EXHIBIT 13

                          ANNUAL REPORT TO STOCKHOLDERS
                             LETTER TO STOCKHOLDERS

CN Bancorp, Inc. has had another very good year, especially regarding our growth
in capital. We are pleased to report that we realized an additional $6.1 million
in capital through January 6, 2004 ($4.9 million by year-end) from the Initial
Public Offering that was concluded in June of 2003 and the exercise of stock
warrants. When this additional capital is leveraged with loans and investments
it reinforces our ability to increase profits, expand to new market areas,
sustain growth, and pay dividends. We more than doubled the number of
stockholders to nearly four hundred at year-end. We want to thank all of you who
purchased additional stock and to welcome those new stockholders who joined our
family of investors.

We have deployed some of this capital with the building of our new branch in
Millersville. We are very excited about the Millersville branch and feel there
is excellent growth potential at this highly visible location. We have planned
an aggressive marketing effort and expect this branch to become profitable
quickly. We will also use additional capital to build a branch in Linthicum.

As you can see from our annual financial report, we continue a steady upward
trend of growth and profitability. Our assets increased by 11.9% to $116 million
and our consolidated net profit was $465,428, an increase of 18% over the
previous year. We had this favorable increase in profits in spite of the fact
that we continue to be in an expansion mode and profits are negatively affected
by the startup costs of opening new branches. We have expanded our resources in
the Loan Department in an effort to acquire new loans while maintaining the high
quality of the portfolio. Our efforts in this regard are showing good results.
Our challenge is to have both vision for future growth and to be grounded in the
reality of the market place.

We have kept up with technology changes, including the use of imaging technology
and the expansion of our Internet banking service to include a bill-pay feature.
Additionally, we have strengthened security thru enhancements to the security
door system and digital, state of the art, surveillance equipment for all four
of our branches. County National Bank has been fortunate not to have fallen
victim to the increasing number of bank robberies in Maryland. We attribute this
to the investment we have made for the protection of our customers and
employees.

The CN Bancorp stock is listed on the Over the Counter Bulletin Board with the
symbol "CNBE" and this provides liquidity and value for our stockholders. The
book value of the stock continues to increase and at year-end was $11.18 per
share versus $10.46 per share at the end of 2002. Book value is an important
element in determining the market value of bank stocks. Stock price quotes are
available on all financial web pages and numerous brokers make a market in our
stock. Feel free to contact Shirley Palmer if you have any questions regarding
broker relations or stockholder matters.

I am very pleased with our progress and the position we are in to create value
for all of our stockholders. The year 2003 was our second full year of paying a
quarterly dividend of $0.03 per share. On March 3, 2004 we paid a one-time
special bonus dividend of $0.05 per share. We also increased the quarterly
dividend for the first quarter of 2004 to $0.04 per share. Our dividend policy
is to provide a return to our investors based on our profits, while maintaining
the bank's "well capitalized" status as defined by regulatory guidelines.

We will be offering alternative investment products to our customers in the
latter part of this year. This will allow us, a small community bank, to compete
with larger banks that offer these products and services in our market area. We
will continue to look for other opportunities to enhance profits and maintain
growth.

Thank you for your continued support. We hope to see you at our Annual Meeting
of Stockholders on Monday, May 24, 2004. Please mark this date on your calendar
and plan to join us on that day.




Jan W. Clark
Chairman/President/CEO



                                       1
<PAGE>

              BUSINESS OF CN BANCORP, INC. AND COUNTY NATIONAL BANK

         CN Bancorp, Inc. is the bank holding company for County National Bank.
CN Bancorp, Inc.'s principal asset is its investment in all of the issued and
outstanding capital stock of County National Bank, and its principal business is
commercial banking.

         County National Bank serves individuals and small to medium sized
businesses in Anne Arundel County, Maryland, with a specific focus in central
and northern Anne Arundel County. County National Bank offers a wide range of
deposit accounts and commercial and consumer loans, tax deferred accounts, safe
deposit boxes, and other services to its customers. Telephone and online banking
is available 24 hours a day.

         County National Bank's mission statement is to:

          o    Provide the highest quality products and personalized services to
               meet the financial needs of our community and customers; and

          o    Provide sound management to maximize our leadership position,
               never losing sight of the well being of our neighbors, friends,
               employees and stockholders.

         County National Bank serves its customers from branches in Glen Burnie,
Pasadena, Odenton and, starting January 2, 2004, Millersville, Maryland and an
additional ATM in Glen Burnie. County National Bank has leased land in
Linthicum, Maryland on which it plans to build a branch in 2004 or 2005.

                           COMMON STOCK AND DIVIDENDS

         CN Bancorp, Inc. common stock is not traded on an organized exchange or
on the Nasdaq National or Small Cap Markets but, in August 2002, CN Bancorp,
Inc.'s common stock was first quoted for trading on the Over the Counter
Bulletin Board (OTCBB) under the symbol "CNBE." Prior to August 2002, the common
stock was traded only in private transactions and only on very limited and
sporadic basis. Since August 2002, the common stock has traded only sporadically
and no assurance can be given that an active or established market will develop
in the foreseeable future. The following table sets forth the high and low bid
prices for the stock during each calendar quarter since the fourth quarter of
2002. These quotations reflect interdealer prices and may not represent actual
transactions. These quotations do not necessarily reflect the intrinsic or
market value of the common stock.

                                          2003                    2002
                                          ----                    ----
                                     High         Low        High        Low
                                     ----         ---        ----        ---
          First Quarter             $15.75       13.50       NA          NA
          Second Quarter             14.25       13.50       NA          NA
          Third Quarter              15.60       14.25       NA          NA
          Fourth Quarter             15.50       13.50       14.00      14.00


         CN Bancorp, Inc. had 390 stockholders of record at February 29, 2004.
Common stock outstanding at that date was 1,356,545 shares. In addition, CN
Bancorp, Inc. had outstanding warrants to purchase 343,431 shares of common
stock exercisable at $10.00 per share.

         CN Bancorp, Inc. declared four dividends (March, June, September and
December) of $.03 per share ($.12 per share for the year) in 2003. In 2002 CN
Bancorp, Inc. declared five dividends (January, March, June, September and
December) of $.03 per share ($.15 per share for the year). CN Bancorp, Inc.'s
continued ability to pay dividends will depend on its compliance with certain
dividend regulations imposed upon it as a bank holding company by the Federal
Reserve Board. In addition, CN Bancorp, Inc.'s ability to pay dividends may
depend on the ability of County National Bank to pay dividends to CN Bancorp,
Inc. County National Bank may not be able to pay dividends to CN Bancorp, Inc.
unless it complies with certain regulatory requirements. In addition, CN
Bancorp, Inc. will consider a number of other factors, including its earning
prospects, financial condition and cash needs before deciding to pay additional
dividends in the future.




                                       2
<PAGE>



                 SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

         The following table summarizes the selected consolidated financial
information and other financial data. The selected balance sheet and statement
of income data are derived from the audited consolidated financial statements
for the years ended December 31, 2003 and 2002. This information should be read
together with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our consolidated financial statements and the related
notes included elsewhere in this annual report. Results for past periods are not
necessarily indicative of results that may be expected for any future period.


<TABLE>
<CAPTION>


                                                                At and for the       At and for the
                                                                  Year Ended           Year Ended
                                                                 December 31,         December 31,
(In thousands except per share data)                                 2003                 2002
                                                              -------------------  -------------------

Statement of Operations Data:
<S>                                                                       <C>                   <C>
Interest income                                                           $4,963                5,190
Interest expense                                                           1,253                1,688
                                                              -------------------  -------------------
          Net interest income                                              3,710                3,502
Provision for loan losses                                                    135                  125
                                                              -------------------  -------------------
Net interest income after provision for loan losses                        3,575                3,377
Other income                                                                 894                  829
Other expense                                                              3,782                3,640
                                                              -------------------  -------------------
Income before taxes                                                          687                  566
Income taxes                                                                 222                  171
                                                              -------------------  -------------------
          Net income                                                        $465                  395
                                                              ===================  ===================

Per Share Data:
Earnings per share, basic                                                  $0.48                 0.46
Earnings per share, diluted                                                 0.38                 0.35
Cash dividends (four dividends in 2003, five in 2002)                       0.12                 0.15
Book value per share                                                       11.18                10.46
Tangible book value per share                                              11.18                10.46

Weighted average shares outstanding, basic                               961,686              860,000
Weighted average shares outstanding, diluted                           1,137,135            1,114,858
Shares outstanding at end of period                                    1,264,745              860,000

Balance Sheet Data:
Total Assets                                                            $116,438              104,044
Securities available for sale, value                                      17,506                9,090
Securities held to maturity, at cost                                       8,209                7,532
Loans receivable, net of unearned income                                  70,879               64,113
Allowance for loan losses                                                    720                  745
Premises and equipment, net                                                4,053                3,365

Non-interest bearing deposits                                             27,098               21,488
Interest bearing deposits                                                 72,212               71,473
                                                              -------------------  -------------------
          Total deposits                                                  99,310               92,961
                                                              -------------------  -------------------
</TABLE>



                                       3
<PAGE>

<TABLE>
<CAPTION>


(In thousands except per share data)                            At and for the       At and for the
                                                                  Year Ended           Year Ended
                                                                 December 31,         December 31,
Continued                                                            2003                 2002
                                                              -------------------  -------------------

<S>                                                                    <C>                     <C>
Securities sold under agreements to repurchase                         $1,453                  988
Stockholders' equity including unrealized gains
  and losses                                                           14,136                8,995

Selected Performance and Other Ratios:
Return on average stockholders' equity                                  4.38%                4.52%
Return on average assets                                                0.43%                0.40%
Net interest margin                                                     3.69%                3.84%
Other income to average assets                                          0.82%                0.83%
Other expenses to average assets                                        3.47%                3.66%
Dividend payout ratio                                                  26.79%               32.66%
Number of branches                                                          3                    3
Allowance for loan losses to total loans                                1.02%                1.16%
Non-performing loans to total loans                                     0.16%                0.43%
Allowance for loan losses to non-performing loans                     648.65%              270.91%

Applicable Company Capital Ratios:
Tier 1 risk-based capital                                               18.6%                12.8%
Total risk-based capital                                                19.6%                13.9%
Leverage capital                                                        12.3%                 8.5%
Stockholders' equity to total assets                                    12.1%                 8.6%

</TABLE>


                           FORWARD-LOOKING STATEMENTS

         The Letter from the Chairman, President and Chief Executive Officer,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, and other portions of this annual report include forward-looking
statements such as: statements of CN Bancorp Inc.'s goals, intentions, and
expectations; estimates of risks and of future costs and benefits; assessments
of loan quality, probable loan losses, liquidity, off-balance sheet
arrangements, and interest rate risk; and statements of its ability to achieve
financial and other goals. These forward-looking statements are subject to
significant uncertainties because they are based upon: the amount and timing of
future changes in interest rates and other economic conditions; future laws,
regulations and accounting principles; and a variety of other matters. Because
of these uncertainties, the actual future results may be materially different
from the results indicated by these forward-looking statements. In addition, CN
Bancorp Inc.'s past growth and performance do not necessarily indicate its
future results.


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

         The following discussion and analysis of the financial condition and
results of operations of CN Bancorp, Inc. should be read in conjunction with CN
Bancorp, Inc.'s audited consolidated financial statements, including the related
footnotes, included elsewhere in this annual report.

GENERAL

         CN Bancorp, Inc. has continued to experience growth since it started
operations in December 1996. Assets increased $12,394,496 (11.9%) to
$116,438,305 at December 31, 2003 from $104,043,809 at December 31, 2002.



                                       4
<PAGE>

Increases in loans and securities comprised the majority of the increase in
assets. The increase in assets was funded by increases in deposits and proceeds
from stock sales.

Critical Accounting Policies
----------------------------

        CN Bancorp, Inc.'s consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States
and follow general practices within the industries in which it operates.
Application of these principles requires management to make estimates,
assumptions and judgments that affect the amounts reported in the financial
statements and accompanying notes. These estimates, assumptions and judgments
are based on information available as of the date of the financial statements;
accordingly, as this information changes, the financial statements could reflect
different estimates, assumptions and judgments. Certain policies inherently have
a greater reliance on the use of estimates, assumptions and judgments and as
such have a greater possibility of producing results that could be materially
different than originally reported. Estimates, assumptions and judgments are
necessary when assets and liabilities are required to be recorded at fair value,
when a decline in the value of an asset not carried on the financial statements
at fair value warrants an impairment write-down or valuation reserve to be
established, or when an asset or liability needs to be recorded contingent upon
a future event. Carrying assets and liabilities at fair value inherently results
in more financial statement volatility. The fair values and the information used
to record valuation adjustments for certain assets and liabilities are based
either on quoted market prices or are provided by other third-party sources,
when available.

        The most significant accounting policies followed by CN Bancorp, Inc.
are presented in Note 1 to the consolidated financial statements. These
policies, along with the disclosures presented in the other financial statement
notes and in this discussion, provide information on how significant assets and
liabilities are valued in the financial statements and how those values are
determined. Based on the valuation techniques used and the sensitivity of
financial statement amounts to the methods, assumptions and estimates underlying
those amounts, management has identified the determination of the allowance for
loan losses as the accounting area that requires the most subjective or complex
judgments, and as such could be most subject to revision as new information
becomes available.

        CN Bancorp, Inc. believes it has developed appropriate policies and
procedures for assessing the adequacy of the allowance for loan losses,
recognizing that this process requires a number of assumptions and estimates
with respect to its loan portfolio. CN Bancorp, Inc.'s assessments may be
impacted in future periods by changes in economic conditions, the impact of
regulatory examinations and the discovery of information with respect to
borrowers which is not known to management at the time of the issuance of the
consolidated financial statements. For additional discussion concerning CN
Bancorp, Inc.'s allowance for loan losses and related matters, see "Provision
for Loan Losses" below.

FINANCIAL CONDITION

         The loan portfolio comprises the majority of CN Bancorp, Inc.'s earning
assets. Loans receivable (net of the allowance for loan losses, unearned fees
and origination costs) increased by $6,790,880 (9.7%) from $63,367,973 at
December 31, 2002 to $70,158,853 at December 31, 2003. Loans receivable, net,
comprise 60.3% of assets ($116,438,305) as of December 31, 2003 and 60.9% of
assets ($104,043,809) at December 31, 2002.

         Residential real estate loans increased $3,579,984 (20.6%) from
$17,418,572 at December 31, 2002 to $20,998,556 at December 31, 2003. Commercial
real estate loans increased $1,211,491 (5.4%) from $22,414,036 at December 31,
2002 to $23,625,527 at December 31, 2003. CN Bancorp, Inc. continued to
concentrate on real estate secured lending for predominately owner-occupied
properties. Commercial loans increased by $2,485,280 (15.1%) from $16,468,693 at
December 31, 2002 to $18,953,973 at December 31, 2003. Installment and other
loans decreased by $619,855 (12.9%) from $4,816,728 at December 31, 2002 to
$4,196,873 at December 31, 2003 primarily because of refinancing activity during
the year. Real estate construction loans increased by $117,647 (4.0%) to
$3,087,734 at December 31, 2003 from $2,970,087 at December 31, 2002

         The allowance for loan losses was $720,000 (1.02% of loans) at December
31, 2003. The allowance was $745,000 (1.16% of loans) at December 31, 2002. At
December 31, 2003, non-interest accrual loans totaled $110,931 as compared to
$275,063 at December 31, 2002. In addition, commercial loans totaling $167,514
were charged off during 2003 as compared to $160,594 of loans that were charged
off in 2002. Recoveries of commercial loans were $27,000 during 2003 (none in
2002).



                                       5
<PAGE>


         During 2003, the Bank sold loan participations to family members of a
director of the Bank and the Company on a non-recourse basis. Under these
transactions, the family members acquired undivided percentage interests in
specific loans held by the Bank. The participations were sold under the same
terms and conditions as loan participations sold to non-related entities. The
total amount of the loan participations sold was $2,058,741. The total loan
participation amount outstanding at December 31, 2003 was $970,605.

         The securities portfolio at December 31, 2003 amounted to $26,355,701,
an increase of $9,238,203, or 54.0% from the amount at December 31, 2002 as
funds obtained through deposit increases and stock sales, and not invested in
loans, were invested in securities. Available for sale investment securities
increased to $17,505,600 at December 31, 2003 from $9,089,740 at December 31,
2002. Held to maturity securities increased to $8,208,601 at December 31, 2003
from $7,531,558 at December 31, 2002. The carrying value of available for sale
securities includes net unrealized appreciation of $2,047 at December 31, 2003
(reflected as unrealized appreciation of $1,351 in stockholders' equity after
deferred taxes) as compared to net unrealized appreciation of $81,205 ($53,595
net of taxes) as of December 31, 2002.

         Deposits are the major source of funds for lending and investment
activities. Deposits increased $6,349,058 (6.8%) to $99,309,796 at December 31,
2003 from $92,960,738 at December 31, 2002. Non-interest bearing deposits
increased 26.1%, savings deposits increased 22.7%, interest bearing demand
deposits decreased 7.6% and certificates of deposit decreased 9.6% during the
year ended December 31, 2003.

         County National Bank was in the process of completing the building and
equipping of a new branch in Millersville, Maryland at December 31, 2003. The
branch opened in January 2004. At December 31, 2003, costs of $818,352 had been
expended on the project.

         Total stockholders' equity was $14,136,422 at December 31, 2003
representing an increase of $5,141,198 from December 31, 2002. The increase from
December 31, 2002 was attributable to the proceeds from the sale of stock in a
public offering of $1,655,541 (net of costs), proceeds of $3,197,160 from sales
of stock in connection with warrants being exercised, earnings of $465,428, a
decrease in unrealized gains on available for sale investment securities of
$52,244, and less dividends of $124,687 ($0.12 per share).

         At December 31, 2003, we continued to exceed all regulatory capital
requirements to be considered a "well capitalized" financial institution under
federal regulations.

RESULTS OF OPERATIONS

Net income

         Net income for the year ended December 31, 2003 was $465,428, an
increase of $70,893, or 18.0%, from $394,535 during 2002. Net income increased
in 2003 as compared to 2002 because of increases in net interest income and
non-interest income exceeded increases in operating expenses. Also contributing
to the increase was the charge-off in 2002 of previously capitalized costs
incurred in connection with an unsuccessful attempt to acquire a local thrift
during 2002 in the amount of $178,111 ($111,608 net of taxes). There was no
similar charge-off in 2003. Operating expenses increased in 2003 in part because
County National Bank incurred personnel, marketing and other costs during 2003
in preparation for the opening of the new branch in Millersville, Maryland in
January 2004.

         CN Bancorp, Inc.'s return on average equity was 4.37% in 2001 to 4.52%
in 2002 and to 4.38% in 2003. The decline in 2003 was attributable to the
increase in stockholders' equity of approximately $4.9 million from the sale of
stock and exercise of warrants during 2003. The return on average assets was
0.43% in 2001, 0.40% in 2002 and 0.43% in 2003.


Net Interest Income and Net Interest Margin

         Net interest income is the amount by which interest earned on assets
exceeds the interest paid on interest-bearing liabilities. CN Bancorp, Inc.'s
principal interest earning assets are loans to businesses and individuals.
Interest-bearing liabilities consist primarily of savings accounts, money market
accounts and certificates of deposit. Generally, changes in net interest income
are measured by net interest rate spread and net interest margin. Net




                                       6
<PAGE>


interest rate spread is equal to the difference between the average rate earned
on interest earning assets and the average rate incurred on interest-bearing
liabilities. Net interest margin represents the difference between interest
income (including net loan fees earned) and interest expense calculated as a
percentage of earning assets.

         Total interest income decreased by $226,749 or 4.4% to $4,963,359 for
the year ended December 31, 2003 as compared to 2002. This decrease was
primarily attributable to the continued low interest rate environment of the
last two years. The new earning rates on re-pricing loans and investments were
lower than those at last re-pricing or origination. Some higher rate loans were
re-financed at lower interest rates by other institutions. New loans were
originated at lower rates (as compared to the refinanced loans). The effect on
interest income of lower interest rates was somewhat offset by increases in
interest earning assets during 2003 as compared to 2002. Average interest
earning assets increased by $9,308,000 to $100,441,000 in 2003 and the yield on
the interest earning assets declined to 4.94% in 2003 from 5.69% in 2002.

         Interest expense decreased by $433,984 or 25.7% to $1,253,682 for the
year ended December 31, 2003 as compared to 2002. This decrease was primarily
attributable to the continued low interest rate environment of the last two
years. The reduction in interest expense from lower interest rates was offset in
part by expenses resulting from an increase in average interest bearing
liabilities during 2003 as compared to 2002. Average interest bearing
liabilities increased by $3,406,000 to $72,010,000 in 2003 and the cost of the
interest bearing funds declined to 1.74% in 2003 from 2.46% in 2002.

         Net interest income increased by $207,235 or 5.9% during 2003 as
compared to 2002. Net interest income increased because the net interest income
on the growth of interest earning assets and interest bearing liabilities
exceeded the effect of the low interest rate environment. The net interest
spread was 3.20% in 2003 as compared to 3.23% in 2002. The net interest margin
was 3.69% in 2003 as compared to 3.84% in 2002.

         The tables below present a summary of CN Bancorp, Inc.'s average daily
balances, rates, interest income and expense, the interest rate spread and net
interest margins for the years ended December 31, 2003 and 2002.

<TABLE>
<CAPTION>


                             AVERAGE BALANCES, RATES AND INTEREST INCOME AND EXPENSE

                                                                    Years Ended December 31,
     (in thousands)                                            2003                           2002
                                                 ------------------------------- -----------------------------
                                                  Average               Yield/    Average             Yield/
                                                  Balance    Interest    Rate     Balance   Interest   Rate
                                                 ------------------------------- -----------------------------
     Assets:
     Interest-Earning Assets:
<S>                                                 <C>           <C>     <C>        <C>         <C>    <C>
       Federal funds sold                           $10,903       $120    1.10%      $9,478      $157   1.66%
       Interest bearing deposits                      2,438         35    1.44%       2,823        43   1.52%
       Investment securities                         22,548        698    3.10%      17,035       721   4.23%
       Loans receivable                              65,305      4,110    6.29%      62,552     4,269   6.82%
        Allowance for loan losses                      (753)        -        -         (755)       -       -
                                                 ------------------------------- -----------------------------
                                                     64,552      4,110    6.37%      61,797     4,269   6.91%
                                                 ------------------------------- -----------------------------

           Total Interest Earning Assets            100,441      4,963    4.94%      91,133     5,190   5.69%
                                                 ------------------------------- -----------------------------
     Non-interest Earning Assets                      8,658                           8,214
                                                 -----------                     -----------
            Total Assets                           $109,099                         $99,347
                                                 ===========                     ===========
     Liabilities and Stockholders' Equity:
     Interest -Bearing Liabilities:
       Interest bearing demand deposits             $12,197        $60    0.49%     $11,724      $103    0.88%
       Savings accounts                              24,273        222    0.91%      20,532       302    1.47%
       Time deposits                                 32,786        949    2.89%      33,523     1,249    3.73%
       Note payable                                      58          2    3.45%           -         -       -
       Securities sold under agreements
         to repurchase                                2,696         20    0.74%       2,825        34    1.20%
                                                 ------------------------------- -----------------------------
           Total Interest Bearing Liabilities        72,010      1,253    1.74%      68,604     1,688    2.46%
                                                 ------------------------------- -----------------------------

</TABLE>


                                       7
<PAGE>

<TABLE>
<CAPTION>

                                                 AVERAGE BALANCES, RATES AND INTEREST INCOME AND EXPENSE

                                                                    Years Ended December 31,
                                                                    ------------------------
     (in thousands)                                            2003                           2002
                                                 ------------------------------- -----------------------------
                                                  Average               Yield/    Average             Yield/
     Continued                                    Balance    Interest    Rate     Balance   Interest   Rate
     ---------                                   ------------------------------- -----------------------------

     Non-interest Bearing Liabilities:
<S>                                                <C>                              <C>
       Demand deposits                             $ 26,166                         $21,468
       Other                                            298                             527
                                                 -----------                     -----------
           Total Liabilities                         98,474                          90,599
     Stockholders' Equity                            10,625                           8,749
                                                 -----------                     -----------
           Total Liabilities and Equity            $109,099                         $99,348
                                                 ===========                     ===========

                                                            -----------                     ----------
     Net Interest Income                                        $3,710                        $ 3,502
                                                            ===========                     ==========

     Net Interest Spread                                                  3.20%                         3.23%
     Net Interest Margin                                                  3.69%                         3.84%
     Ratio of Interest-Earning Assets
       to Interest-Bearing Liabilities               139.48%                         132.84%



Yields on securities are calculated based on amortized cost.
Nonaccruing loans are included in the average loan balances outstanding.
</TABLE>


         The tables below present the relative contribution of changes in
volumes and changes in rates to the changes in net interest income for 2003 and
2002. The change in the interest income and interest expense attributable to the
combined impact of both volume and rate has been allocated proportionately to
the change due to volume and the change due to rate.

<TABLE>
<CAPTION>


                                               RATE/VOLUME ANALYSIS

                                                     2003 vs. 2002                         2002 vs. 2001
                                                     -------------                         -------------
                                                  Increase (Decrease)                   Increase (Decrease)
                                           Volume        Rate         Total       Volume       Rate        Total
                                         -------------------------------------- ------------------------------------
Interest-Earning Assets:

   Federal funds and interest bearing
<S>                                           <C>          <C>         <C>           <C>       <C>         <C>
     deposits with banks                      $17,746      (63,093)    (45,347)      49,791    (288,180)   (238,389)
   Securities                                 228,672     (251,166)    (22,494)      20,901    (135,364)   (114,463)
   Loans receivable                           186,857     (345,765)   (158,908)     636,248    (761,199)   (124,951)
                                         -------------------------------------- ------------------------------------
      Net Change in Interest Income           433,275     (660,024)   (226,749)     706,940  (1,184,743)   (477,803)
                                         -------------------------------------- ------------------------------------

Interest Bearing Liabilities:

   Interest bearing deposits                  762,227   (1,185,005)   (422,778)     427,468    (879,943)   (452,475)
   Note payable                                 2,407            -       2,407          156            -        156
   Securities sold under agreements
      to repurchase                            (1,549)     (12,064)    (13,613)     (17,126)    (76,993)    (94,119)
                                         -------------------------------------- ------------------------------------
      Net Change in Interest Expense          763,085   (1,197,069)   (433,984)     410,498    (956,936)   (546,438)
                                         -------------------------------------- ------------------------------------

      Change in Net Interest Income         $(329,810)     537,045     207,235      296,442    (227,807)     68,635
                                         ====================================== ====================================

</TABLE>

                                       8
<PAGE>


Provision for Loan Losses

         The provision for loan losses represents the amount charged against
earnings to increase the allowance for loan losses to the level deemed
appropriate by management. The provision for loan losses and the allowance for
loan losses are based on management's ongoing assessment of CN Bancorp, Inc.'s
credit exposure and consideration of certain other relevant factors.

         The adequacy of the allowance for loan losses is evaluated based upon
loan categories except for loans rated substandard, doubtful or loss, which are
evaluated separately and assigned loss amounts based upon the evaluation. Loss
ratios are applied to each category of loan to determine estimated loss amounts.
Categories of loans are identified as consumer (secured and unsecured),
commercial (secured and unsecured) and mortgage loans (residential and
commercial real estate). Loss ratios are determined based upon losses incurred
and peer group loss ratios adjusted for the effect of current economic
conditions (currently weakened), any industry concentration or identified
weakness in an industry (none currently), credit management and underwriting
policies changes, secured versus unsecured nature of loan category and
adjustments to the peer group losses based upon local considerations. In
particular, peer group loss ratios are modified to recognize that CN Bancorp,
Inc.'s loans are primarily to small and medium size businesses which do not
necessarily have the resources to timely adjust to changes in economic
conditions. CN Bancorp, Inc. uses peer group loss ratios because its loan
portfolio has not been tested during all economic business cycles since it has
only been operating since December 1996. CN Bancorp, Inc.'s actual losses have
been lower than those of its peer group.

         At December 31, 2003, the range of the loss ratios used to determine
estimated losses by loan category were: consumer loans - .95% to 1.60%;
commercial loans - 1.00% to 1.60%; and, mortgage loans - 0.45% to .95%.
Additional losses are estimated resulting from additional identified risks
factors, such as loans with underwriting exceptions, the level and direction of
payment delinquencies and the level of unsecured credit. These additional loss
estimates are not allocated to the separate loan categories.

         The adequacy of the allowance for loan losses is reviewed at least
quarterly. Loans are assigned a risk rating based upon rating criteria
consistent with regulatory definitions. The risk rating is adjusted, as
necessary, if loans become delinquent, if significant adverse information is
discovered regarding the underlying credit and, in the case of commercial loans
and commercial real estate loans, the normal periodic review of the underlying
credit indicate that a change in risk rating is appropriate. An estimated "low"
and "high" loss percentage is applied to loans in each risk rating. These loss
percentages increase as the loan risk rating increases. Loans rated as
substandard, doubtful or loss are evaluated separately and assigned loss amounts
based upon the separate evaluation. Risks factors identified beyond individual
loan risks, such as economic conditions, underwriting exceptions and loan
concentrations are quantified based upon management's estimations of loss
exposure. Loss percentages used are generally based upon management's best
estimates as we have limited historical loss data because of the relative short
period of time that we have been operating. Estimated "low" and "high" allowance
for loan loss amounts are derived by accumulating the estimated losses using the
"low" and "high" loss percentages for each risk rating and adding losses based
upon separate loan evaluations and identified other risks. The actual allowance
for loan losses is compared to this range to ascertain that it is reasonably
situated within the range. During 2003, there were no significant changes in
estimation methods or assumptions that affected the methodology for assessing
the appropriateness of the allowance.

         At December 31, 2003, the "low" and "high" allowance determination
resulted in a "low" allowance of 1.01% of loans and a "high" allowance of 1.31%
of loans. The actual allowance for loan losses was 1.02% of loans.

         In addition, on at least a quarterly basis, the recorded allowance for
loan losses (as a percent of loans) is compared to peer group levels to
ascertain the reasonableness of the estimate.

         The provision for loan losses was $134,529 during the year ended
December 31, 2003 as compared to $124,594 for the year ended December 31, 2002.
The provision for loan losses did not increase as much as the increase in loans
primarily because the majority of the loan increase was in real estate secured
loans which have low loss estimates.

         The allowance for loan losses represents 1.02% and 1.16% of loans
receivable at December 31, 2003 and December 31, 2002, respectively. CN Bancorp,
Inc. has no exposure to foreign countries or foreign borrowers. Management
believes that the allowance for loan losses is adequate for each period
presented.



                                       9
<PAGE>

         The table below sets forth the period end loans receivable balances and
summarizes CN Bancorp, Inc.'s loan loss experience for the periods presented as
well as certain ratios related to net charge-offs and the allowance for loan
losses (ALL) as a percent of the total loan portfolio. The majority of the 2003
charge-offs related to one commercial loan account.


                      SUMMARY OF LOAN LOSS EXPERIENCE

                                                   Year Ended December 31,
(in thousands)                                       2003           2002
                                                 -------------- -------------
Allowance for loan losses:
Beginning balance                                        $ 745           781
   Charge-offs:
      Commercial loans                                    (168)         (161)
      Consumer loans                                       (26)            -
                                                 -------------- -------------
                                                          (194)         (161)
                                                 -------------- -------------
   Recoveries:
      Commercial loans                                      27             -
      Consumer loans                                         7             -
                                                 -------------- -------------
                                                            34             -
                                                 -------------- -------------
   Provision for loan losses                               135           125
                                                 -------------- -------------
Ending balance                                            $720           745
                                                 ============== =============
Ratios:
Net charge-offs to average loans                          0.25%         0.25%
Net charge-offs to provision for loan losses            118.52%       128.80%
Allowance for loan losses to loans receivable             1.02%         1.16%
Loans receivable before ALL                            $70,879        64,113
Average loan balances                                  $65,305        62,552

         The table below presents information regarding non-performing loans at
December 31, 2003 and 2002.

<TABLE>
<CAPTION>


                                            NON-PERFORMING LOANS

                                                                 December 31,        December 31,
          (In thousands)                                             2003                2002
                                                               -----------------  -------------------

<S>                                                                       <C>                 <C>
          Non-accruing loans                                              $111                275
          Accruing loans past due 90 days or longer                          -                  -
                                                               -----------------  -------------------
            Total non-performing loans                                    $111                275
                                                               =================  ===================
          Non-accruing loans:
            Interest income not recorded on non-
               accruing loans                                               $6                 39
            Interest income included in net income
               for period on non-accruing loans collections                  -                  7

          Ratios:
            Non-performing loans to total loans                           0.16%              0.43%
            Non-performing loans to total assets                          0.10%              0.26%
            Allowance for loan losses to non-
               performing loans                                         648.65%            270.91%
            Commitments to lend additional funds to
               non-performing loan customers                                 -                  -

          Restructured loans:                                             None               None


</TABLE>


                                       10
<PAGE>



     The table below illustrates the estimated breakdown of the allowance for
loan losses as allocated to various segments of the loan portfolio.

<TABLE>
<CAPTION>


                                                           ALLOWANCE FOR LOAN LOSSES BY CATEGORY

                                       -------------------------------- --------------------------------
                                              December 31, 2003                December 31, 2002
                                       -------------------------------- --------------------------------
                                                       % of Loans in                    % of Loans in
                                         Allocated   each Category to     Allocated   each Category to
                                         Allowance      Total Loans       Allowance      Total Loans
                                          Amount        Receivable         Amount        Receivable
           (In thousands)
<S>                                            <C>           <C>            <C>               <C>
           Consumer loans                      $ 51          5.9%           $ 74              7.5%
           Home Equity loans                     21          6.6%             20              6.3%
           Real estate loans                    276         60.7%            282             60.5%
           Commercial loans                     352         26.8%            322             25.7%
           Unallocated to loan type              20            -              47                -
                                       -------------------------------- --------------------------------
                                               $720         00.0%           $745            100.0%
                                       ================================ ================================

</TABLE>


         The allowance for loan losses is reviewed at least quarterly for its
adequacy.

Non-interest Income

         Non-interest income consisted primarily of fees and charges from
depository accounts, increases in cash surrender value of life insurance
policies, gains on sale of securities and other income. Non-interest income
increased $64,937 or 7.8%, to $893,507 for the year ended December 31 2003 as
compared to $828,570 during 2002. This increase was primarily attributable to
fees earned under an overdraft privilege program initiated in late 2001,
increases in cash surrender value of owned life insurance policies, continued
increases in the number of customer accounts, usage of debit cards by customers
and the use of owned ATM machines by non-customers. Gains on sales of securities
were $43,652 in 2003 as compared to $53,669 in 2002. Other income for 2002
included the recovery of a recorded charge for a cash shortage of approximately
$7,500. No such recovery occurred in 2003.

Non-interest Expense

         Non-interest expense was $3,781,685 during the year ended December 31,
2003 representing an increase of $140,806 or 3.9%, as compared to $3,640,879
during 2002. 2002 expenses included a charge-off of $178,111 of previously
capitalized costs incurred in connection with our failed acquisition of North
Arundel Savings Bank, FSB. There was no similar charge-off in 2003. Without this
2002 charge-off, non-interest expenses would have increased by $318,917 or 9.2%.
The largest expense item comprising this increase was to compensation and
benefits, which increased by $196,095 or 11.1% to $1,964,188 during 2003 as
compared to $1,768,093 in 2002 because of the hiring of additional personnel to
staff the new branch in Millersville, normal salary increases, an addition of a
loan officer in 2003 as well as increases in benefit expenses resulting from
additional benefits.

Income Taxes

         Income tax expense was $221,542 (32.2% of pre-tax net income) for the
year ended December 31, 2003 as compared to $171,004 (30.2% of pre-tax net
income) for 2002. The increase in the effective tax rate in 2003 versus 2002
reflects higher state income taxes because the amount of state tax exempt
interest income became a smaller portion of income before income taxes in 2003
as compared to 2002.

ASSET/LIABILITY MANAGEMENT

         A principal objective of CN Bancorp, Inc.'s asset/liability management
policy is to minimize exposure to changes in interest rates by an ongoing review
of the maturity and re-pricing of interest-earning assets and interest-bearing
liabilities. The asset/liability committee and the executive committee of the
board of directors of County National Bank oversee this review.



                                       11
<PAGE>


         The executive committee establishes policies to control interest rate
sensitivity. Interest rate sensitivity is the volatility of a bank's earnings
resulting from movements in the market interest rates. Management monitors rate
sensitivity in order to reduce vulnerability to interest rate fluctuations while
maintaining adequate capital levels and acceptable levels of liquidity. Monthly
financial reports provide management with information to evaluate and manage
rate sensitivity and adherence to policy. CN Bancorp, Inc.'s asset/liability
policy's goal is to manage assets and liabilities in a manner that stabilizes
net interest income and net economic value within a broad range of interest rate
environments. Adjustments to the mix of assets and liabilities are made
periodically in an effort to achieve dependable, steady growth in net interest
income regardless of the behavior of interest rates in general.

         As part of the interest rate risk sensitivity analysis, the
asset/liability committee examines the extent to which CN Bancorp, Inc.'s assets
and liabilities are interest rate sensitive and monitors the interest rate
sensitivity gap. An interest rate sensitive asset or liability is one that,
within a defined time period, either matures or experiences an interest rate
change in line with general market rates. The interest rate sensitivity gap is
the difference between interest-earning assets and interest-bearing liabilities
scheduled to mature or re-price within such time period. A gap is considered
positive when the amount of interest rate sensitive assets exceeds the amount of
interest rate sensitive liabilities. A gap is considered negative when the
amount of interest rate sensitive liabilities exceeds the interest rate
sensitive assets. During a period of rising interest rates, a negative gap would
tend to adversely affect net interest income, while a positive gap would tend to
result in an increase in net interest income. During a period of declining
interest rates, a negative gap would tend to result in an increase in net
interest income, while a positive gap would tend to adversely affect net
interest income. If re-pricing of assets and liabilities were equally flexible
and moved concurrently, the impact of any increase or decrease in interest rates
on net interest income would be minimal.

         CN Bancorp, Inc. currently has a negative gap over the short term,
which suggests that the net yield on interest bearing assets and liabilities may
decrease during periods of rising interest rates. However, a simple interest
rate "gap" analysis by itself may not be an accurate indicator of how net
interest income will be affected by changes in interest rates. Income associated
with interest-earning assets and costs associated with interest-bearing
liabilities may not be affected uniformly by changes in interest rates. In
addition, the magnitude and duration of changes in interest rates may have a
significant impact on net interest income. Although certain assets and
liabilities may have similar maturities or periods of re-pricing, they may react
in different degrees to changes in market interest rates. Interest rates on
certain types of assets and liabilities fluctuate in advance of changes in
general market interest rates, while interest rates on other types may lag
behind changes in general market rates. In the event of a change in interest
rate, prepayment and early withdrawal levels also could deviate significantly
from those assumed in calculating the interest-rate gap. The ability of many
borrowers to service their debts also may decrease in the event of an interest
rate increase.

         The table below presents CN Bancorp, Inc.'s interest rate sensitivity
at December 31, 2003. The table is based upon the earlier of the assets and
liabilities re-pricing date or their maturity date..

<TABLE>
<CAPTION>


                                                     RATE SENSITIVITY ANALYSIS

                                                        December 31, 2003
                                              ----------------------------------
                                   0-3           4-6         7-12         >1&<5
(in thousands)                    Months        Months       Months       Years      5 YRS +         Total
                                 -------       ------       ------       -----      -------         -----
Assets
<S>                              <C>                                                                <C>
Federal funds sold               $6,782       -            -            -           -               $6,782
Interest bearing deposits         1,929       -            -              934       -                2,863
Securities, at cost             -             -            -           23,015         2,698         25,713
Loans                            18,209        2,792        5,614      40,947         3,301         70,863
Bank-owned life insurance                      1,294                                                 1,294
                             -----------  ----------- ------------  ---------- -------------  -------------
Total                            26,920        4,086        5,614      64,896         5,999        107,515
                             -----------  ----------- ------------  ---------- -------------  -------------


                                       12
<PAGE>




                                                     RATE SENSITIVITY ANALYSIS

                                                       December 31, 2003
                                              ----------------------------------
(in thousands)                   0-3           4-6         7-12         >1&<5
Continued                       Months        Months       Months       Years      5 YRS +         Total
                               -------       ------       ------       -----      -------         -----
Liabilities
Savings/Money
     Market/NOW                  $39,665       -            -            -           -               39,665
Certificates of deposit            7,816        7,666        5,823       11,242
Repurchase agreements              1,453       -            -            -           -                1,453
                              -----------  ----------- ------------  ---------- -------------  -------------
Total                             48,934        7,666        5,823       11,242      -               73,665

                              -----------  ----------- ------------  ---------- -------------  -------------
GAP:
  Period                        $(22,014)      (3,580)        (209)      53,654       5,999         $33,850
                              ===========  =========== ============  ========== =============  =============
  Cumulative                                 $(25,594)     (25,803)      27,851      33,850
                                           =========== ============  ========== =============

</TABLE>

LIQUIDITY

         Liquidity represents CN Bancorp, Inc.'s ability to efficiently manage
cash flows to support the lending activities and the requirements of depositors.
Liquidity is essential to fund fluctuations in the balance sheet and provide
funds for growth. Liquidity needs may be met by converting assets into cash or
obtaining sources of additional funding.

         Liquidity, which generally is maintained in cash and amounts due from
banks and federal funds sold, totaled $10,945,679 at December 31, 2003 compared
to $16,122,469 at December 31, 2002. Additional sources of asset liquidity
include funds held in time deposits and cash flow from the investment and loan
portfolios. Liquidity needs may also be met by selling securities available for
sale, selling loans, raising additional capital or borrowing funds. At December
31, 2003, available for sale debt securities totaled $17,505,600 as compared to
$9,089,740 at December 31, 2002.

         Liability liquidity sources include attracting deposits at competitive
rates. In addition, CN Bancorp, Inc. has established a two million dollar line
of credit with a correspondent commercial bank as a reliable source for
short-term funds. Borrowing under this line would be collateralized by
securities in the investment portfolio. CN Bancorp, Inc. has never borrowed
funds under this facility.

         CN Bancorp, Inc. has sufficient liquidity to meet its loan commitments
as well as fluctuations in deposits. Maturing certificates of deposit are
usually retained as we offer competitive rates on certificates of deposit.
Management is not aware of any demands, trends, commitments, or events that
would result in CN Bancorp, Inc.'s inability to meet anticipated or unexpected
liquidity needs.

         CN Bancorp, Inc. is a single bank holding company with no current
business operations other than managing its investment in County National Bank
and holding cash. CN Bancorp, Inc. pays its expenses from cash received on stock
sales and from dividends, if any, from County National Bank. County National
Bank may only pay dividends to CN Bancorp, Inc. if it complies with certain
regulatory requirements.

CAPITAL ADEQUACY

         The Company and the Bank are required to maintain capital ratios in
accordance with guidelines adopted by the federal banking regulators. These
guidelines are commonly known as Risk Based Capital Guidelines. Under these
guidelines, banks are rated as "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized" based upon its capital levels. Banks that are classified as



                                       13
<PAGE>

"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized" are subject to increased regulatory oversight.

         Risk-based capital standards require a bank to have Tier 1 capital of
at least 4% and total capital (including Tier 1 capital) of at least 8% of
risk-weighted assets to be considered "adequately capitalized." The standards
require a bank to have Tier 1 capital of at least 6% and total capital
(including Tier 1 capital) of at least 10% of risk-weighted assets to be
considered "well capitalized." Tier 1 capital includes common stockholders'
equity, plus the net unrealized depreciation (or less the unrealized net
appreciation) on securities available for sale, net of tax, less intangible
assets.

         The table below presents the Company's and the Bank's risk-based
capital ratios and leverage ratio to the minimum regulatory requirements for the
indicated periods.

<TABLE>
<CAPTION>

                                                 RISK-BASED CAPITAL RATIOS
                                                                                 Minimum Ratios
                                                                   -------------------------------------------
                                December 31,       December 31,      To be "Adequately         To be "Well
                                    2003               2002             Capitalized"          Capitalized"
                             ------------------- ----------------- -----------------------  ------------------

         Total capital:
<S>                                <C>                <C>                   <C>
           Company                 19.6%              13.9%                 8.0%
           Bank                    14.6%              13.9%                 8.0%                 10.0%
         Tier I
           Company                 18.6%              12.8%                 4.0%
           Bank                    13.6%              12.8%                 4.0%                  6.0%
         Leverage Total
           Company                 12.3%               8.5%                 4.0%
           Bank                     8.9%               8.4%                 4.0%                  5.0%

</TABLE>


         At December 31, 2003 and 2002, CN Bancorp, Inc. exceeded the capital
requirements necessary to be considered a "well capitalized" financial
institution under federal regulations.

EFFECTS OF INFLATION

         CN Bancorp, Inc.'s asset and liability structure is primarily monetary
in nature. As such, asset and liability values tend to move in concert with
inflation. Changes in interest rates may have a more significant impact on
financial performance than the effects of the general levels of inflation.
Interest rates do not necessarily move in the same direction or at the same
magnitude as prices of other goods and services, and may frequently reflect
government policy initiatives or economic factors not measured by price index.
As previously discussed, CN Bancorp, Inc. strives to manage its interest
sensitive assets and liabilities in order to offset the effects of rate changes
and inflation.


OFF-BALANCE SHEET ARRANGEMENTS

         Standby letters of credit are conditional commitments issued by County
National Bank to guarantee the performance of a customer to a third party. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. County National Bank
holds collateral supporting those commitments for which collateral is deemed
necessary. County National Bank has not been required to perform on any
financial guarantees and has not incurred any losses on its commitments. The
issuance of letters of credit is not a significant activity of County National
Bank. Outstanding letters of credit at December 31, 2003 total $2,172,057
($1,998,657 at December 31, 2002).

         Commitments to extend credit are agreements to lend funds to customers
as long as there are no violations of any condition established in the loan
contracts. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the
commitments are expected to expire




                                       14
<PAGE>

without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained, if it is
deemed necessary by County National Bank upon extension of credit, is based on
management's credit evaluation of the customer. Collateral held varies but may
include accounts receivable, inventory, property, plant and equipment as well as
income producing properties. Commitments to extend credit total $9,156,931 at
December 31, 2003 ($8,280,085 at December 31, 2002). We believe that we have
adequate resources to fund all loan commitments.

         County National Bank has entered into leases for its branches and
office space, most of which contain renewal options. The minimum net
noncancelable future rental commitments at December 31, 2003 were as follows:

                            Year Ending
                           December 31,
                           ------------
                               2004                    $221,442
                               2005                     227,520
                               2006                     141,900
                               2007                      70,800
                               2008                      25,000


FINANCIAL STATEMENTS

The audited financial statements for CN Bancorp, Inc. for the years ended
December 31, 2003 and 2002 follow.




















                                       15
<PAGE>

Letterhead



                          INDEPENDENT AUDITOR'S REPORT


To the Stockholders and Board of Directors
CN Bancorp, Inc.
Glen Burnie, Maryland

         We have audited the accompanying  consolidated  statements of financial
condition of CN Bancorp, Inc. and Subsidiary,  as of December 31, 2003 and 2002,
and the related  statements of operations,  stockholders'  equity and cash flows
for the years  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made be  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects,  the financial position of CN Bancorp,
Inc.  and  Subsidiary,  as of December  31,  2003 and 2002 and the  consolidated
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.




                                                  /s/ Beard Miller Company LLP


February 6, 2004
Baltimore, Maryland






                                       16
<PAGE>


<TABLE>
<CAPTION>

                                          CN BANCORP, INC. AND SUBSIDIARY
                                  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                            December 31, 2003 and 2002



                                                                                          2003                    2002
                                                                                    -----------------       -----------------
                                      ASSETS

<S>                                                                                       <C>                      <C>
Cash and due from banks                                                                 $  4,163,586               3,334,970
Federal funds sold                                                                         6,782,093              12,787,499
Interest bearing deposits                                                                  2,862,991               1,925,878
Investment securities - available for sale (Note 2)                                       17,505,600               9,089,740
Investment securities - held to maturity (Note 2)                                          8,208,601               7,531,558
Other securities (Note 2)                                                                    641,500                 496,200
Loans receivable, net of allowance for loan losses (Note 3)                               70,158,853              63,367,973
Accrued interest receivable on loans and securities                                          459,700                 379,795
Property, equipment and leasehold improvements, net (Note 4)                               4,052,534               3,364,777
Deferred income taxes (Note 10)                                                              112,489                  94,267
Cash surrender value of life insurance policies                                            1,293,665               1,236,561
Prepaid expenses and other assets                                                            196,693                 434,591
                                                                                    -----------------       -----------------

             Total Assets                                                               $116,438,305             104,043,809
                                                                                    =================       =================

                                   LIABILITIES

Deposits (Note 5)                                                                       $ 99,309,796              92,960,738
Securities sold under agreements to repurchase (Note 6)                                    1,452,972                 987,510
Note payable (Note 6)                                                                      -                         250,000
Official checks                                                                            1,210,862                 609,102
Accounts payable and accrued expenses                                                        290,311                 215,435
Dividends payable                                                                             37,942                  25,800
                                                                                    -----------------       -----------------
             Total Liabilities                                                           102,301,883              95,048,585
                                                                                    -----------------       -----------------

Commitments (Note 8)

                       STOCKHOLDERS' EQUITY (Notes 7 and 9)
  Preferred stock - $.01 par value; authorized 5,000,000 shares.
     Issued and outstanding: none at December 31, 2003 and 2002                            -                       -
  Common stock - $10 par value; authorized 5,000,000 shares.
     Issued and outstanding: 1,264,745 shares at December 31,
     2003 and 860,000 at December 31, 2002                                                12,647,450               8,600,000
  Additional paid in capital                                                                 705,730                (99,521)
  Retained earnings                                                                          781,891                 441,150
  Accumulated other comprehensive income:
        Unrealized gains on securities available for sale                                      1,351                  53,595
                                                                                    -----------------       -----------------

             Total Stockholders' Equity                                                   14,136,422               8,995,224
                                                                                    -----------------       -----------------

  Total Liabilities and Stockholders' Equity                                            $116,438,305             104,043,809
                                                                                    =================       =================


The Notes to Consolidated  Financial Statements are an integral part of these
statements.



</TABLE>



                                       17
<PAGE>
<TABLE>
<CAPTION>

                                          CN BANCORP, INC. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                  For the years ended December 31, 2003 and 2002



                                                                                   2003                    2002
                                                                             ------------------      ------------------
Interest income:
<S>                                                                                 <C>                      <C>
   Interest and fees on loans                                                       $4,110,264               4,269,172
   Federal funds sold                                                                  119,946                 156,978
   Interest bearing deposits                                                            34,545                  42,860
   Securities                                                                          698,604                 721,098
                                                                             ------------------      ------------------
                                                                                     4,963,359               5,190,108
                                                                             ------------------      ------------------
Interest expense:
   Certificates of deposit of  $100,000 or more                                        289,230                 364,900
   Other deposits                                                                      941,667               1,288,775
   Repurchase agreements                                                                20,222                  33,835
   Note payable                                                                          2,563                     156
                                                                             ------------------      ------------------
                                                                                     1,253,682               1,687,666
                                                                             ------------------      ------------------

             Net interest income                                                     3,709,677               3,502,442

Provision for loan losses (Note 3)                                                     134,529                 124,594
                                                                             ------------------      ------------------
            Net interest income after provision for loan losses                      3,575,148               3,377,848
                                                                             ------------------      ------------------

Other income:
    Fees and service charges from depository accounts                                  729,830                 655,582
    Other income                                                                        62,921                  82,758
    Increase in cash surrender value of life insurance policies                         57,104                  36,561
    Gain on sale of securities                                                          43,652                  53,669
                                                                             ------------------      ------------------
                                                                                       893,507                 828,570
                                                                             ------------------      ------------------

Operating expenses:
   Compensation and related expenses                                                 1,964,188               1,768,093
   Occupancy expense                                                                   312,143                 287,837
   Depreciation and amortization                                                       343,496                 333,656
   Consulting expense                                                                   87,515                  81,738
   Data processes expense                                                              167,646                 176,354
   Director fees                                                                        77,550                  74,750
   Marketing expense                                                                    92,433                  66,813
   Equipment maintenance costs                                                          97,646                  79,799
   Stationery and office supplies                                                       83,314                  82,884
   Other operating expenses                                                            555,754                 510,844
   Failed acquisition/merger costs (Note 14)                                         -                         178,111
                                                                             ------------------      ------------------
                                                                                     3,781,685               3,640,879
                                                                             ------------------      ------------------
             Income before income taxes                                                686,970                 565,539
Income tax expense (Note 10)                                                           221,542                 171,004
                                                                             ------------------      ------------------
             NET INCOME                                                             $  465,428                 394,535
                                                                             ==================      ==================

Basic earnings per share                                                                  $.48                    $.46
                                                                             ==================      ==================
Diluted earnings per share                                                                $.38                    $.35
                                                                             ==================      ==================



The Notes to Consolidated  Financial Statements are an integral part of these
statements.


</TABLE>



                                       18
<PAGE>
<TABLE>
<CAPTION>


                                          CN BANCORP, INC. AND SUBSIDIARY
                                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                  For the years ended December 31, 2003 and 2002


                                                                                                  Accumulated
                                                              Additional                             Other
                                              Common            Paid in        Retained          Comprehensive
                                               Stock            Capital        Earnings             Income              Total
                                           --------------     ------------    ------------     ------------------    -------------

<S>      <C> <C>                              <C>                <C>              <C>                      <C>          <C>
December 31, 2001                             $8,600,000         (99,521)         175,615                  1,228        8,677,322

Comprehensive income:

   Net income in 2002                                                             394,535                                 394,535

   Change in unrealized gains and
    losses on securities available for
    sale, net of taxes of $41,157                                                                         85,465           85,465

  Reclassification adjustment for gains
    included in net income, net of
    tax of $14,320                                                                                      (33,098)         (33,098)
                                                                                                                     -------------

   Total comprehensive income                                                                                             446,902

Dividends ($.15 per share)                                                      (129,000)                               (129,000)
                                           --------------     ------------    ------------     ------------------    -------------

December 31, 2002                             $8,600,000         (99,521)         441,150                 53,595        8,995,224

Comprehensive income:

   Net income in 2003                                                             465,428                                 465,428

   Change in unrealized gains and
    losses on securities available for
    sale, net of taxes of $2,130                                                                         (4,134)          (4,134)

  Reclassification adjustment for gains
    included in net income, net of
    tax of $24,784                                                                                      (48,110)         (48,110)
                                                                                                                     -------------

   Total comprehensive income                                                                                             413,184

Proceeds from sale of common stock,
    net of offering costs of $350,025          1,383,150          272,391                                               1,655,541

Proceeds from warrant exercises                2,664,300          532,860                                               3,197,160

Dividends ($.12 per share)                                                      (124,687)                               (124,687)
                                           --------------     ------------    ------------     ------------------    -------------

December 31, 2003                            $12,647,450          705,730         781,891                  1,351       14,136,422
                                           ==============     ============    ============     ==================    =============

</TABLE>



The Notes to Consolidated  Financial Statements are an integral part of these
statements.



                                       19
<PAGE>

<TABLE>
<CAPTION>


                                          CN BANCORP, INC. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  For the years ended December 31, 2003 and 2002

                                                                               2003                    2002
                                                                         ------------------     --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                               <C>                       <C>
Net income                                                                        $465,428                  394,535
Adjustments to reconcile net income to net cash
   provided by operations:
   Depreciation and amortization of property,
      equipment and leasehold improvements                                         343,496                  333,656
   Gain on sale of securities                                                     (43,652)                 (53,669)
   Decrease (increase) in accrued interest receivable                             (79,905)                   23,326
   Deferred income taxes                                                             8,692                    7,366
   Provision for loan losses                                                       134,529                  124,594
   Increase in cash surrender value of life insurance policies                    (57,104)                 (36,561)
   Decrease (increase) in other assets                                             237,898                 (36,023)
   Increase in other liabilities                                                    74,876                   34,471
   Increase (decrease) in official checks                                          601,760                (192,397)
   Amortization of premium/discount on investments and other                        41,849                    5,459
                                                                         ------------------     --------------------
Net cash provided  by operating activities                                       1,727,867                  604,757
                                                                         ------------------     --------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans                                                          (6,925,409)              (4,413,020)
Reduction (increase) in interest bearing deposits                                (937,113)                  989,857
Investment in securities - available for sale                                 (24,960,718)             (24,510,557)
Investment in securities - held to maturity                                    (5,045,000)              (6,536,206)
Investment in other securities                                                   (145,300)                        -
Principal payments and redemption of securities                                 11,807,704               22,501,199
Proceeds from sales of securities - available for sale                           9,027,756                4,053,669
Investment in life insurance policies                                                    -              (1,200,000)
Purchase of property, equipment and leasehold
  Improvements                                                                 (1,031,253)                (169,677)

                                                                         ------------------     --------------------
Net cash used by investing activities                                         (18,209,333)              (9,284,735)
                                                                         ------------------     --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits including interest credited                             6,349,058               15,923,456
Net increase (decrease) in securities sold under agreements
  to repurchase                                                                    465,462                (389,570)
Proceeds (repayment) of note payable                                             (250,000)                  250,000
Sales of common stock, net of costs                                              1,655,541                        -
Proceeds from warrant exercises                                                  3,197,160                        -
Dividends paid                                                                   (112,545)                (103,200)

                                                                         ------------------     --------------------
Net cash provided by financing activities                                       11,304,676               15,680,686
                                                                         ------------------     --------------------



The Notes to Consolidated  Financial Statements are an integral part of these
statements.


</TABLE>


                                       20
<PAGE>


<TABLE>
<CAPTION>



                                          CN BANCORP, INC. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  For the years ended December 31, 2003 and 2002
                                                    (Continued)



                                                                               2003                    2002
                                                                         ------------------     --------------------
<S>                                                                           <C>                         <C>
Net increase (decrease) in cash                                                $(5,176,790)               7,000,708
Cash at beginning of period                                                     16,122,469                9,121,761

                                                                         ------------------     --------------------
Cash at end of period                                                          $10,945,679               16,122,469
                                                                         ==================     ====================


Cash and cash equivalents consist of:
     Cash and due from banks                                                    $4,163,586                3,334,970
     Federal funds sold                                                          6,782,093               12,787,499
                                                                         ------------------     --------------------
                                                                               $10,945,679               16,122,469
                                                                         ==================     ====================


SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid on deposits and repurchase agreements                             $1,280,444                1,683,084
                                                                         ==================     ====================

Income taxes paid                                                                 $217,883                  168,000
                                                                         ==================     ====================

</TABLE>


The Notes to Consolidated  Financial Statements are an integral part of these
statements.



                                       21

                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  The Company and its Significant Accounting Policies

         CN Bancorp, Inc. (the Company) was incorporated in January, 1996 under
         the laws of the State of Maryland to serve as a bank holding company
         and formed County National Bank (the Bank) as a wholly owned
         subsidiary. The Company is registered as a bank holding company and the
         Bank is chartered as a national bank. The Bank opened on December 19,
         1996. The Company (as a bank holding company) and the Bank (as a
         nationally chartered bank) are subject to government supervision,
         regulations and control.

         The Bank's primary business activity is the solicitation and acceptance
         of deposits from within its market area and the use of such funds in
         loans and investments. The Bank is subject to competition from other
         financial institutions and financial service companies.

         Principles of Consolidation
         ---------------------------

         The consolidated financial statements include the accounts of the
         Company and its wholly owned subsidiary, County National Bank. All
         inter-company accounts and transactions have been eliminated in
         consolidation.

         Basis of Financial Statement Presentation
         -----------------------------------------

         The financial statements have been prepared in conformity with
         accounting principles generally accepted in the United States of
         America. The preparation of the financial statements requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosures of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenue and expenses during the reporting period.
         Actual results could differ significantly from those estimates.
         Material estimates that are particularly susceptible to significant
         change in the near-term relate to the determination of the allowance
         for loan losses. See below for a discussion of the determination of
         that estimate.

         Securities Available for Sale
         -----------------------------

         Available-for-sale securities consist of bonds and notes not classified
         as trading securities or as held-to-maturity securities. These
         securities are reported at their fair value with the unrealized holding
         gains and losses, net of tax, reported as a net amount in a separate
         component of stockholders' equity until realized. Gains and losses on
         the sale of available-for-sale securities are determined using the
         specific identification method. Premiums and discounts are recognized
         in interest income using the interest method over the period to
         maturity.

         Declines in the fair value of individual held-to-maturity and
         available-for-sale securities below their cost that are other than
         temporary would result in write-downs of the individual securities to
         their fair value. The related write-downs would be included in earnings
         as realized losses.

         Securities Held to Maturity
         ---------------------------

         Securities for which the Company has the positive intent and ability to
         hold to maturity are reported at cost, adjusted for premiums and
         discounts that are recognized in interest income using the interest
         method over the period to maturity. A charge to operations would occur
         if the fair value of the securities declines below cost and the
         Company's intention or ability to hold the securities to maturity
         changes.

         Other Securities
         ----------------

         As a member of the Federal Reserve Bank of Richmond (Federal Reserve)
         and the Federal Home Loan Bank of Atlanta (FHLB), the Company is
         required to acquire and hold stock in these entities. Ownership of
         stock in these entities is restricted to members and can only be sold
         to and acquired from the respective entities at par. The Company also
         owns stock in Atlantic Central Bankers Bank (ACBB) and Maryland
         Financial Bank (in organization) (MFB), banks that generally offers
         product and services only to other banks. Ownership of the ACBB shares
         is




                                       22

<PAGE>



                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  The Company and its Significant Accounting Policies - Continued

         restricted to banks, and there is no active market for the ACBB shares.
         As there is no readily determinable fair value for these securities,
         they are carried at cost.

         Loans and Allowance for Loan Losses
         -----------------------------------

         Loans receivable that management has the intent and ability to hold for
         the foreseeable future or until maturity or pay-off are reported at
         their outstanding principal balance adjusted for any charge-offs, the
         allowance for loan losses and any unamortized deferred fees, costs,
         premiums and discounts. Loan origination fees and certain direct
         origination costs are capitalized and recognized as an adjustment of
         the yield of the related loan.

         The accrual of interest on loans is discontinued when, in management's
         opinion, the full collection of principal or interest is in doubt, or a
         scheduled loan payment has become over ninety days past due, unless the
         obligation is well secured and in the process of collection. When a
         payment is received on a loan on non-accrual status, the amount
         received is allocated to principal and interest in accordance with the
         contractual terms of the loan.

         The Company determines and recognizes impairment of loans in accordance
         with the provisions of Statement of Financial Accounting Standards No.
         114, Accounting for Creditors for Impairment of a Loan as amended by
         Statement 118, Accounting for Creditors for Impairment of a Loan -
         Income Recognition and Disclosures. A loan is determined to be impaired
         when, based on current information and events, it is probable that the
         Company will be unable to collect all amounts due according to the
         contractual terms of the loan agreement. A loan is not considered
         impaired during the period of delay in payment if the Company expects
         to collect all amounts due, including past-due interest. An impaired
         loan is measured at the present value of its expected future cash flows
         discounted at the loan's effective interest rate or at the loan's
         observable market price or the fair value of the collateral if the loan
         is collateral dependent. Statement No. 114 is generally applicable to
         all loans except large groups or smaller- balance homogeneous loans
         that are evaluated collectively for impairment. Interest payments
         received are recognized as interest income or, if ultimate
         collectibility of principal is in doubt, are applied to principal.

         The allowance for loan losses is increased by charges to income and
         decreased by charge-offs (net of recoveries). Management's periodic
         determination and evaluation of the adequacy of the allowance assesses
         various factors including inherent losses in all significant loans;
         known deterioration in concentrations of credit, certain classes of
         loans or collateral; historical loss experiences; results of
         independent reviews of loan quality and the allowance for loan losses;
         trends in portfolio quality, maturity and composition; volumes and
         trends in delinquencies and non-accrual loans, risk management policies
         and practices; lending policies and procedures; economic conditions and
         downturns in specific local industries; and the experience and quality
         of lending management and staff. Estimated losses in the portfolio are
         determined by applying loss ratios to loan categories, other than
         impaired loans and loans considered substandard or doubtful, which are
         evaluated separately, to determine loss estimates. Loss ratios are
         determined using peer group loss ratios as adjusted based upon factors
         determined relevant by management, including economic conditions and
         the nature of the Company's business. CN Bancorp, Inc. uses peer group
         ratios because its loan portfolio has not been tested during all
         economic business cycles.

         The determination of the allowance for loan losses involves the use of
         various subjective estimates by management and may result in over or
         under estimations of the amount of inherent losses in the loan
         portfolio. To review the adequacy of the allowance, on a least a
         quarterly basis, management analyzes the loan portfolio through risk
         ratings. Each loan, other than impaired loans and loans considered
         substandard or doubtful, which are evaluated separately, is assigned a
         risk rating and estimated "low" and "high" loss percentages are applied
         to the loans in each rating. Management determines the loss percentages
         based upon its best estimates as the Company has operated for a
         relatively short period of time. The allowance for loan losses is
         compared to this "low" and "high" range to ascertain that it is
         situated within the range. The allowance is also compared on at least a
         quarterly basis to peer group levels. Management believes that the
         recorded allowance for loan losses is appropriate.



                                       23
<PAGE>




                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  The Company and its Significant Accounting Policies - Continued

         Property, Equipment and Leasehold Improvements
         -----------------------------------------------

         Property, equipment and leasehold improvements are stated at cost less
         accumulated depreciation and amortization. Depreciation is charged to
         operations over the estimated useful lives of the assets using the
         straight-line method. Leasehold improvements are amortized to
         operations over the shorter of the lease term (including renewal
         options) or the life of the improvement.

         Bank Owned Life Insurance
         -------------------------

         The Bank invests in bank owned life insurance (BOLI) as a source of
         funding for employee benefit expenses. BOLI involves the purchase of
         life insurance by the Bank on a select group of officers. The Bank is
         the owner and beneficiary of the policies. This life insurance is
         carried at the cash surrender value of the underlying policies. Income
         from the increase in the cash surrender value of the policies is
         included in other income.

         Securities Sold under Agreements to Repurchase
         ----------------------------------------------

         Securities sold under agreements to repurchase are accounted for as
         borrowings and recorded as a liability at the amount of the repurchase
         obligation. These transactions mature the next business day. The
         Company's repurchase obligations are secured by Company owned
         securities with market values exceeding the obligations. These
         securities are segregated from other, non-pledged securities.

         Income Taxes
         ------------

         Deferred income taxes are recognized for temporary differences between
         the financial reporting basis and the income tax basis of assets and
         liabilities based on enacted tax rates expected to be in effect when
         such amounts are realized or settled. Deferred tax assets are
         recognized only to the extent that it is more likely than not that such
         amounts will be realized based on consideration of available evidence.
         The effect on deferred tax assets and liabilities of a change in tax
         rates is recognized in income in the period that includes the enactment
         date.

         Advertising Costs
         -----------------

         The Company expenses advertising costs as incurred.

         Earnings Per Share
         ------------------

         Basic EPS is computed based upon income available to common
         shareholders and the weighted average number of common shares
         outstanding for the period. Diluted EPS reflects the potential dilution
         that could occur if securities or other contracts to issue common stock
         were exercised or converted into common stock or resulted in the
         issuance of common stock that would share in the earnings of the
         Company. The determination of the amount of common stock equivalents
         arising from the warrants issued by the Company requires the use of the
         average market price of the common shares during the year. The
         Company's common shares are traded on the over-the -counter ("Pink
         Sheets") market. The volume of trading activity is light; therefore,
         management used the average closing prices for days in which trades
         occurred during the year ended December 31, 2003 of $15.20 per share to
         determine dilutive shares at December 31, 2003. The December 31, 2002
         value of $14.50 was derived from a 2002 valuation report and other
         factors.

         The weighted average number of common shares outstanding during 2003
         and 2002 was 961,686 and 860,000 shares, respectively. Dilutive
         securities, comprised of warrants, contributed 277,135 and 254,858
         shares in the determination of diluted earnings per share for the years
         ended December 31, 2003 and 2002, respectively.





                                       24
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  The Company and its Significant Accounting Policies - Continued

         Statement of Cash Flows
         -----------------------

         Cash and cash equivalents in the statement of cash flows include cash
         on hand, non-interest bearing amounts due from correspondent banks and
         the Federal Reserve and Federal funds sold.

         Reclassification
         ----------------

         Certain prior year's amounts have been reclassified to conform to the
current year's method of presentation.


Note 2.  Investment Securities

         Investment securities are summarized as follows:

<TABLE>
<CAPTION>


        AVAILABLE-FOR- SALE SECURITIES
        ------------------------------
                                                                       Gross                 Gross            Estimated
                                               Amortized             Unrealized           Unrealized             Fair
                                                  Cost                 Gains                Losses              Value
                                            -----------------     -----------------     ----------------    ---------------
        December 31, 2003:
<S>                                               <C>                        <C>                  <C>            <C>
          Mortgage-backed securities              $2,518,705                 3,012                8,342          2,513,375
          U.S. Government agency
            Notes                                 14,984,848                39,923               32,546         14,992,225
                                            -----------------     -----------------     ----------------    ---------------
                                                 $17,503,553                42,935               40,888         17,505,600
                                            =================     =================     ================    ===============
        December 31, 2002:
          Mortgage-backed securities              $1,027,700                     -                1,356          1,026,344
          U.S. Government agency
            Notes                                  7,980,835                82,561                    -          8,063,396
                                            -----------------     -----------------     ----------------    ---------------
                                                  $9,008,535                82,561                1,356          9,089,740
                                            =================     =================     ================    ===============

        HELD-TO-MATURITY SECURITIES
        ---------------------------
        December 31, 2003:
          Mortgage-backed securities              $2,688,248                     -               24,688          2,663,560
          U.S. Government agency
             Notes                                 5,520,353                94,942                    -          5,615,295
                                            -----------------     -----------------     ----------------    ---------------
                                                  $8,208,601                94,942               24,688          8,278,855
                                            =================     =================     ================    ===============

        December 31, 2002:
          U.S. Government agency
             Notes                                $7,531,558               151,454                    -          7,683,012
                                            =================     =================     ================    ===============
</TABLE>

         During 2003 the Company sold available for sale securities with a cost
         of $8,984,104 for $9,027,756 realizing gross gains on the sales of
         $43,652. During 2002 the Company sold available for sale securities
         with a cost of $4,000,000 for $4,053,669 realizing gross gains on the
         sales of $53,669.

         Securities with a carrying value of $1,455,109 (cost of $1,455,538 and
         fair value of $1,456,031) are pledged to customers under repurchase
         agreements at December 31, 2003. Securities with a carry value of
         $251,063 (cost of $251,063 and fair value of $255,825) are pledged to a
         local municipality as partial security for performance letters of
         credit issued for the benefit of the municipality.




                                       25
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2.  Investment Securities - Continued

         The stated maturity of securities available-for-sale and
held-to-maturity are as follows at December 31, 2003:

<TABLE>
<CAPTION>


                                                      Available-for-Sale                     Held-to-Maturity
                                              -----------------------------------    ---------------------------------
                                                 Amortized             Fair            Amortized             Fair
                                                   Cost               Value              Cost               Value
                                              ----------------    ---------------    --------------     ---------------
        <S>                                      <C>              <C>                  <C>              <C>
        Matures within 1 year                         $     -                  -                 -                   -
        Matures after 1 through 5 years            14,984,848         14,992,225         5,520,353           5,615,295
                                              ----------------    ---------------    --------------     ---------------
                                                   14,984,848         14,992,225         5,520,353           5,615,295
        Mortgage-backed securities                  2,518,705          2,513,375         2,688,248           2,663,560
                                              ================    ===============    ==============     ===============
                                                  $17,503,553         17,505,600         8,208,601           8,278,855
                                              ================    ===============    ==============     ===============





         Below is a schedule of securities with unrealized losses at December
         31, 2003. There are no continuous unrealized losses existing for
         greater than twelve months on any security at December 31, 2003.
         Unrealized losses (and unrealized gains) are the result of interest
         rate levels differing from those existing at the time of securities'
         acquisitions and, as to mortgage backed securities, actual and
         estimated prepayment speeds. These unrealized losses are considered
         temporary as they reflect market values on December 31, 2003 and are
         subject to change daily as interest rates fluctuate.

                                                           Continuous Unrealized Losses
                                                              for Less than 12 Months
                                                          --------------------------------
                                                                              Unrealized
                                                         Fair Value              Losses

      Mortgage-backed securities (5 securities)            $4,216,907                33,030
      U.S. Government agency Notes (5 securities)           4,939,393                32,546
                                                       ---------------       ---------------
                                                           $9,156,300                65,576
                                                       ===============       ===============

</TABLE>


         Other Securities
         ----------------

         As a requirement for membership in the Federal Reserve and the FHLB,
         the Company is required to acquire and hold stock in these entities.
         The amount of stock that the Company is required to own is determined
         by separate formulas used by each entity. The Company also voluntarily
         acquired stock in ACBB and MFB. The Company records the Federal
         Reserve, FHLB, ACBB and MFB shares at cost. Investment in the shares of
         these entities is as follows:

                                                       December 31,
                                                -----------------------------
                                                   2003              2002
                                                ------------      -----------

      Federal Reserve Bank of
          Richmond Stock                           $282,000          252,000
      Federal Home Loan Bank
         of Atlanta stock                           184,500          169,200
      Atlantic Central Bankers
         Bank stock                                  75,000           75,000
     Maryland Financial Bank
          Stock (in organization)                   100,000                -
                                                ------------      -----------
                                                   $641,500          496,200
                                                ============      ===========




                                       26
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 3.  Loans and Allowance for Loan Losses

         The Bank grants commercial and consumer loans to customers primarily in
         its market area of Anne Arundel County in Maryland. The principal
         categories of the loan portfolio are as follows:

<TABLE>
<CAPTION>


                                                                                 December 31,
                                                                    -------------------------------------
                                                                         2003                  2002
                                                                    ---------------       ---------------
<S>                                                                    <C>                    <C>
              Commercial loans                                         $18,953,973            16,468,693
              Consumer loans                                             4,196,873             4,816,728

              Real Estate loans:
                   Commercial real estate                               24,070,527            23,588,497
                   Residential real estate                              23,641,290            19,214,198
                                                                    ---------------       ---------------
                                                                        47,711,817            42,802,695
                                                                    ---------------       ---------------

                                                                        70,862,663            64,088,116
              Unearned income and deferred costs, net                       16,190                24,857
              Allowance for loan losses                                  (720,000)             (745,000)
                                                                    ---------------       ---------------
                                                                       $70,158,853            63,367,973
                                                                    ===============       ===============


         The allowance for loan losses activity for the years ended December 31,
2003 and 2002 is as follows:


                                                                             December 31,
                                                                    -------------------------------------
                                                                       2003                  2002
                                                                -------------------    ------------------
              Balance at beginning of period                              $745,000               781,000

              Provision for loan losses                                    134,529               124,594

              Less: Commercial loans charged off                           167,514               160,594
                        Consumer loans charged off                          26,261                     -
                                                                -------------------    ------------------
                                                                           193,775               160,594
                                                                -------------------    ------------------

              Recoveries: Commercial loans                                  27,000                     -
                                  Consumer loans                             7,246                     -
                                                                -------------------    ------------------
                                                                            34,246                     -
                                                                -------------------    ------------------
              Balance at end of period                                    $720,000               745,000
                                                                ===================    ==================

</TABLE>


         At December 31, 2003, the Bank has five loans on non-interest accrual
         status which are in process of collection with carrying values totaling
         $110,931: (1) an impaired secured commercial loan in the amount of
         $50,000 ($190,579 balance at December 31, 2002) which is in process of
         collection; (2) a secured residential real estate loan in the amount of
         $50,027; and (3) three consumer loans totaling $10,904. The amount of
         the specific allowance for loan loss on the impaired loan with a
         recorded balance of $50,000 is $16,000 at December 31, 2003 (none at
         December 31, 2002). Unrecognized interest on the non-interest accrual
         loans at December 31, 2003 is $5,981 ($38,805 on non-interest accrual
         loans outstanding at December 31, 2002). The Bank is not committed to
         lend funds to debtors whose loans are on non-interest accrual status or
         are considered impaired.

         At December 31, 2003 and 2002, the balance of commercial and real
         estate loans serviced by the Company for others under loan
         participation agreements was $1,155,075 and $194,041, respectively.



                                       27
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 3.  Loans and Allowance for Loan Losses - Continued

         Certain officers and directors (and companies in which they have a 10%
         or more beneficial ownership) have loans with the Bank. The activity of
         these loans during 2003 and 2002 is as follows:
<TABLE>
<CAPTION>

                                                                       2003                  2002
                                                                -------------------    ------------------
<S>                                                                     <C>                    <C>
                  Total loans at beginning of year                      $3,172,756             4,400,841
                  New loans and funding during the year                    948,308               730,770
                  Repayments during the year                             (989,628)           (1,958,855)
                                                                -------------------    ------------------
                  Total loans at end of year                            $3,131,436             3,172,756
                                                                ===================    ==================


Note 4.  Property, Equipment and Leasehold Improvements

         Property, equipment and leasehold improvements are as follows at
December 31:

                                                     Useful
                                                     Lives                     2003                  2002
                                              --------------------- ---- -----------------     ------------------
               Land                              Not applicable                  $387,768                387,768
               Building                             40 years                      521,877                521,877
               Leasehold improvements            15 to 40 years                 1,751,390              1,731,990
               Furniture and equipment           3 to 15 years                  1,948,343              1,823,713
               Construction in process           Not applicable                   898,457                 94,074
                                                                         -----------------     ------------------
                                                                                5,507,835              4,559,422
               Accumulated depreciation
                   and amortization                                             1,455,301              1,194,645
                                                                         -----------------     ------------------
               Net                                                             $4,052,534              3,364,777
                                                                         =================     ==================


         Construction in process includes the cost of building a new branch
facility that opened in January 2004. Construction contract costs of
approximately $55,000 remain unbilled at December 31, 2003.

Note 5.  Deposits

         Deposit balances are summarized below as of December 31:

                                                                 2003                     2002
                                                          -------------------      -------------------

               Non-interest bearing accounts                     $27,097,779               21,487,512
               NOW accounts                                        5,440,921                6,206,497
               Money market accounts                               6,342,389                6,545,077
               Savings accounts                                   27,881,516               22,725,033
               Time deposit accounts:
                   Less than $100,000                             19,860,041               23,547,684
                   $100,000 or more                               12,687,150               12,448,935
                                                          -------------------      -------------------
                                                                 $99,309,796               92,960,738
                                                          ===================      ===================

</TABLE>


         The time deposit accounts mature and/or re-price as follows: within one
         year - $21,294,069; one to two years - $3,570,404; two to three years -
         $1,167,822; three to four years - $4,958,030; four to five years -
         $1,556,866.




                                       28
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6.  Other Borrowed Funds

         The Bank enters into sales of securities under agreements to repurchase
         the same securities, which mature the next business day. Securities
         pledged as collateral for securities sold under agreements to
         repurchase include various debt securities having an aggregate carrying
         value of $1,455,109 and $978,794 at December 31, 2003 and 2002,
         respectively. The cost of and fair value of the securities were
         $1,455,538 and $1,456,031 at December 31, 2003 and $975,625 and
         $990,037 at December 31, 2002, respectively.

         Information concerning securities sold under agreements to repurchase
         at and during the year ended December 31, 2003 and 2002 is summarized
         as follows:
                                                   2003               2002
                                                -------              -----
Total outstanding at year-end                  $1,452,972           $987,510
Average balance during the year                $2,695,606         $2,824,978
Average interest rate during the year                .75%              1.20%
Maximum balance during the year                $3,711,135         $4,037,701




         The Company borrowed $250,000 in December 2002 under an unsecured note.
         The note bore interest at prime plus .25% (4.50% at December 31, 2002)
         and was paid in full in March 2003.

Note 7.  Capital Stock

         The Company sold warrants to purchase common stock to the Company's
         organizers. Under the warrants, 343,431 shares of common stock may be
         issued at the price of $10.00 per share. The warrants may be exercised
         on or after March 20, 1998 and they expire on March 20, 2006. Proceeds
         from the sale were $3,434. None of these warrants have been exercised
         through December 31, 2003.

         The Company provided each common shareholder of record on December 31,
         1998 a dividend consisting of a warrant to acquire additional common
         stock in the Company. The warrants were issued on January 4, 1999. Each
         share of stock owned entitled the shareholder to a warrant to acquire
         an additional share of common stock for the amount of $12.00 per share.
         The warrants to purchase a total of 860,000 shares of common stock
         became exercisable on January 5, 2000 and expired on January 5, 2004.
         No value was assigned to the warrants at their issuance since the value
         determined using the Black-Scholes option-pricing model was immaterial.
         During 2003, warrants for 266,430 shares of common stock were exercised
         providing $3,197,160 in additional capital. An additional 91,800
         warrants for common stock were exercised after December 31, 2003
         through January 5, 2004.

         The Company sold 138,315 shares of common stock at $14.50 per share
         during 2003 in an initial public offering increasing capital by
         $1,655,541, net of costs.

         The Company is authorized to issue 5,000,000 shares of $.01 par value
         preferred stock. No preferred stock has been offered or issued.

Note 8.  Commitments

         Commitments to extend credit are agreements to lend funds to customers
         as long as there are no violations of any condition established in the
         loan contracts. Commitments generally have fixed expiration dates or
         other termination clauses and may require payment of a fee. Since many
         of the commitments are expected to expire without being drawn upon, the
         total commitment amounts do not necessarily represent future cash
         requirements. The Bank evaluates each customer's credit worthiness on a
         case-by-case basis. The amount of collateral obtained, if it is deemed
         necessary by the Bank upon extension of credit, is based on
         management's credit evaluation of the customer. Collateral held varies
         but may include accounts receivable, inventory, property, plant and
         equipment as well as income producing properties.




                                       29
<PAGE>



                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8.  Commitments -Continued

         Standby letters of credit are conditional commitments issued by the
         Bank to guarantee the performance of a customer to a third party. The
         credit risk involved in issuing letters of credit is essentially the
         same as that involved in extending loan facilities to customers. The
         Bank holds collateral supporting those commitments for which collateral
         is deemed necessary. The Bank has not been required to perform on any
         financial guarantees and has not recorded or incurred any losses on its
         commitments.

         A summary of the Bank's commitments at December 31, 2003 follows:

          Commitments to extend credit               $9,156,931

          Standby letters of credit                  $2,172,057

         The Bank has entered into leases for its branches and office space,
         most of which contain renewal options. The minimum net noncancelable
         future rental commitments at December 31, 2003 are as follows:

                       Year Ending
                      December 31,

                          2004                     $221,442
                          2005                      227,520
                          2006                      141,900
                          2007                       70,800
                          2008                       25,000

         The related net rent expense was $162,005 and $149,554 in 2003 and
2002, respectively.

Note 9.  Regulatory Matters

         The Company and the Bank are subject to various regulatory capital
         requirements administered by the federal banking agencies. Failure to
         meet minimum capital requirements can initiate certain mandatory - and
         possibly additional discretionary - actions by regulators that, if
         undertaken, could have a direct material effect on the Company's
         financial statements. Under capital adequacy guidelines and the
         regulatory framework for prompt corrective action, the Company and the
         Bank must meet specific capital guidelines that involve quantitative
         measures of assets, liabilities and certain off-balance-sheet items as
         calculated under regulatory accounting practices. The Company's and the
         Bank's capital amounts and classification are also subject to
         qualitative judgments by the regulators about components, risk
         weightings and other factors.

         The Company and the Bank must maintain minimum capital and other
         requirements of regulatory authorities when declaring and paying
         dividends. The Company and the Bank have complied with such capital
         requirements.

         Quantitative measures established by regulation to ensure capital
         adequacy require the Company and the Bank to maintain minimum amounts
         and ratios (set forth in the table below) of total and Tier I capital
         (as defined in the regulation) to risk-weighted assets (as defined),
         and of Tier I capital to average assets (as defined). Management
         believes, as of December 31, 2003, that the Company and the Bank meet
         capital adequacy requirements to which they are subject.

         As of December 31, 2003, the most recent notification from the Office
         of the Comptroller of the Currency categorized the Bank as well
         capitalized under the regulatory framework for prompt corrective
         action. To be categorized as well capitalized the Bank must meet
         minimum total risk-based, Tier I risk-based and Tier I leverage ratios.
         There are no conditions or events since that notification that
         management believes have changed the Company's and the Bank's category.



                                       30
<PAGE>



                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

Note 9.  Regulatory Matters - Continued

         Actual capital amounts and ratios are presented in the table below:
                                                                                 To be                         To be
                                                                              "Adequately                      "Well
                                                   Actual                    Capitalized"                  Capitalized"
                                            --------------------- --    ------------------------     --------------------------
                                               Amount       Ratio          Amount         Ratio         Amount         Ratio
                                               ------       -----          ------         -----         ------         -----
December 31, 2003
Total Capital (to risk weighted assets):
<S>                                           <C>             <C>         <C>               <C>
    Company                                   $14,742,582     19.6%       $6,026,741   >    8.0%
                                                                                       -
    Bank                                       10,917,077     14.6%        6,003,123   >    8.0%       $7,503,904  >     10.0%
                                                                                       -                           -

Tier I Capital (to risk weighted assets):
    Company                                    14,022,582     18.6%        3,013,370   >    4.0%
                                                                                       -
    Bank                                       10,197,077     13.6%        3,001,561   >    4.0%        4,502,342  >      6.0%
                                                                                       -                           -

Tier I Capital (to average assets):
    Company                                    14,022,582     12.3%        4,572,202   >    4.0%
                                                                                       -
    Bank                                       10,197,077      8.9%        4,566,740   >    4.0%        5,708,425  >      5.0%
                                                                                       -                           -
December 31, 2002
Total Capital (to risk weighted assets):
    Company                                    $9,592,362     13.9%       $5,521,227   >    8.0%
                                                                                       -
    Bank                                        9,527,987     13.9%        5,499,165   >    8.0%       $6,873,956  >     10.0%
                                                                                       -                           -
Tier I Capital (to risk weighted assets):
    Company                                     8,847,362     12.8%        2,760,613   >    4.0%
                                                                                       -
    Bank                                        8,782,987     12.8%        2,749,582   >    4.0%        4,124,374  >      6.0%
                                                                                       -                           -
Tier I Capital (to average assets):
    Company                                     8,847,362      8.5%        4,180,333   >    4.0%
                                                                                       -
    Bank                                        8,782,987      8.4%        4,161,629   >    4.0%        5,202,036  >      5.0%
                                                                                       -                           -

Note 10. Income Taxes

         The income tax expense consists of the following for the years ended
December 31, 2003 and 2002:

                                                           2003                  2002
                                                     ------------------    ------------------
                    Current:
                         Federal                              $197,533               161,532
                         State                                  15,317                 2,106
                                                     ------------------    ------------------
                                                              $212,850               163,638
                                                     ------------------    ------------------

                    Deferred:
                         Federal                                $7,116                 6,031
                         State                                   1,576                 1,335
                                                     ------------------    ------------------
                                                                 8,692                 7,366
                                                     ------------------    ------------------
                                                              $221,542               171,004
                                                     ==================    ==================

</TABLE>



                                       31
<PAGE>



                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>



Note 10. Income Taxes - Continued

         The reasons for the differences between the statutory federal income
tax rates are summarized as follows:

                                                            2003                                 2002
                                                 ---------------------------           -------------------------
                                                  Amount             Rate             Amount              Rate
                                              ---------------    --------------    --------------     -------------

<S>                                                 <C>                  <C>             <C>                 <C>
         Tax at statutory rates                     $233,569             34.0%           192,284             34.0%
         State income taxes net of
            federal tax benefit                       11,149              1.6%             2,673               .5%
         Increase in cash surrender
            value of life insurance                 (19,415)            (2.8)%          (12,430)            (2.2)%
         Other                                       (3,761)             (.6)%          (11,523)            (2.1)%
                                              ---------------    --------------    --------------     -------------
                                                    $221,542             32.2%           171,004             30.2%
                                              ===============    ==============    ==============     =============

         The deferred income tax account is comprised of the following at
December 31, 2003 and 2002:

                                                                    2003                   2002
                                                            ---------------------    ------------------

          Deferred tax assets:
               Allowance for loan losses                                $258,018               269,998
               Deferred compensation plan                                 28,367                 9,184
               Other                                                      14,024                10,864
                                                            ---------------------    ------------------
                                                                         300,409               290,046
                                                            ---------------------    ------------------
          Deferred tax liabilities:
               Accumulated depreciation                                 $187,224               168,169
               Unrealized gains on securities, net                           696                27,610
                                                            ---------------------    ------------------
                                                                         187,920               195,779
                                                            ---------------------    ------------------
                       Net deferred tax assets                          $112,489                94,267
                                                            =====================    ==================

</TABLE>



         Federal and state income taxes payable of $13,960 ($8,311 Federal and
         $5,649 state) in 2003 ($17,454 of Federal taxes in 2002) is included in
         accounts payable and accrued expenses. There are no state income taxes
         payable at December 31, 2002.

Note 11.  Related Party Transactions

         The Bank leases two properties from entities controlled by a director
         and stockholder of the Company. One property is used for the Bank's
         operations offices and a branch facility. The lease expires in May 2006
         but is renewable at the option of the Bank for two additional five-year
         periods. This lease calls for monthly payments of $11,610. Lease
         payments made for these facilities totaled $137,260 in 2003 and
         $133,584 in 2002. The other leased property is used for a new branch
         facility, which opened in January 2004. The lease expires in May 2008
         but is renewable at the option of the Bank for seven additional
         five-year periods. Current monthly rent under this lease is $5,000.
         Lease payments of $35,000 were made under this lease during 2003.

         During 2003, the Bank sold loan participations to family members of a
         director of the Bank and the Company on a non-recourse basis. Under
         these transactions, the family members acquired undivided percentage
         interests in specific loans held by the Bank. The participations were
         sold under the same terms and conditions as loan participations sold to
         non-related entities. The total amount of the loan participations sold
         was $2,058,741. The total loan participation amount outstanding at
         December 31, 2003 was $970,605.




                                       32
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 12.  Profit Sharing Plan

         The Bank has a 401(k) profit sharing plan for those employees who meet
         the eligibility requirements set forth in the plan. The plan does not
         require the Bank to match the participants' contributions; however, the
         Bank expensed $20,005 and $16,627 for matching the contributions in
         2003 and 2002, respectively.

Note 13.  Fair Value of Financial Instruments

         The estimated fair values of the Company's financial instruments at
         December 31, 2003 and 2002 are summarized below. The fair values of a
         significant portion of these financial instruments are estimates
         derived using present value techniques and may not be indicative of the
         net realizable or liquidation values. Also, the calculation of
         estimated fair values is based on market conditions at a specific point
         in time and may not reflect current or future fair values.

<TABLE>
<CAPTION>


                                                       December  31, 2003                   December  31, 2002
                                               ----------------- -----------------    --------------- ------------------
                                                   Carrying            Fair              Carrying           Fair
                                                    Amount            Value               Amount            Value
                                               ----------------- -----------------    --------------- ------------------
        Financial assets:
<S>                                                  <C>                <C>                <C>                <C>
           Cash and due from banks                   $4,163,586         4,163,586          3,334,970          3,334,970
           Federal funds sold                         6,782,093         6,782,093         12,787,499         12,787,499
           Interest bearing deposits                  2,862,991         2,862,991          1,925,878          1,925,878
           Investment securities (total)             26,355,701        26,425,955         17,117,498         17,268,952
           Loans, net                                70,158,853        70,741,296         63,367,973         64,287,732
           Accrued interest receivable                  459,700           459,700            379,795            379,795

        Financial liabilities:
           Non-interest bearing deposits            $27,097,779        27,097,779         21,487,512         21,487,512
           Interest bearing deposits                 72,212,017        72,605,932         71,473,226         72,024,022
           Securities sold under agreements
             to repurchase                            1,452,972         1,452,972            987,510            987,510
           Note payable                                       -                 -            250,000            250,000
           Accrued interest payable                      40,112            40,112             66,874             66,874
           Commitments to extend credit                       -                 -                  -                  -

</TABLE>


         The fair values of Government agency securities and mortgage-backed
         securities are determined using market quotations. Loans receivable
         were discounted using a single discount rate, comparing the current
         rates at which similar loans would be made to borrowers with similar
         credit ratings and for the same remaining maturities. The fair value of
         variable rate loans is estimated to equal the carrying amount. The
         valuation of loans is adjusted for possible credit losses. The fair
         value of accrued interest receivable is equal to the carrying amounts.

         The fair value of non-interest bearing deposits, interest-bearing
         checking, savings, and money market deposit accounts, securities sold
         under agreements to repurchase, short term note payable and accrued
         interest payable are equal to the carrying amounts. The fair value of
         fixed-maturity time deposits is estimated based on interest rates
         currently offered for deposits of similar remaining maturities.

Note 14.  Failed Acquisition/merger

         In 2001, the Company signed an agreement to acquire a local thrift. As
         part of the transaction the thrift would have converted to a capital
         stock charter and would have become a wholly owned subsidiary of the
         Company. Consummation of the transaction was subject to regulatory
         approval and approval of the thrift's members. During 2002, it was
         determined that regulatory approvals would not be obtained under
         acceptable conditions and the agreement was terminated. The Company
         charged off expenses related to the failed acquisition in the amount of
         $178,111.



                                       33
<PAGE>



                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

Note 15.  Parent Company Financial Information

         Information as to the financial position of CN Bancorp, Inc. as of
         December 31, 2003 and 2002 and results of operations and cash flow for
         the periods then ended follows:
                                                                   December 31,          December 31,
Statements of Financial Condition                                      2003                  2002
-------------------------------------------------------------    ------------------    ------------------
<S>                                                                     <C>                       <C>
Cash in bank and on hand                                                $3,564,018                38,759
Investment in subsidiary                                                10,310,916             8,930,848
Other assets                                                               299,430               301,573
                                                                 ------------------    ------------------
                                                                       $14,174,364             9,271,180
                                                                 ==================    ==================

Dividends payable                                                          $37,942                25,800
Accrued interest payable                                                         -                   156
Note payable                                                                     -               250,000
                                                                 ------------------    ------------------
                                                                            37,942               275,956
                                                                 ------------------    ------------------
Stockholders' equity                                                    14,136,422             8,995,224
                                                                 ------------------    ------------------
                                                                       $14,174,364             9,271,180
                                                                 ==================    ==================


                                                                    Year ended            Year ended
                                                                 December 31, 2003     December 31, 2002
Statements of Operations
-------------------------------------------------------------    ------------------    ------------------
Dividends from bank subsidiary                                             $71,400               221,989
Less expenses:
   Failed acquisition/merger costs                                               -               178,111
   Administrative expenses                                                  58,005                 2,214
                                                                 ------------------    ------------------
       Income before equity in undistributed net income
          of bank subsidiary and income tax benefit                         13,395                41,664
Income tax benefit                                                          19,722                66,503
                                                                 ------------------    ------------------
       Income before equity in undistributed net income
          of bank subsidiary                                                33,117               108,167
Equity in undistributed net income of bank subsidiary                      432,311               286,368
                                                                 ------------------    ------------------
      Net income                                                          $465,428               394,535
                                                                 ==================    ==================


                                                                    Year ended            Year ended
                                                                 December 31, 2003     December 31, 2002
Statements of Cash Flows
-------------------------------------------------------------    ------------------    ------------------
Cash flows from operating activities:
  Net income                                                              $465,428               394,535
  Equity in undistributed earnings of bank subsidiary                    (432,311)             (286,368)
  Increase (decrease) in other assets                                        2,142             (292,985)
  Increase (decrease) in accrued interest payable                            (156)                   156
                                                                 ------------------    ------------------
  Net cash provided (used) in operating activities                          35,103             (184,662)
                                                                 ------------------    ------------------
Cash flows from financing activities:
  Note payable proceeds (Repayment)                                      (250,000)               250,000
  Capital contribution to subsidiary                                   (1,000,000)                     -
  Net proceeds from sale of common stock offering                        1,655,541                     -
  Proceeds from warrant exercises                                        3,197,160                     -
  Dividends                                                              (112,545)             (103,200)
                                                                 ------------------    ------------------
  Net cash provided by financing activities                              3,490,156               146,800
                                                                 ------------------    ------------------
Increase (decrease) in cash and cash equivalents                         3,525,259              (37,862)
Cash and cash equivalents at beginning of period                            38,759               76,621
                                                                 ------------------    ------------------
Cash and cash equivalents at end of period                              $3,564,018                38,759
                                                                 ==================    ==================

</TABLE>


                                       34
<PAGE>


                         CN BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 16.  Recent Accounting Pronouncements

         In November 2002, the Financial Accounting Standards Board (FASB)
         issued Interpretation No. 45 (FIN 45) "Guarantor's Accounting and
         Disclosure Requirements for Guarantees, Including Indirect Guarantees
         of Indebtedness of Others." This Interpretation expands the disclosures
         to be made by a guarantor in its financial statements about its
         obligations under certain guarantees and requires the guarantor to
         recognize a liability for the fair value of an obligation assumed under
         certain specified guarantees. Under FIN 45, the Company does not issue
         any guarantees that would require liability recognition or disclosure,
         other than standby letters of credit as discussed in Note 8. The
         provisions for this Interpretation are applicable on a prospective
         basis to guarantees issued or modified after December 31, 2002.

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
         of Variable Interest Entities, and Interpretation of ARB No. 51." FIN
         46 was revised in December 2003. This Interpretation provides new
         guidance for the consolidation of variable interest entities (VIEs) and
         requires such entities to be consolidated by their primary
         beneficiaries if the entities do not effectively disperse risk among
         parties involved. The Interpretation also adds disclosure requirements
         for investors that are involved with unconsolidated VIEs. The
         disclosure requirements apply to all financial statements issued after
         December 31, 2003. The consolidation requirements apply to companies
         that have interests in special-purpose entities for periods ending
         after December 15, 2003. Consolidation of other types of VIEs is
         required in financial statements for periods ending after March 15,
         2004

         In April 2003, the FASB issued Statement No. 149, "Amendment of
         Statement No. 133, Accounting for Derivative Instruments and Hedging
         Activities." This Statement clarifies the definition of a derivative
         and incorporates certain decisions made by the Board as part of the
         Derivatives Implementation Group process. This Statement is effective
         for contracts entered into or modified and for hedging relationships
         designated after June 30, 2003 and should be applied prospectively. The
         provisions of the Statement that relate to implementation issues
         addressed by the Derivatives Implementation Group that have been
         effective should continue to be applied in accordance with their
         respective dates.

         In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
         Financial Instruments with Characteristics of both Liabilities and
         Equity." This Statement requires that an issuer classify a financial
         instrument that is within its scope as a liability. Many of these
         instruments were previously classified as equity. This Statement was
         effective for financial instruments entered into or modified after May
         31, 2003 and otherwise was effective beginning July 1, 2003.

         The adoption of the above issuances does not, and are not expected to,
         significantly impact the Company's financial condition or its results
         of operations.




                                       35

<PAGE>


<TABLE>
<CAPTION>
<S>            <C>                                      <C>

                             DIRECTORS AND OFFICERS

                                CN BANCORP, INC.

                               Board of Directors

Jan W. Clark, Chairman of the Board         John E. DeGrange, Sr., Vice Chairman of the Board
Carl L. Hein, Jr. (Treasurer)                        Creston G. Tate
Gerald V. McDonald                                   John G. Warner

                                               Henry L. Hein, Director Emeritus
                                                 Shirley S. Palmer, Secretary

Executive Officers
Jan W. Clark                                         President & Chief Executive Officer
John G. Warner                                       Executive Vice President
Michael T. Storm                                     Chief Financial Officer


                              COUNTY NATIONAL BANK

                               Board of Directors

Gerald V. McDonald, Chairman of the Board   John E. DeGrange, Sr., Vice Chairman of the Board
Jan W. Clark                                         Daljit S. Sawhney, MD
F. Paul Dorr                                         Creston G. Tate
Carl L. Hein (Treasurer)                             LeRoy C. Taylor
Robert P. Musselman, Sr.                             John G. Warner
                                                     K. Patricia Wellford

                                               Henry L. Hein, Director Emeritus
                                                 Shirley S. Palmer, Secretary

Executive Officers
Jan W. Clark                                         President & Chief Executive Officer
John G. Warner                                       Executive Vice President & Chief Operating Officer
Michael T. Storm                                     Senior Vice President & Chief Financial Officer
Michael L. Derr                                      Vice President

Other Officers
Douglas W. DeVaughn                                  Vice President
Ralph F. Ebbenhouse                                  Vice President
Janet M. King                                        Vice President
Bridget K. Bunch                                     Assistant Vice President
Susan M. Liebenthal                                  Assistant Vice President
Marni W. McNichol                                    Assistant Vice President
Lois H. Simpson                                      Assistant Vice President
Judith A. Smiechowski                                Assistant Vice President


CN BANCORP, INC. WILL PROVIDE, WITHOUT CHARGE, TO SHAREHOLDERS OF RECORD OR ANY
BENEFICIAL OWNER OF COMMON STOCK, A COPY OF ITS 2003 ANNUAL REPORT ON FORM
10-KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSSION, UPON WRITTEN REQUEST.
REQUESTS SHOULD BE DIRECTED TO SHIRLEY PALMER, CORPORATE SECRETARY, 7401 RITCHIE
HIGHWAY, GLEN BURNIE, MARYLAND 21061.

</TABLE>


                                       36