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 September 30, 2000
                                    ------------------

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

For the transition period from ____________________  to ________________________

                        Commission file number 333-38098

                           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)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15 (d) of the  Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes____. No ____.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of October 25, 2000.

             Common stock, $1 par value--841,219 shares outstanding

                                       1

<PAGE>


                           JAMES MONROE BANCORP, INC.
                                TABLE OF CONTENTS

                                                                       Page. No.

Part I. Financial Information

        Item. 1. Financial Statements
                 Consolidated Balance Sheets at September 30, 2000
                      and December 31, 1999                                 3
                 Consolidated Income Statements for the three-months
                      and nine-months Ended September 30, 2000 and
                      September 30, 1999                                    4
                 Consolidated Statements of Changes in Shareholders'
                      Equity (Deficit) for the nine-months ended
                      September 30, 2000 and September 30, 1999             5
                 Consolidated Statements of Cash Flows for the nine-months
                      ended September 30, 2000 and 1999                     6
                 Notes to Consolidated Financial Statements                 7

        Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                        9

Part II.Other Information

        Item 1.  Legal                                                     23

        Item 2.  Changes in Securities and Use of Proceeds                 23

        Item 3.  Defaults Upon Senior Securities                           23

        Item 4.  Submission of Matters to a Vote of Security Holders       23

        Item 5.  Other Information                                         23

        Item 6.  Exhibits and Reports on Form 8-K                          24

                                       2

<PAGE>



                          PART 1. FINANCIAL INFORMATION

Item. 1. FINANCIAL STATEMENTS


                           JAMES MONROE BANCORP, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                       ($ in thousands, except share data)


<TABLE>
<CAPTION>
                                                                                               (Unaudited)         (Audited)
                                                                                               SEPTEMBER 30,      DECEMBER 31,
                                                                                                   2000               1999
                                                                                              ----------------   --------------
<S>                                                                                              <C>                 <C>
          ASSETS

Cash and due from banks                                                                          $  4,903            $  2,641
Federal funds sold                                                                                  7,844               1,537
Securities available-for-sale at fair value                                                        19,112              13,518
Loans, net of allowance for loan losses of $546,000 in 2000
     and $363,000 in 1999                                                                          44,676              30,676
Bank premises and equipment, net                                                                      698                 714
Accrued interest receivable                                                                           492                 346
Other assets                                                                                          384                 186
                                                                                                 --------            --------

                                                                                                 $ 78,109            $ 49,618
                                                                                                 ========            ========

      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Deposits:
    Noninterest-bearing deposits                                                                 $ 20,429            $ 13,217
    Interest-bearing deposits                                                                      49,972              29,602
                                                                                                 --------            --------
          Total deposits                                                                           70,401              42,819

  Accrued interest payable and other liabilities                                                      424                 199
                                                                                                 --------            --------
          Total liabilities                                                                        70,825              43,018

STOCKHOLDERS' EQUITY
  Common stock, $1 par value; authorized 2,000,000 shares; issued and
    outstanding 744,290 in 2000 and 742,590 in 1999                                                   744                 743
  Capital surplus                                                                                   6,699               6,683
  Retained earnings (deficit)                                                                          (2)               (581)
  Accumulated other comprehensive (loss)                                                             (157)               (245)
                                                                                                 --------            --------
          Total stockholders' equity                                                                7,284               6,600
                                                                                                 --------            --------

                                                                                                 $ 78,109            $ 49,618
                                                                                                 ========            ========
</TABLE>

Notes to financial statements are an integral part of these statements.



                                       3
<PAGE>

                           JAMES MONROE BANCORP, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                     ($ in thousands, except per share data)



<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                        -----------------------------  ----------------------------
                                                                        SEPTEMBER 30,   SEPTEMBER 30,  SEPTEMBER 30,  SEPTEMBER 30,
                                                                             2000           1999           2000           1999
                                                                           --------       --------       --------       --------
<S>                                                                        <C>            <C>            <C>            <C>
INTEREST INCOME:
  Loans, including fees                                                       1,081            556       $  2,799       $  1,353
  Securities, taxable                                                           267            158            735            408
  Federal funds sold                                                             99             87            181            180
                                                                           --------       --------       --------       --------
          Total interest income                                               1,447            801          3,715          1,941

INTEREST EXPENSE:
  Deposits                                                                      622            267          1,429            607
  Borrowed funds                                                                 --             --              3             --
                                                                           --------       --------       --------       --------
          Total interest expense                                                622            267          1,432            607
                                                                           --------       --------       --------       --------
          Net interest income                                                   825            534          2,283          1,334

PROVISION FOR LOAN LOSSES                                                        49             66            183            179
                                                                           --------       --------       --------       --------
          Net interest income after provision for loan losses                   776            468          2,100          1,155

NONINTEREST INCOME:
  Service charges and fees                                                       49             33            145             66
  Gain on sale of securities                                                      2             --              2
  Other                                                                          28             13             59             30
                                                                           --------       --------       --------       --------
          Total noninterest income                                               79             46            206             96

NONINTEREST EXPENSES:
  Salaries and wages                                                            252            183            768            497
  Employee benefits                                                              33             23            107             69
  Occupancy expenses                                                             66             59            197            166
  Equipment expenses                                                             38             26            116             76
  Other operating expenses                                                      189            159            517            377
                                                                           --------       --------       --------       --------
                                                                                578            450          1,705          1,185
                                                                           --------       --------       --------       --------

          Income (loss) before income taxes                                     277             64            601             66
PROVISION FOR INCOME TAXES                                                       22             --             22             --
                                                                           --------       --------       --------       --------

          Net income (loss)                                                $    255       $     64       $    579       $     66
                                                                           ========       ========       ========       ========

EARNINGS PER SHARE-BASIC                                                   $   0.34       $   0.09       $   0.78       $   0.09
                                                                           ========       ========       ========       ========
EARNINGS PER SHARE-DILUTED                                                 $   0.33       $   0.08       $   0.76       $   0.09
                                                                           ========       ========       ========       ========

Weighted-average diluted shares outstanding                                 770,207        762,658        766,437        761,470
                                                                           ========       ========       ========       ========
</TABLE>


Notes to financial statements are an integral part of these statements.


                                       4
<PAGE>

                           JAMES MONROE BANCORP, INC.
                                 AND SUBSIDIARY

      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

              For the Nine Months Ended September 30, 2000 and 1999
                                ($ in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                            ACCUMULATED
                                                                                              OTHER
                                                                               RETAINED       COMPRE-      COMPRE-        TOTAL
                                                      COMMON      CAPITAL      EARNINGS       HENSIVE      HENSIVE    STOCKHOLDERS'
                                                      STOCK       SURPLUS      (DEFICIT)       (LOSS)      INCOME        EQUITY
                                                     -------      -------       -------       -------      -------       -------
<S>                                                  <C>          <C>          <C>           <C>           <C>           <C>
BALANCE, JANUARY 1, 1999                             $   738      $ 6,638      $  (707)      $   (11)                    $ 6,658
  Comprehensive (loss):
    Net income                                                                      66                     $    66            66
    Net change in unrealized (losses)
      on available for sale securities,
      net of deferred taxes of $98                                                              (192)         (192)         (192)
                                                                                                           -------
  Total comprehensive (loss)                                                                               $  (126)
                                                                                                           =======
  Issuance of common stock                                 5           45           --            --                          50
                                                     -------      -------       -------       -------                    -------
BALANCE, SEPTEMBER 30, 1999                          $   743      $ 6,683      $  (641)      $  (203)                    $ 6,582
                                                     =======      =======       =======       =======                    =======
</TABLE>



<TABLE>
<CAPTION>
                                                                                            ACCUMULATED
                                                                                              OTHER
                                                                               RETAINED       COMPRE-      COMPRE-        TOTAL
                                                      COMMON      CAPITAL      EARNINGS       HENSIVE      HENSIVE    STOCKHOLDERS'
                                                      STOCK       SURPLUS      (DEFICIT)   INCOME/(LOSS)   INCOME        EQUITY
                                                     -------      -------       -------    -------------   -------      --------
<S>                                                  <C>          <C>          <C>           <C>           <C>           <C>
BALANCE, JANUARY 1, 2000                             $   743      $ 6,683      $  (581)      $  (245)                    $ 6,600
  Comprehensive income/(loss):
    Net income                                                                     579                     $   579           579
    Net change in unrealized (losses)
      on available for sale securities,
      net of deferred taxes of $45                                                                88            88            88
                                                                                                           -------
  Total comprehensive income                                                                               $   667
                                                                                                           =======
    Exercise of stock options                              1           16                                                     17
                                                     -------      -------       -------       -------                    -------
BALANCE, SEPTEMBER 30, 2000                          $   744      $ 6,699      $    (2)      $  (157)                    $ 7,284
                                                     =======      =======       =======       =======                    =======
</TABLE>

Notes to financial statements are an integral part of these statements.


                                       5
<PAGE>

                                             JAMES MONROE BANCORP, INC.
                                                   AND SUBSIDIARY

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  ($ in thousands)


<TABLE>
<CAPTION>
                                                                                                           (Unaudited)
                                                                                                  NINE MONTHS ENDED SEPTEMBER 30,
                                                                                                 --------------------------------
                                                                                                    2000                 1999
                                                                                                  --------             --------
<S>                                                                                               <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                                               $    579             $     66
  Adjustments to reconcile  net income  (loss) to net cash provided by (used in)
    operating activities:
      Depreciation and amortization                                                                     55                   59
      Provision for loan losses                                                                        183                  179
      Gain on sale of securities                                                                        (2)                  --
      (Increase) in accrued interest receivable                                                       (146)                (186)
      Amortization of bond premium                                                                      17                    3
      Accretion of bond discount                                                                        (2)                  (3)
      (Increase) in other assets                                                                      (199)                 (72)
      Increase/(Decrease) in accrued interest and other liabilities                                    225                  (14)
                                                                                                  --------             --------
          Net cash provided by (used in) operating activities                                     $    710             $     32
                                                                                                  --------             --------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of securities available for sale                                                      $ (6,972)              (9,095)
  Proceeds from calls and maturities of securities  available for sale                               1,485                  730
  Purchases of premises and equipment                                                                  (70)                 (63)
  (Increase) decrease in Federal funds sold                                                         (6,307)                (411)
  Net (increase) in loans                                                                          (14,183)             (14,363)
                                                                                                  --------             --------
          Net cash (used in) investing activities                                                 $(26,047)            $(23,202)
                                                                                                  --------             --------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in demand deposits, savings deposits
    and money market accounts                                                                     $ 13,027             $ 20,167
  Net increase in time deposits                                                                     14,555                4,835
  Proceeds from issuance of common stock                                                                17                   50
                                                                                                  --------             --------
          Net cash provided by financing activities                                               $ 27,599             $ 25,052
                                                                                                  --------             --------

          Increase (decrease)in cash and due from banks                                           $  2,262             $  1,882


CASH AND DUE FROM BANKS
  Beginning                                                                                          2,641                1,306
                                                                                                  --------             --------
  Ending                                                                                          $  4,903             $  3,188
                                                                                                  ========             ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
  cash payments for interest paid to depositors                                                   $  1,345             $    607
                                                                                                  ========             ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES,
  unrealized (loss) on securities available for sale                                              $    133             $   (290)
                                                                                                  ========             ========
</TABLE>


Notes to financial statements are an integral part of these statements.


                                       6
<PAGE>

                           JAMES MONROE BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

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, is James Monroe Bancorp's
sole subsidiary. James Monroe Bank commenced banking operations on June 8, 1998,
and  currently  operates  the main office in  Arlington,  Virginia,  and has one
branch in Annandale, Virginia.

Basis of Presentation.  In the opinion of management, the accompanying unaudited
consolidated  financial statements of James Monroe Bancorp,  Inc. and Subsidiary
(the  Company)  have  been  prepared  in  accordance  with  generally   accepted
accounting   principles  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  nine-month
period ended September 30, 2000, are not  necessarily  indicative of the results
that may be  expected  for the year  ended  December  31,  2000.  The  unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated  financial statements and footnotes for the year ended December 31,
1999.

Note 2--

Earnings Per Share.  The following  table discloses the calculation of basic and
diluted earnings per share for the three months and nine-months  ended September
30, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                 Three Months Ended                 Nine Months Ended
                                                                    September 30,                     September 30,
                                                              -------------------------          ------------------------
                                                                2000             1999             2000             1999
                                                               -------          -------          -------          -------
<S>                                                            <C>              <C>              <C>              <C>
Net Income

Weighted average shares outsanding--basic                      744,290          742,590          744,023          741,802
Common share equivalents for stock options                      25,917           19,668           22,414           19,668
                                                               -------          -------          -------          -------
Weighted average shares outsanding--diluted                    770,207          762,258          766,437          761,470
                                                               =======          =======          =======          =======

Earnings per share-basic                                       $  0.34          $  0.09          $  0.78          $  0.09
                                                               =======          =======          =======          =======
Earnings per share-diluted                                     $  0.33          $  0.08          $  0.76          $  0.09
                                                               =======          =======          =======          =======
</TABLE>




                                       7
<PAGE>

Note 3--

Investment  Securities.  Amortized  cost and carrying  value  (estimated  market
value) of securities  available-for-sale at September 30, 2000, and December 31,
1999,  are  summarized in the table that  follows.  The Company  classifies  all
securities as available-for-sale.


<TABLE>
<CAPTION>
                                                                                        September 30, 2000
                                                                  -----------------------------------------------------------------
                                                                                      Gross              Gross            Estimated
                                                                  Amortized         Unrealized         Unrealized           Market
(In thousands)                                                       Cost             Gains              Losses             Value
                                                                  ---------          --------           --------           --------
<S>                                                                <C>               <C>                <C>                <C>
U.S. Government agencies and corporations                          $ 11,655          $     --           $   (223)          $ 11,432
Mortgaged-backed securities                                           4,333                --                (29)             4,304
Corporate debt securities                                             3,017                14                 --              3,031
Equity securities                                                       345                --                 --                345
                                                                   --------          --------           --------           --------
                                                                   $ 19,350          $     14           $   (252)          $ 19,112
                                                                   ========          ========           ========           ========
</TABLE>

<TABLE>
<CAPTION>
                                                                                         December 31, 1999
                                                                   -----------------------------------------------------------------
                                                                                       Gross              Gross            Estimated
                                                                   Amortized        Unrealized          Unrealized           Market
(In thousands)                                                        Cost             Gains              Losses             Value
                                                                   ---------          --------           --------           --------
<S>                                                                 <C>               <C>                <C>                <C>
U.S. Government agencies and corporations                           $ 13,690          $      5           $   (377)          $ 13,318
Corporate debt securities                                                 --                --                 --                 --
Equity securities                                                        200                --                 --                200
                                                                    --------          --------           --------           --------
                                                                    $ 13,890          $      5           $   (377)          $ 13,518
                                                                    ========          ========           ========           ========
</TABLE>

Note 4

Loans.  Major  classifications  of loans at September 30, 2000, and December 31,
1999, are summarized in the following table.


<TABLE>
<CAPTION>
                                                                                  September 30,                December 31,
($ in thousands)                                                                      2000                         1999
                                                                                  -------------                ------------
<S>                                                                                  <C>                         <C>
Commercial loans                                                                     $ 20,435                    $ 15,812
Real estate-Commercial                                                                 17,506                       9,849
Real estate-1-4 family residential                                                      3,579                       1,003
Home equity loans                                                                         578                         158
Consumer loans                                                                          3,124                       4,217
                                                                                     --------                    --------
                                                                                       45,222                      31,039

Less allowance for loan losses                                                           (546)                       (363)
                                                                                     --------                    --------
Net Loans                                                                            $ 44,676                    $ 30,676
                                                                                     ========                    ========
</TABLE>


                                       8
<PAGE>

Note 4

Capital Requirement.  A comparison of Bancorp's and its wholly-owned  subsidiary
bank (James Monroe Bank) regulatory  capital at September 30, 2000,  compared to
minimum regulatory capital guidelines is shown in the table that follows.


<TABLE>
<CAPTION>
                                                                        Minimum            Minimum To Be
                                                      Actual           Guidelines        "Well Capitalized"
                                                 ------------------ -----------------  -----------------------
<S>                                                    <C>                <C>                  <C>
Total Risk-Based Capital
     Company                                           17.2%              8.0%                 10.0%
     Bank                                              17.9%              8.0%                 10.0%

Tier 1 Risk-Based Capital
     Company                                           14.1%              4.0%                  6.0%
     Bank                                              16.6%              4.0%                  6.0%

Tier 1 Leverage Ratio
     Company                                           10.3%              3.0%                  3.0%
     Bank                                              10.4%              3.0%                  3.0%
</TABLE>



                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

FORWARD-LOOKING STATEMENTS

This document  contains  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. 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,  statements  by  suppliers  of data  processing
equipment and services,  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.

FINANCIAL OVERVIEW

The following  discussion  provides  information about the results of operations
and  financial  condition,  liquidity,  and capital  resources  of James  Monroe
Bancorp  and  should  be read in  conjunction  with our  consolidated  financial
statements and footnotes thereto for the year ended December 31, 1999.


                                       9
<PAGE>

BALANCE SHEET

Total assets  increased by $28 million from  December 31, 1999 to September  30,
2000 ending the period at $78.1  million.  The increase in assets  occurred as a
result of a $27.6 million increase in deposits with noninterest-bearing deposits
increasing $7.2 million and interest-bearing  deposits increasing $20.4 million.
With this growth in  deposits,  the  Company was able to fund the $14.9  million
increase in loans, added $5.5 million to the securities portfolio, and increased
the  Company's  short-term  liquidity  position  by $6.3  million.  The  Company
emphasizes  deposit  generation  as  much  as  loan  generation.  Thus  to-date,
sufficient deposit growth has been available to fund loan demand.

RESULTS OF OPERATIONS


                           James Monroe Bancorp, Inc.

<TABLE>
<CAPTION>
                                                         Three Months Ended Sept. 30,           Nine Months Ended Sept. 30,
                                                      ----------------------------------     ---------------------------------
($ IN THOUSANDS EXCEPT SHARE DATA)                         2000                1999               2000               1999
                                                      --------------      --------------     --------------      -------------
<S>                                                    <C>                   <C>                <C>                <C>
RESULTS OF OPERATIONS:

Total interest income                                  $     1,447           $    801           $  3,715           $  1,941
Total interest expense                                         622                267              1,432                607
Net interest income                                            825                534              2,283              1,334
Provision for loan and lease losses                             49                 66                183                179
Other income                                                    79                 46                206                 96
Noninterest expense                                            578                450              1,705              1,185
Income before taxes                                            277                 64                601                 66
Net income                                                     255                 64                579                 66

PER SHARE DATA:
Earnings per share, diluted                            $      0.33           $   0.08           $   0.76           $   0.09
Weighted average shares outstanding                        770,207            762,258            766,437            761,470
Book value (at period-end)                             $      9.79           $   8.95               9.79               8.95
Shares outstanding                                         744,290            742,590            744,290            742,590

PERFORMANCE RATIOS (ANNUALIZED):
Return on average assets                                      1.41%              0.58%              1.24%              0.24%
Return on average equity                                     14.21%              3.87%             11.28%              1.33%
Net interest margin                                           4.88%              5.19%              5.23%              5.28%
Efficiency Ratio                                             63.94%             77.59%             68.50%             82.87%

OTHER RATIOS:
Allowance for loan losses to total loans                                                            1.21%              1.15%
Equity to assets                                                                                    9.33%             13.81%
Nonperforming assets to total assets                           0.1%                 0%               0.1%                 0%
Net charge-offs to total loans                                   0%                 0%                 0%                 0%
Risk-Adjusted Capital Ratios:
     Tier 1                                                                                         16.6%              21.7%
     Total                                                                                          17.9%              22.7%
     Leverage Ratio                                                                                 10.4%              19.4%
</TABLE>


                                       10
<PAGE>

         For the quarter ended  September 30, 2000, the Company earned  $255,000
or $.33 per share  compared with $64,000 of net income or $.08 per share for the
same period in 1999.  With respect to  performance  ratios,  this resulted in an
annualized  return on average  assets of 1.41% and a return on average equity of
14.21% for the quarter ended September 30, 2000.

         For the  nine-month  period  ended  September  30, the  Company  earned
$579,000 compared with $66,000 for the same nine-month period in 1999.  Earnings
per share  were $.76,  significantly  higher  than the $.09  earned for the same
period in 1999.  Return on average assets was 1.23% and return on average equity
was 11.28% compared with .24% and 1.33%,  respectively,  for the same nine-month
period in 1999. The Company has experienced strong growth in assets and earnings
since it commenced operations in June 1998.

         The Company continues to focus on managing a strong net interest margin
(5.23% vs.  5.28% for the  nine-month  periods in 2000 and 1999,  respectively),
maintaining  strong asset quality as demonstrated by the lack of charge-offs and
nonperforming  loans to-date,  and balancing cost control with the need to incur
costs to support the rapid growth the Company has experienced.

         While the  capital  ratios  shown in the  aforementioned  table  exceed
regulatory minimum  guidelines,  in order to obtain additional capital which the
Company  believes  is  necessary  to support  continued  growth,  the Company is
conducting  an  offering of up to 344,528  shares of common  stock at a price of
$14.50 per share, with an  oversubscription  allocation of an additional 137,930
shares.  The offering  commenced  in August  2000,  and will end on November 15,
2000. On October 16, 2000, the Company accepted  subscriptions  for an aggregate
of  96,929  shares  of common  stock,  and  received  the  $1,407,324  aggregate
subscription  price of such  shares.  As of October  25,  2000,  the Company had
received additional subscriptions for 4,195 shares of common stock. Although the
Company  anticipates that it will accept these subscriptions upon termination of
the offering, there can be no assurance that any additional shares will be sold.

NET INTEREST INCOME

         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 a financial institution's performance
as it is the  principal  source of earnings.  Table 1 presents  average  balance
sheets and a net interest  income  analysis for the quarter ended  September 30,
2000, compared with the quarter ended September 30, 1999, and for the nine-month
period ended September 30, 2000,  compared with the nine-months  ended September
30, 1999.  James Monroe  Bancorp did not have any tax exempt  income  during any
period presented.

         For the nine-month  period ended  September 30 as reflected in Table 1,
net interest income  increased $1 million,  or 71.7%,  from the $1.3 million for
1999 to $2.3  million for the first  nine-months  of 2000.  The increase was due
primarily to the increase in average total earning assets,  and average loans in
particular.  Total average earning assets increased by $24.5 million,  or 72.5%,
from the first  nine-months of 1999 to the same period of 2000, and the yield on
earning  assets  increased  by 81  basis  points  reflecting  increases  in  and
adjustments  to  interest  rates  on new and  outstanding  floating  rate  loans
resulting from 4 increases in the Company's prime rate since September 1999. The
Fed has  raised  rates six times  totaling  175 basis  points  since  they began
raising rates in June 1999. Average loans outstanding grew by $19.3 million,  or
96.3%  and  the  yield  on  such  loans  increased  by  45  basis  points.  Also
contributing to the increase in earning assets on a  period-to-period  basis was
the  increase  in  taxable  securities  which  increased  $6.2  million  for the
nine-months  ended  September  30,  2000,  as compared  with the average for the
nine-months in 1999 and the yield on such  securities,  which increased 37 basis
points period to period.


                                       11
<PAGE>

         Interest income increased  $646,000 for the quarter ended September 30,
2000,  to $1.5  million,  a 80.6%  increase as compared with the same quarter in
1999.  This  improvement  was almost  entirely the result of the increase in the
volume of loans and securities. Interest expense for the quarter ended September
30, 2000,  was $622,000,  an increase of  approximately  $355,000,  or 133% over
interest  expense for the same  quarter of 1999.  The  increase is  attributable
principally to a $20.7 million increase in average interest-bearing deposits.

         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 nine-months ended September 30, 2000, as
compared to the  nine-months  ended September 30, 1999,is almost entirely due to
the growth in the volume of earning assets and interest-bearing liabilities. The
net interest  margin for the nine-month to nine-month  comparative  periods held
relatively  steady,  declining slightly with a 5.23% net interest margin for the
nine-month period in 2000 compared with a 5.28% net interest margin for the same
period in 1999.  The Company has been able to maintain a  relatively  consistent
margin  during a period  where the  national  prime rate has risen 4 times for a
cumulative increase of 1.75% since September 30, 1999.


                                       12
<PAGE>

TABLE 1

Consolidated  Average  Balances,  Yields  and  Rates for the  Nine-Months  Ended
September 30, 2000 and 1999.

($ in thousands)

<TABLE>
<CAPTION>
                                              Nine Months Ended                       Nine Months Ended
                                             September 30, 2000                      September 30, 1999
-------------------------------------------------------------------------------------------------------------------
                                        Average                  Yield/        Average                   Yield/
                                        Balance      Interest     Rate         Balance      Interest      Rate
-------------------------------------------------------------------------------------------------------------------
<S>                                <C>             <C>          <C>           <C>          <C>         <C>
ASSETS
Loans:
     Commercial                        $ 18,381     $   1,305     9.48%       $ 8,528        $   612       9.59%
     Commercial real estate              16,142         1,123     9.29          8,208            534       8.69
     Consumer                             4,734           372    10.50          3,261            207       8.48
                                    --------------------------------------   ----------------------------------------
       Total Loans                       39,257         2,800     9.53         19,997          1,353       9.04
Taxable securities                       15,147           734     6.47          8,972            408       6.07
Federal funds sold                        3,878           181     6.23          4,824            180       4.98
                                    --------------------------------------   ----------------------------------------
         TOTAL EARNING ASSETS            58,282         3,715     8.51%        33,793          1,941       7.67%
Less allowance for loan losses             (451)                                 (211)
Cash and due from banks                   3,440                                 1,888
Premises and equipment, net                 719                                   490
Other assets                                617                                   265
                                      ----------                             -----------
                 TOTAL ASSETS          $ 62,607                                36,225
                                      ==========                             ===========
LIABILITIES AND
     STOCKHOLDERS' EQUITY
Interest-bearning demand deposits      $  3,540      $     56     2.11%       $ 2,754             27      1.31%
Money market deposit accounts            19,594           683     4.66         12,322            371      4.03
Savings accounts                            322             7     2.90            238              5      2.81
Time deposits                            15,428           683     5.91          5,452            204      5.00
Borrowed funds                               60             3     6.68             --             --        --
                                    --------------------------------------   ----------------------------------------
     TOTAL INTEREST-BEARING
          LIABILITIES                    38,944         1,432     4.91%        20,766            607      3.91%
                                    --------------------------------------   ----------------------------------------

Net Interest Income and Net Yield
on Interest-Earning Assets                           $  2,283     5.23%                      $ 1,334      5.28%
                                                   =======================                  =========================

Noninterest-bearing demand
     deposits                            16,550                                 8,721
Other liabilities                           255                                   110
Stockholders' equity                      6,858                                 6,628
                                    -----------                              ---------
     TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY           62,607                                36,225
                                    ===========                              =========
</TABLE>


                                       13


<PAGE>


INTEREST INCOME

         The following table  indicates  changes in interest income and interest
expense  attributable  to  changes  in  average  volume  and  average  rates  in
comparison  with the same period in the preceding  year.  The change in interest
due to  combined  rate-volume  variance  has been  allocated  to rate and volume
changes in proportion to the absolute dollar amounts of the changes in each.

TABLE 2

<TABLE>
<CAPTION>
                                           Nine-Months Ended September 30, 2000
                                                     vs. September 30, 1999
                                           --------------------------------------------
                                              Increase           Due to Change
                                                 or               in Average:
                                                          -----------------------------
                                             (Decrease)       Volume         Rate
                                           --------------------------------------------
<S>                                        <C>            <C>            <C>
            EARNING ASSETS:
            Loans                           $1,447          $  1,370       $   77
            Taxable securities                 326               298           28
            Federal funds sold                   1                (4)           5
                                           --------------------------------------------
                 Total interest income       1,774             1,664          110

            INTEREST-BEARING LIABILITIES:
            Interest-bearing demand
                 deposits                       29                 9           20
            Money market deposit
                 accounts                      312               247           65
            Savings deposits                     2                 2            0
            Time deposits                      479               436           43

            Borrowed funds                       3                 3           --
                                           --------------------------------------------
                 Total interest expense        825               697          128
                                           --------------------------------------------

                      Net Interest Income   $  949           $   967        $ (18)
                                           ============================================
</TABLE>


PROVISION AND ALLOWANCE FOR LOAN LOSSES

         The provision for loan losses is based upon  management's  judgement as
to the adequacy of the allowance to absorb  future  possible  losses.  Since the
Company is a relatively young bank, and its asset quality to date has been high,
it has no history of loan losses. Except for one loan that was put on nonaccrual
status in the third-quarter,  the Company also has not had any nonaccrual loans,
loans past due 90-days or more,  restructured  loans, other real estate owned or
foreclosed properties.  At September 30, 2000, the one loan on nonaccrual status
is for  approximately  $55,000.  There were no other loans which were performing
but as to which information known to us caused management to have serious doubts
as to the ability of the  borrower to comply  with the  current  loan  repayment
terms. In determining  the adequacy of the allowance,  the value and adequacy of
the  collateral  is  considered  as well as the  growth and  composition  of the
portfolio. Consideration is given to the results of examinations and evaluations
of the overall portfolio by senior management, external auditors, and regulatory
examiners. At the present


                                       14
<PAGE>

time the Company's  policy is to maintain the allowance as a percentage of total
loans at approximately 1.20%.  Management considers the allowance to be adequate
for the periods presented.

         The accompany  tables reflect the  composition of the loan portfolio at
September 30, 2000, and September 30, 1999.

TABLE 3

         The following table presents the activity in the allowance for loan and
lease losses for the nine-months ended September 30, 2000 and 1999.

<TABLE>
<CAPTION>
                                            Nine Months Ended
                                               September 30,
                                            -------------------
($ in thousands)                            2000           1999
                                            ----           ----
<S>                                         <C>            <C>
Balance, January 1                          $363           $132
Provision for loan losses                    183            179
Loan charge-offs                               0              0
Loan recoveries                                0              0
                                            ----           ----
     Net charge-offs                           0              0
                                            ----           ----
Balance, September 30                       $546           $311
                                            ====           ====
</TABLE>

         The following table shows the amounts of  non-performing  assets at the
dates indicated.

<TABLE>
<CAPTION>
                                   September 30,    December 31,
($ in thousands)                       2000            1999
                                   -------------    ------------
<S>                                   <C>              <C>
Nonaccrual loans                      $  55            $ -0-
Loans past-due 30-days
    or more                             -0-              -0-
Restructured loans                      -0-              -0-
Other real estate owned                 -0-              -0-
                                       ----            -----
     Total nonperforming assets        $ 55            $ -0-
                                       ====            =====
</TABLE>


                                       15
<PAGE>

TABLE 4

         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.

<TABLE>
<CAPTION>


                                                            September 30,
                                           -----------------------------------------------
                ($ in thousands)                    2000                     1999
                --------------------------------------------------   ---------------------
                                              Amount     Percent       Amount     Percent
                --------------------------------------------------------------------------
                <S>                           <C>          <C>         <C>           <C>
                Commercial                    $ 250        45.8%       $  175        56.3%

                Commercial real estate          200        36.6           115        37.0

                Consumer                         96        17.6            21         6.7

                Other                           -0-         -0-           -0-         -0-
                                              -----      -------       -------      ------
                    Balance End of Period     $ 546         100%       $  311         100%
                                              =====      =======       ========     ======

</TABLE>


TABLE 5

Table 5 shows the maturities of the loan portfolio and the  sensitivity of loans
to interest rate fluctuations at September 30, 2000. Maturities are based on the
earlier of contractual maturity or repricing date.

<TABLE>
<CAPTION>
      ($ in thousands)                                          September 30, 2000
                                           -------------------------------------------------------------
                                                             After One
                                                                Year
                                             One Year or       Through         After
                                                Less          Five Years     Five Years     Total
                                             -----------      ----------     ----------   ---------
      <S>                                     <C>              <C>           <C>          <C>
      Commercial                              $  13,909        $  2,987      $  1,521     $  18,417
      Government guaranteed
         loans                                      191           1,021           317         1,529
      Commercial real estate                      6,089          11,518           243        17,850
      Real estate mortgage                        1,607           2,868           -0-         4,475
      Consumer                                    2,483             468           -0-         2,951
                                              ---------        --------      --------     ---------
                          Total loans         $  24,279        $ 18,862      $  2,081     $  45,222
                                              =========        ========      ========     =========
      Fixed Rate                              $   9,710        $ 11,269      $  2,081     $  23,060
      Variable Rate                              14,569           7,593           -0-        22,162
                                              ---------        --------      --------     ---------
                          Total loans         $  24,279        $ 18,862      $  2,081     $  45,222
                                              =========        ========      ========     =========
</TABLE>

LOANS

         The loan  portfolio  is the  largest  component  of earning  assets and
accounts for the greatest  portion of total  interest  income.  At September 30,
2000, total loans were $45.2 million, a 66.8% increase from the $27.1 million of
loans at September 30, 1999. In general, loans are internally generated with the
exception of a small  percentage of  participation  loans  purchased  from other
local  community  banks,  and  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 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.


                                       16
<PAGE>

         Consumer  loans  consist  primarily of secured  installment  credits to
individuals,  residential  construction  loans secured by a first deed of trust,
home equity loans, or home improvement loans. The consumer portfolio  represents
6.9% of the loan portfolio at September 30, 2000.

TABLE 6

         The following  table presents the  composition of the loan portfolio by
type of loan at the dates indicated.

<TABLE>
<CAPTION>
                                            September 30,        December 31,
        ($  in thousands)                       2000                 1999
                                            -------------        ------------
<S>                                         <C>                  <C>
        Commercial                          $    18,906          $   14,748
        Government guaranteed
           loans                                  1,529               1,064
        Commercial real estate                   17,506              11,010
        Real estate mortgage loans                3,579               1,003
        Consumer loans                            3,652               3,175
        Overdrafts                                   51                  39
                                            -----------           ---------
                             Total Loans    $    45,222           $  31,039
                                            ===========           =========
</TABLE>

INVESTMENT SECURITIES

The carrying value of James Monroe Bancorp's securities portfolio increased $7.0
million to $19.1  million at September  30, 2000 from $12.1 million at September
30, 1999. From December 31, 1999 to September 30, 1999, the portfolio  increased
$5.6  million.  James  Monroe  Bancorp  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  philosophy 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 mortgaged-backed securities, the policy is to invest only in those securities
whose average expected life is projected to be five years or less. To the extent
possible the Company attempts to "ladder" the maturities of such securities.



                                       17
<PAGE>

TABLE 7

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

<TABLE>
<CAPTION>
                                     At September 30, 2000        At December 31, 1999
                                   -------------------------  ---------------------------
                                                 Percent of                   Percent of
($ in thousands)                      Balance       Total        Balance         Total
                                   -----------  ------------  -----------   -------------
<S>                                <C>          <C>           <C>           <C>
INVESTMENTS AVAILABLE-FOR-SALE
(AT ESTIMATED MARKET VALUE):
U.S. Government Agency
   Obligations                      $ 11,432          59.8%    $ 13,318         98.5%
Mortgage-backed securities             4,304          22.5           --          0.0
Corporate debt securities              3,031          15.9           --          0.0
                                   -----------  ------------  -----------   -------------
                                    $ 18,767          98.2     $ 13,318         98.5
Other investments                        345           1.8          200          1.5
                                   -----------  ------------  -----------   -------------
                        Total       $ 19,112         100.0%    $ 13,518        100.0%
                                   ===========  ============  ===========   =============
</TABLE>

         At September 30, 2000,  we recorded a write-down of $238,500,  or 1.2%,
to  reflect  the  decline in the fair  market  value of the  available  for sale
securities, as compared with the original cost.

TABLE 8

         The following  table  presents the book value amount and  maturities of
the investment securities in the portfolio at September 30, 2000.

<TABLE>
<CAPTION>
                                                             Years to Maturity
--------------------------------------------------------------------------------------------------------------------------
                                        Within               Over 1                 Over 5                    Over
($ in thousands)                        1 Year           through 5 Years        through 10 Years            10 Years
--------------------------------------------------------------------------------------------------------------------------
                                  Amount     Yield      Amount      Yield      Amount        Yield      Amount     Yield
--------------------------------------------------------------------------------------------------------------------------
<S>                             <C>         <C>       <C>          <C>        <C>           <C>        <C>         <C>
INVESTMENTS AVAILABLE-FOR-SALE:
U.S. Government Agency           $  250      5.75%     $10,905      5.81%      $  500        7.00%     $   --       0.00%
Mortgage-backed securities       $   --        --           --        --        3,418        6.91         915       6.80
Corporate bonds                  $   --        --        3,017      7.39           --                      --
                                 --------              --------                -------                 -------
       Total Debt Securities
         Available-for-Sale      $  250      5.75%     $13,922      6.15%      $3,918        6.02%     $  915       6.80%
                                 ========              ========                =======                 =======
</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.


                                       18
<PAGE>

         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 a tactical and  contingency  perspectives.  At September 30, 2000, our
Basic Surplus ratios (net access to cash and secured  borrowings as a percentage
of total assets was  approximately  24% compared to the present internal minimum
guideline range of 7% to 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.

         One tool that we  utilize in  managing  our  interest  rate risk is the
matched funding matrix  depicted in the  accompanying  table.  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.

         As can be seen in Table 9, we are asset sensitive in the short term and
then  become  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 utilizes  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,  including 8 different "rate shock" scenarios. At September 30, 2000,
the following  12-month impact on net interest income is estimated to range from
a positive impact of 5% to a negative  impact of 5% for the multiple  scenarios.
In the next  12-month  period  the  range of impact  on net  interest  income is
estimated  to be from a positive  impact of 5% to a  negative  impact of 6%. The
Company believes this to be well within acceptable range given a wide variety of
potential interest rate change scenarios. This process is performed each quarter
to ensure the Company is not materially at risk to possible  changes in interest
rates.


                                       19
<PAGE>

TABLE 9

                              Match Funding Matrix
                                James Monroe Bank
                                 September, 2000

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                   ASSETS      60+    36 - 59   24 - 35   12 - 23     10 - 11    7 - 9     4 - 6    2 - 3   1 MONTH   O/N     TOTAL
                             MONTHS   MONTHS    MONTHS    MONTHS      MONTHS     MONTHS    MONTHS   MONTHS
------------------------------------------------------------------------------------------------------------------------------------
<S>              <C>        <C>      <C>       <C>       <C>         <C>        <C>       <C>      <C>      <C>      <C>     <C>
LIABILITIES &                 9,574   18,605     9,448      7,207      2,438      3,301     3,792    1,053    2,200   20,491  78,109
EQUITY
------------------------------------------------------------------------------------------------------------------------------------
60+ MONTHS        15,264      9,574    5,690                                                                                  15,264
------------------------------------------------------------------------------------------------------------------------------------
36 - 59            6,325               6,325                                                Asset Sensitive                    6,325
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
24 - 35            3,378               3,378                                                                                   3,378
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
12 - 23            6,611               3,212     3,399                                                                         6,611
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
10 - 11            7,605                         6,049      1,556                                                              7,605
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
 7 - 9             4,063                                    4,063                                                              4,063
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
 4 - 6             14,410                                   1,588     2,438       3,301     3,792   1,053     2,200       38  14,410
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
 2 - 3             19,623                                                                                             19,623  19,623
MONTHS
------------------------------------------------------------------------------------------------------------------------------------
1 MONTH               830            Liability Sensitive                                                                 830     830
------------------------------------------------------------------------------------------------------------------------------------
O/N                     0                                                                                                          0
------------------------------------------------------------------------------------------------------------------------------------
TOTAL              78,109  9,574     18,605     9,448       7,207     2,438       3,301     3,792   1,053     2,200   20,491  78,109
====================================================================================================================================
</TABLE>



                                       20
<PAGE>

NONINTEREST INCOME AND EXPENSE

         Noninterest  income  consist  primarily of services  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
expense.  The following tables shows the detail for the quarters ended September
30,  2000  and  1999  and for the  fiscal  year  ended  December  31,  1999  and
seven-month period ended December 31, 1998.

TABLE 10

<TABLE>
<CAPTION>
                                    Nine-Months Ended September 30,
                                 --------------------------------------
(Dollars in thousands)                 2000                 1999
                                 ------------------   -----------------
<S>                              <C>                  <C>
Services charges on deposit
     accounts                   $              145   $              66
Cash management fees                            27                   9
Other fee income                                34                  21
                                 ------------------   -----------------
          Total Noninterest
                     Income     $              206   $              96
                                 ==================   =================
</TABLE>

     The  increase  in  noninterest  income for the  comparative  periods is the
result of the  continued  growth of the  Company and the  expansion  of products
resulting in fee income such as the increase in cash management fee income.

TABLE 11

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

<TABLE>
<CAPTION>
                              Nine-Months Ended September 30,
                            -------------------------------------
(Dollars in thousands)            2000               1999
                            -----------------  ------------------
<S>                        <C>                <C>
Salaries and benefits        $           875    $            566
Occupancy cost, net                      313                 242
Equipment expense                        116                  76
Professional fees                         60                  44
Data processing costs                    159                 101
State franchise tax                       58                  48
Other                                    124                 108
                            -------------------------------------
       Total Noninterest
                 Expense     $         1,705    $          1,185
                            =================  ==================
</TABLE>

         Noninterest expense increased $520,000 or 56% from $1,185 for the first
nine-months of 2000, as compared to the same period in 1999.  Approximately half
of this  increase is due to the  operating  cost of the  Company's  first branch
which was  opened at the end of the year in 1999.  The  increase  in salary  and
benefit  expense of $309,000 is primarily  the result of the staff costs for the
new branch,  the full  effect for the  nine-month  period of several  additional
personnel at the main office added during 1999, and merit increases for 2000.

         Occupancy  and   equipment   costs   increased   $71,000  and  $40,000,
respectively,  in the first  nine-months  of 2000 over the first  nine-months of
1999.  The increase is  predominately  due to the rent and hardware and software
costs of equipment the new branch.  With respect to the $58,000 increase in data


                                       21
<PAGE>

TABLE 12

processing costs in the comparative nine-month periods, again is a result of the
growth in the  number of  accounts  at the bank,  one  additional  ATM,  and the
addition of the debit card to the product  line The increase in Other costs is a
combination  of  higher  postage,   supplies,  and  general  operating  expenses
resulting from a larger operation.

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

<TABLE>
<CAPTION>

                                                      Remaining Maturity
                                         3 Months     4 to 6     7 to 12    Over 12
(Dollars in thousands)                   or Less      Months     Months      Months    Total
                                        ----------- ----------- --------    --------  --------
<S>                                   <C>          <C>        <C>           <C>       <C>
Certificates of deposit less than
$100,000                               $  1,145    $  4,032    $  3,207      $ 2,661  $  11,045
Certificates of deposit of $100,000
or more                                   1,916       3,740       5,938        1,054     12,648
                                       --------    --------    --------      -------  ---------
                                       $  3,061    $  7,772    $  9,145      $ 3,715  $  23,693
                                       ========    ========    ========      =======  =========
</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  September  30,  2000,   stockholders'  equity
increased $684,000 from the $6,600,000 of equity at December 31, 1999 reflecting
earnings of $579,000, an $88,000 improvement in the after-tax change in the fair
value of  securities,  and $17,000  which is the proceeds from the exercise of a
director  stock option.  As a result of the  significant  growth the Company has
experienced  since  its  inception,   management  and  the  board  of  directors
determined that additional  capital was required to support further growth. As a
result, the Company currently is in the process of raising  additional  capital.
The  offering is for up to 344,528  shares of common  stock at a price of $14.50
per share, with an over subscription allocation of an additional 137,930 shares.
The offering  commenced in August  2000,  and will end on November 15, 2000.  On
October 25, 2000, the Company accepted  subscriptions for an aggregate of 96,929
shares of common stock, and received the $1,405,470 aggregate subscription price
of such  shares.  As of October 25, 2000,  the Company had  received  additional
subscriptions for 4,195 shares of common stock. Although the Company anticipates
that it will accept these subscriptions upon termination of the offering,  there
can be no assurances that any additional shares will be sold.

         James  Monroe  Bancorp has  reported a steady  improvement  in earnings
since James Monroe Bank opened on June 8, 1998.  Positive earnings were reported
in the ninth month of  operations  and  culminated  with $125,000 of earnings in
1999.  Earnings for the first  nine-months  of 2000 were  $579,000,  nearly four
times  the  earnings  level  for the  entire  year of 1999.  One of our  initial
strategies was to restore the initial lost capital from the initial organization
costs of $254,000 and the accumulated  earnings loss of $452,000 for 1998. As of
September  30,  2000,  all but $2,000 of the losses  have been  recaputured.  In
addition,  the  Company  has fully  utilized  its net  operating  losses for tax
purposes.


                                       22
<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

         Use Of Proceeds.  On August 11, 2000, the Company's first  registration
statement  under the  Securities  Act of 1933,  on Form  SB-2  (No.  333-38098),
relating to its initial  registered  offering of common stock,  $1.00 par value,
was  declared  effective by the  Securities  and  Exchange  Commission,  and the
offering commenced. The offering related to an aggregate of up to 344,828 shares
of common  stock,  at an offering  price of $14.50 per share,  for an  aggregate
offering price of $5,000,006.  The Company also reserved the right to sell up to
an additional 137, 930 shares of common stock in the event that the offering was
oversubscribed, for an additional aggregate offering price of $1,999,985.

         As of the date of this report,  the offering has been  extended  until,
and the offering will terminate on,  November 15, 2000. On October 16, 2000, the
Company accepted subscriptions for and sold 96,929 shares of common stock at the
offering price of $14.50 per share.  Aggregate  expenses to date of the offering
were $86,883,  resulting in net proceeds of the offering to date of  $1,318,587.
As of  October  25,  2000,  the  Company  has  received,  but has not  accepted,
subscriptions  for an  additional  4,195  shares of common  stock.  Although the
Company  anticipates that it will accept these subscriptions upon termination of
the offering, there can be no assurance that any additional shares will be sold.

         No person or entity underwrote the Company's  offering,  which was made
through the efforts of the Company's directors and executive  officers.  None of
such directors or officers received any special  compensation in connection with
the offering.

         As of the date hereof,  none of the proceeds of the offering  have been
applied,  other than investment in temporary  investments pending application of
the proceeds.  The Company  anticipates  contributing at least $1,000,000 of the
proceeds to its  subsidiary  bank at  year-end.  The  remaining  proceeds of the
offering  will be  retained by the  Company  and held in  temporary  investments
pending contribution to the bank.

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None


                                       23
<PAGE>

Item 6.  Exhibits and reports on Form 8-K

Exhibits

<TABLE>
<CAPTION>


         Number   Description
         <S>      <C>
         3(a)     Articles of Incorporation of James Monroe Bancorp, as amended (1)

         3(b)     Bylaws of James Monroe Bancorp, (1)

         10(a)    Employment contract between James Monroe Bancorp and John R. Maxwell (1)

         10(b)    James Monroe Bancorp 1998 Management Incentive Stock Option Plan (1)

         10(c)    Monroe Bancorp 1999 Director's Stock Option Plan (1)

         11       Statement re: Computation of Per Share Earnings

                  Please refer to Note 2 to the financial statements included in this report.

         27       Financial Data Schedule

                  (1)      Incorporated  by reference to the exhibit of the same
                           number in the  Company's  registration  statement  on
                           Form SB-2 no. 333-38098.

</TABLE>


                                   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:    October 25, 2000        BY:  /s/ John R. Maxwell
                                      ---------------------------------------
                                          John R. Maxwell, President & CEO


Date:    October 25, 2000        BY:  /s/ Richard I. Linhart
                                      ---------------------------------------
                                          Richard I. Linhart, Executive Vice
                                          President & Chief Operating Officer


                                       24