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                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K

         Annual Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934
                   For the fiscal year ended December 31, 1999
                        Commission File Number 000-22523

                          UNION NATIONAL BANCORP, INC.

         Maryland                                       52-1862338
         (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                 identification number)

         117 East Main Street, Westminster, MD 21157    (410) 848-7200
         (Address of principal executive offices)       (Telephone number)

         Securities Registered Pursuant to Section 12(b) of the Act:

                  None.

         Securities Registered Pursuant to Section 12(g) of the Act:

                  Common Stock.

         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
filing requirements for the past 90 days.

                                            YES [X]  NO [  ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy of information
statement incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K [ X ]

         The aggregate market value of common stock of Union National Bancorp as
February 5, 2000 is $55,601,544.

         As of February 5, 2000, Union National Bancorp had 1,965,349 shares of
common stock outstanding, par value $.01.

Documents Incorporated by Reference

         Portions of the Union National Bancorp Inc. 1999 Annual Stockholders
Report for the year ended December 31, 1999, Parts II and IV

PART I


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ITEM 1. BUSINESS

GENERAL

         Union National Bancorp, Inc. was incorporated under the laws of the
State of Maryland on January 19, 1994, and is a one-bank holding company
headquartered in Westminster, Maryland.

         Union National Bancorp is primarily engaged in commercial and retail
banking services and in business related to banking services through its
subsidiary, The Union National Bank of Westminster. Union National Bank was
founded in Westminster in 1816 under the name of Bank of Westminster, and was
briefly known during the period of 1821 to 1830 as a branch of the Farmers &
Mechanics of Frederick. In 1865, Union National Bank became known as "The Union
National Bank of Westminster". Union National Bank is currently in its 183rd
year of operation.

         Union National Bank has nine full service banking offices in Carroll
County, four of which are located in Westminster, one in Finksburg, one in
Hampstead, one in Eldersburg, one in Sykesville, and one in Mount Airy. Union
National Bank also has one loan production office, which is located in the same
building as Union National Bank's office headquarters in Westminster, Maryland.
Union National Bank through its affiliate Barnes-Bollinger Insurance Services,
Inc., offers a full line of insurance products.

LENDING, DEPOSIT AND INVESTMENT ACTIVITIES

         LENDING ACTIVITIES. Union National Bank provides a full range of
commercial and consumer loan products designed to meet the borrowing needs of
businesses and consumers in our market. The majority of loans are to customers
serviced by our nine branch locations in Carroll County. Union National Bank
conducts lending related activities pursuant to credit policies, lending
guidelines and a structured loan approval process adopted by its Board of
Directors. Union National Bank's credit policies establish broad parameters that
reflect the Board's appetite for risk and how that risk should be managed; its
lending guidelines provide the specific parameters used in the underwriting
process for individual loans. Commercial loans are approved under a system of
dual credit authority up to designated limits with committee approval required
on larger loans. Residential and consumer loans are approved under designated
single authorities with higher authority required on exceptions. Union National
Bank has no foreign loans or highly leveraged transactions as defined by the
Federal Reserve Board. Union National Bank has limited purchases of loans
originated by other banks. Union National Bank has an extensive management
information system and credit review process for monitoring compliance with
credit processes and the quality of the loan portfolio.

         Commercial loans offered by Union National Bank include (i) seasonal
lines of credit, (ii) revolving credit facilities including floor plan
facilities, (iii) real estate construction and mortgage loans, (iv) term loans,
(v) residential builder lines and (vi) SBA-guaranteed loans. Seasonal lines of
credit provide funds for temporary fluctuations in working assets and are
committed for periods of one year while revolving credit facilities provide
permanent working capital for periods up to three years. Real estate
construction and mortgage loans provide funding for the construction and
permanent financing for a variety of investment and owner occupied commercial
properties. These facilities are generally written for a term not to exceed
seven years based on an amortization period of 20 years. Term loans provide
funds for equipment purchases and permanent working capital for a term and
amortization generally not to exceed seven years. Builder lines are tailored
credit facilities for residential builders. Union National Bank's market
consists mostly of owner managed business, and the personal guarantees of the
principals of those businesses are generally required. An experienced credit
analysis and extensive underwriting process coupled with a well defined risk
management program and early recognition of deteriorating credits minimizes any
potential for losses. Union National Bank employs three full-time commercial
relationship managers supported by an experienced credit staff.

         Consumer loans offered by Union National Bank include (i) residential
real estate loans, (ii) personal lines of credit, (iii) installment loans and
(iv) term and revolving home equity loans.


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         Residential mortgage products include adjustable rate, balloon and
fixed rate loans secured by a first lien on residential property. The majority
of loans are underwritten for sale in the secondary market and comply with
investor guidelines published by organizations such as FNMA and FREDDIE MAC. The
largest segment of Union National Bank's consumer installment loan portfolio is
secured by automobiles and includes indirect lending through selected auto
dealers. Credit scores and debt service coverage are the major components
impacting installment loan decisions. Home equity products include both fixed
term loans and revolving lines of credit. A variety of structures are available
based on credit scores, debt service coverage and the loan to value.

         DEPOSIT ACTIVITIES. Union National Bank also offers a full range of
deposit and personal banking services insured by the Federal Deposit Insurance
Corporation ("FDIC"), including (i) commercial checking and small business
checking products, (ii) trust and cash management services, (iii) retirement
accounts such as Individual Retirement Accounts ("IRA") and Simplified Employee
Pension accounts, retail deposit services such as certificates of deposit, money
market, savings accounts, checking account products and Automated Teller
Machines ("ATM"), Point of Sale and other electronic services, and (iv) other
personal miscellaneous services such as safe deposit boxes, foreign draft,
foreign currency exchanges, night depository services, travelers checks,
merchant credit cards, debit card services, direct deposit of payroll, U.S.
savings bonds, official bank checks and money orders. Union National Bank now
provides 24-hour access to customer information through its automated voice
response system. This system provides customers with balances, recent
transactions, pending transactions, the ability to transfer funds between
accounts, and receive facsimile statements. Union National Bank offers credit
cards and a full range of trust services through one of its correspondent
banking relationships.

         The principal sources of funds for Union National Bank are core
deposits (demand deposits, interest-bearing transaction accounts, money market
accounts, savings accounts and certificates of deposits). Union National Bank
solicits these deposits from individuals, businesses, foundations and government
authorities. Substantially all of Union National Bank's deposits are from the
local market areas surrounding each of its offices.

         INVESTMENT PORTFOLIO ACTIVITIES. Union National Bank's investment
portfolio has several objectives. A key objective is to provide a balance in
Union National Bank's asset mix of loans and investments that is consistent with
its liability structure, and to assist in management of interest rate risk. The
investments augment Union National Bank's capital position in the risk based
capital formula, providing the necessary liquidity to meet fluctuations in
credit demands of the community and fluctuations in deposit levels. In view of
the above objectives, the portfolio is treated conservatively by management, and
only securities that pass conservative investment criteria are purchased. Union
National Bank does not engage in any derivatives trading. The portfolio will
commonly fluctuate between 30% and 40% of Union National Bank's assets. In May
of 1998 Union National Bank formed a passive investment company in Wilmington
Delaware, Union National Delaware Holdings, Incorporated. Union National
Delaware Holdings is administered by Delaware Trust Capital Management, a
subsidiary of First Union. As of December 31,1999, 61% of the total security
portfolio was at Union National Delaware Holdings.

         ADDITIONAL ACTIVITIES. Union National Bank provides its customers with
access to investment products through a third party vendor, PrimeVest Financial
Services, Inc., which offers annuities and mutual fund products and is based in
Minnesota. Union National Bank's wholly owned subsidiary, Barnes-Bollinger
Insurance Services, Inc., offers a full range of business, personal, life, group
medical, disability, and long term care insurance products.

COMPETITION

         Union National Bank operates in a highly competitive environment,
competing for deposits and loans with commercial banks, savings banks, thrift
institutions, credit unions, and finance and mortgage companies. Some of these
competitors possess substantially greater financial resources than those
available to Union National Bank. Also, certain of these institutions have
significantly higher lending limits than Union National Bank, and may provide
various services for their customers, such as trust services, which Union
National Bank does offer directly to its customers.


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         Union National Bank does not maintain data concerning its competitive
position within its market area. Occasionally, limited market share data is
produced by third parties. According to a 1999 publication by the FDIC, at June
30, 1999, Union National Bank had 13.62% market share of deposits held by the
Carroll County branches of banks, savings associations, and credit unions. Only
one other institution had larger deposit market share (26.04%) for their Carroll
County branches.

         Financial institutions compete generally on the basis of rate and
service. In its lending business, Union National Bank is subject to increasing
competition from consumer finance companies.

RECENT DEVELOPMENTS

         While Union National Bank will seek to remain competitive with the
interest rate that it charges on loans and offers on deposits, Union National
Bank believes that its success has been and will continue to be due to its
emphasis on its community banking, customer service and relationships. With the
continuing consolidation in the banking industry, particularly in Union National
Bank's markets, Union National Bancorp has entered into a definitive agreement
to the merger of Union National Bancorp with Mercantile Bankshares Corporation,
and, immediately thereafter, be merged with and into Mercantile Bankshares
Corporation (Nasdaq: MRBK). The agreement provides for the merger of Union
National Bank with Westminster Bank and Trust Company, a wholly owned subsidiary
of Mercantile Bankshares Corporation. Management of Union National Bancorp
believes it can utilize this opportunity to establish a greater local presence
in the Carroll County area while still providing community-banking services.

SUPERVISION AND REGULATION

         GENERAL. Union National Bancorp and Union National Bank are extensively
regulated under federal and state law. Generally, these laws and regulations are
intended to protect depositors, not stockholders. The following is a summary
description of certain provisions of certain laws that affect the regulation of
banks and bank holding companies. The discussion is qualified in its entirety by
reference to applicable laws and regulations. Changes in such laws and
regulations may have a material effect on the business and prospects of the
Union National Bancorp and Union National Bank.

         FEDERAL BANK HOLDING COMPANY REGULATION AND STRUCTURE. Union National
Bancorp is a bank holding company within the meaning of the Bank Holding Company
Act of 1956, as amended, and as such, it is subject to regulation, supervision,
and examination by the Federal Reserve Board. Union National is required to file
annual and quarterly reports with Federal Reserve Board and to provide the
Federal Reserve Board with such additional information as the Federal Reserve
Board may require. The Federal Reserve Board may conduct examinations of Union
National Bancorp and its subsidiaries.

         With certain limited exceptions, Union National Bancorp is required to
obtain prior approval from the Federal Reserve Board before acquiring direct or
indirect ownership or control of more than 5% of any voting securities or
substantially all of the assets of a bank or bank holding company, or before
merging or consolidating with another bank holding company. Additionally, with
certain exceptions, any person proposing to acquire control through direct or
indirect ownership of 25% or more of any voting securities of Union National
Bancorp is required to give 60 day written notice of the acquisition to Federal
Reserve Board, which may prohibit the transaction, and to publish notice to the
public.

         Generally, a bank holding company may not engage in any activities
other than banking, managing or controlling its bank and other authorized
subsidiaries, and providing services to these subsidiaries. With prior approval
of the Federal Reserve Board, Union National Bancorp may acquire more than 5% of
the assets or outstanding shares of a company engaging in non-bank activities
determined by the Federal Reserve Board to be closely related to the business of
banking or of managing or controlling banks. The Federal Reserve Board provides
expedited procedures for expansion into approved categories of non-bank
activities.

         Subsidiary banks of a bank holding company are subject to certain
quantitative and qualitative restrictions on extensions of credit to the bank
holding company or its subsidiaries, on investments in their securities and on
the


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use of their securities as collateral for loans to any borrower. These
regulations and restrictions may limit Union National Bancorp's ability to
obtain funds from Union National Bank for its cash needs, including funds for
the payment of dividends, interest and operating expenses. Further, subject to
certain exceptions, a bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale or property of furnishing of services. For example, Union
National Bank may not generally require a customer to obtain other services from
itself or Union National Bancorp, and may not require that a customer promise
not to obtain other services from a competitor as a condition to and extension
of credit to the customer.

         Under Federal Reserve Board policy, a bank holding company is expected
to act as a source of financial strength to its subsidiary banks and to make
capital injections into a troubled subsidiary bank, and Federal Reserve Board
may charge the bank holding company with engaging in unsafe and unsound
practices for failure to commit resources to a subsidiary bank when required. A
required capital injection may be called for at a time when the holding company
does not have the resources to provide it. In addition, depository institutions
insured by the FDIC can be held liable for any losses incurred by, or reasonably
anticipated to be incurred by, the FDIC in connection with the default of, or
assistance provided to, a commonly controlled FDIC-insured depository
institution. Accordingly, in the event that any insured subsidiary of Union
National Bancorp causes a loss to FDIC, other insured subsidiaries of Union
National Bancorp could be required to compensate FDIC by reimbursing it for the
estimated amount of such loss. Such cross guaranty liabilities generally are
superior in priority to the obligations of the depository institution to its
stockholders due solely to their status as stockholders and obligations to other
affiliates.

         STATE BANKING HOLDING COMPANY REGULATIONS. As a Maryland bank holding
company, Union National Bancorp is subject to various restrictions on its
activities as set forth in Maryland law, in addition to those restrictions set
forth in federal law above. Under Maryland law, a bank holding company that
desires to acquire a bank or bank holding company that has its principal place
of business in Maryland must obtain approval from the Maryland Commissioner of
Financial Regulation (the "Commissioner"). Also, a bank holding company and its
Maryland State chartered bank or trust company cannot directly or indirectly
acquire banking or non-banking subsidiaries or affiliates until the bank or
trust company receives the approval of the Commissioner.

         FEDERAL BANK REGULATION. Union National Bancorp's banking subsidiary is
a federally-chartered national bank regulated by the Office of Comptroller of
the Currency ("OCC"). The Office of Comptroller of the Currency may prohibit the
institution over which it has supervisory authority from engaging in activities
or investments that the agency believes constitutes unsafe or unsound banking
practices. Federal banking regulators have extensive enforcement authority over
the institution they regulate to prohibit or correct activities that violate
law, regulation or a regulatory agreement or which are deemed to constitute
unsafe or unsound practices. Enforcement actions may include the appointment of
a conservator or receiver, the issuance of a cease and desist order, the
termination of deposit insurance, the imposition of civil money penalties on the
institution, its directors, officers, employees and institution-affiliated
parties, and the enforcement of any such mechanisms through restraining orders
or other court actions.

         Union National Bank is subject to certain restrictions on extensions of
credit to executive officers, directors, principal stockholders or any related
interest of such persons which generally require that such credit extensions be
made on substantially the same terms as are available to third persons dealing
with Union National Bank and not involve more than the normal risk of repayment.
Other laws tie maximum amount that may be loaned to any one customer and its
related interests to capital levels.

         Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), described in more detail below, each federal banking agency is
required to prescribe, by regulation, non-capital safety and soundness standards
for institutions under its authority. The federal banking agencies, including
the OCC, have adopted standards covering internal controls, information systems
and internal audit systems, loan documentation, credit underwriting, interest
rate exposure, asset growth, compensation, fees and benefits. An institution,
which fails to meet those standards, may be required by the agency to develop a
plan acceptable to the agency, specifying the steps that the institution will
take to meet the standards. Failure to submit or implement such a plan may
subject the institution to regulatory sanctions. Union National Bancorp, on
behalf of Union National Bank, believes that it


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meets substantially all standards that have been adopted. FDICIA also imposed
new capital standards on insured depository institutions.

         Before establishing new branch offices, Union National Bank must meet
certain minimum capital stock and surplus requirements and Union National Bank
must obtain OCC approval.

         DEPOSIT INSURANCE. As a FDIC member institution, Union National Bank's
deposits are insured to a maximum of $100,000 per depositor through the Bank
Insurance Fund ("BIF"), administered by the FDIC, and each institution is
required to pay semi-annual deposit insurance premium assessments to the FDIC.
The BIF assessment rates have a range of 0 to 27 cents for every $100 in
assessable deposits. Banks with no premium are subject to an annual statutory
minimum assessment.

         CAPITAL REQUIREMENTS. The federal banking regulators have adopted
certain risk-based capital guidelines to assist in the assessment of the capital
adequacy of a banking organization's operations for both transactions reported
on the balance sheet as assets and transactions, such as letters of credit, and
recourse agreements, which are recorded as off balance sheet items. Under these
guidelines, nominal dollar amounts of asset and credit equivalent amounts of off
balance sheet items are multiplied by one of several risk adjustment
percentages, which range from 0% for assets with low credit risk, such as
certain U.S. Treasury securities, to 100% for assets with relatively high credit
risk, such as business loans. For bank holding companies with less than
$150,000,000 in consolidated assets, the guidelines are applied on a bank-only
basis.

         A banking organization's risk-based capital ratios are obtained by
dividing its qualifying capital by its total risk adjusted assets. The
regulators measure risk-adjusted assets, which include off balance sheet items,
against both total qualifying capital (the sum to Tier 1 capital and limited
amounts of Tier 2 capital) and Tier 1 capital. "Tier 1", or core capital,
include, common equity, perpetual preferred stock (excluding auction rate
issues) and minority interest in equity accounts of consolidated subsidiaries,
less goodwill and other intangibles, subject to certain exceptions. "Tier 2", or
supplementary capital, includes, among other things, limited-life preferred
stock, hybrid capital instruments, mandatory convertible securities, qualifying
subordinated debt, and the allowance for loan and lease losses, subject to
certain limitations and less required deductions. The inclusion of elements of
Tier 2 capital is subject to certain other requirements and limitations of
federal banking agencies. Banks and bank holding companies subject to the risk
based capital guidelines are required to maintain a ratio of Tier 1 capital to
risk-weighted assets of at least 4% and a ratio of total capital to
risk-weighted assets of at least 8%. The appropriate regulatory authority may
set higher capital requirements when particular circumstances warrant. As of
December 31,1999 Union National Bank's ratio of Tier 1 to risk-weighted assets
stood at 13.0% and its ratio of total capital to risk weighted assets stood at
14.0%. In addition to risk-based capital, banks and bank holding companies are
required to maintain a minimum amount of Tier 1 capital to total assets,
referred to as the leverage capital ratio, of at least 3%. As of December 31,
1999, Union National Bank's leverage capital ratio was 8.6%

         In August, 1995 and May, 1996 the federal banking agencies adopted
final regulations specifying that the agencies will include, in their
evaluations of a bank's capital adequacy, an assessment of each bank's interest
rate risk ("IRR") exposure. The standards for measuring the adequacy and
effectiveness of a banking organization's interest rate risk management included
a measurement of board of director and senior management oversight, and a
determination of whether a banking organization's procedures for comprehensive
risk management are appropriate to the circumstances of the specific banking
organization. Union National Bank has internal interest rate risk models that
are used to measure and monitor interest rate risk. Additionally, the regulatory
agencies have been assessing interest rate risk on an informal basis for several
years. For these reasons, Union National Bancorp does not expect the addition of
interest rate risk evaluation to the agencies' capital guidelines to result in
significant changes in capital requirements for Union National Bank.

         Failure to meet applicable capital guidelines could subject a banking
organization to a variety of enforcement actions, including limitations on its
ability to pay dividends, the issuance by the applicable regulatory authority of
a capital directive to increase capital and, in the case of depository
institutions, the termination of deposit insurance by the FDIC, as well as to
the measures described under "Federal Deposit Insurance Corporation Improvement
Act of 1991" below, as applicable to undercapitalized institutions. In addition,
future changes in regulations or practices could further reduce the amount of
capital recognized for purposes of capital adequacy.


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Such a change could affect the ability of Union National Bank to grow and could
restrict the amount of profits, if any, available for payment of dividends to
Union National Bancorp.

         FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991. In
December, 1991, Congress enacted FDICIA, which substantially revised the bank
regulatory and funding provisions of the Federal Deposit Insurance Act and made
significant revisions to several other federal banking statutes. FDICIA provides
for, among other things, (i) publicly available annual financial condition and
management reports for financial institutions, including audits by independent
accountants, (ii) the establishment of uniform accounting standards by federal
banking agencies, (iii) the establishment of a "prompt corrective action" system
of regulatory supervision intervention, based on capitalization levels, with
more scrutiny and restrictions placed on depository institutions with lower
levels of capital, (iv) additional grounds for the appointment of a conservator
or receiver, and (v) restrictions or prohibitions on accepting brokered
deposits, except for institutions which significantly exceed minimum capital
requirements. FDICIA also provides for increased funding of FDIC insurance funds
and the implementation of risk-based premiums. See "Deposit Insurance."

         A central feature of FDICIA is the requirement that the federal banking
agencies take "prompt corrective action" with respect to depository institutions
that do not meet minimum capital requirements. Pursuant to FDICIA, the federal
bank regulatory authorities have adopted regulations setting forth a six-tiered
system for measuring the capital adequacy of the depository institution that
they supervise. Under these regulations, a depository institution is classified
in one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," " significantly undercapitalized" and "
critically undercapitalized." Union National Bank is currently classified as
"well-capitalized." An institution may be deemed by regulators to be in a
capitalization category that is lower than is indicated by its actual capital
position if, among other things, it receives an unsatisfactory examination
rating with respect to asset quality, management, earnings or liquidity.

         FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of cash dividend) or paying any
management fees to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions are
subjected to growth limitations and are required to submit capital restoration
plans. If a depository institution fails to submit an acceptable plan, it is
treated as if it is significantly undercapitalized. Significantly
undercapitalized depository institutions may be subject to a number of other
requirements and restrictions, including orders to sell sufficient voting stock
to become adequately capitalized, requirements to reduce total assets and stop
accepting deposits from correspondent banks. Critically undercapitalized
institutions are subject to the appointment of a receiver or conservator,
generally within 90 days of the date such institution is determined to be
critically undercapitalized.

         FDICIA provides the federal banking agencies with significantly
expanded powers to take enforcement action against institutions that fail to
comply with capital or other standards. Such action may include the termination
of deposit insurance by the FDIC or the appointment of a receiver or conservator
for the institution. FDICIA also limits the circumstances under which FDIC is
permitted to provide financial assistance to an insured institution before
appointment of a conservator or receiver.

         INTERSTATE BANKING LEGISLATION. The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 was enacted into law on September 29, 1994. The
law provides that, among other things, substantially all state law barriers to
the acquisition of banks by out-of-state bank holding companies were eliminated
effective on September 29, 1995. The law also permits interstate branching by
banks effective as of June 1,1997, subject to the ability of the state to
opt-out completely or to set an earlier effective date. Maryland generally
established an earlier effective date of September 29, 1995.

         FINANCIAL MODERNIZATION. In November, 1999, the Gramm-Leach-Bliley Act
("GLB") was signed into law. Effective in pertinent part on March 11, 2000, GLB
revises the Bank Holding Company Act of 1956 and repeals the affiliation
provisions of the Glass-Steagall Act of 1933, which, taken together, limited the
securities, insurance and other non-banking activities of any company that
controls a FDIC insured financial institution. Under GLB, bank holding
companies, such as Union National Bancorp, can elect, subject to certain
qualifications, to become a "financial holding company." GLB provides that a
financial holding company may engage in a full range of financial activities,
including, insurance and securities sales and underwriting activities, and real
estate development,


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with new expedited notice procedures. GLB also permits certain qualified
national bank subsidiaries to form financial subsidiaries, which have broad
authority to engage in all financial activities except insurance underwriting,
insurance investments, real estate investment or development, or merchant
banking.

         NASDAQ SMALLCAP MARKET REQUIREMENTS. "The Nasdaq Stock Market" or
"Nasdaq" is a highly-regulated electronic securities market comprised of
competing Market Makers whose trading is supported by a communications network
linking them to quotation dissemination, trade reporting, and order execution
systems. The Nasdaq Stock Market consists of two distinct market tiers: the
Nasdaq National Market and The SmallCap Market. The Nasdaq stock market is
operated by The Nasdaq Stock Market, Inc., a wholly-owned subsidiary of the
National Association of Securities Dealers, Inc. Companies who publicly trade
stock on the Nasdaq SmallCap market are required to submit certain financial
documents, in conjunction with forms required by regulatory authorities. All
reports and other documents must be provided to Nasdaq on or before the date
they are required to be filed with the Securities Exchange Commission or another
regulatory authority. Any company listing on Nasdaq SmallCap Market must meet
minimum financial qualification and must continue to meet financial
qualifications to maintain its listing. The Nasdaq Stock Market also requires
listing companies meet certain standards of corporate governance.

         MONETARY POLICY. The earnings of a bank holding company are affected by
the policies of regulatory authorities, including the Federal Reserve Board, in
connection with the Federal Reserve Board's regulation of the money supply.
Various methods employed by the Federal Reserve Board are open market operations
in United States Government securities, changes in the discount rate on member
bank borrowings and changes in reserve requirements against member bank
deposits. These methods are used in varying combinations to influence overall
growth and distribution of bank loans, investments and deposits, and their use
may also affect interest rates charged on loans or paid on deposits. The
monetary policies of the Federal Reserve Board have had a significant effect on
the operating results of commercial banks in the past and are expected to
continue to do so in the future.

EMPLOYEES

         As of December 31,1999, Union National Bank had the equivalent of 118
full-time employees.

ITEM 2. PROPERTIES

         Union National Bank owns the following properties:

         OFFICES                       LOCATION           ADDITIONAL SERVICES
  --------------------        ---------------------       ---------------------

Corporate Headquarters        117 East Main Street
                              Westminster, MD 21157

Loan Operations               118 East Main Street
                              Westminster, MD 21157

East Main Street              111 East Main Street            Drive-Up Window
                              Westminster, MD 21157           Automatic Teller
                                                              Machine

Sykesville                    7564 Main Street                Automatic Teller
                                                              Machine
                              Sykesville, MD 21784

         Union National Bank leases the following properties:

         BRANCH                  LOCATION                  ADDITIONAL SERVICES
-----------------------     --------------------          ---------------------

West Main Street            132 West Main Street              Drive-Up Window
                            Westminster, MD 21157             Automatic Teller
                                                              Machine


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Finksburg                   2926 Baltimore Blvd.             Drive-Up Window
                            Finksburg, MD 21048              Automatic Telle
                                                             Machine

140 Village                 588 Baltimore Blvd.              Drive-Up Window
                            140 Village Shopping Center      Automatic Teller
                            Westminster, MD 21157            Machine

Eldersburg                  5420 Klee Mill Road              Drive-Up Window
                            Eldersburg, MD 21784             Automatic Teller
                                                             Machine

Hampstead                   1631 North Main Street           Drive-Up Window
                            Hampstead, MD 21102              Automatic Teller
                                                             Machine

Cranberry                   400 North Center Street
                            Westminster, MD 21157            Automatic Teller
                            (within shopping mall)           Machine

Mount Airy                  400 E. Ridgeville Blvd.          Drive-Up Window
                            Mt. Airy, MD 21771               Automatic Teller
                                                             Machine

         REMOTE ATM                         LOCATION
 -----------------------------       -----------------------

Eagle Oil                           8 Sullivan Rd.
Westminster Exxon                   Westminster, MD 21157

Eagle Oil                           822 South Main St.
Hampstead Exxon                     Hampstead, MD 21074

Eagle Oil                            251 E. Baltimore Ave.
Taneytown Exxon                     Taneytown, MD 21787

Carroll Community College           1601 Washington Rd.
                                    Westminster, MD 21157

Emmitsburg Exxon                    110 Silo Hill Rd.
                                    Emmitsburg, MD 21727

Cranberry Food Court                400 North Center Street
                                    Westminster, MD 21157
                                    (within shopping mall)

ITEM 3. LEGAL PROCEEDINGS

         Union National Bancorp and Union National Bank are subject to various
legal proceedings which are incidental to their business. In the opinion of
management, the liabilities (if any) resulting from such legal proceedings will
not have a material effect on the consolidated financial statements or
consolidated ratios of Union National Bancorp and Union National Bank.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS


<PAGE>

         There were no matters that were submitted to a vote of the security
holders during the fourth quarter of 1999.

         Due to the proposed merger of Union National Bancorp with Mercantile
Bankshares Corporation, the Annual Meeting of Stockholders, originally scheduled
for April 18, 2000, has been postponed. It is anticipated that the next
stockholders' meeting will be held on a date in late spring or early summer of
2000.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS
  MATTERS

         Union National Bancorp has been traded publicly on the Nasdaq Small Cap
Market as of April, 1998. It is listed under the trading symbol UNNL. The low
and high ranges presented in the table below prior to this date are based on
trades reported through the over the counter bulletin board. Since this date,
price information is reflected of actual sale price quoted on the Nasdaq
SmallCap Market. On January 27, 1998, Union National Bancorp's Board of
Directors authorized a two-for-one stock split, effected in the form of a 100%
stock dividend, thereby increasing the number of shares authorized on that date
to 1,674,870, and in September, 1998 authorized a 10% stock dividend. The
following table reflects stock prices for Union National Bancorp's shares to the
extent such information is available, and dividends declared with respect
thereto during the preceding two years. The number of common shares and per
share amounts have been restated to reflect the stock split and 10% stock
dividend.


<TABLE>
<CAPTION>

                             1999                               1998                           1997
                 --------------------------------  --------------------------------  --------------------------------
                       Price Range     Dividends          Price Range    Dividends          Price Range    Dividends
                 --------------------              ---------------------             ---------------------
                       Low      High    Declared         Low       High   Declared         Low       High   Declared
--------------------------------------------------------------------------------------------------------------------


<S>                 <C>       <C>         <C>         <C>        <C>        <C>         <C>        <C>        <C>
1st Quarter         $29.50    $38.50      $0.110      $16.82     $22.75     $0.091      $14.55     $16.82     $0.068
2nd Quarter          26.25     32.75       0.115       19.09      30.45      0.095       15.00      16.93      0.073
3rd Quarter          26.00     28.50       0.115       25.45      28.18      0.100       15.11      16.82      0.082
4th Quarter          27.00     29.25       0.120       29.00      32.00      0.110       15.11      17.27      0.086


</TABLE>


         As of February 5, 2000, the approximate number of holders of record of
Union National Bancorp's shares was 451. At such date, 1,965,349 shares were
outstanding. Dividends are paid quarterly.

         LIMITS ON DIVIDENDS AND OTHER PAYMENTS. Union National Bancorp's
current ability to pay dividends is largely dependent upon the receipt of
dividends from its banking subsidiary, Union National Bank. Federal laws impose
restrictions on the ability of Union National Bancorp to pay dividends. Federal
Reserve Board has issued a policy statement that provides that, as a general
matter, insured banks and bank holding companies may pay dividends only out of
prior operating earnings. The National Bank Act prohibits a national bank from
paying a dividend greater than the bank's undivided profits. In addition to
these specific restrictions, bank regulatory agencies, in general, also have the
ability to prohibit proposed dividends by a financial institution which would
otherwise be permitted under applicable regulations of the regulatory body
determines that such distribution would constitute an unsafe or unsound
practice.

ITEM 6. SELECTED FINANCIAL DATA.

         Union National Bancorp's 1999 Annual Stockholders Report, attached
hereto as Exhibit 13, is incorporated by reference herein.


<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
        RESULTS OF OPERATIONS.

         Union National Bancorp's 1999 Annual Stockholders Report, attached
hereto as Exhibit 13, is incorporated by reference herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Union National Bancorp's 1999 Annual Stockholders Report, attached
hereto as Exhibit 13, is incorporated by reference herein.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         Union National Bancorp's 1999 Annual Stockholders Report, attached
hereto as Exhibit 13, is incorporated by reference herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

WESLEY D. BLAKESLEE, 52, a director since 1988, is an attorney in private
practice in Westminster, Maryland. He is a member of the Carroll County and
Maryland Bar Associations. He is also President of Will Plan Corporation.

DAVID L. BRAUNING, SR., 62, a director since 1988, is a longtime representative
of Nationwide Insurance located in Finksburg, Maryland. Mr. Brauning is a member
of the Board of the Maryland State Fair. He has been active in local 4H Club
activities, and serves on the Maryland State Appraisers Commission.

ROBERT L. BULLOCK, 63, a director since 1983, is the owner of Bullock's Country
Meats in Smallwood, Maryland. He is a longtime member of Hoffman Home in
Gettysburg, Pennsylvania and serves on the Board of Governors of the Carroll
County Farm Museum.

DONALD C. ESSICH, 67, a director since 1983, is Vice Chairman of the Board of
Union National Bank and Union National Bancorp. He is currently involved in real
estate development. He is retired from actively farming, continuing to be
involved in agriculture related and community organizations. He is a Past
President of the Carroll County Farm Bureau.

DEAN H. GRIFFIN, M.D., 65, a director since 1984, is a family practice medical
doctor in Westminster, Maryland. He serves as a Board of Director of Maryland
Family Health Foundation.

BERNARD L. JONES, SR., 58, a director since 1991, is a senior engineer/systems
technologist for BAE Systems in Rockville, Maryland. Mr. Jones is the President
of HOPE, Inc., a local developer of low cost housing. Mr. Jones is a director
for the Maryland Affordable Housing Trust.


<PAGE>

WILLIAM R. KLINGER, 44, a director since 1988, is the owner and general manager
of Star Vending Service. Prior to starting his own business, Mr. Klinger was a
sales manager for Mid-Atlantic Coca-Cola Company and Vice President of
Westminster Coca-Cola Bottling Company.

K. WAYNE LOCKARD, 66, a director since 1973, is the Chairman of the Board of
Union National Bank and Union National Bancorp. He is a self employed real
estate consultant and partner in "Lockard Properties", developers and investors
of commercial and residential real estate. He actively serves on numerous
Boards, and on committees at Carroll County General Hospital, and he is a member
of the Board of Trustees of Lancaster Theological Seminary.

ELLEN MILLER, 52, a director since 1995, is Assistant Secretary for Employment &
Training for the Maryland Department of Labor, Licensing & Regulation. Prior to
joining the State Department, she was the Director of Business and Industry
Training at Carroll Community College in Westminster, and owned and operated her
own small business. Mrs. Miller is active in numerous non-profit organizations.

ROBERT T. SCOTT D.D.S., 56, a director since 1990, is an orthodontist practicing
as Senior Partner of Scott, Lawyer & Lu Orthodontics, LLC with offices
throughout Carroll County. His family is developing Manchester Manor, an
independent living community. He is also a member of the Carroll County Economic
Development Committee and a member of the Westminster Rotary Club.

ETHAN A. SEIDEL, 57, a director since 1995, is the Vice President of
Administration and Finance at Western Maryland College. Dr. Seidel also teaches
economics at the college. He has received numerous awards for teaching
excellence and has been very instrumental in the success of the Junior
Achievement Economics Program.

VIRGINIA W. SMITH, 50, a director since 1996, was elected President and Chief
Executive Officer of Union National Bancorp and of Union National Bank on
January 12, 1996. She served as Executive Vice President of Union National Bank
from August 1995 to January 1996. Prior to joining Union National Bank she had
12 years experience as a Senior Executive for Bank of Baltimore and Signet. She
is President of the Carroll County General Hospital Foundation Board, Vice
Chairman of Carroll County United Way Partnership and serves on the Board of
Directors of the Baltimore Branch of the Federal Reserve Bank.

LARRY A. VAN SANT, SR., 47, a director since 1998, is President and owner of Van
Sant Plumbing & Heating, Inc. in Mount Airy, Maryland. Mr. Van Sant currently
serves on the Board of Trustees of Frederick Memorial Hospital. He is a member
of the Mt. Airy Rotary Club and various trade associations related to his
business.

KENNETH B. WRIGHT, 57, a director since 1986, is the owner and President of
Towne Pride Interiors in Hampstead, Maryland. Mr. Wright has served on the
Carroll County Chamber of Commerce, has been a board member of the Carroll
County YMCA, Hampstead Business Association and various trade associations
related to his business.

GABRIELLE M. PEREGOY, 42, has been Treasurer of Union National Bancorp since
August 1997 and Vice President of Union National Bank since April 1997. Mrs.
Peregoy oversees all financial aspects of Union National Bancorp: accounting,
tax liabilities and investments. Mrs. Peregoy joined Union National Bank in 1984
as Administrative Assistant, promoted to Investment Manager in 1993 and promoted
to Funds Manager in 1996.

DENISE L. BAKER, 46, has been Secretary to Union National Bancorp since 1994 and
Vice President of Union National Bancorp since April 1997. Cashier and Secretary
to the Board of Directors of Union National Bank since 1989. Mrs. Baker has held
numerous positions with Union National Bank since she joined Union National Bank
in 1972.

STEVEN L WANTZ, 41, has been Senior Vice President and Chief Operating Officer
of Union National Bank since April 1997. Mr. Wantz joined Union National Bank in
1976 and held the position of Auditor from 1978 to 1985 when he was promoted to
Officer in Charge of Operations and currently oversees all aspects of
operations.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


<PAGE>

         Section 16(a) of the Securities Exchange Act of 1934 requires Union
National Bancorp's directors, executive officers and persons who own more than
ten percent of Union National Bancorp's Common Stock to file monthly and annual
reports of ownership and changes in ownership of their shares with the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc with a copy to Union National Bancorp. To Union National Bancorp's
knowledge, based solely on review of the copies of such reports furnished to
Union National Bancorp, all Section 16 filing requirements applicable to Union
National Bancorp's executive officers, directors and greater than ten percent
beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION

         The following table provides certain information concerning
compensation of Union National Bancorp's Chief Executive Officer and other
executive officers who earned more than $100,000 in the fiscal year ended
December 31, 1999.

<TABLE>
<CAPTION>


                           Summary Compensation Table

                             ANNUAL COMPENSATION                       LONG-TERM COMPENSATION AWARDS
                             ------------------                        -----------------------------
<S>                         <C>         <C>          <C>                 <C>
                                                      Other Annual          Securities
NAME & PRINCIPAL POSITION   YEAR        SALARY       COMPENSATION(1)     UNDERLYING OPTIONS
------------------------    ----        ------       --------------      ------------------

Virginia W. Smith           1999      153,587.00       18,677.45                     0
President and Chief
Executive Officer           1998      144,487.00       18,677.51                   825

                            1997      137,100.00       17,255.00                 9,240  (2)

</TABLE>



(1)  For 1999, includes automobile allowance of $7,199.92, deferred director
     fees of $7,200.00 and matching contributions by Union National Bank under
     the Employee Savings & Benefit Plan. For 1998, includes automobile
     allowance of $7,199.92, deferred director fees of $7,200.00 and matching
     contributions by Union National Bank under the Employee Savings & Benefit
     Plan. For 1997, includes automobile allowance of $7,199.92, deferred
     director fees of $6,000 and matching contributions by Union National Bank
     under the Employee Savings & Benefit Plan.

(2)  Share amounts have been adjusted to reflect the 2-for-1 stock split
     effected in the form of a 100% stock dividend declared on January 27, 1998
     and 10% stock dividend declared on September 22, 1998.


<PAGE>

STOCK OPTIONS

         No stock options were granted to the President and Chief Executive
Officer of Union National Bancorp. The following table sets forth information
regarding stock options exercises and values during 1999.

<TABLE>
<CAPTION>


               AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                       OPTION VALUES AT DECEMBER 31, 1999
                       ----------------------------------


                                                                                       VALUE OF UNEXERCISED
                  SHARES ACQUIRED                    NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
NAME              ON EXERCISE       VALUE REALIZED   UNEXERCISED OPTIONS AT 12-31-99 OPTIONS AT 12-31-99
----               ----------       -------------    ---------------------------------------------------
                                                     EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
                                                     -----------   -------------   -----------   ------------
<S>               <C>               <C>              <C>              <C>           <C>          <C>
Virginia W. Smith       -0-           -0-                3861          6204         29,235.36     43,853.04

</TABLE>


PENSION PLAN & THRIFT PLAN

         Employee benefits are administered through plans sponsored by Union
National Bank rather than Union National Bancorp. Union National Bank sponsors a
defined benefit pension plan covering substantially all employees. Benefits are
based on years of service and the employee's compensation. Union National Bank's
funding strategy has been to contribute the maximum amount deductible for income
tax purposes. Contributions provide not only for benefits attributed to service
to date, but also for those expected to be earned in the future. Net pension
cost for 1999, 1998 and 1997 includes the following components:

<TABLE>
<CAPTION>


                                                            1999                1998              1997
                                                            ----                ----              ----

<S>                                                      <C>                  <C>                <C>
Service cost-benefits earned during the year             $105,323             $72,280            $83,251
Interest cost on projected benefit obligation              70,736              60,149             65,815
Less: Actual return on plan assets                       (126,069)            (50,921)           (93,269
Net amortization and deferral                              67,254              10,982             61,321
                                                           ------              ------             ------
                                                         $117,244             $92,490           $117,118
Additional expense related to settlement of
pension obligations                                           ---                 ---             88,718
                                                                              --------          --------
Net pension cost                                         $117,244             $92,490           $205,836

</TABLE>



         During 1997, Union National Bank's defined benefit pension plan made
lump sum payments to plan participants which met the criteria for a settlement
of pension obligations as defined in SFAS No. 88 "Employers' Accounting for
Settlements and Curtailments of Defined Benefit Plans and for Termination
Benefits". This settlement resulted in additional pension expense of $88,718 for
the year ended December 31, 1997.

         The weighted-average discount rate used in determining the actuarial
present value of the projected benefit obligation was 7.25% for 1999, 7.50% for
1998 & 1997. The expected long-term rate of return on assets was 7.50% for 1999,
1998 and 1997.

         Union National Bank has an Employee Savings and Investment Plan,
401(k), in which substantially all employees are eligible to participate. Under
the terms of the Plan, Union National Bank may match employee contributions up
to 6% of compensation. Union National Bank's contributions to the Plan were
$76,457 for 1999, $79,388 for 1998 and $62,564 for 1997.

         Union National Bank had also made agreements with certain officers to
provide additional retirement benefits under a Supplemental Executive Retirement
Plan. This program was designed to, when combined with


<PAGE>

Social Security and Union National Bank's defined benefit plan, give those
officers covered approximately 60% of final salary. The plan is unfunded so that
amounts payable represent unsecured liabilities of Union National Bank, subject
to claims of secured creditors. At this time the plan is no longer actively
offered and the single remaining participant in the plan has retired and begun
receiving benefits. The amount included in operating expenses was $12,187 for
1999, $12,884 for 1998 and ($9,754) for 1997.

COMPENSATION OF DIRECTORS

         Directors of Union National Bancorp do not receive compensation in that
capacity. However, as directors of Union National Bank they receive compensation
for serving on the Board of Directors in the following amounts: $1,000 per month
for the Chairman of the Board, $700 per month for the Vice Chairman of the
Board, and $600 per month for all other directors. In addition, all directors of
Union National Bank receive $100 for each special meeting of the Board of
Directors which they attend. During 1992 Union National Bank entered into an
agreement with members of its Board of Directors to allow director fees to be
deferred until retirement. The director may defer a portion or all of their fee
until retirement. Those fees deferred will be paid either in a lump sum or over
a pre-determined period of up to fifteen years at retirement or separation from
Union National Bancorp.

EMPLOYMENT CONTRACT

         Virginia W. Smith entered into an employment contract with Union
National Bank effective August 9, 1995 ("Employment Contract") by which she was
made Executive Vice President of Union National Bank. Ms. Smith became President
of Union National Bank on January 12, 1996. Under the Employment Contract, her
term as President is for one year, which term and the Employment Contract are
automatically renewed each year unless either party provides 120 days advance
notice to the contrary. The Employment Contract further provides that if Ms.
Smith's employment is terminated for a reason other than for cause, she will be
paid her then-current salary and benefits for 12 months thereafter ("Severance
Pay"). In addition, if following a merger or other corporate reorganization in
which Union National Bank is not the survivor, Ms. Smith's duties and
authorities are diminished or her salary is decreased or she is forced to
relocate, Ms. Smith can make a claim for Severance Pay. If Union National Bank
disagrees that Severance Pay is owing, the dispute is subject to binding
arbitration.

KEY EMPLOYEE RETENTION PLAN

         In December 1997 Union National Bank adopted a Key Employee Retention
Plan to provide incentives to attract and retain key employees. The plan is
administered by the board of directors and is subject to the provisions of the
plan and applicable law. Participation in the plan is restricted to key
employees and approved by the board of directors. The plan provides severance
benefits in the event a participant's employment is terminated as a result of a
change of control of Union National Bancorp. The plan generally defines change
of control as a change of beneficial ownership of 50% or more of Union National
Bancorp's common stock. The plan provides that participants may receive from a
minimum of 3 months base salary to a maximum of 30 months based on level in the
organization and years of service. Severance payments will be reduced by any
amounts granted under any other contract with Union National Bancorp. Severance
will also be adjusted based on any amount received from other employment during
the severance period.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Management Oversight Committee of the Board of Directors serves as
compensation committee of Union National Bancorp and Union National Bank. The
current members of the Management Oversight Committee in 1999 were Virginia W.
Smith, Donald C. Essich, K. Wayne Lockard, Ethan A. Seidel, Kenneth B. Wright,
David L. Brauning and Dean H. Griffin. Ms. Smith is the current CEO and
President of Union National Bancorp and Union National Bank. While Ms. Smith was
specifically excluded from any committee discussion concerning her own
compensation, she did participate in the committee's discussion concerning other
key executive compensation.

CORPORATE COMPENSATION POLICY


<PAGE>

         The Management Oversight Committee of the Board of Directors sets
compensation guidelines for the Chief Executive Officer and other executive
officers of Union National Bancorp and Union National Bank. Such guidelines are
intended to provide suitable rewards for individual performance and to tie such
performance to increased stockholder value. While stock performance may be one
indicator of stockholder value, several factors such as regulatory capital
strength, asset quality, and other factors also represent valid bases on which
to judge management's performance. Total compensation includes base salary,
benefits, short and long term incentives and perquisites.

MANAGEMENT OVERSIGHT COMMITTEE REPORT

         The guidelines used by the Committee involve the following factors:
corporate profitability measured by return on assets (ROA), stock price, asset
quality, loss reserve levels, market-share, regulatory capital strength, cost
control, and regulatory examinations.

         Annually, at year-end, the Committee reviews the base compensation and
benefit levels of the CEO, and other executive officers. Each officer's
compensation is based on their contribution to Union National Bancorp and Union
National Bank, and their meeting of the goals and objectives as set forth in the
Strategic Plan. To verify that the compensation and benefits are reasonable and
competitive, they are compared with those of executive officers of similarly
sized financial services companies in the Mid-Atlantic region. These companies
are other banks and thrift institutions. The objective is to set base pay at a
level comparable to that being paid by other successful community banking
organizations. Such compensation must be maintained at a level sufficient to
attract and retain qualified executives. These surveys are readily available in
the marketplace and are relied upon by the industry.

         The individual components of Union National Bancorp's compensation
program include:

         (a) BASE SALARY. Base salary levels are established for senior officers
primarily based upon the valuation of historical performance, degree of
responsibility and level of expertise. In addition, the Management Oversight
Committee considers compensation data available through various surveys
including the Sheshunoff Bank Executive & Director Compensation Survey, Bank
Administration Institute Key Executive Compensation Surveys and Starkey & Beall
Regional Financial Industry Salary Survey.

         (b) ANNUAL INCENTIVES/BONUSES (SHORT-TERM INCENTIVE). In 1996 Union
National Bank adopted a Management Incentive Compensation Program ("MIP") for
key officers other than the Chief Executive Officer. The MIP was designed to be
similar to existing plans of other banks and financial service companies. The
MIP, like these plans in general, requires a considerable degree of specificity
with regard to the performance measures and evaluations, which are benchmarked
to industry incentive practices. MIP allows the Management Oversight Committee
to establish annual performance measures to be used in conjunction with the
goals in Union National Bancorp's strategic plan. Executives are eligible for
incentive compensation expressed as a percentage of their base salaries for
meeting established performance measures. In addition to the MIP Union National
Bank has an annual Profit Sharing Bonus Program which has a targeted payout of 0
to 5% of profits. The level of payout is determined by the Board of Directors
based on performance versus pre-determined net income targets. All employees
that meet the seniority and performance requirements are eligible to
participate.

         (c) STOCK OPTION AWARD (LONG-TERM INCENTIVE). The Management Oversight
Committee believes that the granting of stock options is the most appropriate
form of long-term compensation for key officers, since awards of equity
encourage ownership in the success of Union National Bancorp. Stock option
grants are discretionary and are limited by the terms and conditions of Union
National Bancorp's 1997 Stock Option Plan, which was approved by the
shareholders at the 1997 annual meeting. In 1997 a total of 21,890 options were
granted as adjusted for stock splits. In 1998 a total of 18,982 options were
granted. In 1999 a total of 21,483 options were granted.

                  Management Oversight Committee

                  By:      Kenneth B. Wright         K. Wayne Lockard
                           David L. Brauning         Ethan A. Seidel


<PAGE>
                           Donald C. Essich          Virginia W. Smith
                           Dean H. Griffin

PERFORMANCE GRAPH

[GRAPH]

<TABLE>
<CAPTION>

                                         1994     1995      1996      1997      1998       1999
                                         ----     ----      ----      ----      ----       ----

<S>                                      <C>     <C>       <C>       <C>       <C>       <C>
       Union National Bancorp, Inc.      $100    $113.04   $126.49   $145.71   $256.52   $238.78
       NASDAQ Composite                  $100    $139.91   $171.68   $208.82   $291.58   $541.13
       NASDAQ Bank Index                 $100    $144.82   $182.70   $298.87   $263.69   $242.64

</TABLE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information regarding the ownership of
Union National Bancorp's common stock by directors, each executive officer of
Union National Bancorp and Union National Bank and each person who was known to
own beneficially, directly or indirectly, more than 5% of Union National
Bancorp's common stock outstanding on February 5, 2000. The term "beneficial
ownership" includes common stock that may be acquired within 60 days upon the
exercise of options, warrants, and other rights. The address of each person
below is the address of Union National Bancorp.


<TABLE>
<CAPTION>


Name of                                Common Stock                Percent of Class
DIRECTOR/EXECUTIVE OFFICER         BENEFICIALLY OWNED (1)          BENEFICIALLY OWNED
-------------------------          ---------------------           ------------------

<S>                                           <C>                                 <C>
Baker, Denise L                               9,598                           *   (2)
Blakeslee, Wesley D                           4,355                           *   (3)
Brauning, David L.                           24,026                          1.2  (4)
Bullock, Robert L.                           17,891                           *   (5)
Essich, Donald C.                             5,921                           *
Griffin, Dean H., M.D.                       13,430                           *   (6)
Jones, Bernard L., Sr.                          660                           *


</TABLE>


<PAGE>

<TABLE>
<CAPTION>


<S>                                             <C>
Klinger, William R.                             862                       *
Lockard, K. Wayne                            11,520                       *   (7)
Miller, Ellen                                   220                       *
Peregoy, Gabrielle M.                         2,643                       *   (8)
Scott, Robert T., D.D.S.                      2,615                       *   (9)
Seidel, Ethan A.                              1,386                       *
Smith, Virginia W.                           64,718                      3.4  (10)
Van Sant, Larry A., Sr.                       1,398                       *   (11)
Wantz, Steven L.                             14,521                       *   (12)
Wright, Kenneth B.                            3,190                       *   (13)
All directors and executive officers
   as a group ( 17 persons)                 178,954                     12.2

NAME OF BENEFICIAL OWNERS
-------------------------
Union National 401(k) plan                  121,280                      6.5  (14)
Virginia C. Wantz                           140,395                      7.6  (15)

</TABLE>


*        Less than 1% of Union National Bancorp's outstanding common stock.

1)   Except as otherwise indicated and except for shares held by members of an
     individual's family or in trust, all shares are held with sole investment
     and voting power. Fractional shares resulting from participation in the
     dividend reinvestment plan have been rounded to the nearest whole share.

2)   Includes 8,482 shares held in the Union National 401(k) Plan and 888 shares
     that may be purchased upon the exercise of stock options.

3)   Includes 3,349 shares held in an IRA.

4)   Includes 5,190 shares held in his spouse's 401(k) Plan.

5)   Includes 1,000 shares in name of a company he controls.

6)   Includes 685 shares owned by John W. Griffin & Dean H. Griffin, Jt. Ten.,
     and 430 shares owned by Mr. Griffin's spouse, as to which Mr. Griffin
     disclaims beneficial ownership.

7)   Includes 2,728 shares owned by Mr. Lockard's spouse, as to which Mr.
     Lockard disclaims beneficial ownership

8)   Includes 2,082 shares held by the reporting person in the Union National
     401(k) Plan and includes 165 shares held jointly by Ms. Peregoy and her
     spouse and 396 shares that may be purchased upon the exercise of stock
     options.

9)   Includes 365 shares held jointly by Mr. Scott and his spouse and 880 shares
     held by Mr. Scott under the Robert T. Scott, DDS PTA Pension Plan.

10)  Includes 670 shares held by the reporting person in the Union National
     401(k) Plan and 3,861 shares that may be purchased upon the exercise of
     stock options.

11)      Includes 786 shares held by Mr. Van Sant and his spouse.

12)  Includes 492 shares held jointly by Mr. Wantz and his spouse and 11,701
     shares held by Mr. Wantz in the Union National 401(k) Plan and 1800 shares
     that may be purchased upon the exercise of stock options.

13)  Includes 793 shares held jointly by Mr. Wright and his spouse.


<PAGE>

14)  The Union National 401(k) plan, while owning 6.5% of the outstanding stock
     of Union National Bancorp, does not control the voting of those shares.
     Participants are forwarded a proxy statement and cast their vote according
     to the same rules as any other stockholder.

15)  Includes 70,699 shares held by trustees for the benefit of Virginia C.
     Wantz.

DEFINITIVE CHANGE IN CONTROL AGREEMENT

         On January 21, 2000, Union National Bancorp and Union National Bank
announced that they had entered into a definitive agreement for the merger of
Union National Bancorp into Mercantile Bankshares Corporation, and the merger of
Union National Bank with Westminster Bank and Trust Company, a subsidiary of
Mercantile Bankshares Corporation. The agreement provides for an exchange of
1.15 shares of Mercantile common stock for each share of common stock of Union
National Bancorp, and is subject to customary closing conditions.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

INDEBTEDNESS OF MANAGEMENT.

         During the past year Union National Bancorp has had, and expects to
have in the future, banking transactions in the ordinary course of its business
through Union National Bank, its wholly owned banking subsidiary, with its
directors and executive officers and with their associates. Such transactions
are on substantially the same terms, including interest rates, collateral, and
repayment terms on loans, as those prevailing at the same time for comparable
transactions with others. The extensions of credit by Union National Bank to
these persons have not, and do not currently, involve more than the normal risk
of collectibility or present other unfavorable features. At December 31, 1999,
the outstanding principal balance of loans as well as credit available, but
unused under line of credit agreements to directors and executive officers and
their associates, including loans guaranteed by any such person, aggregated
$4,534,777 which represented approximately 19% of Union National Bank's equity
capital accounts.

LEASE AGREEMENTS.

         In 1996, Union National Bank entered into a lease involving 2,400
square feet of office space in Hampstead Maryland, at a monthly rental of
$3,150, which Union National Bank uses as its Hampstead branch office. The
lessor of the property is K. Wayne Lockard, Chairman of the Board, and his wife,
Bonnie M. Lockard, both of whom are stockholders of Union National Bank. In
1992, Union National Bank entered into a lease involving 3,076 square feet of
office space in Finksburg Maryland, with a current monthly rental of $1,944.33,
which Union National Bank uses as its Finksburg branch office. The lessor of the
property is Finksburg Shopping Center Partnership of which David L. Brauning,
Director is a 25% partner and stockholder of Union National Bank.

         The leases were negotiated on an arm's-length basis, and are subject to
terms that are generally prevailing in the area for comparable properties. In
the opinion of Union National Bancorp's Board, the terms of the leases are at
least as favorable to Union National Bank as could have been obtained from
unaffiliated third parties and the leases are fair and reasonable to Union
National Bank.

CERTAIN BUSINESS RELATIONSHIPS.

          Union National Bank has retained, among others, Wesley D. Blakeslee,
P.C., the law firm of Director Wesley D. Blakeslee, on an at-will basis to
perform collection work. Fees for collection work are assessed on an hourly
basis for consumer loans and on a percentage of the amount collected for
residential mortgages and commercial loans. Union National Bank paid $5,646.87
in 1999 for these services. The retention of Mr. Blakeslee's firm was negotiated
on an arm's-length basis, and is subject to terms that are within the range
generally prevailing in this area for collection work. In the opinion of Union
National Bancorp's Board of Directors, the terms are at least


<PAGE>

as favorable to Union National Bank as could have been obtained from
unaffiliated third parties and are fair and reasonable to Union National Bank.

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTED OF FORM 8-K

         (a) Documents filed as part of this report:

         (1), (2)The following financial statements are included in Exhibit 13
of the Union National's 1999 Annual report to Stockholders:

INDEPENDENT AUDITOR'S REPORT
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF CHANGES
   IN STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  (3) Exhibits filed herewith or incorporated by reference
herein as set forth in the following table prepared in accordance with Item 601
of Regulation S-K.

                                  EXHIBIT INDEX

         (3) CHARTER AND BYLAWS

                  (3a.) Articles of Incorporation of Union National Bancorp is
incorporated by reference from Union National Bancorp's Form 10, filed with the
Commission of May 5, 1997, and Form 10/A, filed with the Commission on August
21,1997 (Registration No. 0-22523)

                  (3b.) Bylaws of Union National Bancorp, as amended, is filed
herewith

         (10) MATERIAL CONTRACTS

                  (10a.) Employment Agreement between the Union National Bank of
Westminster and Virginia W. Smith, President, is incorporated by reference from
Union National Bancorp's Form 10, filed with the Commission on May 5, 1997, and
Form 10/A, filed with the Commission on August 21,1997 (Registration No.
0-22523)

                  (10b.) 1997 Stock Option Plan is incorporated by reference
from Union National Bancorp's Form 10, filed with the Commission of May 5, 1997,
and Form 10/A, filed with the Commission on August 21,1997 (Registration No.
0-22523)

                  (10c.) Leases between The Union National Bank of Westminster
and K. Wayne Lockard, Director, dated October 1, 1997, is incorporated by
reference from Union National's Form 10, filed with the Commission of May 5,
1997, and Form 10/A, filed with the Commission on August 21,1997 (Registration
No. 0-22523)


<PAGE>

                  (10d.) Amendment to employment agreement between the Union
National Bank of Westminster and Virginia W. Smith, President, is incorporated
by reference from Union National Bancorp's Form 8-K, filed with the Commission
on October 26, 1998

                  (10e.) Key Employee Retention Plan is incorporated by
reference from Union National's Form 10-K, filed with the Commission on March
25, 1999

         (11) STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

                  Union National Bancorp's 1999 Annual Stockholders Report,
Exhibit 13, incorporated herein by reference.

         (12)  STATEMENTS RE COMPUTATION OF RATIOS

                  a. The percentage ratio of net income to average total assets
is calculated by dividing net income for 1999 of $3,203,094 , by the average
total assets for 1999 of 297,245,000. For 1998 by dividing net income of
$2,637,824, by the average totals assets for 1998 of $268,614,000

                  b. The percentage ratio of net income to average shareholders'
equity is calculated by dividing net income for 1999 of $3,203,094, by the
average shareholders' equity for 1999 of $24,085,000. For 1998 by dividing net
income for 1998 of $2,637,824, by the average shareholders' equity for 1998 of
$21,165,000.

                  c. The percentage ratio of shareholders' equity to total
assets is calculated by dividing shareholders' equity for 1999 of $25,582,882,
by the total assets for 1999 of $302,928,108. For 1998 by dividing shareholders'
equity for 1998 of $22,236,679, by the total assets for 1998 of $283,913,435.

                  d. The percentage ratio of cash dividends declared to net
income on a per share basis is calculated by dividing the cash dividend per
share for 1999 of $0.46, by net earnings per share for 1999 of $1.68. For 1998
by dividing the cash dividend per share for 1998 of $0.40, by net earnings per
share for 1998 of $1.43.

         (13) ANNUAL REPORT TO STOCKHOLDERS

                  1999 Annual Stockholders Report is filed herewith.

         (21)  SUBSIDIARIES OF THE REGISTRANT

                  Union National Bancorp wholly owns The Union National Bank of
Westminster, a national banking association. The Union National Bank of
Westminster wholly owns Barnes-Bollinger Insurance Services, Inc., a Maryland
corporation and licensed insurance agency, and Union National Delaware Holdings,
Incorporated, a Delaware corporation.

         (23) CONSENTS OF EXPERTS & COUNSEL

                 (23a.) Consent of Keller Bruner & Co. L.L.P. is filed herewith.

         (27) FINANCIAL DATA SCHEDULE

                  Filed electronically herewith via EDGAR.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

                                    Union National Bancorp, Inc.

Date: March 28, 2000                By: /s/ VIRGINIA W. SMITH
                                        ----------------------------------------
                                         President and Chief Executive Officer

Date:  March 28, 2000               By: /s/ GABRIELLE M. PEREGOY
                                        ----------------------------------------
                                         Vice President & Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

Date: March 28, 2000                by: /s/ K. Wayne Lockard
                                         Director & Chairman of the Board

Date: March 28, 2000                by: /s/ Donald C. Essich
                                         Director & Vice Chairman

Date: March 28, 2000                by: /s/ Kenneth B. Wright
                                         Director

Date: March 28, 2000                by: /s/ Robert T. Scott
                                         Director

Date: March 28, 2000                by: /s/ Larry A. Van Sant, Sr.
                                         Director

Date: March 28, 2000                by: /s/ Virginia W. Smith
                                         Director

Date: March 28, 2000                by: /s/ Wesley D. Blakeslee
                                         Director

Date: March 28, 2000                by: /s/ Dean H. Griffin
                                         Director

Date: March 28, 2000                by: /s/ Ethan A. Seidel
                                         Director

Date: March 28, 2000                by: /s/ Ellen Willis Miller
                                         Director

Date: March 28, 2000                by: /s/ William R. Klinger
                                         Director

Date: March 28, 2000                by: /s/ Bernard L. Jones, Sr.


<PAGE>

                                         Director

Date: March 28, 2000                by: /s/ Robert L. Bullock
                                         Director

Date: March 28, 2000                by: /s/ David L. Brauning
                                         Director