<PAGE>

================================================================================

                                United States
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                  FORM 10-QSB


(Mark One)

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

                 For the quarterly period ended March 31, 2001.

                                       Or

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

For the transition period from_______________ to ______________

                           Commission File No. 0-13395

                    UNITED FINANCIAL BANKING COMPANIES, INC.

A Virginia Corporation                             IRS Employer Identification
                                                         No. 54-1201253

                   8399 Leesburg Pike, Vienna, Virginia 22182
                            Telephone: (703) 734-0070


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes   X    No
                                         -----     -----

                          Common Stock $1.00 Par Value
                          1,001,499 Shares Outstanding
                              as of March 31, 2001

   Transitional Small Business Disclosure Format:  Yes        No   X
                                                       -----     -----
================================================================================
<PAGE>

Item 1:    Financial Statements

UNITED FINANCIAL BANKING COMPANIES, INC., AND SUBSIDIARIES Consolidated
Statements of Income and Comprehensive Income / Results of Operations
(Unaudited)

<TABLE>
<CAPTION>

                                                                               Three Months Ended
                                                                                     March 31,
                                                                      ----------------------------------------
                                                                             2001                   2000
                                                                      -----------------     ------------------
<S>                                                                   <C>                   <C>
Interest income:
     Interest and fees on loans/leases                                       $1,297,617             $  935,925
     Interest on investment securities                                          147,234                117,065
     Interest on federal funds sold                                              33,403                 77,002
     Interest on interest-bearing deposits                                          549                     67
                                                                      -----------------     ------------------
          Total interest income                                               1,478,803              1,130,059
                                                                      -----------------     ------------------

Interest expense:
     Interest on deposits                                                       538,840                398,610
     Interest on short-term borrowings                                           35,296                      -
                                                                      -----------------     ------------------
          Total interest expense                                                574,136                398,610
                                                                      -----------------     ------------------
          Net interest income                                                   904,667                731,449
Provision for loan/lease losses                                                  46,274                 33,000
                                                                      -----------------     ------------------
          Net interest income after provision
            for loan/lease losses                                               858,393                698,449
Noninterest income:
     Gain (loss) on sale of real estate
       owned and other earning assets                                               194                   (280)
     Loan servicing and other fees                                               27,556                 15,013
     Other income                                                                44,786                 43,144
                                                                      -----------------     ------------------
          Total noninterest income                                               72,536                 57,877
                                                                      -----------------     ------------------
Noninterest expense:
     Salaries                                                                   300,526                276,203
     Employee benefits                                                           61,528                 49,780
     Occupancy                                                                   89,829                 97,847
     Furniture and equipment                                                     29,776                 43,071
     Data processing                                                             38,730                 38,235
     Other insurance                                                              8,149                  6,053
     Real estate owned holding expense                                            7,957                  6,803
     Legal                                                                        4,801                  5,657
     FDIC insurance                                                               2,677                  2,417
     Other expense                                                              108,000                104,032
                                                                      -----------------     ------------------
          Total noninterest expense                                             651,973                630,098
                                                                      -----------------     ------------------
          Income (loss) before income taxes                                     278,956                126,228
Provision (credit) for income taxes                                               3,400                      -
                                                                      -----------------     ------------------
          Net income (loss)                                                  $  275,556             $  126,228
                                                                      =================     ==================

Net income (loss) per common share (Note 3)
     Basic                                                                   $     0.28             $     0.13
                                                                      =================     ==================
     Diluted                                                                 $     0.27             $     0.13
                                                                      =================     ==================

Comprehensive Income (Note 4)
-----------------------------
     Net income                                                              $  275,556             $  126,228
     Other comprehensive income, net of tax
       Unrealized gains (losses) on available-for-sale securities                42,877                (16,729)
                                                                      -----------------     ------------------
      Comprehensive income                                                   $  318,433             $  109,499
                                                                      =================     ==================
</TABLE>

                                       2
<PAGE>

UNITED FINANCIAL BANKING COMPANIES, INC., AND SUBSIDIARIES
Consolidated Balance Sheets / Financial Condition

<TABLE>
<CAPTION>
                                                                       (Unaudited)               (Audited)
                                                                        March 31,               December 31,
                                                                               2001                     2000
                                                                  ---------------------    ---------------------
<S>                                                               <C>                      <C>
                        Assets
                       --------
Cash and due from banks                                                     $ 2,315,111              $ 2,990,025
Federal funds sold                                                            5,300,000                  600,000
Investment Securities:
     Available-for-sale (AFS)                                                 5,946,618                8,101,889
     Held-to-maturity (HTM)                                                   1,711,627                2,270,483
Loans, net of unearned
  income of $101,488 and $54,614                                             54,897,356               55,701,135
     Less:  Allowance for loan/lease losses                                    (984,351)                (973,431)
                                                                  ---------------------    ---------------------
          Net loans                                                          53,913,005               54,727,704
Real estate owned held for sale, net                                          1,411,627                1,364,066
Premises and equipment, net                                                     188,524                  206,669
Deferred income taxes                                                           919,156                  919,156
Other assets                                                                    591,552                  674,121
                                                                  ---------------------    ---------------------
        Total assets                                                        $72,297,220              $71,854,113
                                                                  =====================    =====================

          Liabilities and Stockholders' Equity
         --------------------------------------
Deposits:
     Demand                                                                 $14,803,882              $15,103,101
     Savings and NOW                                                          4,967,353                5,232,987
     Money market                                                            13,015,967               13,896,824
Time deposits:
    Under $100,000                                                           15,666,050               15,937,455
    $100,000 and over                                                        11,841,149               10,472,041
                                                                  ---------------------
           Total deposits                                                    60,294,401               60,642,408
                                                                  ---------------------    ---------------------

Short-term borrowings                                                         2,600,000                2,186,000
Other liabilities                                                               533,603                  474,922
                                                                  ---------------------    ---------------------
          Total liabilities                                                  63,428,004               63,303,330
                                                                  ---------------------    ---------------------

Stockholders' Equity:
     Preferred stock of no par value, authorized
     5,000,000 shares, no shares issued                                               -                        -
     Common Stock, par value $1; authorized 3,500,000 shares,
       issued 1,001,499 shares at 3/31/01 and 12/31/00                        1,001,499                1,001,499
     Capital in excess of par value                                          15,975,810               15,975,810
     Retained earnings                                                       (8,108,913)              (8,384,469)
     Unrealized holding gain (loss) - AFS securities                                820                  (42,057)
                                                                  ---------------------    ---------------------
          Total stockholders' equity                                          8,869,216                8,550,783
                                                                  ---------------------    ---------------------
        Total liabilities and stockholders' equity                          $72,297,220              $71,854,113
                                                                  =====================    =====================

</TABLE>

                                       3
<PAGE>

UNITED FINANCIAL BANKING COMPANIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
                                                                         Three  Months Ended
                                                                   -----------------------------------------
                                                                      March 31, 2001         March 31, 2000
                                                                   -------------------  ---------------------
<S>                                                                <C>                  <C>
Cash flows from operating activities:
Net Income                                                                 $   275,556            $   126,228
Adjustment to reconcile net income (loss) to
  net cash provided by (used in) operating activities:
  Depreciation & amortization                                                   21,207                 25,344
  Provision for loan/lease losses                                               46,274                 33,000
  Amortization of investment security discount                                   2,261                  1,233
  Amortization of loan fees and discounts, net                                     343                 14,526
  Net (gain) loss on disposal of equipment                                           -                 (1,650)
  Net (gain) loss on sale of other real estate owned                              (194)                   280
  (Increase) decrease in other assets                                           82,569                (20,652)
  Increase (decrease) in other liabilities                                      58,681                 19,771
                                                                   -------------------  ---------------------
    Net cash provided by (used in) operating activities                        486,697                198,080
                                                                   -------------------  ---------------------

Cash flows from investing activities:
  Loans originated - non-bank subsidiaries                                           -                (72,051)
  Principal collected - non-bank subsidiaries                                      489                 50,389
  Loans and lease originations, net of collections                             767,593             (2,672,238)
  Purchases of securities available-for-sale                                         -             (1,167,482)
  Purchases of securities held-to-maturity                                           -               (906,308)
  Investment made in other real estate owned                                  (201,000)               (34,657)
  Proceeds received from maturity of securities
   available-for-sale                                                        2,195,887                421,810
  Proceeds received from maturity of securities held to maturity               558,856                      -
  Proceeds from real estate owned                                              153,633                126,620
  Purchases of premises and equipment                                           (3,062)               (12,133)
  Proceeds from disposal of equipment                                                -                  6,000
                                                                   -------------------  ---------------------
    Net cash provided by (used in) investing activities                      3,472,396             (4,260,050)
                                                                   -------------------  ---------------------

Cash flow from financing activities:
  Net increase (decrease) in demand deposits, savings
      accounts, NOW accounts and money market accounts                      (1,445,710)             2,987,098
  Certificates of deposit sold (matured), net                                1,097,703                940,681
  Net change in short-term borrowings                                          414,000                      -
  Proceeds from sale of common stock                                                 -                344,385
                                                                   -------------------  ---------------------
    Net cash provided by (used in) financing activities                         65,993              4,272,164
                                                                   -------------------  ---------------------

Net increase (decrease) in cash and cash equivalents                         4,025,086                210,194
Cash and cash equivalents at beginning of the year                           3,590,025              7,137,515
                                                                   -------------------  ---------------------
Cash and cash equivalents at end of the quarter                            $ 7,615,111            $ 7,347,709
                                                                   ===================  =====================

Supplemental disclosures of cash flow information:
  Cash paid during the years for:
    Interest on deposits and other borrowings                              $   588,224            $   398,205
    Income taxes                                                                18,806                      -

Non-Cash Items:
  Effect on stockholders' equity of an unrealized gain (loss)
    on debt and equity securities available-for-sale                       $    42,877            $  (16,729)
</TABLE>

                                       4
<PAGE>

                   Notes to Consolidated Financial Statements
                   ------------------------------------------


Note 1 -  The accompanying unaudited consolidated financial statements have been
          prepared in accordance with the instructions for Form 10-QSB and,
          therefore, do not include all information and footnotes required by
          generally accepted accounting principles for complete financial
          statements. The interim financial statements have been prepared
          utilizing the interim basis of reporting and, as such, reflect all
          adjustments which are, in the opinion of management, necessary for a
          fair presentation of the results for the periods presented. The
          results of operations for the interim periods are not necessarily
          indicative of the results for the full year.

Note 2 -  The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial statements and the reported amounts of revenues
          and expenses during the reporting period. Actual results could differ
          from those estimates.

Note 3 -  On December 31, 1997, the Company adopted Statement of Financial
          Accounting Standards No. 128, Earnings per share (SFAS 128), which
          supersedes Accounting Principles Board Opinion No. 15. Under SFAS 128,
          earnings per common share are computed by dividing net income (loss)
          available to common stockholders by the weighted average number of
          common shares outstanding during the period. Diluted earnings per
          share reflects the potential dilution, if any, that could occur if
          securities or other contracts to issue common stock were exercised or
          converted into common stock or resulted in the issuance of common
          stock. Prior period amounts have been restated, where appropriate, to
          conform to the requirements of SFAS 128.

Note 4 -  On January 1, 1998, United Financial Banking Companies, Inc. adopted
          Statement of Financial Accounting Standards No. 130, Reporting
          Comprehensive Income (SFAS 130). Under SFAS 130, each company is
          required to present a 'Statement of Comprehensive Income'.
          Comprehensive income is defined as the change in equity during a
          period from transactions and other events and circumstances from non-
          owner sources such as foreign currency items, minimum pension
          liability adjustments and unrealized gains and losses on certain
          investments in debt and equity securities.

                                       5
<PAGE>

UNITED FINANCIAL BANKING COMPANIES, INC.
CONSOLIDATED AVERAGE BALANCES/NET INTEREST ANALYSIS/
YIELDS AND RATES
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          For the Three Months Ended
                                                       March 31, 2001                                   March 31, 2000
---------------------------------------------------------------------------------------------------------------------------------
                                      Average                               Yield/            Average                      Yield/
                                      Balance              Interest          Rate             Balance           Interest    Rate
---------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                   <C>                <C>            <C>                   <C>         <C>
ASSETS
Earning assets:
 Loans/Leases:
 Commercial                            $37,090,845            $  832,143        9.10%          $26,229,953     $  593,257    9.17%
 Real estate construction                9,485,360               248,964       10.64%            5,059,499        130,753   10.48%
 Real estate mortgage                    7,118,089               166,141        9.47%            8,748,960        169,990    7.88%
 Installment                             2,873,129                50,369        7.11%            1,872,321         41,925    9.08%
 Leases                                          -                     -           -                     -              -       -
                                 -----------------  --------------------               -------------------   ------------
    Total loans/leases                  56,567,423             1,297,617        9.30%           41,910,733        935,925    9.06%
                                 -----------------  --------------------               -------------------   ------------

Interest-bearing deposits                   20,234                   549       11.00%                    -              -       -
Federal funds sold                       2,478,072                33,403        5.47%            5,421,700         77,069    5.77%
Investment securities                    9,204,181               147,234        6.49%            7,646,398        117,065    6.21%
                                 -----------------  --------------------               -------------------   ------------
   Total earning assets                 68,269,910             1,478,803        8.78%           54,978,831      1,130,059    8.34%
                                                    ====================                                     ============

Noninterest-earning assets
 Cash and due from banks                 2,324,338                                               2,153,733
 Other assets                            3,134,286                                               2,520,642
 Allowance for loan losses/lease          (989,140)                                               (789,915)
                                 -----------------                                     -------------------
     Total assets                      $72,739,394                                             $58,863,291
                                 =================                                     ===================

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
 Savings and NOW accounts                5,414,123                38,383        2.88%            4,999,224         34,804    2.82%
 Money market accounts                  13,643,996               115,280        3.43%           12,229,619         97,428    3.23%
 Time:
  Under $100,000                        15,828,329               228,761        5.86%           15,379,224        198,780    5.24%
  $100,000 and over                     11,261,212               156,416        5.63%            5,341,223         67,598    5.13%
                                 -----------------  --------------------               -------------------   ------------

    Total interest-bearing
      deposits                          46,147,660               538,840        4.74%           37,949,290        398,610    4.26%
Short-term borrowings                    2,640,818                35,296        5.42%                    -              -       -
                                 -----------------  --------------------               -------------------   ------------

   Total interest-bearing
     liabilities                        48,788,478               574,136        4.77%           37,949,290        398,610    4.26%
                                                    ====================                                     ============

Non interest-bearing liabilities:
 Demand deposits                        14,809,943                                              13,152,947
 Other liabilities                         557,724                                                 419,226
 Stockholders' equity                    8,583,249                                               7,341,828
                                 -----------------                                     -------------------

    Total liabilities and
       stockholders' equity            $72,739,394                                             $58,863,291
                                 =================                                     ===================

Net interest income                                           $  904,667                                       $  731,449
                                                    ====================                                     ============

Net interest margin (1)                                                         5.37%                                        5.40%
                                                                        ============                                     ========
Net interest spread (2)                                                         4.01%                                        4.08%
                                                                        ============                                     ========

Fees included in loan income                                  $   42,729                                       $   36,250
                                                    ====================                                     ============
Taxable equivalent adjustment                                 $        -                                       $        -
                                                    ====================                                     ============
</TABLE>

Average balances for the years presented are calculated on a monthly basis.
Nonaccruing loans are included in the average loan balance.

(1) Net interest income divided by total earning assets.
(2) Average rate earned on total earning assets less average rate paid for
    interest-bearing liabilities.

                                       6
<PAGE>

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

Forward looking statements.  This discussion and other sections of this report
contain forward looking statements, including statements of goals, intentions
and expectations as to future trends, plans, or results of Company operations
and policies and assumptions 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 policy,
competitive factors and other conditions which, by their nature, are not
conducive 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
may differ materially from those indicated herein.

A.   Results of Operations for the Three Months Ended March 31, 2001 as Compared
     ---------------------------------------------------------------------------
     to the Three Months Ended March 31, 2000
     ----------------------------------------

General
-------
     The following discussion provides an overview of the financial condition
and results of operations of United Financial Banking Companies, Inc. (UFBC) and
its subsidiaries, The Business Bank and Business Venture Capital, Inc., which is
presented on a consolidated basis.  UFBC reported net income of $275,556 for the
three-month period ended March 31, 2001.  This compares with net income of
$126,228 for the same period of 2000.  Basic earnings per share were $.28 for
the first three months ended March 31, 2001 compared to $.13 for the first three
months of 2000.

     Earnings for the first three months of 2001 are primarily due to an
increased volume of earning assets and a favorable net interest margin.  During
the past year, UFBC's primary subsidiary, The Business Bank (the Bank),
continued to increase the Company's earning asset base.  At March 31, 2001,
average total earning assets increased $13,291,079 or 24.2% when compared to the
first three months of March 31, 2000 (Consolidated Average Balances table).  The
increased volume contributed favorably to the Company's operating earnings.  The
net interest margin of 5.37% at March 31, 2001 was comparable to the net
interest margin of 5.40% at March 31, 2000. The interest margin also contributed
favorably to the Company's net income.

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

     For the three-month period ended March 31, 2001, net interest income
increased $173,218 or 23.7% from $731,449 at March 31, 2000 to $904,667 at March
31, 2001.  The improvement is primarily attributable to interest income from
increased loan volume.  As shown in the Consolidated Average Balances table,
average total loans increased $14,656,690 or 34.9% from $41,910,733 at March 31,
2000 to $56,567,423 at March 31, 2001.  Interest income on loans increased
$361,692 or 38.7% at March 31, 2001 when compared to March 31, 2000
(Consolidated Statements of Income and Comprehensive Income table).

     Interest expense increased $175,526 or 44.0% from $398,610 at March 31,
2000 to $574,136 at March 31, 2001 (Consolidated Statements of Income and
Comprehensive Income table).  The increase was primarily due to an increased
volume of interest-bearing deposits.  The average volume of interest-bearing
deposits increased $8,198,370 or 21.6% during the past year (Consolidated
Average Balances table).  The Bank supplemented loan funding by utilizing short-
term borrowing.  The borrowing expense also contributed to the increased
interest expense in the first quarter of 2001.

     The rate environment significantly impacts the Bank's net interest income.
An increased prime rate notably impacts the Bank's earnings as approximately one
third of the Bank's loan portfolio is tied to prime repricing.  During the first
quarter of 2001, the Bank's loan portfolio continued to benefit from the prime
rate increases which occurred during 2000.  The yield on total loans rose
twenty-four basis points from 9.06% at March 31, 2000 to 9.30% at March 31, 2001
(Consolidated Average Balances table).  The Company anticipates that the recent
200 basis point decline in the prime rate will have a negative impact on
earnings during the second quarter of 2001; however, the Company anticipates
that earnings will stabilize during the second half of 2001 as approximately
$21,000,000 of liabilities will reprice at market.

                                       7
<PAGE>

     The cost of deposits rose forty-eight basis points from 4.26% at March 31,
2000 to 4.74% at March 31, 2001 (Consolidated Average Balances table).  The Bank
used the deposit mix to manage the cost of funds over the past year. The average
volume of money market, savings and NOW and demand deposit accounts, which are
generally less costly deposit accounts,  increased $3,486,272 or 11.5% when
comparing March 31, 2001 and 2000.  The average volume of certificate of deposit
accounts increased $6,369,459 or 30.7% during the past year.  During the fourth
quarter of 2000, the volume of time deposits over $100,000 increased through the
expansion of core deposit relationships (customers with an established banking
relationship).  The management of funds resulted in a net interest margin of
5.37% at March 31, 2001 compared to 5.40% at March 31, 2000.

Provision for Loan Losses
-------------------------

      Provision expense increased $13,274 or 40.2% from $33,000 at March 31,
2000 to $46,274 at March 31, 2001.  The Bank's loan volume is a significant
factor in determining the appropriate amount to fund the allowance for loan
losses.  During the first three months of 2001, the allowance for loan losses
was funded in anticipation of the projected growth of the Bank's loan portfolio
during 2001 through a charge to provision expense.

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

     Total noninterest income increased $14,659 or 25.3% for the three month
period ended March 31, 2001 compared to the same period of 2001.  The increase
was primarily attributable to fees earned on deposit products which were
implemented during the fourth quarter of 2000.

Noninterest Expense
-------------------

     Total noninterest expense increased $21,875 or 3.5% during the three months
ended March 31, 2001 when compared to the same period of 2000.  The increase was
primarily attributable to additional staffing and increased employee benefits.

     Salaries and employee benefits increased $36,071 or 11.1% from $325,983 at
March 31, 2000 to $362,054 at March 31, 2001.  The increase was due to
additional staffing for the Company to expands its banking operations, most
notably the McLean branch.

     Furniture and equipment expense decreased $13,295 or 30.9% over the past
year as several assets became fully depreciated.  It is the Company's policy to
depreciate equipment on a three year straight-line basis. The decreased expense
off-set the increase in salaries and benefits.

Income Taxes
------------

     The Company does not anticipate accruing a substantial tax liability during
2001.  Management expects to utilize UFBC's deferred income tax benefit to off-
set any tax liability that may be incurred during 2001.  The Company will accrue
an alternative minimum tax liability during 2001 equivalent to the alternative
minimum tax of $18,800 incurred during 2000.

B.   Financial Condition as of March 31, 2001
     ----------------------------------------

Assets
------
     Total assets increased $443,107 or .6% during the first three months of
2001.  The increase was primarily attributable to the Bank's increased volume of
short-term borrowings which increased the volume of assets available for
investment.  Short-term borrowings increased $414,000 or 18.9% from $2,186,000
at December 31, 2000 to $2,600,000 at March 31, 2001.  The increased volume of
assets was invested into federal funds sold which increased $4,700,000 during
the first three months of 2001.  In addition to short-term borrowings, proceeds
from the maturity of several called securities and proceeds from the sale of a
portion of the Riverbend loan portfolio contributed to the increase.  Investment
securities decreased $2,714,127 or 26.2% during the first three months of 2001.
Loans, net of unearned income decreased $803,779 or 1.4% for the same period.

Allowance for Loan/Lease Losses
-------------------------------

     The allowance for loan/lease losses (allowance) represents an amount which
management believes will be adequate to absorb potential losses inherent in the
loan portfolio.  The provision for loan losses represents the charge to earnings
during the year to fund the allowance to cover potential future losses.  The
amount charged to expense during the year is dependent upon management's and the
Board of Directors' assessment of the adequacy

                                       8
<PAGE>

of the allowance. Principal factors used in evaluation include prior loss
experience, changes in the composition and volume of the portfolio, overall
portfolio quality, the value of underlying collateral, reviews of portfolio
quality by state and federal supervisory authorities, specific problem loans,
and current and anticipated economic conditions that may affect a borrower's
ability to repay.

     At March 31, 2001 and December 31, 2000, the allowance was $984,351 and
$973,431, respectively, or 1.8% of total loans and leases.  Nonperforming loans
for the three-month period ended March 31, 2001 totaled $12,406, which were held
by BVCI.  This compares to a balance of $12,507 at December 31, 2001, which was
also held by BVCI.  The consolidated allowance for loan losses covered
nonperforming loans 79.3 times at March 31, 2001 compared to coverage of 78.4
times at year end 2000.

Deferred Tax Asset
------------------

     At December 31, 2000, the Company had potential off-balance sheet deferred
income tax credits of $2,135,000. The deferred income tax credits primarily
resulted from net operating loss carryforwards.  The Company used the following
criteria to determine an appropriate and reasonable amount of deferred income
tax credits to recognize as an asset for the year ended December 31, 2000.  The
Company projected income three years forward, 2001, 2002 and 2003.  A discount
was applied to each year's income projection in consideration for unknown
variables.  Other factors such as the Company's historical earnings performance,
growth potential, the local and national economy and market competition were
also used to determine the reasonableness of the Company's income projections.
Once the projected income was ascertained, a 34% tax rate was applied to the
projection to determine the amount of deferred income tax credits to
beneficially recognize.  Until all of the deferred tax credits have either been
utilized to off-set income or beneficially recognized as an asset, the amount of
tax credits appropriately recognized as an asset will be reevaluated annually.

Liabilities and Equity
----------------------

     Total deposits decreased $348,007 or .6% during the first three months of
2001 when compared to the year ended December 31, 2000.  Core deposits, which
consist of demand, savings, NOW, money market and certificate of deposits less
than $100,000, declined $1,717,115 or 3.4%.  Though management continues to
focus on the growth of core deposits, certificate of deposits over $100,000 grew
$1,369,108 during the first three months of 2001 due to the expansion of
existing account relationships.

     Stockholders' equity increased $318,433 or 3.7% during the three months
ended March 31, 2001 when compared to the year ended December 31, 2000.  The
increase was primarily due to earnings.  Unrealized gains on available-for-sale
securities also contributed to the increase.

Liquidity and Investment
------------------------

     UFBC's operational needs have been significantly reduced in recent years as
overhead has been allocated proportionately between the subsidiaries.  For the
near future, management projects that proceeds received from the past two
capital offerings and reimbursements from allocated expenses will provide
sufficient cash flow for UFBC's continuing operational needs.

     Consolidated average liquid assets were 19.3% of average total assets at
March 31, 2001 compared to 25.9% for the same period ended March 31, 2000
(Consolidated Average Balances table).  The Company's liquidity needs exist
primarily in the Bank subsidiary.  To ensure adequate liquidity, the Bank
purchases certain traditional assets such as government and other investment
securities in addition to maintaining several lines of credit. The Bank's
securities portfolio is generally comprised of U.S. Treasury securities, U.S.
Government agency securities, mortgage-backed and equity securities.  The Bank
has strategically grown its securities portfolio to ensure safe levels of
liquidity, to enhance the overall credit quality of its asset base, to generate
increased interest income, to balance assets and liabilities and to hedge
interest rate risk.  The securities portfolio includes both instruments
available-for-sale and held-to-maturity.  Securities classified as available-
for-sale may be sold in response to changes in market interest rates, changes in
prepayment or extension risk, management of the federal tax position, liquidity
needs and other asset/liability management issues.  Securities classified as
held-to-maturity are intended for investment purposes.

                                       9
<PAGE>

     At March 31, 2001, the Bank's investment portfolio consisted of the
following:

<TABLE>
<CAPTION>
                              Available-for-Sale  Held-to-Maturity
                              ------------------  ----------------
<S>                           <C>                 <C>
U.S. Government Agency                 4,645,695         1,468,387
Mortgage-backed Securities             1,071,773           243,240
Equity                                   229,150                --
</TABLE>

Capital Requirements
--------------------

     The Company is subject to various regulatory capital requirements
administered by the Federal banking agencies.  Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements.  Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Company and bank subsidiary must meet specific capital guidelines that involve
quantitative measures of assets, liabilities and certain off-balance sheet items
as calculated under regulatory accounting practices.  The Company and bank
subsidiary are also subject to qualitative judgments by the regulators about
components, risk weightings and other factors.

     Quantitative measures established by regulation to ensure capital adequacy
require the Company and the bank subsidiary to maintain minimum amounts and
ratios of Total and Tier 1 capital to risk-weighted assets, and of Tier 1
capital to average assets.  As of March 31, 2001, the Company and the Bank met
the criteria to be well capitalized under the regulatory framework for prompt
corrective action.  To be categorized as well capitalized, the Company and the
bank subsidiary must maintain Total risk-based, Tier 1 risk-based and Tier 1
average asset ratios as set forth in the table.  There have been no conditions
or events since December 31, 2000 that management believes would result in the
institution not being adequately capitalized.

<TABLE>
<CAPTION>
                                                                            Required for Capital           Required To Be
                                                       Actual                 Adequacy Purposes           Well Capitalized
                                                       ------                 -----------------           ----------------
                                                 Amount      Ratio         Amount         Ratio         Amount         Ratio
                                                 ------      -----         ------         -----         ------         -----
<S>                                             <C>          <C>       <C>                <C>       <C>                <C>
As of March 31, 2001:
Total capital (to risk-weighted assets)
          Company                               9,056,000    16.37%          4,425,437     8.00%          5,531,796    10.00%
          The Business Bank                     8,015,000    14.85%          4,317,840     8.00%          5,397,300    10.00%
 Tier 1 capital (to risk-weighted assets)
          Company                               8,361,000    15.11%          2,212,718     4.00%          3,319,078     6.00%
          The Business Bank                     7,327,000    13.58%          2,158,920     4.00%          3,238,380     6.00%
 Tier 1 capital (to average assets)
          Company                               8,361,000    11.49%          2,909,576     4.00%          3,636,970     5.00%
          The Business Bank                     7,327,000    10.28%          2,850,960     4.00%          3,563,700     5.00%

As of March 31, 2000:
 Total capital (to risk-weighted assets)
          Company                               7,701,514    18.20%          3,385,513     8.00%          4,231,891    10.00%
          The Business Bank                     6,882,132    16.38%          3,362,258     8.00%          4,202,823    10.00%
 Tier 1 capital (to risk-weighted assets)
          Company                               7,168,978    16.94%          1,692,756     4.00%          2,539,135     6.00%
          The Business Bank                     6,353,614    15.12%          1,681,129     4.00%          2,521,694     6.00%
 Tier 1 capital (to average assets)
          Company                               7,168,978    12.18%          2,354,532     4.00%          2,943,165     5.00%
          The Business Bank                     6,353,614    10.92%          2,327,423     4.00%          2,909,279     5.00%

</TABLE>

                                       10
<PAGE>

Earnings Per Share
-------------------

The following table is a reconciliation of earnings per common share as computed
under SFAS 128.

(See note 3).

<TABLE>
<CAPTION>
                                                                              Income       Shares       Per Share
                                                                           (Numerator)  (Denominator)    Amount
                                                                           -----------  -------------    ------
<S>                                                                        <C>           <C>           <C>
Basic Earnings Per Share:

For the three months ended March 31, 2001
         Net Income                                                          $275,556

            Income available to common stockholders                          $275,556      1,001,499    $      .28
                                                                             ========     ==========   ===========

For the three months ended March 31, 2000
         Net Income                                                          $126,228

            Income available to common stockholders                          $126,228        981,315    $      .13
                                                                             ========     ==========   ===========

Diluted Earnings Per Share:

For the three months ended March 31, 2001
         Net Income available to common stockholders                         $275,556      1,001,499

         Add: Contracts to issue common stock
              Warrants - expire                                               9/30/01          4,174
              Warrants - expire                                               1/27/07            261
              Options - expire 12/31/05 - 6/30/08                                              5,932
                                                                                         -----------
              Weighted-average diluted shares outstanding                                     10,367

         Diluted earnings  per common share:                                 $275,556      1,011,866    $      .27
                                                                             ========     ==========   ===========

For the three months ended March 31, 2000
         Net Income available to common stockholders                         $126,228        981,315

         Add: Contracts to issue common stock
              Warrants - expire                                               9/30/01          5,333
              Warrants - expire                                               1/27/07            333
              Options - expire 12/31/05 - 6/30/08                                              7,622
                                                                                         -----------
              Weighted-average diluted shares outstanding                                     13,288

         Diluted earnings  per common share:                                 $126,228        994,603    $      .13
                                                                             ========     ==========   ===========
</TABLE>

Contingencies & Commitments
---------------------------
        In the opinion of management, there were no legal matters pending as of
March 31, 2001 which would have a material adverse effect on the Company's
financial statements.

                                       11
<PAGE>

                          PART II.  OTHER INFORMATION


ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(4)    None


ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K


(6)    None.



                                   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.


                              UNITED FINANCIAL BANKING COMPANIES, INC.


                              By: /s/ HAROLD C. RAUNER
                                  ------------------------------------------
                                  Harold C. Rauner
                                  President and CEO

                                  /s/ LISA M. PORTER
                                  -------------------------------------------
                                  Lisa M. Porter
                                  Chief Financial Officer

Date:    May 10, 2001
      ------------------


                                       12