SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                                   FORM 10-KSB

(Mark One)
 X           ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---          ACT  OF  1934

                  For the fiscal year ended:  December 31, 2001
                                             ------------------

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

               For the transition period from ________ to ________

                         Commission File No.:  33-43317
                                               --------

                              EASTON BANCORP, INC.
           -----------------------------------------------------------
           (Name of small business issuer as specified in its charter)

               Maryland                                 52-1745344
  -------------------------------                   -------------------
  (State or other jurisdiction of                    (I.R.S. Employer
   incorporation or organization)                   Identification No.)

  501 Idlewild Avenue, Easton, Maryland                        21601
----------------------------------------                     ----------
(Address of principal executive offices)                     (Zip Code)

Issuer's telephone number, including area code:   (410) 819-0300
                                                  --------------

         Securities registered under Section 12(b) of the Exchange Act:

                                                       Name of each exchange
     Title of each class                                on which registered
     -------------------                                -------------------
            None                                               None

         Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                ----------------
                                (Title of Class)

Check  whether  the small business issuer: (1) has filed all reports required to
be  filed  by  Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  past  12  months (or for such shorter period that the small business issuer
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.     YES  X    NO
                                                ---      ---

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  the  small  business  issuer's  knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.   [X]

State  the  small  business  issuer's  revenues for its most recent fiscal year:
$6,036,524.

The  aggregate  market  value  of the Common Stock held by non-affiliates of the
small  business  issuer  on March 15, 2002, was $2,903,345.  This calculation is
based  upon  an  estimation  by  the Company's Board of Directors of fair market
value  of  the Common Stock of $10.50 per share.  There is not an active trading
market  for  the  Common  Stock and it is not possible to identify precisely the
market  value  of  the  Common  Stock.

On  March  15,  2002, 560,318 shares of the small business issuer's Common Stock
were  issued  and  outstanding.

Transitional  Small  Business  Disclosure  Format:          YES      NO  X
                                                                ---     ---

     DOCUMENTS  INCORPORATED  BY  REFERENCE

The  Company's  Annual  Report  to  Stockholders for the year ended December 31,
2001,  is  incorporated by reference in this Form 10-KSB in Part II Item 5, Item
6, and Item 7.  The Company's Proxy Statement for Annual Meeting of Stockholders
to  be held on May 15, 2002, is incorporated by reference in this Form 10-KSB in
Part  III  Item  9,  Item  10,  Item  11,  and  Item  12.


<PAGE>
     This Report contains statements which constitute forward-looking statements
within  the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of  the Securities Exchange Act of 1934.  These statements appear in a number of
places in this Report and include all statements regarding the intent, belief or
current  expectations of the Company, its directors or its officers with respect
to, among other things: (i) the Company's financing plans; (ii) trends affecting
the  Company's financial condition or results of operations; (iii) the Company's
growth  strategy and operating strategy; and (iv) the declaration and payment of
dividends.  Investors are cautioned that any such forward-looking statements are
not  guarantees  of  future performance and involve risks and uncertainties, and
that  actual  results  may  differ  materially  from  those  projected  in  the
forward-looking  statements  as a result of various factors discussed herein and
those  factors  discussed in detail in the Company's filings with the Securities
and  Exchange  Commission.

                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS
-----------------------------------

GENERAL

     Easton  Bancorp,  Inc.  (the  "Company")  was  incorporated  as  a Maryland
corporation  on  July  19, 1991, primarily to own and control all of the capital
stock  of  Easton  Bank  &  Trust  Company  (the "Bank") upon its formation.  On
December  31,  1992,  the  Company  completed  the  initial public offering (the
"Offering") of its Common Stock, par value $0.10 per share (the "Common Stock"),
in  which it sold 559,328 shares of Common Stock at a price of $10.00 per share.
Out  of  the proceeds of the Offering, the Company paid $5.0 million to the Bank
in  exchange for all of its outstanding capital stock and retained approximately
$600,000  to  cover expenses of the Company and to provide additional capital to
the Bank if required.  The Bank commenced business on July 1, 1993, and the only
activity  of  the Company since then has been the ownership and operation of the
Bank.

     The  Bank  was  organized  as  a nonmember state bank under the laws of the
State of Maryland.  The Bank is engaged in a general commercial banking business
with  its  main  office  located  in  its  primary  service area, Talbot County,
Maryland.  In February 1999, the Bank opened a loan production office in Denton,
Maryland, which is in Caroline County.  This office became a full service branch
in  October 1999.  In addition, in November 2001, the Bank opened a full service
branch  in  Oxford,  Maryland,  which  is  in  Talbot  County.

     The  Company's holding company structure can assist the Bank in maintaining
its  required capital ratios because the Company may, subject to compliance with
debt  guidelines  implemented  by  the Board of Governors of the Federal Reserve
System  (the  "Board  of  Governors" or the "Federal Reserve"), borrow money and
contribute  the  proceeds  to  the Bank as primary capital.  The holding company
structure  also  permits greater flexibility in issuing stock for cash, property
or  services  and  in reorganization transactions.  Moreover, subject to certain
regulatory  limitations, a holding company can purchase shares of its own stock,
which  the  Bank  may  not  do.  A  holding  company  may also engage in certain
non-banking  activities  which  the  Board of Governors has deemed to be closely
related  to  banking  and  proper  incidents  to  the business of a bank holding
company.  These  activities  include making or servicing loans and certain types
of leases; performing certain data processing services; acting as a fiduciary or
investment  or  financial  advisor;  acting as a management consultant for other
depository  institutions;  providing  courier, appraisal, and consumer financial
counseling  services; providing tax planning and preparation services; providing
check  guaranty  and collection agency services; engaging in limited real estate
investment  activities;  underwriting,  brokering,  and  selling credit life and
disability  insurance;  engaging  in certain other limited insurance activities;
providing  discount  brokerage  services;  underwriting  and  dealing in certain
government  obligations  and  money  market  instruments and providing portfolio
investment  advice;  acting  as  a  futures  commission merchant with respect to
certain  financial  instrument transactions; providing foreign exchange advisory
and  transactional  services;  making  investments  in  certain corporations for
projects  designed  primarily  to  promote  community  welfare;  and  owning and
operating  certain  healthy savings and loan associations.  Although the Company
has  no  present  intention  of  engaging  in  any  of  these  activities,  if
circumstances  should  lead  the Company's management to believe that there is a
need  for  these  services in the Bank's marketing area and that such activities
could  be  profitably  conducted,  the  management of the Company would have the
flexibility  of  commencing these activities upon filing notice thereof with the
Board  of  Governors.


                                        1
<PAGE>
LOCATION  AND  SERVICE  AREA

     The  Bank  conducts  a  general  commercial banking business in its primary
service  area,  emphasizing  the  banking  needs  of  individuals  and  small to
medium-sized  businesses  and  professional  concerns.  The Bank operates from a
main office located at 501 Idlewild Avenue in Easton, Maryland,  a branch office
in  the William Hill Manor located on Dutchman's Lane in Easton, a branch office
located at 104 Factory Street in Oxford, Maryland, and a branch office on Market
Street in Denton, Maryland.  See "Facilities" below.  The Bank draws most of its
customer  deposits and conducts most of its lending transactions from within its
primary  service  area,  which  encompasses  Talbot  County and Caroline County,
Maryland.

     Talbot  County  is centrally located on the eastern shore of the Chesapeake
Bay  in  eastern  Maryland.  Easton,  the county seat, is approximately 59 miles
southeast of Baltimore and 73 miles east of Washington, D.C.  The City of Easton
and  Talbot  County  have experienced growth in population in recent years.  The
population of Easton increased from approximately 7,500 in 1980 to approximately
9,000  in  1990,  while  the  population  of  Talbot  County  increased  from
approximately  25,000  to  30,000  during  this  period.

     The  principal components of the economy of Talbot County are manufacturing
(which  accounts  for  approximately 30% of the economic activity), agriculture,
and  tourism.  Easton  also  has  a  strong  component  of  health-care  related
businesses.  The  largest  employers  in  the  county include Memorial Hospital,
Black & Decker, Allen Family Foods, a poultry producer, Cadmus Journal Services,
a  printing  company, and William Hill Manor, Inc., a continuing care retirement
community.  The  county  has  had  a significant boating industry since colonial
days.  At  present,  this industry is made up of over a dozen builders, numerous
supply  companies,  dealers and charter companies, and approximately 20 marinas.
Talbot  County's  colonial  homes and historical sites and boating, hunting, and
fishing  opportunities  have  resulted  in  tourism  constituting  a significant
segment  of  the  economy.

     Caroline County is centrally located on the eastern shore of the Chesapeake
Bay  in eastern Maryland.  Denton, the county seat, is situated approximately 60
miles  from  Baltimore  and  60 miles from Washington, D.C.  Caroline County has
experienced  growth  in  its  population  in  recent  years.  The  population of
Caroline  County  increased from approximately 24,000 in 1990 to 27,000 in 1998,
while  the  population  of  Denton  remained  steady  with  a  population  of
approximately  3,000  during  this  period.

     The  principal  components  of  the  economy  of  Caroline  County  are
manufacturing and agriculture.  The largest employers in the county include Solo
Cup  and  Choptank  Electric  Company.

BANKING  SERVICES

     The  Bank  offers  a  full  range  of  deposit  services that are typically
available  in  most  banks and savings and loan associations, including checking
accounts,  NOW  accounts,  savings  accounts  and other time deposits of various
types,  ranging  from daily money market accounts to longer-term certificates of
deposit.  The  transaction  accounts  and  time certificates are tailored to the
Bank's  principal market area at rates competitive to those offered in the area.
In  addition,  the  Bank  offers  certain  retirement  account services, such as
Individual  Retirement  Accounts  ("IRAs").  All deposit accounts are insured by
the  Federal Deposit Insurance Corporation (the "FDIC") up to the maximum amount
allowed by law (generally, $100,000 per depositor subject to aggregation rules).
The  Bank solicits these accounts from individuals, businesses, associations and
organizations,  and  governmental  authorities.

     The  Bank  also offers a full range of short- to medium-term commercial and
personal  loans.  Commercial  loans include both secured and unsecured loans for
working  capital  (including  inventory  and  receivables),  business  expansion
(including  acquisition  of  real  estate  and  improvements),  and  purchase of
equipment and machinery.  Consumer loans include secured and unsecured loans for
financing  automobiles,  home improvements, education, and personal investments.
The  Bank also originates and holds or sells into the secondary market fixed and
variable rate mortgage loans and real estate construction and acquisition loans.
The Bank's lending activities are subject to a variety of lending limits imposed
by  state  and  federal  law.  The  Bank may not make any loans to any director,
officer,  or  employee of the Bank (except for commercial loans to directors who
are  not  officers  or  employees)  unless  the loan is approved by the Board of
Directors  of  the Bank.  Any such loan must be reviewed every six months by the
Board  of  Directors.


                                        2
<PAGE>
     Other  bank  services include cash management services, safe deposit boxes,
travelers  checks,  direct  deposit  of  payroll and social security checks, and
automatic drafts for various accounts.  The Bank is associated with the STAR and
PLUS  networks  of  automated teller machines that may be used by Bank customers
throughout  Maryland  and other regions.  The Bank also offers a VISA debit card
and  it  offers MasterCard and VISA credit card services through a correspondent
bank  as  an  agent  for  the  Bank.

     The  Bank  does  not  presently exercise trust powers.  The Bank may in the
future offer a full-service trust department, but cannot do so without the prior
approval  of  the  Maryland  State  Bank  Commissioner  (the  "Commissioner").

COMPETITION

     The  banking  business  is  highly  competitive.  The  Bank  competes  as a
financial  intermediary  with  other  commercial  banks,  savings  and  loan
associations,  credit  unions, and money market mutual funds operating in Talbot
County, Caroline County and elsewhere.  As of December 31, 2001, there were nine
commercial  banks  operating  a  total  of  twenty-one offices in Talbot County,
Maryland.  Of  these  institutions,  only  The  Talbot Bank of Easton is locally
owned  and  operated.  The  Talbot  Bank  has  a main office in Easton and three
branches:  two  located  in  Easton and one in St. Michaels.  St. Michaels Bank,
while  locally  chartered,  is controlled by a holding company in Baltimore.  It
operates  a  main office and three branches in Talbot County.  Allfirst Bank and
First  Mariner  Bank,  both  with one branch in Talbot County, are both based in
Baltimore.  Queenstown  Bank,  with  one  branch  in Talbot County, has its main
office  in  Queenstown,  Maryland.  Bank  of  America, based in Charlotte, North
Carolina,  operates  four  branches  in  Talbot County.  SunTrust Bank, based in
Atlanta,  Georgia, operates one branch in Talbot County and First Virginia Bank,
based  in  Richmond, Virginia, operates one branch in Talbot County.  One credit
union  operates in the county; however, it has only nominal deposits.  Financial
service  companies,  such  as  Legg Mason Wood Walker, Inc., Ferris Baker Watts,
Inc.,  Merrill  Lynch,  A.G. Edwards & Sons, Inc. and H.C. Wainwright, Inc. also
operate  offices  in  Talbot  County.

     As  of  December  31,  2001,  there were seven commercial banks operating a
total  of  fifteen offices in Caroline County, Maryland.  Of these institutions,
only  Provident  State Bank of Preston, Maryland, is locally owned and operated.
Provident  State Bank has a main office in Preston and three branches located in
Caroline  County.  Centreville  National Bank based in Centreville, Maryland has
one branch in Caroline County.  Peoples Bank of Denton, while locally chartered,
is  controlled by a holding company in Baltimore.  It operates a main office and
four  branches  in Caroline County.  Allfirst Bank, based in Baltimore, and Bank
of  America,  based  in  Charlotte,  North  Carolina, each operate one branch in
Caroline  County.  First  Virginia  Bank  of  Richmond,  Virginia,  operates two
branches  in  Caroline  County.

FACILITIES

     The Bank's main office is located at 501 Idlewild Avenue, Easton, Maryland,
on approximately 53,000 square feet of land at the corner of Idlewild Avenue and
Caulk  Lane.  The  Bank  also  operates  a branch facility at William Hill Manor
located on Dutchman's Lane in Easton with approximately 72 square feet of leased
space.  This  branch  is limited to accepting deposits and cashing checks and is
open  only  for  limited  hours  each  business  day.  See  Item  12.  "Certain
Relationships and Related Transactions."  The Bank operates an office in Denton,
Maryland  from  leased  facilities  with  approximately  1,733  square feet.  In
addition, the Bank operates an office in Oxford, Maryland from leased facilities
with  approximately  900  square feet.  The Company will continue to investigate
other  branching  possibilities  during  2002.

     The  main  office  building,  which was constructed in 1993, is a two story
building  consisting  of  approximately  14,000 square feet.  The Bank presently
occupies  approximately  11,600  square  feet for housing the main branch of the
Bank,  the  operations  center  of  the  Bank,  and the executive offices of the
Company  and  the Bank.  The remaining additional space in the building has been
leased  to  third  parties.

     Approximately  1,800 square feet of the main office building is leased to a
third  party  with an initial lease term of eight years.  The lease commenced on
August  1,  1997 and the annual rent for this lease is $20,020.  The annual rent
is  subject  to  adjustment  each  year  during  the initial term and during the
renewal  term,  if  any;  provided,  however,  the  annual  rent  shall  only be
increased.  In  addition,  approximately  600  square  feet  of  the main office


                                        3
<PAGE>
building  is  leased  to William Hill Manor, Inc. at a rate of $14.00 per square
foot.  The lease commenced on July 1, 1998 and has a five year term.  The annual
rent  for  this lease is $7,938.  Dr. W. David Hill, the Chief Executive Officer
of  the  Company,  is  the  Chief  Executive  Officer,  founder  and  principal
stockholder  of  William  Hill  Manor,  Inc.

     The  William  Hill  Manor  branch office space is leased pursuant to a five
year  lease  that  was  renewed effective July 1, 2000.  Rent is fixed at $3,600
annually.  At  the  end  of  the  current  term, the lease provides an option to
extend  with  rent increases contingent on the performance of the Bank and based
on  the  consumer  price  index.

     The  Denton  branch  office  space  is leased pursuant to a five year lease
dated  June  4, 1999, with three five year renewal options.  During the original
five  year  term,  monthly  rent  is  fixed  at  $2,166.

     The  Oxford  branch  office  space  is leased pursuant to a five year lease
dated  September 1, 1997, between the Town of Oxford and NationsBank, N.A.   The
lease was assigned to the Bank as of November 9, 2001.  Monthly rent is fixed at
$1,400.  This lease expires on August 31, 2002.  However, the Town of Oxford and
the Bank have verbally agreed to renew the lease for an additional five years on
the  same  terms  as  the  existing  lease.

EMPLOYEES

     As  of  March 15, 2002, the Bank had 31 full-time employees and 4 part-time
employees.  The  Company's  operations  are  conducted  through  the  Bank.
Consequently,  the  Company  does  not have any separate employees.  None of the
employees  of  the  Bank are represented by any collective bargaining unit.  The
Bank  considers  its  relations  with  its  employees  to  be  good.

                           SUPERVISION AND REGULATION

     The  Company and the Bank are subject to state and federal banking laws and
regulations  which  impose specific requirements or restrictions on, and provide
for  general  regulatory  oversight  with  respect  to, virtually all aspects of
operations.  These  laws  and  regulations  are  generally  intended  to protect
depositors,  not  stockholders.  The  following  is  a  brief summary of certain
statutes,  rules  and  regulations  affecting  the Company and the Bank.  To the
extent  that the following summary describes statutory or regulatory provisions,
it  is  qualified  in  its entirety by reference to the particular statutory and
regulatory  provisions.  Any change in applicable laws or regulations may have a
material adverse effect on the business and prospects of the Company.  Beginning
with  the  enactment  of  the  Financial  Institutions  Reform,  Recovery  and
Enforcement  Act  of  1989  ("FIRREA")  and  following  with the Federal Deposit
Insurance  Corporation  Improvement  Act of 1991 ("FDICIA"), numerous additional
regulatory  requirements  have  been  placed on the banking industry in the past
several years, and additional changes have been proposed.  The operations of the
Company  and the Bank may be affected by legislative changes and the policies of
various  regulatory authorities.  The Company is unable to predict the nature or
the  extent  of  the effect on its business and earnings that fiscal or monetary
policies,  economic control, or new federal or state legislation may have in the
future.

GRAMM-LEACH-BLILEY  ACT

     On  November  4,  1999,  the  U.S. Senate and House of Representatives each
passed  the  Gramm-Leach-Bliley  Act, previously known as the Financial Services
Modernization Act of 1999.  The Act was  signed into law by President Clinton on
November  12,  1999.  Among  other  things,  the Act repeals the restrictions on
banks  affiliating  with securities firms contained in sections 20 and 32 of the
Glass-Steagall  Act.  The Act also permits bank holding companies to engage in a
statutorily  provided  list  of  financial  activities,  including insurance and
securities  underwriting  and agency activities, merchant banking, and insurance
company portfolio investment activities. The Act also authorizes activities that
are  "complementary"  to  financial  activities.

     The  Act is intended to grant to community banks certain powers as a matter
of  right  that  larger  institutions  have  accumulated  on  an  ad  hoc basis.
Nevertheless,  the  Act  may  have  the  result  of  increasing  the  amount  of
competition  that  the  Company  and  the Bank face from larger institutions and
other  types  of  companies.  In  fact,  it  is not possible to predict the full
effect  that  the Act will have on the Company and the Bank.  From time to time,
other  changes  are  proposed  to laws affecting the banking industry, and these
changes  could  have  a  material  effect  on  the business and prospects of the


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<PAGE>
Company  and  the  Bank.  The Company cannot predict the nature or the extent of
the effect on its business and earnings of fiscal or monetary policies, economic
controls,  or  new  federal  or  state  legislation.

THE  COMPANY

     Because  it owns the outstanding common stock of the Bank, the Company is a
bank  holding company within the meaning of the federal Bank Holding Company Act
of  1956  (the  "BHCA").  Under  the  BHCA,  the  Company is subject to periodic
examination  by  the Federal Reserve and is required to file periodic reports of
its  operations  and  such  additional  information  as  the Federal Reserve may
require.  The  Company's  and  the  Bank's  activities  are  limited to banking,
managing or controlling banks, furnishing services to or performing services for
its  subsidiaries,  or  engaging  in any other activity that the Federal Reserve
determines  to be so closely related to banking or managing or controlling banks
as  to  be  a  proper  incident  thereto.

     Investments, Control, and Activities.  With certain limited exceptions, the
BHCA  requires  every  bank  holding company to obtain the prior approval of the
Federal  Reserve  before (i) acquiring substantially all the assets of any bank,
(ii)  acquiring  direct or indirect ownership or control of any voting shares of
any  bank  if after such acquisition it would own or control more than 5% of the
voting  shares  of such bank (unless it already owns or controls the majority of
such  shares),  or  (iii)  merging  or  consolidating  with another bank holding
company.

     In  addition, and subject to certain exceptions, the BHCA and the Change in
Bank  Control Act, together with regulations thereunder, require Federal Reserve
approval (or, depending on the circumstances, no notice of disapproval) prior to
any person or company acquiring "control" of a bank holding company, such as the
Company.  Control  is conclusively presumed to exist if an individual or company
acquires  25%  or  more  of  any  class of voting securities of the bank holding
company.  Because  the Company's Common Stock is registered under the Securities
Exchange  Act  of  1934,  under  Federal  Reserve  regulations  control  will be
rebuttably  presumed  to  exist if a person acquires at least 10%, but less than
25%, of the outstanding shares of any class of voting securities of the Company.
The  regulations  provide  a  procedure  for challenge of the rebuttable control
presumption.

     Under  the  BHCA,  the Company is generally prohibited from engaging in, or
acquiring direct or indirect control of more than 5% of the voting shares of any
company  engaged in, nonbanking activities, unless the Federal Reserve, by order
or regulation, has found those activities to be so closely related to banking or
managing  or  controlling banks as to be a proper incident thereto.  Some of the
activities  that  the  Federal Reserve has determined by regulation to be proper
incidents  to  the  business  of  banking  include making or servicing loans and
certain  types  of  leases, engaging in certain insurance and discount brokerage
activities,  performing  certain  data  processing  services,  acting in certain
circumstances  as a fiduciary or investment or financial advisor, owning savings
associations,  and  making  investments  in  certain  corporations  or  projects
designed  primarily  to  promote  community  welfare.

     The  Federal  Reserve  imposes  certain capital requirements on the Company
under  the  BHCA,  including  a  minimum  leverage  ratio and a minimum ratio of
"qualifying"  capital to risk-weighted assets.  These requirements are described
below  under  "Capital  Regulations."  Subject  to  its capital requirements and
certain  other  restrictions,  the  Company  is  able  to borrow money to make a
capital  contribution  to the Bank, and these loans may be repaid from dividends
paid  from  the  Bank  to  the  Company.  The Bank's ability to pay dividends is
subject  to  regulatory  restrictions  as  described  below in "Dividends."  The
Company  is  also  able to raise capital for contribution to the Bank by issuing
securities  without having to receive regulatory approval, subject to compliance
with  federal  and  state  securities  laws.

     Source  of  Strength;  Cross-Guarantee.  In accordance with Federal Reserve
policy,  the Company is expected to act as a source of financial strength to the
Bank  and  to commit resources to support the Bank in circumstances in which the
Company  might  not  otherwise  do  so.  Under the BHCA, the Federal Reserve may
require  a  bank holding company to terminate any activity or relinquish control
of  a  nonbank  subsidiary  (other than a nonbank subsidiary of a bank) upon the
Federal  Reserve's  determination  that  such  activity or control constitutes a
serious  risk  to  the  financial  soundness  or  stability  of  any  subsidiary
depository  institution  of  the  bank  holding  company.  Further, federal bank
regulatory  authorities  have  additional  discretion  to require a bank holding
company  to  divest  itself  of  any  bank  or  nonbank subsidiary if the agency


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<PAGE>
determines  that  divestiture  may  aid  the  depository institution's financial
condition.  The  Bank may be required to indemnify, or cross-guarantee, the FDIC
against  losses  it  incurs  with  respect  to  any other bank controlled by the
Company,  which in effect makes the Company's equity investments in healthy bank
subsidiaries  available  to  the  FDIC  to  assist  any  failing  or failed bank
subsidiary  of  the  Company.

THE  BANK

     General.  The  Bank  operates  as  a  state  nonmember  banking association
incorporated  under  the  laws  of  the  State  of  Maryland  and  is subject to
examination  by the FDIC and the Commissioner.  Deposits in the Bank are insured
by the FDIC up to a maximum amount (generally $100,000 per depositor, subject to
aggregation rules).  The Commissioner and the FDIC regulate or monitor all areas
of the Bank's operations, including security devices and procedures, adequacy of
capitalization  and  loss  reserves,  loans,  investments, borrowings, deposits,
mergers,  issuances  of securities, payment of dividends, interest rates payable
on  deposits,  interest  rates  or  fees  chargeable  on loans, establishment of
branches,  corporate  reorganizations,  maintenance  of  books  and records, and
adequacy  of  staff  training  to  carry  on  safe lending and deposit gathering
practices.  The  FDIC  requires  the Bank to maintain certain capital ratios and
imposes  limitations  on  the  Bank's  aggregate investment in real estate, bank
premises,  and furniture and fixtures.  The Bank is required by the FDIC and the
Commissioner  to prepare quarterly reports on the Bank's financial condition and
to  conduct  an annual audit of its financial affairs in compliance with minimum
standards  and  procedures  prescribed  by  the  Commissioner.

     Under  FDICIA,  all  insured  institutions  must  undergo  periodic on-site
examination  by  their  appropriate banking agency.  The cost of examinations of
insured  depository  institutions  and  any  affiliates  may  be assessed by the
appropriate  agency  against each institution or affiliate as it deems necessary
or  appropriate.  Insured  institutions are required to submit annual reports to
the  FDIC  and  the  appropriate  agency (and state supervisor when applicable).
FDICIA also directs the FDIC to develop with other appropriate agencies a method
for  insured  depository  institutions to provide supplemental disclosure of the
estimated  fair  market  value of assets and liabilities, to the extent feasible
and practicable, in any balance sheet, financial statement, report of condition,
or other report of any insured depository institution.  FDICIA also requires the
federal  banking  regulatory agencies to prescribe, by regulation, standards for
all insured depository institutions and depository institution holding companies
relating,  among  other things, to:  (i) internal controls, information systems,
and  audit  systems;  (ii)  loan  documentation; (iii) credit underwriting; (iv)
interest  rate  risk  exposure;  and  (v)  asset  quality.

     State  nonmember  banks which have been newly chartered within the past two
years,  and  state  nonmember  banks  and  their  holding  companies  which have
undergone  a  change  in  control  within  the past two years or which have been
deemed  by the FDIC to be troubled institutions, must give the FDIC or the Board
of  Governors,  respectively,  30  days  prior  notice of the appointment of any
senior executive officer or director.  Within the 30 day period, the FDIC or the
Board  of  Governors,  as  the case may be, may disapprove any such appointment.

     Transactions  with Affiliates and Insiders.  The Bank is subject to Section
23A  of  the  Federal Reserve Act, which places limits on the amount of loans or
extensions  of credit to, or investments in, or certain other transactions with,
affiliates  and on the amount of advances to third parties collateralized by the
securities  or  obligations  of  affiliates.  The  aggregate  of  all  covered
transactions is limited in amount, as to any one affiliate, to 10% of the Bank's
capital  and  surplus  and,  as to all affiliates combined, to 20% of the Bank's
capital  and  surplus.  Furthermore,  within  the  foregoing  limitations  as to
amount,  each  covered  transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of  low  quality assets.  The Bank is also subject to Section 23B of the Federal
Reserve Act which, among other things, prohibits an institution from engaging in
certain  transactions  with  certain  affiliates  unless the transactions are on
terms  substantially  the  same, or at least as favorable to such institution or
its  subsidiaries,  as  those prevailing at the time for comparable transactions
with  non-affiliated  companies.  The Bank is subject to certain restrictions on
extensions  of  credit  to  executive  officers,  directors,  certain  principal
stockholders,  and  their related interests.  Such extensions of credit (i) must
be  made  on  substantially  the  same  terms,  including  interest  rates  and
collateral,  as  those  prevailing  at the time for comparable transactions with
third  parties  and (ii) must not involve more than the normal risk of repayment
or  present  other  unfavorable  features.

     Community  Reinvestment  Act.  The Community Reinvestment Act requires that
each  insured  depository  institution shall be evaluated by its primary federal
regulator  with  respect  to its record in meeting the credit needs of its local


                                        6
<PAGE>
community,  including low and moderate income neighborhoods, consistent with the
safe  and  sound  operation  of  those  institutions.  These  factors  are  also
considered  in  evaluating  mergers,  acquisitions,  and  applications to open a
branch  or  facility.  Failure  to  adequately  meet these criteria would impose
additional  requirements  and  limitations  on  the  Bank.  The  Bank received a
satisfactory  rating  in  its  most  recent  evaluation.

     Other  Regulations.  Interest  and  certain  other  charges  collected  or
contracted  for  by the Bank are subject to state usury laws and certain federal
laws  concerning interest rates.  The Bank's loan operations are also subject to
certain  federal  laws  applicable  to  credit transactions, such as the federal
Truth-In-Lending  Act  governing  disclosures  of  credit  terms  to  consumer
borrowers,  the  Home  Mortgage  Disclosure  Act  of  1975  requiring  financial
institutions to provide information to enable the public and public officials to
determine  whether  a financial institution is fulfilling its obligation to help
meet  the housing needs of the community it serves, the Equal Credit Opportunity
Act  prohibiting  discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act of 1978 governing the
use  and  provision  of  information to credit reporting agencies, the Fair Debt
Collection  Act governing the manner in which consumer debts may be collected by
collection  agencies,  and  the  rules  and  regulations  of the various federal
agencies charged with the responsibility of implementing such federal laws.  The
deposit  operations  of  the  Bank  also  are  subject to the Right to Financial
Privacy  Act,  which  imposes  a  duty  to  maintain confidentiality of consumer
financial  records  and  prescribes procedures for complying with administrative
subpoenas  of  financial  records,  and  the  Electronic  Funds Transfer Act and
Regulation  E  issued  by the Federal Reserve Board to implement that act, which
governs  automatic  deposits  to  and  withdrawals  from  deposit  accounts  and
customers'  rights  and  liabilities  arising  from  the use of automated teller
machines  and  other  electronic  banking  services.

DEPOSIT  INSURANCE

     The FDIC establishes rates for the payment of premiums by federally insured
banks and thrifts for deposit insurance.  A separate Bank Insurance Fund ("BIF")
and  Savings  Association  Insurance Fund ("SAIF") are maintained for commercial
banks  and thrifts, respectively, with insurance premiums from the industry used
to  offset  losses  from  insurance  payouts when banks and thrifts fail.  Since
1993,  insured  depository  institutions  like  the  Bank  have paid for deposit
insurance  under a risk-based premium system.  Under this system, until mid-1995
depository  institutions  paid  to  BIF  or SAIF from $0.23 to $0.31 per $100 of
insured deposits depending on its capital levels and risk profile, as determined
by  its  primary federal regulator on a semi-annual basis.  Once the BIF reached
its  legally  mandated  reserve ratio in mid-1995, the FDIC lowered premiums for
well-capitalized  banks,  eventually to $.00 per $100, with a minimum semiannual
assessment  of  $1,000.  However, in 1996 Congress enacted the Deposit Insurance
Funds  Act of 1996, which eliminated this minimum assessment.  It also separated
the  Financial Corporation (FICO) assessment to service the interest on its bond
obligations.  The  amount  assessed  on  individual  institutions, including the
Bank,  by FICO is in addition to the amount paid for deposit insurance according
to  the  risk-related  assessment rate schedule.  Increases in deposit insurance
premiums  or  changes  in  risk  classification will increase the Bank's cost of
funds,  and  there  can  be  no assurance that such cost can be passed on to the
Bank's  customers.

DIVIDENDS

     The  principal  source  of the Company's cash revenues comes from dividends
received from the Bank.  The amount of dividends that may be paid by the Bank to
the  Company  depends on the Bank's earnings and capital position and is limited
by  federal  and  state law, regulations, and policies.  The Federal Reserve has
stated  that  bank  holding  companies  should  refrain  from  or limit dividend
increases or reduce or eliminate dividends under circumstances in which the bank
holding  company fails to meet minimum capital requirements or in which earnings
are  impaired.

     For  each of the four quarters in 2001, the Company paid a cash dividend of
$0.05  per  share  to  stockholders  of record as of January 29, 2001, April 30,
2001, July 30, 2001, and October 30, 2001.  The total dividend paid each quarter
was  $28,015.90,  totaling  $112,063.60 for 2001.  In the first quarter of 2002,
the  Company  paid  a  cash dividend to stockholders of record as of January 31,
2002 of $0.05 per share plus an additional $0.20 per share as a special one time
only  dividend.  The  total  dividend  paid  was  $140,079.50.


                                        7
<PAGE>
     The  Company's ability to pay any cash dividends to its stockholders in the
future  will  depend  primarily  on  the  Bank's ability to pay dividends to the
Company.  In  order  to  pay dividends to the Company, the Bank must comply with
the  requirements  of  all applicable laws and regulations.  Under Maryland law,
the  Bank  may  pay a cash dividend only from the following, after providing for
due or accrued expenses, losses, interest, and taxes: (i) its undivided profits,
or  (ii)  with  the prior approval of the Commissioner, its surplus in excess of
100%  of  its  required  capital  stock.  Under  FDICIA,  the Bank may not pay a
dividend if, after paying the dividend, the Bank would be undercapitalized.  See
"Capital  Regulations"  below.

     In addition to the availability of funds from the Bank, the future dividend
policy of the Company is subject to the discretion of the Board of Directors and
will  depend  upon  a  number  of  factors, including future earnings, financial
condition,  cash needs, and general business conditions.  If dividends should be
declared  in  the  future,  the  amount  of  such  dividends presently cannot be
estimated  and  it  cannot  be  known  whether such dividends would continue for
future  periods.

CAPITAL  REGULATIONS

     The  federal  bank  regulatory  authorities have adopted risk-based capital
guidelines  for  banks  and  bank  holding  companies  that are designed to make
regulatory  capital  requirements  more sensitive to differences in risk profile
among  banks and bank holding companies, account for off-balance sheet exposure,
and  minimize  disincentives  for  holding liquid assets.  The resulting capital
ratios  represent  qualifying  capital  as  a  percentage of total risk-weighted
assets  and  off-balance  sheet  items.  The  guidelines  are  minimums, and the
regulators  have  noted  that  banks  and  bank  holding companies contemplating
significant  expansion  programs  should  not  allow expansion to diminish their
capital  ratios  and should maintain ratios well in excess of the minimums.  The
current  guidelines  require  all bank holding companies and federally regulated
banks to maintain a minimum risk-based total capital ratio equal to 8%, of which
at  least  4%  must  be  Tier  1  capital.  Tier  1  capital  includes  common
stockholders'  equity  before  the  unrealized  gains  and  losses on securities
available for sale, qualifying perpetual preferred stock, and minority interests
in  equity accounts of consolidated subsidiaries, but excludes goodwill and most
other  intangibles and excludes the allowance for loan and lease losses.  Tier 2
capital  includes  the  excess  of  any  preferred  stock not included in Tier 1
capital,  mandatory  convertible  securities,  hybrid  capital  instruments,
subordinated  debt  and  intermediate term-preferred stock, and general reserves
for  loan  and  lease  losses  up  to  1.25%  of  risk-weighted  assets.

     Under  the  guidelines, banks' and bank holding companies' assets are given
risk-weights  of 0%, 20%, 50%, and 100%.  In addition, certain off-balance sheet
items  are  given  credit conversion factors to convert them to asset equivalent
amounts  to  which  an  appropriate  risk-weight will apply.  These computations
result  in  the total risk-weighted assets.  Most loans are assigned to the 100%
risk  category,  except  for  first  mortgage loans fully secured by residential
property  and, under certain circumstances, residential construction loans, both
of which carry a 50% rating.  Most investment securities are assigned to the 20%
category,  except for municipal or state revenue bonds, which have a 50% rating,
and  direct  obligations  of  or  obligations  guaranteed  by  the United States
Treasury  or  United  States  Government  agencies,  which  have  a  0%  rating.

     The  federal  bank  regulatory authorities have also implemented a leverage
ratio,  which  is  Tier  1  capital as a percentage of average total assets less
intangibles,  to  be  used  as  a  supplement to the risk-based guidelines.  The
principal  objective  of  the  leverage  ratio  is  to place a constraint on the
maximum  degree  to which a bank holding company may leverage its equity capital
base.  The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to  200  basis  points.

     FDICIA  established  a  new  capital-based  regulatory  scheme  designed to
promote  early  intervention  for troubled banks and requires the FDIC to choose
the  least  expensive  resolution  of  bank  failures.  The  new  capital-based
regulatory  framework  contains  five  categories  of compliance with regulatory
capital  requirements,  including  "well capitalized," "adequately capitalized,"
"undercapitalized,"  "significantly  undercapitalized,"  and  "critically
undercapitalized."  To  qualify as a "well capitalized" institution, a bank must
have  a  leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than  6%, and a total risk-based capital ratio of no less than 10%, and the bank
must  not be under any order or directive from the appropriate regulatory agency
to  meet  and  maintain  a specific capital level.  As of December 31, 2001, the
Company  and  the  Bank  were  qualified  as  "well  capitalized."  See "Item 6.
Management's  Discussion  and  Analysis  or  Plan  of  Operation  --  Capital."


                                        8
<PAGE>
     Under  the  FDICIA  regulations,  the  applicable  agency  can  treat  an
institution  as  if  it were in the next lower category if the agency determines
(after  notice  and  an  opportunity  for hearing) that the institution is in an
unsafe  or  unsound  condition  or is engaging in an unsafe or unsound practice.
The  degree of regulatory scrutiny of a financial institution will increase, and
the  permissible  activities  of  the  institution  will  decrease,  as it moves
downward through the capital categories.  Institutions that fall into one of the
three  undercapitalized  categories  may  be  required  to  (i) submit a capital
restoration  plan;  (ii)  raise additional capital; (iii) restrict their growth,
deposit interest rates, and other activities; (iv) improve their management; (v)
eliminate  management  fees;  or  (vi) divest themselves of all or part of their
operations.  Bank  holding  companies  controlling financial institutions can be
called  upon  to  boost the institutions' capital and to partially guarantee the
institutions'  performance  under  their  capital  restoration  plans.

     These  capital  guidelines  can affect the Company in several ways.  If the
Bank  begins  to  grow  at  a rapid pace, a premature "squeeze" on capital could
occur  making  a  capital infusion necessary.  The requirements could impact the
Company's  ability  to  pay dividends.  The Company's present capital levels are
more  than  adequate; however, rapid growth, poor loan portfolio performance, or
poor  earnings  performance  or  a combination of these factors could change the
Bank's  capital  position  in  a  relatively  short  period  of  time.

     Failure  to  meet these capital requirements would mean that the Bank would
be  required  to  develop  and  file  a  plan  with  its primary federal banking
regulator  describing the means and a schedule for achieving the minimum capital
requirements.  In  addition,  the  Bank  would  generally not receive regulatory
approval of any application that requires the consideration of capital adequacy,
such  as  a  branch  or  merger application, unless the Bank could demonstrate a
reasonable  plan  to  meet the capital requirement within a reasonable period of
time.

     Both  the Company and the Bank exceeded their respective regulatory capital
requirements at December 31, 2001.  See "Management's Discussion and Analysis or
Plan  of  Operation  --  Capital."

INTERSTATE  BANKING  AND  BRANCHING  RESTRICTIONS

     On  September  29,  1994,  the  federal  government enacted the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Banking
Act").  This  Act  became  effective on September 29, 1995, and permits eligible
bank  holding  companies  in  any  state,  with  regulatory approval, to acquire
banking  organizations  in  any  other  state.  Effective  June  1,  1997,  the
Interstate Banking Act allowed banks with different home states to merge, unless
a  particular  state  opts  out  of the statute.  Consistent with the Interstate
Banking  Act, Maryland adopted legislation in 1995 which permits interstate bank
mergers  beginning  September  29,  1995.

     In  addition,  beginning June 1, 1997, the Interstate Banking Act permitted
national and state banks to establish de novo branches in another state if there
is  a law in that state which applies equally to all banks and expressly permits
all out-of-state banks to establish de novo branches.  In 1995, Maryland adopted
"opt-in" legislation by which Maryland adopted the federal legislation effective
September  29,  1995,  before it automatically took effect on June 1, 1997.  The
Maryland  legislation  permits  out-of-state  banks  to  establish  branches  in
Maryland  by  opening  a  de novo branch, by acquiring an existing branch from a
Maryland  depository  institution, or as a result of an interstate merger with a
Maryland  banking  organization, as long as such states grant similar privileges
for  acquiring banking organizations in their states to banking organizations in
Maryland.  Under Maryland law, the Bank may open branches state-wide, subject to
the  prior  approval  of  the Commissioner and the FDIC.  There are currently no
definite plans for the Company to acquire any bank, but the Company remains open
to  acquisitions  as  part  of  its  strategic  growth  plan.

ENFORCEMENT  POWERS

     FIRREA  expanded  and  increased civil and criminal penalties available for
use  by  the  federal  regulatory  agencies  against depository institutions and
certain  "institution-affiliated  parties."  Institution-affiliated  parties
primarily  include management, employees, and agents of a financial institution,
as  well  as  independent  contractors  and  consultants  such  as attorneys and
accountants  and  others  who  participate  in  the  conduct  of  the  financial
institution's  affairs.  These  practices  can  include  the  failure  of  an
institution to timely file required reports or the filing of false or misleading
information  or the submission of inaccurate reports.  Civil penalties may be as
high  as  $1,000,000  a  day  for  such violations.  Criminal penalties for some


                                        9
<PAGE>
financial  institution  crimes  have  been  increased to 20 years.  In addition,
regulators are provided with greater flexibility to commence enforcement actions
against  institutions  and institution-affiliated parties.  Possible enforcement
actions  include  the  termination  of  deposit insurance.  Furthermore, banking
agencies' power to issue cease-and-desist orders was expanded.  Such orders may,
among  other  things,  require  affirmative action to correct any harm resulting
from  a  violation  or  practice,  including  restitution,  reimbursement,
indemnification or guarantees against loss.  A financial institution may also be
ordered to restrict its growth, dispose of certain assets, rescind agreements or
contracts,  or  take  other  actions  as determined by the ordering agency to be
appropriate.

EFFECT  OF  GOVERNMENTAL  MONETARY  POLICIES

     The Company's earnings are affected by domestic economic conditions and the
monetary  and  fiscal policies of the United States government and its agencies.
The  Federal Reserve's monetary policies have had, and are likely to continue to
have,  an  important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb  inflation  or  combat  a  recession.  The monetary policies of the Federal
Reserve  have  major  effects  upon  the  levels  of bank loans, investments and
deposits  through  its  open  market  operations  in  United  States  government
securities  and  through  its  regulation  of the discount rate on borrowings of
member  banks  and the reserve requirements against member bank deposits.  It is
not  possible  to predict the nature or impact of future changes in monetary and
fiscal  policies.

RECENT  LEGISLATIVE  DEVELOPMENTS

     From  time  to  time,  various  bills  are  introduced in the United States
Congress  and  at  the state legislative level with respect to the regulation of
financial  institutions.  Certain  of  these  proposals,  if  adopted,  could
significantly  change  the  regulation  of  banks  and  the  financial  services
industry.  The Company cannot predict whether any such proposals will be adopted
or,  if  adopted,  how  such  proposals  would  affect  the  Company.

ITEM  2.  DESCRIPTION  OF  PROPERTY
-----------------------------------

     The  Bank's main office is located at 501 Idlewild Avenue, Easton, Maryland
on approximately 53,000 square feet of land at the corner of Idlewild Avenue and
Caulk  Lane.  The  Bank  also  operates  branch facilities at William Hill Manor
located on Dutchman's Lane in Easton, on Market Street in Denton, and on Factory
Street  in  Oxford,  with  approximately 72, 1,733 and 900 square feet of leased
space,  respectively.  The  William  Hill  Manor  branch is limited to accepting
deposits  and  cashing  checks  and is open only for limited hours each business
day.  See  Item  12.  "Certain  Relationships  and  Related  Transactions."

     The  main  office  building,  which was constructed in 1993, is a two story
building  consisting  of  approximately  14,000 square feet.  The Bank presently
occupies  approximately  11,600  square  feet for housing the main branch of the
Bank,  the  operations  center  of  the  Bank,  and the executive offices of the
Company  and  the Bank.  The remaining additional space in the building has been
leased  to  third  parties.

     Approximately  1,800 square feet of the main office building is leased to a
third  party  with an initial lease term of eight years.  The lease commenced on
August  1,  1997 and the annual rent for this lease is $20,020.  The annual rent
is  subject  to  adjustment  each  year  during  the initial term and during the
renewal  term,  if  any;  provided,  however,  the  annual  rent  shall  only be
increased.  In  addition,  approximately  600  square  feet  of  the main office
building  is  leased  to William Hill Manor, Inc. at a rate of $14.00 per square
foot.  The lease commenced on July 1, 1998 and has a five year term.  The annual
rent  for  this lease is $7,938.  Dr. W. David Hill, the Chief Executive Officer
of  the  Company,  is  the  Chief  Executive  Officer,  founder  and  principal
stockholder  of  William  Hill  Manor,  Inc.

     The  William  Hill  Manor  branch office space is leased pursuant to a five
year  lease  that  was  renewed effective July 1, 2000.  Rent is fixed at $3,600
annually.  At  the  end  of  the  current  term, the lease provides an option to
extend  with  rent increases contingent on the performance of the Bank and based
on  the  consumer  price  index.

     The  office  space  for the branch office in Denton is leased pursuant to a
five year lease which commenced June 4, 1999.  Rent for this space is $2,166 per
month.  This  lease  provides  for three five-year renewals at the discretion of
the  Bank.


                                       10
<PAGE>
     The  Oxford  branch  office  space  is leased pursuant to a five year lease
dated  September 1, 1997, between the Town of Oxford and NationsBank, N.A.   The
lease was assigned to the Bank as of November 9, 2001.  Monthly rent is fixed at
$1,400.  This lease expires on August 31, 2002.  However, the Town of Oxford and
the Bank have verbally agreed to renew the lease for an additional five years on
the  same  terms  as  the  existing  lease.

ITEM  3.  LEGAL  PROCEEDINGS
----------------------------

     There are no material pending legal proceedings to which the Company or the
Bank  or  any of their properties are subject.  Neither the Company nor the Bank
is  aware  of  any  proceeding  that  a governmental authority is contemplating.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

     There  were  no  matters  submitted  to  a  vote of the stockholders of the
Company  during  the  fourth  quarter  of  2001.


                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS
-------------------------------------------------------------------------

     In  response  to  this  Item,  the  information  included on page 17 of the
Company's Annual Report to Stockholders for the year ended December 31, 2001, is
incorporated  herein  by  reference.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
--------------------------------------------------------------------------

     In response to this Item, the information included on pages 3 through 16 of
the  Company's  Annual  Report  to  Stockholders for the year ended December 31,
2001,  is  incorporated  herein  by  reference.

ITEM  7.  FINANCIAL  STATEMENTS
-------------------------------

     In  response  to this Item, the information included on pages 18 through 40
of  the  Company's Annual Report to Stockholders for the year ended December 31,
2001,  is  incorporated  herein  by  reference.

ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
--------------------------------------------------------------------------------
FINANCIAL  DISCLOSURE
---------------------

     Not  applicable.


                                    PART III

ITEM  9.  DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(A) OF THE
--------------------------------------------------------------------------------
EXCHANGE  ACT
-------------

     In response to this Item, the information included on pages 2 through 6 and
page  8  of the Company's Proxy Statement for the Annual Meeting of Stockholders
to  be  held  on  May  15,  2002,  is  incorporated  herein  by  reference.

ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------

     In  response to this Item, the information included on pages 7 through 8 of
the  Company's Proxy Statement for the Annual Meeting of Stockholders to be held
on  May  15,  2002,  is  incorporated  herein  by  reference.


                                       11
<PAGE>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
--------------------------------------------------------------------------------

     In response to this Item, the information included on pages 9 through 11 of
the  Company's Proxy Statement for the Annual Meeting of Stockholders to be held
on  May  15,  2002,  is  incorporated  herein  by  reference.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
-------------------------------------------------------------

     In  response  to  this  Item,  the  information  included on page 11 of the
Company's  Proxy  Statement for the Annual Meeting of Stockholders to be held on
May  15,  2002,  is  incorporated  herein  by  reference.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K
------------------------------------------------

(a)  Exhibits.
     --------

     3.1    Articles of Incorporation of the Company (incorporated by reference
            to  Exhibit  3.1  of  Registration  Statement on Form S-18, File No.
            33-43317).

     3.2    Amended  and  Restated  Bylaws  of  the  Company.

     10.1   Easton  Bancorp,  Inc.  1991  Stock  Option  Plan  (incorporated  by
            reference  to  Exhibit  10.2 of Registration Statement on Form S-18,
            File  No.  33-43317).

     10.2   Form  of  Warrant  Agreement  (incorporated  by reference to Exhibit
            10.3  of  Registration  Statement  on Form S-18, File No. 33-43317).

     10.3   Lease  Agreement dated June 4, 1999, between the Bank  and ZNB,  LLP
            (incorporated  by  reference to Exhibit 10.3 of the Company's Annual
            Report  on  Form 10-KSB filed on March 28, 2000, for the fiscal year
            ended  December  31,  1999).

     10.4   Non-Qualified  Stock  Option  Agreement  with  R. Michael S. Menzies
            dated  May 1, 1999 (incorporated by reference to Exhibit 10.4 of the
            Company's  Annual Report on Form 10-KSB filed on March 28, 2000, for
            the  fiscal  year  ended  December  31,  1999).

     11     Computation  of  Earnings  Per  Share.

     13     Annual  Report to Stockholders for the year ended December 31, 2001.

     21     Subsidiaries  of  the  Company.


(b)  Reports  on  Form  8-K
     ----------------------

      No reports on Form 8-K were filed by the Company during the fourth quarter
      of  the  year  ended  December  31,  2001.


                                       12
<PAGE>
                                   SIGNATURES

     In  accordance  with  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.

                                   EASTON  BANCORP,  INC.
                                   ----------------------
                                   (Registrant)

                                   By: /s/  R.  Michael  S.  Menzies,  Sr.
                                      ------------------------------------
                                            R.  Michael  S.  Menzies,  Sr.
                                            President
Date:  March  20,  2002

     In  accordance  with  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.


<TABLE>
<CAPTION>
Signature                       Title                                Date
------------------------------  -----------------------------------  --------------
<S>                             <C>                                  <C>
/s/ Jack H. Bishop              Director                             March 20, 2002
------------------------------
Jack H. Bishop

/s/ J. Parker Callahan, Jr.     Director                             March 20, 2002
------------------------------
J. Parker Callahan, Jr.

/s/ Stephen W. Chitty           Director                             March 20, 2002
------------------------------
Stephen W. Chitty

/s/ J. Fredrick Heaton          Director                             March 20, 2002
------------------------------
J. Fredrick Heaton

/s/ Thomas E. Hill              Director                             March 20, 2002
------------------------------
Thomas E. Hill

/s/ William C. Hill             Director                             March 20, 2002
------------------------------
William C. Hill
                                Director; Chairman of the Board;
/s/ W. David Hill               Chief Executive Officer (principal   March 20, 2002
------------------------------  executive officer)
W. David Hill

/s/ William R. Houck            Director                             March 20, 2002
------------------------------
William R. Houck

------------------------------  Director
David F. Lesperance

/s/ Vinodrai Mehta              Director                             March 22, 2002
------------------------------
Vinodrai Mehta

/s/ R. Michael S. Menzies, Sr.  Director; President                  March 20, 2002
------------------------------
R. Michael S. Menzies, Sr.



                                       13
<PAGE>
Signature                       Title                                Date
------------------------------  -----------------------------------  --------------

/s/ Roger A. Orsini             Director                             March 22, 2002
------------------------------
Roger A. Orsini

/s/ Mahmood S. Shariff          Director                             March 20, 2002
------------------------------
Mahmood S. Shariff

------------------------------  Director
James B. Spear, Sr.

/s/ Myron J. Szczukowski, Jr.   Director                             March 20, 2002
------------------------------
Myron J. Szczukowski, Jr.

/s/ Sheila A. Wainwright        Director; Secretary                  March 20, 2002
------------------------------
Sheila A. Wainwright
                                Director; Treasurer (principal
/s/ Jerry L. Wilcoxon           financial officer and principal      March 20, 2002
------------------------------  accounting officer)
Jerry L. Wilcoxon
</TABLE>


                                       14
<PAGE>
<TABLE>
<CAPTION>
                                   INDEX TO EXHIBITS



Exhibit                                                                     Sequential
Number   Description                                                        Page Number
-------  -----------------------------------------------------------------  -----------
<C>      <S>                                                                <C>
    3.1  Articles of Incorporation of the Company (incorporated by
         reference to Exhibit 3.1 of Registration Statement on Form S-18,
         File No. 33-43317).

    3.2  Amended and Restated Bylaws of the Company.

   10.1  Easton Bancorp, Inc. 1991 Stock Option Plan (incorporated by
         reference to Exhibit 10.2 of Registration Statement on Form S-18,
         File No. 33-43317).

   10.2  Form of Warrant Agreement (incorporated by reference to Exhibit
         10.3 of Registration Statement on Form S-18, File No. 33-43317).

   10.3  Lease Agreement dated June 4, 1999, between the Bank and ZNB,
         LLP (incorporated by reference to Exhibit 10.3 of the Company's
         Annual Report on Form 10-KSB filed on March 28, 2000, for the
         fiscal year ended December 31, 1999).

   10.4  Non-Qualified Stock Option Agreement with R. Michael S.
         Menzies dated May 1, 1999 (incorporated by reference to Exhibit
         10.4 of the Company's Annual Report on Form 10-KSB filed on
         March 28, 2000, for the fiscal year ended December 31, 1999).

     11  Computation of Earnings Per Share.

     13  Annual Report to Stockholders for the year ended December 31,
         2001.

     21  Subsidiaries of the Company.
</TABLE>


<PAGE>