Table Of Contents
                             Union National Bancorp



PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
         Consolidated Balance Sheet                                           4
         Consolidated Statement of Income                                     5
         Consolidated Statement of Cash Flows                                 6
         Consolidated Statement of Changes on Stockholders' Equity            7
Item 2. Management's Discussion and Analysis                               8-12
PART II - OTHER INFORMATION
Item 1. Exhibits and Reports on Form 8-K                                     12



<PAGE>



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

                                    FORM 10-Q
{ X }    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30,1997

{   }    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
         SECURITIES EXCHANGE ACT OF 1934


For the transition period from ____________to____________

COMMISSION FILE NUMBER:                     000-22523

UNION  NATIONAL  BANCORP,  INC.  (Exact name of  registrant  as specified in its
charter)

         Maryland                                         52-0514247
         (State of incorporation)               (I.R.S. Identification Number)


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

         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 {   }

         The number of shares of common stock outstanding as of June 30, 1997 is
834,000 shares.



<PAGE>



Part 1 Financial Information Item 1 Financial Statements
Union National Bancorp
Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                June 30,                December 31,
                                                                  1997                       1996
                                                                  ----                       ----
ASSETS                                                         (Unaudited)
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Cash and due from banks                                         $6,471,761                 $6,910,561
Interest bearing deposits with banks                                43,627                    160,821
Federal funds sold                                              11,081,530                  8,882,550
Investment securities available for sale-at fair value          48,607,907                 38,866,761
Investment securities held to maturity - at amortized
  cost - fair value of $      (1997) and $17,304,150 (1996)     14,837,241                 17,073,011
Loans                                                          148,093,328                147,350,540
Less: allowance for credit losses                               (1,848,177)                (1,772,433)
                                                              ------------               ------------

Loans - net                                                    146,245,152                145,578,107
Bank premises and equipment                                      3,903,890                  3,928,561
Foreclosed real estate                                             646,528                    391,236
Accrued interest receivable                                      1,837,098                  1,292,194
Other assets                                                     1,890,061                  1,951,826
                                                              ------------               ------------

         TOTAL ASSETS                                         $235,564,796               $225,035,628
                                                              ============               ============

LIABILITIES

Deposits:
  Non-interest bearing deposits                               $ 24,618,474               $ 23,694,607
  Interest bearing deposits                                    180,977,331                175,596,828
                                                              ------------               ------------

         Total deposits                                        205,595,805                199,291,435
Short-term borrowings                                           10,012,991                  6,808,596
Federal Home Loan Bank Borrowing                                     --                         --
Accrued expenses and other liabilities                             891,860                    882,930
                                                                   -------                    -------

         Total liabilities                                     216,500,656                206,982,961
                                                               -----------                -----------



STOCKHOLDERS' EQUITY
Common stock - $.01 par; 10,000,000 shares authorized;
  834,000 shares issued and outstanding                              8,340                      8,340
Surplus                                                          8,342,055                  8,342,055
Unrealized appreciation (depreciation) on securities available
  for sale (net of related tax effects)                             36,702                    (58,586)
Retained earnings                                               10,677,043                  9,760,858
                                                                ----------                  ---------

         Total stockholders' equity                             19,064,140                 18,052,667
                                                                ----------                 ----------

         TOTAL LIABILITIES AND
            STOCKHOLDERS' EQUITY                             $ 235,564,796               $225,035,628
                                                             =============               ============

</TABLE>



<PAGE>




Union National Bancorp
Consolidated Statements of Income (Unaudited)

<TABLE>
<CAPTION>
                                                              Three Months Ended               Six Months Ended
                                                                   June 30,                        June 30,
                                                            1997            1996             1997           1996
                                                       ---------------------------------------------------------------
<S>     <C>                                                   <C>             <C>             <C>           <C>    
INTEREST INCOME:
     Interest and fees on loans                               $3,387,604      $3,475,763      $6,734,470    $6,936,787
     Interest and dividends on investment securities:
        Taxable interest on mortgage backed securities           316,979         370,890         646,958       756,777
        Other taxable interest & dividends                       605,831         290,311       1,140,245       566,035
        Nontaxable interest                                       75,353          94,713         152,931       191,561
     Interest on deposits at other banks                             517          36,722           2,756        57,396
     Interest on federal funds sold                              109,423          87,179         199,897       156,087
                                                       ---------------------------------------------------------------
        Total interest income                                  4,495,706       4,355,580        8,877,257    8,664,643

INTEREST EXPENSE:
     Interest on deposits:
        Time certificates of deposit of $100,000 and more        270,731         410,079          575,569      642,778
        Other deposits                                         1,687,560       1,512,880        3,238,282    3,216,516
                                                       ----------------------------------------------------------------
        Total interest on deposits                             1,958,291       1,922,959        3,813,851    3,859,294
     Interest on short-term borrowings                            99,248          84,716          231,706      156,039
     Interest on Federal Home Loan Bank borrowings                     0               0                0       26,300
                                                       ---------------------------------------------------------------
        Total interest expense                                 2,057,539       2,007,675        4,045,557    4,041,633

NET INTEREST INCOME                                            2,438,166       2,347,905        4,831,700    4,623,010

PROVISION FOR CREDIT LOSSES                                       55,000         122,000          115,000      191,000
                                                       ---------------------------------------------------------------
NET INTEREST INCOME AFTER
  PROVISION FOR CREDIT LOSSES                                  2,383,166       2,225,905        4,716,700    4,432,010
                                                       ---------------------------------------------------------------        
NON-INTEREST INCOME:
     Service charges on deposit accounts                         234,512         174,323          460,852      332,105
     Other service charges                                        66,334          26,529           91,333       56,456
     Gains on sales of loans                                           -               -                -       13,668
     Other income                                                 14,806          35,963           84,170       94,802
                                                       ---------------------------------------------------------------
        Total other operating income                             315,653         236,815          636,355      497,031
                                                       ---------------------------------------------------------------
NON-INTEREST EXPENSES:
     Salaries and employee benefits                            1,041,316         902,512        2,064,670    1,890,865
     Occupancy expense of bank premises                          182,584         190,772          358,585      387,270
     Equipment expenses                                          105,849          82,237          197,008      179,757
     Other expenses                                              489,351         472,734          982,872      953,243
                                                       ---------------------------------------------------------------
        Total other operating expenses                         1,819,100       1,648,256        3,603,135    3,411,135

                                                       ---------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                       879,719         814,464        1,749,920    1,517,906
APPLICABLE INCOME TAXES                                          289,081         291,453          575,195      526,567
                                                       ---------------------------------------------------------------
NET INCOME                                                      $590,638        $523,011       $1,174,725     $991,339
                                                       ===============================================================
EARNINGS PER COMMON SHARE                                          $0.71           $0.63           $1.41

</TABLE>



<PAGE>



Union National Bancorp
Consolidated Statements of Cash Flows (Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>

<S>                                                                             <C>                   <C> 
                                                                                1997                  1996
                                                                           --------------         -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                $1,178,231              $991,399
    Adjustments to reconcile net income to net cash
          provided by operating activities:
       Provision for credit losses                                               115,000               191,000
       Depreciation and amortization                                             319,187               291,050
       Gain on sales of other real estate and other assets                       (19,157)              (35,941)
       Deferred income taxes                                                     (18,190)               (2,015)
       Net decrease (increase) in accrued interest receivable                   (544,903)               76,890
       Net increase (decrease) in accrued expenses & other liabilities             8,930                43,572
       Other - net                                                            (2,433,311)              150,651
                                                                           --------------          ------------
          Net cash provided by operating activities                           (1,394,213)            1,706,606
                                                                           --------------          ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of available for sale securities                               (10,930,000)           (8,000,000)
    Proceeds from maturities of available for sale securities                  2,241,584             3,580,793
    Purchase of  held to maturity securities                                           -              (445,000)
    Proceeds from maturities of held to maturity securities                    3,327,466             3,782,150
    Proceeds from sale of other real estate and other assets                     137,510               301,182
    Net increase in loans                                                     (1,181,149)           (1,012,815)
    Bank premises and equipment acquired                                        (343,858)             (239,773)
    Foreclosed  real estate acquired                                            (124,451)             (124,451)
       Net cash used in investing activities                                  (6,872,898)           (2,157,914)
                                                                           --------------          ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in deposits                                                   6,339,086              3,841,476
    Net increase (decrease) in short-term borrowings                           3,705,101              1,595,043
    Repayments of Federal Home Loan Bank borrowings                                    -             (5,000,000)
    Cash dividends paid                                                         (258,540)              (233,520)
       Net cash provided by financing activities                               9,785,647                202,999
                                                                           --------------          -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           1,642,987               (248,309)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                15,953,932             13,641,267
                                                                           --------------          -------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                     $17,596,919            $13,392,958
                                                                           ==============          =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                                               $684,103               $660,179
                                                                           ==============          =============
    Income taxes paid                                                            515,000                520,000
                                                                           ==============          =============
NON-CASH INVESTING ACTIVITIES
    Transfer from loans to foreclosed real estate                               $375,000               $319,708
    Transfer from available for sale securities                            --------------          -------------
       to held to maturity securities                                           $-                     $-
                                                                           ==============          =============
</TABLE>



<PAGE>



Union National Bancorp
Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>


                                                                          Unrealized
                                                                         Appreciation
                                                                        (Depreciation)
                                                                         on Securities
                                               Common                      Available          Undivided
                                               Stock       Surplus         for Sale            Profits             Total
                                               -----       -------         --------            -------             -----
<S>                                            <C>       <C>               <C>                 <C>              <C>

Balance at December 31,1995                    $8,340    $8,342,055        ($183,075)          $8,372,716       $16,540,036
     Net income                                 -             -              -                    991,339           991,339
     Cash dividends ($.50 per share)            -             -              -                   (233,520)         (233,520)
     Unrealized depreciation on securities
         available for sale (net of tax)        -             -             (252,551)           -                  (252,551)
                                             ---------   -----------      ------------         -------------    ------------

Balance at June 30, 1996                        8,340     8,342,055         (435,626)           9,130,535        17,045,304
     Net income                                 -             -              -                    872,183           872,183
     Cash dividends ($.52 per share)            -             -              -                   (241,860)         (241,860)
     Unrealized appreciation on securities
         available for sale (net of tax)        -             -              377,040            -                   377,040
                                             ---------   -----------      ------------         -------------    ------------

Balance at December 31, 1996                   $8,340    $8,342,055         $(58,586)          $9,760,858       $18,052,667

     Net income                                 -             -               -                 1,174,725         1,174,725
     Cash dividends ($.57 per share)            -             -               -                  (258,540)         (258,540)
     Unrealized appreciation on securities
         available for sale (net of tax)        -             -               95,288            -                    95,288
                                             ---------   -----------      ------------         ------------     ------------

Balance at June 30, 1997                      $8,340     $8,342,055          $36,702          $10,677,043       $19,064,140
                                             =========   ===========      ============        ==============    ============
</TABLE>




<PAGE>



Union National Bancorp

Notes to Consolidated Financial Statements (Unaudited)

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

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

Overview

     On June 30, 1994, Union National Bancorp,  Inc. commenced operations as the
parent company of its sole  subsidiary,  The Union National Bank of Westminster,
("Bank") which has conducted the business of banking since 1816.  Since the Bank
is the primary possession of the holding company,  the assets and liabilities of
the holding company are made up almost entirely of the assets and liabilities of
the Bank.  The same is true for the income and expense of the  Company  with the
exception of activities  conducted at the holding  company  level only,  such as
mergers and acquisitions. All data is presented in this analysis in consolidated
form and is compared to like data for the Bank for prior years.

     Total  assets were $235.6  million at June 30,  1997,  an increase of $15.8
million or 6.7% over one year  earlier.  The  primary  source of these funds was
certificates  of deposit.  Growth in deposits  has  declined in recent  years as
depositors have sought other avenues of investment to enhance their yields. Loan
growth  slowed during the second half of 1996 and remained  sluggish  throughout
1997. Other investments have increased as loan growth has declined.

     Net  income  rose 15.6% in the first  half of 1997 to  $1,174,725  from net
income of $991,339 in the same period of 1996.  The return on average assets for
the six  months  ended June 30,  1997 was 1.04% and .91% for the same  period in
1996.  The  return on average  equity  was 12.84% for the six months  ended June
30,1997 and 11.68% for the six months ended June 30,1996.


Net Interest Income

     Net interest income is the major component of the Banks's earnings,  and it
consists of the excess of interest  income from earning  assets less the expense
of interest bearing liabilities.  Earning assets are composed primarily of loans
and  securities,  while deposits and short-term  borrowings  represent the major
portion of interest bearing liabilities.  Changes in the volume and mix of these
assets and liabilities,  as well as changes in the yields earned and rates paid,
are determinants of the changes in net interest income.  The net interest margin
is calculated as


<PAGE>



tax-equivalent  net interest income (income plus the tax savings from tax-exempt
loans and  investments)  divided by average  earning  assets and  represents the
Banks's net yield on its earning assets.

     First  half net  interest  income  before  provision  for loan  losses  was
$4,831,700 in 1997,  $4,623,011  in 1996.  These levels  represent  increases of
$208,689 (4.5%) for 1997. On a tax-equivalent basis, the respective net interest
incomes  for the first half 1997 and 1996,  respectively,  were  $4,913,508  and
$4,701,286. In 1996, the growth in net interest income slowed because the growth
of earning assets as well as the spread between the rate of interest  earned and
that paid were declining. This trend has continued, but it improved in 1997. The
net  interest  spread  rose to 4.03% in the first half of 1997 from 4.01% in the
same period of 1996.  The net interest  margin as a percentage of earning assets
was 4.62% for the first half, up slightly from 4.59% in 1996.

Non-Interest Income

     Total non-interest  income for the first six months of 1997 was $636,355 up
$139,323 or 28.0% from $497,032 for the first six months in 1996.  This increase
is  principally  attributed  to a  $128,747  increase  in service  charge  fees.
Recoveries of prior  expenses or losses  occurred  which  totaled  $9,444 and an
increase of 17,431 for other servicing commissions were additional factors.

     For the second  quarter of 1997 total  non-interest  income was $315,653 up
$78,838 or 33.3% from $236,815 for the second quarter of 1996.  This increase is
due to the same factors as the first half,  increased  servicing fees attributed
60,189 and recoveries attributed 39,805.

Non-Interest Expense

      Non-interest  expense for the first six months of 1997 was  $3,603,135  an
increase of $191,998.00  or 5.6% from  $3,411,137 in 1996.  These  increases are
generally  direct  reflections  of the  growth in assets as well as the  related
investment in services, branches, and facilities.

     In the  first  half 1997  salaries  and  benefits  totaled  $2,064,669,  up
$173,804  or 9.2% from  $1,890,865  in the  second  quarter  of 1996.  Personnel
expense represented 57.3% of total non-interest expense in the second quarter of
1997  compared  to 55.6% in the same  period of 1996.  The  average  assets  per
employee  have  increased for the first six months from $1.87 million in 1996 to
$1.97 million in 1997. This shows increased automation of functions as well as a
general  improvement in the efficient  allocation of resources since assets have
grown more rapidly than the revenue of staff to support the business.

     Occupancy  expense for the first half was $358,585 in 1997, down $28,685 or
7.4%  from  $387,270  of the  first  half of 1996.  The  primary  source of this
decrease is due to a 70.4% increase in rental income  associated with a increase
activity in  non-traditional  products.  Rental  expenses for the first half was
$126,266 in 1997,  up $25,209 or 24.9% from  $101,057 of the first half of 1996.
This increase in expense was due to expansion of branch locations.



<PAGE>



         Other  operating  expense was $1,174,571 for the first half of 1997, up
$51,667 or 4.6% from  $1,122,904  for the first  half of 1996.  An  increase  in
checks,  account,  and cash  loss of  $58,973  or 87.1%  in the  first  half was
practically  offset by a reductions  of computer  service  expense of $39,433 of
14.1%.

Income Taxes

      Income tax expense for the first half of 1997 and 1995 were  $575,195  and
$426,567  respectively.  Income taxes were 32.9% of net income  before taxes for
the first half of 1997 and 41.2% for the first half of 1996.  Federal income tax
accounted  for 84.3% of total tax in 1997 first half  compared  to 76.0% in 1996
first half. As  non-taxable  income  declines as a result of the 1986 Tax Reform
Act, tax expense  rises faster than net income,  and federal tax is making up an
increasing portion of the total.

Securities Portfolio

         Total  holdings  in the  investment  portfolio  at  June  30,1997  were
$63,445,149 and at year-end were  $55,939,772 in 1996. In aggregate,  investment
securities  increased  7,505,377 or 13.4% in the first half of the year.  During
1996 and 1997,  the  portfolio  was  increased  as the  spread  of  longer  term
investments to overnight funds widened,  and further  additions settled early in
1997. The total portfolio had an average  maturity of 2.9 years on June 30, 1997
compared with 3.8 years on June 30,1996. These maturities represent estimates of
the actual life of instruments considering  mortgage-back pay downs and puts for
tax-free securities

Loan Portfolio

     Total loans  outstanding on June 30,1997 were  $148,093,328 and on December
31,1996 were $147,350,540.  The loan portfolio  increased 742,788 or .51% in the
first half of the year. The portfolio  represented 62.9% of total assets on June
30,1997 and 65.5% of total assets on December 31,1996.

     In  the  first  half  of  1997  the  commercial  loan  portfolio  decreased
$3,617,343 or 15.1% although commercial mortgages increased $5,788,618 or 10.5%.
The greatest  majority of commercial  loans are  collateralized  by some form of
real  estate.   Residential  real  estate  declined  $1,574,560  or  5.1%.  Most
residential  mortgages  are kept "in  house",  however  the Bank is  involved in
selling mortgages on the secondary market. The installment  portfolio  increased
$288,912 or .8%. The home equity  portfolio  increased  2,513,293 or 47.3% while
the direct and indirect portfolio decreased 2,033,112 or 8.1%.


Allowance for Credit Losses
     The allowance for loan losses on June 30,1997 was 1,848,176 and on December
31,1996  was  1,772,433.  This is an  increase  of 75,743 or 4.3%.  The ratio of
allowance  to total loans was 1.21% at year end 1996 and 1.26% at the end of the
first half of 1997.



<PAGE>



Deposits

     The Company uses  deposits as the primary  source of funding of its assets.
The  Company  has  experienced  continuous  growth of  deposits,  especially  in
certificates of deposit.

Total deposits were  $205,595,805  on June 30,1997 and  $199,291,435 on December
31,  1996.  The main  source  area in both  1997 and  1996 was  certificates  of
deposits  which grew $3.4 million or 3.1%. In addition,  checking  accounts rose
$2.3  million  or  5.1%.   Both  regular   savings  and  money  market  remained
approximately  the  same,   257,820  or  .81%  and  112,211  or  .64%  increases
respectively.

Short-Term Borrowings

     Short-term  borrowings  consist  of  Federal  funds  purchased,  repurchase
agreements,  and  borrowings  from the Federal  Reserve Bank or the Federal Home
Loan Bank and correspondent bank lines.

     Repurchase  agreements  averaged  $10,513,697  during  1997  compared  to $
8,555,503 in 1996. At June 30,1997 there were  $10,012,991 and at year-end 1996,
they were $6,808,596.  These funds included  customer  repurchase  agreements in
addition to those funds which were obtained solely to provide liquidity.


Liquidity

     Traditionally,  The Bank has maintained a strong liquidity position because
of a  concentration  of core  deposits  such as  regular  savings  and  checking
accounts. A high percentage of money market accounts and certificates of deposit
can also be  considered  core  deposits.  Federal  funds sold is the Bank's most
liquid  earning  asset.  Other  sources  include  money market  instruments  and
securities classified available for sale. In addition to these sources, the Bank
has total credit lines of $33 million available from  correspondent  banks as of
June 30,1997.

     On June  30,1997  securities  available  for sale and  federal  funds  sold
totaled  $59,689,437  compared with 47,749,311 on December 31, 1996. These funds
averaged  $53,631,971  on June  30,1997 and  $40,304,499  on year end 1996.  (No
securities  were  classified  available for sale until December 31, 1993.) Asset
liquidity is also provided by managing the maturities of loans, securities,  and
certificates of deposit.





<PAGE>



Capital Management
<TABLE>
<CAPTION>

     The Company's capital position is presented in the following table:

                                                        June 30,        December 31       Regulatory
                                                        1997            1996              Requirement
-----------------------------------------------------------------------------------------------------
<S>                                                     <C>             <C>               <C>

Tier 1 capital to risk weighted assets                  11.9%           11.7%             4.0%
Total capital to risk weighted assets                   13.0%           12.9%             8.0%
Capital leverage ratio                                   8.7%            8.0%             3.0%
</TABLE>



PART II - OTHER INFORMATION

Item 1. Exhibits and Reports on Form 8-K

A Report on Form-8K

(a) There  have been no  Reports  on Form 8-k filed by the  Company  during  the
quarter for which this report is filed.



SIGNATURES

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

Union National Bancorp (Registrant)


August 13, 1997                     By: /s/ Virginia W. Smith
                                    -------------------------
                                    Virginia W. Smith
                                    President and Chief Executive Officer


August 13, 1997                     By: /s/ Gabrielle M. Peregoy
                                    ----------------------------
                                    Gabrielle M. Peregoy
                                    Vice President



<PAGE>