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

                                   FORM 10-QSB

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

     For the quarterly period ended March 31, 2003

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

      For the transition period from __________________to ________________

                        Commission file number 000-32641

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

             VIRGINIA                                     54-1941875
  (State or Other Jurisdiction              (I.R.S. Employer Identification No.)
of Incorporation or Organization)


                  3033 WILSON BLVD., ARLINGTON, VIRGINIA 22201
                    (Address of Principal Executive Offices)

                                  703-524-8100
                (Issuer's Telephone Number, Including Area Code)

                                       N/A
              (Former Name, Former Address and Former Fiscal Year,
                         If Changed Since Last Report)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 8, 2003.

   Commonstock, $1 par value--1,840,677 shares outstanding, without adjustment
      for the five for four stock split in the form of a 25% stock dividend
      payable on May 16, 2003 to shareholders of record on April 25, 2003.


                                       1

<page>


                           JAMES MONROE BANCORP, INC.
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                                                                   Page No.
<S>      <C>                                                                          <C>
Part I.  Financial Information

         Item 1.  Financial Statements
                  Consolidated Balance Sheets at March 31, 2003,
                    December 31, 2002, and March 31, 2002                              3
                  Consolidated Income Statements for the three-months
                    ended March 31, 2003 and 2002                                      4
                  Consolidated Statements of Changes in Stockholders'
                    Equity for the three-months ended March 31, 2003 and 2002          5
                  Consolidated Statements of Cash Flows for the three-months
                    ended March 31, 2003 and 2002                                      6
                  Notes to Interim Consolidated Financial Statements                   7

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

         Item 3.  Controls and Procedures                                             26

Part II. Other Information

         Item 1.  Legal Proceedings                                                   27

         Item 2.  Changes in Securities                                               27

         Item 3.  Defaults Upon Senior Securities                                     27

         Item 4.  Submission of Matters to a Vote of Security Holders                 27

         Item 5.  Other Information                                                   27

         Item 6.  Exhibits and Reports on Form 8-K                                    27


</TABLE>

                                       2

<page>


                          PART I. Financial Information

Item 1. Financial Statements

                           JAMES MONROE BANCORP, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (Dollars in thousands, except share data)

<TABLE>
<CAPTION>


                                                                            (Unaudited)      (Audited)       (Unaudited)
                                                                             MARCH 31,      DECEMBER 31,      MARCH 31,
                                                                               2003             2002            2002
                                                                              --------        --------        --------
<S>                                                                           <C>             <C>             <C>
     ASSETS

Cash and due from banks                                                       $ 24,387        $ 11,051        $  9,145
Interest-bearing deposits in banks                                               1,461             655           5,901
Federal funds sold                                                              22,566          28,826          22,670
Securities available-for-sale, at fair value                                    65,066          76,063          17,369
Mortgage loans, held-for-sale                                                      206              --              --
Loans, net of allowance for loan losses of $1,513 at March 31, 2003,
  $1,390 at December 31, 2002, and $1,212 at March 31, 2002                    131,967         119,657          96,586
Bank premises and equipment, net                                                 1,399           1,333           1,244
Accrued interest receivable                                                        957             916             609
Other assets                                                                       340             292             570
                                                                              --------        --------        --------
TOTAL ASSETS                                                                  $248,349        $238,793        $154,094
                                                                              ========        ========        ========

      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
 Deposits:
  Noninterest-bearing deposits                                                $ 70,745        $ 66,729        $ 39,995
  Interest-bearing deposits                                                    152,573         147,141          96,467
                                                                              --------        --------        --------
       Total deposits                                                          223,318         213,870         136,462
Trust preferred capital notes                                                    5,000           5,000           5,000
Accrued interest payable and other liabilities                                     674             728             518
                                                                              --------        --------        --------
       Total liabilities                                                       228,992         219,598         141,980

STOCKHOLDERS' EQUITY
 Common stock, $1 par value; authorized 5,000,000 shares;
  issued and outstanding 2,300,633 at March 31, 2003, 1,840,677
  at December 31, 2002 and 964,167 at March 31, 2002                             2,301           1,841             964
 Capital surplus                                                                12,894          13,354           9,555
 Retained earnings                                                               3,358           2,894           1,555
 Accumulated other comprehensive income                                            804           1,106              40
                                                                              --------        --------        --------
       Total stockholders' equity                                               19,357          19,195          12,114
                                                                              --------        --------        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $248,349        $238,793        $154,094
                                                                              ========        ========        ========

</TABLE>

See notes to interim consolidated financial statements.


                                       3

<page>

                           JAMES MONROE BANCORP, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                 (UNAUDITED)
                                                                              THREE MONTHS ENDED
                                                                       ---------------------------------
                                                                          MARCH 31,         MARCH 31,
                                                                            2003              2002
                                                                       ----------------   --------------
<S>                                                                         <C>               <C>
INTEREST AND DIVIDEND INCOME:
   Loans, including fees                                                    $    2,190        $   1,708
   Securities, taxable                                                             700              291
   Federal funds sold                                                               36               33
   Other interest income                                                             1                2
                                                                            ----------        ---------
          Total interest and dividend income                                     2,927            2,034
INTEREST EXPENSE:
   Deposits                                                                        813              661
   Borrowed funds                                                                   64                5
                                                                            ----------        ---------
          Total interest expense                                                   877              666
                                                                            ----------        ---------
          Net interest income                                                    2,050            1,368
PROVISION FOR LOAN LOSSES                                                          178              181
                                                                            ----------        ---------
          Net interest income after provision for loan losses                    1,872            1,187

NONINTEREST INCOME:
Service charges and fees                                                            74               75
Gain on sale of securities                                                          15               16
Other                                                                               60               54
                                                                            ----------        ---------
          Total noninterest income                                                 149              145

NONINTEREST EXPENSES:
  Salaries and wages                                                               587              437
  Employee benefits                                                                104               76
  Occupancy expenses                                                               155              125
  Equipment expenses                                                                96               58
  Other operating expenses                                                         398              310
                                                                            ----------        ---------
            Total noninterest expense                                            1,340            1,006
                                                                            ----------        ---------
          Income before income taxes                                               681              326
PROVISION FOR INCOME TAXES                                                         217              112
                                                                            ----------        ---------
          Net income                                                        $      464        $     214
                                                                            ==========        =========
EARNINGS PER SHARE, basic                                                   $     0.20        $    0.12
                                                                            ==========        =========
EARNINGS PER SHARE, diluted                                                 $     0.19        $    0.11
                                                                            ==========        =========
</TABLE>


See notes to interim consolidated financial statements.

                                       4





<page>

                           JAMES MONROE BANCORP, INC.
                                AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
               For the Three Months Ended March 31, 2003 and 2002
                             (Dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                ACCUMULATED
                                                                                   OTHER
                                                                                  COMPRE-      COMPRE-          TOTAL
                                        COMMON        CAPITAL      RETAINED       HENSIVE      HENSIVE      STOCKHOLDERS'
                                         STOCK        SURPLUS      EARNINGS        INCOME       INCOME         EQUITY
                                         -----        -------      --------        ------       ------         ------


<S>                                     <C>          <C>           <C>             <C>         <C>           <C>
BALANCE, JANUARY 1, 2002                $    960     $   9,522     $   1,341       $    144                  $   11,967
 Comprehensive income:
  Net income                                                             214                      $   214           214

  Net change in unrealized (loss)
   on available for sale securities,
   net of deferred taxes of $54                                                        (104)         (104)         (104)
                                                                                                 --------
 Total comprehensive income                                                                      $    110
                                                                                                 ========
  Exercise of stock options                    4            33                                                       37
                                        ---------    ----------    ----------      ---------                 -----------
BALANCE, MARCH 31, 2002                 $    964     $   9,555     $   1,555       $     40                  $   12,114
                                        =========    ==========    ==========      =========                 ===========

<CAPTION>
                                                                                ACCUMULATED
                                                                                   OTHER
                                                                                  COMPRE-      COMPRE-          TOTAL
                                        COMMON        CAPITAL      RETAINED       HENSIVE      HENSIVE      STOCKHOLDERS'
                                         STOCK        SURPLUS      EARNINGS        INCOME       INCOME         EQUITY
                                         -----        -------      --------        ------       ------         ------
<S>                                     <C>          <C>           <C>             <C>         <C>           <C>
BALANCE, JANUARY 1, 2003               $   1,841    $   13,354     $   2,894      $   1,106                  $   19,195
 Comprehensive income:
  Net income                                                             464                     $    464           464
  Net change in unrealized gains
   on available for sale securities,
   net of deferred taxes of $156                                                      (302)         (302)         (302)
                                                                                                 --------
 Total comprehensive income                                                                      $    162
                                                                                                 ========
 Effect of 5-for-4 stock split               460          (460)
                                       ----------   -----------    ----------      ---------                 -----------
BALANCE, MARCH 31, 2003                $   2,301    $   12,894     $   3,358       $    804                  $   19,357
                                       ==========   ===========    ==========      =========                 ===========
</TABLE>

See notes to interim consolidated financial statements.


                                       5



<page>

                           JAMES MONROE BANCORP, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                      (Unaudited)
                                                                               THREE MONTHS ENDED MARCH 31,
                                                                                --------------------------
                                                                                   2003           2002
                                                                                ---------       ----------
<S>                                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                                                     $    464        $    214
 Adjustments to reconcile net income to net cash provided by
  operating activities:
   Depreciation and amortization                                                      75              52
   Provision for loan losses                                                         178             181
   Amortization of bond premium                                                      108              16
   Accretion of bond discount                                                        (20)            (11)
   Realized (gain) on sale of securities                                             (15)            (16)
   Origination of mortgage loans held for sale                                      (206)             --
   (Increase) decrease in accrued interest receivable                                (41)             22
   (Increase) decrease in other assets                                               108            (208)
   Increase (decreased) in accrued interest and other liabilities                    (54)             86
                                                                                --------        --------
     Net cash provided by operating activities                                       597             336
                                                                                --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchases of securities available for sale                                      (26,741)            (75)
 Proceeds from calls and maturities of securities available for sale              37,257           4,677
 Purchases of premises and equipment                                                (141)           (289)
 Decrease in federal funds sold and interest-bearing deposits                      5,454         (17,067)
 Net (increase) in loans                                                         (12,438)        (11,659)
                                                                                --------        --------
     Net cash (used in) investing activities                                       3,391         (24,413)
                                                                                --------        --------
CASH FLOWS FROM FINANCING ACTIVITIES
 Net increase in demand deposits,
  savings deposits and money market accounts                                       6,265           9,745
 Net increase in time deposits                                                     3,183          12,458
 Proceeds from issuance of common stock                                               --              37
 Proceeds from issuance of trust preferred capital notes                              --           5,000
                                                                                --------        --------
     Net cash provided by financing activities                                     9,448          27,240
                                                                                --------        --------
     Increase in cash and due from banks                                          13,436           3,163
CASH AND DUE FROM BANKS
 Beginning                                                                        11,051           5,982
                                                                                --------        --------
 Ending                                                                         $ 24,487        $  9,145
                                                                                ========        ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
 Interest paid on deposits and borrowed funds                                   $    876        $    744
                                                                                ========        ========
 Income taxes paid                                                              $    217        $     48
                                                                                ========        ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES,
   Unrealized gain (loss) on securities available for sale                      $   (458)       $   (158)
                                                                                ========        ========
</TABLE>

See notes to interim consolidated financial statements.



                                       6


<page>





                   JAMES MONROE BANCORP, INC. AND SUBSIDIARIES
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                             (Dollars in Thousands)

NOTE 1--

Organization. James Monroe Bancorp, Inc. was incorporated under the laws of the
Commonwealth of Virginia on April 9, 1999 to be the holding company for James
Monroe Bank. James Monroe Bancorp acquired all of the shares of James Monroe
Bank on July 1, 1999 in a mandatory share exchange under which each outstanding
share of common stock of James Monroe Bank was exchanged for one share of James
Monroe Bancorp common stock. James Monroe Bank, a Virginia chartered commercial
bank, which is a member of the Federal Reserve System, and James Monroe
Statutory Trust I, are James Monroe Bancorp's subsidiaries. James Monroe Bank
commenced banking operations on June 8, 1998. As of March 31, 2003 the Company
operated the main office in Arlington, Virginia, one branch in Annandale,
Virginia, one branch and a drive-up facility in Leesburg, Virginia, and one
branch in Fairfax City, Virginia.

Basis of Presentation. In the opinion of management, the accompanying unaudited
consolidated financial statements of James Monroe Bancorp, Inc. and Subsidiaries
(the Company) have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all the information and footnotes required for complete financial
statements. In the opinion of management, all adjustments and reclassifications
necessary for a fair presentation have been included. Operating results for the
three month period ended March 31, 2003 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2003, or any other
period. The unaudited interim consolidated financial statements should be read
in conjunction with the audited consolidated financial statements and footnotes
for the year ended December 31, 2002.

Stock Compensation Plans. At March 31, 2003, the Company had a stock-based
compensation plan. The Company accounts for this plan under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. No stock-based employee compensation
cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the underlying common stock on the
date of the grant. The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value recognition
provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to
stock-based employee compensation. The per share calculations have been adjusted
to reflect the 5-for-4 stock split discussed in Note 7 and all preceding stock
splits.

                                                     QUARTER ENDED MARCH 31,
                                                     -----------------------
                                                       2003           2002
                                                     --------       --------


Net income, as reported                               $   464       $   214
Deduct:Total stock-based employee
compensation expense determined under fair
value based method for all awards                          (9)          (19)
                                                      -------       -------
Pro forma net income                                  $   455       $   195
                                                      =======       =======

Earnings per share:
     Basic- as reported                                  0.20          0.12
                                                      =======       =======
     Basic- pro forma                                    0.20          0.11
                                                      =======       =======
     Diluted- as reported                                0.19          0.11
                                                      =======       =======
     Diluted- pro forma                                  0.19          0.10
                                                      =======       =======

                                       7


<PAGE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions:

                                                          2002
                                                        --------
         Dividend yield                                    0.00%
         Expected life                                  10 years
         Expected volatility                               0.50%
         Risk-free interest rate                           5.05%

No options were granted in 2003.

NOTE 2--

Earnings Per Share. The following table discloses the calculation of basic and
diluted earnings per share for the three months ended March 31, 2003 and 2002,
restated to reflect a 5-for-4 stock split as discussed in Note 7.

                                                          THREE-MONTHS ENDED
                                                               MARCH 31,
                                                       ------------------------
                                                          2003          2002
                                                       ----------    ----------
         Net Income                                    $      464    $      214
                                                       ==========    ==========

         Weighted average shares outsanding--basic      2,300,846     1,803,265
         Common share equivalents for stock options       150,979        90,944
                                                       ----------    ----------

         Weighted average shares outsanding--diluted    2,451,825     1,894,209
                                                       ==========    ==========

         Earnings per share-basic                      $     0.20    $     0.12
                                                       ==========    ==========
         Earnings per share-diluted                    $     0.19    $     0.11
                                                       ==========    ==========

                                       8

<PAGE>


NOTE 3--

Securities available-for-sale. Securities available-for-sale are reported at
fair value with unrealized gains and losses (net of income taxes) recorded in
shareholders' equity as a component of "accumulated other comprehensive income."
Actual gains and losses on the sales of these securities, if any, are computed
using the specific identification method and included in "gain on sale of
securities" on the income statement. The amortized cost and carrying value
(estimated market value) of securities available-for-sale at March 31, 2003,
December 31, 2002, and March 31, 2002, are summarized in the tables that follow.
The Company classifies all securities as available-for-sale.


<TABLE>
<CAPTION>


                                                                      March 31, 2003
                                             ---------------------------------------------------------------------
                                                                  Gross               Gross              Estimated
                                             Amortized          Unrealized          Unrealized            Market
($ in thousands)                                Cost              Gains               Losses              Value
                                             ---------          ----------          ----------           ---------
<S>                                           <C>                <C>                 <C>                 <C>

U.S. Government and federal agency            $ 27,006           $    259            $     --            $ 27,265
Mortgage-backed securities                      23,161                520                 (13)             23,668
Corporate notes                                 12,898                458                  (4)             13,352
Restricted Stock                                   781                 --                  --                 781
                                              --------           --------            --------            --------
                                              $ 63,846           $  1,237            $    (17)           $ 65,066
                                              ========           ========            ========            ========

</TABLE>

<TABLE>
<CAPTION>


                                                                    December 31, 2002
                                             ---------------------------------------------------------------------
                                                                  Gross               Gross              Estimated
                                             Amortized          Unrealized          Unrealized            Market
($ in thousands)                                Cost              Gains               Losses              Value
                                             ---------          ----------          ----------           ---------
<S>                                           <C>                <C>                 <C>                 <C>

U.S. Government and federal agency            $ 35,013           $    285            $     --            $ 35,298
Mortgage-backed securities                      26,606                571                 (64)             27,113
Corporate notes                                 12,139                884                  --              13,023
Restricted Stock                                   629                 --                  --                 629
                                              --------           --------            --------            --------
                                              $ 74,387           $  1,740            $    (64)           $ 76,063
                                              ========           ========            ========            ========

</TABLE>

<TABLE>
<CAPTION>


                                                                      March 31, 2002
                                             ---------------------------------------------------------------------
                                                                  Gross               Gross              Estimated
                                             Amortized          Unrealized          Unrealized            Market
($ in thousands)                                Cost              Gains               Losses              Value
                                             ---------          ----------          ----------           ---------
<S>                                           <C>                <C>                 <C>                 <C>

U.S. Government and federal agency            $  3,501           $     51            $     --            $  3,552
Mortgage-backed securities                       7,170                115                  (6)              7,279
Corporate notes                                  6,130                 49                (150)              6,029
Restricted Stock                                   509                 --                  --                 509
                                              --------           --------            --------            --------
                                              $ 17,310           $    215            $   (156)           $ 17,369
                                              ========           ========            ========            ========

</TABLE>

                                       9

<PAGE>


NOTE 4--

Loans. Major classifications of loans at March 31, 2003, December 31, 2002, and
March 31, 2002 are summarized in the following table.

<TABLE>
<CAPTION>


                                                        MARCH 31,          DECEMBER 31,         MARCH 31,
         ($ in thousands)                                 2003                2002                2002
                                                        ---------          ------------         ---------
         <S>                                            <C>                 <C>                 <C>
         Construction                                   $  15,111           $  12,160           $   8,169
         Commercial loans                                  26,834              27,862              24,850
         Real estate-commercial                            80,540              70,318              51,967
         Real estate-1-4 family residential                 1,410               2,069               3,143
         Home equity loans                                  2,769               2,390               1,531
         Consumer loans                                     6,640               6,088               7,948
         Deposit overdrafts                                   176                 160                 190
                                                        ---------           ---------           ---------
                                                          133,480             121,047              97,798

         Less allowance for loan losses                    (1,513)             (1,390)             (1,212)
                                                        ---------           ---------           ---------
         Net Loans                                      $ 131,967           $ 119,657           $  96,586
                                                        =========           =========           =========

</TABLE>


         Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>


                                                             QUARTER ENDED,     YEAR ENDED,      QUARTER ENDED,
                                                                MARCH 31,       DECEMBER 31,       MARCH 31,
         ($ in thousands)                                          2003            2002              2002
                                                             --------------    -------------     --------------
         <S>                                                     <C>              <C>              <C>

         Beginning balance                                       $ 1,390          $ 1,030          $ 1,030
         Loans charged-off:
              Commercial                                             (20)            (122)              --
              Consumer                                               (35)              (4)              --
         Recoveries of loans previously charged-off:
              Commercial                                              --               --
              Consumer                                                --                3                1
                                                                 -------          -------          -------
              Net charge-offs                                        (55)            (123)               1
                                                                 -------          -------          -------
         Provision for loan losses                                   178              483              181
                                                                 -------          -------          -------
         Ending balance                                          $ 1,513          $ 1,390          $ 1,212
                                                                 =======          =======          =======

</TABLE>

         The following table presents the amounts of nonperforming assets at the
dates indicated.

<TABLE>
<CAPTION>


                                        March 31,            December 31,           March 31,
($ in thousands)                          2003                  2002                  2002
                                        --------             -----------            ---------
<S>                                        <C>                  <C>                   <C>

Nonaccrual loans                           $345                 $296                  $255
Loans past-due 90-days or more               --                   --                    --
Restructured loans                           --                   --                    --
Other real estate owned                      --                   --                    --
                                           ----                 ----                  ----
     Total nonperforming assets            $345                 $296                  $255
                                           ====                 ====                  ====

</TABLE>

                                       10

<PAGE>

NOTE 5--

Deposits. Interest-bearing deposits consist of the following:

                                                  MARCH 31,
                                            -------------------
($ in thousands)                               2003       2002
                                            --------   --------
NOW accounts                                $  8,323   $  4,820
Savings accounts                               1,254      1,086
Money market accounts                        101,492     48,517
Certificates of deposit under $100,000        12,169     16,725
Certificates of deposit $100,000 and over     27,602     24,107
Individual retirement accounts                 1,733      1,212
                                            --------   --------
                                            $152,573   $ 96,467
                                            ========   ========


NOTE 6--

Trust Preferred Capital Securities. On March 25, 2002, James Monroe Statutory
Trust I, a subsidiary of the Company, was formed for the purpose of issuing
redeemable trust preferred securities and purchasing the Company's junior
subordinated debentures, which are its sole assets. The Company owns all of the
Trust's outstanding common securities. On March 26, 2002, $5 million of the
trust preferred securities were issued in a pooled underwriting totaling
approximately $500 million. The securities have a LIBOR-indexed floating rate of
interest which is set and payable on a quarterly basis. During 2002, the
interest rates ranged from 5.79% to 5.00%. The rate for the quarterly period
beginning December 26, 2002, was 5.00%. The securities have a maturity date of
March 25, 2032, and are subject to varying call provisions beginning March 26,
2007.

The Securities may be included in Tier 1 capital for regulatory capital adequacy
determination purposes up to 25% of Tier 1 capital. The portion of the
Securities not considered as Tier 1 capital will be included in Tier 2 capital.
At March 31, 2003, all of the trust preferred securities qualified as Tier 1
capital.

The Company and the Trust believe that, taken together, the Company's
obligations under the junior subordinated debentures, the Indenture, the Trust
declaration and the Guarantee entered into in connection with the issuance of
the trust preferred securities constitute a full and unconditional guarantee by
the Company of the Trust's obligations with respect to the trust preferred
securities.

Subject to certain exceptions and limitations, the Company may elect from time
to time to defer interest payments on the junior subordinated debt securities,
which would result in a deferral of distribution payments on the related trust
preferred securities.

NOTE 7--

Common Stock Split. The Company authorized a 5-for-4 stock split in the form of
a 25% stock dividend for shareholders of record of record on April 25, 2003,
payable May 16, 2003. The earnings per common share for all periods presented
have been restated to reflect the stock split as has the Stockholders' Equity
section of the balance sheet as of March 31, 2003.



                                       11


<PAGE>


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

INTRODUCTION

         This Management's Discussion and Analysis reviews the financial
condition and results of operations of the Company and its subsidiaries as of
and for the three-months ended March 31, 2003 and 2002. Some tables cover more
than these periods to comply with Securities and Exchange Commission disclosure
requirements or to illustrate trends over a period of time. When reading this
discussion, reference should be made to the consolidated financial statements
and related notes that appear herein and to our consolidated financial
statements and footnotes thereto for the year ended December 31, 2002.

CRITICAL ACCOUNTING POLICIES

         There were no changes to the Company's critical accounting policies in
the first quarter of 2003. Critical accounting policies are those applications
of accounting principles or practices that require considerable judgment,
estimation, or sensitivity analysis by management. In the financial service
industry, examples, albeit not an all inclusive list, of disclosures that may
fall within this definition are the determination of the adequacy of the
allowance for loan losses, valuation of mortgage servicing rights, valuation of
derivatives or securities without a readily determinable market value, and the
valuation of the fair value of intangibles and goodwill. Except for the
determination of the adequacy of the allowance for loan losses, the Company does
not believe there are other practices or policies relating to its financial
statements that require significant sensitivity analysis, judgments, or
estimations.

         Allowance for Loan Losses. The Company has developed a methodology to
determine, on a quarterly basis, an allowance to absorb probable loan losses
inherent in the portfolio based on evaluations of the collectibility of loans,
historical loss experience, peer bank loss experience, delinquency trends,
economic conditions, portfolio composition, and specific loss estimates for
loans considered substandard or doubtful. All commercial and commercial real
estate loans that exhibit probable or observed credit weaknesses are subject to
individual review. If necessary, reserves would be allocated to individual loans
based on management's estimate of the borrower's ability to repay the loan given
the availability of collateral and other sources of cash flow. Any reserves for
impaired loans are measured based on the present rate or fair value of the
underlying collateral. The Company evaluates the collectibility of both
principal and interest when assessing the need for a loss accrual. A composite
allowance factor that considers the Company's and other peer bank loss
experience ratios, delinquency trends, economic conditions, and portfolio
composition are applied to the total of commercial and commercial real estate
loans not specifically evaluated. A percentage of this composite allowance
factor is also applied to the aggregate of unused commercial lines of credit
which the Company has an obligation to honor but where the borrower has not
elected to draw on their lines of credit.

         Homogenous loans, such as consumer installment, residential mortgage
loans, home equity loans, and smaller consumer loans are not individually risk
graded. Reserves are established for each homogenous pool of loans based on the
expected net charge-offs from a current trend in delinquencies, losses or
historical experience and general economic conditions. The Company has no
material delinquencies in these types of loans, and has not, since inception,
had a trend or an indication of a trend that would guide the Company in expected
material losses in these types of homogenous pools of loans.

         The Company's allowance for loan losses is determined based upon a
methodology developed by management as described above and is approved by the
board of directors each quarter.

         Management has significant discretion in making the judgments inherent
in the determination of the provision and allowance for credit losses, including
in connection with the valuation of collateral, a borrower's prospects of
repayment, and in establishing allowance factors. The establishment of allowance
factors is a continuing exercise, based on management's continuing assessment of
the global factors discussed above and their impact on the portfolio, and
allowance factors may change from period to period, resulting in an increase or
decrease in the amount of the provision or allowance, based upon the same volume
and classification of loans. Changes in allowance factors will have a direct
impact on the amount of the provision, and a corresponding effect on net income.
Errors in management's perception and assessment of the global factors and their
impact on the portfolio could result in the allowance not being adequate to
cover losses in the portfolio, and may result in additional provisions or
charge-offs.


                                       12

<PAGE>


FORWARD-LOOKING STATEMENTS

         This Management's Discussion and Analysis and other portions of this
report contain forward looking statements within the meaning of the Securities
Exchange Act of 1934, as amended, including statements of goals, intentions, and
expectations as to future trends, plans, events or results of Company operations
and policies and regarding general economic conditions. In some cases, forward
looking statements can be identified by use of such words as "may," "will,"
"anticipate," "believes," "expects," "plans," "estimates," "potential,"
"continue," "should," and similar words or phases. These statements are based
upon current and anticipated economic conditions, nationally and in the
Company's market, interest rates and interest rate policies, competitive
factors, government agencies and other third parties, which by their nature are
not susceptible to accurate forecast, and are subject to significant
uncertainty. Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual future
operations and results in the future may differ materially from those indicated
herein. Readers are cautioned against placing undue reliance on any such
forward-looking statement. The Company does not undertake to update any
forward-looking statement to reflect occurrences or events, which may not have
been anticipated as of the date of such statements.

COMPANY HIGHLIGHTS SINCE DECEMBER 31, 2002 ARE:

            o     Assets grew $9.6 million (4%).
            o     Loans grew $12.4 million (10%).
            o     Deposits grew $9.5 million (4.4%).
            o     Net interest  margin  remained at 3.9% in the first quarter of
                  2003 compared to the year 2002.
            o     Asset quality  remains strong with $55 thousand in charge offs
                  for  the  first  quarter  of  2003  and  the  Company  has not
                  experienced any  significant  deterioration  in  nonperforming
                  assets or delinquency trends.
            o     The Company has excellent  liquidity  and adequate  capital to
                  support further growth.
            o     The Company started James Monroe Bank Mortgage Services in the
                  first  quarter.  Expenses were incurred for staffing and other
                  start up costs  but as of March  31,  2003 had not sold any of
                  the mortgages originated.
            o     The Company  declared a 5-for-4  stock  split  payable May 16,
                  2003 to shareholders of record April 25, 2003.

FINANCIAL OVERVIEW

         The following discussion provides information about the results of
operations and financial condition, liquidity, and capital resources of Bancorp
and should be read in conjunction with our consolidated financial statements and
notes thereto for the year ended December 31, 2002.

BALANCE SHEET

         Total assets increased to $248.3 million at March 31, 2003, an increase
of $9.6 million from December 31, 2002, and an increase of $94.3 million from
March 31, 2002. During the three-months ended March 31, 2003, deposits increased
$9.5 million over December 31, 2002, with noninterest-bearing deposits
increasing $4.0 million, and interest-bearing deposits increasing $5.5 million.
With the growth in deposits, the Company was able to fund $12.3 million net
increase in loans. Securities declined $11 million due to the call on a number
of the callable securities resulting in the liquidity position of the Company
increasing by $7.9 million.

COMPARISON OF FIRST QUARTER 2003 OPERATING RESULTS TO FIRST QUARTER 2002

         For the quarter ended March 31, 2003, the Company had net income of
$464 thousand, or $.19 per share on a fully diluted basis, compared to $214
thousand, or $.11 per share, for the comparable quarter of 2002. Annualized
return on average assets was .83% for the three-months ended March 31, 2003,
compared to .67% for the same quarter in 2002, and the return on average equity
was 9.79% for the quarter ended March 31, 2003, compared with 7.13% for the
first quarter of 2002.

         During 2003, the Company continued to focus on managing its net
interest margin, especially in light of the rapidly changing interest rate
environment in 2001 and then the sustained extremely low rate environment in
2002. In 2001, the Federal Reserve reduced interest rates 11 times, for a total
reduction of 475 basis points, an unprecedented reduction both in terms of the
number of, and amount of, rate changes in a 12-month period. The Federal Reserve
reduced

                                       13

<PAGE>


interest rates an additional 50 basis points in November 2002. These rate
reductions had a direct impact in 2001 and 2002 on the rates earned on the
Bank's outstanding floating or adjustable rate loans, as well as new loans, and
on the rates earned on other investments. These dramatic reductions continued to
impact the loan and investment portfolios in 2003, as loans repriced on a
delayed basis or renewed at lower interest rates, and as investment securities
matured or were called, and were reinvested at lower rates. This was partially
offset by continued repricing upon renewal of certificates of deposit. These
rate reductions resulted in a reduction in the net interest margin, which
declined from 5.09% in 2000 to 4.56% in 2001 to 3.90% in 2002 The net interest
margin remained at 3.90% for the first quarter of 2003. Despite these
reductions, the Company's practice of managing its interest rate risk process
has mitigated the negative effect of such a severely declining rate environment.
Although the Company continued to grow in asset size since its inception in
1998, and added its third and fourth branches in 2002, it has been able to
control its operating efficiency. The Company's Efficiency Ratio decreased from
66.49% in the first quarter of 2002 to 60.94% in the first quarter of 2003. We
compute our Efficiency Ratio by dividing noninterest expense by the sum of net
interest income on a tax equivalent basis and noninterest income Comparison of
our efficiency ratio with those of other companies may not be possible, because
other companies may calculate the efficiency ratio differently.

QUARTERLY RESULTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                  2003                                    2002
                                              -------------   --------------------------------------------------------------
($ in thousands except share data)               FIRST           FOURTH          THIRD           SECOND           FIRST
                                              -------------   -------------   -------------   -------------    -------------
<S>                                             <C>             <C>             <C>             <C>              <C>
RESULTS OF OPERATIONS:
Net interest income                                  2,050           1,932      $    1,715      $    1,467       $    1,368
Provision for loan and lease losses                    178              98             134              70              181
Other income                                           149             358             134             123              145
Noninterest expense                                  1,340           1,188           1,134           1,066            1,006
Income before taxes                                    681           1,004             581             454              326
Net income                                             464             661             382             296              214

PER SHARE DATA:
Earnings per share, basic                       $     0.20      $     0.32      $     0.17      $     0.16       $     0.12
Earnings per share, diluted                     $     0.19      $     0.31      $     0.16      $     0.15       $     0.11
Weighted average shares
     outstanding-basic                           2,300,846       2,054,844       2,299,455       1,815,808        1,803,264
                -diluted                         2,451,825       2,160,539       2,405,840       1,920,873        1,894,209

AT PERIOD END
Loans                                           $  133,480      $  121,047      $  115,303      $  105,370       $   97,798
Earning assets                                     222,279         226,591         185,552         175,864          143,738
Total assets                                       248,349         238,793         204,088         189,835          154,094
Deposits                                           223,318         213,870         180,338         166,891          136,462
Shareholders' equity                                19,357          19,195          18,129          17,466           12,114
Book value*                                     $     8.41      $     8.34      $     7.88      $     7.60       $     6.70
Shares outstanding*                              2,300,633       2,300,846       2,299,455       2,299,455        1,807,814

PERFORMANCE RATIOS:
Return on average assets                             0.83%           0.88%           0.79%           0.73%            0.67%
Return on average equity                             9.79%          10.15%           8.49%           9.56%            7.13%
Net interest margin                                  3.90%           3.90%           3.75%           3.86%            4.58%
Efficiency ratio**                                  60.94%          60.67%          61.33%          67.04%           66.49%

OTHER RATIOS:
Allowance for loan losses to total loans             1.13%           1.15%           1.23%           1.22%            1.24%
Equity to assets                                     7.79%           8.04%           8.88%           9.20%            7.86%
Nonperforming loans to total loans                   0.26%           0.24%           0.35%           0.24%            0.26%
Net charge-offs to total loans                       0.04%           0.12%           0.00%           0.00%            0.00%
Risk-Adjusted Capital Ratios:
     Tier 1                                          14.7%           15.4%           16.8%           17.9%            14.6%
     Total                                           15.6%           16.4%           17.9%           18.9%            16.6%
     Leverage Ratio                                  10.4%           10.5%           11.7%           13.4%            12.4%
</TABLE>

*  Information has been adjusted to reflect the 5-for-4 stock split in the form
   of a 25% stock dividend payable on May 16, 2003 to shareholders of record
   April 25, 2003 and for all preceding stock splits.

** The Company computes the Efficiency Ratio including all categories of
   noninterest income and noninterest expense.

Net interest income is the difference between interest and fees earned on assets
and the interest paid on deposits and borrowings. Net interest income is one of
the major determining factors in the Bank's performance as it is the principal
source of revenue and earnings. Unlike the larger regional or mega-banks who
have significant sources of fee income,

                                       14

<PAGE>


community banks, such as James Monroe Bank, rely on net interest income from
traditional banking activities as the primary revenue source. Table 1 presents
average balance sheets and a net interest income analysis for the quarters ended
March 31, 2003 and March 31, 2002. The Company did not have any tax-exempt
income during any of the periods presented in Table 1.

         For the three-month period ended March 31, 2003, net interest income
increased $682 thousand, or 50%, to $2.1 million from the $1.4 million for the
same period in 2002, primarily as a result of increases in the volume of earning
assets, and the reduction in interest expense of $211 thousand due to the lower
interest rate environment. Total average earning assets increased by $92.1
million, or 76%, from the three-months ended March 31, 2002 to the same period
of 2003. Average loans outstanding grew by $35.8 million, or 29.6%, during the
first three-months of 2003 compared to the same period in 2002, but, at the same
time, the yield on such loans decreased by 56 basis points. The federal funds
rate, which is the short-term liquidity yield, saw a similar decrease of 51
basis points, while the securities portfolio saw the greatest decline of 212
basis points. Many securities were called in 2002 and reinvested in lower
yielding securities. Additional securities were purchased from the liquidity
generated in 2003 and invested in securities at yields greater than that of
federal funds but less than the yields generated by loans.

COMPARISON OF AVERAGE BALANCES, INTEREST AND YIELDS

         The following table provides certain information relating to the
Company's average consolidated statements of financial condition and reflects
the interest income on interest-earning assets and interest expense of
interest-bearing liabilities for the periods indicated and the average yields
earned and rates paid in 2003 and 2002. Table 3 provides comparable information
for 2001 as compared to 2002. These yields and costs are derived by dividing
income or expense by the average daily balance of the related asset or liability
for the periods presented. Yields on loans and securities have been calculated
on a tax equivalent basis using a 34% marginal rate. Non-accrual loans have been
included in the average balances of loans receivable.



                                       15

<PAGE>

TABLE 1: AVERAGE BALANCE SHEETS, NET INTEREST INCOME, AND YIELDS/RATES

<TABLE>
<CAPTION>

                                                  Three Months Ended                    Three Months Ended
                                                    March 31, 2003                        March 31, 2002
---------------------------------------------------------------------------------------------------------------------------
                                            Average                       Yield/      Average                        Yield/
                                            Balance      Interest          Rate       Balance          Interest       Rate
---------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>              <C>             <C>       <C>              <C>             <C>
ASSETS
Loans:
     Commercial                            $ 38,143         $   576         6.12%     $ 33,217         $   524         6.40%
     Commercial real estate                  76,803           1,393         7.36        46,764             941         8.16
     Consumer                                13,309             221         6.73        12,486             243         7.89
                                           -------------------------------------      -------------------------------------
          Total Loans                       128,255           2,190         6.93        92,467           1,708         7.49
Mortgage loans held for sale                      2              --           --            --              --           --
Taxable securities                           69,894             701         4.07        19,065             291         6.19
Federal funds sold and cash equivalents      15,169              36         0.96         9,642              35         1.47
                                           -------------------------------------      -------------------------------------
                     TOTAL EARNING ASSETS   213,320           2,927         5.56%      121,174           2,034         6.81%

Less allowance for loan losses               (1,428)                                    (1,107)
Cash and due from banks                      11,498                                      7,223
Premises and equipment, net                   1,364                                      1,155
Other assets                                  1,352                                        918
                                           --------                                   --------
                             TOTAL ASSETS  $226,106                                   $129,363
                                           ========                                   ========
LIABILITIES AND
     STOCKHOLDERS' EQUITY

Interest-bearing demand deposits           $  8,168         $    18         0.89%     $  5,241         $    14         1.08%
Money market deposit accounts               101,513             500         2.00        46,362             305         2.67
Savings accounts                              1,321               5         1.54         1,058               5         1.92
Time deposits                                40,393             290         2.91        32,567             337         4.20
Trust preferred capital notes                 5,000              64         5.12           333               5         6.01
                                           -------------------------------------      -------------------------------------
     TOTAL INTEREST-BEARING
          LIABILITIES                       156,395             877         2.27%       85,561             666         3.16%
                                           -------------------------------------      -------------------------------------

Net Interest Income and Net Yield on
Interest-Earning Assets                                     $ 2,050        3.90%                       $ 1,368         4.58%
                                                            ===================                        ====================
Noninterest-bearing demand
     deposits                                49,662                                     31,032
Other liabilities                               830                                        605
Stockholders' equity                         19,219                                     12,165
                                           --------                                   --------
          TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY             $226,106                                   $129,363
                                           ========                                   ========

</TABLE>



         Interest expense for the first three-months of 2003 was $877 thousand
compared with $666 thousand in interest expense for the first three-months of
2002.

         Table 2 shows the composition of the net change in net interest income
for the periods indicated, as allocated between the change in net interest
income due to changes in the volume of average assets and the changes in net
interest income due to changes in interest rates. As the table shows, the
increase in net interest income for the three-months ended March 31, 2003, as
compared to the three-months ended March 31, 2002, is primarily due to the
growth in the volume of earning assets and interest-bearing liabilities. Growth
in the volume of assets and liabilities resulted in $582 thousand higher net
interest income in the first quarter of 2003 compared with the first quarter of
2002 while change in interest rates contributed $100 thousand to the total
increase in net interest income.

                                       16


<PAGE>

TABLE 2

          EFFECT OF VOLUME RATE CHANGES ON NET INTEREST INCOME


                                                     March 31
                                                  2003 vs. 2002
                                            -----------------------------
                                                           Due to Change
                                             Increase       in Average
                                               or         ---------------
                                            (Decrease)    Volume    Rate
                                            -----------------------------
          EARNING ASSETS:
          Loans                                $ 482     $  600   $ (118)
          Taxable securities                     410        471      (61)
          Federal funds sold                       1          3       (2)
                                            -----------------------------
            Total interest income                893      1,074     (181)

          INTEREST-BEARING LIABILITIES:
          Interest-bearing demand
            deposits                               4          6       (2)
          Money market deposit
            accounts                             195        250      (55)
          Savings deposits                        --         --       --
          Time deposits                          (47)       176     (223)
          Borrowed funds                          59         60       (1)
                                            -----------------------------
            Total interest expense               211        492     (281)
                                            -----------------------------

              Net Interest Income              $ 682     $  582   $  100
                                            =============================




                                       17

<PAGE>


TABLE 3
AVERAGE BALANCE SHEETS, NET INTEREST INCOME, AND YIELDS/RATES

<TABLE>
<CAPTION>


                                                          Three Months Ended                    Three Months Ended
                                                            March 31, 2002                        March 31, 2001
---------------------------------------------------------------------------------------------------------------------------
                                                  Average                     Yield/     Average                     Yield/
                                                  Balance       Interest       Rate      Balance       Interest       Rate
---------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>            <C>            <C>      <C>            <C>            <C>

ASSETS
Loans:
     Commercial                                  $ 33,217           524         6.40%   $ 23,131           547         9.59%
     Commercial real estate                        46,764           941         8.16      23,120           535         9.38
     Consumer                                      12,486           243         7.89       9,172           204         9.02
                                                 -----------------------------------    -----------------------------------
          Total Loans                              92,467         1,708         7.49      55,423         1,286         9.41
Taxable securities                                 19,065           291         6.19      20,648           329         6.46
Federal funds sold and cash equivalents             9,642            35         1.47       9,800           129         5.34
                                                 -----------------------------------    -----------------------------------
                     TOTAL EARNING ASSETS         121,174         2,034         6.81%     85,871         1,744         8.24%
Less allowance for loan losses                     (1,107)                                  (631)
Cash and due from banks                             7,223                                  4,687
Premises and equipment, net                         1,155                                    687
Other assets                                          918                                    566
                                                 --------                               --------
                             TOTAL ASSETS        $129,363                               $ 91,180
                                                 ========                               ========
LIABILITIES AND
     STOCKHOLDERS' EQUITY
Interest-bearing demand deposits                 $  5,241       $    14         1.08%   $  4,646       $    27         2.36%
Money market deposit accounts                      46,362           305         2.67      24,668           267         4.39
Savings accounts                                    1,058             5         1.92         480             4         3.38
Time deposits                                      32,567           337         4.20      28,267           439         6.30
Trust preferred capital notes                         333             5         6.01          --            --           --
                                                 -----------------------------------    -----------------------------------
     TOTAL INTEREST-BEARING
          LIABILITIES                              85,561           666         3.16%     58,061           737         5.15%
                                                 -----------------------------------    -----------------------------------

Net Interest Income and Net Yield on
Interest-Earning Assets                                         $ 1,368         4.58%                  $ 1,007         4.76%
                                                                ====================                   ====================

Noninterest-bearing demand
     deposits                                      31,032                                 21,630
Other liabilities                                     605                                    523
Stockholders' equity                               12,165                                 10,966
                                                 --------                               --------
          TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                   $129,363                               $ 91,180
                                                 ========                               ========

</TABLE>



         First Quarter 2002 vs. 2001 Rate/Volume Analysis. For the first quarter
of 2002, net interest income was $1.4 million compared to $1.0 million for the
same quarter of 2001, which represents a $359 thousand, or 36%, increase. For
these comparable quarters, the yield on earning assets declined from 8.24% for
the first quarter of 2000 to 6.81% in the first quarter of 2002 reflecting the
significant decline in interest rates that occurred in 2001. The overall yield
on loans dropped 192 basis points, the securities portfolio declined 27 basis
points and the yield on Federal funds and cash equivalents declined 387 basis
points reflects the amount of decline in interest rates from first quarter last
year to first quarter this year.

         Interest expense during these comparable quarters, first quarter 2002
versus first quarter 2001, decreased $71,000 or 10%, from $737 thousand in
interest expense in 2001 to $666 thousand in interest expense in 2002. The
overall cost of interest-bearing liabilities decreased 199 basis points from
5.15% in 2001 to 3.16% in 2001. The benefit of the decline in interest rates
exceeded the increase in interest expense resulting from $27.5 million more in
average interest-bearing liabilities.

                                       18

<PAGE>


         The resulting effect of the changes in interest rates between the
quarters ended March 31, 2002 and 2001, and the changes in the volume and mix of
earning assets and interest-bearing liabilities resulted in a 4.58 % net
interest margin in 2002 versus a 4.76% net interest margin in 2001. Management
believes that a decline of only 18 basis points in the net interest margin when
the overall rate environment changed by nearly 375 basis points is indicative of
the Company's interest rate risk management process.

TABLE 4

EFFECT OF VOLUME RATE CHANGES ON NET INTEREST INCOME

                                                       March 31
                                                    2002 vs. 2001
                                            -----------------------------
                                                           Due to Change
                                             Increase       in Average
                                               or         ---------------
                                            (Decrease)    Volume    Rate
                                            -----------------------------


EARNING ASSETS:
Loans                                        $  422       $ 607   $  (185)
Taxable securities                              (38)        (25)      (13)
Federal funds sold                              (94)         (1)      (93)
                                            -----------------------------
  Total interest income                         290         581      (291)

INTEREST-BEARING LIABILITIES:
Interest-bearing demand
  deposits                                      (13)          4       (17)
Money market deposit
  accounts                                       38          71       (33)
Savings deposits                                  1           2        (1)
Time deposits                                  (102)         86      (188)
Borrowed funds                                    5           5        --
                                            -----------------------------
  Total interest expense                        (71)        168      (239)
                                            -----------------------------

    Net Interest Income                      $  361       $ 413   $   (52)
                                            =============================

PROVISION AND ALLOWANCE FOR LOAN LOSSES

         The provision for loan losses is based upon a methodology that includes
among other factors, a specific evaluation of commercial and commercial real
estate loans that are considered special mention, substandard or doubtful. All
other loans are then categorized in pools of loans with common characteristics.
A potential loss factor is applied to these loans which considers the company
and peer group historical charge off history, trends in delinquencies and loan
grading, current economic conditions, and factors that include the composition
of the Company's loan portfolio. At March 31, 2003, the Company had $345
thousand of nonperforming loans, all of which were nonaccrual loans, of which a
$234,000 loan was deemed to be impaired. The impaired loan is current as to
principal and interest payments. This compares to $255 thousand of nonperforming
assets at March 31, 2002, all of which were nonaccrual and $296 thousand of
nonperforming assets at December 31, 2002, including a $240 thousand impaired
loan but which is current as to principal and interest.

         The Company made a provision for loan losses of $178 thousand during
the quarter ended March 31, 2003, and charged off $35 thousand of consumer loans
and $20 thousand of commercial loans, resulting in a net increase in the
allowance of $123 thousand. This compared to a provision of $180 thousand, net
of $1 thousand of recoveries, in the same period in 2002. The decline in the net
provision reflects the application of the allowance methodology as described in
the Critical Accounting Policies which resulted in an allowance for loan losses
to total loans of 1.15% or no change from December 31, 2002.

                                       19

<PAGE>


         The methodology established for determining an appropriate allowance
for loan losses was approved by the Audit Committee and the Board of Directors.
The quarterly provision is approved by the Board. The methodology is reevaluated
on a quarterly basis. Pending the development of a negative trend with respect
to past due loans or charge-offs or significant changes in economic conditions,
the Company continues to maintain an allowance it believes is adequate but not
excessive.

         As reflected in Table 5 below, the allowance is allocated among the
various categories of loans based upon the methodology described herein.


TABLE 5

         The following table shows the allocation of the allowance for loan
losses at the dates indicated. The allocation of portions of the allowance to
specific categories of loans is not intended to be indicative of future losses,
and does not restrict the use of the allowance to absorb losses in any category
of loans. See Note 4 to the unaudited consolidated financial statements included
in this report for additional information regarding the allowance for loan
losses and nonperforming assets.


<TABLE>
<CAPTION>


                                                MARCH 31, 2003           DECEMBER 31, 2002           MARCH 31, 2002
                                             --------------------       --------------------       -------------------
                                                         Percent                    Percent                   Percent
                                                         Of Total                   Of Total                  Of Total
($ in thousands)                             Amount        Loans        Amount        Loans        Amount       Loans
                                             --------------------       --------------------       -------------------
<S>                                          <C>           <C>          <C>          <C>            <C>          <C>

Construction loans                           $   43           11%       $   35           10%           97            8%
Commercial loans                                695           19%          765           23%          308           25%
Commercial real estate loans                    707           62%          504           58%          646           53%
Real estate 1-4 family residential
loans                                            13            3%            6            2%           39            3%
Home equity loans                                 9            2%            8            2%           19            2%
Consumer loans                                   46            3%           72            5%          103            9%
                                             -------------------        -------------------        -------------------
Balance end of the period                    $1,513          100%       $1,390        100.0%       $1,212        100.0%
                                             ===================        ===================        ===================

</TABLE>

LOANS

         The loan portfolio is the largest component of earning assets and
accounts for the greatest portion of total interest income. At March 31, 2003,
total loans were $133.5 million, a 36.5% increase from the $97.8 million in
loans outstanding at March 31, 2002. Total loans at March 31, 2003, represented
a 10.3% increase from the $121 million of loans at December 31, 2002. In
general, loans are internally generated with the exception of a small percentage
of participation loans purchased from other local community banks. Lending
activity is confined to our market of Northern Virginia. We do not engage in
highly leveraged transactions or foreign lending activities.

         Loans in the commercial category, as well as commercial real estate
mortgages, consist primarily of short-term (five year or less final maturity)
and/or floating or adjustable rate commercial loans made to small to
medium-sized companies. We do not have any agricultural loans in the portfolio.
There are no substantial loan concentrations to any one industry or to any one
borrower.

         Over 71% of the Company's loans are commercial real estate mortgage or
real estate construction loans, . relating to property in the Northern Virginia
market, and the vast majority of the remaining loans are commercial loans not
secured by real estate to borrowers in the same market. As such, they are
subject to risks relating to the general economic conditions in that market, and
the market for real estate in particular. While the region has experienced some
decline in economic activity during 2002, the local real estate market remains
generally strong, and the Company attempts to mitigate risk though careful
underwriting, including primary reliance on the borrower's financial capacity
and ability to repay without resort to the property, and lends primarily with
respect to owner occupied or managed properties.

         The Company's 1-4 family residential real estate loans are generally
not the typical purchase money first mortgage loan or refinancing, but are loans
made for other purposes and the collateral obtained is a first deed of trust on
the


                                       20
<PAGE>


residential property of the borrower. The underlying loan would have a final
maturity much shorter than the typical first mortgage and may be a variable or
fixed rate loan. As reflected in Table 6, 26% of the Company's loans are fixed
rate loans. Ninety-nine percent of the Company's loans reprice or have a
maturity date that falls within five years.

         Consumer loans consist primarily of secured installment credits to
individuals. The consumer portfolio, which includes consumer loans, home equity
loans, and 1-4 family residential loans, represents 8.1% of the loan portfolio
at March 31, 2003, as compared to 12.9% at March 31, 2002 and 8.7% at December
31, 2002.

TABLE 6

         Table 6 shows the maturities of the loan portfolio and the sensitivity
of loans to interest rate fluctuations at March 31, 2003. Maturities are based
on the earlier of contractual maturity or repricing date. Demand loans, loans
with no contractual maturity and overdrafts are represented in one year or less.

<TABLE>
<CAPTION>


                                                                        MARCH 31, 2002
                                                  -----------------------------------------------------------------
                                                                    AFTER ONE
                                                   WITHIN          YEAR THROUGH         AFTER FIVE
                                                  ONE YEAR          FIVE YEARS            YEARS              TOTAL
                                                  -----------------------------------------------------------------
                                                                        ($ in thousands)
<S>                                               <C>                <C>                <C>                <C>

          Construction loans                      $ 15,111           $     --           $     --           $ 15,111
          Commercial loans                          23,737              3,097                 --           $ 26,834
          Commercial real estate loans              42,557             36,203              1,780           $ 80,540
          Real estate 1-4 family residential         1,033                377                 --           $  1,410
          Home equity loans                          2,769                 --                 --           $  2,769
          Consumer loans                             5,624              1,016                 --           $  6,640
          Overdrafts                                   176                 --                 --           $    176
                                                  -----------------------------------------------------------------
                                                  $ 91,007           $ 40,693           $  1,780           $133,480
                                                  =================================================================

</TABLE>


<TABLE>
<CAPTION>

                                                                    AFTER ONE
                                                   WITHIN          YEAR THROUGH         AFTER FIVE
                                                  ONE YEAR          FIVE YEARS            YEARS              TOTAL
                                                  -----------------------------------------------------------------
                                                                        ($ in thousands)
<S>                                               <C>                <C>                <C>                <C>


          Fixed Rate                              $ 19,399           $ 14,037           $  1,780           $ 35,216
          Variable/Adjustable Rate                  71,608             26,656                 --             98,264
                                                  -----------------------------------------------------------------
                              Total               $ 91,007           $ 40,693           $  1,780           $133,480
                                                  =================================================================

</TABLE>


INVESTMENT SECURITIES

         The Company currently, and for all periods shown, classifies its entire
securities portfolio as Available-for-Sale. Increases in the portfolio have
occurred whenever deposit growth has outpaced loan demand and the forecast for
loan growth is such that the investment of excess liquidity in investment
securities (as opposed to short-term investments such as federal funds) is
warranted. In general, our investment policy is to acquire high quality
government agency securities or high-grade corporate bonds, with a maturity of
five years or less in the case of fixed rate securities. In the case of
mortgage-backed securities, the policy is to invest only in those securities
whose average expected life is projected to be approximately five years or less
except for adjustable rate securities which may have an average life greater
than five years. The Company's investment policy is driven by its interest rate
risk process and the need to minimize the effect of changing interest rates to
the entire balance sheet.

TABLE 7

The following table provides information regarding the composition of our
investment portfolio at the dates indicated.


                                       21
<PAGE>

<TABLE>
<CAPTION>

                                                                  AT MARCH 31, 2003           AT MARCH 31, 2002
                                                               -----------------------    ------------------------
                                                                              Percent                     Percent
                                                                                of                          of
     ($ in thousands)                                          Balance       Portfolio    Balance        Portfolio
                                                               -------       ---------    -------        ---------
<S>                                                            <C>            <C>         <C>             <C>
     AVAILABLE-FOR-SALE (AT ESTIMATED MARKET VALUE):
          U.S. Agency                                          $27,265          41.9%     $ 3,552          20.5%
          Mortgage-backed securities                            18,092          27.8        5,766          33.2
          Adjustable rate mortgage-backed securities             5,576           8.6        1,513           8.7
          Corporate bonds                                       13,352          20.5        6,029          34.7
          Restricted stock                                         781           1.2          509           2.9
                                                               -------         -----      -------         -----
                                                  TOTAL        $65,066         100.0%     $17,369         100.0%
                                                               =======         =====      =======         =====

</TABLE>

TABLE 8

The following table provides information regarding the maturity composition of
our investment portfolio, at book value, at March 31, 2003.

MATURITY OF SECURITIES AT MARCH 31, 2003

<TABLE>
<CAPTION>
                                                             Years to Maturity
---------------------------------------------------------------------------------------------------------------------------------
                                        Within          Over 1 Year          Over 5 Years       Over
           (in thousands)               1 Year        through 5 Years      through 10 Years    10 Years            Total
---------------------------------------------------------------------------------------------------------------------------------
                                    Amount   Yield   Amount      Yield     Amount   Yield   Amount     Yield   Amount   Yield
-------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>      <C>   <C>          <C>     <C>        <C>     <C>         <C>    <C>        <C>
Investments Available-For-Sale:
   U. S. Agency                      $ --      --   $27,265      2.95%   $   --       --    $    --       --   $27,265    2.95%
   Mortgage-backed securities          --      --     2,005      3.71%    1,620     4.39%    14,467     5.48%   18,092    5.18%
   Adjustable rate mortgage-
   backed securities                   --      --        --        --        --       --      5,576     4.74%    5,576    4.74%
   Corporate bonds                     --      --     5,255      3.36%    6,356     3.89%     1,741     7.29%   13,352    4.12%
   Restricted Stock                    --      --        --        --        --       --        781     5.26%      781    5.26%
                                      ---           -------              ------             -------            -------
               Total Debt Securities
                  Available-for-Sale $ --      --   $34,525      3.06%   $7,976     3.99%   $22,565     5.43%  $65,066    3.99%
                                      ===           =======              ======             =======            =======

</TABLE>


LIQUIDITY AND INTEREST RATE SENSITIVITY MANAGEMENT

         The primary objectives of asset and liability management are to provide
for the safety of depositor and investor funds, assure adequate liquidity, and
maintain an appropriate balance between interest sensitive earning assets and
interest-bearing liabilities. Liquidity management involves the ability to meet
the cash flow requirements of customers who may be depositors wanting to
withdraw funds or borrowers needing assurance that sufficient funds will be
available to meet their credit needs.

         We define liquidity for these purposes as the ability to raise cash
quickly at a reasonable cost without principal loss. The primary liquidity
measurement we utilize is called the Basic Surplus, which captures the adequacy
of our access to reliable sources of cash relative to the stability of our
funding mix of deposits. Accordingly, we have established borrowing facilities
with other banks (Federal funds) and the Federal Home Loan Bank as sources of
liquidity in addition to the deposits.

         The Basic Surplus approach enables us to adequately manage liquidity
from both tactical and contingency perspectives. At March 31, 2003, our Basic
Surplus ratios (net access to cash and secured borrowings) as a percentage of
total assets were approximately 15%, compared to the present internal minimum
guideline range of 5-10%.

         Financial institutions utilize a number of methods to evaluate interest
rate risk. Methods range from the original static gap analysis (the difference
between interest sensitive assets and interest sensitive liabilities repricing
during the same period, measured at a specific point in time), to running
multiple simulations of potential interest rate scenarios, to rate shock
analysis, to highly complicated duration analysis.

                                       22

<PAGE>


         One tool that we utilize in managing our interest rate risk is a
matched funding matrix analysis. The matrix arrays repricing opportunities along
a time line for both assets and liabilities. The longest term, most fixed rate
sources are presented in the upper left hand corner while the shorter term, most
variable rate items, are at the lower left. Similarly, uses of funds, assets,
are arranged across the top moving from left to right.

         The body of the matrix is derived by allocating the longest fixed rate
funding sources to the longest fixed rate assets and shorter term variable
sources to shorter term variable uses. The result is a graphical depiction of
the time periods over which we expect to experience exposure to rising or
falling rates. Since the scales of the liability and assets sides are identical,
all numbers in the matrix would fall within the diagonal lines if we were
perfectly matched across all repricing time frames. Numbers outside the diagonal
lines represent two general types of mismatches: liability sensitive in time
frames when numbers are to the left of the diagonal line and asset sensitive
when numbers are to the right of the diagonal line.

         At March 31, 2003, the Company is asset sensitive in the short term and
then becomes slightly liability sensitive. This is primarily caused by the
assumptions used in allocating a repricing term to nonmaturity deposits--demand
deposits, savings accounts, and money market deposit accounts. While the
traditional gap analysis and the matched funding matrix show a general picture
of our potential sensitivity to changes in interest rates, it cannot quantify
the actual impact of interest rate changes. The actual impact due to changes in
interest rates is difficult to quantify in that the administrative ability to
change rates on these products is influenced by competitive market conditions in
changing rate environments, prepayments of loans, customer demands, and many
other factors.

         Thus, the Company manages its exposure to possible changes in interest
rates by simulation modeling or "what if" scenarios to quantify the potential
financial implications of changes in interest rates. In practice, each quarter
approximately 14 different "what if" scenarios are evaluated which include the
following scenarios: Static Rates, Most Likely Rate Projection, Rising Rate
Environment, Declining Rate Environment, Ramp Up 100bp and 200bp over 12-months,
and Ramp Down 100bp and 200bp over 12-months scenarios. The modeled scenarios do
not reduce rates below 0%. In addition, 8 rate shock scenarios are modeled at 50
bp up and 50 bp down increments. At March 31, 2003, the following 12-month
impact on net interest income is estimated to range from a positive impact of
7.5% to a negative impact of (7.5)% for the multiple scenarios, which remains
within internal policy guidelines. This process is performed each quarter to
ensure the Company is not materially at risk to possible changes in interest
rates.

         The following are the projected potential percentage impact on the
Company's net interest income over the next 12 months for the most likely to
occur scenarios, but measured against a static interest rate environment as of
March 31, 2003. Clearly the Company is positioned to substantially improve
earnings if and when rates rise. With respect to further reductions in rates,
Most Likely scenario and the Ramp Down scenarios, the Company would experience
further negative implications on margins and earnings; however, the Company does
not believe that a 100 or 200 basis point decline is realistic given the already
extremely low interest rates. Thus management believes the exposure to future
changes in interest rates would not have a material negative effect on the
results of operations.

           Static Rates                                     -0-%
           Most Likely Rates                                1.8%
           Ramp Up 100bp- 12 months                         4.7%
           Ramp Up 200bp- 12 months                         7.1%
           Ramp Down 100bp- 12 months                     (4.1)%
           Ramp Down 200bp- 12 months                     (7.5)%
           Rising Rate Scenario                             7.5%
           Declining Rate Scenario                        (2.8)%

Since the earnings model uses numerous assumptions regarding the effect of
changes in interest rates on the timing and extent of repricing characteristics,
future cash flows and customer behavior, the model cannot precisely estimate net
income and the effect on net income from sudden changes in interest rates.
Actual results will differ from simulated results due to the timing, magnitude
and frequency of interest rate changes and changes in market conditions and
management strategies, among other factors.

NONINTEREST INCOME AND EXPENSE

         Noninterest income consists primarily of service charges on deposit
accounts and fees and other charges for banking services. Noninterest expense
consists primarily of salary and benefit costs and occupancy and equipment

                                       23

<PAGE>


expense. To date, the company has not been required to pay any premiums for
deposit insurance. To the extent that deposit premiums may become required, the
Company's results of operations will be adversely affected.

The following table shows the detail of noninterest income for the three-month
periods ended March 31, 2003 and 2002.

TABLE 10

<TABLE>
<CAPTION>


                                                                   THREE-MONTHS ENDED MARCH 31,
                                                                   ----------------------------
             ($ in thousands)                                          2003            2002
                                                                   -----------     ------------
             <S>                                                       <C>             <C>
             Service charges on deposit accounts                       $ 74            $ 75
             Cash management fees                                        26              32
             Other fee income                                            34              22
             Gain on sale of securities                                  15              16
                                                                       ----            ----
                                       Total Noninterest Income        $149            $145
                                                                       ====            ====

</TABLE>

         The increase in noninterest income for the three months ended March 31,
2003 as compared to the same period in 2002, is the result of the continued
growth of the Company and the expansion of products resulting in fee income. In
addition, for the first three-months of 2003, the Company averaged between $20
to $25 million in off-balance sheet customer sweep accounts for which a fee is
earned.

TABLE 11

 The categories of noninterest expense that exceed 1% of operating revenue are
as follows:

<TABLE>
<CAPTION>


                                                                 THREE-MONTHS ENDED MARCH 31,
                                                                 ----------------------------
             ($ in thousands)                                       2003             2002
                                                                 ----------       -----------
             <S>                                                   <C>              <C>
             Salaries and benefits                                 $  690           $  513
             Occupancy cost, net                                      155              125
             Equipment expense                                         96               58
             Professional fees                                         36               22
             Data processing costs                                    100               88
             Postage and supplies                                      36               41
             Courier and express services                              28               23
             Advertising and public relations                          30               38
             State franchise tax                                       43               38
             Other                                                    125               60
                                                                   ------           ------
                                    Other Noninterest Expense      $1,339           $1,006
                                                                   ======           ======

</TABLE>


         Noninterest expense increased $334 thousand or 34% from $1 million to
$1.3 million for the first quarter of 2003, as compared to the same period in
2002.

         Occupancy cost increased $30 thousand for the first three-months of
2003 compared with a year earlier due to the addition of two additional branch
facilities since the first quarter of 2002. Equipment costs increased a modest
$38 thousand for the same comparative periods due to additional equipment
required and software enhancements plus equipment for the additional branches.
With respect to the increases in data processing, the increase is due to the
increase in the volume of accounts and business transactions processed in 2003
versus 2002. The increase in the state franchise tax is due to the increased
capital of the Bank from earnings retention and the capital infusion to the bank
in 2002. Other expenses are up $65 thousand quarter to quarter primarily due to
the growth of the Bank and increased volume of banking activities.

DEPOSITS AND OTHER BORROWINGS

         The principal sources of funds for the Bank are core deposits (demand
deposits, NOW accounts, money market accounts, savings accounts and certificates
of deposit less than $100,000) from the local market areas surrounding the
Bank's offices. The Bank's deposit base includes transaction accounts, time and
savings accounts and accounts which

                                       24
<PAGE>


customers use for cash management and which provide the Bank with a source of
fee income and cross-marketing opportunities as well as a low-cost source of
funds. Time and savings accounts, including money market deposit accounts, also
provide a relatively stable and low-cost source of funding.

TABLE 12

         The following table reflects deposits by category for the three months
ended ended March 31, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                       ---------------------------------------------------------------------------
                                                                 2003                     2002                     2001
                                                       ------------------------  ------------------------  -----------------------
($ in thousands)                                         Average    Average Rate   Average    Average Rate   Average   Average
                                                         Balance                   Balance                   Balance      Rate
                                                       ------------------------  ------------------------  -----------------------
<S>                                                       <C>          <C>          <C>          <C>          <C>         <C>
Deposits
    Noninterest-bearing demand                            $  49,662      -- %       $  31,032      -- %       $ 21,630      -- %
    Interest-bearing demand                                   8,168    0.89             5,241    1.08            4,646    2.36
    Money Market                                            101,513    2.00            46,362    2.67           24,668    4.39
    Savings                                                   1,321    1.54             1,058    1.92              480    3.38
    Certificates of deposit of $100,000 or more              26,956    2.83            19,161    4.06           14,800    6.33
    Other time                                               13,437    3.00            13,406    4.39           13,467    6.29
                                                       ------------------------  ------------------------  -----------------------
Total Deposits                                            $ 201,057    2.18 %       $ 116,260    3.87 %       $ 79,691    5.68 %
                                                       ========================  ========================  =======================
</TABLE>

TABLE 13

         The following table indicates the amount of certificates of deposit of
less than $100,000 and $100,000 or more, and their remaining maturities as of
March 31, 2003.

<TABLE>
<CAPTION>
                                                3 MONTHS OR       4 TO 6        7 TO 12         OVER 12
                                                   LESS           MONTHS         MONTHS          MONTHS         TOTAL
                                                 --------        --------       --------        --------       --------
<S>                                              <C>             <C>            <C>             <C>            <C>
($ in thousands)
Certificates of deposit less than $100,000       $  2,542        $  3,872       $  4,627        $  2,597       $ 13,638
Certificates of deposit of $100,000 or more      $  7,115        $  5,847       $ 11,554        $  3,350       $ 27,866
                                                 --------        --------       --------        --------       --------
                                                 $  9,657        $  9,719       $ 16,181        $  5,947       $ 41,504
                                                 ========        ========       ========        ========       ========
</TABLE>

CAPITAL MANAGEMENT

         Management monitors historical and projected earnings, asset growth, as
well as its liquidity and various balance sheet risks in order to determine
appropriate capital levels. At March 31, 2003, stockholders' equity increased
$7.2 million from the $12 million in equity at March 31, 2002 as a result of the
$1.8 million increase in retained earnings in 2002 and the $4.7 million in
equity sold in June 2002.

Capital Requirement. A comparison of the Company's and the Bank's regulatory
capital at March 31, 2003, compared to minimum regulatory capital guidelines is
shown in the table that follows.

                                       25

<PAGE>

TABLE 11

                                                Minimum        Minimum To Be
                                   Actual     Guidelines     "Well Capitalized"
                                   ------     ----------     ------------------
Total Risk-Based Capital
     Company                       15.8%         8.0%               N/A
     Bank                          11.5%         8.0%              10.0%

Tier 1 Risk-Based Capital
     Company                       14.8%         4.0%               N/A
     Bank                          10.6%         4.0%               6.0%

Tier 1 Leverage Ratio
     Company                       10.4%         4.0%               N/A
     Bank                           7.7%         4.0%               5.0%

ITEM 3. CONTROLS AND PROCEDURES

         Within the ninety days prior to the filing of this report, the
Company's management under the supervision and with the participation of the
Chief Executive Officer and Chief Operating/Financial Officer, evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures, as defined in Rule 13a-14 under the Securities Exchange Act of
1934. Based on that evaluation, the Chief Executive Officer and Chief
Operating/Financial Officer concluded that the Company's disclosure controls and
procedures were adequate. There were no significant changes (including
corrective actions with regard to significant deficiencies or material
weaknesses) in the Company's internal controls or in other factors subsequent to
the date of the evaluation that could significantly affect those controls.


                                       26


<PAGE>

                           PART II. Other Information

Item 1.  Legal Proceedings None

Item 2.  Changes in Securities and Use of Proceeds   None

Item 3.  Defaults Upon Senior Securities    None

Item 4.  Submission of Matters to a Vote of Security Holders  None

Item 5.  Other Information          None

Item 6.  Exhibits and reports on Form 8-K

(a)      Exhibits

Number        Description
------        -----------
3(a)          Articles of Incorporation of James Monroe Bancorp, as amended (1)
3(b)          Bylaws of James Monroe Bancorp (2)
4(a)          Indenture, dated as of March 26, 2002 between James Monroe
              Bancorp, Inc. and State Street Bank and Trust Company of
              Connecticut, National Association, as trustee (3)
4(b)          Amended and Restated Declaration of Trust, dated as of March 26,
              2002 among James Monroe Bancorp, Inc., State Street Bank
              and Trust Company of Connecticut, National Association, as
              Institutional Trustee, and John R. Maxwell, David W. Pijor and
              Richard I. Linhart as Administrators (3)
4(c)          Guarantee Agreement dated as of March 26, 2002, between James
              Monroe Bancorp, Inc. and State Street Bank and Trust Company of
              Connecticut, National Association, as trustee (3)
10(a)         Employment contract between James Monroe Bancorp and John R.
              Maxwell(4)
10(b)         Employment contract between James Monroe Bancorp and Richard I.
              Linhart(4)
10(c)         James Monroe Bancorp1998 Management Incentive Stock Option
              Plan (5)
10(d)         James Monroe Bancorp 2000 Director's Stock Option Plan (6)
10(e)         James Monroe Bancorp, Inc. 2003 Equity Compensation Plan, filed
              herewith
11.           Statement re: Computation of Per Share Earnings
                Please refer to Note 2 to the financial statements included in
                this report.
21            Subsidiaries of the Registrant
99(a)         Certification of Chief Executive Officer
99(b)         Certification of Chief Financial Officer
--------------------------
     (1)    Incorporated by reference to exhibit 3(a) tot he Company's Annual
            Report on Form 10-KSB for the year ended December 31, 2002.
     (2)    Incorporated by reference to exhibit 3(b) to the Company's
            registration statement on Form SB-2 (No. 333-38098).
     (3)    Not filed in accordance with the provisions of Item 601(b)(4)(iii)
            of Regulation SK. The Company agrees to provide a copy of these
            documents to the Commission upon request.
     (4)    Incorporated by reference to exhibit of same number to the Company's
            Annual Report on Form 10-KSB for the year ended December 31, 2002.
     (5)    Incorporated by reference to exhibit 10(b) to the Company's
            registration statement on Form SB-2 (No. 333-38098).
     (6)    Incorporated by reference to exhibit 10(c) to the Company's
            registration statement on Form SB-2 (No. 333-38098).
(b)         Reports on Form 8-K

            The Company did not file any reports on Form 8-K during the quarter
ended March 31, 2003.


                                       27
<PAGE>

                                   SIGNATURES

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



Date:    May 8, 2003                 BY: /s/ John R. Maxwell
                                         ---------------------------------------
                                              John R. Maxwell, President &
                                              Chief Executive Officer


Date:    May 8, 2003                 BY:  /s/ Richard I. Linhart
                                          --------------------------------------
                                              Richard I. Linhart, Executive Vice
                                              President & Chief Operating and
                                              Financial Officer


                                       28
<PAGE>

                                  CERTIFICATION

I, John R. Maxwell, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of James Monroe Bancorp,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 8, 2003                         /s/ John R. Maxwell
                                          --------------------
                                          President and Chief Executive Officer


                                       29
<PAGE>

                                  CERTIFICATION

I, Richard I. Linhart, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of James Monroe Bancorp,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 8, 2003        /s/ Richard I. Linhart
                          ----------------------
                          Executive Vice President and Chief Financial Officer


                                       30