United States Securities and Exchange Commission
                             Washington, D. C. 20549

                                   FORM 10-QSB

(Mark One)

[ x ]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the quarterly period ended
        December 31, 2003

[   ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        For the transition period from __________  to  ___________


                         Commission File Number: 0-28032


                             PATAPSCO BANCORP, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)


           Maryland                                   52-1951797
-------------------------------                   -------------------
(State or Other Jurisdiction of                    (I.R.S. Employer
 Incorporation or Organization)                   Identification No.)


              1301 Merritt Boulevard, Dundalk, Maryland 21222-2194
              ----------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (410) 285-1010
               --------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


     Check  whether  the issuer (1) 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
    --    --
The issuer has been subject to such filing requirements for the past 90 days.

     As of  February  8, 2004,  the issuer had  458,497  shares of Common  Stock
issued and outstanding.

     Transitional Small Business Disclosure Format (check one):

         Yes                                No    X
                ----                            -----

<PAGE>

         CONTENTS
         --------
<TABLE>
<CAPTION>

                                                                                                         PAGE
                                                                                                         ----
PART I.  FINANCIAL INFORMATION
         ---------------------
<S>                                                                                                       <C>
Item 1.  Financial Statements

         Consolidated Statements of Financial Condition at December 31, 2003
                   And June 30, 2003                                                                      3

         Consolidated Statements of Income for the Six and Three-Month Periods Ended
                  December 31, 2003 and 2002                                                              4

         Consolidated Statements of Comprehensive Income for the Six and Three-Month
                  Periods Ended December 31, 2003 and 2002                                                5

         Consolidated Statements of Cash Flows for the Six-Month Periods Ended
                  December 31, 2003 and 2002                                                              6

         Notes to Financial Statements                                                                    7


Item 2.  Management's Discussion and Analysis or Plan of Operations                                       9

Item 3.  Controls and procedures                                                                          18


PART II.  OTHER INFORMATION
          -----------------

Item 1.  Legal Proceedings                                                                               19

Item 2.  Changes in Securities and Use of Proceeds

Item 3.  Defaults Upon Senior Securities                                                                 19

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information                                                                               19

Item 6.  Exhibits and Reports on Form 8-K

Signatures                                                                                               20

Certifications                                                                                           21
</TABLE>

                                       2
<PAGE>

                      Patapsco Bancorp, Inc. and Subsidiary
                                Dundalk, Maryland

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>

                                                                            December 31,            June 30,
                                                                          2003 (Unaudited)            2003
                                                                          ----------------         -----------
<S>                                                                             <C>                     <C>
                                      Assets
                                      ------
Cash:
     On hand and due from banks                                            $   2,539,695       $    2,193,246
     Interest bearing deposits in other banks                                  5,734,303            5,488,697
Federal funds sold                                                             2,900,000            6,525,000
Investment securities, at fair value                                           8,755,654            4,541,938
Mortgage Backed securities, at fair value                                     23,075,006           19,843,414
Loans receivable, net                                                        114,409,999          113,251,659
Investment in securities required by law, at cost                              1,836,700            1,318,350
Property and equipment, net                                                      984,067              997,646
Goodwill                                                                       1,869,691            1,869,691
Deferred income taxes                                                            522,986              356,332
Accrued interest, prepaid expenses and other assets                            3,579,364            1,418,868
                                                                           -------------       --------------
              Total assets                                                 $ 166,207,465       $  157,804,841
                                                                           =============       ==============

                   Liabilities and Stockholders' Equity
                   ------------------------------------
Liabilities:
   Savings deposits:
        Interest bearing deposits                                          $ 110,853,454       $  112,776,166
        Non interest bearing deposits                                          8,120,856            6,878,914
   Borrowings                                                                 29,200,000           20,174,389
   Accrued expenses and other liabilities                                      1,921,990            2,070,113
                                                                           -------------       --------------
              Total liabilities                                              150,096,300          141,899,582

Temporary Equity - ESOP shares subject to put option                           1,177,740              776,996

Stockholders' equity:
    Preferred stock-Series A Noncumulative Convertible
      Perpetual  $0.01 par value; authorized 1,000,000
      shares with a liquidation preference of $25 per
      share; 99,926 and 100,166 shares outstanding, respectively                     984                  997

Additional paid-in capital                                                     2,460,608            2,494,695
   Common stock $0.01 par value: authorized 4,000,000
     shares: issued and outstanding 412,422 and
     373,613 shares, respectively                                                  4,585                4,126
  Additional paid-in capital                                                   4,222,949            3,081,676
   Contra equity - Employee stock ownership plan                                 (55,532)             (55,532)
   Obligation under Rabbi Trust                                                  249,976              249,976
   Contra equity - stock held by Rabbi Trust                                     (77,544)             (77,544)
   Retained income, substantially restricted                                   8,067,913            9,070,227
   Unrealized net holding gains on available-for-sale
      portfolios, net of taxes                                                    59,486              359,642
                                                                           -------------       --------------
               Total stockholders' equity (including temporary equity)        16,111,165           15,905,259
                                                                           -------------       --------------
              Total liabilities and stockholders' equity                   $ 166,207,465       $  157,804,841
                                                                           =============       ==============
</TABLE>

                                       3
<PAGE>


                      Patapsco Bancorp, Inc. and Subsidiary
                                Dundalk, Maryland

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                  For Six Months Ended              For Three Months Ended
                                                                        December 31,                     December 31,
                                                                --------------------------       ---------------------------
                                                                  2003              2002           2003               2002
                                                                --------          --------       --------           --------
<S>                                                               <C>              <C>             <C>                  <C>
Interest income:
    Loans receivable                                         $ 4,287,131       $ 4,769,537       $ 2,110,237        $2,378,704
    Mortgage-backed securities                                   537,599           414,768           267,727           215,930
    Investment Securities                                        193,329           171,226            99,396            78,482
    Federal funds sold and other investments                      64,861            92,640            28,552            47,288
                                                             -----------       -----------     -------------       -----------
          Total interest income                                5,082,920         5,448,171         2,505,912         2,720,404
                                                             -----------       -----------     -------------       -----------

Interest expense:
    Savings deposits                                           1,260,947         1,505,914           610,500           729,068
    Borrowings                                                   617,084           567,866           308,094           281,716
                                                             -----------       -----------     -------------       -----------
          Total interest expense                               1,878,031         2,073,780           918,594         1,010,784
                                                             -----------       -----------     -------------       -----------

          Net interest income                                  3,204,889         3,374,391         1,587,318         1,709,620
Provision for losses on loans                                     42,000           240,000                --           120,000
                                                             -----------       -----------     -------------       -----------
          Net interest income after provision
                   for losses on loans                         3,162,889         3,134,391         1,587,318         1,589,620

Noninterest income:
    Fees and service charges                                     183,549           196,515            89,073            87,076
    Net gain on sales of securities                                   --            14,255                --             1,395
    Net gain on sale of loans                                     12,925             5,006             3,147             5,006
    Net loss on sale of repossessed real estate                       --            (3,071)               --                --
    Other                                                         36,723            15,600            22,802             8,821
                                                             -----------       -----------     -------------       -----------
        Total noninterest income                                 233,197           228,305           115,022           102,298
                                                             -----------       -----------     -------------       -----------

Noninterest expenses:
    Compensation and employee benefits                         1,406,700         1,345,845           702,232           691,715
    Insurance premiums                                            34,170            36,061            16,314            17,996
    Professional fees                                            125,555           173,584            48,206           111,852
    Equipment expense                                             91,700           107,478            46,243            45,930
    Occupancy expense                                            106,058           102,306            53,353            46,245
    Advertising                                                   63,751            54,107            32,732            32,163
    Data processing                                              107,884           106,873            54,569            53,477
    Other                                                        351,896           378,956           204,509           181,288
                                                             -----------       -----------     -------------       -----------
          Total noninterest expense                            2,287,714         2,305,210         1,158,162         1,180,666
                                                             -----------       -----------     -------------       -----------
          Income before provision for income taxes             1,108,372         1,057,486           544,178           511,252
Provision for income taxes                                       410,256           390,718           199,846           185,208
                                                             -----------       -----------     -------------       -----------
          Net Income                                         $   698,116       $   666,768     $     344,332       $   326,044
                                                             ===========       ===========     =============       ===========
          Basic earnings per share                           $      1.31       $      1.27     $        0.64       $      0.61
                                                             ===========       ===========     =============       ===========
          Diluted earnings per share                         $      1.11       $      1.09     $        0.54       $      0.53
                                                             ===========       ===========     =============       ===========
</TABLE>

See accompanying notes to financial statements.


                                       4

<PAGE>

                      Patapsco Bancorp, Inc. and Subsidiary
                                Dundalk, Maryland

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                   For Six Months Ended             For Three Months Ended
                                                                       December  31,                      December 31,
                                                              ----------------------------       ---------------------------
                                                                  2003              2002           2003               2002
                                                              -----------        ---------       --------           -------
<S>                                                                <C>              <C>              <C>              <C>
Net income                                                   $   698,116       $   666,768      $  344,332         $326,044
Other comprehensive income, net of tax:
  Unrealized net holding (losses)/gains on
    available-for-sale portfolios                               (300,156)          242,682         (24,913)         (40,863)
Reclassification adjustment for gains
    Included in net income, net of tax                                --            (8,749)             --             (856)
                                                             -----------       -----------      ----------         --------
Comprehensive income                                         $   397,960       $   900,701      $  319,419         $284,325
                                                             ===========       ===========      ==========         ========


</TABLE>

See accompanying notes to financial statements.

                                       5
<PAGE>

                      Patapsco Bancorp, Inc. and Subsidiary
                                Dundalk, Maryland

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                  For Six Months Ended
                                                                                       December  31,
                                                                           ---------------------------------
                                                                                2003                2002
                                                                           -------------        ------------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
  Net income                                                               $  698,116          $   666,768
  Adjustments to reconcile net income to net
    cash provided by operating activities:
       Depreciation                                                            98,349               67,520
       Provision for losses on loans                                           42,000              240,000
       Loss on Sale of repossessed real estate                                     --                3,071
       Gain  on  sale  of   investment  &  mortgage   backed
        securities                                                                 --              (14,255)
       Proceeds from sale of loans available for sale                       1,557,483              489,776
       Disbursements from sale of loans available for sale                 (1,544,558)            (484,770)
       Gain from sale of loans held for sale                                  (12,925)              (5,006)
       Amortization of premiums and discounts, net                             23,351              (69,615)
       Increase in the cash value of life insurance                           (15,648)                  --
       Deferred loan origination fees/(costs)                                (121,260)              50,477
       (Increase)Decrease in deferred taxes,
           prepaid expenses and other assets                                 (524,743)              39,212
       Decrease in accrued expenses and other liabilities                    (148,123)            (729,292)
                                                                         ------------         ------------
         Net cash provided by operating activities                             52,042              253,886
                                                                         ------------         ------------

Cash flows from investing activities:
  Loan principal disbursements, net of repayments                          (1,004,705)           5,487,987
  Proceeds from sale of repossessed real estate                                    --              126,839
  Proceeds from sale/redemption of investments available for sale             750,000            1,621,252
  Purchase of investment security available-for-sale                       (5,015,234)          (1,190,000)
  Purchase of mortgage-backed security available-for-sale                 (10,200,344)          (4,986,227)
  (Purchase)Redemption of investments required by law                        (518,350)             360,000
  Purchase of property and equipment                                          (84,770)             (10,728)
  Purchase of Bank Owned Life Insurance                                    (1,600,000)                  --
  Principal repayment on mortgage-backed securities available
    for sale                                                                6,453,170            1,425,169
                                                                         ------------         ------------
        Net cash (used in)/provided by investing activities               (11,220,233)           2,834,292

Cash flows from financing activities:
  Net  (decrease) in deposits                                                (672,700)          (4,486,850)
  Net increase  in borrowings                                               9,000,000              550,000
  Cash received in exercise of stock options                                   39,050               16,465
  Dividends paid                                                             (231,104)            (199,509)
                                                                         ------------         ------------
         Net cash provided by (used in) financing activities                8,135,246           (4,119,894)
                                                                         ------------         ------------

  Net  (decrease) in cash and cash equivalents                           $ (3,032,945)        $ (1,031,716)
  Cash and cash equivalents at beginning of period                         14,206,943           14,856,821
                                                                         ------------         ------------
  Cash and cash equivalents end of period                                $ 11,173,998         $ 13,825,105
                                                                         ============         ============
Supplemental information:
  Interest paid on deposits and borrowed funds                               1,862,282           2,073,780
  Income taxes paid                                                             70,508             272,052

</TABLE>

See accompanying notes to financial statements.

                                       6

<PAGE>

                      Patapsco Bancorp, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements
                                   (unaudited)


Note 1: Principles of Consolidation

The consolidated  financial statements include the accounts of Patapsco Bancorp,
Inc. ("the Company") and its  wholly-owned  subsidiary,  The Patapsco Bank ("the
Bank").  All intercompany  accounts and transactions have been eliminated in the
accompanying consolidated financial statements.

Note 2: The Patapsco Bank

The Bank is regulated  by The Federal  Reserve  Bank of Richmond  ("the  Federal
Reserve Bank") and The State of Maryland. The primary business of the Bank is to
attract  deposits  from  individual  and  corporate  customers  and to originate
residential  and  commercial  mortgage  loans,  consumer  loans  and  commercial
business loans. The Bank competes with other financial and mortgage institutions
in attracting and retaining deposits and originating loans. In October, 2002 the
Bank created a leasing  company  called Prime  Business  Leasing,  Inc. The Bank
conducts operations through three offices.

Note 3: Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with  instructions  for Form 10-QSB and therefore,  do not include
all  disclosures  necessary  for a complete  presentation  of the  statements of
condition,  statements of operations  and statements of cash flows in conformity
with generally accepted  accounting  principles.  However,  all adjustments that
are, in the opinion of management,  necessary for the fair  presentation  of the
interim  financial  statements have been included.  Such  adjustments  were of a
normal  recurring  nature.  The results of  operations  for the six months ended
December  31, 2003 are not  necessarily  indicative  of the results  that may be
expected  for  the  entire  year.  For  additional  information,  refer  to  the
consolidated  financial  statements and footnotes thereto included in the Bank's
Annual report of form 10-KSB for the year ended June 30, 2003.

Note 4 Cash and Cash Equivalents

Cash equivalents include short-term investments, which consists of Federal funds
sold.  Cash  equivalents  and other  liquidity and  short-term  investments  are
carried at cost, which approximates market value.

Note 5: Regulatory Capital Requirements

At December  31,  2003,  the Company  met each of the three  minimum  regulatory
capital  requirements.  The following table summarizes the Company's  regulatory
capital position at December 31, 2003 (in thousands).
<TABLE>
<CAPTION>

                                                                           Well Capitalized Under
                                                            For Capital       Prompt Corrective
                                         Actual          Adequacy Purposes     Action Provision
                                 ---------------------   ----------------- -----------------------
                                  Amount          %       Amount      %        Amount         %
                                 -----------------------------------------------------------------
<S>                                <C>           <C>       <C>       <C>        <C>          <C>
Total Capital (to Risk
  Weighted Assets)               $14,748        14.51%    $8,134    8.00%     $10,167       10.00%

Tier 1 Capital (to Risk
   Weighted Assets)              $13,633        13.41%    $4,067    4.00%     $ 6,100        6.00%

Tier 1 Capital (to Average
    Assets)                      $13,633         8.33%    $6,547    4.00%     $ 8,183        5.00%
</TABLE>


                                       7
<PAGE>

Note 6: Earnings Per Share

Basic per share amounts are based on the weighted average shares of common stock
outstanding.  Diluted  earnings  per share  assume the  conversion,  exercise or
issuance  of  all  potential  common  stock  instruments  such  as  options  and
convertible  securities,  unless  the  effect  is to  reduce a loss or  increase
earnings per share.  Earnings per share for the prior periods ended December 31,
2002 have been restated to reflect stock dividends.
<TABLE>
<CAPTION>

                                                   Six Months Ended                  Three Months Ended
                                                  December 31, 2003                  December 31, 2003
                                             Basic               Diluted          Basic              Diluted
                                             ---------------------------          --------------------------
<S>                                             <C>               <C>              <C>                  <C>
Net Income                                   698,116             698,116          344,332            344,332
Preferred Stock Dividends                     92,222                   0           46,111                  0
                                             -------             -------          -------            -------
Net Income Available to Common               605,894             698,116          298,221            344,332

Weighted average shares outstanding          461,670             461,670          463,134            463,134

Diluted Securities:
  Preferred Stock                                                131,134                             130,832
  Options                                                         36,333                              37,937
Adjusted Weighted Average Shares             461,670             629,137          463,134            631,903

Per Share Amount                               $1.31               $1.11            $0.64              $0.54

</TABLE>
<TABLE>
<CAPTION>


                                                   Six Months Ended                  Three Months Ended
                                                  December 31, 2002                  December 31, 2002
                                             Basic               Diluted          Basic              Diluted
                                             ---------------------------          --------------------------
<S>                                             <C>               <C>              <C>                  <C>
Net Income                                   666,768             666,768          326,044            326,044
Preferred Stock Dividends                     93,793                   0           46,840                  0
                                             -------             -------          -------            -------
Net Income Available to Common               572,975             666,768          279,204            326,044

Weighted average shares outstanding          452,063             452,063          460,645            460,645

Diluted Securities:
  Preferred Stock                                                133,214                             133,107
  Options                                                         26,343                              25,364
Adjusted Weighted Average Shares             452,063             611,620          460,645            619,116

Per Share Amount                               $1.27               $1.09            $0.61              $0.53
</TABLE>


Note 7: Goodwill and Intangible Assets

Under  the  provisions  of SFAS  No.  142,  goodwill  is  subject  to an  annual
impairment  test. In November  2003,  the Company  completed its annual test for
goodwill impairment. This test resulted in a determination that goodwill was not
impaired. The Company will review goodwill on an annual basis for impairment and
as events occur or circumstances change.



                                       8

<PAGE>

Note 7: Stock Options

SFAS No. 148, "Accounting for Stock-Based Compensation", requires the Company to
make  certain  disclosures  as if the fair value method of  accounting  had been
applied  to  the  Company's   stock  option  grants  made  subsequent  to  1994.
Accordingly,  no stock option based employee  compensation  cost is reflected in
net income, as all options granted under these plans had an exercise price equal
to the market value of the  underlying  common  stock on the date of grant.  The
following  table  illustrates the effect on net income and earnings per share if
the Company had applied the fair value recognition  provisions of FASB Statement
No. 148.


                                                       Six Months Ended
                                                 ----------------------------
                                                 12/31/03            12/31/02
                                                 --------            --------

Net Income as reported                           $698,116            $666,768
Deduct: Total stock option based employee
compensation expense determined under
fair value based method for all awards, net
of related tax effects                            (13,472)            (14,964)
                                                 --------            --------
Proforma Net Income                              $684,644            $651,804

Earnings per share:

 Basic - as reported                                $1.31               $1.27
 Basic - pro forma                                   1.28                1.23

 Diluted - as reported                              $1.11               $1.09
 Diluted - pro forma                                 1.09                1.07


                                                      Three Months Ended
                                                 ----------------------------
                                                 12/31/03            12/31/02
                                                 --------            --------

Net Income as reported                           $344,332            $326,044
Deduct: Total stock option based employee
compensation expense determined under
fair value based method for all awards, net
of related tax effects                             (6,736)             (7,482)
                                                 --------            --------
Proforma Net Income                              $337,596            $318,562

Earnings per share:

 Basic - as reported                                $0.64               $0.61
 Basic - pro forma                                   0.63                0.59

 Diluted - as reported                              $0.54               $0.53
 Diluted - pro forma                                 0.53                0.51


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

GENERAL

The  Company's  results  of  operations  depend  primarily  on its  level of net
interest   income,   which  is  the  difference   between   interest  earned  on
interest-earning  assets,  consisting primarily of loans, investment securities,
mortgage-backed  securities  and other  investments,  and the  interest  paid on
interest-bearing liabilities, consisting primarily of deposits and advances from
the  Federal  Home Loan  Bank of  Atlanta.  The net  interest  income  earned on
interest-earning   assets   ("net   interest   margin")   and   the   ratio   of
interest-earning  assets  to  interest-bearing  liabilities  have a

                                       9
<PAGE>

significant  impact on net interest income. The Company's net interest margin is
affected by regulatory, economic and competitive factors that influence interest
rates, loan and deposit flows. The Company,  like other financial  institutions,
is subject to interest rate risk to the degree that its interest-earning  assets
mature  or  reprice  at  different  times,  or on a  different  basis,  than its
interest-bearing  liabilities.  To a lesser  extent,  the  Company's  results of
operations are also affected by the amount of its noninterest income,  including
loan fees and service charges, and levels of noninterest expense, which consists
principally  of  compensation  and  employee   benefits,   insurance   premiums,
professional  fees,  equipment  expense,  occupancy  costs,  advertising,   data
processing and other operating expenses.

The Company's  operating results are significantly  affected by general economic
and  competitive  conditions,  in particular,  changes in market interest rates,
government  policies  and  actions  taken  by  regulatory  authorities.  Lending
activities  are influenced by general  economic  conditions,  competition  among
lenders,  the level of interest  rates and the  availability  of funds.  Deposit
flows and costs of funds are influenced by prevailing  market rates of interest,
primarily on competing investments, account maturities and the level of personal
income and savings in the Company's market area.


FORWARD-LOOKING STATEMENTS

When used in this Form 10-QSB,  the words or phrases "will likely  result," "are
expected  to," "will  continue,"  "is  anticipated,"  "estimate,"  "project"  or
similar expressions are intended to identify "forward-looking statements" within
the  meaning of the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements are subject to certain risks and  uncertainties  including changes in
economic  conditions  in the  Company's  market  area,  changes in  policies  by
regulatory  agencies,  fluctuations in interest  rates,  demand for loans in the
Company's market area, and competition that could cause actual results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company wishes to caution readers not to place undue reliance on
any such forward-looking  statements,  which speak only as of the date made. The
Company  wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with respect to future periods in any current statements.

The Company does not undertake,  and specifically  disclaims any obligation,  to
publicly  release  the  result  of  any  revisions  which  may  be  made  to any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

CRITICAL ACCOUNTING POLICIES

The Company's  consolidated financial statements are prepared in accordance with
accounting  principals  generally  accepted  in the  United  States  of  America
("GAAP") and follow general  practices within the industry in which it operates.
Application  of  these  principals   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.  These estimates,  assumptions and judgments
are necessary  when  financial  instruments  are required to be recorded at fair
value or when the decline in the value of an asset  carried on the balance sheet
at historic cost requires an impairment  write-down or a valuation reserve to be
established.

The allowance for loan losses is an estimate of the losses that may be sustained
in the loan and lease  portfolio.  Provisions  for loan  losses  are  charged to
earnings to maintain the total  allowance for loan losses at a level  considered
adequate by management  to provide for probable  loan losses.  The allowance for
loan losses is based on two principals of accounting: (1) Statement of Financial
Accounting Standards ("SFAS") No.5 "Accounting for Contingencies", that requires
losses to be accrued when their  occurrence is probable and  estimable,  and (2)
SFAS No. 114  "Accounting by Creditors for Impairment of a Loan",  that requires
losses be accrued  when it is  probable  that the lender  will not  collect  all
principal and interest due under the original term of the loan.

                                       10
<PAGE>

Management believes that the allowance is adequate.  However,  its determination
requires significant judgment,  and estimates of the probable losses in the loan
and lease portfolio can vary significantly from amounts that actually occur.

PENDING ACQUISITION

On November 12, 2003, The Board of Directors of Patapsco Bancorp,  Inc. issued a
press release  announcing  that The Patapsco Bank and Parkville  Federal Savings
Bank have entered into a reorganization  and Merger Agreement  pursuant to which
The Patapsco Bank would acquire Parkville by way of a merger of Parkville with a
to-be-formed  interim  federal savings bank subsidiary of the Patapsco Bank. The
Company will pay  approximately  $4.7 million for all the outstanding  shares of
Parkville.  At December 31, 2003,  Parkville had $49.4 million in assets,  $45.7
million in deposits and $3.4 million in stockholders' equity.

The  consummation of the Merger is subject to a number of customary  conditions,
including but not limited to: (i) the receipt of all regulatory  approvals;  and
(ii)  the  adoption  and  approval  of  the  agreement  by the  stockholders  of
Parkville.

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2003 AND JUNE 30, 2003

The  Company's  assets  increased by $8.4  million or 5.3% to $166.2  million at
December  31,  2003  compared  to $157.8  million at June 30,  2003.  During the
quarter ended  September 30, 2003, the Company  purchased $10 million in ten and
fifteen year  mortgage-backed  securities  funded with $10 million in borrowings
from the Federal Home Loan Bank of Atlanta. Liquidity from early payoff of first
mortgage  loans was used to purchase $5 million in short and  intermediate  term
investment securities,  purchase $1.6 million in bank owned life insurance, fund
a $1.1  million  increase in loans  receivable,  and to fund a $0.7  million net
deposit outflow.

Interest bearing deposits have decreased $1.9 million or $1.7% in the six months
ended  December 31, 2003 to $110.8 million from $112.8 million at June 30, 2003.
This  decrease has  primarily  occurred in the  certificate  of deposit  account
categories.  With the relatively high level of cash on hand, the Company has not
negotiated  with  customers  with limited  relationships  in order to retain the
certificate  accounts.  We believe  many of these  customers  have  taken  their
certificate accounts to local thrifts for higher rates and that if needed, these
types  of funds  can be  raised  locally  by  posting  more  competitive  rates.
Non-interest  bearing  deposits  have  increased  $1.2  million or 18.0% to $8.1
million  at  December  31,  2003 from $6.9  million at June 30,  2003.  Although
balances in these accounts are volatile, the Company has experienced core growth
in these types of accounts.

Total  borrowings  have  increased  by $9.0  million  as the  $10.0  million  in
borrowings  used  to  purchase  mortgage-backed   securities  noted  above  were
partially offset by the payoff of a $1 million advance.


COMPARISON OF OPERATING  RESULTS FOR THE QUARTERS AND SIX MONTHS ENDED  DECEMBER
31, 2003 AND DECEMBER 31, 2002

Net Income
----------

The  Company's  net income  increased  by $18,000  or 5.6% to  $344,000  for the
quarter ended December 31, 2003 from $326,000 for the quarter ended December 31,
2002. The Company's net income  increased by $31,000 or 4.7% to $698,000 for the
six months  ended  December  31,  2003 from  $667,000  for the six months  ended
December  31,  2002.  The  increase  in the  Company's  net  income  during  the
comparable three-month period is a result of lower operating expenses and higher
non-interest  income in the quarter  ended  December 31, 2003 as compared to the
quarter ended December 31, 2002.  Lower net interest income in the quarter ended
December 31, 2003 was offset by a lower provision for loan losses in the quarter
ended  December 31, 2003 as compared to the quarter ended December 31, 2002. The
increase in the  Company's net income for the  comparable  six month period is a
result  of  lower  provision  for  loan  losses  and  lower  operating  expenses
offsetting lower net interest income.

Interest Income
---------------

Total  interest  income  decreased  by $214,000 or 7.9% to $2.5  million for the
quarter  ended  December  31, 2003 when  compared to $2.7

                                       11
<PAGE>

million in the  quarter  ended  December  31, 2002 as lower  interest  income on
loans,  primarily  due to lower  rates was  somewhat  offset by higher  interest
income on investment and mortgage-backed  securities.  Approximately $229,000 of
the decrease in interest  income in the quarterly  period is the result of lower
yields on earning assets. This was somewhat offset by the higher average balance
in the securities portfolio.

Total interest income  decreased by $365,000 or 6.7% to $5.1 million for the six
months ended  December 31, 2003 when  compared to $5.4 million in the six months
ended  December 31, 2002 as lower  interest  income on loans,  due to both lower
rates  earned  and to lower  average  balances,  was  somewhat  offset by higher
interest  income on investment  and  mortgage-backed  securities.  Approximately
$372,000  of the  decrease  in interest  income in the  six-month  period is the
result of lower yields on earning  assets.  This was offset by a $1,000 increase
in interest income from higher average balances in the investment portfolio.  In
the six-months  ended December 31, 2003,  yields on earning assets  decreased 76
basis points to 6.49% from 7.25% when compared to the six months ended  December
31, 2002.

Interest  income on loans  receivable  decreased  by  $268,000  or 11.2% to $2.1
million  for the  quarter  ended  December  31,  2003 from $2.4  million for the
quarter ended December 31, 2002.  Interest income on loans receivable  decreased
by $0.5 million or 10.1% to $4.3  million for the six months ended  December 31,
2003 from $4.8 million for the six months ended  December 31, 2002. The decrease
in interest income on loans  receivable  during the three month period is due to
both lower average  balances on loans  receivable  and to lower yields earned on
loans receivable. During the three months ended December 31, 2003 as compared to
the same period ended  December 31, 2002 the average  loans  receivable  balance
decreased by $1.8 million or 1.6% to $113.9  million from $115.7 million and the
average yield  decreased by 64 basis points to 7.51% from 8.15%.  During the six
months ended December 31, 2003 as compared to the same period ended December 31,
2002 the average balance of loans  receivable  decreased by $4.1 million or 3.6%
to $112.9 million from $117.0million and the average yield decreased by 39 basis
points to 7.70% from 8.08%.

Interest income on investment  securities increased by $21,000 to $99,000 and by
$22,000 to $193,000 in the three and six month periods ended  December 31, 2003,
respectively  primarily due to higher average balances of investment  securities
offsetting lower yields on these securities.

Interest income on mortgage-backed  securities  increased by $52,000 to $268,000
and by $123,000 to $538,000 in the three and six month  periods  ended  December
31, 2003, respectively. These increases are the result of large increases in the
average  balances of these securities  offsetting lower yields.  The Company has
invested some of the excess liquidity that resulted from the high level of first
mortgage loan payoffs into mortgage-backed securities, primarily fifteen and ten
year maturities.

Interest income on federal funds sold and other investments decreased by $19,000
or 39.6% to $28,000 for the quarter ended December 31, 2003 from $47,000 for the
quarter ended December 31, 2002. Interest income on federal funds sold and other
investments  decreased  by $28,000 or 30.0% to $65,000 for the six months  ended
December 31, 2003 from $93,000 for the six months ended  December 31, 2002.  The
decrease in the three-month  period was due to both lower rates earned and lower
volumes of these assets.  The decrease in the six-month  period was due to lower
rates offsetting slightly higher average balances.

Interest Expense
----------------

Total  interest  expense  decreased  by $92,000 or 9.1% to $0.9  million for the
quarter ended December 31, 2003 from $1.0 million for the quarter ended December
31,  2002.  Total  interest  expense  decreased  by $0.2 million or 9.4% to $1.9
million for the six months ended December 31, 2003 from $2.1 million at December
31, 2002. The decrease in interest  expense during the comparable  quarterly and
year to date periods is due to lower rates paid on interest bearing  liabilities
offsetting higher volumes.

Interest expense on deposits  decreased by $119,000 or 16.3% to $611,000 for the
quarter ended December 31, 2003 from $729,000 for the quarter ended December 31,
2002.  Interest  expense on  deposits  decreased  by  $245,000  or 16.3% to $1.3
million  from $1.5  million for the six months  ended  December  31,  2002.  The
decrease in interest  expense on deposits in both the quarterly and year to date
periods is almost  entirely  due to lower rates paid by the Company on deposits.
The  combination  of the aggressive  actions of the Federal  Reserve in lowering
interest  rates and lower loan demand has  allowed  the Company to  aggressively
lower the rates paid on deposit accounts.

Net Interest Income
-------------------

The Company's net interest income before the provision for loan losses decreased
by $122,000 or 7.2% to $1.6 million for the quarter

                                       12
<PAGE>

ended  December  31, 2003 from $1.7 million for the quarter  ended  December 31,
2002.  Net interest  income before the  provision  for loan losses  decreased by
$170,000 or 5.0% to $3.2 million for the six months ended December 31, 2003 from
$3.4 million during the six months ended December 31, 2002. The decreases in net
interest  income  during the  comparable  quarters  and  six-month  periods were
primarily due to the lower rates earned on assets  offsetting  the lower cost of
liabilities. In the three month period ended December 31, 2003, the net interest
margin decreased by 52 basis points to 4.02% from 4.54%. In the six-month period
ended December 31, 2003, the net interest margin decreased by 45 basis points to
4.04% from 4.49%.

Average Balance Sheet
---------------------

The following  tables sets forth certain  information  relating to the Company's
average  balance  sheet and  reflects  the  average  yield on assets and cost of
liabilities  for the periods  indicated and the average  yields earned and rates
paid.   Dividing  income  or  expense  by  the  average  balance  of  assets  or
liabilities,  respectively,  for the periods  presented  derives these yield and
costs. Average balances are daily balances.

The table presents information for the periods indicated with respect to the net
interest margin, which is its net interest income divided by the average balance
of interest-earning assets. Also presented is the difference between the average
yield   earned   on   interest-earning   assets   and   average   rate  paid  on
interest-bearing  liabilities,  or interest  rate spread  ,which is also used to
measure the earnings power of financial institutions.




                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                     Six Months Ended December 31,
                                               ----------------------------------------------------------------------------
                                                              2003                                     2002
                                               ----------------------------------     -------------------------------------
                                               Average                   Average       Average
                                               Balance      Interest      Rate(1)      Balance       Interest       Rate(1)
                                               -------      --------     --------     ---------      --------       -------
                                                                            (Dollars in thousands)
<S>                                             <C>           <C>          <C>          <C>            <C>           <C>
Interest-earning assets:
   Loans receivable (2)                        112,928       $4,287        7.59%      $117,026        $4,769         8.08%
   Investment securities                         9,937          193        3.89%         7,227           171         4.70%
   Mortgage-backed securities                   24,503          538        4.39%        14,203           415         5.79%
   Federal funds sold and other
      interest-earning assets                   11,366           65        1.14%        10,524            93         1.75%
                                              --------       ------                   --------      --------
Total interest earning assets                  158,734        5,083        6.40%       148,980         5,448         7.25%
                                                             ------                                 --------
Noninterest-earning assets                       6,791                                   5,860
                                              --------                                --------
Total Average Assets                          $165,525                                $154,840
                                              ========                                ========

Interest-bearing liabilities:
Savings deposits                              $112,071       $1,261        2.25%      $111,547      $  1,506         2.68%
Borrowings                                      29,861          617        4.13%        21,746           568         5.18%
                                              --------       ------                   --------      --------
Total interest-bearing liabilities             141,932        1,878        2.65%       133,293         2,074         3.09%
                                                             ------        ----                     --------         ----
Noninterest-bearing liabilities                  7,727                                   6,485
                                              --------                                --------
Total liabilities                              149,659                                 139,778
Stockholders' equity                            15,866                                  15,062
                                              --------                                --------
    Total liabilities and stockholders'
     equity                                   $165,525                                $154,840
                                              ========                                ========

Net interest income                                          $3,205                                 $  3,374
                                                             ======                                 ========
Net Interest margin                                                        4.04%                                     4.49%
                                                                           ====                                      ====
Interest rate spread                                                       3.76%                                     4.16%
                                                                           ====                                      ====
Ratio of average interest-earning assets
  to average interest-bearing liabilities                                111.84%                                   111.77%
                                                                         ======                                    ======
</TABLE>

___________

(1)  Yields and rates are annualized.
(2)  Includes nonaccrual loans.

                                       14

<PAGE>
<TABLE>
<CAPTION>
                                                                     Three Months Ended December 31,
                                               ----------------------------------------------------------------------------
                                                              2003                                     2002
                                               ------------------------------------    -------------------------------------
                                               Average                     Average      Average
                                               Balance      Interest       Rate(1)      Balance       Interest       Rate(1)
                                               -------      --------      --------     ---------      --------       -------
                                                                            (Dollars in thousands)
<S>                                             <C>           <C>          <C>          <C>            <C>           <C>
Interest-earning assets:
   Loans receivable (2)                        $113,952      $2,110          7.41%     $115,744      $2,379          8.15%
   Investment securities                         10,831          99          3.67%        7,036          78          4.43%
   Mortgage-backed securities                    23,418         268          4.57%       15,082         216          5.68%
   Federal funds sold and other
      interest-earning assets                     9,652          29          1.18%       11,633          47          1.61%
                                               --------       -----                    --------      ------
Total interest earning assets                   157,853       2,506          6.35%      149,495       2,720          7.22%
                                                              -----                                  ------
Noninterest-earning assets                        8,256                                   6,446
                                               --------                                --------
Total assets                                   $166,109                                $155,941
                                               ========                                ========
Interest-bearing liabilities:
Savings deposits                               $111,954      $  611          2.18%     $111,014      $  729          2.61%
Borrowings                                       29,533         308          4.17%       22,049         282          5.00%
                                               --------      ------                    --------      ------
Total interest-bearing liabilities              141,487         919          2.60%      133,063       1,011          3.01%
                                                             ------                                  ------
Noninterest-bearing liabilities                   8,686                                   7,648
                                               --------                                --------
Total liabilities                               150,173                                 140,711
Stockholders' equity                             15,936                                  15,230
                                               --------                                --------
    Total liabilities and stockholders'
     equity                                    $166,109                                $155,941
                                               ========                                ========

Interest rate spread                                         $1,587                                  $1,709
                                                             ======                                  ======
Net interest margin                                                          4.02%                                   4.54%
                                                                             ====                                    ====
Interest rate spread                                                         3.75%                                   4.21%
                                                                             ====                                    ====
Ratio of average interest-earning assets
  to average interest-bearing liabilities                                  111.57%                                 112.35%
                                                                           ======                                  ======
</TABLE>

___________
(1)  Yields and rates are annualized.
(2)  Includes nonaccrual loans.


Provision For Loan Losses
-------------------------

Provision for Loan losses. Provisions for loan losses are charged to earnings to
maintain the total allowance for loan losses at a level  considered  adequate by
management to provide for loan losses.  The components of the allowance for loan
losses  represent an estimation  done pursuant to either  Statement of Financial
Accounting Standards ("SFAS") No. 5, "Accounting for Contingencies," or ("SFAS")
No. 114, "Accounting by Creditors for Impairment of a Loan." The adequacy of the
allowance for loan losses is determined  through a continuous review of the loan
and lease portfolio and considers factors such as prior loss experience, type of
collateral,  industry standards, past due loans in the Company's loan portfolio,
current economic  conditions,  both national and local, and other factors unique
to particular loans and leases. The Company's management  periodically  monitors
and adjusts its  allowance  for loan losses  based upon its analysis of the loan
portfolio

There was no provision for loan losses in the quarter  ended  December 31, 2003,
compared to $120,000 for the quarter ended  December 31, 2002. The provision for
loan losses decreased by $198,000 or 82.5% to $42,000 in in the six-months ended
December 31, 2003 from $240,000 in the  six-months  ended December 31, 2002. Due
to growth in the loan  portfolio,  the  Company's  allowance for loan losses has
decreased as a percentage  of total loans  outstanding  to 0.96% at December 31,
2003 from 1.00% at June 30, 2003.  The Company's  allowance for loan losses as a
percentage of nonperforming loans was 462.6% at December 31, 2003 as compared to
348.3% at June 30, 2003.

                                       15

<PAGE>

Activity in the allowance for loan losses is as follows (dollars in thousands):
<TABLE>
<CAPTION>

                                                   Six Months Ended      Three Months Ended
                                                   ----------------      ------------------
                                                                 December 31,
                                                                 ------------

                                                     2003     2002          2003    2002
                                                     ----     ----          ----    ----
<S>                                                   <C>     <C>            <C>     <C>
Allowance for loan losses, beginning of period      $1,139   1,438         $1,158   1,504

Provision for loan losses                               42     240              0     120

Loans Charged Off:
         Consumer                                       86      93             55      36
         Real Estate                                     0       0              0       0
         Commercial                                     71     423             51     410
                                                    ------  ------         ------  ------
  Total Charge-Offs                                    157     516            106     446

Recoveries:
         Consumer                                       17      22              4      10
         Real Estate                                     0       0              0       0
         Commercial                                     74      11             59       7
                                                    ------  ------         ------  ------
  Total Recoveries                                      91      33             63      17
                                                    ------  ------         ------  ------

Allowance for loan losses, end of period            $1,115  $1,195         $1,115  $1,195
                                                    ======  ======         ======  ======
</TABLE>

     The following  table sets forth  information  with respect to the Company's
non-performing assets at the dates indicated.
<TABLE>
<CAPTION>

                                                                At December 31,     At June 30,
                                                                ---------------     -----------
                                                                      2003              2003
                                                                ---------------     -----------
<S>                                                                     <C>            <C>
                                                                          (In thousands)
Loans accounted for on a non-accrual basis: (1)
    Real estate:
       Residential.............................................  $     129          $      90
       Commercial..............................................         --                 --
       Construction............................................         --                 --
    Consumer...................................................         33                 44
    Commercial Loan/Lease......................................         79                193
                                                                 ---------          ---------
       Total...................................................  $     241          $     327
                                                                 =========          =========
Accruing loans which are contractually past due
   90 days or more.............................................  $      --          $      --
                                                                 ---------          ---------
       Total...................................................  $      --          $      --
                                                                 ---------          ---------

       Total non-performing loans..............................  $     241          $     327
                                                                 =========          =========

Percentage of total loans......................................       0.21%              0.29%
                                                                 =========          =========
Other non-performing assets (2)................................  $       4          $      19
                                                                 =========          =========
</TABLE>

_____________
(1)  Non-accrual  status  denotes loans on which,  in the opinion of management,
     the collection of additional  interest is unlikely.  Payments received on a
     non-accrual loan are either applied to the outstanding principal balance or
     recorded as interest  income,  depending on management's  assessment of the
     collectability of the loan.
(2)  Other  non-performing  assets  represents  property acquired by the Company
     through foreclosure or repossession.  This property is carried at the lower
     of its fair market  value less  estimated  selling  costs or the  principal
     balance of the related loan, whichever is lower.

     At December 31, 2003,  non-accrual  loans consisted of two residential real
estate loans totaling  $129,000,  two second  mortgages  totaling  $33,000,  one
commercial loan totaling $4,000 and four commercial leases totaling

                                       16
<PAGE>

$75,000.  As of February 5, 2004,  the Company had received full payment for one
residential  mortgage totaling $90,000 and one second mortgage totaling $21,000.
The property  securing the other second  mortgage has been sold and proceeds are
in  the  hands  of  the  trustee.  A  full  recovery  of  $12,000  is  expected.
Additionally,   the  remaining   first   mortgage  of  $39,000  has  been  fully
charged-off.

Except  as  discussed  below,  the  Company  had  no  loans  not  classified  as
non-accrual,  90 days past due or  restructured  where known  information  about
possible credit problems of borrowers caused management to have serious concerns
as to the ability of the borrowers to comply with present loan  repayment  terms
and may result in disclosure as non-accrual,  90 days past due or  restructured.
At December 31 the company had $347,000 in  commercial  loans rated  substandard
outstanding to borrower who has  repeatedly  been in the 30 to 60 day delinquent
category.  There  is an SBA  guarantee  of  $111,000.  The  borrower  is  having
difficulty  collecting accounts receivable,  primarily a $150,000 receivable due
from the  Baltimore  City School  System.  The Company has and will  continue to
monitor this credit closely.

Noninterest Income
------------------

The Company's noninterest income consists of deposit fees, service charges, late
fees and gains and losses on sales of  securities,  loans and  repossessed  real
estate.  Total noninterest  income increased by $12,000 or 12.4% to $115,000 for
the quarter ended December 31, 2003 from $102,000 for the quarter ended December
31,  2002.  Total  noninterest  income  increased  by $4,900 or 2.1% to $233,000
during the six months  ended  December  31,  2003 from  $228,000  during the six
months ended December 31, 2002.

Non-interest Expenses
---------------------

Total non-interest expenses decreased by $23,000 or 2.0% to $1.2 million for the
quarter ended December 31, 2003 from $1.2 million for the quarter ended December
31, 2002. Total non-interest expense decreased by $17,000 to $2.3 million during
the six months ended  December 31, 2003 from $2.3 million  during the six months
ended December 31, 2002. In the comparable quarterly periods, lower professional
fees  offset  increases  in most other  expense  categories.  In the  comparable
six-month periods,  lower professional fees, equipment and other expenses offset
higher   compensation  and  benefits  and  advertising   expenses.   The  higher
professional  fees in the  comparable  time  periods  resulted  from  legal  and
consulting  expenses  arising from loan workouts as well as  consulting  expense
incurred  in  the  evaluation  of  potential  new  outsourced   data  processing
providers.

Liquidity and Capital Resources
-------------------------------

An important component of the Company's  asset/liability  structure is the level
of  liquidity  available  to meet the  needs of  customers  and  creditors.  The
Company's   Asset/Liability   Management   Committee  has  established   general
guidelines for the  maintenance  of prudent  levels of liquidity.  The Committee
continually monitors the amount and source of available  liquidity,  the time to
acquire it and its cost. Management of the Company seeks to maintain an adequate
level of  liquidity  in  order  to  retain  flexibility  in terms of  investment
opportunities and deposit pricing. Because liquid assets generally provide lower
rates of return, a high level of liquidity will, to a certain extent,  result in
lower net interest margins and lower net income.

The Company's most liquid assets are cash on hand, interest-bearing deposits and
Federal  funds  sold,  which are  short-term,  highly  liquid  investments  with
original  maturities of less than three months that are readily  convertible  to
known amounts of cash. The levels of these assets are dependent on the Company's
operating,  financing  and  investing  activities  during any given  period.  At
December 31, 2003,  the Company's  cash on hand,  interest-bearing  deposits and
Federal  funds  sold  totaled  $11.2  million.  In  addition,  the  Company  has
approximately  $31.8  million  of  mortgage-backed  and  investment   securities
classified as available-for-sale.

The Company anticipates that it will have sufficient funds available to meet its
current  loan  commitments  of $5.4  million.  These  funds  will be  internally
generated,  raised through  deposit  operations,  or borrowed.  Certificates  of
deposits that are scheduled to mature in less than one year at December 31, 2003
totaled $35.4 million. Historically, a high percentage of maturing deposits have
remained with the Company.  However,  due the Company's high level of liquidity,
rates paid on certificates  have been aggressively  lowered.  This may result in
some customers  withdrawing their certificates in order to chase yields at other
financial institutions.

The Company's  primary  sources of funds are deposits and proceeds from maturing
investment securities and mortgage-backed  securities and principal and interest
payments   on  loans.   While   maturities   and   scheduled   amortization   of
mortgage-backed  securities and loans are predictable sources of funds,  deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions, competition and other factors.


                                       17

<PAGE>

The Company, as the holding company for the Bank, has an annual cash requirement
of approximately $476,000 for the payment of common and preferred dividends. The
holding company currently has cash on hand of $900.000. The only source of funds
for the holding company is dividends from the Bank. The amount of dividends that
can be paid to the holding  company  from the bank is limited by the earnings of
the bank.

As discussed in Note 5 - Regulatory  Capital  Requirements,  the Company and the
Bank exceeded all regulatory minimum capital requirements.

Contingencies and Off-Balance Sheet Items
-----------------------------------------

The  Company  is party to  financial  instruments  with  off-balance  sheet risk
including  commitments  to extend  credit  under both new  facilities  and under
existing lines of credit.  Commitments to fund loans  typically  expire after 60
days,  commercial  lines of credit are subject to annual reviews and home equity
lines of credit are generally for a term of 20 years. These instruments contain,
to varying  degrees,  credit  and  interest  rate risk in excess of the  amounts
recognized in the consolidated balance sheets.


Off-balance sheet financial  instruments whose contract amounts represent credit
and interest rate risk are summarized as follows:

                                          December 31, 2003     June 30, 2003
                                          -----------------    ---------------
                                                  (dollars in thousands)

Commitments to originate new loans             $5,363             $1,566
Undisbursed lines of credit                     4,090              4,720
Financial standby letters of credit               985                958


As discussed in Note 5 - Regulatory  Capital  Requirements,  the Company and the
Bank exceeded all regulatory minimum capital requirements.


ITEM 3 : CONTROLS AND PROCEDURES
--------------------------------

As of the end of the period  covered by this report,  management  of the Company
carried out an evaluation,  under the supervision and with the  participation of
the Company's  principal  executive officer and principal  financial officer, of
the effectiveness of the Company's disclosure controls and procedures.  Based on
this  evaluation,  the  Company's  principal  executive  officer  and  principal
financial  officer  concluded  that  the  Company's   disclosure   controls  and
procedures are effective in ensuring that  information  required to be disclosed
by the Company in reports that it files or submits under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

In addition,  there have been no changes in the Company's  internal control over
financial  reporting  (to the extent  that  elements of  internal  control  over
financial  reporting are subsumed  within  disclosure  controls and  procedures)
identified in connection  with the evaluation  described in the above  paragraph
that occurred  during the Company's  last fiscal  quarter,  that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.



                                       18

<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 2.  Changes in  Securities and small  business  issuer  purchases of equity
         securities

None.

Item 3.  Defaults Upon Senior Securities

None

Item 4.  Submission of Matters to a Vote of Security Holders

          The  following  table sets forth  matters  that were voted upon at the
          Company's Annual Meeting of Stockholder's held on October 23, 2003:

                            Votes           Votes             Broker
                             For           Against           Non-votes
                           -------        --------           ---------

Election of Directors:

Joseph J. Bouffard         369,698          392                   --
Nicole N. Glaeser          336,165          925                   --
J. Thomas Hoffman          369,709          381                   --

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

        (a)      Exhibits

        The following exhibit is filed herewith:

        Exhibit                      Title
        Number                       -----
        ------

        31.1     Rule 13a-14(a) Certification of Chief Executive Officer
        31.2     Rule 13a-14(a) Certification of Chief Financial Officer
        32       Certification pursuant to 18 U.S.C. Section 1350


        (b)  Reports on Form 8-K

               The  Company  filed the  following  Current  Reports  on Form 8-K
          during the quarter ended December 31, 2003:
<TABLE>
<CAPTION>

                  Date of Report            Item(s) Reported           Financial Statements Filed
                  --------------            ----------------           --------------------------
                     <S>                        <C>                             <C>
                  October 23, 2003                5, 7, 12                      N/A
                  November 12, 2003               5, 7                          N/A
</TABLE>

                                       19

<PAGE>

                                   Signatures


In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its  behalf by the  undersigned
thereunto duly authorized.


                                        PATAPSCO BANCORP, INC.



Date:  February 12, 2004                /s/ Joseph J. Bouffard
                                        ---------------------------------------
                                        Joseph J. Bouffard
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)




Date: February 12, 2004                 /s/ Michael J. Dee
                                        ---------------------------------------
                                        Michael J. Dee
                                        Chief Financial Officer & Controller
                                        (Principal Financial Officer)


                                       20