| MARYLAND                                                                     |   | 52-1782444               |
|------------------------------------------------------------------------------|--------|--------------------------|
| (State or other jurisdiction                                  |   | (I.R.S. Employer    |
| of incorporation or organization)                             |   | Identification No.) |
|                                                                         |   |                     |
| 101 Crain Highway, S.E., Glen Burnie, Maryland |   | 21061                    |
| (Address of principal executive offices)                 |   | (Zip Code)          |

| Title of Class |   | Name of Each Exchange on Which Registered |
|--------------------------|--------|-------------------------------------------------------------------------|
| None                     |   | None                                                                    |

----

| PART      I      |                                                                                |
|------------------|-------------------------------------------------------------------------------------|
|             |                                                                                |   |
| Item      1.     | Business                                                                            | 3 |
| Item      2.     | Properties                                                                          | 16 |
| Item      3.     | Legal      Proceedings                                                              | 17 |
|             | Executive      Officers of the Registrant                                           | 17 |
|             |                                                                                |   |
| PART      II     |                                                                                |
|             |                                                                                |   |
| Item      4.     | Market      for Registrant’s Common Equity, Related                           |   |
|             | Stockholder      Matters and Issuer Purchases of Equity Securities                  | 18 |
| Item      5.     | Selected      Financial Data                                                        | 20 |
| Item      6.     | Management’s      Discussion and Analysis of Financial                        |   |
|             | Condition      and Results of Operations                                            | 21 |
| Item      7.     | Financial      Statements and Supplementary Data                                    | 30 |
| Item      8.     | Changes      in and Disagreements with Accountants                                  |   |
|             | on      Accounting and Financial Disclosure                                         | 30 |
| Item      8A(T). | Controls      and Procedures                                                        | 30 |
| Item      8B.    | Other      Information                                                              | 31 |
|             |                                                                                |   |
| PART      III    |                                                                                |
|             |                                                                                |   |
| Item      9.     | Directors,      Executive Officers and Corporate Governance                         | 32 |
| Item      10.    | Executive      Compensation                                                         | 32 |
| Item      11.    | Security      Ownership of Certain Beneficial Owners                                |   |
|             | and      Management and Related Stockholder Matters                                 | 32 |
| Item      12.    | Certain      Relationships and Related Transactions, and Director      Independence | 32 |
| Item      13.    | Principal      Accountant Fees and Services                                         | 32 |
|             |                                                                                |   |
| PART      IV     |                                                                                |
|             |                                                                                |   |
| Item      14.    | Exhibits      and Financial Statement Schedules                                     | 33 |
|             |                                                                                |   |
| Signatures       | 34                                                                                  |

----

ITEM1.  BUSINESS

----

|                                    |   | At December 31, |    |
|-----------------------------------------|--------|---------------------------|---------|
|                                    |   | 2009                      |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| (Dollars in Thousands)        |   | $                         |    |   | % |   |   | $ |   |   | % |   |   | $ |   |   | % |   |   | $ |   |   | % |   |   | $ |   |   | % |   |
| Mortgage:                               |   |                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                             |   | $                         | 95,683  |   |   |   | 39.81 | % |   | $ | 87,708 |   |   |   | 36.85 | % |   | $ | 76,781 |   |   |   | 37.98 | % |   | $ | 68,341 |   |   |   | 34.88 | % |   | $ | 71,841 |   |   |   | 37.17 | % |
| Commercial                              |   |                      | 79,845  |   |   |   | 33.23 |   |   |   | 76,153 |   |   |   | 31.99 |   |   |   | 47,843 |   |   |   | 23.66 |   |   |   | 53,164 |   |   |   | 27.13 |   |   |   | 37,666 |   |   |   | 19.50 |   |
| Construction      and land development  |   |                      | 1,743   |   |   |   | 0.73 |   |   |   | 6,590 |   |   |   | 2.77 |   |   |   | 5,876 |   |   |   | 2.91 |   |   |   | 1,609 |   |   |   | 0.83 |   |   |   | 1,402 |   |   |   | 0.73 |   |
|                                    |   |                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer:                               |   |                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment                             |   |                      | 15,965  |   |   |   | 6.64 |   |   |   | 16,451 |   |   |   | 6.91 |   |   |   | 17,087 |   |   |   | 8.45 |   |   |   | 15,044 |   |   |   | 7.67 |   |   |   | 15,748 |   |   |   | 8.15 |   |
| Credit      card                        |   |                      | 166     |   |   |   | 0.07 |   |   |   | 173 |   |   |   | 0.07 |   |   |   | 143 |   |   |   | 0.07 |   |   |   | 144 |   |   |   | 0.08 |   |   |   | 128 |   |   |   | 0.07 |   |
| Indirect      automobile                |   |                      | 37,092  |   |   |   | 15.44 |   |   |   | 43,970 |   |   |   | 18.47 |   |   |   | 49,260 |   |   |   | 24.37 |   |   |   | 52,539 |   |   |   | 26.81 |   |   |   | 60,510 |   |   |   | 31.31 |   |
| Commercial                              |   |                      | 9,801   |   |   |   | 4.08 |   |   |   | 6,974 |   |   |   | 2.94 |   |   |   | 5,184 |   |   |   | 2.56 |   |   |   | 5,077 |   |   |   | 2.60 |   |   |   | 5,932 |   |   |   | 3.07 |   |
| Gross      loans                        |   |                      | 240,295 |   |   |   | 100.00 | % |   |   | 238,019 |   |   |   | 100.00 | % |   |   | 202,174 |   |   |   | 100.00 | % |   |   | 195,918 |   |   |   | 100.00 | % |   |   | 193,227 |   |   |   | 100.00 | % |
| Unearned      income on loans           |   |                      | (839    | ) |   |   |   |   |   |   | (864 | ) |   |   |   |   |   |   | (816 | ) |   |   |   |   |   |   | (743 | ) |   |   |   |   |   |   | (821 | ) |   |   |   |   |
| Gross      loans net of unearned income |   |                      | 239,456 |   |   |   |   |   |   |   | 237,155 |   |   |   |   |   |   |   | 201,357 |   |   |   |   |   |   |   | 195,175 |   |   |   |   |   |   |   | 192,406 |   |   |   |   |   |
| Allowance      for credit losses        |   |                      | (3,573  | ) |   |   |   |   |   |   | (2,022 | ) |   |   |   |   |   |   | (1,604 | ) |   |   |   |   |   |   | (1,839 | ) |   |   |   |   |   |   | (2,201 | ) |   |   |   |   |
| Loans,      net                         |   | $                         | 235,883 |   |   |   |   |   |   | $ | 235,133 |   |   |   |   |   |   | $ | 199,753 |   |   |   |   |   |   | $ | 193,336 |   |   |   |   |   |   | $ | 190,205 |   |   |   |   |   |

----

|                                   |   | Due WithinOne Year |   |   | Due Over One ToFive Years |   |   | Due OverFive Years |   |   | Total   |   |
|----------------------------------------|--------|------------------------------|--------|--------|-----------------------------------------------|--------|--------|------------------------------|--------|--------|---------|--------|
|                                   |   | (In      Thousands)          |   |   |                                          |   |
| Real      Estate - mortgage:           |   |                         |   |   |                                          |   |   |                         |   |   |    |   |
| Residential                            |   | $                            | 7,447  |   |                                          | $      | 2,580  |                         |   | $      | 85,656  |   |   | $ | 95,683 |   |
| Commercial                             |   |                         | 11,113 |   |                                          |   | 43,639 |                         |   |   | 25,093  |   |   |   | 79,845 |   |
| Construction      and land development |   |                         | 738    |   |                                          |   | 281    |                         |   |   | 724     |   |   |   | 1,743 |   |
| Installment                            |   |                         | 492    |   |                                          |   | 9,792  |                         |   |   | 5,681   |   |   |   | 15,965 |   |
| Credit      Card                       |   |                         | 51     |   |                                          |   | 27     |                         |   |   | 88      |   |   |   | 166 |   |
| Indirect      automobile               |   |                         | 1,082  |   |                                          |   | 29,512 |                         |   |   | 6,498   |   |   |   | 37,092 |   |
| Commercial                             |   |                         | 6,169  |   |                                          |   | 500    |                         |   |   | 3,132   |   |   |   | 9,801 |   |
|                                   |   | $                            | 27,092 |   |                                          | $      | 86,331 |                         |   | $      | 126,872 |   |   | $ | 240,295 |   |

----

----

|                                                               |   | At December 31,   |   |
|--------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                               |   | 2009                        |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                               |   | (Dollars      In Thousands) |   |
| Restructured      Loans                                            |   | $                           | 87     |   |   | $ | - |   |   | $ | 578 |   |   | $ | - |   |   | $ | - |   |
|                                                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual      loans:                                            |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate – mortgage:                                 |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                        |   | $                           | 215    |   |   | $ | - |   |   | $ | - |   |   | $ | 3 |   |   | $ | 14 |   |
| Commercial                                                         |   |                        | 2,626  |   |   |   | 659 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate - construction                                    |   |                        | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Installment                                                        |   |                        | 176    |   |   |   | 208 |   |   |   | 212 |   |   |   | 46 |   |   |   | 159 |   |
| Commercial                                                         |   |                        | -      |   |   |   | - |   |   |   | - |   |   |   | 8 |   |   |   | 12 |   |
| Total      non-accrual loans                                       |   |                        | 3,017  |   |   |   | 867 |   |   |   | 212 |   |   |   | 57 |   |   |   | 185 |   |
|                                                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accruing      loans past due 90 days or more                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate – mortgage:                                 |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                        |   |                        | 8      |   |   |   | 3 |   |   |   | 512 |   |   |   | 2 |   |   |   | 1 |   |
| Commercial                                                         |   |                        | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate - construction                                    |   |                        | -      |   |   |   | 5 |   |   |   | - |   |   |   | - |   |   |   | 3 |   |
| Installment                                                        |   |                        | 1      |   |   |   | 26 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                         |   |                        | 12     |   |   |   | - |   |   |   | 128 |   |   |   | - |   |   |   | - |   |
| Total      accruing loans past due 90 days or more                 |   |                        | 21     |   |   |   | 34 |   |   |   | 640 |   |   |   | 2 |   |   |   | 4 |   |
| Total      non-accrual and past due loans                          |   | $                           | 3,038  |   |   | $ | 901 |   |   | $ | 852 |   |   | $ | 59 |   |   | $ | 189 |   |
| Non-accrual      and past due loans to gross loans                 |   |                        | 1.26   | % |   |   | 0.38 | % |   |   | 0.43 | % |   |   | 0.03 | % |   |   | 0.10 | % |
| Allowance      for credit losses to non-accrual and past due loans |   |                        | 117.61 | % |   |   | 224.42 | % |   |   | 188.27 | % |   |   | 3,116.95 | % |   |   | 1,164.55 | % |

----

|                                             |   | Year Ended December 31, |    |
|--------------------------------------------------|--------|----------------------------------------|---------|
|                                             |   | 2009                                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                             |   | (Dollars      In Thousands)            |    |
| Beginning      Balance                           |   | $                                      | 2,022   |   |   | $ | 1,604 |   |   | $ | 1,839 |   |   | $ | 2,201 |   |   | $ | 2,412 |   |
|                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      charged off                           |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate - mortgage:                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                      |   |                                   | 85      |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | - |   |
| Commercial                                       |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate - construction                  |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Installment                                      |   |                                   | 1,070   |   |   |   | 1,079 |   |   |   | 591 |   |   |   | 528 |   |   |   | 495 |   |
| Credit      card & related                   |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                       |   |                                   | 133     |   |   |   | 2 |   |   |   | - |   |   |   | 253 |   |   |   | 127 |   |
| Total                                            |   |                                   | 1,288   |   |   |   | 1,081 |   |   |   | 591 |   |   |   | 782 |   |   |   | 622 |   |
|                                             |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries                                       |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate - mortgage:                     |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                      |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | - |   |
| Commercial                                       |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate - construction                  |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Installment                                      |   |                                   | 359     |   |   |   | 333 |   |   |   | 258 |   |   |   | 335 |   |   |   | 276 |   |
| Credit      card & related                   |   |                                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                       |   |                                   | 37      |   |   |   | 20 |   |   |   | 48 |   |   |   | 22 |   |   |   | 185 |   |
| Total                                            |   |                                   | 396     |   |   |   | 353 |   |   |   | 306 |   |   |   | 358 |   |   |   | 461 |   |
| Net      charge offs/(recoveries)                |   |                                   | 892     |   |   |   | 728 |   |   |   | 285 |   |   |   | 424 |   |   |   | 161 |   |
| Provisions      (credited) charged to operations |   |                                   | 2,443   |   |   |   | 1,146 |   |   |   | 50 |   |   |   | 62 |   |   |   | (50 | ) |
| Ending      balance                              |   | $                                      | 3,573   |   |   | $ | 2,022 |   |   | $ | 1,604 |   |   | $ | 1,839 |   |   | $ | 2,201 |   |
| Average      loans                               |   | $                                      | 239,788 |   |   | $ | 219,485 |   |   | $ | 199,632 |   |   | $ | 186,706 |   |   | $ | 191,706 |   |
| Net      charge-offs to average loans            |   |                                   | 0.37    | % |   |   | 0.33 | % |   |   | 0.14 | % |   |   | 0.23 | % |   |   | 0.09 | % |

----

|                                  |   | At December 31,            |   |
|---------------------------------------|--------|--------------------------------------|--------|
|                                  |   | 2009                                 |   |   | 2008 |   |
| Portfolio                             |   | Allowance ForEach Category |   |   | Percentage Of Loans InEach Category ToTotal Loans |   |   | Allowance ForEach Category |   |   | Percentage Of Loans InEach Category ToTotal Loans |   |
|                                  |   | (Dollars      In Thousands)          |   |
| Real      Estate - mortgage:          |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Residential                           |   | $                                    | 162    |   |   |   | 39.81 | % |   | $ | 123 |   |   |   | 36.85 | % |
| Commercial                            |   |                                 | 2,377  |   |   |   | 33.23 |   |   |   | 460 |   |   |   | 31.99 |   |
| Real      Estate — construction |   |                                 | 4      |   |   |   | 0.73 |   |   |   | 63 |   |   |   | 2.77 |   |
| Installment                           |   |                                 | 146    |   |   |   | 6.64 |   |   |   | 161 |   |   |   | 6.91 |   |
| Credit      Card                      |   |                                 | -      |   |   |   | 0.07 |   |   |   | - |   |   |   | 0.07 |   |
| Indirect      automobile              |   |                                 | 697    |   |   |   | 15.44 |   |   |   | 942 |   |   |   | 18.47 |   |
| Commercial                            |   |                                 | 237    |   |   |   | 4.08 |   |   |   | 240 |   |   |   | 2.94 |   |
| Unallocated                           |   |                                 | (50    | ) |   |   | - |   |   |   | 33 |   |   |   | - |   |
| Total                                 |   | $                                    | 3,573  |   |   |   | 100.00 | % |   | $ | 2,022 |   |   |   | 100.00 | % |

|                                  |   | At December 31,            |   |
|---------------------------------------|--------|--------------------------------------|--------|
|                                  |   | 2007                                 |   |   | 2006 |   |   | 2005 |   |
| Portfolio                             |   | Allowance ForEach Category |   |   | Percentage OfLoans In EachCategory ToTotal Loans |   |   | Allowance ForEach Category |   |   | Percentage OfLoans In EachCategory ToTotal Loans |   |   | Allowance ForEach Category |   |   | Percentage OfLoans In EachCategory ToTotal Loans |   |
|                                  |   | (Dollars      In Thousands)          |   |
| Real      Estate – mortgage:    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                           |   | $                                    | 117    |   |   |   | 37.98 | % |   | $ | 149 |   |   |   | 34.88 | % |   | $ | 153 |   |   |   | 37.17 | % |
| Commercial                            |   |                                 | 163    |   |   |   | 23.66 |   |   |   | 314 |   |   |   | 27.13 |   |   |   | 277 |   |   |   | 19.50 |   |
| Real      Estate – construction |   |                                 | 102    |   |   |   | 2.91 |   |   |   | 14 |   |   |   | 0.83 |   |   |   | 8 |   |   |   | 0.73 |   |
| Installment                           |   |                                 | 55     |   |   |   | 8.45 |   |   |   | 103 |   |   |   | 7.67 |   |   |   | 103 |   |   |   | 8.15 |   |
| Credit      Card                      |   |                                 | -      |   |   |   | 0.07 |   |   |   | - |   |   |   | 0.08 |   |   |   | - |   |   |   | 0.07 |   |
| Indirect      automobile              |   |                                 | 892    |   |   |   | 24.37 |   |   |   | 1,119 |   |   |   | 26.81 |   |   |   | 1,260 |   |   |   | 1.31 |   |
| Commercial                            |   |                                 | 257    |   |   |   | 2.56 |   |   |   | 260 |   |   |   | 2.60 |   |   |   | 264 |   |   |   | 3.07 |   |
| Unallocated                           |   |                                 | 18     |   |   |   | - |   |   |   | 120 |   |   |   | - |   |   |   | 136 |   |   |   | - |   |
| Total                                 |   | $                                    | 1,604  |   |   |   | 100.00 | % |   | $ | 1,839 |   |   |   | 100.00 | % |   | $ | 2,201 |   |   |   | 100.00 | % |

|                                                         |   | At December 31, |   |
|--------------------------------------------------------------|--------|---------------------------|--------|
|                                                         |   | 2009                      |   |   | 2008 |   |   | 2007 |   |
|                                                         |   | (In      Thousands)       |   |
| U.S.      Treasury securities                                |   | $                         | -      |   |   | $ | - |   |   | $ | - |   |
| U.S.      Government agencies and mortgage backed securities |   |                      | 54,030 |   |   |   | 25,571 |   |   |   | 44,094 |   |
| Obligations      of states and political subdivisions        |   |                      | 30,073 |   |   |   | 31,466 |   |   |   | 32,311 |   |
| Corporate      trust preferred                               |   |                      | 2,080  |   |   |   | 2,169 |   |   |   | 2,167 |   |
| Total      investment securities                             |   | $                         | 86,183 |   |   | $ | 59,206 |   |   | $ | 78,572 |   |

----

|                                                         |   | One Year Or Less |   |   | One To Five Years |   |   | Five to Ten Years |   |   | More Than Ten Years |   |   | Total      |   |
|--------------------------------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|--------|--------|------------------------------------|--------|--------|------------|--------|
|                                                         |   | Amort.Cost                      |   |   | Weighted AverageYield       |   |   | Amort.Cost                       |   |   | Weighted AverageYield         |   |   | Amort.Cost |   |   | Weighted AverageYield |   |   | Amort.Cost |   |   | Weighted AverageYield |   |   | Amort.Cost |   |   | Weighted AverageYield |   |
| U.S.      Treasury securities                                |   | $                               | -      |   |                             |   | -      | %                                |   | $      | -                                  |   |   |       | -      | % |   | $ | - |   |   |   | - | % |   | $ | - |   |   |   | - | % |   | $ | - |   |   |   | - | % |
| U.S.      Government agencies and mortgage backed securities |   |                            | -      |   |                             |   | -      |                             |   |   | -                                  |   |   |       | -      |   |   |   | 1,261 |   |   |   | 5.00 |   |   |   | 52,769 |   |   |   | 4.67 |   |   |   | 54,030 |   |   |   | 4.67 |   |
| Obligations      of states and political subdivisions        |   |                            | 650    |   |                             |   | 3.19   |                             |   |   | 1,825                              |   |   |       | 3.49   |   |   |   | 566 |   |   |   | 4.36 |   |   |   | 27,032 |   |   |   | 4.40 |   |   |   | 30,073 |   |   |   | 4.32 |   |
| Corporate      trust preferred                               |   |                            | -      |   |                             |   | -      |                             |   |   | -                                  |   |   |       | -      |   |   |   | - |   |   |   | - |   |   |   | 2,080 |   |   |   | 8.68 |   |   |   | 2,080 |   |   |   | 8.68 |   |
| Total      investment securities                             |   | $                               | 650    |   |                             |   | 3.19   | %                                |   | $      | 1,825                              |   |   |       | 3.49   | % |   | $ | 1,827 |   |   |   | 4.80 | % |   | $ | 81,881 |   |   |   | 4.70 | % |   | $ | 86,183 |   |   |   | 4.67 | % |

9:

|                               |   | Amount(In Thousands) |   |
|------------------------------------|--------|---------------------------|--------|
| Three      months or less          |   | $                         | 10,286 |   |
| Over      three through six months |   |                      | 4,829  |   |
| Over      six through 12 months    |   |                      | 10,948 |   |
| Over      12 months                |   |                      | 19,183 |   |
| Total                              |   | $                         | 45,246 |   |

----

----

----

----

----

----

ITEM2.  PROPERTIES

|                                                                                  |   | YearOpened |   | Owned/Leased |   | Book Value |      |   | ApproximateSquare Footage |   |   | Deposits |   |
|---------------------------------------------------------------------------------------|--------|------------|--------|--------------|--------|-----------------|-----------|--------|--------------------------------|--------|--------|----------|--------|
| Main Office:                                                                          |   |       |   |         |   |            |      |   |                           |   |   |     |   |
| 101      Crain Highway, S.E.Glen      Burnie, MD  21061                     |   | 1953       |   | Owned        |   | $               | 671,060   |   |                           |   | 10,000 |     |   | $ | 87,115,646 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Branches:                                                                             |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Odenton1405      Annapolis RoadOdenton,      MD  21113                      |   | 1969       |   | Owned        |   |            | 150,062   |   |                           |   | 6,000  |     |   |   | 40,465,617 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Riviera      Beach8707      Ft. Smallwood RoadPasadena,      MD  21122      |   | 1973       |   | Owned        |   |            | 130,706   |   |                           |   | 2,500  |     |   |   | 31,372,810 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Crownsville1221      Generals HighwayCrownsville,      MD  21032            |   | 1979       |   | Owned        |   |            | 296,199   |   |                           |   | 3,000  |     |   |   | 51,088,811 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Severn811      Reece RoadSevern,      MD  21144                             |   | 1984       |   | Owned        |   |            | 144,954   |   |                           |   | 2,500  |     |   |   | 28,640,749 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| New      Cut Road740      Stevenson RoadSevern,      MD  21144              |   | 1995       |   | Owned        |   |            | 1,371,380 |   |                           |   | 2,600  |     |   |   | 23,941,839 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| LinthicumBurwood      Village Shopping CenterGlen      Burnie, MD  21060    |   | 2005       |   | Leased       |   |            | 133,556   |   |                           |   | 2,500  |     |   |   | 15,043,178 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Severna      Park534      Ritchie HighwaySeverna      Park, MD   21146 |   | 2002       |   | Leased       |   |            | 87,353    |   |                           |   | 2,184  |     |   |   | 17,219,471 |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| Operations Centers:                                                                   |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| 106      Padfield Blvd.Glen      Burnie, MD  21061                          |   | 1991       |   | Owned        |   |            | 863,065   |   |                           |   | 16,200 |     |   |   | N/A |   |
|                                                                                  |   |       |   |         |   |            |      |   |                           |   |   |     |   |   |   |   |
| 103      Crain Highway, S.E.Glen      Burnie, MD 21061                                |   | 2000       |   | Owned        |   |            | 272,262   |   |                           |   | 3,727  |     |   |   | N/A |   |

----

ITEM3.  LEGALPROCEEDINGS

| NAME                        |   | AGE    |   | POSITIONS                                              |   |
|-----------------------------|--------|--------|--------|--------------------------------------------------------|--------|
|                        |   |   |   |                                                   |   |
| F.      William Kuethe, Jr. |   | 77     |   | President      Emeritus                                |   |
| Michael      G. Livingston  |   | 56     |   | President      and Chief Executive Officer             |   |
| John      E. Porter         |   | 56     |   | Senior      Vice President and Chief Financial Officer |   |

----

| ITEM      4. | MARKET      FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS      AND ISSUER PURCHASES OF EQUITY      SECURITIES |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------|

|               |   | 2009   |   |   | 2008   |   |
|--------------------|--------|--------|--------|--------|--------|--------|
| Quarter Ended |   | High   |   |   | Low    |   |   | Dividends |   |   | High |   |   | Low |   |   | Dividends |   |
|               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March      31,     |   | $      | 10.96  |   |   | $      | 8.41 |   |   | $ | 0.10 |   |   | $ | 14.12 |   |   | $ | 10.25 |   |   | $ | 0.10 |   |
| June      30,      |   |   | 9.40   |   |   |   | 7.80 |   |   |   | 0.10 |   |   |   | 12.95 |   |   |   | 11.00 |   |   |   | 0.10 |   |
| September      30  |   |   | 9.25   |   |   |   | 7.70 |   |   |   | 0.10 |   |   |   | 12.00 |   |   |   | 8.90 |   |   |   | 0.10 |   |
| December      31   |   |   | 9.76   |   |   |   | 8.09 |   |   |   | 0.10 |   |   |   | 10.94 |   |   |   | 8.54 |   |   |   | 0.15 |   |

----

| Total Return Analysis |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |
|---------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|
|                            |   | 12/31/2004 |   |   | 12/31/2005 |   |   | 12/31/2005 |   |   | 12/31/2007 |   |   | 12/31/2008 |   |   | 12/31/2009 |   |
| Glen      Burnie Bancorp        |   | $          | 100.00 |   |       | $      | 91.06  |       |   | $      | 89.12      |   |   | $          | 83.66  |   |       | $      | 73.68 |   |   | $ | 64.92 |   |
| Peer      Group                 |   | $          | 100.00 |   |       | $      | 99.12  |       |   | $      | 103.87     |   |   | $          | 85.27  |   |       | $      | 56.78 |   |   | $ | 51.09 |   |
| Nasdaq      Composite           |   | $          | 100.00 |   |       | $      | 102.12 |       |   | $      | 112.73     |   |   | $          | 124.73 |   |       | $      | 74.87 |   |   | $ | 108.83 |   |

----

ITEM5.  SELECTED FINANCIALDATA

|                                                                |   | Year      Ended December 31,                     |      |
|---------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                |   | 2009                                             |      |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                |   | (Dollars      In Thousand Except Per Share Data) |      |
| Operations      Data:                                               |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Interest Income                                            |   | $                                                | 12,102    |   |   | $ | 11,922 |   |   | $ | 11,866 |   |   | $ | 11,821 |   |   | $ | 11,966 |   |
| Provision      for Credit Losses                                    |   |                                             | 2,443     |   |   |   | 1,146 |   |   |   | 50 |   |   |   | 62 |   |   |   | (50 | ) |
| Other      Income                                                   |   |                                             | 2,365     |   |   |   | 2,051 |   |   |   | 2,157 |   |   |   | 2,244 |   |   |   | 2,114 |   |
| Other      Expense                                                  |   |                                             | 10,995    |   |   |   | 13,102 |   |   |   | 10,433 |   |   |   | 10,682 |   |   |   | 10,625 |   |
| Net      Income                                                     |   |                                             | 1,262     |   |   |   | 404 |   |   |   | 2,782 |   |   |   | 2,720 |   |   |   | 2,775 |   |
|                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share      Data:                                                    |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      Net Income Per Share                                     |   | $                                                | 0.46      |   |   | $ | 0.14 |   |   | $ | 0.93 |   |   | $ | 0.92 |   |   | $ | 0.94 |   |
| Diluted      Net Income Per Share                                   |   |                                             | 0.46      |   |   |   | 0.14 |   |   |   | 0.93 |   |   |   | 0.92 |   |   |   | 0.94 |   |
| Cash      Dividends Declared Per Common Share                       |   |                                             | 0.40      |   |   |   | 0.45 |   |   |   | 0.45 |   |   |   | 0.45 |   |   |   | 0.41 |   |
| Weighted      Average Common Shares Outstanding:                    |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                               |   |                                             | 2,734,524 |   |   |   | 2,981,124 |   |   |   | 2,988,796 |   |   |   | 2,972,362 |   |   |   | 2,956,417 |   |
| Diluted                                                             |   |                                             | 2,734,524 |   |   |   | 2,981,124 |   |   |   | 2,988,796 |   |   |   | 2,972,362 |   |   |   | 2,956,417 |   |
|                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Condition Data:                                      |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                   |   | $                                                | 353,397   |   |   | $ | 332,502 |   |   | $ | 307,274 |   |   | $ | 317,746 |   |   | $ | 306,561 |   |
| Loans      Receivable, Net                                          |   |                                             | 235,883   |   |   |   | 235,133 |   |   |   | 199,753 |   |   |   | 193,337 |   |   |   | 190,205 |   |
| Total      Deposits                                                 |   |                                             | 294,358   |   |   |   | 269,768 |   |   |   | 252,917 |   |   |   | 274,833 |   |   |   | 265,248 |   |
| Long      Term Borrowings                                           |   |                                             | 27,034    |   |   |   | 27,072 |   |   |   | 17,107 |   |   |   | 7,140 |   |   |   | 7,171 |   |
| Junior      Subordinated Debentures                                 |   |                                             | 5,155     |   |   |   | 5,155 |   |   |   | 5,155 |   |   |   | 5,155 |   |   |   | 5,155 |   |
| Total      Stockholders’ Equity                               |   |                                             | 25,149    |   |   |   | 27,908 |   |   |   | 29,736 |   |   |   | 28,201 |   |   |   | 26,625 |   |
|                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance      Ratios:                                            |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return      on Average Assets                                       |   |                                             | 0.36      | % |   |   | 0.13 | % |   |   | 0.89 | % |   |   | 0.84 | % |   |   | 0.89 | % |
| Return      on Average Equity                                       |   |                                             | 4.87      |   |   |   | 1.49 |   |   |   | 9.60 |   |   |   | 10.00 |   |   |   | 10.50 |   |
| Net      Interest Margin (1)                                        |   |                                             | 4.29      |   |   |   | 4.31 |   |   |   | 4.39 |   |   |   | 4.31 |   |   |   | 4.46 |   |
| Dividend      Payout Ratio                                          |   |                                             | 85.59     |   |   |   | 332.98 |   |   |   | 48.33 |   |   |   | 49.18 |   |   |   | 43.52 |   |
|                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Ratios:                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      Equity to Average Assets                               |   |                                             | 7.37      | % |   |   | 8.99 | % |   |   | 9.28 | % |   |   | 8.36 | % |   |   | 8.47 | % |
| Leverage      Ratio                                                 |   |                                             | 8.86      |   |   |   | 10.50 |   |   |   | 11.34 |   |   |   | 10.30 |   |   |   | 10.17 |   |
| Total      Risk-Based Capital Ratio                                 |   |                                             | 14.40     |   |   |   | 14.93 |   |   |   | 17.50 |   |   |   | 17.07 |   |   |   | 16.98 |   |
|                                                                |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset      Quality Ratios:                                          |   |                                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for Credit Losses to Gross Loans                     |   |                                             | 1.18      | % |   |   | 0.85 | % |   |   | 0.80 | % |   |   | 0.94 | % |   |   | 1.14 | % |
| Non-accrual      and Past Due Loans to Gross Loans                  |   |                                             | 1.26      | % |   |   | 0.38 | % |   |   | 0.43 | % |   |   | 0.03 | % |   |   | 0.10 | % |
| Allowance      for Credit Losses to Non- Accrual and Past Due Loans |   |                                             | 117.61    | % |   |   | 224.42 | % |   |   | 188.27 | % |   |   | 3,116.95 | % |   |   | 1,164.55 | % |
| Net      Loan Charge-offs  (Recoveries) to Average Loans  |   |                                             | 0.37      | % |   |   | 0.33 | % |   |   | 0.14 | % |   |   | 0.23 | % |   |   | 0.09 | % |

----

----

| ITEM      6. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|--------------|-------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                       |   | Year Ended December 31, |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                                       |   | 2009                                   |   |   | VS. |   |   | 2008 |   |   | 2008 |   |   | VS. |   |   | 2007 |   |
|                                                                                                       |   |                                   |   |   | Change Due To: |   |   |   |   |   | Change Due To: |   |
|                                                                                                       |   | Increase/Decrease                      |   |   | Rate |   |   | Volume |   |   | Increase/Decrease |   |   | Rate |   |   | Volume |   |
|                                                                                                       |   | (In Thousands)                    |   |
| ASSETS:                                                                                                    |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning      assets:                                                                              |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      funds sold                                                                                    |   | $                                      | 7      |   |   | $ | (44 | ) |   | $ | 51 |   |   | $ | (134 | ) |   | $ | (18 | ) |   | $ | (116 | ) |
| Interest-bearing      deposits                                                                             |   |                                   | (115   | ) |   |   | (229 | ) |   |   | 114 |   |   |   | 31 |   |   |   | (207 | ) |   |   | 238 |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities:                                                                                |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Treasury securities, obligations of U.S. government agencies and      mortgage-backed securities |   |                                   | (109   | ) |   |   | (404 | ) |   |   | 295 |   |   |   | (591 | ) |   |   | 7 |   |   |   | (598 | ) |
| Obligations      of states and political subdivisions(1)                                                   |   |                                   | (121   | ) |   |   | 68 |   |   |   | (189 | ) |   |   | (75 | ) |   |   | 43 |   |   |   | (118 | ) |
| All      other investment securities                                                                       |   |                                   | (4     | ) |   |   | (1 | ) |   |   | (3 | ) |   |   | (58 | ) |   |   | 1 |   |   |   | (59 | ) |
| Total      investment securities                                                                           |   |                                   | (234   | ) |   |   | (337 | ) |   |   | 103 |   |   |   | (724 | ) |   |   | 51 |   |   |   | (775 | ) |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans,      net of unearned income:                                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand,      time and lease                                                                                |   |                                   | 9      |   |   |   | (122 | ) |   |   | 131 |   |   |   | (58 | ) |   |   | (179 | ) |   |   | 121 |   |
| Mortgage      and construction                                                                             |   |                                   | 995    |   |   |   | (436 | ) |   |   | 1,431 |   |   |   | 1,749 |   |   |   | 152 |   |   |   | 1,597 |   |
| Installment      and credit card                                                                           |   |                                   | (212   | ) |   |   | 54 |   |   |   | (266 | ) |   |   | (183 | ) |   |   | 253 |   |   |   | (436 | ) |
| Total      gross loans(2)                                                                                  |   |                                   | 792    |   |   |   | (504 | ) |   |   | 1,296 |   |   |   | 1,508 |   |   |   | 226 |   |   |   | 1,282 |   |
| Allowance      for credit losses                                                                           |   |                                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      net loans                                                                                       |   |                                   | 792    |   |   |   | (504 | ) |   |   | 1,296 |   |   |   | 1,508 |   |   |   | 226 |   |   |   | 1,282 |   |
| Total      interest-earning assets                                                                         |   | $                                      | 450    |   |   | $ | (1,114 | ) |   | $ | 1,564 |   |   | $ | 681 |   |   | $ | 52 |   |   | $ | 629 |   |
|                                                                                                       |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES:                                                                                               |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits:                                                                            |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and NOW                                                                                       |   | $                                      | (22    | ) |   | $ | (23 | ) |   | $ | 1 |   |   | $ | (79 | ) |   | $ | (69 | ) |   | $ | (10 | ) |
| Money      market                                                                                          |   |                                   | (5     | ) |   |   | (8 | ) |   |   | 3 |   |   |   | (41 | ) |   |   | (27 | ) |   |   | (14 | ) |
| Other      time deposits                                                                                   |   |                                   | 184    |   |   |   | (958 | ) |   |   | 1,142 |   |   |   | 76 |   |   |   | (209 | ) |   |   | 285 |   |
| Total      interest-bearing deposits                                                                       |   |                                   | 157    |   |   |   | (989 | ) |   |   | 1,146 |   |   |   | (44 | ) |   |   | (305 | ) |   |   | 261 |   |
| Non-interest-bearing      deposits                                                                         |   |                                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Borrowed      funds                                                                                        |   |                                   | 130    |   |   |   | (147 | ) |   |   | 277 |   |   |   | 328 |   |   |   | (577 | ) |   |   | 905 |   |
| Total      interest-bearing liabilities                                                                    |   | $                                      | 287    |   |   | $ | (1,136 | ) |   | $ | 1,423 |   |   | $ | 284 |   |   | $ | (882 | ) |   | $ | 1,166 |   |

----

|                                                                                                       |   | Year Ended December 31, |    |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                       |   | 2009                                   |    |   | 2008 |   |   | 2007 |   |
|                                                                                                       |   | AverageBalance                         |    |   | Interest |   |   | Yield/Cost |   |   | AverageBalance |   |   | Interest |   |   | Yield/Cost |   |   | AverageBalance |   |   | Interest |   |   | Yield/Cost |   |
|                                                                                                       |   | (Dollars      In Thousands)            |    |
| ASSETS:                                                                                                    |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning      assets:                                                                              |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      funds sold                                                                                    |   | $                                      | 4,843   |   |   | $ | 12 |   |   |   | 0.26 | % |   | $ | 433 |   |   | $ | 5 |   |   |   | 1.15 | % |   | $ | 2,665 |   |   | $ | 139 |   |   |   | 5.22 | % |
| Interest-bearing      deposits                                                                             |   |                                   | 12,337  |   |   |   | 15 |   |   |   | 0.12 |   |   |   | 6,560 |   |   |   | 130 |   |   |   | 1.98 |   |   |   | 1,929 |   |   |   | 99 |   |   |   | 5.13 |   |
|                                                                                                       |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      securities:                                                                                |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Treasury securities, obligations of U.S. government agencies and      mortgage-backed securities |   |                                   | 44,367  |   |   |   | 1,854 |   |   |   | 4.18 |   |   |   | 38,532 |   |   |   | 1,963 |   |   |   | 5.09 |   |   |   | 50,392 |   |   |   | 2,554 |   |   |   | 5.07 |   |
| Obligations      of states and political subdivisions(1)                                                   |   |                                   | 29,557  |   |   |   | 2,013 |   |   |   | 6.81 |   |   |   | 32,421 |   |   |   | 2,134 |   |   |   | 6.58 |   |   |   | 34,288 |   |   |   | 2,209 |   |   |   | 6.45 |   |
| All      other investment securities                                                                       |   |                                   | 2,138   |   |   |   | 189 |   |   |   | 8.84 |   |   |   | 2,168 |   |   |   | 193 |   |   |   | 8.90 |   |   |   | 2,839 |   |   |   | 251 |   |   |   | 8.84 |   |
| Total      investment securities                                                                           |   |                                   | 76,062  |   |   |   | 4,056 |   |   |   | 5.33 |   |   |   | 73,121 |   |   |   | 4,290 |   |   |   | 5.87 |   |   |   | 87,519 |   |   |   | 5,014 |   |   |   | 5.73 |   |
|                                                                                                       |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans,      net of unearned income:                                                                        |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand,      time and lease                                                                                |   |                                   | 8,132   |   |   |   | 399 |   |   |   | 4.91 |   |   |   | 6,082 |   |   |   | 390 |   |   |   | 6.41 |   |   |   | 4,788 |   |   |   | 448 |   |   |   | 9.36 |   |
| Mortgage      and construction                                                                             |   |                                   | 173,741 |   |   |   | 10,770 |   |   |   | 6.20 |   |   |   | 151,656 |   |   |   | 9,775 |   |   |   | 6.45 |   |   |   | 126,391 |   |   |   | 8,026 |   |   |   | 6.35 |   |
| Installment      and credit card                                                                           |   |                                   | 57,915  |   |   |   | 4,079 |   |   |   | 7.04 |   |   |   | 61,747 |   |   |   | 4,291 |   |   |   | 6.95 |   |   |   | 68,453 |   |   |   | 4,474 |   |   |   | 6.54 |   |
| Total      gross loans(2)                                                                                  |   |                                   | 239,788 |   |   |   | 15,248 |   |   |   | 6.36 |   |   |   | 219,485 |   |   |   | 14,456 |   |   |   | 6.59 |   |   |   | 199,632 |   |   |   | 12,948 |   |   |   | 6.49 |   |
| Allowance      for credit losses                                                                           |   |                                   | (2,037  | ) |   |   |   |   |   |   |   |   |   |   | (1,479 | ) |   |   |   |   |   |   |   |   |   |   | (1,766 | ) |   |   |   |   |   |   |   |   |
| Total      net loans                                                                                       |   |                                   | 237,751 |   |   |   | 15,248 |   |   |   | 6.41 |   |   |   | 218,006 |   |   |   | 14,456 |   |   |   | 6.63 |   |   |   | 197,866 |   |   |   | 12,948 |   |   |   | 6.54 |   |
| Total      interest-earning assets                                                                         |   |                                   | 330,993 |   |   |   | 19,331 |   |   |   | 5.84 |   |   |   | 298,120 |   |   |   | 18,881 |   |   |   | 6.33 |   |   |   | 289,979 |   |   |   | 18,200 |   |   |   | 6.28 |   |
| Cash      and due from banks                                                                               |   |                                   | 4,488   |   |   |   |   |   |   |   |   |   |   |   | 7,891 |   |   |   |   |   |   |   |   |   |   |   | 8,862 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                                          |   |                                   | 16,709  |   |   |   |   |   |   |   |   |   |   |   | 14,740 |   |   |   |   |   |   |   |   |   |   |   | 13,661 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                                          |   | $                                      | 352,192 |   |   |   |   |   |   |   |   |   |   | $ | 320,751 |   |   |   |   |   |   |   |   |   |   | $ | 312,502 |   |   |   |   |   |   |   |   |   |
|                                                                                                       |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY:                                                           |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits:                                                                            |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      and NOW                                                                                       |   | $                                      | 71,124  |   |   |   | 162 |   |   |   | 0.23 | % |   | $ | 69,468 |   |   |   | 184 |   |   |   | 0.26 | % |   | $ | 72,831 |   |   |   | 263 |   |   |   | 0.36 | % |
| Money      market                                                                                          |   |                                   | 14,363  |   |   |   | 57 |   |   |   | 0.40 |   |   |   | 13,751 |   |   |   | 62 |   |   |   | 0.45 |   |   |   | 15,918 |   |   |   | 103 |   |   |   | 0.65 |   |
| Other      time deposits                                                                                   |   |                                   | 137,764 |   |   |   | 4,718 |   |   |   | 3.42 |   |   |   | 110,049 |   |   |   | 4,534 |   |   |   | 4.12 |   |   |   | 103,491 |   |   |   | 4,458 |   |   |   | 4.31 |   |
| Total      interest-bearing deposits                                                                       |   |                                   | 223,251 |   |   |   | 4,937 |   |   |   | 2.21 |   |   |   | 193,268 |   |   |   | 4,780 |   |   |   | 2.47 |   |   |   | 192,240 |   |   |   | 4,824 |   |   |   | 2.51 |   |
| Short-term      borrowed funds                                                                             |   |                                   | 262     |   |   |   | 0 |   |   |   | 0.02 |   |   |   | 2,209 |   |   |   | 51 |   |   |   | 2.31 |   |   |   | 2,294 |   |   |   | 119 |   |   |   | 5.19 |   |
| Long-term      borrowed funds                                                                              |   |                                   | 32,206  |   |   |   | 1,605 |   |   |   | 4.98 |   |   |   | 26,287 |   |   |   | 1,424 |   |   |   | 5.42 |   |   |   | 13,949 |   |   |   | 1,028 |   |   |   | 7.37 |   |
| Total      interest-bearing liabilities                                                                    |   |                                   | 255,719 |   |   |   | 6,542 |   |   |   | 2.56 |   |   |   | 221,764 |   |   |   | 6,255 |   |   |   | 2.82 |   |   |   | 208,483 |   |   |   | 5,971 |   |   |   | 2.86 |   |
|                                                                                                       |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing      deposits                                                                         |   |                                   | 67,572  |   |   |   |   |   |   |   |   |   |   |   | 68,340 |   |   |   |   |   |   |   |   |   |   |   | 73,415 |   |   |   |   |   |   |   |   |   |
| Other      liabilitiesS                                                                                    |   |                                   | 2,957   |   |   |   |   |   |   |   |   |   |   |   | 1,806 |   |   |   |   |   |   |   |   |   |   |   | 1,609 |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity                                                                            |   |                                   | 25,944  |   |   |   |   |   |   |   |   |   |   |   | 28,841 |   |   |   |   |   |   |   |   |   |   |   | 28,995 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and equity                                                                          |   | $                                      | 352,192 |   |   |   |   |   |   |   |   |   |   | $ | 320,751 |   |   |   |   |   |   |   |   |   |   | $ | 312,502 |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                                                   |   |                                   |    |   |   | $ | 12,789 |   |   |   |   |   |   |   |   |   |   | $ | 12,626 |   |   |   |   |   |   |   |   |   |   | $ | 12,229 |   |   |   |   |   |
| Net      interest spread                                                                                   |   |                                   |    |   |   |   |   |   |   |   | 3.28 | % |   |   |   |   |   |   |   |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   |   |   | 3.42 | % |
| Net      interest margin                                                                                   |   |                                   |    |   |   |   |   |   |   |   | 4.29 | % |   |   |   |   |   |   |   |   |   |   | 4.31 | % |   |   |   |   |   |   |   |   |   |   | 4.39 | % |

----

----

----

|                                             |   | 0-3 Months                  |     |   | Over 3 To12 Months |   |     | Over 1Through 5 Years |   |   | Over 5Years |   |   | Total  |    |
|-------------------------------------------------------|--------|----------------------------------|----------|--------|-----------------------------------|--------|----------|--------------------------------------|--------|--------|------------------|--------|--------|--------|---------|
|                                             |   | (Dollars In Thousands) |     |
| Assets:                                               |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |
| Cash      and due from banks                          |   | $                                | -        |   |                              | $      | -        |                                 |   | $      | -                |   |   | $      | -       |   |   | $ | 10,742 |   |
| Federal      funds and overnight deposits             |   |                             | 692      |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 692 |   |
| Securities                                            |   |                             | -        |   |                              |   | 651      |                                 |   |   | 1,851            |   |   |   | 81,961  |   |   |   | 84,463 |   |
| Loans                                                 |   |                             | 11,508   |   |                              |   | 11,172   |                                 |   |   | 86,331           |   |   |   | 126,872 |   |   |   | 235,883 |   |
| Fixed      Assets                                     |   |                             | -        |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 4,121 |   |
| Other      Assets                                     |   |                             | -        |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 17,496 |   |
|                                                  |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |   |   |   |   |   |
| Total      assets                                     |   | $                                | 12,200   |   |                              | $      | 11,823   |                                 |   | $      | 88,182           |   |   | $      | 208,833 |   |   | $ | 353,397 |   |
|                                                  |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |   |   |   |   |   |
| Liabilities:                                          |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |   |   |   |   |   |
| Demand      deposit accounts                          |   | $                                | -        |   |                              | $      | -        |                                 |   | $      | -                |   |   | $      | -       |   |   | $ | 67,808 |   |
| NOW      accounts                                     |   |                             | 22,353   |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 22,353 |   |
| Money      market deposit accounts                    |   |                             | 15,284   |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 15,284 |   |
| Savings      accounts                                 |   |                             | 48,378   |   |                              |   | 212      |                                 |   |   | -                |   |   |   | -       |   |   |   | 48,500 |   |
| IRA      accounts                                     |   |                             | 5,988    |   |                              |   | 10,969   |                                 |   |   | 21,674           |   |   |   | 819     |   |   |   | 39,450 |   |
| Certificates      of deposit                          |   |                             | 25,591   |   |                              |   | 41,374   |                                 |   |   | 33,484           |   |   |   | 422     |   |   |   | 100,871 |   |
| Other      liabilities                                |   |                             | -        |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 28,737 |   |
| Junior      Subordinated Debenture                    |   |                             | -        |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 5,155 |   |
| Stockholders’      equity                       |   |                             | -        |   |                              |   | -        |                                 |   |   | -                |   |   |   | -       |   |   |   | 25,149 |   |
|                                                  |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |   |   |   |   |   |
| Total      liabilities and Stockholders’ equity |   | $                                | 117,594  |   |                              | $      | 52,555   |                                 |   | $      | 55,158           |   |   | $      | 1,241   |   |   | $ | 353,397 |   |
|                                                  |   |                             |     |   |                              |   |     |                                 |   |   |             |   |   |   |    |   |   |   |   |   |
| GAP                                                   |   | $                                | (105,396 | )      |                              | $      | (40,732  | )                                    |   | $      | 33,024           |   |   | $      | 207,592 |   |   |   |   |   |
| Cumulative      GAP                                   |   |                             | (105,396 | )      |                              |   | (146,128 | )                                    |   |   | (113,014         | )      |   |   | 94,578  |   |   |   |   |   |
| Cumulative      GAP as a % of total assets            |   |                             | (29.82   | %)     |                              |   | (41.35   | %)                                   |   |   | (31.98           | %)     |   |   | 26.76   | % |   |   |   |   |

|                                 |   | Immediate Change in Rates |   |
|-------------------------------------------|--------|------------------------------------------|--------|
|                                 |   |  -200                               |   |   | -100 |   |   | +100 |   |   | +200 |   |
|                                 |   | Basis Points                        |   |   | Basis Points |   |   | Basis Points |   |   | Basis Points |   |
|                                      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| %      Change in Net Interest Income      |   |                                     | -4.9   | % |   |   | -3.1 | % |   |   | 0.6 | % |   |   | -1.6 | % |
| %      Change in Economic Value of Equity |   |                                     | -16.1  | % |   |   | -8.2 | % |   |   | 0.4 | % |   |   | -11.4 | % |

----

----

In June 2009, the Financial Accounting Standards Board (FASB) issuedAccounting Standards Update (ASU) 2009-01, Topic 105 Generally Accepted AccountingPrinciples - Amendments Based on Statement of Financial Accounting Standards No.168 - The FASB Accounting Standards CodificationTM and the Hierarchy of GenerallyAccepted Accounting Principles.  Under this ASU, The FASB AccountingStandards Codification (Codification) became the source of authoritativeU.S. generally accepted accounting principles (GAAP) recognized by the FASB tobe applied by nongovernmental entities.  For SEC registrants, rulesand interpretive releases of the Securities and Exchange Commission (SEC) underauthority of federal securities laws are also sources of authoritativeGAAP.  On September 15, 2009, the effective date of this ASU, theCodification superseded all then-existing non-SEC accounting and reportingstandards unless a particular accounting or reporting standard was specificallygrandfathered into the Codification as authoritative GAAP.  All othernon-grandfathered non-SEC accounting literature not included in the Codificationis no longer authoritative.  In the FASB’s view, the issuance of thisASU and the Codification does not change GAAP (except in limited instances notapplicable to public nongovernmental entities).  The adoption of ASU2009-01, formerly FASB Statement No. 168, did not have a material impact on theCompany’s consolidated financial statements.

----

| ITEM      7. | FINANCIAL STATEMENTS      AND SUPPLEMENTARY DATA |
|--------------|--------------------------------------------------|

| ITEM      8. | CHANGES IN AND      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL      DISCLOSURE |
|--------------|------------------------------------------------------------------------------------------------|

| ITEM      8A(T). | CONTROLS AND      PROCEDURES |
|------------------|------------------------------|

----

| ITEM      8B. | OTHER      INFORMATION |
|---------------|------------------------|

----

PART III

| ITEM 9. | DIRECTORS, EXECUTIVE      OFFICERS AND CORPORATEGOVERNANCE |
|--------------|------------------------------------------------------------|

| ITEM      10. | EXECUTIVE      COMPENSATION |
|---------------|-----------------------------|

| ITEM      11. | SECURITY OWNERSHIP OF      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER      MATTERS |
|---------------|----------------------------------------------------------------------------------------------------------|

| ITEM      12. | CERTAIN RELATIONSHIPS AND      RELATED TRANSACTIONS AND DIRECTOR  INDEPENDENCE |
|---------------|--------------------------------------------------------------------------------|

| ITEM      13. | PRINCIPAL ACCOUNTANT      FEES AND SERVICES |
|---------------|---------------------------------------------|

----

| ITEM 14. | EXHIBITS AND FINANCIAL      STATEMENT SCHEDULES |
|---------------|-------------------------------------------------|

|                                                                                                                            |   | Page |
|---------------------------------------------------------------------------------------------------------------------------------|--------|------|
| Report      of Independent registered Public Accounting Firm                                                                    |   | F-1  |
| Consolidated      Balance Sheets as of December 31, 2009, 2008 and 2007                                                         |   | F-2  |
| Consolidated      Statements of Income for the Years Ended December 31, 2009, 2008 and      2007                                |   | F-3  |
| Consolidated      Statements of Comprehensive Income for the Years Ended December 31, 2009,      2008 and 2007                  |   | F-4  |
| Consolidated      Statements of Changes in Stockholders’ Equity for the Years Ended December      31, 2009, 2008 and 2007 |   | F-5  |
| Consolidated      Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and      2007                            |   | F-6  |
| Notes      to Consolidated Financial Statements                                                                                 |   | F-8  |

| Exhibit No. |   |                                                                                                                                                                                                                                                                                                                                           |
|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1              |   | Articles      of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment      No. 1 to the Registrant’s Form 8-A filed December 27, 1999, File No.      0-24047)                                                                                                                                                            |
| 3.2              |   | Articles of Amendment, dated      October 8, 2003 (incorporated by reference to Exhibit 3.2 to the      Registrant’s Quarterly Report on Form 10-Q for the Quarter ended September      30, 2003, File No. 0-24047)                                                                                                                      |
| 3.3              |   | Articles      Supplementary, dated November 16, 1999 (incorporated by reference to      Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed December      8, 1999, File No. 0-24047)                                                                                                                                        |
| 3.4              |   | By-Laws      (incorporated by reference to Exhibit 3.4 to the Registrant’s Quarterly      Report on Form 10-Q for the Quarter ended September 30, 2003, File No.      0-24047)                                                                                                                                                           |
| 4.1              |   | Rights      Agreement, dated as of February 13, 1998, between Glen Burnie Bancorp and      The Bank of Glen Burnie, as Rights Agent, as amended and restated as of      December 27, 1999 (incorporated by reference to Exhibit 4.1 to Amendment      No. 1 to the Registrant’s Form 8-A filed December 27, 1999, File No.      0-24047) |
| 10.1             |   | Glen      Burnie Bancorp Director Stock Purchase Plan (incorporated by reference to      Exhibit 99.1 to Post-Effective Amendment No. 1 to the Registrant’s      Registration Statement on Form S-8, File No.33-62280)                                                                                                                   |
| 10.2             |   | The      Bank of Glen Burnie Employee Stock Purchase Plan (incorporated by      reference to Exhibit 99.1 to Post-Effective Amendment No. 1 to the      Registrant’s Registration Statement on Form S-8, File No.      333-46943)                                                                                                        |
| 10.3             |   | Amended      and Restated Change-in-Control Severance Plan (incorporated by reference      to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the      Fiscal Year Ended December 31, 2001, File No. 0-24047)                                                                                                             |
| 10.4             |   | The      Bank of Glen Burnie Executive and Director Deferred Compensation Plan      (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual      Report on Form 10-K for the Fiscal Year Ended December 31, 1999, File No.      0-24047)                                                                                   |
| 21               |   | Subsidiaries      of the Registrant (incorporated by reference to Exhibit 3.2 to the      Registrant’s Annual Report on Form 10-K for the Fiscal Year Ended December      31, 2001, File No. 0-24047)                                                                                                                                    |
| 23               |   | Consent      of TGM Group LLC                                                                                                                                                                                                                                                                                                                  |
| 31.1             |   | Rule      15d-14(a) Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                   |
| 31.2             |   | Rule      15d-14(a) Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                   |
| 32.1             |   | Section      1350 Certifications                                                                                                                                                                                                                                                                                                               |

----

|                | GLEN      BURNIE BANCORP |
|---------------------|--------------------------|
|                |                     |
| March      12, 2010 | By:                      |   /s/ Michael G.      Livingston |
|                |                     | Michael      G. Livingston |
|                |                     | President      and Chief ExecutiveOfficer |

| Signature                                   |   | Title                                   |   | Date                |
|---------------------------------------------|--------|-----------------------------------------|--------|---------------------|
|                                        |   |                                    |   |                |
| /s/ Michael G. Livingston                   |   | President,      Chief Executive Officer |   | March      12, 2010 |
|  Michael      G. Livingston            |   | and      Director                       |   |                |
|                                        |   |                                    |   |                |
| /s/ F. William Kuethe, Jr.                  |   | President      Emeritus and Director    |   | March      12, 2010 |
|  F.      William Kuethe, Jr.           |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ John E. Porter                          |   | Senior      Vice President and Chief    |   | March      12, 2010 |
|  John      E. Porter                   |   | Financial      Officer                  |   |                |
|                                        |   |                                    |   |                |
| /s/ John E. Demyan                          |   | Chairman      of the Board and Director |   | March      12, 2010 |
|  John      E. Demyan                   |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Shirley E. Boyer                        |   | Director                                |   | March      12, 2010 |
|  Shirley      E. Boyer                 |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Thomas Clocker                          |   | Director                                |   | March      12, 2010 |
|  Thomas      Clocker                   |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Norman E. Harrison, Jr.                 |   | Director                                |   | March      12, 2010 |
|  Norman      E. Harrison, Jr.          |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ F. W. Kuethe, III                       |   | Director                                |   | March      12, 2010 |
|  F.      W. Kuethe, III                |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Charles Lynch                           |   | Director                                |   | March      12, 2010 |
|  Charles      Lynch                    |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Edward L. Maddox                        |   | Director                                |   | March      12, 2010 |
|  Edward      L. Maddox                 |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/  William N. Scherer,      Sr. |   | Director                                |   | March      12, 2010 |
|        William N. Scherer, Sr.         |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Karen B. Thorwarth                      |   | Director                                |   | March      12, 2010 |
|  Karen      B. Thorwarth               |   |                                    |   |                |
|                                        |   |                                    |   |                |
| /s/ Mary Lou Wilcox                         |   | Director                                |   | March      12, 2010 |
|  Mary      Lou Wilcox                  |   |                                    |   |                |

----

----

| Glen      Burnie Bancorp and Subsidiaries                      |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated      Balance Sheets                               |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31,                                              |   |   | 2009 |   |   |   | 2008 |   |   |   | 2007 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Assets                                                              |   |
| Cash      and due from banks                                        |   | $ | 6,993,811 |   |   | $ | 6,960,377 |   |   | $ | 8,220,582 |   |
| Interest-bearing      deposits in other financial institutions      |   |   | 3,748,387 |   |   |   | 7,883,816 |   |   |   | 5,847,562 |   |
| Federal      funds sold                                             |   |   | 691,624 |   |   |   | 6,393,710 |   |   |   | 726,916 |   |
| Cash      and cash equivalents                                      |   |   | 11,433,822 |   |   |   | 21,237,903 |   |   |   | 14,795,060 |   |
| Investment      securities available for sale, at fair value        |   |   | 84,462,605 |   |   |   | 57,948,645 |   |   |   | 77,182,181 |   |
| Investment      securities held to maturity (fair value             |   |   |   |   |   |   |   |   |   |   |   |   |
| 2007      $726,193)                                       |   |   | - |   |   |   | - |   |   |   | 683,832 |   |
| Federal      Home Loan Bank stock, at cost                          |   |   | 1,858,300 |   |   |   | 1,767,600 |   |   |   | 1,381,900 |   |
| Maryland      Financial Bank stock, at cost                         |   |   | 100,000 |   |   |   | 100,000 |   |   |   | 100,000 |   |
| Common      stock in the Glen Burnie Statutory Trust I              |   |   | 155,000 |   |   |   | 155,000 |   |   |   | 155,000 |   |
| Ground      rents, at cost                                          |   |   | 184,900 |   |   |   | 184,900 |   |   |   | 202,900 |   |
| Loans,      less allowance for credit losses                        |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009 $3,572,528; 2008      $2,021,690; 2007 $1,604,491;             |   |   | 235,882,862 |   |   |   | 235,132,621 |   |   |   | 199,753,132 |   |
| Premises      and equipment, at cost, less accumulated depreciation |   |   | 4,120,597 |   |   |   | 3,099,448 |   |   |   | 3,087,908 |   |
| Accrued      interest receivable on loans and investment securities |   |   | 1,626,792 |   |   |   | 1,680,392 |   |   |   | 1,508,640 |   |
| Deferred      income tax benefits                                   |   |   | 3,129,435 |   |   |   | 2,286,483 |   |   |   | 453,512 |   |
| Other      real estate owned                                        |   |   | 25,000 |   |   |   | 550,000 |   |   |   | 50,000 |   |
| Cash      value of life insurance                                   |   |   | 7,702,656 |   |   |   | 7,434,573 |   |   |   | 7,161,403 |   |
| Other      assets                                              |   |   | 2,714,728 |   |   |   | 924,650 |   |   |   | 758,400 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                   |   | $ | 353,396,697 |   |   | $ | 332,502,215 |   |   | $ | 307,273,868 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Stockholders' Equity                           |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilites:                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing                                                 |   | $ | 67,807,699 |   |   | $ | 63,538,759 |   |   | $ | 68,760,373 |   |
| Interest-bearing                                                    |   |   | 226,550,138 |   |   |   | 206,228,839 |   |   |   | 184,156,393 |   |
| Total      deposits                                                 |   |   | 294,357,837 |   |   |   | 269,767,598 |   |   |   | 252,916,766 |   |
| Short-term      borrowings                                          |   |   | 81,290 |   |   |   | 629,855 |   |   |   | 502,529 |   |
| Long-term      borrowings                                           |   |   | 27,033,711 |   |   |   | 27,071,712 |   |   |   | 17,107,135 |   |
| Junior      subordinated debentures owed to unconsolidated          |   |   |   |   |   |   |   |   |   |   |   |   |
| subsidiary      trust                                               |   |   | 5,155,000 |   |   |   | 5,155,000 |   |   |   | 5,155,000 |   |
| Dividends      payable                                              |   |   | 230,285 |   |   |   | 385,794 |   |   |   | 385,010 |   |
| Accrued      interest payable on deposits                           |   |   | 112,599 |   |   |   | 139,579 |   |   |   | 134,274 |   |
| Accrued      interest payable on junior subordinated debentures     |   |   | 171,518 |   |   |   | 171,518 |   |   |   | 171,518 |   |
| Other      liabilities                                              |   |   | 1,105,335 |   |   |   | 1,272,907 |   |   |   | 1,165,482 |   |
| Total      liabilities                                              |   |   | 328,247,575 |   |   |   | 304,593,963 |   |   |   | 277,537,714 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity:                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock, par value $1, authorized 15,000,000 shares;      |   |   |   |   |   |   |   |   |   |   |   |   |
| issued      and outstanding 2009      2,683,015 shares;             |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008      2,967,727 shares; 2007 2,484,465 shares;                  |   |   | 2,683,015 |   |   |   | 2,967,727 |   |   |   | 2,498,465 |   |
| Surplus                                                        |   |   | 9,190,911 |   |   |   | 11,568,241 |   |   |   | 11,921,129 |   |
| Retained      earnings                                              |   |   | 14,311,508 |   |   |   | 14,129,637 |   |   |   | 15,750,156 |   |
| Accumulated      other comprehensive loss, net of tax               |   |   | (1,036,312 | ) |   |   | (757,353 | ) |   |   | (433,596 | ) |
| Total      stockholders' equity                                     |   |   | 25,149,122 |   |   |   | 27,908,252 |   |   |   | 29,736,154 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders' equity                     |   | $ | 353,396,697 |   |   | $ | 332,502,215 |   |   | $ | 307,273,868 |   |

----

| Glen      Burnie Bancorp and Subsidiaries                  |   |
|------------------------------------------------------------|--------|
|                                                       |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Income                     |   |
|                                                       |   |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31,                              |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                       |   |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |   |
| Interest      income on:                                   |   |   |   |   |   |   |   |   |   |
| Loans,      including fees                                 |   | $ | 15,248,717 |   |   | $ | 14,456,017 |   |   | $ | 13,326,693 |   |
| U.S.      Government agency securities                     |   |   | 1,854,201 |   |   |   | 1,962,553 |   |   |   | 2,553,527 |   |
| State      and municipal securities                        |   |   | 1,308,116 |   |   |   | 1,410,676 |   |   |   | 1,451,540 |   |
| Corporate      trust preferred securities                  |   |   | 189,012 |   |   |   | 192,749 |   |   |   | 250,526 |   |
| Federal      funds sold                                    |   |   | 12,428 |   |   |   | 5,034 |   |   |   | 139,075 |   |
| Other                                                      |   |   | 31,823 |   |   |   | 149,007 |   |   |   | 115,895 |   |
| Total      interest income                                 |   |   | 18,644,297 |   |   |   | 18,176,036 |   |   |   | 17,837,256 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense on:                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                   |   |   | 4,937,282 |   |   |   | 4,780,185 |   |   |   | 4,824,425 |   |
| Short-term      borrowings                                 |   |   | 49 |   |   |   | 50,567 |   |   |   | 119,101 |   |
| Long-term      borrowings                                  |   |   | 1,058,749 |   |   |   | 877,101 |   |   |   | 481,092 |   |
| Junior      subordinated debentures                        |   |   | 546,430 |   |   |   | 546,180 |   |   |   | 546,430 |   |
| Total      interest expense                                |   |   | 6,542,510 |   |   |   | 6,254,033 |   |   |   | 5,971,048 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                   |   |   | 12,101,787 |   |   |   | 11,922,003 |   |   |   | 11,866,208 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for credit losses                           |   |   | 2,442,976 |   |   |   | 1,145,649 |   |   |   | 50,000 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income after provision for credit losses |   |   | 9,658,811 |   |   |   | 10,776,354 |   |   |   | 11,816,208 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income:                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges on deposit accounts                   |   |   | 693,725 |   |   |   | 737,070 |   |   |   | 814,392 |   |
| Other      fees and commissions                            |   |   | 817,559 |   |   |   | 849,417 |   |   |   | 953,873 |   |
| Gains      on investment securities, net                   |   |   | 585,882 |   |   |   | 190,930 |   |   |   | 120,079 |   |
| Income      on life insurance                              |   |   | 268,083 |   |   |   | 273,170 |   |   |   | 268,948 |   |
| Total      other income                                    |   |   | 2,365,249 |   |   |   | 2,050,587 |   |   |   | 2,157,292 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      expenses:                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and wages                                    |   |   | 4,792,480 |   |   |   | 4,694,461 |   |   |   | 4,623,067 |   |
| Employee      benefits                                     |   |   | 1,503,848 |   |   |   | 1,525,023 |   |   |   | 1,702,535 |   |
| Occupancy                                                  |   |   | 871,081 |   |   |   | 903,976 |   |   |   | 886,345 |   |
| Furniture      and equipment                               |   |   | 761,462 |   |   |   | 754,191 |   |   |   | 844,147 |   |
| Impairment      loss on investment securities              |   |   | 76,779 |   |   |   | 2,816,000 |   |   |   | - |   |
| Other      expenses                                        |   |   | 2,989,201 |   |   |   | 2,408,690 |   |   |   | 2,376,925 |   |
| Total      other expenses                                  |   |   | 10,994,851 |   |   |   | 13,102,341 |   |   |   | 10,433,019 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income taxes (benefits)          |   |   | 1,029,209 |   |   |   | (275,400 | ) |   |   | 3,540,481 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      and state income taxes (benefits)             |   |   | (233,253 | ) |   |   | (679,362 | ) |   |   | 758,340 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                            |   | $ | 1,262,462 |   |   | $ | 403,962 |   |   | $ | 2,782,141 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted earnings per share of common stock  |   | $ | 0.46 |   |   | $ | 0.14 |   |   | $ | 0.93 |   |

----

| Glen      Burnie Bancorp and Subsidiaries                           |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Comprehensive Income                |   |
|                                                                |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31,                                       |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                |   |   |   |   |   |   |   |   |   |
|                                                                |   |   |   |   |   |   |   |   |   |
| Net      income                                                     |   | $ | 1,262,462 |   |   | $ | 403,962 |   |   | $ | 2,782,141 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive loss, net of tax                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      holding gains (losses) arising during the           |   |   |   |   |   |   |   |   |   |   |   |   |
| period      (net of deferred taxes (benefits) 2009      $18,260;    |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008      ($1,264,081); 2007 ($23,422))                             |   |   | 27,648 |   |   |   | (1,913,998 | ) |   |   | (37,231 | ) |
| Reclassification      adjustment for impairment loss included       |   |   |   |   |   |   |   |   |   |   |   |   |
| in      net income (net of deferred tax benefits 2009 $30,539; |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008 $1,110,771)                                               |   |   | 46,240 |   |   |   | 1,705,229 |   |   |   | - |   |
| Reclassification      adjustment for gains included in net          |   |   |   |   |   |   |   |   |   |   |   |   |
| income      (net of deferred taxes 2009      $233,034;              |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008      $75,942; 2007 $50,237)                                    |   |   | (352,847 | ) |   |   | (114,988 | ) |   |   | (79,842 | ) |
| Total      other comprehensive loss                                 |   |   | (278,959 | ) |   |   | (323,757 | ) |   |   | (117,073 | ) |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income                                           |   | $ | 983,503 |   |   | $ | 80,205 |   |   | $ | 2,665,068 |   |

----

| Glen      Burnie Bancorp and Subsidiaries                       |
|-----------------------------------------------------------------|
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Changes in Stockholders' Equity |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31, 2009, 2008, and 2007              |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   | Other |   |   | Total |   |
|                                                            |   | Common      Stock |   |   |   |   |   | Retained |   |   | Comprehensive |   |   | Stockholders' |   |
|                                                            |   | Shares |   |   | Par      Value |   |   | Surplus |   |   | Earnings |   |   | Loss |   |   | Equity |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      December 31, 2006                                |   |   | 2,484,633 |   |   | $ | 2,484,633 |   |   | $ | 11,719,907 |   |   | $ | 14,312,496 |   |   | $ | (316,523 | ) |   | $ | 28,200,513 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,782,141 |   |   |   | - |   |   |   | 2,782,141 |   |
| Cash      dividends, $.45 per share                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,344,481 | ) |   |   | - |   |   |   | (1,344,481 | ) |
| Dividends      reinvested under dividend                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment      plan                                          |   |   | 12,791 |   |   |   | 12,791 |   |   |   | 187,668 |   |   |   | - |   |   |   | - |   |   |   | 200,459 |   |
| Shares      issued under employee stock                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| purchase      plan                                              |   |   | 1,041 |   |   |   | 1,041 |   |   |   | 13,554 |   |   |   | - |   |   |   | - |   |   |   | 14,595 |   |
| Other      comprehensive loss, net of tax                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (117,073 | ) |   |   | (117,073 | ) |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      December 31, 2007                                |   |   | 2,498,465 |   |   |   | 2,498,465 |   |   |   | 11,921,129 |   |   |   | 15,750,156 |   |   |   | (433,596 | ) |   |   | 29,736,154 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 403,962 |   |   |   | - |   |   |   | 403,962 |   |
| Cummulative      effect of adoption                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of      EITF 06-04                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (179,794 | ) |   |   | - |   |   |   | (179,794 | ) |
| Shares      repurchased and retired                             |   |   | (50,300 | ) |   |   | (50,300 | ) |   |   | (526,939 | ) |   |   | - |   |   |   | - |   |   |   | (577,239 | ) |
| Cash      dividends, $.45 per share                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,345,128 | ) |   |   | - |   |   |   | (1,345,128 | ) |
| Dividends      reinvested under dividend                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment      plan                                          |   |   | 20,003 |   |   |   | 20,003 |   |   |   | 174,051 |   |   |   | - |   |   |   | - |   |   |   | 194,054 |   |
| Stock      split effected in form of 20%                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock      dividend                                             |   |   | 499,559 |   |   |   | 499,559 |   |   |   | - |   |   |   | (499,559 | ) |   |   | - |   |   |   | - |   |
| Other      comprehensive loss, net of tax                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (323,757 | ) |   |   | (323,757 | ) |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      December 31, 2008                                |   |   | 2,967,727 |   |   |   | 2,967,727 |   |   |   | 11,568,241 |   |   |   | 14,129,637 |   |   |   | (757,353 | ) |   |   | 27,908,252 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,262,462 |   |   |   | - |   |   |   | 1,262,462 |   |
| Shares      repurchased and retired                             |   |   | (305,083 | ) |   |   | (305,083 | ) |   |   | (2,530,626 | ) |   |   | - |   |   |   | - |   |   |   | (2,835,709 | ) |
| Cash      dividends, $.45 per share                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,080,591 | ) |   |   | - |   |   |   | (1,080,591 | ) |
| Dividends      reinvested under dividend                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment      plan                                          |   |   | 20,371 |   |   |   | 20,371 |   |   |   | 153,296 |   |   |   | - |   |   |   | - |   |   |   | 173,667 |   |
| Other      comprehensive loss, net of tax                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (278,959 | ) |   |   | (278,959 | ) |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      December 31, 2009                                |   |   | 2,683,015 |   |   | $ | 2,683,015 |   |   | $ | 9,190,911 |   |   | $ | 14,311,508 |   |   | $ | (1,036,312 | ) |   | $ | 25,149,122 |   |

----

| Glen      Burnie Bancorp and Subsidiaries                               |   |
|-------------------------------------------------------------------------|--------|
|                                                                    |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Cash Flows                              |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31,                                           |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                              |   |   |   |   |   |   |   |   |   |
| Net      income                                                         |   | $ | 1,262,462 |   |   | $ | 403,962 |   |   | $ | 2,782,141 |   |
| Adjustments      to reconcile net income to net                         |   |   |   |   |   |   |   |   |   |   |   |   |
|   cash      provided by operating activities                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation,      amortization, and accretion                          |   |   | 652,780 |   |   |   | 421,229 |   |   |   | 496,172 |   |
| Provision      for credit losses                                        |   |   | 2,442,976 |   |   |   | 1,145,649 |   |   |   | 50,000 |   |
| Deferred      income (benefits) taxes, net                              |   |   | (658,719 | ) |   |   | (1,605,603 | ) |   |   | (87,720 | ) |
| Gains      on disposals of assets, net                                  |   |   | (569,428 | ) |   |   | (173,393 | ) |   |   | (119,652 | ) |
| Impairment      losses on investment securities                         |   |   | 76,779 |   |   |   | 2,816,000 |   |   |   | - |   |
| Income      on investment in life insurance                             |   |   | (268,083 | ) |   |   | (273,170 | ) |   |   | (268,948 | ) |
| Changes      in assets and liabilities:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|        Decrease (increase) in accrued interest receivable          |   |   | 53,600 |   |   |   | (171,752 | ) |   |   | 118,793 |   |
|   (Increase)      decrease in other assets                    |   |   | (1,838,514 | ) |   |   | (118,962 | ) |   |   | 106,163 |   |
|   (Decrease)      increase in accrued interest payable        |   |   | (26,980 | ) |   |   | 5,305 |   |   |   | (11,368 | ) |
|   Decrease      in other liabilities                          |   |   | (167,572 | ) |   |   | (72,369 | ) |   |   | (21,890 | ) |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net      cash provided by operating activities  |   |   | 959,301 |   |   |   | 2,376,896 |   |   |   | 3,043,691 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Maturities      of available for sale mortgage-backed securities        |   |   | 7,612,135 |   |   |   | 4,402,208 |   |   |   | 7,301,634 |   |
| Maturities      of other available for sale investment securities       |   |   | - |   |   |   | - |   |   |   | 300,000 |   |
| Sales      of held to maturity debt securities                          |   |   | - |   |   |   | 684,100 |   |   |   | - |   |
| Sales      of available for sale debt securities                        |   |   | 24,920,635 |   |   |   | 25,977,280 |   |   |   | 17,889,342 |   |
| Purchases      of available for sale mortgage-backed securities         |   |   | (54,787,147 | ) |   |   | (981,811 | ) |   |   | - |   |
| Purchases      of other available for sale investment securities        |   |   | (4,456,293 | ) |   |   | (13,318,481 | ) |   |   | (6,907,162 | ) |
| Purchase      of FHLB stock                                             |   |   | (90,700 | ) |   |   | (385,700 | ) |   |   | (453,900 | ) |
| Increase      in loans, net                                             |   |   | (3,193,217 | ) |   |   | (36,525,138 | ) |   |   | (6,466,528 | ) |
| Proceeds      from sales of other real estate                           |   |   | 548,994 |   |   |   | 50,000 |   |   |   | - |   |
| Purchases      of other real estate                                     |   |   | (25,000 | ) |   |   | (550,000 | ) |   |   | - |   |
| Purchases      of premises and equipment                                |   |   | (1,398,320 | ) |   |   | (501,717 | ) |   |   | (128,452 | ) |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      cash (used) provided by investing activities |   |   | (30,868,913 | ) |   |   | (21,149,259 | ) |   |   | 11,534,934 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in noninterest-bearing deposits, NOW           |   |   |   |   |   |   |   |   |   |   |   |   |
| accounts,      money market accounts, and savings accounts, net         |   |   | 4,268,940 |   |   |   | (5,221,614 | ) |   |   | (5,968,925 | ) |
| Increase      (decrease) in time deposits, net                          |   |   | 20,321,299 |   |   |   | 22,072,446 |   |   |   | (15,947,766 | ) |
| (Decrease)      increase in short-term borrowings                       |   |   | (548,565 | ) |   |   | 127,326 |   |   |   | (42,820 | ) |
| Proceeds      from long-term borrowings                                 |   |   | - |   |   |   | 10,000,000 |   |   |   | 10,000,000 |   |
| Repayments      of long-term borrowings                                 |   |   | (38,001 | ) |   |   | (35,423 | ) |   |   | (33,035 | ) |
| Cash      dividends paid                                                |   |   | (1,236,100 | ) |   |   | (1,344,344 | ) |   |   | (1,326,051 | ) |
| Common      stock dividends reinvested                                  |   |   | 173,667 |   |   |   | 194,054 |   |   |   | 200,459 |   |
| Repurchase      and retirement of common stock                          |   |   | (2,835,709 | ) |   |   | (577,239 | ) |   |   | - |   |
| Issuance      of common stock                                           |   |   | - |   |   |   | - |   |   |   | 14,595 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      cash provided (used) by financing activities |   |   | 20,105,531 |   |   |   | 25,215,206 |   |   |   | (13,103,543 | ) |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| (Decrease)      increase in cash and cash equivalents                   |   |   | (9,804,081 | ) |   |   | 6,442,843 |   |   |   | 1,475,082 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of year                       |   |   | 21,237,903 |   |   |   | 14,795,060 |   |   |   | 13,319,978 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents, end of year                             |   | $ | 11,433,822 |   |   | $ | 21,237,903 |   |   | $ | 14,795,060 |   |

----

| Glen      Burnie Bancorp and Subsidiaries      |   |
|------------------------------------------------|--------|
|                                           |   |   |   |   |   |   |   |   |   |
| Consolidated      Statements of Cash Flows     |   |
| (Continued)                                    |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |
| Years      Ended December 31,                  |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |   |
| Supplementary      Cash Flow Information:      |   |   |   |   |   |   |   |   |   |
| Interest      paid                             |   | $ | 6,569,490 |   |   | $ | 6,248,728 |   |   | $ | 5,982,416 |   |
| Income      taxes paid                         |   |   | 1,125,000 |   |   |   | 600,000 |   |   |   | 886,156 |   |
| Total      increase in unrealized depreciation |   |   |   |   |   |   |   |   |   |   |   |   |
| on      available for sale securities          |   |   | (463,192 | ) |   |   | (551,125 | ) |   |   | (190,732 | ) |

----

----

----

----

----

|                           |   |      |       |   | Gross      |   |    | Gross      |   |   |      |   |
|--------------------------------|--------|-----------|------------|--------|------------|--------|---------|------------|--------|--------|-----------|--------|
|                           |   | Amortized |       |   | Unrealized |   |    | Unrealized |   |   | Fair      |   |
| December 31, 2009              |   | Cost      |       |   | Gains      |   |    | Losses     |   |   | Value     |   |
|                           |   |      |       |   |       |   |    |       |   |   |      |   |
| Available      for sale:       |   |      |       |   |       |   |    |       |   |   |      |   |
| U.S.      Government agencies  |   | $         | 3,180,360  |   |       | $      | 14,060  |       |   | $      | 135,330   |   |   | $ | 3,059,090 |   |
| State      and municipal       |   |      | 30,073,170 |   |       |   | 335,146 |       |   |   | 664,647   |   |   |   | 29,743,669 |   |
| Corporate      trust preferred |   |      | 2,080,282  |   |       |   | 33,521  |       |   |   | 1,102,874 |   |   |   | 1,010,929 |   |
| Mortgage-backed                |   |      | 50,849,527 |   |       |   | 368,642 |       |   |   | 569,252   |   |   |   | 50,648,917 |   |
|                           |   |      |       |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                           |   | $         | 86,183,339 |   |       | $      | 751,369 |       |   | $      | 2,472,103 |   |   | $ | 84,462,605 |   |

|                           |   |      |       |   | Gross      |   |    | Gross      |   |   |      |   |
|--------------------------------|--------|-----------|------------|--------|------------|--------|---------|------------|--------|--------|-----------|--------|
|                           |   | Amortized |       |   | Unrealized |   |    | Unrealized |   |   | Fair      |   |
| December 31, 2008              |   | Cost      |       |   | Gains      |   |    | Losses     |   |   | Value     |   |
|                           |   |      |       |   |       |   |    |       |   |   |      |   |
| Available      for sale:       |   |      |       |   |       |   |    |       |   |   |      |   |
| U.S.      Government agencies  |   | $         | 8,686,877  |   |       | $      | 191,455 |       |   | $      | 140,280   |   |   | $ | 8,738,052 |   |
| State      and municipal       |   |      | 31,466,012 |   |       |   | 235,128 |       |   |   | 979,935   |   |   |   | 30,721,205 |   |
| Corporate      trust preferred |   |      | 2,168,928  |   |       |   | -       |       |   |   | 971,426   |   |   |   | 1,197,502 |   |
| Mortgage-backed                |   |      | 16,884,368 |   |       |   | 413,682 |       |   |   | 6,164     |   |   |   | 17,291,886 |   |
|                           |   |      |       |   |       |   |    |       |   |   |      |   |   |   |   |   |
|                           |   | $         | 59,206,185 |   |       | $      | 840,265 |       |   | $      | 2,097,805 |   |   | $ | 57,948,645 |   |

----

| December 31, 2007    |   | AmortizedCost |       |   | GrossUnrealizedGains |   |    | GrossUnrealizedLosses |   |   | FairValue |   |
|--------------------------------|--------|---------------|------------|--------|----------------------|--------|---------|-----------------------|--------|--------|-----------|--------|
|                           |   |          |       |   |                 |   |    |                  |   |   |      |   |
| Available      for sale:       |   |          |       |   |                 |   |    |                  |   |   |      |   |
| U.S.      Government agencies  |   | $             | 8,489,126  |   |                 | $      | 44,593  |                  |   | $      | 761,906   |   |   | $ | 7,771,813 |   |
| State      and municipal       |   |          | 31,627,159 |   |                 |   | 272,449 |                  |   |   | 164,764   |   |   |   | 31,734,844 |   |
| Corporate      trust preferred |   |          | 2,167,271  |   |                 |   | 253,283 |                  |   |   | -         |   |   |   | 2,420,554 |   |
| Mortgage-backed                |   |          | 35,605,038 |   |                 |   | 110,145 |                  |   |   | 460,213   |   |   |   | 35,254,970 |   |
|                           |   |          |       |   |                 |   |    |                  |   |   |      |   |   |   |   |   |
|                           |   | $             | 77,888,594 |   |                 | $      | 680,470 |                  |   | $      | 1,386,883 |   |   | $ | 77,182,181 |   |
|                           |   |          |       |   |                 |   |    |                  |   |   |      |   |   |   |   |   |
| Held      to maturity:         |   |          |       |   |                 |   |    |                  |   |   |      |   |   |   |   |   |
| State      and municipal       |   | $             | 683,832    |   |                 | $      | 42,361  |                  |   | $      | -         |   |   | $ | 726,193 |   |
|                           |   |          |       |   |                 |   |    |                  |   |   |      |   |   |   |   |   |
|                           |   | $             | 683,832    |   |                 | $      | 42,361  |                  |   | $      | -         |   |   | $ | 726,193 |   |

|                                         |   | Less      than 12 months |       | 12      months or more         |   | Total   |                           |
|----------------------------------------------|--------|--------------------------|------------|--------------------------------|--------|---------|--------------------------------|
|                                         |   | Fair                     |       | Unrealized                     |   | Fair    |                           | Unrealized |   | Fair |   | Unrealized |   |
|                                         |   | Value                    |       | Loss                           |   | Value   |                           | Loss |   | Value |   | Loss |   |
| Obligations      of U.S. Government agencies |   | $                        | 1,076,590  |       | $      | 103,770 |       | $ | 968,440 |       | $ | 31,560 |       | $ | 2,045,030 |       | $ | 135,330 |   |
| State      and Municipal                     |   |                     | 6,126,763  |                           |   | 205,869 |                           |   | 3,328,682 |   |   | 458,778 |   |   | 9,455,445 |   |   | 664,647 |   |
| Corporate      trust preferred               |   |                     | -          |                           |   | -       |                           |   | 25,091 |   |   | 1,102,874 |   |   | 25,091 |   |   | 1,102,874 |   |
| Mortgaged-backed                             |   |                     | 31,403,867 |                           |   | 569,252 |                           |   | - |   |   | - |   |   | 31,403,867 |   |   | 569,252 |   |
|                                         |   |                     |       |                           |   |    |                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   | $                        | 38,607,220 |                           | $      | 878,891 |                           | $ | 4,322,213 |   | $ | 1,593,212 |   | $ | 42,929,433 |   | $ | 2,472,103 |   |

----

----

|                                              |   | Available      for Sale |       |   | Held      to Maturity |   |
|---------------------------------------------------|--------|-------------------------|------------|--------|-----------------------|--------|
|                                              |   | Amortized               |       |   | Fair                  |   |   | Amortized |   |   | Fair |   |
| December 31, 2009                                 |   | Cost                    |       |   | Value                 |   |   | Cost |   |   | Value |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |
| Due      within one year                          |   | $                       | 649,998    |   |                  | $      | 650,982 |   |   |   |   |   |   |   |
| Due      over one to five years                   |   |                    | 1,825,146  |   |                  |   | 1,850,726 |   |   |   |   |   |   |   |
| Due      over five to ten years                   |   |                    | 565,946    |   |                  |   | 571,123 |   |   |   |   |   |   |   |
| Due      over ten years                           |   |                    | 32,292,722 |   |                  |   | 30,740,857 |   |   |   |   |   |   |   |
| Mortgage-backed,      due in monthly installments |   |                    | 50,849,527 |   |                  |   | 50,648,917 |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
|                                              |   | $                       | 86,183,339 |   |                  | $      | 84,462,605 |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
| December 31, 2008                                 |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
| Due      within one year                          |   | $                       | -          |   |                  | $      | - |   |   |   |   |   |   |   |
| Due      over one to five years                   |   |                    | 4,577,077  |   |                  |   | 4,560,487 |   |   |   |   |   |   |   |
| Due      over five to ten years                   |   |                    | 5,563,224  |   |                  |   | 5,685,637 |   |   |   |   |   |   |   |
| Due      over ten years                           |   |                    | 32,181,516 |   |                  |   | 30,410,635 |   |   |   |   |   |   |   |
| Mortgage-backed,      due in monthly installments |   |                    | 16,884,368 |   |                  |   | 17,291,886 |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
|                                              |   | $                       | 59,206,185 |   |                  | $      | 57,948,645 |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
| December 31, 2007                                 |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |
| Due      within one year                          |   | $                       | 1,000,000  |   |                  | $      | 996,094 |   |   | $ | - |   |   | $ | - |   |
| Due      over one to five years                   |   |                    | 9,638,992  |   |                  |   | 9,635,177 |   |   |   | - |   |   |   | - |   |
| Due      over five to ten years                   |   |                    | 4,089,402  |   |                  |   | 4,068,131 |   |   |   | - |   |   |   | - |   |
| Due      over ten years                           |   |                    | 27,555,162 |   |                  |   | 27,227,809 |   |   |   | 683,832 |   |   |   | 726,193 |   |
| Mortgage-backed,      due in monthly installments |   |                    | 35,605,038 |   |                  |   | 35,254,970 |   |   |   | - |   |   |   | - |   |
|                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | $                       | 77,888,594 |   |                  | $      | 77,182,181 |   |   | $ | 683,832 |   |   | $ | 726,193 |   |

----

|                                   |   | 2009   |        |   | 2008   |   |        | 2007   |   |
|----------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| Mortgage:                              |   |   |        |   |   |   |        |   |   |
| Residential                            |   | $      | 95,683,441  |   |   | $      | 87,707,878  |   |   | $ | 76,780,857 |   |
| Commercial                             |   |   | 79,845,030  |   |   |   | 76,152,837  |   |   |   | 47,842,942 |   |
| Construction      and land development |   |   | 1,742,515   |   |   |   | 6,589,673   |   |   |   | 5,876,285 |   |
| Demand      and time                   |   |   | 9,800,625   |   |   |   | 6,974,607   |   |   |   | 5,184,349 |   |
| Installment                            |   |   | 53,222,692  |   |   |   | 60,593,752  |   |   |   | 66,490,020 |   |
|                                   |   |   | 240,294,303 |   |   |   | 238,018,747 |   |   |   | 202,174,453 |   |
| Unearned      income on loans          |   |   | (838,913    | )      |   |   | (864,436    | )      |   |   | (816,830 | ) |
|                                   |   |   | 239,455,390 |   |   |   | 237,154,311 |   |   |   | 201,357,623 |   |
| Allowance      for credit losses       |   |   | (3,572,528  | )      |   |   | (2,021,690  | )      |   |   | (1,604,491 | ) |
|                                   |   |   |        |   |   |   |        |   |   |   |   |   |
|                                   |   | $      | 235,882,862 |   |   | $      | 235,132,621 |   |   | $ | 199,753,132 |   |

----

|                             |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|----------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                             |   |   |       |   |   |   |       |   |   |
| Balance,      beginning of year  |   | $      | 2,021,690  |   |   | $      | 1,604,491  |   |   | $ | 1,839,094 |   |
| Provision      for credit losses |   |   | 2,442,976  |   |   |   | 1,145,649  |   |   |   | 50,000 |   |
| Recoveries                       |   |   | 395,584    |   |   |   | 352,933    |   |   |   | 305,841 |   |
| Loans      charged off           |   |   | (1,287,722 | )      |   |   | (1,081,383 | )      |   |   | (590,444 | ) |
|                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Balance,      end of year        |   | $      | 3,572,528  |   |   | $      | 2,021,690  |   |   | $ | 1,604,491 |   |

|                                                                                           |   | 2009   |       |   | 2008   |   |      | 2007   |   |
|------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Loans      classified as impaired with a valuation allowance                                   |   | $      | 9,513,637  |   |   | $      | 1,387,043 |   |   | $ | 212,416 |   |
| Allowance      for credit losses on impaired loans                                             |   |   | 2,187,699  |   |   |   | 629,036   |   |   |   | 159,312 |   |
| Average      balance of impaired loans                                                         |   |   | 10,111,516 |   |   |   | 1,458,245 |   |   |   | 95,605 |   |
|                                                                                           |   |   |       |   |   |   |      |   |   |   |   |   |
| Following      is a summary of cash receipts on impaired loans and how they were      applied: |   |
|                                                                                           |   |   |       |   |   |   |      |   |   |   |   |   |
| Cash      receipts applied to reduce principal balance                                         |   | $      | 2,604,832  |   |   | $      | 131,730   |   |   | $ | - |   |
| Cash      receipts recognized as interest income                                               |   |   | 380,190    |   |   |   | 41,062    |   |   |   | - |   |
|                                                                                           |   |   |       |   |   |   |      |   |   |   |   |   |
| Total      cash receipts                                                                       |   | $      | 2,985,022  |   |   | $      | 172,792   |   |   | $ | - |   |

----

|                          | Useful          |   |   |       |   |   |   |       |   |   |
|-------------------------------|-----------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                          | lives           |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|                          |            |   |   |       |   |   |   |       |   |   |
| Land                          |            |   | $      | 684,977    |   |   | $      | 684,977    |   |   | $ | 684,977 |   |
| Buildings                     | 5-50      years |   |   | 5,864,145  |   |   |   | 4,796,309  |   |   |   | 4,738,733 |   |
| Equipment      and fixtures   | 5-30      years |   |   | 5,093,759  |   |   |   | 5,056,015  |   |   |   | 5,450,210 |   |
| Construction      in progress |            |   |   | 322        |   |   |   | 121,973    |   |   |   | 60,226 |   |
|                          |            |   |   | 11,643,203 |   |   |   | 10,659,274 |   |   |   | 10,934,146 |   |
| Accumulated      depreciation |            |   |   | (7,522,606 | )      |   |   | (7,559,826 | )      |   |   | (7,846,238 | ) |
|                          |            |   |   |       |   |   |   |       |   |   |   |   |   |
|                          |            |   | $      | 4,120,597  |   |   | $      | 3,099,448  |   |   | $ | 3,087,908 |   |

|                               |   | 2009   |   |   | 2008   |   |    | 2007   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|                               |   |   |   |   |   |   |    |   |   |
| Notes      payable - U.S. Treasury |   | $      | 81,290 |   |   | $      | 629,855 |   |   | $ | 502,529 |   |

----

|                                                                                                                                                                       |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                                                                                                                                       |   |   |       |   |   |   |       |   |   |
| Federal      Home Loan Bank of Atlanta,  convertible advances                                                                                                    |   | $      | 27,000,000 |   |   | $      | 27,000,000 |   |   | $ | 17,000,000 |   |
| Mortgage      payable-individual, interest at 7%, payments of $3,483, including      principal and interest, due monthly through October 2010, secured      by real estate |   |   | 33,711     |   |   |   | 71,712     |   |   |   | 107,135 |   |
|                                                                                                                                                                       |   |   |       |   |   |   |       |   |   |   |   |   |
|                                                                                                                                                                       |   | $      | 27,033,711 |   |   | $      | 27,071,712 |   |   | $ | 17,107,135 |   |

|                     |   | 2009   |       |
|--------------------------|--------|--------|------------|
|                     |   |   |       |
| 2010                     |   | $      | 7,034,000  |   |
| 2015      and thereafter |   |   | 20,000,000 |   |
|                     |   |   |       |   |
|                     |   | $      | 27,034,000 |   |

----

|                                           |   | 2009   |        |   | 2008   |   |        | 2007   |   |
|------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
|                                           |   |   |        |   |   |   |        |   |   |
| NOW      and SuperNOW                          |   | $      | 22,353,053  |   |   | $      | 21,079,314  |   |   | $ | 23,154,540 |   |
| Money      Market                              |   |   | 15,284,223  |   |   |   | 12,764,167  |   |   |   | 12,948,342 |   |
| Savings                                        |   |   | 48,378,319  |   |   |   | 45,801,719  |   |   |   | 47,381,613 |   |
| Certificates      of Deposit, $100,000 or more |   |   | 31,576,905  |   |   |   | 27,882,777  |   |   |   | 20,654,230 |   |
| Other      time deposits                       |   |   | 108,957,638 |   |   |   | 98,700,862  |   |   |   | 80,017,668 |   |
|                                           |   |   |        |   |   |   |        |   |   |   |   |   |
|                                           |   | $      | 226,550,138 |   |   | $      | 206,228,839 |   |   | $ | 184,156,393 |   |

----

|                                           |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                           |   |   |      |   |   |   |      |   |   |
| NOW      and SuperNOW                          |   | $      | 27,702    |   |   | $      | 30,618    |   |   | $ | 47,885 |   |
| Money      Market                              |   |   | 57,280    |   |   |   | 62,475    |   |   |   | 103,472 |   |
| Savings                                        |   |   | 134,607   |   |   |   | 153,301   |   |   |   | 214,998 |   |
| Certificates      of Deposit, $100,000 or more |   |   | 1,063,174 |   |   |   | 976,446   |   |   |   | 915,889 |   |
| Other      time deposits                       |   |   | 3,654,519 |   |   |   | 3,557,345 |   |   |   | 3,542,181 |   |
|                                           |   |   |      |   |   |   |      |   |   |   |   |   |
|                                           |   | $      | 4,937,282 |   |   | $      | 4,780,185 |   |   | $ | 4,824,425 |   |

|                     |   | 2009   |        |
|--------------------------|--------|--------|-------------|
|                     |   |   |        |
| 2010                     |   | $      | 84,136,000  |   |
| 2011                     |   |   | 25,662,000  |   |
| 2012                     |   |   | 7,061,000   |   |
| 2013                     |   |   | 15,312,000  |   |
| 2014                     |   |   | 7,123,000   |   |
| 2015      and thereafter |   |   | 1,241,000   |   |
|                     |   |   |        |   |
|                     |   | $      | 140,535,000 |   |

|                                   |   | 2009   |     |   | 2008   |   |       | 2007   |   |
|----------------------------------------|--------|--------|----------|--------|--------|--------|------------|--------|--------|
| Current:                               |   |   |     |   |   |   |       |   |   |
| Federal                                |   | $      | 268,693  |   |   | $      | 655,129    |   |   | $ | 646,449 |   |
| State                                  |   |   | 156,773  |   |   |   | 271,112    |   |   |   | 199,611 |   |
|                                   |   |   |     |   |   |   |       |   |   |   |   |   |
| Total      current                     |   |   | 425,466  |   |   |   | 926,241    |   |   |   | 846,060 |   |
| Deferred      income taxes (benefits): |   |   |     |   |   |   |       |   |   |   |   |   |
| Federal                                |   |   | (509,545 | )      |   |   | (1,275,873 | )      |   |   | (80,277 | ) |
| State                                  |   |   | (149,174 | )      |   |   | (329,730   | )      |   |   | (7,443 | ) |
|                                   |   |   |     |   |   |   |       |   |   |   |   |   |
| Total      deferred                    |   |   | (658,719 | )      |   |   | (1,605,603 | )      |   |   | (87,720 | ) |
|                                   |   |   |     |   |   |   |       |   |   |   |   |   |
| Income      tax (benefit) expense      |   | $      | (233,253 | )      |   | $      | (679,362   | )      |   | $ | 758,340 |   |

----

|                                                       |   | 2009   |      |   | 2008   |   |     | 2007   |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|----------|--------|--------|
|                                                       |   |   |      |   |   |   |     |   |   |
| Income      (loss) before income tax (benefit) expense     |   | $      | 1,029,209 |   |   | $      | (275,400 | )      |   | $ | 3,540,481 |   |
|                                                       |   |   |      |   |   |   |     |   |   |   |   |   |
| Taxes      computed at Federal income tax rate             |   | $      | 349,925   |   |   | $      | (93,636  | )      |   | $ | 1,203,764 |   |
| Increase      (decrease) resulting from:                   |   |   |      |   |   |   |     |   |   |   |   |   |
| Tax-exempt      income                                     |   |   | (502,488  | )      |   |   | (547,038 | )      |   |   | (581,208 | ) |
| State      income taxes, net of Federal income tax benefit |   |   | (80,690   | )      |   |   | (38,688  | )      |   |   | 126,832 |   |
| Other                                                      |   |   | -         |   |   |   | -        |   |   |   | 8,952 |   |
|                                                       |   |   |      |   |   |   |     |   |   |   |   |   |
| Income      tax (benefit) expense                          |   | $      | (233,253  | )      |   | $      | (679,362 | )      |   | $ | 758,340 |   |

|                                                                              |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|-----------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                                              |   |   |      |   |   |   |      |   |   |
| Deferred      income tax benefits:                                                |   |   |      |   |   |   |      |   |   |
| Accrued      deferred compensation                                                |   | $      | 90,594    |   |   | $      | 82,049    |   |   | $ | - |   |
| Impairment      loss on investment securities                                     |   |   | 1,072,662 |   |   |   | 1,110,771 |   |   |   | - |   |
| Allowance      for credit losses                                                  |   |   | 1,206,604 |   |   |   | 563,737   |   |   |   | 80,300 |   |
| Nonaccrual      interest                                                          |   |   | 11,849    |   |   |   | -         |   |   |   | - |   |
| Alternative      minimum tax credits                                              |   |   | -         |   |   |   | 66,371    |   |   |   | 94,642 |   |
| Net      unrealized depreciation on investment securities available for      sale |   |   | 684,422   |   |   |   | 500,186   |   |   |   | 272,816 |   |
| Accumulated      depreciation                                                     |   |   | 35,692    |   |   |   |      |   |   |   |   |   |
| Reserve      for unfunded commitments                                             |   |   | 78,890    |   |   |   | 78,890    |   |   |   | 78,890 |   |
| Total      deferred income tax benefits                                           |   |   | 3,180,713 |   |   |   | 2,402,004 |   |   |   | 526,648 |   |
|                                                                              |   |   |      |   |   |   |      |   |   |   |   |   |
| Deferred      income tax liabilities:                                             |   |   |      |   |   |   |      |   |   |   |   |   |
| Accumulated      depreciation                                                     |   |   | -         |   |   |   | 41,113    |   |   |   | 15,769 |   |
| Accumulated      securities discount accretion                                    |   |   | 51,278    |   |   |   | 74,408    |   |   |   | 57,367 |   |
| Total      deferred income tax liabilities                                        |   |   | 51,278    |   |   |   | 115,521   |   |   |   | 73,136 |   |
|                                                                              |   |   |      |   |   |   |      |   |   |   |   |   |
| Net      deferred income tax benefits                                             |   | $      | 3,129,435 |   |   | $      | 2,286,483 |   |   | $ | 453,512 |   |

----

|                                                 |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                                 |   |   |      |   |   |   |      |   |   |
| Professional      services                           |   | $      | 489,485   |   |   | $      | 485,685   |   |   | $ | 479,877 |   |
| Stationery,      printing and supplies               |   |   | 189,446   |   |   |   | 214,815   |   |   |   | 225,709 |   |
| Postage      and delivery                            |   |   | 162,782   |   |   |   | 187,017   |   |   |   | 222,642 |   |
| FDIC      assessment                                 |   |   | 549,716   |   |   |   | 35,544    |   |   |   | 31,605 |   |
| Directors      fees and expenses                     |   |   | 200,765   |   |   |   | 198,939   |   |   |   | 210,097 |   |
| Marketing                                            |   |   | 246,947   |   |   |   | 255,921   |   |   |   | 236,917 |   |
| Data      processing                                 |   |   | 82,743    |   |   |   | 100,562   |   |   |   | 109,797 |   |
| Correspondent      bank services                     |   |   | 87,249    |   |   |   | 60,706    |   |   |   | 95,407 |   |
| Telephone                                            |   |   | 173,550   |   |   |   | 160,242   |   |   |   | 157,811 |   |
| Liability      insurance                             |   |   | 67,264    |   |   |   | 71,497    |   |   |   | 67,959 |   |
| Losses      and expenses on real estate owned (OREO) |   |   | 64,790    |   |   |   | 8,343     |   |   |   | 2,905 |   |
| Other      ATM expense                               |   |   | 155,818   |   |   |   | 232,670   |   |   |   | 242,429 |   |
| Other                                                |   |   | 518,646   |   |   |   | 396,749   |   |   |   | 293,770 |   |
|                                                 |   |   |      |   |   |   |      |   |   |   |   |   |
|                                                 |   | $      | 2,989,201 |   |   | $      | 2,408,690 |   |   | $ | 2,376,925 |   |

----

|                                   |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|----------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Loan      commitments:                 |   |   |       |   |   |   |       |   |   |
| Construction      and land development |   | $      | 1,155,200  |   |   | $      | 400,000    |   |   | $ | - |   |
| Other      mortgage loans              |   |   | 2,270,000  |   |   |   | 2,590,000  |   |   |   | 685,000 |   |
|                                   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                   |   | $      | 3,425,200  |   |   | $      | 2,990,000  |   |   | $ | 685,000 |   |
| Unused      lines of credit:           |   |   |       |   |   |   |       |   |   |   |   |   |
| Home-equity      lines                 |   | $      | 6,404,113  |   |   | $      | 6,395,182  |   |   | $ | 7,507,778 |   |
| Commercial      lines                  |   |   | 11,335,335 |   |   |   | 13,380,292 |   |   |   | 18,335,771 |   |
| Unsecured      consumer lines          |   |   | 805,479    |   |   |   | 785,487    |   |   |   | 815,960 |   |
|                                   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                   |   | $      | 18,544,927 |   |   | $      | 20,560,961 |   |   | $ | 26,659,509 |   |
|                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Letters      of credit:                |   | $      | 79,250     |   |   | $      | 196,530    |   |   | $ | 197,000 |   |

----

|                                                       |   |   |   |   | Grant  |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                       |   | Shares |   |   | Price  |   |
|                                                       |   |   |   |   |   |   |
| Outstanding      December 31, 2006                         |   |   | -      |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |
| Granted      on August 9, 2007, expiring December 10, 2007 |   |   | 3,126  |   |   | $      | 14.02 |   |
| Exercised                                                  |   |   | (1,041 | )      |   |   |   |   |
| Expired                                                    |   |   | (2,085 | )      |   | $      | 14.02 |   |
|                                                       |   |   |   |   |   |   |   |   |
| Outstanding      December 31, 2007                         |   |   | -      |   |   |   |   |   |

----

----

|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   | To      Be Well Capitalized |   |
|--------------------------------|--------|--------|------------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------------|--------|--------|-----------------------------|--------|
|                           |   |   |       |   |                   |   |   | For      Capital       |   |   | Under      Prompt Corrective |   |
|                           |   | Actual |       |   | Adequacy      Purposes |   |   | Action      Provisions |   |
|                           |   | Amount |       |   | Ratio                  |   |   | Amount                 |   |   | Ratio                        |   |   | Amount                      |   |   | Ratio |   |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| As      of December 31, 2009   |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| Total      Capital             |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| Company                        |   | $      | 34,048,000 |   |                   |   | 14.5   | %                      |   | $      | 18,798,000                   |   |   |                        | 8.0    | % |   |   | N/A |   |   |   |   |
| Bank                           |   |   | 33,745,000 |   |                   |   | 14.4   | %                      |   |   | 18,786,000                   |   |   |                        | 8.0    | % |   | $ | 23,483,000 |   |   |   | 10.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 31,100,000 |   |                   |   | 13.2   | %                      |   |   | 9,403,000                    |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 30,799,000 |   |                   |   | 13.1   | %                      |   |   | 9,390,000                    |   |   |                        | 4.0    | % |   |   | 14,085,000 |   |   |   | 6.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Average Assets)       |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 31,100,000 |   |                   |   | 8.9    | %                      |   |   | 14,041,000                   |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 30,799,000 |   |                   |   | 8.7    | %                      |   |   | 14,193,000                   |   |   |                        | 4.0    | % |   |   | 14,741,000 |   |   |   | 5.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| As      of December 31, 2008   |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Total      Capital             |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   | $      | 35,687,000 |   |                   |   | 14.9   | %                      |   | $      | 19,122,000                   |   |   |                        | 8.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 35,707,000 |   |                   |   | 15.0   | %                      |   |   | 19,107,000                   |   |   |                        | 8.0    | % |   | $ | 23,884,000 |   |   |   | 10.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 33,665,000 |   |                   |   | 14.1   | %                      |   |   | 9,564,000                    |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 33,485,000 |   |                   |   | 14.0   | %                      |   |   | 9,553,000                    |   |   |                        | 4.0    | % |   |   | 14,330,000 |   |   |   | 6.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Average Assets)       |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 33,665,000 |   |                   |   | 10.5   | %                      |   |   | 12,825,000                   |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 33,485,000 |   |                   |   | 10.2   | %                      |   |   | 13,196,000                   |   |   |                        | 4.0    | % |   |   | 16,495,000 |   |   |   | 5.0 | % |

----

|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   | To      Be Well Capitalized |   |
|--------------------------------|--------|--------|------------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------------|--------|--------|-----------------------------|--------|
|                           |   |   |       |   |                   |   |   | For      Capital       |   |   | Under      Prompt Corrective |   |
|                           |   | Actual |       |   | Adequacy      Purposes |   |   | Action      Provisions |   |
|                           |   | Amount |       |   | Ratio                  |   |   | Amount                 |   |   | Ratio                        |   |   | Amount                      |   |   | Ratio |   |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| As      of December 31, 2007   |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| Total      Capital             |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |
| Company                        |   | $      | 36,774,000 |   |                   |   | 17.6   | %                      |   | $      | 16,744,000                   |   |   |                        | 8.0    | % |   |   | N/A |   |   |   |   |
| Bank                           |   |   | 36,592,000 |   |                   |   | 17.5   | %                      |   |   | 16,728,000                   |   |   |                        | 8.0    | % |   | $ | 20,910,000 |   |   |   | 10.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Risk Weighted Assets) |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 35,170,000 |   |                   |   | 16.8   | %                      |   |   | 8,374,000                    |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 34,788,000 |   |                   |   | 16.6   | %                      |   |   | 8,363,000                    |   |   |                        | 4.0    | % |   |   | 12,544,000 |   |   |   | 6.0 | % |
|                           |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Tier      I Capital            |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| (to      Average Assets)       |   |   |       |   |                   |   |   |                   |   |   |                         |   |   |                        |   |   |   |   |   |   |   |   |   |   |
| Company                        |   |   | 35,170,000 |   |                   |   | 11.3   | %                      |   |   | 12,494,000                   |   |   |                        | 4.0    | % |   |   | N/A |   |   |   |   |   |
| Bank                           |   |   | 34,788,000 |   |                   |   | 11.3   | %                      |   |   | 12,271,000                   |   |   |                        | 4.0    | % |   |   | 15,339,000 |   |   |   | 5.0 | % |

|                                            |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|-------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Basic:                                          |   |   |      |   |   |   |      |   |   |
| Net      income                                 |   | $      | 1,262,462 |   |   | $      | 403,962   |   |   | $ | 2,782,141 |   |
| Weighted      average common shares outstanding |   |   | 2,734,524 |   |   |   | 2,981,124 |   |   |   | 2,988,796 |   |
| Basic      net income per share                 |   | $      | 0.46      |   |   | $      | 0.14      |   |   | $ | 0.93 |   |

----

|                                                                             |   | 2009     |        |   | 2008   |   |        | 2007     |   |
|----------------------------------------------------------------------------------|--------|----------|-------------|--------|--------|--------|-------------|----------|--------|
|                                                                             |   | Carrying |        |   | Fair   |   |        | Carrying |   |   | Fair |   |   | Carrying |   |   | Fair |   |
|                                                                             |   | Amount   |        |   | Value  |   |        | Amount   |   |   | Value |   |   | Amount |   |   | Value |   |
| Financial      assets:                                                           |   |     |        |   |   |   |        |     |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                     |   | $        | 6,993,811   |   |   | $      | 6,993,811   |     |   | $ | 6,960,377 |   |   | $ | 6,960,377 |   |   | $ | 8,220,582 |   |   | $ | 8,220,582 |   |
| Interest-bearing      deposits in other financial institutions                   |   |     | 3,748,387   |   |   |   | 3,748,387   |     |   |   | 7,883,816 |   |   |   | 7,883,816 |   |   |   | 5,847,562 |   |   |   | 5,847,562 |   |
| Federal      funds sold                                                          |   |     | 691,624     |   |   |   | 691,624     |     |   |   | 6,393,710 |   |   |   | 6,393,710 |   |   |   | 726,916 |   |   |   | 726,916 |   |
| Investment      securities available for sale                                    |   |     | 84,462,605  |   |   |   | 84,462,605  |     |   |   | 57,948,645 |   |   |   | 57,948,645 |   |   |   | 77,182,181 |   |   |   | 77,182,181 |   |
| Investment      securities held to maturity                                      |   |     | -           |   |   |   | -           |     |   |   | - |   |   |   | - |   |   |   | 683,832 |   |   |   | 726,193 |   |
| Federal      Home Loan Bank Stock                                                |   |     | 1,858,300   |   |   |   | 1,858,300   |     |   |   | 1,767,600 |   |   |   | 1,767,600 |   |   |   | 1,381,900 |   |   |   | 1,381,900 |   |
| Maryland      Financial Bank Stock                                               |   |     | 100,000     |   |   |   | 100,000     |     |   |   | 100,000 |   |   |   | 100,000 |   |   |   | 100,000 |   |   |   | 100,000 |   |
| Common      stock-Statutory Trust I                                              |   |     | 155,000     |   |   |   | 155,000     |     |   |   | 155,000 |   |   |   | 155,000 |   |   |   | 155,000 |   |   |   | 155,000 |   |
| Ground      rents                                                                |   |     | 184,900     |   |   |   | 184,900     |     |   |   | 184,900 |   |   |   | 184,900 |   |   |   | 202,900 |   |   |   | 202,900 |   |
| Loans,      less allowance for credit losses                                     |   |     | 235,882,862 |   |   |   | 239,915,000 |     |   |   | 235,132,621 |   |   |   | 239,446,000 |   |   |   | 199,753,132 |   |   |   | 203,326,000 |   |
| Accrued      interest receivable                                                 |   |     | 1,626,792   |   |   |   | 1,626,792   |     |   |   | 1,680,392 |   |   |   | 1,680,392 |   |   |   | 1,508,640 |   |   |   | 1,508,640 |   |
|                                                                             |   |     |        |   |   |   |        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:                                                      |   |     |        |   |   |   |        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                         |   |     | 294,357,837 |   |   |   | 267,358,000 |     |   |   | 269,767,598 |   |   |   | 272,091,000 |   |   |   | 252,916,766 |   |   |   | 251,088,000 |   |
| Short-term      borrowings                                                       |   |     | 81,290      |   |   |   | 81,290      |     |   |   | 629,855 |   |   |   | 629,855 |   |   |   | 502,529 |   |   |   | 502,529 |   |
| Long-term      borrowings                                                        |   |     | 27,033,711  |   |   |   | 25,979,000  |     |   |   | 27,071,712 |   |   |   | 27,162,000 |   |   |   | 17,107,135 |   |   |   | 16,982,135 |   |
| Dividends      payable                                                           |   |     | 230,285     |   |   |   | 230,285     |     |   |   | 385,794 |   |   |   | 385,794 |   |   |   | 385,010 |   |   |   | 385,010 |   |
| Accrued      interest payable                                                    |   |     | 112,599     |   |   |   | 112,599     |     |   |   | 139,579 |   |   |   | 139,579 |   |   |   | 134,274 |   |   |   | 134,274 |   |
| Accrued      interest payable on junior subordinated debentures                  |   |     | 171,518     |   |   |   | 171,518     |     |   |   | 171,518 |   |   |   | 171,518 |   |   |   | 171,518 |   |   |   | 171,518 |   |
| Junior      subordinated debentures owed to unconsolidated subsidiary      trust |   |     | 5,155,000   |   |   |   | 5,707,615   |     |   |   | 5,155,000 |   |   |   | 5,281,827 |   |   |   | 5,155,000 |   |   |   | 6,031,097 |   |
| Unrecognized      financial instruments:                                         |   |     |        |   |   |   |        |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      to extend credit                                                |   |     | 21,970,127  |   |   |   | 21,970,127  |     |   |   | 23,550,961 |   |   |   | 23,550,961 |   |   |   | 27,344,509 |   |   |   | 27,344,509 |   |
| Standby      letters of credit                                                   |   |     | 79,250      |   |   |   | 79,250      |     |   |   | 196,530 |   |   |   | 196,530 |   |   |   | 197,000 |   |   |   | 197,000 |   |

----

----

|                               |   |         |   |   |         |   |       |         |   |   | Fair   |   |
|------------------------------------|--------|--------------|--------|--------|--------------|--------|------------|--------------|--------|--------|--------|--------|
|                               |   | Level      1 |   |   | Level      2 |   |       | Level      3 |   |   | Value  |   |
|                               |   |         |   |   |         |   |       |         |   |   |   |   |
| Securities      available for sale |   | $            | -      |   |         | $      | 84,462,605 |         |   | $      | -      |   |   | $ | 84,462,605 |   |

|                |   |         |   |   |         |   |   |         |   |   | Fair      |   |
|---------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|--------|-----------|--------|
|                |   | Level      1 |   |   | Level      2 |   |   | Level      3 |   |   | Value     |   |
|                |   |         |   |   |         |   |   |         |   |   |      |   |
| Impaired      loans |   | $            | -      |   |         | $      | -      |         |   | $      | 7,325,938 |   |   | $ | 7,325,938 |   |
| OREO                |   |         | -      |   |         |   | 25,000 |         |   |   | -         |   |   |   | 25,000 |   |
|                |   |         |   |   |         |   |   |         |   |   |      |   |   |   |   |   |
|                |   | $            | -      |   |         | $      | 25,000 |         |   | $      | 7,325,938 |   |   | $ | 7,350,938 |   |

----

----

----

| Balance      Sheets                                        |   |
|------------------------------------------------------------|--------|
| December      31,                                          |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                       |   |
| Assets                                                     |   |
|                                                       |   |   |   |   |   |   |   |   |   |
| Cash                                                       |   | $ | 348,515 |   |   | $ | 338,902 |   |   | $ | 532,222 |   |
| Investment      in The Bank of Glen Burnie                 |   |   | 29,848,797 |   |   |   | 32,727,244 |   |   |   | 34,354,422 |   |
| Investment      in GBB Properties, Inc.                    |   |   | 260,184 |   |   |   | 261,999 |   |   |   | 263,787 |   |
| Investment      in the Glen Burnie Statutory Trust I       |   |   | 155,000 |   |   |   | 155,000 |   |   |   | 155,000 |   |
| Due      from subsidiaries                                 |   |   | 43,996 |   |   |   | 22,878 |   |   |   | 22,709 |   |
| Other      assets                                          |   |   | 49,433 |   |   |   | 114,541 |   |   |   | 119,542 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                          |   | $ | 30,705,925 |   |   | $ | 33,620,564 |   |   | $ | 35,447,682 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Stockholders’ Equity            |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      payable                                     |   | $ | 230,285 |   |   | $ | 385,794 |   |   | $ | 385,010 |   |
| Accrued      interest payable on borrowed funds            |   |   | 171,518 |   |   |   | 171,518 |   |   |   | 171,518 |   |
| Other      liabilities                                     |   |   | - |   |   |   | - |   |   |   | - |   |
| Borrowed      funds from subsidiary                        |   |   | 5,155,000 |   |   |   | 5,155,000 |   |   |   | 5,155,000 |   |
| Total      liabilities                                     |   |   | 5,556,803 |   |   |   | 5,712,312 |   |   |   | 5,711,528 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders’      equity:                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      stock                                          |   |   | 2,683,015 |   |   |   | 2,967,727 |   |   |   | 2,498,465 |   |
| Surplus                                                    |   |   | 9,190,911 |   |   |   | 11,568,241 |   |   |   | 11,921,129 |   |
| Retained      earnings                                     |   |   | 14,311,508 |   |   |   | 14,129,637 |   |   |   | 15,750,156 |   |
| Accumulated      other comprehensive loss, net of benefits |   |   | (1,036,312 | ) |   |   | (757,353 | ) |   |   | (433,596 | ) |
| Total      stockholders’ equity                      |   |   | 25,149,122 |   |   |   | 27,908,252 |   |   |   | 29,736,154 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders’ equity      |   | $ | 30,705,925 |   |   | $ | 33,620,564 |   |   | $ | 35,447,682 |   |

----

| Statements      of Income                                                                         |   |
|---------------------------------------------------------------------------------------------------|--------|
| Years      Ended December 31,                                                                     |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |
| Dividends      and distributions from subsidiaries                                                |   | $ | 4,269,844 |   |   | $ | 1,902,239 |   |   | $ | 1,565,000 |   |
| Other      income                                                                                 |   |   | 16,430 |   |   |   | 16,430 |   |   |   | 16,430 |   |
| Interest      expense on junior subordinated debentures                                           |   |   | (546,430 | ) |   |   | (546,180 | ) |   |   | (546,430 | ) |
| Other      expenses                                                                               |   |   | (122,096 | ) |   |   | (69,468 | ) |   |   | (62,271 | ) |
| Income      before income tax benefit and equity in undistributed net income of      subsidiaries |   |   | 3,617,748 |   |   |   | 1,303,021 |   |   |   | 972,729 |   |
| Income      tax benefit                                                                           |   |   | 246,018 |   |   |   | 226,356 |   |   |   | 224,002 |   |
| Change      in undistributed equity of subsidiaries                                               |   |   | (2,601,304 | ) |   |   | (1,125,415 | ) |   |   | 1,585,410 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                   |   | $ | 1,262,462 |   |   | $ | 403,962 |   |   | $ | 2,782,141 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Statements      of Cash Flows                                                                     |   |
| Years      Ended December 31,                                                                     |   | 2009 |   |   | 2008 |   |   | 2007 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                   |   | $ | 1,262,462 |   |   | $ | 403,962 |   |   | $ | 2,782,141 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:       |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      in other assets                                                                     |   |   | 65,108 |   |   |   | 5,001 |   |   |   | 458 |   |
| (Increase)      decrease in due from subsidiaries                                                 |   |   | (21,118 | ) |   |   | (169 | ) |   |   | 4,111 |   |
| Change      in undistributed equity of subsidiaries                                               |   |   | 2,601,304 |   |   |   | 1,125,415 |   |   |   | (1,585,410 | ) |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by operating activities                                                    |   |   | 3,907,756 |   |   |   | 1,534,209 |   |   |   | 1,201,300 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds      from dividend reinvestment plan                                                     |   |   | 173,667 |   |   |   | 194,054 |   |   |   | 200,459 |   |
| Proceeds      from issuance of common stock                                                       |   |   | - |   |   |   | - |   |   |   | 14,595 |   |
| Repurchase      and retirement of common stock                                                    |   |   | (2,835,709 | ) |   |   | (577,239 | ) |   |   | - |   |
| Dividends      paid                                                                               |   |   | (1,236,101 | ) |   |   | (1,344,344 | ) |   |   | (1,326,051 | ) |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash used in financing activities                                                        |   |   | (3,898,143 | ) |   |   | (1,727,529 | ) |   |   | (1,110,997 | ) |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash                                                                  |   |   | 9,613 |   |   |   | (193,320 | ) |   |   | 90,303 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash,      beginning of year                                                                      |   |   | 338,902 |   |   |   | 532,222 |   |   |   | 441,919 |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash,      end of year                                                                            |   | $ | 348,515 |   |   | $ | 338,902 |   |   | $ | 532,222 |   |

----

| 2009                                          |   |
|-----------------------------------------------|--------|
| (Dollars      in thousands,                   |   | Three      months ended, |   |
| except      per share amounts)                |   | December      31 |   |   | September      30 |   |   | June      30 |   |   | March      31 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                          |   | $ | 4,673 |   |   | $ | 4,749 |   |   | $ | 4,689 |   |   | $ | 4,533 |   |
| Interest      expense                         |   |   | 1,570 |   |   |   | 1,649 |   |   |   | 1,655 |   |   |   | 1,668 |   |
| Net      interest income                      |   |   | 3,103 |   |   |   | 3,100 |   |   |   | 3,034 |   |   |   | 2,865 |   |
| Provision      for credit losses              |   |   | 1,747 |   |   |   | 337 |   |   |   | 209 |   |   |   | 150 |   |
| Net      securities gains                     |   |   | 402 |   |   |   | 135 |   |   |   | 51 |   |   |   | (2 | ) |
| Income      before income taxes               |   |   | (699 | ) |   |   | 648 |   |   |   | 570 |   |   |   | 510 |   |
| Net      income                               |   |   | (210 | ) |   |   | 527 |   |   |   | 490 |   |   |   | 455 |   |
| Net      income per share (basic and diluted) |   | $ | (0.08 | ) |   | $ | 0.20 |   |   | $ | 0.18 |   |   | $ | 0.16 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2008                                          |   |
| (Dollars      in thousands,                   |   | Three      months ended, |   |
|  except      per share amounts)          |   | December      31 |   |   | September      30 |   |   | June      30 |   |   | March      31 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                          |   | $ | 4,604 |   |   | $ | 4,667 |   |   | $ | 4,492 |   |   | $ | 4,413 |   |
| Interest      expense                         |   |   | 1,661 |   |   |   | 1,546 |   |   |   | 1,499 |   |   |   | 1,548 |   |
| Net      interest income                      |   |   | 2,943 |   |   |   | 3,121 |   |   |   | 2,993 |   |   |   | 2,865 |   |
| Provision      for credit losses              |   |   | 700 |   |   |   | 239 |   |   |   | 152 |   |   |   | 55 |   |
| Net      securities gains                     |   |   | 50 |   |   |   | 86 |   |   |   | 48 |   |   |   | 7 |   |
| Income      before income taxes               |   |   | 272 |   |   |   | (1,915 | ) |   |   | 743 |   |   |   | 625 |   |
| Net      income                               |   |   | 1,382 |   |   |   | (2,118 | ) |   |   | 604 |   |   |   | 536 |   |
| Net      income per share (basic and diluted) |   | $ | 0.47 |   |   | $ | (0.71 | ) |   | $ | 0.20 |   |   | $ | 0.18 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2007                                          |   |
| (Dollars      in thousands,                   |   | Three      months ended, |   |
| except      per share amounts)                |   | December      31 |   |   | September      30 |   |   | June      30 |   |   | March      31 |   |
|                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                          |   | $ | 4,487 |   |   | $ | 4,476 |   |   | $ | 4,465 |   |   | $ | 4,409 |   |
| Interest      expense                         |   |   | 1,506 |   |   |   | 1,441 |   |   |   | 1,507 |   |   |   | 1,517 |   |
| Net      interest income                      |   |   | 2,981 |   |   |   | 3,035 |   |   |   | 2,958 |   |   |   | 2,892 |   |
| Provision      for credit losses              |   |   | - |   |   |   | - |   |   |   | 20 |   |   |   | 30 |   |
| Net      securities gains                     |   |   | - |   |   |   | 115 |   |   |   | 4 |   |   |   | 1 |   |
| Income      before income taxes               |   |   | 903 |   |   |   | 1,049 |   |   |   | 873 |   |   |   | 715 |   |
| Net      income                               |   |   | 700 |   |   |   | 785 |   |   |   | 691 |   |   |   | 606 |   |
| Net      income per share (basic and diluted) |   | $ | 0.23 |   |   | $ | 0.27 |   |   | $ | 0.23 |   |   | $ | 0.20 |   |

----