SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549

FORM 10-Q

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

FOR THE QUARTER ENDED MARCH 31, 2001

Commission File Number:  0001003986

CALVIN B. TAYLOR BANKSHARES, INC.

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

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


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


State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date:	The registrant had 3,240,000 shares
of common stock ($1.00 par) outstanding as of April 30,
2001.


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


Part I  -	Financial Information

Item 1	Consolidated Financial Statements
	Consolidated Balance Sheets
	Consolidated Statements of Income
	Consolidated Statements of Cash Flows
	Notes to Financial Statements

Item 2	Management's Discussion and Analysis of
Financial Condition
and Results of Operation

Item 3	Quantitative and Qualitative Disclosures
About Market RiskS

Part II -	Other Information

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


Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Part I - Financial Information
Consolidated Statements of Condition

                                              (unaudited)
                                                 March            December
                                                  2001              2000
                  Assets
Cash and due from banks                      15,163,920        13,332,279
Federal funds sold                           26,341,018        18,167,527
Interest-bearing deposits                       784,000           784,000
Investment securities available for sale      4,073,081         4,052,934
Investment securities held to maturity
  (approximate fair value of $60,604,000
   and $68,152,000)                          59,840,687        76,273,558
Loans, less allowance for credit losses
  of $2,192,755 and $2,192,755              173,242,632       168,571,199
Premises and equipment                        5,719,473         5,620,478
Accrued interest income                       1,682,066         1,948,199
Deferred income taxes                           105,563           107,227
Other assets                                    215,522           190,610
                                            287,167,962       289,048,011

   Liabilities and Stockholders' Equity
Deposits
  Noninterest-bearing                        46,946,416        49,674,943
  Interest-bearing                          181,307,274       182,251,249
                                            228,253,690       231,926,192
Securities sold under agreements to repurch   2,993,308         3,113,671
Accrued interest payable                        510,606           503,519
Note payable                                    227,652           231,517
Accrued income taxes                            728,658           103,818
Other liabilities                                 9,338            84,085
                                            232,723,252       235,962,802
Stockholders' equity
  Common stock, par value $1 per share
   authorized 10,000,000 shares, issued and
   issued and outstanding 3,240,000 shares    3,240,000         3,240,000
  Additional paid in capital                 17,290,000        17,290,000
  Retained earnings                          33,415,354        32,058,498
                                             53,945,354        52,588,498
  Net unrealized gain on securities
   available for sale                           499,356           496,711
                                             54,444,710        53,085,209
                                            287,167,962       289,048,011





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

                                           For the three months ended
                                                March 31
                                                  2001              2000
Interest and dividend revenue
  Loans, including fees                       3,576,124         3,263,760
  U.S. Treasury and Agency securities           896,411           953,832
  State and municipal securities                 94,413           106,306
  Federal funds sold                            261,284           300,507
  Deposits with banks                            11,972            11,936
  Equity securities                              14,703             9,107
          Total interest and dividend reven   4,854,907         4,645,448

Interest expense
  Deposit interest                            1,513,256         1,428,192
  Other                                          16,043             4,892
          Total interest expense              1,529,299         1,433,084

          Net interest income                 3,325,608         3,212,364

Provision for credit losses                         -              42,080
          Net interest income after
            provision for credit losses       3,325,608         3,170,284

Other operating revenue
  Service charges on deposit accounts           202,387           174,433
  Miscellaneous revenue                          82,513            68,962
          Total other operating revenue         284,900           243,395

Other expenses
  Salaries and employee benefits                842,147           724,623
  Occupancy                                     128,032           170,312
  Furniture and equipment                       142,470           236,848
  Other operating                               412,570           309,880
          Total other expenses                1,525,219         1,441,663

Income before income taxes                    2,085,289         1,972,016
Income taxes                                    728,433           675,889

Net income                                    1,356,856         1,296,127

Basic earnings per share                           0.42              0.40






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

                                           For the three months ended
                                               March 31,
                                                  2001              2000
Cash flows from operating activities
  Interest received                           5,087,621         4,889,441
  Fees and commissions received                 319,770           259,339
  Interest paid                              (1,522,212)       (1,442,414)
  Cash paid to suppliers and employees       (1,522,349)       (1,317,518)
  Income taxes paid                            (103,593)          (62,082)
                                              2,259,237         2,326,766
Cash flows from investing activities
  Proceeds from maturities of investment se  20,465,000        21,120,000
  Purchase of investment securities held to  (4,014,548)         (105,010)
  Certificates of deposit purchased, net of         -             100,000
  Purchases of premises, equipment, and int    (253,395)         (126,779)
  Loans made, net of principal collected     (4,671,433)       (8,232,387)
  Proceeds from sales of equipment               17,000               423
                                             11,542,624        12,756,247
Cash flows from financing activities
  Net change in time deposits                   501,653        (2,156,531)
  Net change in other deposits               (4,174,155)       (8,803,803)
  Net change in repurchase agreements          (120,363)              -
  Payment on mortgage obligation                 (3,865)           (8,453)
  Dividend paid                                     -                 -
                                             (3,796,730)      (10,968,787)

Net increase (decrease) in cash              10,005,132         4,114,226
Cash and equivalents at beginning of period  31,499,806        34,423,959
Cash and equivalents at end of period        41,504,938        38,538,185

Reconciliation of net income to net cash provided
  from operating activities
  Net income                                  1,356,856         1,296,127
  Adjustments
    Depreciation and amortization               116,872           119,862
    Deferred income tax                             -                 -
    Provision for loan losses                       -              42,080
    Security discount accretion, net of premium
      amortization                              (33,419)             (200)
    (Gain) loss on disposition of assets            -                 -
    Decrease (increase) in accrued interest
      receivable and other assets               261,748           260,137
    Increase (decrease) in accrued interest
      payable and other liabilities             557,180           608,760
                                              2,259,237         2,326,766


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


1.	Basis of Presentation

		The accompanying unaudited consolidated
financial statements have been prepared in
accordance with generally accepted accounting
principles for interim financial information and
with the instructions to Form 10-Q.  Accordingly,
they do not include all the information and
footnotes required by generally accepted accounting
principles for complete financial statements.  In
the opinion of management, all adjustments
considered necessary for a fair presentation of
financial position and results of operations have
been made.  These adjustments are of a normal
recurring nature.  Results of operations for the
three months ended March 31, 2001 are not
necessarily indicative of the results that may be
expected for the year ending December 31, 2001.  For
further information, refer to the audited
consolidated financial statements and related
footnotes for the Registrant's fiscal period ended
December 31, 2000.

		Consolidation has resulted in the elimination of
all significant intercompany accounts and
transactions.

	Cash Flows

			For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due
from banks and overnight investments in federal
funds sold.

	Per share data
		Earnings per common share and dividends per
common share are determined by dividing net income
and dividends by the 3,240,000 shares outstanding,
giving retroactive effect to the stock dividends
distributed.

2.	Comprehensive Income
			Comprehensive income consists of:
					Three months ended March 31,
						2001		2000
Net income				$1,356,856		$1,296,127
Unrealized gain (loss) on
investment securities
available for sale, net of
income taxes			     2,645		    68,438
Comprehensive income		$1,359,501		$1,364,565













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

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

General

	Calvin B. Taylor Bankshares, Inc. (the "Company")
was incorporated as a Maryland corporation on October
31, 1995.  The Company owns all of the stock of two
banks.  The Maryland bank is a commercial bank
incorporated under the laws of the State of Maryland on
December 17, 1907.  This bank operates nine banking
offices in Worcester County with the Bank's main office
located in Berlin, Maryland.  It is engaged in a
general commercial and retail banking business serving
individuals, businesses, and governmental units in
Worcester County, Maryland and neighboring counties.
The second bank was incorporated in Delaware in 1997
and opened late in the second quarter of 1998.  This
one-branch Delaware bank offers the same services as
the Maryland bank.  The Company currently engages in no
business other than owning and managing the Banks.

Financial Condition, Liquidity and Sources of Capital

	Total assets of the Company have decreased $1.9
million from December 31, 2000 to March 31, 2001.
During the first quarter of the year, the banks
typically experience a decline in deposits since
business customers are using their deposits to meet
cash flow needs.  Generally, this situation reverses
late in the second quarter of the year as the banks
receive loan repayments from seasonal business
customers, and deposits from summer residents and
tourists.

	During the first quarter of 2001, the banks' loan
portfolios have increased $4.7 million.  Funding for
these loans was provided by maturities of investment
securities.  Management expects increased earnings from
this shift since loan yields are higher than investment
yields.  Management has determined that this shift
would not negatively impact the Company's ability to
meet liquidity demands.

		The allowance for credit losses represents a
reserve for potential losses in the loan portfolio.
The adequacy of the allowance for credit losses is
evaluated periodically based on a review of all
significant loans, with a particular emphasis on non-
accruing, past due, and other loans that management
believes require attention.  The determination of the
reserve level rests upon management's judgment about
factors affecting loan quality and anticipated changes
in the composition and size of the portfolio, as well
as assumptions about the economy.  Historically, the
Company has low loan charge-offs.  	The banks' target
levels for their allowances as a percentage of gross
loans range from approximately 1.00% to 1.35%.   Based
on review of the consolidated loan portfolio, the
Company determined than an allowance of 1.25% of gross
loans was adequate as of March 31, 2001.  At December
31, 2000, the allowance was 1.28% of gross loans.  At
March 31, 2001, there
were no nonaccruing loans and .11% of the portfolio was
delinquent ninety days or more.

Financial Condition, Liquidity and Sources of Capital
(continued)

	The company's major sources of liquidity arise from
loan repayments, short-term investments, including
federal funds sold, and an increase in core deposits.
Throughout the first quarter of the year, when the
banks typically experience a decline in deposits,
federal funds sold and investment securities are
primary sources of liquidity.  During the second
quarter of the year, additional sources of liquidity
become more readily available as business borrowers
start repaying loans, and the banks receive seasonal
deposits.  Throughout the second and third quarters the
banks maintain a high liquidity level.  Funds from
seasonal deposits are generally invested in short-term
U.S. Treasury Bills and overnight federal funds.
Average liquid assets (cash and amounts due from banks,
interest bearing deposits in other banks, federal funds
sold, and investment securities) compared to average
deposits were 46.21% for the first quarter of 2001,
compared to 51.22% for the first quarter of 2000.

	At March 31, 2001, the Company's interest rate
sensitivity, as measured by gap analysis, showed the
Company was asset-sensitive with a one-year cumulative
gap of 24.21%, as a percentage of interest-earning
assets.  Generally asset-sensitivity indicates that
assets reprice more quickly than liabilities and in a
rising rate environment net interest income typically
increases.  Conversely, if interest rates decrease, net
interest income would decline.  Both banks have
classified their demand mortgage and commercial loans
as immediately repriceable.  Unlike loans tied to
prime, these rates do not necessarily change as prime
changes since the decision to call the loans and change
the rates rests with management.

	Tier one risk-based capital ratios of the Company
as of March 31, 2001 and 2000 were 35.05% and 35.45%,
respectively.  Both are substantially in excess of
regulatory minimum requirements.


Results of Operations

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

	Net income for the three months ended March 31,
2001, was $1,356,856 or $.42 per
share, compared to $1,296,127 or $.40 per share for the
first quarter of 2000.  This represents an increase of
$60,729, from the prior year.  The primary reason net
income increased is due to an increase in net interest
income.  Net interest income increased $113,244 in the
first quarter of 2001 as compared to the first quarter
of 2000 as the Company has shifted earning assets from
investment securities to loans.

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

Results of Operations (continued)

	No provision for loan losses was made in the first
quarter of 2001, versus a $42,080 provision in first
quarter 2000.  There were no loans charged-off during
the first three months of this year.

	Personnel expenses are higher for the three month
period ended March 31, 2001compared to the comparable
period in 2000 due to general increases in salaries and
the cost of health insurance.  The banks employed 107
full time equivalent employees as of March 31, 2001, an
increase of eight employees from March 31, 2000.  The
Maryland bank hires seasonal employees during the
summer.  The Company has no employees other than those
hired by the banks.

	The Company's occupancy expense decreased $42
thousand from first quarter 2000 to 2001.  Of this, $39
thousand was due to the relocation, in 2000, of
vehicular access to a branch, which was necessary due
to road construction.  In the same period, furniture
and equipment expense decreased by $94 thousand due to
lower service contract costs and a change in accounting
for service contracts from cash basis to amortizing the
cost through out the year.  Although the Company's
current data processing equipment meets the needs of
the banks, it is nearing the end of its economic life.
The Company expects to replace its core processing
system in the second half of 2001 and expects related
depreciation, maintenance costs, and software
amortization expense to increase with this replacement.
Prior to the installation of the new processing system,
improved data storage, networking and Internet banking
systems are planned.  It is anticipated that these,
too, will cause an increase in related costs.

	Other operating expense increased $103 thousand in
the first quarter of 2001 as compared to the first
quarter of 2000.  Significant components of this
increase are advertising expense of $22 thousand,
stationery, printing and supplies of $25 thousand, and
computer-related expense $27 thousand.  The first two
categories relate to the timing of routine orders and
billings, while the increase in computer-related
expense reflects non-capital costs associated with
replacement and upgrade of various aspects of the
Company's computer systems.

Plans of Operation

	The banks conduct general commercial banking
businesses in their service areas, of Worcester County,
Maryland and Sussex County, Delaware, while also
emphasizing the banking needs of individuals and small-
to medium-sized businesses and professional concerns.
The banks offer a full range of federally insured
deposit services that are typically available in most
banks and savings and loan associations, including
checking accounts, NOW accounts, savings accounts and
other time deposits of various types ranging from daily
money market accounts to longer-term certificates of
deposit.

	The Company, through its banks, offers a full range
of short- to medium-term commercial and personal loans,
and originates mortgage loans, including real estate
construction and acquisition loans.  The banks have the
intent and the ability to hold loans that their
portfolios.

	Other bank services include cash management
services, safe deposit boxes, travelers checks, direct
deposit of payroll and social security checks, debit
cards, and automatic drafts for various accounts.  The
Company is associated with the MAC network of automated
teller machines that may be used by customers
throughout Maryland, Delaware and other regions.  The
Company offers credit card services through a
correspondent bank.

Capital Resources and Adequacy

	Total stockholders' equity increased $1,359,501
from December 31, 2000 to March 31, 2001.  This
increase is attributable to the comprehensive income
recorded during the period, as detailed in Note 2 of
the Notes to Financial Statements.

	Under the capital guidelines of the Federal Reserve
Board and the FDIC, the Company and its banks are
currently required to maintain a minimum risk-based
total capital ratio of 8%, with at least 4% being Tier
1 capital.  Tier 1 capital consists of common
shareholders' equity, qualifying perpetual preferred
stock, and minority interests in equity accounts of
consolidated subsidiaries, less certain intangibles.
In addition, the Company and the banks must maintain a
minimum Tier 1 leverage ratio (Tier 1 capital to total
assets) of at least 3%, but this minimum ratio is
increased by 100 to 200 basis points for other than the
highest-rated institutions.

Item 3.  Quantitative and Qualitative Disclosures About
Market Risk

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

























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


Item 1	Legal Proceedings
	Not applicable

Item 2	Changes in Securities and Use of Proceeds
	Not applicable

Item 3	Defaults Upon Senior Securities
	Not applicable

Item 4	Submission of Matters to a Vote of Security
Holders
	Not applicable

Item 5	Other information
	Not applicable.

Item 6	Exhibits and Reports on Form 8-K
a)	Exhibits
2.  Proxy Statement dated March 7, 2001, is
incorporated by reference.

	b)	Reports on Form 8-K
	There were no reports on Form 8-K filed for
the quarter ended March 31, 2001.




SIGNATURES

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



		Calvin B. Taylor Bankshares, Inc.







Date: _________________	By:    /s/  Reese F. Cropper, Jr.
			Reese F. Cropper, Jr.
			President and Chief Executive Officer



Date: _________________	By:    /s/  William H. Mitchell
			William H. Mitchell
			Chief Financial Officer







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