U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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


                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999


                        Commission File Number: 000-24561


                         RESOURCE BANKSHARES CORPORATION
             (Exact name of Registrant as specified in its charter)

                  Virginia                              54-1904386
      (State or other jurisdiction of       (I.R.S. Employer Identification No.)
      incorporation or organization)


                 3720 Virginia Beach Blvd., Va. Beach, VA.23452
               (Address of principal executive offices) (Zip Code)

                                 (757) 463-2265
                         (Registrant's telephone number,
                              including area code)

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

At March 31, 1999, 2,529,351 shares of Resource Bankshares  Corporation's common
stock, $1.50 par value, were outstanding.




<PAGE>






                                          RESOURCE BANKSHARES CORPORATION
                                                     FORM 10-Q
                                                  MARCH 31, 1999

                                                       INDEX

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

                    Consolidated Balance Sheets as of March 31, 1999 and
                    December 31, 1998                                                                     3

                    Consolidated Statements of Income for the periods ended
                    March 31, 1999 and 1998                                                               4

                    Consolidated Statements of Stockholder's Equity for the period
                    ended March 31, 1999                                                                  6

                    Consolidated Statements of Cash Flows for the periods ended
                    March 31, 1999 and 1998                                                               7

                    Notes to Consolidated Financial Statements                                            8

       Item 2.      Management's Discussion and Analysis of Financial Condition                          12
                    and Results of Operations

       Item 3.    Quantitative and Qualitative Disclosures about Market Risks                            21

PART II. OTHER INFORMATION

       Item 1.      Legal Proceedings                                                                    21

       Item 2.      Changes in Securities                                                                21

       Item 6.      Exhibits and Reports on Form 8-K                                                     22

</TABLE>

<PAGE>



PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>

RESOURCE BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)                                March 31              December 31
                                                                         1999                    1998
                                                                         ----                    ----
                                                                             (Dollars in  thousands)
<S>     <C>
ASSETS
Cash and due from banks                                                  $4,040                  $4,325
Interest bearing deposits with banks                                     18,613                   3,357
Federal funds sold                                                           93                     800
Funds advanced in settlement of mortgage loans                           16,290                  21,052
Securities available for sale                                            22,499                   8,619
Securities held to maturity                                               1,053                   1,224
Loans, net of unearned income:
  Commercial                                                             68,986                  68,569
  Real estate - construction                                             50,962                  44,607
  Commercial real estate                                                 29,376                  42,482
  Residential real estate                                                36,036                  28,702
  Installment and consumer loans                                          3,794                   4,162
                                                                 ---------------        ----------------
TOTAL LOANS                                                             189,154                 188,522
  Allowance for loan losses                                             (2,411)                 (2,500)
                                                                 ---------------        ----------------
NET LOANS                                                               186,743                 186,022

Other real estate owned                                                     389                     647
Premises and equipment                                                    3,365                   3,281
Other assets                                                              3,315                   2,531
Accrued interest                                                          1,592                   1,602
                                                                 ---------------        ----------------
                                                                       $257,992                $233,460
                                                                 ===============        ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Non-interest bearing                                                  $18,423                 $15,783
  Interest bearing                                                      202,044                 190,436
                                                                 ---------------        ----------------
TOTAL DEPOSITS                                                          220,467                 206,219

FHLB advances                                                             7,300                   7,300
Other liabilities                                                         1,851                   1,500
Accrued interest                                                            777                     652
Capital debt securities                                                   9,200                       -
                                                                 ---------------        ----------------
TOTAL LIABILITIES                                                       239,595                 215,671

STOCKHOLDERS' EQUITY
 Common stock, par value $1.50 a share
  Shares authorized: 6,666,666
  Shares issued and outstanding:
  1999 - 2,529,351; 1998 2,477,124                                        3,794                   3,716
 Additional paid-in capital                                              10,883                  10,702
 Retained earnings                                                        3,819                   3,310
 Accumulated other comprehensive income                                    (99)                      61
                                                                 ---------------        ----------------
                                                                         18,397                  17,789
                                                                 ---------------        ----------------
                                                                       $257,992                $233,460
                                                                 ===============        ================
See notes to consolidated financial statements.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


RESOURCE BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
                                                                Three months ended
                                                                     March 31
                                                              1999               1998
                                                              ----               ----
                                                              (Dollars in thousands)
<S>     <C>
Interest income:
 Interest and fees on loans                                      $4,007             $3,547
 Interest on investment securities                                  332                306
 Interest on funds advanced                                         322                772
 Interest on federal funds sold                                      39                  6
                                                        ----------------    ---------------

     Total interest income                                        4,700              4,631
                                                        ----------------    ---------------

Interest expense:
 Interest on deposits                                             2,500              2,317
 Interest on short-term borrowings                                  102                263
 Interest on capital debt securities                                 52                  -
                                                        ----------------    ---------------

     Total interest expense                                       2,654              2,580
                                                        ----------------    ---------------

     Net interest income                                          2,046              2,051

Provision for loan losses                                                              125
                                                        ----------------    ---------------

     Net interest income after provision for loan losses          2,046              1,926
                                                        ----------------    ---------------

Noninterest income:
  Mortgage banking income                                         1,402              2,104
  Service charges                                                   212                158
  Gain on sale of loans and other real estate                       152                  2
                                                        ----------------    ---------------

                                                                  1,766              2,264
                                                        ----------------    ---------------
Noninterest expense:
  Salaries and employee benefits                                  1,363              1,861
  Occupancy expenses                                                286                272
  Depreciation and equipment maintenance                            164                162
  Stationery and supplies                                            77                 74
  Marketing and business development                                 76                 76
  Professional fees                                                  35                 32
  Outside computer services                                          98                149
  Provision for funds advanced                                        -                126
  FDIC insurance                                                     29                 10
  Expenses associated with other real estate                         10                  1
  Other                                                             519                285
                                                        ----------------    ---------------

                                                                  2,657              3,048
                                                        ----------------    ---------------

Income before income tax                                          1,155              1,142
Income tax                                                          400                400
                                                        ----------------    ---------------
Net income                                                         $755               $742
                                                        ================    ===============
</TABLE>

<PAGE>

RESOURCE BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(UNAUDITED)
<TABLE>
<S>                                                     <C>                 <C>
Cash dividend declared per common share                           $0.06              $0.06
                                                        ================    ===============
Basic earnings per common share (Note 5)                          $0.30              $0.30
                                                        ================    ===============
Diluted earnings per common share (Note 5)                        $0.27              $0.27
                                                        ================    ===============
</TABLE>

See notes to consolidated financial statements.


<PAGE>







RESOURCE BANKSHARES CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>

Three Months Ended March 31, 1999                                                                           Accumulated
                                                                                                               Other
                                                                           Additional       Retained       Comprehensive
                                                 Common Stock               Paid-in         Earnings           Income
                                            Shares          Amount          Capital          (Deficit)         (Loss)         Total
                                            ------          ------          -------          ---------         ------         -----
                                                                                    (Dollars in thousands)

<S>                                        <C>              <C>            <C>               <C>                 <C>    <C>
Balance, December 31, 1998                   2,477,124        $3,716         $10,702           $3,310              $61    $17,789

Comprehensive income:
    Net income                                       -             -               -              756                -        756

Changes in unrealized appreciation
   (depreciation) on securities
    available for sale, net of
    reclassification adjustment and
    tax effect
          Total comprehensive income                 -             -               -                             (160)      (160)

Proceeds from exercise of stock
     options                                     2,666             4              20                                           24

Proceeds from exercise of warrants              53,361            80             229                                          309

Reacquisition of common stock                  (3,800)           (6)            (68)                                         (74)

Cash dividend declared
     $ .10 per share                                 -             -               -            (247)                       (247)

Balance, March 31, 1999                      2,529,351        $3,794         $10,883           $3,819            ($99)    $18,397
                                         ============== ============= =============== ================ ================ ==========
</TABLE>

See notes to consolidated financial statements




<PAGE>

RESOURCE BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              Three months ended
                                                                        March 31, 1999       March 31, 1998
                                                                        --------------       --------------
   Operating activities                                                       (Dollars in thousands)
<S> <C>
  Net income                                                                      $755                 $742
  Adjustments to reconcile to net cash
   used by operating activities:
   Provision for losses on loans and other real estate owned                         -                  125
   Depreciation and amortization                                                    77                   65
     premiums, net of discounts                                                   (16)                    9
   Gain on sale of loans or other real estate owned                              (156)                  (2)
   Deferred loan origination fees, net of costs                                    298                   77
   Changes in:
    Funds advanced in settlement of mortgage loans                               4,762             (56,540)
    Interest receivable                                                             10                 (42)
    Interest payable                                                               125                   87
    Other assets                                                                 (437)                (387)
    Other liabilities                                                              352                  990
                                                                   --------------------    -----------------
     Net cash used operating activities                                          5,770             (54,876)

Investing activities:
  Proceeds from sale of real estate owned, net of costs                            379                    -
  Proceeds from sales and maturities of
    available-for-sale securities                                                1,054                1,802
  Proceeds from maturities of
    held-to-maturity securities                                                    167                    -
  Purchases of available-for-sale securities                                  (15,066)              (1,004)
  Loan originations, net of principal repayments                                 (983)              (8,029)
  Purchases of premises, equipment and other assets                              (197)                 (92)
                                                                   --------------------    -----------------
     Net cash used investing activities                                       (14,646)              (7,323)

Financing activities:
  Proceeds from exercise of stock options                                          333                    -
  Payments to reacquire common stock                                              (74)                    -
  Cash dividends declared                                                        (248)                (147)
  Net proceeds in FHLB advances                                                      -               22,370
  Net proceeds from issuance of capital debt securities                          8,883                    -
  Net increase in demand deposits,
    NOW accounts and savings accounts                                            6,440                3,651
  Net increase in certificates of deposit                                        7,807               38,580
                                                                   --------------------    -----------------
     Net cash provided by financing activities                                  23,141               64,454

Increase in cash and cash equivalents                                           14,265                2,255
Cash and cash equivalents at beginning of period                                 8,481               13,210
                                                                   --------------------    -----------------
Cash and cash equivalents at end of period                                     $22,746              $15,465
                                                                   ====================    =================

Supplemental schedules and disclosures of cash flow information:
Cash paid for:
    Interest on deposits and other borrowings                                   $2,476               $2,493
                                                                   ====================    =================

Schedule of noncash investment activities:
    Foreclosed real estate                                                      $(380)                $(50)
                                                                   ====================    =================
</TABLE>

                                  See notes to consolidated financial statements


<PAGE>


                         RESOURCE BANKSHARES CORPORATION

                   Notes to Consolidated Financial Statements
                                 March 31, 1999
                                   (UNAUDITED)
                  (Dollars in thousands, except per share data)

Organization and Summary of Significant Accounting Policies


(1) GENERAL

         Resource   Bankshares   Corporation,   a  Virginia   Corporation   (the
"Company"),  was incorporated  under the laws of the Commonwealth of Virginia on
February 4, 1998, primarily to serve as a holding company for Resource Bank (the
"Bank").

         On July 1, 1998,  all Resource Bank common  stock,  $3.00 par value was
converted to the common  stock,  $1.50 par value,  of the Company on a two share
for one share exchange basis,  making the Bank a wholly owned  subsidiary of the
Company  (the  "Reorganization").  In order to effect  the  Reorganization,  the
Company issued approximately 2,453,380 shares of common stock. Accordingly,  the
average  number  of  shares  outstanding  and per share  amounts  for  earnings,
dividends declared,  and book value have been restated for all periods presented
to give affect to the conversion.

         The  Reorganization  became  effective on July 1, 1998.  The  financial
statements reflect the financial position, results of operations, and cash flows
of the Company for the period ended March 31,  1999.  The  financial  statements
conform to  generally  accepted  accounting  principles  and to general  banking
industry  practices.  The interim  period  financial  statements  are unaudited;
however,  in the opinion of management,  all adjustments in the normal recurring
nature which are necessary for a fair  presentation of the financial  statements
included herein have been reflected in the financial statements.  The results of
operations for the interim periods are not necessarily indicative of the results
to be expected for the full year.


(2) CASH AND CASH EQUIVALENTS

         For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks, interest-bearing deposits with banks, and federal funds
sold.

(3) SECURITIES

         The amortized costs,  gross unrealized gains,  gross unrealized losses,
and fair values for  securities  at March 31, 1999,  are shown in the  following
table.


<PAGE>

<TABLE>
<CAPTION>



                                                              Gross                   Gross
      Available-for-Sale:                Amortized Costs   Unrealized Gains       Unrealized Losses       Fair Values
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------
<S>                                              <C>                        <C>                    <C>            <C>
      U.S. Government Agencies                   $5,835                     $1                     $24            $5,812
      Corporate Securities                       11,608                      9                     108            11,509
      Other Securities                            5,208                     --                      30             5,178
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------
      TOTALS                                    $22,651                    $10                    $162           $22,499
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------




<CAPTION>


                                                               Gross                   Gross
      Held-to-Maturity:                   Amortized Costs  Unrealized Gains       Unrealized Losses       Fair Values
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------
<S>                                              <C>                        <C>                    <C>            <C>
      U.S. Government and agency
        securities                                 $307                     $7                     $--              $314
      Municipal securities                          746                     21                      --               767
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------
      TOTALS                                     $1,053                    $28                     $--            $1,081
      --------------------------------- ---------------- ---------------------- ----------------------- -----------------
</TABLE>


(4) ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses are as follows:

               Balance as of January 1, 1999         $2,500

               Provision for loan losses                 --

               Loans charged off                        (90)

               Recoveries                                 1
                                                     ------

               Balance at March 31, 1999             $2,411
                                                     ======
<PAGE>


(5) NET INCOME PER SHARE

     The Bank adopted Financial Accounting Standards Board (FASB) Statement No.
128, Earnings Per Share, on December 31, 1997. This statement established
standards for computing and presenting earnings per share (EPS). This statement
supersedes standards previously set forth in APB Opinion No. 15, Earnings Per
Share. FASB No. 128 requires dual presentation of basic and diluted EPS on the
face of the income statement, and it requires a reconciliation of the numerator
and denominator of the diluted EPS computation. This Statement is effective for
financial statements issued for periods after December 15, 1997. In accordance
with the requirements of this Statement, all prior period EPS have been restated
to reflect the change in reporting requirements.

     Basic EPS excludes dilution and is computed by dividing income available to
common shareholders by the weighted-average number of shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised, converted
into common stock or resulted in the issuance of common stock that then shares
in the earnings of the entity. The average number of basic shares outstanding
for the three months ended March 31, 1999, and 1998 were 2,447,737 and
2,453,380, respectively. The diluted average number of shares for the three
months ended March 31, 1999 and 1998 were 2,686,150 and 2,710,404, respectively.



<PAGE>


(6) COMPREHENSIVE INCOME

     Comprehensive income for the three months ended March 31, 1999 is as
follows:

                        Net income                           $ 755
                        Other comprehensive income,
                        net of taxes of $ 37,311            $ (160)
                                                            -------
                        Comprehensive income                 $ 595
                                                             =====

     Other comprehensive income consists only of unrealized gains or losses on
available for sale securities as illustrated below:

                                                  Accumulated other
                                               comprehensive income
    Beginning balance                                          $ 61
    Current period unrealized loss                            (160)
                                                              -----
    Ending balance                                         $   (99)
                                                           ========

     No reclassification adjustment was necessary as no realized gains or losses
were included in net income for the period.

(7) SEGMENT REPORTING

     The Company has one reportable segment, its mortgage banking operations.
This segment originates residential loans and subsequently sells them to
investors. The commercial banking and other banking operations provide a broad
range of lending and deposit services to individual and commercial customers,
including such products as commercial and construction loans, as well as other
business financing arrangements.

     The Company's reportable segment is a strategic business unit that offers
different products and services. It is managed separately because the segment
appeals to different markets and, accordingly, requires different technology and
marketing strategies.

     The mortgage banking segment's most significant revenue and expense is
non-interest income and non-interest expense, respectively. The Company's
segments are reported below for the periods ended March 31, 1999 and March 31,
1998.



<PAGE>


Selected Financial Information
<TABLE>
<CAPTION>

                                                  Commercial                Mortgage
                                                  and Other                  Banking
                                                  Operations               Operations              Total
                                                  ----------               ----------              -----
<S>                                               <C>                      <C>                     <C>
Three Months Ended March 31, 1999:

Net interest income after provision
     for loan losses                              $  2,046                  $    --                $2,046
Noninterest income                                     364                    1,402                 1,766
Noninterest expense                                 (1,251)                  (1,406)               (2,657)
                                                  --------                ----------              --------
Net income before income taxes                    $  1,159                  $    (4)               $1,155
                                                  ========                ==========               =======

Three Months Ended March 31, 1998:
Net interest income after provision
     for loan losses                              $  1,926                   $   --               $ 1,926
Noninterest income                                     159                    2,104                 2,263
Noninterest expense                                 (1,342)                  (1,705)               (3,047)
                                                  ---------                  ------                -------
Net income before income taxes                    $    743                  $   399               $ 1,142
                                                  ========                  =======                =======

<CAPTION>


Segment Assets
                                                  Commercial                 Mortgage
                                                    and Other                Banking
                                                   Operations               Operations                  Total
                                                   ----------               ----------                  -----
<S>                                               <C>                      <C>                 <C>
March 31, 1999                                     $257,181                 $   811               $257,992

March 31, 1998                                     $274,311                 $ 1,037               $275,348

</TABLE>


<PAGE>






Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations
        (Dollars in thousands, except per share data)

Financial Condition and Results of Operations

     Resource Bankshares Corporation, a Virginia Corporation (the "Company"),
was incorporated under the laws of the Commonwealth of Virginia on February 4,
1998, primarily to serve as a holding company for Resource Bank (the "Bank").

     On July 1, 1998, all Resource Bank common stock, $3.00 par value was
converted to the common stock, $1.50 par value, of the Company on a two share
for one share exchange basis, making the Bank a wholly owned subsidiary of the
Company (the "Reorganization"). In order to effect the Reorganization, the
Company issued approximately 2,453,380 shares of common stock. Accordingly, the
average number of shares outstanding and per share amounts for earnings,
dividends declared, and book value have been restated for all periods presented
to give affect to the conversion.

     In addition to historical information, the following discussion contains
forward looking statements that are subject to risks and uncertainties that
could cause the Company's actual results to differ materially from those
anticipated. These forward looking statements include, but are not limited to,
the effect of increasing interest rates on the Company's profitability and the
adequacy of the Company's allowance for future loan losses. Several factors,
including the local and national economy and the demand for residential mortgage
loans and the adequacy of the Company's Year 2000 compliance, may adversely
affect the Company's ability to achieve the expected results. Readers are
cautioned not to place undue reliance on these forward looking statements, which
reflect management's analysis only as of the date of this report.

     Total assets at March 31, 1999 were $257,992, up 10.5% from $233,460 at
December 31, 1998, reflecting growth in securities and loans. The Company
purchased $11,357 of investment grade corporate securities in the first quarter
of 1999. The principal components of the Company's assets at the end of the
period were $23,552 in securities, $22,746 in cash and cash equivalents, $16,290
in funds advanced in settlement of mortgage loans and $186,743 in net loans. The
Company's lending activities are a principal source of income.

     Total liabilities at March 31, 1999 were $239,595, up from $215,671 at
December 31, 1998, with the increase almost entirely represented by $14,248
(6.9%) growth in deposits and the issuance of $9,200 Trust Preferred Stock.
Non-interest bearing demand deposits increased $2,640 or 16.7%, while interest
bearing deposits increased by $11,608 or 6.1%. The Company's deposits are
provided by individuals and businesses located within the communities served as
well as the national market.

     The Company raised $9,200 of additional capital in the first quarter of
1999 by issuing 368,000 Trust Preferred Securities at a price of $25.00 per
Security. The Trust Preferred Securities feature a 9.25% coupon. The Company, in
turn, purchased $5,000 of non-cumulative 9.25% Preferred Stock issued by the
Bank. This Preferred Stock qualifies as Tier 1 capital for the Bank for
regulatory purposes. Management believes that this additional Tier 1 capital
provides the Bank with an increased loans to one borrower limitation, and the
ability to continue to grow its balance sheet while maintaining its well
capitalized status. The Preferred Stock 9.25% coupon matches the coupon of the
Trust Preferred Securities.
<PAGE>

     The funds generated by the Trust Preferred Securities offering have been
invested in marketable securities and will also be used by the Company in its
stock repurchase program. The marketable securities are held as
available-for-sale to meet liquidity needs. The Company's stock repurchase
program will be used to offset the otherwise dilutive effects of stock options
granted to the Company's management as employment recruitment and retention
perquisites.

     Total shareholders' equity at March 31, 1999 was $18,397, compared to
$17,789 at December 31, 1998. The Company had net income of $755 for three
months ended March 31, 1999 compared with net income of $742 for the comparable
period in 1998, an increase of 1.8%.

     Profitability as measured by the Company's return on average assets (ROA)
was 1.3% for the three months ended March 31, 1999, down .1% from the same
period of 1998. A key indicator of performance, the return on average equity
(ROE) was 16.9% and 19.2% for the quarters ended March 31, 1999 and 1998,
respectively.

             Net interest income  represents a principal  source of earnings for
the Company. The first component is the loan portfolio. Making sound loans that
will increase the Company's net interest margin is the first priority of
management. The second component is gathering core deposits to match and fund
the loan production. The Company also uses electronic funding of deposits and
Federal Home Loan Bank ("FHLB") advances to fund loan growth either for asset
and liability management purposes or for a less expensive source of funds.

           Net interest  income,  before  provision  for loan  losses,  remained
almost unchanged at $2,046 for the three months ended March 31, 1999 versus
$2,051 for the same period in 1998. This slight decrease (0.2%) in net interest
income for the first quarter of 1999 in comparison to 1998 occurred primarily as
the result of decreases in the prime lending rate caused by Federal Reserve Bank
actions in the second half of 1998. Such rate cuts affected the Company's loan
portfolio yields more immediately than its interest bearing deposit costs. Net
interest income was also negatively impacted by a $10,557 reduction in average
balances related to funds advanced in settlement of mortgage loans, which are
interest bearing.

<PAGE>


  Average Balances, Interest Income and Expenses, and Average Yields and Rates

   The  following  table sets  forth,  for the  periods  indicated,  information
regarding: (i) the total dollar amount of interest income of the Company from
categories of interest-bearing assets and the resultant average yield; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average cost; (iii) net interest position; (iv) net interest income;
(v) net interest rate spread; (vi) net interest yield on interest-earning
assets; and (vii) the ratio of total interest-earning assets to total
interest-bearing liabilities. Since quarter-end balances can be distorted by
one-day fluctuations, an analysis of changes in the quarterly averages is
provided to give a better indication of balance sheet trends.


<TABLE>
<CAPTION>
                                                                1st Quarter                            4th Quarter
                                                                   1999                                    1998
                                                     Average                  Yield/         Average                    Yield/
                                                   Balance (1)   Interest     Rate (2)     Balance (1)    Interest      Rate (2)
                                               --------------------------------------  -----------------------------------------
<S>                                                   <C>         <C>         <C>           <C>             <C>          <C>
Assets
Interest-earning assets:
    Securities                                        $15,699        $205      5.22%          $10,385         $149        5.74%
    Loans (3)                                         188,686       4,007      8.49%          182,720        4,084        8.94%
    Interest bearing deposits in other banks           12,893         166      5.15%            5,725           77        5.38%
    Other interest-earning assets (4)                  14,869         322      8.66%           25,426          434        6.83%
                                                      -------        ----      -----          -------         ----        -----
       Total interest earning assets                  232,147       4,700      8.10%          224,256        4,744        8.46%
Noninterest earning assets:
    Cash and due from banks                             3,989                                   3,880
     Premises and equipment                             3,296                                   3,273
     Other assets                                       4,946                                   4,646
      Less: Allowance for loan losses                 (2,442)                                 (2,522)
                                                      -------                                 -------

       Total noninterest earning assets                9,789                                    9,277
                                                       ------                                   -----


           Total assets                              $241,936                                $233,533
                                                     ========                                ========


Liabilities and Stockholders'  Equity
Interest-bearing liabilities:
  Interest bearing deposits:
   Demand/Money Market Accounts                       $13,585        $108      3.18%          $11,463          $97        3.38%
    Savings                                            22,327         243      4.35%           20,245          234        4.62%
    Certificates of deposit                           160,154       2,149      5.37%          154,151        2,189        5.68%
                                                     --------      ------      -----         --------       ------        -----
       Total interest bearing deposits                196,066       2,500      5.10%          185,859        2,520        5.42%
    FHLB advances and other borrowings (5)              7,300         102      5.59%           10,978          156        5.68%
    Capital debt securities                             2,421          52      8.59%                -            -           -
                                                       ------         ---      -----         --------       ------        ----

       Total interest-bearing liabilities             205,787       2,654      5.16%          196,837        2,676        5.44%
                                                     --------      ------      -----         --------       ------        -----
 Noninterest-bearing liabilities:
    Demand deposits                                    16,154                                  15,928
    Other liabilities                                   2,130                                   3,352
                                                       ------                                  ------

       Total noninterest earning liabilities           18,284                                  19,280
                                                      -------                                  ------

 Stockholders' equity                                  17,865                                  17,416
                                                       -------                                 ------

Total liabilities and stockholder's equity           $241,936                                $233,533
                                                     =========                               ========
Net interest income/interest rate spread (6)                      $2,046       2.94%                       $2,068         3.02%
                                                                  =======      =====                       =======        =====
Net interest position (7) / Net yield on
 interest-earning assets (8)                         $ 26,360                  0.88%         $ 27,419                     0.92%
                                                     ========                  =====         ========                     =====
Ratio of average interest-earning assets to
 average interest-bearing liabilities (9)                                    112.81%                                    113.93%
                                                                             =======                                    =======
</TABLE>
<PAGE>



(1) Average   balances  are  computed  on  daily balances.
(2) Yield and rate percentages are all computed through the annualization of
    interest income and expenses versus the average balances of their respective
    accounts.
(3) Non-accrual loans are included in the average loan balances, and income on
    such loans is recognized on a cash basis.
(4) Consists of funds  advanced in  settlement  on loans.
(5) Consists of FHLB  advances  and federal funds purchased.
(6) Represents the difference between the average yield earned on
    interest-earning assets and the average rate paid on interest-bearing
    liabilities.
(7) Equals total interest-earning assets minus total interest-bearing
    liabilities.
(8) Equals net interest income divided by average interest-earning assets.
(9) Equals  average  interest-earning  assets  divided  by  average
    interest-bearing liabilities.


           Non-interest  income decreased from $2,264 for the three months ended
March 31, 1998 to $1,766 for the same period in 1999. This decrease was
primarily attributable to reduced activity in the Company's mortgage banking
operations. For the three months ended March 31, 1999, mortgage banking income
declined by 33.0% or $702 to $1,402 versus the same period of 1998. Mortgage
banking still made a significant contribution to the Company's results in the
first quarter of 1999. Because of the uncertainty of future loan origination
volume and the future level of interest rates, there can be no assurance that
the Company will realize the same level of mortgage banking income in future
periods. Other non-interest income, consisting mostly of service charges, and a
gain on sale of loans, increased by $204 to $364 for the quarter ending March
31, 1999 compared to the same period in 1998.

           For the three months ended March 31, 1999, the Company's non-interest
expense totaled $2,657 or 12.8% lower than the same period in 1998. This
decrease in expenses was also primarily due to reduced mortgage banking
activity. The largest component of non-interest expense, salaries and employee
benefits, which represents 51.3% of total non-interest expense, decreased 26.8%
to $1,363 for the three months ended March 31, 1999 over the same period in
1998. Occupancy expense increased by 5.2% to $286, depreciation and equipment
maintenance increased by 1.2% to $164, marketing and business development
remained constant at $76, and outside computer services decreased (due to
one-time expenses incurred in 1998 in connection with a system conversion) by
34.2% to $98 for the three months ended March 31, 1999 over the same period in
1998.

            In establishing the allowance for loan losses,  management considers
a number of factors, including loan asset quality, related collateral and
economic conditions prevailing during the loan's repayment. In its loan
policies, management emphasizes the borrower's ability to service the debt, the
borrower's general creditworthiness and the quality of collateral. The allowance
for loan losses as a percentage of quarter-end loans at March 31 was 1.3% and
1.7% for 1999 and 1998, respectively. The provisions for loan losses were $0 and
$125 for the three months ended March 31, 1999 and 1998, respectively.

             While the Company  believes  it has  sufficient  allowance  for its
existing portfolio, there can be no assurances that an additional allowance for
losses on existing loans may not be necessary in the future, particularly if the
economy worsens.
<PAGE>

           Management  believes  that losses on these  assets,  if any,  will be
minimal, although no assurance can be given in this regard. Loans are generally
placed in nonaccrual status when the collection of principal and interest is 90
days or more past due, unless the obligation is both well-secured and in the
process of collection.

 Non Performing Assets

            The following table presents the Company's non performing assets for
the periods set forth.

<TABLE>
<CAPTION>
                                                              March 31         December 31
                                                                1999             1998
                                                               -----             ----
                                                                (Dollars in thousands)
<S>                                                         <C>              <C>
Non accrual loans                                               $322              $533
Other real estate                                                389               647
Loans 90 days or more past due and still

  accruing interest                                            1,088               412
                                                               ------              ---
      Total non performing assets                             $1,799            $1,592
                                                              =======           ======

       Total assets                                         $257,992          $233,460
                                                            =========         ========

       Total non performing assets to total assets              0.70%             0.68%
                                                                =====             =====
</TABLE>

<PAGE>



Summary of Loan Loss Experience

The following  table  presents the Company's  loan loss  experience and selected
loan loss ratios for the three months ended March 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                   Three months ended March 31
                                                                                        1999            1998
                                                                                      (Dollars in thousands)
<S>                                                                               <C>                 <C>
Balance of allowance for loan losses at beginning of year                             $2,500          $2,573

Loans charged-off:
 Commercial                                                                               (4)             --
 Installment                                                                              (1)             (4)
 Real Estate                                                                             (84)             --
 Credit Cards and Other Consumer                                                          (1)             (6)
                                                                                         ----            ---
 Total loans charged-off                                                                 (90)            (10)
                                                                                         ----           ----
Recoveries of loans previously charged-off:
   Commercial                                                                               -              -
   Installment                                                                              1              -
   Real Estate                                                                              -              3
   Credit Cards and Other Consumer                                                          -             18
                                                                                         -----         -----
   Total recoveries                                                                         1             21
                                                                                         -----         ------

Net loans charged-off                                                                     (89)            11
Additions to allowance charged to expense                                                   -            125
                                                                                         ----          ------
Balance at end of quarter                                                              $2,411         $2,709
                                                                                       ------          ------

Average loans                                                                        $203,444       $153,662

Loans at end of period                                                               $189,154       $158,553
Selected Loan Loss Ratios:
 Net charge-off during the period to average loans                                       0.04%         -0.01%
 Provision for loan losses  to average loans                                             0.00%          0.08%
 Provision for loan losses  to net charge-offs during the period                            0%         -1136%
 Allowance for loan losses to loans at end of period                                     1.27%          1.71%
 Non-performing assets at end of period                                                $1,799         $2,734
 Non-performing assets to  total loans at end of period                                  0.95%          1.72%
 Allowance for loan losses  to non-performing assets at end of period                     134%            99%
</TABLE>

Interest Rate Sensitivity

           Management  evaluates  interest  sensitivity  through  the  use of an
asset/liability management reporting gap model on a quarterly basis and then
formulates strategies regarding asset generation and pricing, funding sources
and pricing, and off-balance sheet commitments in order to decrease sensitivity
risk. These strategies are based on management's outlook regarding interest rate
movements, the state of the regional and national economies and other financial
and business risk factors. In addition, the Company establishes prices for
deposits and loans based on local market conditions and manages its securities
portfolio under policies that take interest risk into account.

<PAGE>

           Liquidity  represents the  institution's  ability to meet present and
future financial obligations. Liquid assets include cash, interest bearing
deposits with banks, federal funds sold, investments and loans maturing within
one year. The Company's funding requirements are supplied from a range of
traditional sources, including various types of demand deposits, money market
accounts, certificates of deposit and short-term borrowings. Federal Home Loan
Bank ("FHLB") advances are utilized as funding sources by the Company. At March
31, 1999, there were $7,300 in FHLB advances outstanding. The Company has a
warehouse line of credit collateralized by first mortgage loans amounting to
$50,000, which expires December 2, 1999. The Company has no reason to believe
this arrangement will not be renewed. The Bank had $0 and $22,920 outstanding
warehouse advances at March 31, 1999 and 1998, respectively. At March 31, 1998,
$20,400 was outstanding in FHLB advances outside of the warehouse line.

         Management seeks to ensure adequate liquidity to fund loans and meet
the Company's financial requirements and opportunities. To provide liquidity for
current, ongoing and unanticipated needs, the Company maintains short-term
interest bearing certificates of deposits, federal funds sold, and a portfolio
of debt securities. The Company also structures and monitors the flow of funds
from debt securities and from maturing loans. As securities are generally
purchased to provide a source of liquidity, most are classified as securities
available-for-sale when purchased. Unrealized holding gains and losses for
available-for-sale securities are excluded from earnings and reported as a net
amount in a separate component of stockholders' equity until realized.
Securities are composed primarily of governmental or quasi-governmental
agencies.

         The Company's  financial  position at March 31, 1999 reflects liquidity
and capital  levels that  management  believes  are  currently  adequate to fund
anticipated future business expansion.  Capital ratios are in excess of required
regulatory  minimums  for a well  capitalized  institution.  The  assessment  of
capital  adequacy  depends  on a  number  of  factors  such  as  asset  quality,
liquidity,   earnings  performance,  and  changing  competitive  conditions  and
economic forces. The adequacy of the Company's capital is reviewed by management
on an ongoing basis.  Management seeks to maintain a capital structure that will
assure an adequate level of capital to support  anticipated  asset growth and to
absorb potential losses.



<PAGE>



         The  following  table  presents the amounts of the  Company's  interest
sensitive  assets  and  liabilities  that  mature  or  reprice  in  the  periods
indicated.

<TABLE>
<CAPTION>
                                                                          March 31, 1999
                                                                              Maturing
                                             --------------------------------------------------------------------------
                                                     Within           4-12          1 - 5          Over
                                                    3 months         Months        Years         5 Years       Total
                                                                            (Dollars in thousands)
<S>                                                    <C>           <C>           <C>            <C>         <C>
Interest-Earning Assets:
    Investment securities                               $5,504        $1,671       $15,933           $537      $23,645
    Loans                                              112,005        14,612        41,138         21,399      189,154
    Interest bearing deposits in other banks            18,613             -             -              -       18,613
    Other interest-earning assets                       16,290             -             -              -       16,290
                                                        ------ -      ------        ------         ------      -------
Total interest-earning assets                          152,412        16,283        57,071         21,936      247,702
                                                       -------        ------        ------         ------      -------

Interest-Bearing Liabilities:
   Deposits
        Demand and savings (1)                                                     $37,253              -      $37,253
        Time deposits, $100,000 and over                 2,883         7,183           757              -       10,823
        Other time deposits                             37,539       112,475         3,954              -      153,968
   Other interest-bearing liabilities                        -         2,000         5,300              -        7,300
   Capital debt securities                                   -             -             -          9,200        9,200
                                                        ------       -------        ------          -----      -------
Total interest-earning liabilities                      40,422       121,658        47,264          9,200      218,544
                                                        ------       -------        ------          -----      -------

         Period Gap                                   $111,990    $(105,375)        $9,807        $12,736      $29,158
                                                      --------    ----------        ------        -------      -------

         Cumulative Gap                               $111,990        $6,615       $16,422        $29,158
                                                      --------        ------       -------        -------

         Ratio cumulative gap total
            interest-earning assets                     45.21%         2.67%         6.63%         11.77%
</TABLE>


(1) Management has determined that interest checking, money market and savings
accounts are not sensitive to changes in related market ratio and, therefore,
the Company has placed them in the 1-5 years category.

             The capital adequacy standards are based on an established  minimum
for Tier 1 Risk-Based Capital, Risk-Based Capital and the Tier 1 Leverage Ratio.
The following table summarizes regulatory capital ratios for the Company and its
subsidiary at March 31, 1999.

                                              Resource     Resource
                        Required Ratio       Bankshares      Bank
                        --------------       ----------    --------
     Tier 1 risk-based      4.00%              11.89%       11.16%

     Total risk-based       8.00%              14.54%       12.33%

     Tier 1 leverage        4.00 to 5.00%      10.15%        9.53%

          The  Company  and its  subsidiary  are in  full  compliance  with  all
relevant regulatory capital requirements.
<PAGE>

          The effect of changing  prices on financial  institutions is typically
different from other industries as the Company's assets and liabilities are
monetary in nature. Interest rates are significantly impacted by inflation, but
neither the timing nor the magnitude of the changes are directly related to
price level indices. Impacts of inflation on interest rates, loan demand and
deposits are reflected in the Company's financial statements. Management
believes that the mortgage banking operations provide somewhat of a natural
interest rate hedge, in that the Company is interest rate sensitive in the
six-month period. When interest rates decline, the Company's earnings will be
negatively impacted in the six-month period but the mortgage operation's volume
should increase. The reverse should occur in rising interest rate markets.


Year 2000 Compliance

             The  ability  of  the  Company's  computers,   software  and  other
equipment utilizing microprocessors to recognize and properly process data
fields containing a 2-digit year after 1999 is commonly referred to as the "Year
2000" issue. The Year 2000 issue is the result of computer programs and
equipment which are dependent on "embedded chip technology" using two digits
rather than four to define the applicable year. Any of the Company's computer
programs or equipment that are date dependent may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, or a temporary inability
to process transactions, or otherwise engage in similar normal business
activities.

              The Company  adopted a five phase plan of action  developed by the
Federal Financial Institutions Examination Council ("FFIEC") to address Year
2000 issues. During phase one, "awareness," the Company developed an overall
strategy and timetable for the completion of all Year 2000 requirements. Phase
two, "assessment," involved analyzing, prioritizing and putting all internal
systems, both information technology (IT) and non-IT systems, on track for Year
2000 compliance according to the timetable established in the awareness phase.
The Company has no proprietary or in-house developed systems or software, so
non-IT systems are limited to infrastructure and communications. During the
third phase, "renovation," necessary upgrades were ordered for hardware and
software. In addition, each of the Company's vendors was contacted regarding
their Year 2000 progress. Phases one through three have been completed.

           The Company  changed data processors in late 1997 and is processed by
a Service Bureau which houses and maintains all hardware, software and backups
applicable to updating and maintaining the Company's customer and financial
records. Because this is the area of greatest risk to the Company with regard to
year 2000 issues, this arrangement means the Company must carefully oversee the
efforts of the vendor to ensure Year 2000 compliance is complete and timely. The
data processor has renovated and tested its systems and has supplied a series of
reports of their progress. The final stages of its live data testing occurred in
the first quarter of 1999 and to date all applications have tested Year 2000
ready.

          As the Company  proceeds with the fourth phase,  "validation," it will
continue to monitor the validation of all its vendors' systems, as well as
continue validation of its internal systems through ongoing actual real life
testing of all the new upgrades and components. The Company will continue
testing and validation throughout the remainder of 1999 to ensure the continuing
reliability of its systems.

           The  final  phase,  "implementation,"  will  occur at the turn of the
century with the readiness to execute contingency plans if necessary.
Contingency plans include alternatives for each critical system, which should
allow business to continue with little or no interruption past the turn of the
century. These alternatives are being subjected to the same process as the
Company's primary service providers. Additionally, the contingency plans include
performing tasks manually if necessary, until the appropriate applications are
operational.

           In addition to verifying  its internal and vendor supplied systems,
the Company has provided compliance certification questionnaires to its
customers in order to determine their ability to be Year 2000 compliant. If a
customer does not respond to the questionnaire or if its response does not
provide the Company with adequate assurance that such customer's failure to be
Year 2000 compliant would have a material adverse effect on the Company, the
Company is entitled to take steps to terminate its relationship with the
customer before December 31, 1999.
<PAGE>

           Costs to date directly attributable to the Year 2000 project have not
been substantial due to the fact that the change in data processors and the
acquisition of a bank in late 1997 required a complete upgrade of all desktop
computer systems and servers. Year 2000 compliance was an important part of all
purchases and management believes that any known issues were corrected. Costs to
date total $35,000; however, testing by outside vendors may exceed $100 thousand
based on best estimates available to date. Management anticipates that these
funds will be financed internally.

           Because the Company had a detailed Business  Continuation Plan before
the Year 2000 plan began, various potential business interruptions and
alternatives were already documented which should permit a short term
continuance as long as the data processor preserves the ability to update
records. Loss of the data processor is the greatest risk to the Company. The
Year 2000 progress of all data processing companies is being monitored by
outside auditors and regulators and the Company receives regular reports
regarding the progress. While a change of data processors would be time
consuming, the Company's contingency plans include alternatives for each
critical system, as well as plans to perform tasks manually if necessary, until
appropriate applications are operational.

             The Company's  Year 2000 readiness is subject to supervision by the
Federal Reserve System through examination for compliance with the guidance
issued by the FFIEC. Should the Company's readiness be found deficient, it could
be subject to informal enforcement actions such as written notification of
deficiencies to be remediated, to formal enforcement actions such as civil
penalties, temporary cease and desist orders requiring immediate corrective
actions, and the possible public release of any such cease and desist order.

          If the Company and its customers,  suppliers and vendors were not Year
2000 compliant by January 1, 2000, the most reasonably likely worst case
scenario would be a temporary shutdown of operations. Any such shutdown could
have a material adverse effect on the Company's results of operations, liquidity
and financial position.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

        Not applicable.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

          There are no material  pending legal  proceedings to which the Company
is a party or of which the property of the Company is subject. The Company is
party to certain nonmaterial legal proceedings ocurring in the normal course of
business.

Item 2. Changes in Securities

           In the first quarter of 1999, the Company raised $9,200 of additional
capital through the issuance of Trust Preferred Securities ("Preferred
Securities") to the public. The issuer of these securities was Resource Capital
Trust I (the "Trust"). The common securities of the Trust are owned by the
Company. In connection with the Trust's issuance of the Preferred Securities to
the public, the Company issued Junior Subordinated Debt Securities ("Junior Debt
Securities") to the Trust. The Trust paid for the Junior Debt Securities with
proceeds from the sale of the Preferred Securities. The Company will make
payments due under the Junior Debt Securities to the Trust and the Trust will in
turn make payments to holders of Preferred Securities. The Company has
guaranteed the Trust's obligations to make these payments to holders of
Preferred Securities.
<PAGE>

          Upon any  voluntary or  involuntary  liquidation  or bankruptcy of the
Company, the Trustee of the Trust, as holder of the Junior Debt Securities,
would be a subordinate creditor of the Company. However, the Company would be
obligated to pay all principal and interest due under the Junior Debt Securities
before any distribution, dividends or other payments could be made to holders of
the Company's Common Stock.

Item 6. Exhibits And Reports on Form 8-K

    (a)  The  registrant  includes  herein  the following exhibits.

                   Exhibit No.     Item
                   -----------     ----

                           27      Financial Data Schedule


<PAGE>

                                   SIGNATURES

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

RESOURCE BANKSHARES CORPORATION


                                              /s/ Lawrence N. Smith
                                        -----------------------------------
                                                 Lawrence N. Smith
                                        President & Chief Executive Officer
                                                Date: May 17, 1999

                                             /s/ Eleanor J. Whitehurst
                                  ----------------------------------------------
                                               Eleanor J. Whitehurst
                                 Senior Vice President & Chief Financial Officer
                                                 Date: May 17, 1999