SECURITIES AND EXCHANGE COMMISSION
Washington,  DC  20549

FORM 10-QSB

(Mark One)

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF 
THE SECURITIES EXCHANGE ACT OF 1934 
For the quarter ended March 31, 1998

[ ]TRANSITION REPORT UNDER SECTION 13 OR 
15(d) OF THE SECURITIES AND EXCHANGE ACT OF 
1934 FOR THE TRANSITION PERIOD 
FROM __________________ TO _________________

Commission File Number:  0001003986

CALVIN B. TAYLOR BANKSHARES, INC.
(Exact name of issuer as specified 
in its charter)

Maryland          	
(State of Incorporation)		  
52-1948274            
(I.R.S. Employer Identification No.)

24 North Main Street,
Berlin,  Maryland  21811
Address of principal executive offices

(410) 641-1700     
(Issuer's telephone number)
Not Applicable                                           
(Former name, former address and former 
fiscal year, if changed since last report)


Check whether the issuer (1) filed all reports 
required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months 
(or for such shorter period that the registrant 
was required to file such reports), and (2) has 
been subject to such filing requirements 
for the past 90 days.
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 has 810,000 shares of 
common stock ($1.00 par) outstanding 
as of May 8, 1998.


Transitional Small Business 
Disclosure Format (check one)
YES    NO    X  

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


Part I-	Financial Information	       Page

Item 1	Financial Statements
Consolidated Statements of Condition	3
Consolidated Statements of Income	4
Consolidated Statements of Cash Flows	5
Notes
Item 2  Management's Discussion
and Analysis of Financial Condition
and Results of Operation               7-8

Part II - Other Information
Item 1	Legal Proceedings		9
Item 2	Changes in Securities		9
Item 3	Defaults Upon Senior Securities	9
Item 4	Submission of Matters to a
Vote of Security Holders		9
Item 5	Other Information		9
Item 6	Exhibits and Reports
        on Form 8-K			9


Calvin B. Taylor Bankshares, Inc.
and Subsidiary

Part I - Financial Information
Consolidated Statements of Condition 
(unaudited)
                      March 31,        December 31, 
                      1998             1997
Assets
Cash and due
from banks          $11,153,852       $ 9,150,979 

Federal fund sold    21,201,342        20,207,703 

Interest-bearing
deposits              1,229,000         1,229,000 

Investment 
securities available
for sale              2,690,129         2,573,450 

Investment securities
held to maturity
(approximate fair
value of $59,384,421
and $63,457,503)     59,229,913        63,249,260 

Loans, less allowance
for credit losses
of $2,075,729 and
$2,080,798          145,652,705       147,190,832 

Premises 
and equipment         4,140,071         4,152,389 

Accrued interest
income                1,456,243         1,790,423 

Intangible assets        88,181           107,476 

Deferred income taxes   112,195           104,061 

Other assets             51,318           137,039 

                  $ 247,004,949     $ 249,892,612 



Liabilities and Stockholders' Equity

Deposits

Noninterest-bearing $ 30,654,269     $ 33,093,588 

Interest-bearing     171,644,717      173,699,610 
                
                     202,298,986      206,793,198 

Accrued interest
payable                  440,925          433,344 

Accrued income
taxes                    526,302           21,527 

Obligation under
capital lease              -               61,720 

Other liabilities         11,757            5,806 
    
                     203,277,970      207,315,595 

Stockholders'
equity

Common stock, par
value $1 per share 
authorized 2,000,000
shares, issued and 
outstanding 810,000
shares                   810,000          810,000 
  
Capital surplus       17,290,000       17,290,000 
  
Retained earnings     25,274,342       24,120,666 

                      43,374,342       42,220,666 

Net unrealized gain
on securities
available for sale       352,637          356,351 

                      43,726,979       42,577,017 

                   $ 247,004,94   9 $ 249,892,612 






Calvin B. Taylor Bankshares, 
Inc. and Subsidiary

Consolidated Statements 
of Income (unaudited)

                     For the three months
                     ended March 31,
                     
                     1998             1997

Interest and
dividend revenue

Loans,
including fees    $  3,085,908      $ 3,162,369 
U.S. Treasury 
securities             775,779          659,099 

State and 
municipal 
securities              92,966          147,360 
  
Federal funds
sold                   341,748          205,274 
  
Deposits with 
banks                   17,808           17,961 
  
Equity securities        3,322            3,234 
          
Total interest and
dividend revenue     4,317,531        4,195,297 




Interest expense


Deposit interest     1,495,239        1,451,139 
  
Other                   -                -   
          
Total interest
expense              1,495,239        1,451,139 



Net interest
income               2,822,292        2,744,158 

Provision for
credit losses           -                -   
          
Net interest
income after
provision for
credit losses        2,822,292        2,744,158 



Other operating
revenue

Service charges
on deposit 
accounts               142,732          140,993 
  
Miscellaneous
revenue                 54,770           41,527 
          
Total other
operating revenue      197,502          182,520 


Other expenses

Salaries and
employee benefits      690,462          625,721 
  
Occupancy              116,284           99,207 
  
Furniture and
equipment              151,293          153,059 
  
Other operating        276,031          228,128 
          
Total other
expenses             1,234,070        1,106,115 


Income before
income taxes         1,785,724        1,820,563 

Income taxes           632,048          634,570 


Net income        $  1,153,676     $  1,185,993 


Earnings per
common share      $       1.42     $       1.46 




Calvin B. Taylor Bankshares, Inc. 
and Subsidiary


Consolidated Statements
of Cash Flows (unaudited)

                         For the Three Months Ended 
                                 March 31, 

                         1998                  1997 

Cash flows
from operating
activities

Interest received  $ 4,592,244          $ 4,269,012 
  
Other revenue
received               196,870              166,363 
  
Cash paid for 
operating expenses  (1,142,832)          (1,023,787)
  
Interest paid       (1,487,658)          (1,473,173)
  
Taxes paid             (32,212)             (81,197)

                     2,126,412            1,857,218 


Cash flows
from investing 
activities

Cash paid for
premises, 
equipment, 
intangibles,
and construction
in progress             (68,180)           (516,339)
  
Net customer loans
repaid (advanced)     1,538,127          (3,097,467)
  
Redemption of
matured securities   18,385,000          10,682,000 
  
Investment in 
securities          (14,428,915)             -   
  
Redemption of 
certificates, net 
of purchases             -                  194,000 

                      5,426,032           7,262,194 


Cash flows from 
financing activities

Net change in 
time deposits         3,645,041         (13,521,042)
  
Net change in 
other deposits       (8,139,253)          7,361,510 
  
Payment on 
capital lease           (61,720)             -   
  
Dividends paid           -                   -   

                     (4,555,932)         (6,159,532)


Net increase
(decrease) in 
cash                  2,996,512           2,959,880 

Cash and 
equivalents at 
beginning of 
period               29,358,682          23,802,923 

Cash and 
equivalents at 
end of period      $ 32,355,194        $ 26,762,803 




Reconciliation of net income 
to net cash provided
from operating activities


Net income        $   1,153,676       $   1,185,993 
  
Adjustments

Depreciation and
amortization             85,287              85,072 
   
Loss on sale of
securities               -                   -   
    
Deferred tax 
provision                (5,798)             -   
    
Provision for 
loan losses              -                   -   
    
Security discount 
accretion, net of 
premium amortization    (59,467)           (113,072)
    
Decrease (increase) 
in accrued interest  
receivable and other 
assets                  434,407             165,549 
    
Increase (decrease) 
in accrued interest  
payable and other 
liabilities             518,307             533,676 

                    $ 2,126,412         $ 1,857,218 


  





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



1.	Basis of Presentation

The accompanying unaudited condensed financial
statements have been prepared in accordance with 
generally accepted accounting principles for the 
interim financial information and with the 
instructions to Form 10-QSB and Regulation S-X 
of the Securities and Exchange Commission.  
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 (consisting of normal recurring 
accruals) considered necessary for a fair 
presentation have been included.  Operating 
results of the quarters ended March 31, 1998 
and 1997 are not necessarily indicative of the 
results that may be expected for the years ending 
December 31, 1998 and 1997.  For further 
information, refer to the financial statements 
and footnotes thereto for the Registrant's fiscal 
period ended December 31, 1997.

2.	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.

3.	Allowance for Loan Losses

The Bank regulators have requested that the 
portion of the allowance for loan losses related 
to off-balance sheet items be included with other 
liabilities.  The Company has allocated $8,014 of 
its allowance for loan losses to unfunded loan 
commitments and letters of credit.






Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I Financial Information
Item 2.  Management's Discussion and Analysis or 
Plan of Operation.

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
The Company was incorporated in Maryland on 
October 31, 1995 as a bank holding company.  Stock 
of a Maryland state bank with the name Calvin B. 
Taylor Banking Company (the "Bank") was exchanged 
in February, 1996 for the outstanding stock of 
the Company.

The Bank was established in 1890 and incorporated 
in 1907.  The Company currently engages in no 
business other than owning and managing the Bank.  
It is in the process of obtaining final regulatory 
approval to charter a second bank in the state 
of Delaware.

Financial Condition, Liquidity and Sources of Capital

The major sources of liquidity of the Company arise 
from loan repayments, short-term investments, 
including federal funds sold, and an increase in core 
deposits.  During the first quarter of the year, the 
Bank typically experiences a decline in deposits since 
these businesses are using their deposits to meet their 
cash flow needs.  Generally, this situation reverses 
during the second quarter of the year as the businesses 
start repaying loans, and the Bank receives seasonal 
deposits from tourists and Summer residents.  Throughout 
the second and third quarters the Bank maintains its high 
liquidity level.  Funds from seasonal deposits are invested 
in short-term U.S. Treasury Bills and Federal Funds.  
Because of decreased loan demand, the Bank has shifted 
funds to more liquid investments causing the first 
quarter, 1998 liquidity ratio to be higher than normal 
for the period.  Average liquid assets (cash and amounts 
due form banks, interest bearing deposits in other banks, 
federal funds sold, and investment securities) compared 
to average deposits were 46.68% for the first quarter of 
1998 compared to a rate of 42.71% for the first quarter 
of 1997.

At March 31, 1997, the Bank's interest rate sensitivity, 
as measured by gap analysis, showed the Bank was 
asset-sensitive with a one-year cumulative gap, as a 
percentage of interest-earning assets, of 13.00%.  
Generally asset-sensitivity indicates that assets reprice 
quicker than liabilities and in a rising rate environment 
net interest income typically increases.  Conversely, if 
interest rates decrease, net interest income would decline.  
The Bank has classified its demand mortgage and commercial 
loans as immediately repriceable.  Unlike loans tied to 
prime, these rates do not necessarily change as prime 
changes since the decision to call the loans and change 
the rates rests with management.  

Tier one capital ratios of the Bank, based on average 
assets for the quarters ended March 31, 1998 and 1997 were 
15.71% and 16.48%, respectively.  Both are substantially 
in excess of regulatory minimum requirements. 

Results and Plan of Operation

Net income for the three months ended March 31, 1998, 
was $1,153,676, or $1.42 per share, compared to 
$1,185,993, or $1.46 per share, for the first quarter 
of 1997. The primary reason net income 
decreased is due to a decrease in other operating expense.

Salaries and benefits have increased 10.35% when comparing 
the first quarter of 1998 to the same period in 1997 as a 
result of salary increases and additional staff.  The Bank 
has added staff in anticipation of opening a bank in Delaware.  

Other operating expenses have also increased $47,903 or 
21.00% from $228,128 for the first quarter of 1997 to $276,031 
for the quarter ended March 31, 1998.  During the first 
quarter of 1998, a branch of the Bank was robbed resulting 
in a loss of $18,102.  Federal and State regulatory 
assessments have increased by $14,375 during the first quarter 
of 1998 compared to the comparable quarter in 1997. 

The Bank reviewed its loan portfolio and determined the 
allowance, at 1.41% of gross loans, was adequate at 
March 31, 1998.  At December 31, 1997, the allowance was 
also 1.41% of gross loans.  At March 31, 1998, there 
were no nonaccruing loans and only .28% of the portfolio 
was delinquent ninety days or more.

The Bank employed ninety six full time equivalent employees 
during the first quarter of 1998.  The Bank hires seasonal 
employees during the summer.  The Company employs 
no employees outside those hired by the Bank.

The Bank conducts a general commercial banking business in 
its service area, of Worcester County emphasizing the 
banking needs of individuals and small- to medium-sized 
businesses and professional concerns.  The Bank offers a 
full range of 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 Bank also offers a full range of short- to medium-term 
commercial and personal loans.  The Bank also originates 
demand mortgage loans and real estate construction and 
acquisition loans.  Loans originated to date are anticipated 
to be held in the Bank's portfolio.  Other bank services 
include cash management services, safe deposit boxes, 
travelers checks, direct deposit of payroll and social 
security checks, and automatic drafts for various accounts.  
The Bank is associated with the MAC network of automated teller 
machines that may be used by Bank customers throughout 
Maryland and other regions.  The Bank offers MasterCard and 
VISA credit card services through a correspondent bank as 
an agent for the Bank.

During 1996 and 1997, the Company purchased two parcels 
of land in Delaware.  The Company expects to open full 
service bank on one of the parcels during the second or 
third quarter of 1998.


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


Item 1	Legal Proceedings
	Not applicable

Item 2	Changes in Securities
	Not applicable

Item 3	Defaults Upon Senior Securities
	Not applicable

Item 4	Submission of Matters to a Vote of 
        Security Holders
	No matters were submitted to stockholders 
        during the first quarter of 1998.

Item 5	Other information
	Not applicable.

Item 6	Exhibits and Reports on Form 8-K
	a)	Exhibits

2.  Proxy Statement dated April 22, 1998, 
    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, 1998.










Calvin B. Taylor Bankshares, Inc.




Financial Data Schedule














Item


March 31,

Number


1998

9-03(1)
Cash and due from banks

   11,153,852 

9-03(2)
Interest-bearing deposits

     1,229,000 

9-03(3)
Federal funds sold

   21,201,342 

9-03(4)
Trading account assets



9-03(6)
Investment and mortgage-backed securities





held for sale
     2,690,129 

9-03(6)
Investment and mortgage-backed securities





held to maturity - carrying value
   59,229,913 

9-03(6)
Investment and mortgage-backed securities





held to maturity - market value
   59,384,421 

9-03(7)
Loans

 147,728,434 

9-03(7)(2)
Allowance for losses

     2,075,729 

9-03(11)
Total assets

 247,004,949 

9-03(12)
Deposits

 202,298,986 

9-03(13)
Short-term borrowings

                -   

9-03(15)
Other liabilities

        978,984 

9-03(16)
Long-term debt



9-03(19)
Preferred stock - mandatory redemption



9-03(20)
Preferred stock - no mandatory redemption



9-03(21)
Common stock

        810,000 

9-03(22)
Other stockholders' equity

   42,916,979 

9-03(23)
Total liabilities and stockholders' equity

 247,004,949 

Calvin B. Taylor Bankshares, Inc.




Financial Data Schedule




(continued)












 Three Months Ended 

Guide


March 31,

Number


1998

9-04(1)
Interest and fees on loans

     3,085,908 

9-04(2)
Interest and dividends on investments

        872,067 

9-04-(4)
Other interest income

        359,556 

9-04-(5)
Total interest income

     4,317,531 

9-04-(6)
Interest on deposits

     1,495,239 

9-04-(9)
Total interest expense

     1,495,239 

9-04-(10)
Net interest income

     2,822,292 

9-04-(11)
Provision for loan losses

                -   

9-04-(13)(h)
Investment securities gains/(losses)

                -   

9-04-(14)
Other expenses

     1,234,070 

9-04(15)
Income/loss before income tax

     1,785,724 

9-04(17)
Income/loss before extraordinary items

     1,785,724 

9-04(18)
Extraordinary items, less tax

                -   

9-04(19)
Cumulative change in accounting principles

                -   

9-04(20)
Net income or loss

     1,153,676 

9-04(21)
Earnings per share - basic

             1.42 

9-04(21)
Earnings per share - diluted

             1.42 

I.B.5
Net yield on interest earning assets

             5.03 
%
III.C.1(a)
Loans on nonaccrual

                -   

III.C.1(b)
Accruing loans past due 90 days or more

        415,024 

III.C.1(c)
Troubled debt restructuring

                -   

III.C.2
Potential problem loans

                -   

IV.A.1
Allowance for loan loss - beginning of period

     2,080,798 

IV.A.2
Total chargeoffs

           4,639 

IV.A.3
Total recoveries

           7,584 

IV.A.4
Allowance for loan loss - end of period

     2,083,743 

IV.B.1
Loan loss allowance allocated to domestic loans

     2,083,743 

IV.B.2
Loan loss allowance allocated to foreign loans

                -   

IV.B.3
Loan loss allowance - unallocated

                -   
















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 CEO



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