   issued and outstanding
   3,211,558 shares at September 30, 2004 and
   3,227,966 shares at December 31, 2003      3,211,558     3,227,966
  Additional paid in capital                 16,294,805    16,869,085
  Retained earnings                          46,553,204    42,391,363
                                             66,059,567    62,488,414
   Accumulated other comprehensive income     1,271,584     1,147,618
                                             67,331,151    63,636,032
                                           $412,155,404  $386,486,401

See accompanying Notes to Consolidated Financial Statements
















Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)

                                       For the three months ended September 30,
                                               2004         2003
Interest and dividend revenue
  Loans, including fees                   $  2,840,008  $  3,042,068
  U.S. Treasury and Agency securities          708,673       667,572
  State and municipal securities                72,835        57,325
  Federal funds sold                           177,937       154,312
  Interest-bearing deposits                     11,595        10,924
  Equity securities                              9,195         2,333
    Total interest and dividend revenue      3,820,243     3,934,534

Interest expense
  Deposit interest                             377,714       468,017
  Borrowings                                     5,047         5,762
    Total interest expense                     382,761       473,779
    Net interest income                      3,437,482     3,460,755

Provision for loan losses                         -             -
    Net interest income after
      provision for loan losses              3,437,482     3,460,755

Non-interest revenue
  Service charges on deposit accounts          265,332       242,606
  Miscellaneous revenue                        171,782       142,521
    Total non-interest revenue                 437,114       385,127

Non-interest expenses
  Salaries                                     751,872       752,379
  Employee benefits                            163,555       118,603
  Occupancy                                    144,916       138,445
  Furniture and equipment                      141,103       148,602
  Other operating                              435,186       440,728
    Total non-interest expenses              1,636,632     1,598,757

Income before income taxes                   2,237,964     2,247,125
Income taxes                                   790,000       818,000

Net income                                $  1,447,964  $  1,429,125

Basic earnings per share                  $       0.45  $       0.44

See accompanying Notes to Consolidated Financial Statements














Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
(Continued)

                                         For the nine months ended September 30,
                                                2004          2003
Interest and dividend revenue
  Loans, including fees                    $  8,652,638  $  9,179,266
  U.S. Treasury and Agency securities         2,044,401     2,128,927
  State and municipal securities                199,343       162,310
  Federal funds sold                            331,299       419,616
  Interest-bearing deposits                      35,109        31,808
  Equity securities                              34,108        30,571
    Total interest and dividend revenue      11,296,898    11,952,498

Interest expense
  Deposit interest                            1,156,169     1,679,547
  Borrowings                                     13,350        16,886
    Total interest expense                    1,169,519     1,696,433
    Net interest income                      10,127,379    10,256,065

Provision for loan losses                          -             -
    Net interest income after
    provision for loan losses                10,127,379    10,256,065

Non-interest revenue
  Service charges on deposit accounts           786,822       768,256
  Miscellaneous revenue                         535,904       405,892
    Total non-interest revenue                1,322,726     1,174,148

Non-interest expenses
  Salaries                                    2,285,596     2,245,474
  Employee benefits                             535,520       455,637
  Occupancy                                     433,847       389,151
  Furniture and equipment                       422,049       412,407
  Other operating                             1,346,252     1,315,874
    Total non-interest expenses               5,023,264     4,818,543

Income before income taxes                    6,426,841     6,611,670
Income taxes                                  2,265,000     2,380,000

Net income                                 $  4,161,841  $  4,231,670

Basic earnings per share                   $       1.29  $       1.31

See accompanying Notes to Consolidated Financial Statements

















Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)

                                        For the nine months ended September 30,
                                                2004          2003
Cash flows from operating activities
  Interest received                        $ 11,288,221  $ 11,941,280
  Fees and commissions received               1,327,427     1,158,902
  Interest paid                              (1,189,360)   (1,774,472)
  Cash paid to suppliers and employees       (4,657,504)   (4,515,229)
  Income taxes paid                          (2,290,678)   (2,430,698)
                                              4,478,106     4,379,783
Cash flows from investing activities
  Certificates of deposit purchased, net
      of redemptions                                 (3)     (374,978)
  Purchase of investment securities
      available for sale                       (164,504)     (182,500)
  Proceeds from maturities of investment
      securities held to maturity            77,740,084    86,215,000
  Purchase of investment securities held
      to maturity                           (86,908,942) (115,476,017)
  Loans made, net of principal collected      3,954,014    (1,991,634)
  Purchases of premises, equipment, and
      intangibles                              (287,086)   (1,659,344)
  Purchase of bank owned life insurance            -       (4,000,000)
                                             (5,666,437)  (37,469,473)

Cash flows from financing activities
  Net increase (decrease) in
    Time deposits                            (6,759,292)    1,522,793
    Other deposits                           26,533,917    45,456,679
    Securities purchased under agreements
       to repurchase                          2,256,148     1,434,727
  Payment on note payable                       (14,088)      (13,269)
  Purchases and retirement of common stock     (590,688)     (422,366)
                                             21,425,997    47,978,564

Net increase (decrease) in cash              20,237,666    14,888,874
Cash and equivalents at beginning of
   period                                    50,158,779    75,873,029
Cash and equivalents at end of period     $  70,396,445 $  90,761,903
















Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)


                                      For the nine months ended September 30,
                                               2004           2003

Reconciliation of net income to net cash
provided
 By operating activities
 Net income                               $   4,161,841 $   4,231,670
  Adjustments to reconcile net income
     to net cash provided by operating
     activities
     Depreciation and amortization              491,434       472,945
    Security discount accretion, net of
     premium amortization                       (38,048)      (62,082)
    (Gain) loss on disposition of assets         12,899         2,140
    Decrease (increase) in
     Accrued interest receivable                 28,812        50,863
     Cash surrender value of bank owned
      life insurance                           (121,327)      (15,368)
      Other assets                               61,388       (86,797)
    Increase (decrease) in
     Accrued interest payable                   (19,841)      (78,039)
     Other liabilities                          (99,052)     (135,549)
                                          $   4,478,106 $   4,379,783

  Composition of cash and cash
   equivalents
  Cash and due from banks                 $  22,363,881 $  21,315,902
  Federal funds sold                         47,816,193    69,446,001
  Interest-bearing deposits, except for
   time deposits                                216,371          -
                                          $  70,396,445 $  90,761,903


See accompanying Notes to Consolidated Financial Statements







Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Financial Statements

1.     Basis of Presentation
       The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all the information and footnotes
required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments
considered necessary for a fair presentation have been made.  These
adjustments are of a normal recurring nature.  Results of operations for
the nine months ended September 30, 2004 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2004.
For further information, refer to the audited consolidated financial
statements and related footnotes for the Registrant's year ended
December 31, 2003.
       Consolidation has resulted in the elimination of all significant
intercompany accounts and transactions.

       Cash Flows
       For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, federal funds sold, and interest-bearing
deposits except for time deposits.  Federal funds are purchased and sold for
one-day periods.

	Per share data

        Earnings per common share are determined by dividing net income by the
weighted average number of common shares outstanding for the period, as follows:

                                                 2004          2003

Three months ended September 30                3,216,586     3,234,983
Nine months ended September 30                 3,222,068     3,238,309

2.    Comprehensive Income

			Comprehensive income consists of:

                                             For the nine months ended
                                                     September 30,

                                                 2004          2003

Net income                                    $4,161,841    $4,231,670
Unrealized gain on investment securities
available for sale, net of income taxes          123,966       386,443
Comprehensive income                          $4,285,807    $4,618,113

3.    Loan commitments

      Loan commitments are agreements to lend to customers as long as
there is no violation of any conditions of the contracts.  Outstanding
loan commitments and letters of credit consist of:

                                                     September 30,

                                                 2004          2003

Loan commitments                             $28,387,145   $24,224,769
Standby letters of credit                    $ 1,843,425   $ 2,525,518


Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I.  Financial Information
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

     The following discussion contains certain forward-looking statements
within the meaning of and made pursuant to the safe harbor provisions of
the Private Litigation Securities Reform Act of 1995.

     The following discussion of the financial condition and results of
operations of the Registrant (the Company) should be read in conjunction
with the Company's financial statements and related notes and other statistical
information included elsewhere herein.

General

     Calvin B. Taylor Bankshares, Inc. (the "Company") was incorporated as a
Maryland corporation on October 31, 1995.  The Company owns all of the
stock of Calvin B. Taylor Banking Company (the "Bank"), a commercial bank
that was established in 1890 and incorporated under the laws of the State
of Maryland on December 17, 1907.  The Bank operates nine branches in
Worcester County, Maryland and one branch in Ocean View, Delaware.  The
Bank's administrative office is located in Berlin, Maryland.  The Bank is
engaged in a general commercial and retail banking business serving individuals,
businesses, and governmental units in Worcester County, Maryland, Ocean View,
Delaware, and neighboring counties.  The Company currently engages in no
business other than owning and managing the Bank.

Critical Accounting Policies

     The Company's financial condition and results of operations are
sensitive to accounting measurements and estimates of inherently uncertain
matters.  When applying accounting policies in areas that are subjective in
nature, management uses its best judgment to arrive at the carrying value of
certain assets.  One of the most critical accounting policies applied is
related to the valuation of the loan portfolio.  Management estimates the
appropriate allowance for loan losses, including the timing of loan charge-offs.

     The allowance for loan losses represents a reserve for potential losses
in the loan portfolio.  It is one of the most difficult and subjective
judgments.  The adequacy of the allowance for loan losses is evaluated
periodically based on a review of the loan portfolio, with a particular
emphasis on non-accruing, past due, and other loans that management believes
require attention.  The determination of the reserve level relies on
management's judgment about factors affecting loan quality, current trends
in delinquencies and charge-offs, and anticipated changes in the composition
and size of the portfolio.  Management also considers external factors such
as changes in the interest rate environment, the view of the Bank's regulators,
economic conditions in the Bank's service area and beyond, and legislation
that affects the banking industry.

Financial Condition

     Total assets of the Company increased $25.7 million from December 31, 2003
to September 30, 2004.  Combined deposits and customer repurchase agreements
increased $22.0 million during the same period.  During the first quarter of
the year, the Bank typically experiences a decline in deposits since business
customers are using their deposits to meet cash flow needs.  Generally, this
situation reverses late in the second quarter of the year as the Bank
receives deposits from seasonal business customers, summer residents and
tourists.  During the first nine months of 2003, this traditional pattern did
not apply.  Management believes that adverse conditions in the stock markets
contributed to unusually large increases in deposits in the first three
quarters of last year.  After nearly three years of unusually large deposit
increases, the Bank appears to be returning to a more historically typical
model in 2004.

     During the first nine months of 2004, the Bank's gross loan portfolio
decreased $4.0 million.  Management believes that steep competition in a
historically low interest rate market is responsible for much of this decline.


     Historically, the Company has low loan charge-offs.  Based on a review
of the consolidated loan portfolio, the Company determined that an allowance
of 1.36% of gross loans was adequate as of September 30, 2004.  At December
31, 2003, the allowance was 1.33% of gross loans.  At September 30, 2004,
there was one non-accruing loan with an outstanding principal balance of
$866.  Loans delinquent ninety days or more, and still accruing interest,
totaled $302,568 or .19% of the portfolio.

Liquidity

     The Company's major sources of liquidity are loan repayments, maturities
of short-term investments including federal funds sold, and increases in
core deposits.  Throughout the first quarter of the year, when the Bank
typically experiences a decline in deposits, federal funds sold and investment
securities are primary sources of liquidity.  During the second quarter of
the year, additional sources of liquidity become more readily available as
business borrowers start repaying loans, and the Bank receives seasonal
deposits.  Throughout the second and third quarters the Bank maintains a
high liquidity level.  Funds from seasonal deposits are generally invested
in short-term U.S. Treasury Bills and overnight federal funds.  Average
liquid assets (cash and amounts due from banks, interest bearing deposits
in other banks, federal funds sold, and investment securities) compared to
average deposits were 69.85% for the third quarter of 2004 compared to 67.47%
for the third quarter of 2003.  This increase in liquidity is primarily due
to growth in deposits, which has not been accompanied by a corresponding
increase in demand for loans.

Results of Operations

     Net income for the three months ended September 30, 2004, was $1,447,964
or $.45 per share, compared to $1,429,125 or $.44 per share for the third
quarter of 2003.  This represents an increase of $18,839 or 1.32% from the prior
year.  Year to date net income decreased $69,829 or $.02 per share to $4,161,841
or $1.29 per share in 2004 from $4,231,670 or $1.31 per share in 2003.  The year
to date decrease in net income is comprised of a $128,686 decrease in net
interest income, a $148,578 increase in non-interest revenues, a $204,721
increase in non-interest expense, and a $115,000 decrease in income tax expense.

     Net interest income decreased $128,686 in the first nine months of 2004
compared to the first nine months of 2003, largely attributable to the fall
of market rates throughout 2001 through 2003.  Although deposit rates
dropped to their current level in July 2003, the Bank's loan and investment
portfolios have continued to reprice downward.  Management expects to see a
gradual upward repricing of earnings assets and liabilities as the upward
market rate trend begun earlier this year continues.  The first earning
asset to reflect this trend is the overnight investment in federal funds
sold.

     The Company's net interest income is one of the most important factors
in evaluating its financial performance.  Management uses interest sensitivity
analysis to determine the effect of rate changes.  Net interest income is
projected over a one-year period to determine the effect of an increase or
decrease in the prime rate of 100 basis points.  If prime were to decrease
one hundred basis points, and all assets and liabilities maturing within
that period were fully adjusted for the rate change, the Company would
experience a decrease of less than five percent in net interest income.
The sensitivity analysis does not consider the likelihood of these rate
changes nor whether management's reaction to this rate change would be to
reprice its loans or deposits.

     No provision for loan losses was made in the first three quarters of
2004 or 2003.  Net loans charged-off / (recovered) were $2,393 during the
first nine months of 2004, versus ($4,385) during the same period in 2003.

     Non-interest revenue, including service charges on deposit accounts,
increased $51,987 from third quarter 2003 to third quarter 2004.  For the
year to date, non-interest revenue has increased $148,578 from 2003 to 2004.
Revenue increases are primarily due to deposit services charges assessed
against a larger deposit base and fee increases placed in effect in May 2004.
Additionally, the Bank purchased Bank Owned Life Insurance policies at a
cost of $4.0 million in August 2003.  The year to date tax-exempt increase
in cash surrender value of $121,327 on these policies is included in
miscellaneous non-interest revenue.

     Employee benefit costs for nine months ended September 30, 2004 versus
the same period in 2003, are $79,883 higher including an $86,962 increase
in group insurance costs.  Salaries were slightly lower in the third quarter
of 2004 versus 2003, and are up only slightly year to date.  Throughout the
year, the Bank has made an effort to streamline the employee roster,
increasing production per employee.  Lower salaries in the current quarter
result from a decreased number of full time equivalent employees along
with reduced overtime stemming from increased efficiency.  The Bank, which
hires seasonal employees during the summer, employed 90 full time equivalent
employees as of September 30, 2004, versus 97 full time equivalent employees
at September 30, 2003.  The Company has no employees other than those hired
by the bank.

     The Company's occupancy expense increased $44,696 for nine months
ended September 30, 2004 from the same period in 2003.  Notable factors
in this increase are increased depreciation and real estate taxes related
to the newly constructed operations wing added to the Berlin, Maryland
office in August 2003.

     Third quarter income taxes are $28,000 less than last year, on a
pre-tax income decrease of $9,161.  Year-to-date income taxes are $115,000
less than last year, on a pre-tax income decrease of $184,829.  Of the
$115,000 decrease, approximately $46,850 is due to the tax-exempt income
from bank owned life insurance.  The balance relates to the overall
decrease in earnings.

Plans of Operation

     The Bank offers a full range of deposit services including checking,
NOW, Money Market, and savings accounts, and time deposits including
certificates of deposit.  The transaction accounts and time certificates are
tailored to the Bank's principal market areas at rates competitive to those
offered in the area. In addition, the Bank offers certain retirement account
services, such as Individual Retirements Accounts ("IRAs").  All deposits are
insured by the Federal Deposit Insurance Corporation (the "FDIC") up to the
maximum amount allowed by law (generally, $100,000 per depositor subject to
aggregation rules).  The Bank solicits these accounts from individuals,
businesses, associations and organizations, and governmental authorities.

     The Company, through the Bank, offers a full range of short- to medium-
term commercial and personal loans.  Commercial loans include both secured and
unsecured loans for working capital (including inventory and receivables),
business expansion (including acquisition of real estate and improvements),
and purchase of equipment and machinery.  Consumer loans include secured and
unsecured loans for financing automobiles, home improvements, education, and
personal investments.  The Company originates commercial and residential
mortgage loans and real estate construction and acquisition loans.  These
lending activities are subject to a variety of lending limits imposed by
state and federal law.  The Bank may not make any loans to any director
or executive officer (except for commercial loans to directors who are not
officers or employees) unless the Board of Directors of the Bank approves
the loans.  The Board of Directors must review any such loan every six months.

     Other bank services include cash management services, 24-hour ATM's,
debit cards, safe deposit boxes, travelers' checks, direct deposit of
payroll and social security, and automatic drafts.  The Bank offers bank-
by-phone and Internet banking services, including electronic bill-payment,
to both commercial and retail customers.

Capital Resources and Adequacy

     Total stockholders' equity increased $3,695,119 from December 31, 2003
to September 30, 2004.  This increase is attributable to the comprehensive
income recorded during the period, as detailed in Note 2 of the Notes to
Financial Statements, reduced by $590,688 used to purchase and retire 16,408
shares of common stock.  Stock repurchases were at a price of $36.00 dollars
per share.

     Under the capital guidelines of the Federal Reserve Board and the
FDIC, the Company and Bank are currently required to maintain a minimum
risk-based total capital ratio of 8%, with at least 4% being Tier 1
capital.  Tier 1 capital consists of stockholders' equity less
accumulated other comprehensive income.  In addition, the Company and the
Bank must maintain a minimum Tier 1 leverage ratio (Tier 1 capital to
total assets) of at least 3%, but this minimum ratio is increased by 100
to 200 basis points for other than the highest-rated institutions.

     Tier one risk-based capital ratios of the Company as of September 30,
2004 and 2003 were 41.77% and 36.75%, respectively.  Both are substantially
in excess of regulatory minimum requirements.

Website Access to SEC Reports

     The Bank maintains an Internet website at www.taylorbank.com.  The
Company's periodic SEC reports, including annual reports on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, are
accessible through this website.  Access to these filings is free of
charge.  The reports are available as soon as practicable after they are
filed electronically with the SEC.




Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The Company's principal market risk exposure relates to interest rates on
interest-earning assets and interest-bearing liabilities.  Unlike most
industrial companies, the assets and liabilities of financial institutions
such as the Company and the Bank are primarily monetary in nature.  Therefore,
interest rates have a more significant effect on the Company's performance than
do the effects of changes in the general rate of inflation and change in prices.
In addition, interest rates do not necessarily move in the same direction or
in the same magnitude as the prices of goods and services.  As discussed
previously, management monitors and seeks to manage the relationships
between interest sensitive assets and liabilities in order to protect
against wide interest rate fluctuations, including those resulting from
inflation.

     At September 30, 2004, the Company's interest rate sensitivity, as
measured by gap analysis, showed the Company was asset-sensitive with a
one-year cumulative gap of 14.34%, as a percentage of interest-earning
assets.  Generally asset-sensitivity indicates that assets reprice more
quickly than liabilities and in a rising rate environment net interest
income typically increases.  Conversely, if interest rates decrease, net
interest income would decline.  The Bank has classified its demand
mortgage and commercial loans as immediately repriceable.  Unlike loans
tied to prime, these rates do not necessarily change as prime changes
since the decision to call the loans and change the rates rests with
management.


Item 4.  Controls and procedures

     Within the ninety days prior to the date of this report, the
Company's management performed an evaluation of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
and its internal controls and procedures for financial reporting.
Disclosure Controls are procedures that are designed to ensure that
information required to be disclosed in the Company's publicly filed
reports is reported in a timely manner.  As part of these controls,
Management reviews information gathered through systems developed for
that purpose to determine the nature of required disclosure.

     Internal controls are procedures designed to provide management with
reasonable assurance that assets are safeguarded, and that transactions
are properly authorized, executed, and recorded to permit the preparation
of financial statements in accordance with generally accepted accounting
principles.  Because of inherent limitations in any internal controls,
errors or irregularities may occur and not be detected.  The projection
of an evaluation of controls to future periods is subject to the risk
that procedures may become inadequate due to changes in conditions
including the degree of compliance with procedures.

     The Chief Executive Officer and the Treasurer of the Company have
concluded, based on the evaluation of disclosure controls and internal
controls that the financial information and disclosures included in
periodic SEC filings and the Company's financial statements are fairly
presented in conformity with generally accepted accounting principles.

Changes in Internal Controls

     There were no significant changes in the company's internal controls
or in other factors that could significantly affect internal controls,
including corrective actions with regard to significant deficiencies and
material weaknesses.



Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part II. Other Information


Item 1      Legal Proceedings
            Not applicable

Item 2      Changes in Securities and Use of Proceeds
     e)     The following table presents information about the
            Company's repurchase of its equity securities during the
            calendar quarter ended on the date of this Form 10-Q.

                                   (c ) Total number     (d)Maximum Number
         (a) Total    (b) Average   of Shares Purchased   of Shares that may
         Number       Price Paid    as Part of a Publicly yet be Purchased
Period   of Shares    per Share     Announced Program     Under the Program
July       2,780       $36.00         2,780                 301,968
August     3,540       $36.00         3,540                 298,428
September  2,870       $36.00         2,870                 295,558
Totals     9,190       $36.00         9,190                   n/a

	The Company publicly announced on August 14, 2003, that it would
repurchase up to 10% of its outstanding equity stock at that time, which
equates to a total of 324,000 common shares available for repurchase.
There is no expiration date for this program.  No other stock repurchase
plan or program exists at this time, nor has any other plan or program
expired during the period covered by this table.

Item 3     Defaults Upon Senior Securities
           Not applicable
Item 4     Submission of Matters to a Vote of Security Holders
           The Company held its annual meeting on May 12, 2004, during which
           the items detailed in the proxy statement dated March 19, 2004,
           were approved.  This includes the reelection of the Board of
           Directors.

Item 5     Other information
           Not applicable.

Item 6     Exhibits and Reports on Form 8-K
     a)    Exhibits
           2.   Proxy Statement dated March 19, 2004, is incorporated by
                reference.
           31.  Certifications of Principal Executive Officer and Principal
                Financial Officer pursuant to Section 302 of the Sarbanes-
                Oxley Act of 2002 are presented on pages 15 and 16,
                respectively.
           32.  Certification of Principal Executive Officer and Principal
                Financial Officer pursuant to Section 906 of the Sarbanes-
                Oxley Act of 2002 is presented on page 17.

     b)    Reports on Form 8-K
           There were no reports on Form 8-K filed for the quarter ended
           September 30, 2004.








Exhibit 31
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Reese F. Cropper, Jr., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Calvin B.
      Taylor Bankshares, Inc.;
2.    Based on my knowledge, this quarterly report does not contain any
      untrue statement of a material fact or omit to state a material
      fact necessary to make the statements made, in light of the
      circumstances under which such statements were made, not misleading
      with respect to the period covered by this quarterly report;
3.    Based on my knowledge, the financial statements, and other
      financial information included in this quarterly report, fairly
      present in all material respects the financial condition, results
      of operations and cash flows of the registrant as of, and for, the
      periods presented in this quarterly report;
4.    The registrant's other certifying officers and I are responsible
      for establishing and maintaining disclosure controls and procedures
      (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
      registrant and we have:
         a. designed such disclosure controls and procedures to ensure
            that material information relating to the registrant,
            including its consolidated subsidiary, is made known to us by
            others within those entities, particularly during the period
            in which this quarterly report is being prepared;
         b. evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to
            the filing date of the quarterly report (the "Evaluation
            Date"); and
         c. presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based
            on our evaluation as of the Evaluation Date;
5.    The registrant's other certifying officers and I have disclosed,
      based on our most recent evaluation, to the registrant's auditors
      and the audit committee of the registrant's board of directors (or
      persons performing the equivalent function):
         a. all significant deficiencies in the design or operation of
            internal controls which could adversely affect the
            registrant's ability to record, process, summarize and report
            financial data and have identified for the registrant's
            auditors any material weaknesses in internal controls; and
         b. any fraud, whether or not material, that involves management
            or other employees who have a significant role in the
            registrant's internal controls; and
6.    The registrant's other certifying officers and I have indicated in
      the quarterly report whether or not there were significant changes
      in internal controls or in other factors that could significantly
      affect internal controls subsequent to the date of our most recent
      evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.

Calvin B. Taylor Bankshares, Inc.


Date:  November 2, 2004_______	       By:/s/Reese F. Cropper, Jr.
                                           Reese F. Cropper, Jr.
                                           Chairman & Chief Executive Officer
                                           (Principal Executive Officer)



Exhibit 31
Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jennifer G. Hawkins, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Calvin B.
      Taylor Bankshares, Inc.;
2.    Based on my knowledge, this quarterly report does not contain any
      untrue statement of a material fact or omit to state a material
      fact necessary to make the statements made, in light of the
      circumstances under which such statements were made, not misleading
      with respect to the period covered by this quarterly report;
3.    Based on my knowledge, the financial statements, and other
      financial information included in this quarterly report, fairly
      present in all material respects the financial condition, results
      of operations and cash flows of the registrant as of, and for, the
      periods presented in this quarterly report;
4.    The registrant's other certifying officers and I are responsible
      for establishing and maintaining disclosure controls and procedures
      (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
      registrant and we have:
         a. designed such disclosure controls and procedures to ensure
            that material information relating to the registrant,
            including its consolidated subsidiary, is made known to us by
            others within those entities, particularly during the period
            in which this quarterly report is being prepared;
         b. evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to
            the filing date of the quarterly report (the "Evaluation
            Date"); and
         c. presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based
            on our evaluation as of the Evaluation Date;
5.    The registrant's other certifying officers and I have disclosed,
      based on our most recent evaluation, to the registrant's auditors
      and the audit committee of the registrant's board of directors (or
      persons performing the equivalent function):
         a. all significant deficiencies in the design or operation of
            internal controls which could adversely affect the
            registrant's ability to record, process, summarize and report
            financial data and have identified for the registrant's
            auditors any material weaknesses in internal controls; and
         b. any fraud, whether or not material, that involves management
            or other employees who have a significant role in the
            registrant's internal controls; and
6.    The registrant's other certifying officers and I have indicated in
      the quarterly report whether or not there were significant changes
      in internal controls or in other factors that could significantly
      affect internal controls subsequent to the date of our most recent
      evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.

Calvin B. Taylor Bankshares, Inc.


Date:  November 2, 2004_______	        By:/s/Jennifer G. Hawkins
                                            Jennifer G. Hawkins
                                            Treasurer
                                            (Principal Financial Officer)


Exhibit 32
Certification of Principal Executive Officer and Principal Financial Officer
Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)

We, the undersigned, certify that to the best of our knowledge, based
upon a review of the Quarterly Report on Form 10-Q for the period ended
September 30, 2004 of the Registrant (the "Report"):

(1)The Report fully complies with the requirements of Section 13(a) or 15
   (d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all
   material respects, the financial condition and results of operations
   of the Registrant.



Calvin B. Taylor Bankshares, Inc.




Date:  November 2, 2004_______              By:/s/Reese F. Cropper, Jr.
                                            Reese F. Cropper, Jr.
                                            Chairman & Chief Executive Officer
                                            (Principal Executive Officer)


Date:  November 2, 2004_______              By:/s/Jennifer G. Hawkins
                                            Jennifer G. Hawkins
                                            Treasurer
                                            (Principal Financial Officer)



SIGNATURES

    Pursuant to the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



Calvin B. Taylor Bankshares, Inc.




Date:  November 2, 2004_______              By:/s/Reese F. Cropper, Jr.
                                            Reese F. Cropper, Jr.,
                                            Chairman & Chief Executive Officer


Date:  November 2, 2004_______              By:/s/Jennifer G. Hawkins
                                            Jennifer G. Hawkins
                                            Treasurer
                                            (Principal Financial Officer)