<PAGE>


                                  UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549


                                   FORM 10-Q


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

              For the quarterly period ended November 30, 1997
                                             -----------------
                                     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 Number 0-18107

                                      
                           MARYLAND FEDERAL BANCORP, INC.         
              ------------------------------------------------------
              (Exact name of registrant as specified in its charter) 

                 Maryland                          52-1640579       
      -------------------------------          ----------------------
      (State or other jurisdiction of           (I.R.S. Employer
       incorporation or organization)          Identification Number)


         3505 Hamilton Street, Hyattsville, MD.              20782        
        --------------------------------------            -----------
        (Address of principal executive office)           (Zip Code)

  Registrant's telephone number,
     including area code:             (301) 779-1200
                                     ----------------

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 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_____

           Number of Shares of Common Stock Outstanding as of
                             January 8, 1998


     Title of Class                       Number of Shares Outstanding
   --------------------                   ----------------------------
     Common Stock ($.01                        6,481,262 Shares
     par value per share)


<PAGE>


                                   INDEX



PART I - FINANCIAL INFORMATION:                             PAGE
                                                           ------

     Item 1.   Financial Statements:
                         
               Consolidated Statements of Financial
               Condition as of November 30, 1997 and 
               February 28, 1997                              1

               Consolidated Statements of Income and 
               Retained Earnings for the nine and three
               months ended November 30, 1997 and 1996        2

               Consolidated Statements of Cash Flows for 
               the nine months ended November 30, 1997 and  
               1996                                           3

               Notes to Consolidated Financial Statements    4-6

     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of 
               Operations                                   7-15

     Item 3.   Quantitative and Qualitative Disclosures
               about Market Risk                              15


PART II - OTHER INFORMATION:

     Item 1.   Legal Proceedings                              16

     Item 2.   Changes in Securities                          16

     Item 3.   Defaults upon Senior Securities                16

     Item 4.   Submission of Matters to a Vote of Security 
               Holders                                        16

     Item 5.   Other Information                              16

     Item 6.   Exhibits and Reports on Form 8-K               16


SIGNATURES                                                    17  

<PAGE>

                 MARYLAND FEDERAL BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                       NOVEMBER 30,  FEBRUARY 28,
                                                                                           1997          1997
                                                                                       ------------  ------------
<S>                                                                                    <C>           <C>
                                                                                             (IN THOUSANDS)
ASSETS
Cash and due from banks..............................................................   $    9,136   $      2,558
Interest-bearing deposits with banks.................................................       42,671          8,381
Federal funds sold and securities purchased under agreements to resell...............       17,288         17,665
Securities available for sale........................................................       71,928         69,360
Securities held to maturity (fair value, $23,451,000 and $11,417,000,
  respectively)......................................................................       23,438         11,448
Loans held for sale, at cost.........................................................        6,243          2,679
Loans receivable, net................................................................      984,858        989,273
Accrued interest receivable..........................................................        6,355          6,021
Federal Home Loan Bank stock, at cost................................................       12,547         11,364
Foreclosed real estate, net..........................................................        1,532          1,299
Premises and equipment, net..........................................................        4,870          4,576
Other assets.........................................................................        3,428          3,859
                                                                                       ------------  ------------
        Total assets.................................................................   $1,184,294   $  1,128,483
                                                                                       ------------  ------------
                                                                                       ------------  ------------
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Deposits.............................................................................   $  823,915   $    788,933
Advances from Federal Home Loan Bank of Atlanta......................................      241,930        226,280
Advances from borrowers for taxes and insurance......................................        4,105          9,074
Income taxes.........................................................................        1,511          1,898
Accrued expenses and other liabilities...............................................       10,249          7,037
                                                                                       ------------  ------------
        Total liabilities............................................................    1,081,710      1,033,222
                                                                                       ------------  ------------

STOCKHOLDERS' EQUITY
Preferred stock; 10,000,000 shares authorized; none issued...........................       --            --
Common stock; $.01 par value; 15,000,000 shares authorized; 8,286,714 and 4,093,576
  shares issued, respectively........................................................           83             41
Additional paid-in capital...........................................................       44,083         42,625
Retained earnings, substantially restricted..........................................       72,232         66,976
Unrealized holding gains, net........................................................        4,206          2,835
Treasury stock, at cost; 1,810,852 shares and 883,426 shares, respectively...........      (18,020)       (17,216)
                                                                                       ------------  ------------
      Total stockholders' equity.....................................................      102,584         95,261
                                                                                       ------------  ------------
        Total liabilities and stockholders' equity...................................   $1,184,294   $  1,128,483
                                                                                       ------------  ------------
                                                                                       ------------  ------------
</TABLE>
 
See Notes to Consolidated Financial Statements.

                                      -1-

<PAGE>

                 MARYLAND FEDERAL BANCORP, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                                         NINE MONTHS ENDED     THREE MONTHS ENDED
                                                                            NOVEMBER 30,          NOVEMBER 30,
                                                                        --------------------  --------------------
                                                                          1997       1996       1997       1996
                                                                        ---------  ---------  ---------  ---------
                                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                     <C>        <C>        <C>        <C>
Interest income:
    Loans receivable:
      First mortgage loans............................................  $  50,175  $  50,589  $  16,651  $  16,743
      Consumer and other loans........................................      7,042      5,160      2,507      1,867
    Securities available for sale and held to maturity................      3,869      3,931      1,348      1,222
    Other interest-earning assets.....................................      2,513      1,841        989        587
                                                                        ---------  ---------  ---------  ---------
        Total interest income.........................................     63,599     61,521     21,495     20,419
                                                                        ---------  ---------  ---------  ---------
Interest expense:
    Deposits..........................................................     29,947     29,258     10,087      9,685
    Advances from Federal Home Loan Bank of Atlanta...................     10,303     10,152      3,502      3,282
    Advances from borrowers for taxes and insurance...................         18         23          1          3
                                                                        ---------  ---------  ---------  ---------
        Total interest expense........................................     40,268     39,433     13,590     12,970
                                                                        ---------  ---------  ---------  ---------
Net interest income...................................................     23,331     22,088      7,905      7,449
Provision for loan losses.............................................        160        195         30         50
                                                                        ---------  ---------  ---------  ---------
Net interest income after provision for loan losses...................     23,171     21,893      7,875      7,399
                                                                        ---------  ---------  ---------  ---------
Noninterest income:
    Banking service charges and fees..................................      1,631      1,213        556        461
    Loan fees and service charges.....................................        341        257        152         83
    Gain on sales of first mortgage loans.............................        440        501        271        115
    Gain on sales of securities.......................................        165     --         --         --
    Other.............................................................         94         78         45          5
                                                                        ---------  ---------  ---------  ---------
        Total noninterest income......................................      2,671      2,049      1,024        664
                                                                        ---------  ---------  ---------  ---------
Noninterest expense:
    Compensation and benefits.........................................      7,634      7,474      2,652      2,511
    Occupancy and equipment...........................................      2,323      2,271        805        770
    SAIF recapitalization assessment..................................     --          5,077     --          5,077
    Federal deposit insurance premiums................................        386      1,294        129        389
    Loss on foreclosed real estate, net...............................         83        101         49         60
    Advertising.......................................................        451        434        129        108
    Other.............................................................      3,045      2,835      1,003        971
                                                                        ---------  ---------  ---------  ---------
        Total noninterest expense.....................................     13,922     19,486      4,767      9,886
                                                                        ---------  ---------  ---------  ---------
Income (loss) before income taxes.....................................     11,920      4,456      4,132     (1,823)
Income tax expense (benefit)..........................................      4,617        151      1,606     (2,310)
                                                                        ---------  ---------  ---------  ---------
NET INCOME............................................................      7,303      4,305      2,526        487
Retained earnings, substantially restricted:
    Balance, beginning of period......................................     66,976     67,492     70,435     70,311
    Stock dividends...................................................     --         (4,884)    --         (4,884)
    Cash dividends....................................................     (2,047)    (1,515)      (729)      (516)
                                                                        ---------  ---------  ---------  ---------
    Balance, end of period............................................  $  72,232  $  65,398  $  72,232  $  65,398
                                                                        ---------  ---------  ---------  ---------
                                                                        ---------  ---------  ---------  ---------
Primary earnings per share............................................  $    1.10  $     .65  $     .38  $     .08
                                                                        ---------  ---------  ---------  ---------
                                                                        ---------  ---------  ---------  ---------
</TABLE>
 
See Notes to Consolidated Financial Statements.

                                                             -2-

<PAGE>

                 MARYLAND FEDERAL BANCORP, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Unaudited)
<TABLE>
<CAPTION>
                                                                                              NINE MONTHS ENDED
                                                                                                 NOVEMBER 30,
                                                                                            ----------------------
                                                                                               1997        1996
                                                                                            ----------  ----------
                                                                                                (IN THOUSANDS)
<S>                                                                                         <C>         <C>
OPERATING ACTIVITIES:
  Net income..............................................................................  $    7,303  $    4,305
  Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization:
      Premises and equipment..............................................................         618         660
      Other...............................................................................        (813)       (856)
    Loans originated for sale.............................................................     (59,110)    (54,529)
    Sale of loans originated for sale.....................................................      55,546      67,191
    Provision for losses on loans and foreclosed real estate..............................         300         235
    Gain on sales of securities...........................................................        (165)     --
    Gain on sales of foreclosed real estate...............................................        (127)        (55)
    Deferred income taxes.................................................................        (897)        309
    Tax benefits relating to stock options................................................         305         119
    Decrease (increase) in:
      Accrued interest receivable.........................................................        (334)         15
      Other assets........................................................................         216      (2,002)
    Increase (decrease) in:
      Current income taxes payable........................................................        (315)       (525)
      Accrued expenses and other liabilities..............................................       3,126       1,428
                                                                                            ----------  ----------
          Net cash provided by operating activities.......................................       5,653      16,295
                                                                                            ----------  ----------
INVESTING ACTIVITIES:
  Loans originated........................................................................    (124,890)    (93,847)
  Principal collected on loans............................................................     128,436      83,749
  Purchases of securities:
    Available for sale....................................................................     (15,088)     (3,985)
    Held to maturity......................................................................     (18,965)    (12,870)
  Principal collected on mortgage-backed and related securities...........................       8,438       8,831
  Proceeds from maturities of securities:
    Available for sale....................................................................         620       5,293
    Held to maturity......................................................................       7,000      11,000
  Proceeds from sales of securities.......................................................       5,902      --
  Net decrease in federal funds sold and securities purchased under agreements to
    resell................................................................................         377         762
  Decrease (increase) in Federal Home Loan Bank stock.....................................      (1,183)      1,237
  Proceeds from sales of foreclosed real estate...........................................       1,387       1,162
  Purchases of premises and equipment.....................................................        (912)       (597)
                                                                                            ----------  ----------
          Net cash provided by (used in) investing activities.............................      (8,878)        735
                                                                                            ----------  ----------
FINANCING ACTIVITIES:
  Net increase in deposits................................................................      34,982      13,168
  Proceeds from Federal Home Loan Bank advances...........................................     106,100      92,000
  Principal payments on Federal Home Loan Bank advances...................................     (90,450)   (113,750)
  Net decrease in advances from borrowers for taxes and insurance.........................      (4,969)     (4,993)
  Proceeds from issuance of stock under stock plans.......................................       1,195         650
  Purchase of treasury stock..............................................................        (804)     (5,880)
  Cash dividends paid.....................................................................      (1,961)     (1,502)
                                                                                            ----------  ----------
          Net cash provided by (used in) financing activities.............................      44,093     (20,307)
                                                                                            ----------  ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..........................................      40,868      (3,277)
CASH AND CASH EQUIVALENTS:
  Beginning of period.....................................................................      10,939      22,905
                                                                                            ----------  ----------
  End of period...........................................................................  $   51,807  $   19,628
                                                                                            ----------  ----------
                                                                                            ----------  ----------
</TABLE>
 
See Notes to Consolidated Financial Statements.

                                  -3-

<PAGE>

            MARYLAND FEDERAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


NOTE 1 - BASIS OF PRESENTATION:  

      In the opinion of the management of Maryland Federal Bancorp,  Inc. 
(the "Company"), the accompanying unaudited consolidated financial statements 
reflect all adjustments (consisting only of normal recurring adjustments) 
necessary for a fair presentation of the Company's financial condition as of 
November 30, 1997, and the results of its operations for the nine and three 
months ended November 30, 1997 and 1996, and cash flows for the nine months 
ended November 30, 1997 and 1996.  These financial statements should be read 
in conjunction with the consolidated financial statements and notes included 
in Maryland Federal Bancorp, Inc. and Subsidiary's annual report for the 
fiscal year ended February 28, 1997.  The results of operations for the 
period ended November 30, 1997 are not necessarily indicative of the 
operating results which may be achieved for the full fiscal year.

NOTE 2 - TWO-FOR-ONE STOCK SPLIT:

     On October 17, 1997, the Board of Directors declared a two-for-one split 
of the Company's common stock, effected in the form of a 100 percent stock 
dividend paid on November 21, 1997, to shareholders of record at the close of 
business on November 7, 1997. Par value remains at $.01 per share as a result 
of transferring $41,425 to common stock from additional paid-in capital, 
representing the aggregate par value of the shares issued under the stock 
split. All historical weighted average share and per share amounts have been 
restated to reflect the stock split.  Share amounts presented in the 
Consolidated Statements of Financial Condition reflect the actual share 
amounts outstanding for each period presented.

NOTE 3 - EARNINGS PER SHARE:

     Primary earnings per share for the nine months ended November 30, 1997 
and 1996 are computed based on the weighted-average number of shares actually 
outstanding, as adjusted for applicable stock dividends and stock splits, 
plus the shares that would be outstanding assuming  exercise of dilutive 
stock options, all of which are considered to be common stock equivalents.  
The number of shares that would be issued from the exercise of stock options 
has been reduced by the number of shares that could have been purchased from 
the proceeds at the average market price of the Company's stock during the 
period.  The number of shares used in the computations of primary earnings 
per share was 6,661,333 and 6,644,418 for the nine months ended November 30, 
1997 and 1996, respectively.

                                    -4-
<PAGE>


     The Company has not separately reported fully diluted earnings per share 
since the amounts are not materially different from primary earnings per 
share.

     In February 1997, the Financial Accounting Standards Board (the "FASB") 
issued Statement of Financial Accounting Standards No. 128, "Earnings Per 
Share" ("SFAS 128").  SFAS 128 specifies the computation, presentation, and 
disclosure requirements for earnings per share ("EPS") for entities with 
publicly-held common stock, effective for periods ending after December 15, 
1997.  It replaces Primary EPS and Fully Diluted EPS with Basic EPS and 
Diluted EPS, respectively.  The impact of implementation is not quantified; 
however, the Company expects upon adoption, Basic EPS will be slightly higher 
than Primary EPS and Diluted EPS will be approximately the same as Fully 
Diluted EPS.

NOTE 4 - COMMON STOCK ISSUED:

     During the nine months ended November 30, 1997, 47,209 shares were 
issued at an average of $23.18 per share ($1,094,000) as a result of stock 
options being exercised.  During the nine months ended November 30, 1996, 
28,212 shares were issued at an average of $19.31 per share ($545,000) as a 
result of stock options being exercised.  In addition, 3,422 shares were 
issued at $29.32 per share ($100,000) and 4,310 shares were issued at $24.33 
per share ($105,000) through Maryland Federal Bank's (which changed its name 
from Maryland Federal Savings and Loan Association effective September 21, 
1997) Employee Stock Purchase Plan during the nine months ended November 30, 
1997 and 1996, respectively.

NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS:

     In June 1997, the FASB issued Statement of Financial Accounting 
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130") and 
Statement of Financial Accounting Standards No. 131, "Disclosures about 
Segments of an Enterprise and Related Information" ("SFAS 131"). SFAS 130 
establishes standards for the reporting and display of comprehensive income 
and its components in a full set of general-purpose financial statements.  
SFAS 131 specifies the presentation and disclosure of operating segment 
information reported in the annual report and interim reports issued to 
stockholders.  The provisions of both statements will be effective for fiscal 
years beginning after December 15, 1997.  The management of the Company 
believes that the adoption of these statements will not have a material 
impact on the Company's financial position, results of operations, or 
liquidity.

                                    -5-
<PAGE>


NOTE 6 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 

                                             Nine Months Ended
                                                November 30,
                                            --------------------
                                              1997        1996
                                            --------     -------
                                               (In Thousands)

      Cash paid for:
        Interest....................        $39,609      $38,476
        Income taxes...............           5,173        1,482



NOTE 7 - RECLASSIFICATIONS:

     Certain amounts for the nine and three months ended November 30,
1996 have been reclassified for comparative purposes. 


                                    -6-
<PAGE>


Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL       
              CONDITION AND RESULTS OF OPERATIONS


GENERAL
    
     Maryland Federal Bancorp, Inc. (the "Company") is the unitary savings 
and loan holding company of Maryland Federal Bank (the "Bank", which changed 
its name from Maryland Federal Savings and Loan Association effective 
September 21, 1997) and its subsidiary.  The Company and the Bank are 
sometimes collectively referred to as "Maryland Federal."  The Company 
currently owns 100% of the issued and outstanding common stock of the Bank, 
which is the principal asset of the Company.  The Company does not presently 
own or operate any subsidiaries other than the Bank and its subsidiary.  

     Maryland Federal's earnings are primarily dependent upon its net 
interest income, which is determined by the Bank's interest rate spread 
(i.e., the difference between the yields earned on its interest-earning 
assets and the rates paid on its interest-bearing liabilities) and the 
relative amounts of its interest-earning assets and interest-bearing 
liabilities.  The Bank's net income is also affected by the level of its 
noninterest income, provision for estimated losses on loans and noninterest 
expense.

     Deposit flows and the cost of funds are influenced by interest rates on 
competing investments and general market rates of interest. Lending 
activities are affected by consumer demand, the interest rate environment, 
and the availability of funds.

FINANCIAL CONDITION

     Assets.  Total assets as of November 30, 1997 increased $55.8 million or 
4.9% to $1.18 billion as compared to February 28, 1997. This increase was 
primarily due to increases of $6.6 million or 257.2% in cash and due from 
banks, $34.3 million or 409.1% in interest-bearing deposits with banks, $2.6 
million or 3.7% in securities available for sale, $12.0 million or 104.7% in 
securities held to maturity and $1.2 million or 10.4% in Federal Home Loan 
Bank stock, at cost.  These increases were partially offset by an $851,000 or 
0.1% decrease in loans receivable, net (including loans held for sale).  The 
increases in cash and due from banks and interest-bearing deposits with banks 
were due to management's decision to grow the Bank's short-term liquidity in 
the form of such assets.

     Liabilities.  Total liabilities as of November 30, 1997 increased $48.5 
million or 4.7% to $1.08 billion as compared to February 28, 1997.  This 
increase was primarily due to increases of $35.0 million or 4.4% in deposits, 
$15.7 million or 6.9% in advances from the Federal Home Loan Bank of Atlanta 
("FHLB"), and $3.2 million or 45.6% in accrued expenses and other labilities. 
 These increases were partially offset by a decrease of $5.0 million or 54.8% 
in advances 

                                    -7-
<PAGE>


from borrowers for taxes and insurance.  The increases in deposits and 
advances from the FHLB were necessitated by the continued demand for consumer 
and other loans, including home equity lines of credit, and management's 
intent to grow short-term liquidity.  The decrease in advances from borrowers 
for taxes and insurance was the result of real estate taxes paid, during the 
quarter ended November 30, 1997, on behalf of borrowers for properties 
pledged against mortgage loans.

     Stockholders' Equity.  Stockholders' equity increased $7.3 million or 
7.7% to $102.6 million at November 30, 1997, versus $95.3 million at February 
28, 1997.  During the nine months ended November 30, 1997, such increase 
primarily reflects net income of $7.3 million, a $1.5 million increase 
related to the issuance of shares under Maryland Federal's stock plans, and a 
$1.4 million increase recorded to recognize the net change in unrealized 
holding gains, net, which were offset by dividends to shareholders of $2.0 
million and the repurchase of 44,000 shares of the Company's common stock at 
a cost of $804,000.  As more fully discussed in Note 2 of Notes to 
Consolidated Financial Statements, the Company effected a two-for-one split 
of common stock.  Share amounts presented in the Consolidated Statements of 
Financial Condition reflect the actual share amounts outstanding for each 
period presented.

RESULTS OF OPERATIONS

     Maryland Federal reported net income of $7.3 million and $4.3 million 
during the nine months ended November 30, 1997 and 1996, respectively.  Net 
income increased by $3.0 million or 69.6% during the nine months ended 
November 30, 1997, as compared to the same period in 1996.  The increase in 
net income was the result of a $1.2 million increase in net interest income, 
a $622,000 increase in noninterest income, a $5.6 million decrease in 
noninterest expense, and a $35,000 decrease in provision for loan losses, 
which more than offset a $4.5 million increase in income tax expense, during 
the nine months ended November 30, 1997, as compared to the same period in 
1996.

     Maryland Federal reported net income of $2.5 million and $487,000 during 
the three months ended November 30, 1997 and 1996, respectively.  Net income 
increased by $2.0 million or 418.7% during the three months ended November 
30, 1997, as compared to the same period in 1996.  The increase in net income 
was the result of a $456,000 increase in net interest income, a $360,000 
increase in noninterest income, a $5.1 million decrease in noninterest 
expense, and a $20,000 decrease in provision for loan losses, which more than 
offset a $3.9 million increase in income tax expense, during the three months 
ended November 30, 1997, as compared to the same period in 1996.

                                    -8-
<PAGE>

NET INTEREST INCOME

     Net interest income increased by $1.2 million or 5.6% and $456,000 or 
6.1% for the nine and three months ended November 30, 1997, respectively, as 
compared to the same periods in 1996.  The increase for the nine months ended 
November 30, 1997 was primarily the result of a nine basis point net increase 
in the yield earned on interest-earning assets over the rate paid on 
interest-bearing liabilities ("interest rate spread"), which more than offset 
a $182,000 or 0.2% decrease in the average balance of interest-earning assets 
over interest-bearing liabilities, as compared to the same period in 1996.  
The increase for the three months ended November 30, 1997 was primarily the 
result of a five basis point net increase in the interest rate spread coupled 
with a $4.2 million or 4.5% increase in the average balance of 
interest-earning assets over interest-bearing liabilities, as compared to the 
same period in 1996.

INTEREST INCOME
 
     Loans receivable.  During the nine months ended November 30, 1997, 
interest earned on loans receivable increased by $1.5 million or 2.6%, as 
compared to the same period in 1996.  This increase was primarily the result 
of a $15.7 million or 1.6% increase in the average balance of loans 
receivable coupled with an eight basis point increase in the average yield 
earned thereon to 7.57%.  During the three months ended November 30, 1997, 
interest earned on loans receivable increased by $548,000 or 2.9%, as 
compared to the same period in 1996.  This increase was primarily the result 
of an $11.8 million or 1.2% increase in the average balance of loans 
receivable coupled with a 13 basis point increase in the average yield earned 
thereon to 7.61%.  The increase in the average balance of loans receivable 
during both the nine and three month periods reflects the high demand in loan 
originations for consumer and other loans.

     Mortgage-backed and related securities.  During the nine and three 
months ended November 30, 1997, interest earned on mortgage-backed and 
related securities decreased by $155,000 or 4.8% and $106,000 or 10.3%, 
respectively, as compared to the same periods in 1996.  These decreases 
during the nine and three months ended November 30, 1997, were primarily the 
result of a $2.7 million or 4.3% and a $5.8 million or 9.5% decrease in the 
average balance of mortgage-backed and related securities, respectively, 
coupled with a three and six basis point decrease in the average yield earned 
on such securities to 6.76% and 6.73%, respectively, as compared to the same 
periods in 1996.  The decrease in the average balance of mortgage-backed and 
related securities reflects the sale of a portion of such securities during 
the second quarter of fiscal 1998.

     Investment securities and other interest-earning assets.  During the 
nine and three months ended November 30, 1997, interest earned on investment 
securities and other interest-earning assets increased by $765,000 or 29.7% 
and $634,000 or 81.1%, respectively, as 

                                    -9-
<PAGE>


compared to the same periods in 1996.  These increases during the nine and 
three months ended November 30, 1997, were primarily the result of a $15.4 
million or 25.7% and a $42.5 million or 79.3% increase in the average balance 
of investment securities and other interest-earning assets, respectively, 
coupled with an 18 and six basis point increase in the average yield earned 
on such assets to 5.90% and 5.90%, respectively, as compared to the same 
periods in 1996.

INTEREST EXPENSE

     Deposits.  Interest expense on deposits during the nine and three months 
ended November 30, 1997, increased by $689,000 or 2.4% and $402,000 or 4.2%, 
respectively, as compared to the same periods in the prior fiscal year.  The 
increase during the nine months ended November 30, 1997, was primarily 
attributable to a $27.9 million or 3.6% increase in the average balance of 
deposits, which more than offset a six basis point decrease in the average 
rate paid on such deposits, as compared to the same period in 1996.  The 
increase during the three months ended November 30, 1997, was primarily 
attributable to a $31.2 million or 3.9% increase in the average balance of 
deposits coupled with a one basis point increase in the average rate paid on 
such deposits, as compared to the same period in 1996.  The increase in the 
average balance of deposits during the nine and three months ended November 
30, 1997, as compared to the same periods in 1996, was due primarily to the 
competitive interest rates offered on deposits by the Bank.
      
     Borrowed funds.  Interest expense on borrowed funds (including advances 
from borrowers for taxes and insurance) increased by $146,000 or 1.4% and 
$218,000 or 6.6% during the nine and three months ended November 30, 1997, as 
compared to the same periods in 1996.  These increases were primarily due to 
an increase of $691,000 or 0.3% and $13.3 million or 5.9% in the average 
balance of such funds coupled with a seven and four basis point increase in 
the average rate paid on such funds during the nine and three months ended 
November 30, 1997, as compared to the same periods in 1996.

PROVISION FOR LOAN LOSSES

     Loan review procedures are utilized by the Bank in order to ensure that 
potential problem loans are identified early, thereby lessening any 
potentially negative impact such problem loans may have on the Bank's 
earnings.  During the nine and three months ended November 30, 1997, the 
Bank's provision for loan losses totaled $160,000 and $30,000, respectively, 
as compared to $195,000 and $50,000, respectively, during the same respective 
prior periods in 1996.

                                    -10-
<PAGE>



     The allowance for loan losses is maintained at a level believed adequate 
by management to absorb losses in the loan portfolio. Management's 
determination of the adequacy of the allowance is based on an evaluation of 
the loan portfolio, past loan loss experience, current economic conditions, 
volume, growth and composition of the loan portfolio, and other relevant 
factors.  The allowance is increased by provisions for loan losses which are 
charged against income.  While management uses the best information available 
to make such determinations, no assurance can be given as to whether future 
adjustments may be necessary.  

     As of November 30, 1997, non-performing loans (loans ninety days or more 
delinquent but still accruing interest, and non-accrual loans) totaled $5.6 
million ($5,607,000 of which consist of first mortgage loans, with the 
remaining $25,000 consisting of consumer and other loans) and represented 
0.57% of total loans receivable.  At February 28, 1997, non-performing loans 
totaled $4.6 million ($4,595,000 of which consist of first mortgage loans, 
with the remaining $35,000 consisting of consumer and other loans) and 
represented 0.47% of total loans receivable.  As of November 30, 1997, the 
allowance for loan losses amounted to $4.7 million and represented 83.5% of 
non-performing loans.  At February 28, 1997, the allowance for loan losses 
amounted to $4.6 million and represented 99.3% of non-performing loans.

NONINTEREST INCOME

     Total noninterest income increased by $622,000 or 30.4% and $360,000 or 
54.2% during the nine and three months ended November 30, 1997, respectively, 
as compared to the same periods in 1996.  During the nine months ended 
November 30, 1997, the increase was primarily the result of a $418,000 or 
34.5% increase in banking service charges and fees, an $84,000 or 32.7% 
increase in loan fees and service charges, and a  $165,000 increase in gain 
on sales of securities, which more than offset a decrease of $61,000 or 12.2% 
in gain on sales of first mortgage loans, as compared to the same period in 
1996. During the three months ended November 30, 1997, the increase was 
primarily the result of a $95,000 or 20.6% increase in banking service 
charges and fees, a $69,000 or 83.1% increase in loan fees and service 
charges, a $156,000 or 135.7% increase in gain on sales of first mortgage 
loans, and a $40,000 or 800.0% increase in other noninterest income, as 
compared to the same period in 1996.  There were no sales of securities 
during the nine months ended November 30, 1996.

NONINTEREST EXPENSE

     Total noninterest expense decreased by $5.6 million or 28.6% and $5.1 
million or 51.8% for the nine and three months ended November 30, 1997, 
respectively, as compared to the same periods in 1996.  The components of 
noninterest expense are discussed below.

                                    -11-
<PAGE>


     Compensation and benefits.  During the nine and three months ended 
November 30, 1997, compensation and benefits increased by $160,000 or 2.1% 
and $141,000 or 5.6%, respectively, as compared to the same periods in 1996, 
due primarily to additional staffing necessitated by the expansion of branch 
offices, which more than offset a decrease in retirement benefit expense.

     Occupancy and equipment.  During the nine and three months ended 
November 30, 1997, occupancy and equipment expense increased $52,000 or 2.3% 
and $35,000 or 4.5%, respectively, as compared to the same periods in 1996.  
The Bank relocated two branch offices and opened two new branch offices 
during the first and third quarter of the fiscal year ending February 28, 
1998.

     Savings Association Insurance Fund ("SAIF") recapitalization assessment. 
 Deposits of the Bank are currently insured by the Federal Deposit Insurance 
Corporation ("FDIC") through the SAIF.  On September 30, 1996, legislation 
was enacted to address the undercapitalization of the SAIF.  As a result, the 
FDIC imposed a one-time special assessment of $.657 for every $100 of 
assessable deposits as of March 31, 1995.  Based on the Bank's assessable 
deposits, Maryland Federal's pro rata share of the special recapitalization 
assessment was $5.1 million or approximately $3.1 million, net of applicable 
tax benefits, which was recognized and paid during the quarter ended November 
30, 1996.

     Federal deposit insurance premiums.  During the nine and three months 
ended November 30, 1997, federal deposit insurance premiums to the FDIC 
decreased $908,000 or 70.2% and $260,000 or 66.8%, respectively, as compared 
to the same periods in 1996.  These decreases were primarily the result of 
the legislation discussed above, which also reduced the insurance premium 
rates payable by the Bank from 23 to 6.4 basis points on every $100 of 
assessable deposits effective January 1, 1997.  Federal deposit insurance 
premiums are a function of the size of the Bank's deposit base.

     Loss on foreclosed real estate, net.  During the nine and three months 
ended November 30, 1997, loss on foreclosed real estate, net, decreased by 
$18,000 or 17.8% and $11,000 or 18.3%, respectively, as compared to the same 
periods in 1996.

     Advertising.  During the nine and three months ended November 30, 1997, 
advertising expense increased by $17,000 or 3.9% and $21,000 or 19.4%, 
respectively, as compared to the same periods in 1996.

     Other.  During the nine and three months ended November 30, 1997, other 
noninterest expense increased by $210,000 or 7.4% and $32,000 or 3.3%, 
respectively, as compared to the same periods in 1996.  These increases were 
primarily due to increases in legal fees and special services, and expenses 
such as telephone and postage. 

                                    -12-
<PAGE>


INCOME TAXES

     During the nine months ended November 30, 1997, the Company recognized a 
provision for income taxes of $4.6 million as compared to $151,000 during the 
same period in 1996.  During the three months ended November 30, 1997, the 
Company recognized a provision for income taxes of $1.6 million as compared 
to an income tax benefit of $2.3 million during the same period in 1996.  
During the nine and three months ended November 30, 1997, income tax expense 
increased by $4.5 million and $3.9 million, respectively, as compared to the 
same periods in 1996.  These increases were primarily a result of the 
one-time special assessment to recapitalize the SAIF (which was deductible 
for tax purposes), and a $1.6 million adjustment to revise prior estimates in 
recording the tax provision, both of which occurred during the third quarter 
of the previous fiscal year.

CAPITAL ADEQUACY

    The Bank is required under certain federal regulations to maintain 
minimum tangible capital equal to 1.5% of its adjusted total assets, minimum 
core capital equal to 3.0% of its adjusted total assets and minimum total 
capital (a combination of core and supplementary capital) equal to 8.0% of 
its risk-weighted assets.  At November 30, 1997, the Bank had tangible 
capital equal to 8.08% of adjusted total assets, core capital equal to 8.08% 
of adjusted total assets and total capital equal to 16.13% of risk-weighted 
assets. 

     In August 1993, the OTS issued a final rule which adds an interest rate 
risk component to the existing 8% risk-based capital requirement.  Under the 
rule, a savings institution would be required to hold capital as a safeguard 
against interest rate exposure in an amount equal to 50% of the decline in 
the market value of the institution's portfolio equity (i.e., the net present 
value of the institution's assets, liabilities and certain off-balance-sheet 
items) that would result from a 200 basis point change in market interest 
rates.  The requirement would apply to those institutions considered to be 
carrying "above normal" risk.  "Above normal" risk is defined as occurring 
when the decline in the market value of the portfolio equity, under a 200 
basis point rate change, exceeds 2% of the market value of the institution's 
assets.

     However, in October 1994, the Director of the OTS indicated that it 
would waive the capital deductions for institutions with a greater than 
"normal" risk until the OTS publishes an appeals process.  In August 1995, 
the OTS issued Thrift Bulletin No. 67 which allows eligible institutions to 
request an adjustment to their interest rate risk component as calculated by 
the OTS or to request use of their own models to calculate their interest 
rate component.  The OTS also indicated that it will delay invoking its 
interest rate risk rule requiring institutions with "above normal" interest 
rate risk exposure to adjust their regulatory capital requirement until new 
procedures are implemented and evaluated.  The OTS has not yet established an 

                                    -13-
<PAGE>


effective date for the capital deduction.  Because of the Bank's strong 
capitalization, management does not believe that compliance with the new rule 
would adversely affect its operations.
  
     Pursuant to the Federal Deposit Insurance Corporation Improvement Act of 
1991, each federal banking agency is also required to establish capital 
levels for insured depository institutions including "well capitalized", 
"adequately capitalized", "undercapitalized" and "critically 
undercapitalized".  A depository institution's capital adequacy will be 
measured on the basis of its total risk-based capital ratio, Tier 1 
risk-based capital ratio and leverage ratio.  The degree of regulatory 
intervention is tied to the institution's capital category, with increasing 
scrutiny and more stringent restrictions being imposed as the institution's 
capital declines.

     To be considered "well capitalized," an institution must generally have 
a total risk-based capital ratio of at least 10%, a Tier 1 risk-based capital 
ratio of at least 6% and a leverage capital ratio of at least 5%.  At 
November 30, 1997, the Bank was considered to be "well capitalized."

LIQUIDITY AND CAPITAL RESOURCES

     The Bank is required under certain federal regulations to maintain 
specified levels of "liquid" investments including United States Government 
and federal agency securities and other investments. Regulations currently in 
effect require the Bank to maintain liquid assets of not less than 4% of its 
net withdrawable accounts plus short-term borrowings.  The Bank has 
consistently maintained liquidity at or above the levels required by the 
regulations.

     The Bank's principal sources of funds are deposits, amortization and 
prepayment of outstanding loans, borrowed funds and proceeds from the sale of 
loans.  During the past several years, the Bank has used such funds primarily 
to maintain its required liquidity levels, meet its ongoing commitments to 
fund maturing savings certificates and savings withdrawals, and fund existing 
and continuing loan commitments.

     At November 30, 1997, the Bank had $5.5 million of undisbursed loan 
funds and $52.4 million in approved loan commitments.  These commitments were 
partially offset by $16.3 million in forward commitments to sell.  In 
addition, as of November 30, 1997, the Bank had $144.3 million of approved 
home equity lines of credit, of which $76.2 million had been drawn by 
borrowers.  The Bank anticipates that it will have the funds necessary to 
meet these obligations through the sources of funds mentioned above.  The 
amount of certificate accounts which are scheduled to mature by November 30, 
1998 is $519.4 million. Management believes that, by evaluating competitive 
instruments and pricing in its market area, it can, in most circumstances, 
manage and control maturing deposits so that a substantial amount of such 
deposits are redeposited in the Bank.

                                    -14-
<PAGE>


IMPACT OF INFLATION AND CHANGING PRICES

     The consolidated financial statements and related data presented in this 
report have been prepared in accordance with generally accepted accounting 
principles, which typically require the measurement of financial position and 
operating results in terms of historical dollars without considering changes 
in the relative purchasing power of money over time due to inflation.

     Virtually all of the assets and liabilities of Maryland Federal are 
monetary in nature.  As a result, interest rates have a more significant 
impact on Maryland Federal's performance than the general level of inflation. 
 Interest rates do not necessarily move in the same direction or in the same 
magnitude as the prices of goods and services.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Not Applicable

                                    -15-
<PAGE>


PART II - OTHER INFORMATION:


Item 1 - Legal Proceedings

          The Company is not involved in any pending legal proceedings
          other than routine, nonmaterial legal proceedings occurring
          in the ordinary course of business.

Item 2 - Changes in Securities

          Not Applicable


Item 3 - Defaults upon Senior Securities

          Not Applicable

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

          Not Applicable

Item 5 - Other Information

          Not Applicable

Item 6 - Exhibits and Reports on Form 8-K

          Not Applicable


                                    -16-
<PAGE>


                                 SIGNATURES


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

                          MARYLAND FEDERAL BANCORP, INC.



Date: JANUARY 14, 1998         By:/s/ Robert H. Halleck       
      ----------------            ------------------------------
                               Robert H. Halleck, President
                               and Chief Executive Officer

Date: JANUARY 14, 1998         By:/s/ Lynn B. Hounslow        
      ----------------            ------------------------------
                               Lynn B. Hounslow, Senior
                               Vice President, Treasurer,
                               Chief Financial Officer and
                               Principal Accounting Officer




     
                    
                                    -17-