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U.S. SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20549
FORM 10-K
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Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
(Fee required)

For the fiscal year ended December 31, 2000

Commission file number: 0-23090

                               Carrollton Bancorp
                 ---------------------------------------------
                        (Name of Issuer in Its Charter)

<TABLE>
<S>                                                           <C>
                          Maryland                                             52-1660951
       ---------------------------------------------          ---------------------------------------------
      (State or Other Jurisdiction of Incorporation or            (I.R.S. Employer Identification No.)
                       Organization)
            344 North Charles Street, Suite 300                                21201-4301
                    Baltimore, Maryland                       ---------------------------------------------
       ---------------------------------------------                           (Zip Code)
          (Address of Principal Executive Offices)
                      (410) 536-4600
       ---------------------------------------------
                (Issuer's Telephone Number)

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

                    Title of Each Class                                   Name of Each Exchange
                            None                                           on Which Registered
       ---------------------------------------------                              None
                                                              ---------------------------------------------
</TABLE>

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

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

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


Indicate by checkmark if disclosure of delinquent filers in response to Item 405
of Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  /X/
Issuer's revenues for its most recent fiscal year. $34,639,094.

As of February 28, 2001, the aggregate market value of the voting stock held by
non-directors and executive officers: $20,886,305.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 2,707,733 shares as of March 8, 2001.

                      DOCUMENTS INCORPORATED BY REFERENCE
                                     None.


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PART I
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ITEM 1: DESCRIPTION OF BUSINESS

 GENERAL. - Carrollton Bancorp (the "Company") is a bank holding company
registered as such under the Bank Holding Company Act of 1956, as amended, and
was organized on January 11, 1990. Carrollton Bank (the "Bank") is a commercial
bank and the principal subsidiary of the Company. The Bank was chartered by an
act of the General Assembly of Maryland (Chapter 727) approved April 10, 1900.
The Bank is engaged in a general commercial and retail banking business.

 SERVICE AREA. - The service area for the Bank is defined principally by
geographic area. The Bank's eleven bank branches are located in Baltimore City,
Baltimore County and Anne Arundel County, Maryland. The Bank attracts deposits
and generates loan activity throughout this area primarily through its branch
network. In addition, the Bank has made loans in Harford County, Howard County
and Prince George's County, Maryland, and in southern Pennsylvania. The Bank
also has deposit customers who live in Harford County and Howard County,
Maryland. The Bank also operates an ATM network of 174 machines in Maryland,
Virginia, Pennsylvania, West Virginia, and Delaware. The Bank also sponsors
national retailers in various electronic networks operating as regional switches
for electronic transactions throughout the country.

 DESCRIPTION OF SERVICES. - The Bank provides a broad range of consumer and
commercial banking products and services to individuals, businesses,
professionals and governments. The services and products have been designed in
such a manner as to appeal to consumers and business principals.

 The loan portfolio of the Bank consists primarily of loans for which the cash
flow of the borrower serves as the principal source of debt service and loan
retirement, with secondary emphasis on asset-collateral and other forms of
secondary support. In this regard, many small businesses require short-term
inventory financing which can be supported by cash flow and individual assets.
The Bank also engages in asset-based lending, traditional real estate loans and
general consumer loans to individuals. The loan portfolio is approximately 33%
adjustable rate loans and 67% fixed rate.

 The Bank has established and implemented lending policies and procedures,
underwriting guidelines and internal control systems in order to conduct its
business in a sound and prudent manner. Potential loan customers are carefully
evaluated in order to assess risk and to expedite any later loan approval
process. The Bank monitors and assesses the performance of the smaller
businesses to which it provides funding.

 The following is a partial listing of the types of services and products which
the Bank offers:

- Commercial loans for businesses, including those for working capital purposes,
  equipment purchases and accounts receivable and inventory financing.

- Commercial and residential real estate loans for acquisition, refinancing and
  construction.

- Selected consumer loans including automobile loans, residential mortgages,
  home equity loans and lines of credit.

- Loans guaranteed by the United States Small Business Administration.

- Money market deposits, demand deposits, NOW accounts and certificates of
  deposit.

- Letters of credit and remittance services.

- Credit and debit card services.

- Merchant credit card deposit servicing.

- Brokerage services for stocks, bonds, mutual funds and annuities.

- A 24-hour ATM network.

- After-hours depository services.

- Safe deposit boxes.

- Other services, such as direct deposit services, travelers checks and IRA.

 Customer service hours for the Bank are fully competitive with other
institutions in the market area. The Bank also acts as a reseller of services
purchased from third party vendors for customers requiring services not offered
directly by the Bank.

 LENDING ACTIVITIES. - The Bank makes various types of loans to borrowers based
on, among other things, an evaluation of the borrowers' net asset value, cash
flow, security and indicated ability to repay. Loans to consumers include
residential mortgages, home equity loans, home improvement loans, overdraft
loans, and installment loans for automobiles, boats and recreational vehicles.
The Bank also makes loans secured by deposit accounts and common stocks. The
Bank's commercial loan product line includes first mortgage loans, time and
demand loans, lines and letters of credit, and asset based financing. The Notes
to the Consolidated Financial Statements contained in Part II, Item 8 show the
classification by type of loan for the whole portfolio.

 First and second residential mortgage loans, made principally through a
subsidiary of the Bank, Carrollton Mortgage Services Inc., ("CMSI") enabled
customers to purchase or refinance residential properties. These loans are
secured by liens on the residential property. All first mortgage loans with a
loan to value greater then 80% have private mortgage insurance coverage equal to
or greater

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than the amount required under the Federal National Mortgage Association
guidelines. CMSI offered a wide variety of adjustable rate and fixed rate
mortgage products. The borrower was required to meet the income and debt
criteria consistent with the underwriting standards of the Federal National
Mortgage Association and Federal Home Loan Mortgage Corporation. CMSI also
reviewed the credit history of each applicant. CMSI offered a community
homebuyer program for qualified purchasers whose income is less than or equal to
115% of the median income for the Baltimore Metropolitan Statistical Area. Under
this program, CMSI financed 100% of the purchase price, plus up to $5,000 toward
closing costs. The customer must pay their pre-paids out of their own funds, and
must have had two months cash reserves. The borrower(s) must have also obtain
homebuyer counseling. While the primary emphasis of this program was first time
homebuyers, low to moderate income move-up borrowers could still qualify for the
program. It was intended for those homeowners that would not experience a
significant gain on the sale of their current residence. They could not own any
other real estate at the time of settlement of the community homebuyer loan.
Residential loans are considered low risk based on the type of collateral
(residential property) and the underwriting standards used. The Bank experienced
net losses of $96,961 and net recoveries of $30,317 on residential mortgage
loans in 2000. The Bank experienced no losses on residential mortgage loans
during 1999 or 1998. There were no residential mortgage loans delinquent more
than 90 days at December 31, 2000. There are no discernible delinquency or loss
trends relating to residential mortgage loans known to management.

 Home equity lines of credit are typically second mortgage loans (sometimes
first mortgages) secured by the borrower's primary residence structured as a
revolving borrowing line with a maximum loan amount. Customers write checks to
access the line. Generally, the Bank has a second lien on the property behind
the first mortgage lien holder. The Bank has a number of different equity loan
products that it offers. Borrowers can choose between fixed rate loans or loans
tied to the prime rate with margins ranging from 0% to 1.5%. The Bank will
finance up to 90% of the value of the home in combination with the first
mortgage loan balance and depending on the rate and program. As with first
mortgage residential loans, borrowers are required to meet certain income and
debt ratios. The Bank also has a program which will finance up to 125% of the
value of the home, subject to stricter income and debt ratios, with a maximum
loan amount of $25,000. Home equity loans carry a higher level of risk than
first mortgage residential loans because of the second lien position on the
property behind the first mortgage, and because a higher loan to value ratio is
used in the underwriting of the loan. However, the overall risk of loss on home
equity loans is also considered low due to the underlying values of the
collateral. The Bank experienced net losses on home equity loans during 2000 of
$104,226 and no net recoveries. There were net losses of $44,000 and net
recoveries of $12,000 in 1999. There were no losses or recoveries on home equity
loans during 1998. There were approximately $282,000 of home equity loans
delinquent more than 90 days at December 31, 2000. There are no discernible
delinquency or loss trends relating to home equity loans known to management.

 Commercial and investment mortgage loans are first mortgage loans made to
individuals or to businesses to finance acquisitions of plant or earning assets,
such as rental property. These loans are secured by a first mortgage lien on the
commercial property, and may be further secured by other property or other
assets depending on the value of the mortgaged property. In most instances,
these loans are guaranteed personally by the principals. The Bank typically
looks for cash flow from the business at least equal to 100% coverage of the
business debt service, and to income-producing property to be self-supporting
generally with a minimum debt service coverage ratio of 120% to 125%. Commercial
mortgage loans carry more risk than residential real estate loans. First,
commercial mortgage loans tend to be larger in size, and the properties tend to
exhibit more fluctuation in value. Second, the repayment of the loan is
primarily dependent on the success of the business itself, or the tenants in the
case of income producing property. Economic cycles can affect the success of a
business depending on the type of business. Therefore, business risk to the
Bank's customer is involved. The Bank did not experience any losses on
commercial mortgage loans during 2000 or 1999. There were $96,600 of commercial
mortgage loans past due more than 90 days at December 31, 2000. The Bank
experienced net losses on commercial mortgage loans in 1998 of $81,000. There
are no known discernible delinquency or loss trends relating to commercial
mortgage loans.

 Construction and land development loans are loans to finance the acquisition
and development of parcels of land and to construct residential housing or
commercial property. The Bank's financing of these types of transactions
principally relates to projects for residential housing development and
construction. The Bank typically will finance 70% to 75% of the discounted
future value of these projects, or 80% of value or 90% of cost, whichever is
less, on a single-family detached home. The loan is collateralized by the
project or real estate itself, and other assets or guarantees of the principals
in most cases. Repayment to the Bank is anticipated from the proceeds of sale of
the final units, or permanent mortgage financing on a residential construction
loan for a single borrower. These types of loans carry a higher degree of risk
than a commercial mortgage loan. Interest rates, buyer preferences, and desired
locations are all subject to

                                      3
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change during the period from the time of the loan commitment to final delivery
of the final unit, all of which can change the economics of the project. In
addition, real estate developers to whom these loans are typically made are
subject to the business risk of operating a business in a competitive
environment. The Bank did not experience any losses on construction and land
development loans during 2000, 1999 or 1998. There were no construction and land
development loans past due more than 90 days at December 31, 2000. There are no
discernible delinquency or loss trends relating to construction and land
development loans known to management.

 Time and demand loans and lines of credit are loans to businesses for
relatively short periods of time, usually not more than one year. These loans
are made for any valid business purpose. These loans may be secured by assets of
the borrower or guarantor, but also may be unsecured based on the personal
guarantee of the principal. If secured, loans may be made for up to 100% of the
value of the collateral. Time and demand loans and lines of credit are more
risky than secured commercial real estate lending transactions. The businesses
to which these loans are made are subject to normal business risk, and cash
flows of the business may be subject to economic cycles. In addition, the value
of the collateral may fluctuate, or the collateral may be used for other
purposes if not subject to Uniform Commercial Code filings. If guaranteed by the
principal, the net worth and assets of the principal may be dissipated by
demands of the business, or due to other factors. The Bank had net losses on
time and demand loans of $30,000, $71,000 and $236,000 in 2000, 1999 and 1998,
respectively. There were $847,360 of time and demand and line of credit loans
delinquent more than 90 days at December 31, 2000. There are no discernible
delinquency or loss trends relating to time and demand loans or lines of credit
known to management.

 Home improvement loans are loans made to borrowers to complete improvements to
their homes including such projects as room additions, swimming pool
installations or new roofs. Home improvement loans include those made directly
to customers and those made indirectly or originated through an approved home
improvement dealer. The Bank makes unsecured home improvement loans to a maximum
amount of $12,500. Any loan above that limit is secured by a deed of trust.
Borrowers are required to own their home, and to meet certain income and debt
ratio requirements. The Bank also reviews the credit history of all applicants.
Because they are unsecured or secured by a deed of trust, these loans are more
risky than first mortgage residential lending. This risk is mitigated somewhat
based on the fact that the loans are used to improve the borrower's home,
typically a borrower's most significant asset. In addition, the
income-and-debt-ratio requirement helps determine the borrower's current ability
to repay the loan. The Bank had net charge-offs of home improvement loans of
approximately $22,000, $0 and $4,000 in 2000, 1999 and 1998. There were net
recoveries of $39,000 and $5,000 in 2000 and 1999. There were no home
improvement loans delinquent more than 90 days at December 31, 2000. There are
no discernible loss or delinquency trends relating to home improvement loans
known to management.

 The remainder of the consumer loan portfolio is composed of installment loans
for automobiles, boats and recreational vehicles, overdraft protection lines,
and loans secured by deposit accounts or stocks. The largest portion of this
group is installment loans for automobiles and other vehicles. The Bank will
finance 85% of the cost of a new car purchase, or the maximum loan amount as
determined by the National Automobile Dealers Association (NADA) publication for
used cars. The Bank will finance 85% of the cost of a new boat or RV, or the
maximum loan amount determined by the NADA Boat/RV Guide for used Boats and RVs.
These loans are secured by the vehicle purchased. Borrowers must meet certain
income and debt ratio requirements, and a credit review is performed on each
applicant. These types of loans are subject to the risk that the value of the
vehicle will decline faster than the amount due on the loan. However, the
income-to-debt ratio requirement helps determine the borrower's current ability
to repay. The Bank had net losses on automobile loans in 2000, 1999 and 1998 of
$208, $0, and $1,000, respectively. There were no automobile or other vehicle
loans past due more than 90 days at December 31, 2000. There are no discernible
delinquency or loss trends relating to automobile or other vehicle loans known
to management.

 Overdraft lines and other personal loans are unsecured lending arrangements.
These loans or lines of credit are made to allow customers to easily make
purchases of consumer goods. The line amounts are subject to fairly low limits
based on an assessment of the customer's credit history and income and debt
ratios. If the lines are handled as agreed, they will typically be automatically
renewed each year. Because they are unsecured, these loans carry a higher level
of risk than secured lending transactions. The Bank attempts to mitigate
significant risk by establishing fairly low credit limits. Net charge-offs in
2000, 1999 and 1998 were approximately $122,000, $60,000, and $209,000,
respectively. There were no overdraft loans and other personal loans past due
more than 90 days at December 31, 2000. There are no discernible delinquency or
loss trends relating to overdraft lines and other personal loans known to
management, however, the increased losses for the three year period relate
primarily to a higher level of personal bankruptcy filings.

 Loans secured by savings accounts in the Bank and stock and bond certificates
are secured lending

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arrangements. The Bank will advance funds for up to 100% of balances in savings
or certificates of deposit accounts in the Bank. The Bank will advance funds up
to 70% of the market value of actively traded stock certificates and bonds or
60% of the market value of listed but not actively traded stocks and bonds.
Loans secured by stocks and bonds are subject to margin calls to maintain the
loan to value ratio. Collateral is not released until the loan is repaid, and
the borrower is generally required to pay interest monthly. There were no losses
on loans secured by savings accounts or stock and bond certificates during 2000,
1999 or 1998. There were no loans secured by savings accounts or stock and bond
certificates past due more than 90 days at December 31, 2000. There are no
discernible delinquency or loss trends relating to loans secured by savings
accounts or stock and bond certificates known to management.

 Reference is also made to Note 4 of the Notes to Consolidated Financial
Statements included in this Report for the composition of the loan portfolio by
type of loan. This Note will indicate the relative size of the various types of
loans to the portfolio in total. Reference is made to the Statistical
Disclosures in this Report for an allocation of the allowance for loan losses by
type of loan which also indicates management's assessment of the degree of risk
that each type of loan carries.

 The Bank is the principal originator of the loans it makes, with the exception
of residential mortgage loans and home equity loans and lines of credit. These
types of loans are predominately loans purchased from a network of brokers or
other types of originators with whom the Bank does business. The Bank has begun
to sell loans into the secondary market and therefore derives a small amount of
noninterest income from serviced loans. These income amounts are not significant
to the amounts of noninterest income derived from other sources.

 Reference is made to Note 4 of the Notes to Consolidated Financial Statements
which contains the amounts of nonaccrual and delinquent loans at December 31,
2000.

 Carrollton Community Development Corporation (CCDC), an 96.4% owned subsidiary
of Carrollton Bank, was established in 1995 for the purpose of promoting,
developing, and improving the housing and economic conditions of people in
Maryland with particular emphasis on Metropolitan Baltimore. CCDC encourages and
assists through loans, investments, and other transactions, to increase housing
for low and moderate income individuals.

 INVESTMENT ACTIVITIES. - The Company maintains a portfolio of investment
securities to provide liquidity and income. The current portfolio amounts to
about 19% of total assets, and is invested primarily in U.S. Treasury, U.S.
Government Agencies, state and municipal bonds, and mortgage backed securities
with maturities varying from 2001 to 2017. Reference is made to Note 3 of the
Notes to Consolidated Financial Statements included in this Report and
Statistical Disclosures for additional information concerning the investment
portfolio.

 DEPOSIT SERVICES. - The Bank offers a wide range of both personal and
commercial types of deposit accounts and services as a means of gathering funds.
Types of deposit accounts available include noninterest bearing demand checking,
interest bearing checking (NOW accounts), savings, money market, certificates of
deposit, individual retirement accounts, and Christmas Club accounts. These
accounts carry varying fee structures depending on the level of services desired
by the customer and varying interest rates depending on the balance in the
account maintained by the customer. Commercial deposit customers may also choose
an overnight investment account which automatically invests excess balances
available in demand accounts on a daily basis in repurchase agreements. The
Bank's customer base for deposits is primarily retail in nature. The Bank does
offer certificates of deposit over $100,000 to its retail and commercial
customers. The Bank has used deposit brokers in the past and may do so in the
future to meet liquidity needs. The balance of accounts over $100,000 is not
significant, and these accounts are offered principally as accommodations to
existing customers.

 Reference is also made to Note 8 of the Notes to Consolidated Financial
Statements included in this Report for additional information concerning
deposits of the Bank.

 BROKERAGE ACTIVITIES. - Carrollton Financial Services, Inc., a subsidiary of
the Bank, provides full service brokerage services for stocks, bonds, mutual
funds and annuities. For 2000, commission and other income totaled $1,273,855
and income after taxes was $285,566.

 SOURCES OF BUSINESS. - The major focus of the Bank's marketing efforts is both
on individual consumers and on small to medium-sized businesses and
professionals in the Bank's service area. The Bank's ability to generate
deposits, loans and service income is dependent upon the growth of its market
and the development and execution of a marketing strategy. Marketing primarily
involves the print, television and radio media, and sponsorships of various
prominent events in the Bank's market area. Direct mail is used on a sporadic
basis, and direct calling on business customers is performed by branch and
commercial lending personnel. The Bank's customers also promote the Bank through
word of mouth referral. In its marketing efforts, the Bank emphasizes the
advantages of dealing with a locally-owned institution which provides
personalized service and is sensitive to the particular needs of consumers and
businesses.

 COMPETITION. - The Bank faces strong competition in all areas of its
operations. This competition comes from entities operating in Baltimore City,

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Baltimore County, Anne Arundel County and Carroll County, and includes branches
of some of the largest banks in Maryland. Its most direct competition for
deposits historically has come from other commercial banks, savings banks,
savings and loan associations and credit unions. The Bank also competes for
deposits with money market funds, mutual funds and corporate and government
securities. The Bank competes with the same banking entities for loans, as well
as mortgage banking companies and other institutional lenders. The competition
for loans varies from time to time depending on certain factors, including,
among others, the general availability of lendable funds and credit, general and
local economic conditions, current interest rate levels, conditions in the
mortgage market and other factors which are not readily predictable. Some of the
Bank's competitors have greater assets and operating capacity than the Bank.

 ASSET MANAGEMENT. - The Bank makes available several types of loan services to
its customers as described above, depending on customer needs. Recent emphasis
has been made on originating short-term (one year or less), variable rate
commercial loans and variable rate home equity lines of credit, with the balance
of its funds invested in consumer/installment loans and real estate loans, both
commercial and residential. The addition of a mortgage subsidiary in late 1997
resulted in growth in residential mortgage lending during 1998 and 1999; due to
the Company's liability sensitive position in an increasing rate environment a
decision to place the mortgage subsidiary in an inactive status has been made.
In addition, a portion of the Bank's assets is invested in high-grade securities
and other investments in order to provide income, liquidity and safety. Such
investments include U.S. government and U.S. government agency securities,
mortgage-backed securities and collateralized mortgage obligations, as well as
advances of federal funds to other member banks of the Federal Reserve System.
Subject to the effects of taxes, the Bank also invests in tax-exempt state and
municipal securities with a minimum rating of "A" by a recognized ratings
agency. The Bank's primary source of funds is customer deposits. Increased usage
of wholesale funding sources over the past two years has been necessary to
support growth in the loan portfolio.

 The risk of non-repayment (or deferred payment) of loans is inherent in the
business of commercial banking, regardless of the type of loan or borrower. The
Bank's efforts to expand its loan portfolio to small and medium-sized businesses
may result in the Bank undertaking certain lending risks which are somewhat
different from those involved in loans made to larger businesses. The Bank's
management evaluates all loan applications and seeks to minimize the exposure to
credit risks through the use of thorough loan application, approval and
monitoring procedures. However, there can be no assurance that such procedures
significantly reduce all risks.

 EMPLOYEES. - As of December 31, 2000, the Bank and its subsidiaries had 149
full time equivalent employees, 42 of whom were officers. Each officer generally
has responsibility for one or more loan, banking, customer contact, operations,
or subsidiary functions. Non-officer employees are employed in a variety of
administrative capacities. Management does not anticipate any inordinate
difficulty in recruiting and training such additional officers and employees as
it may need in the future. Management believes that relations with its employees
are good.

SUPERVISION AND REGULATION

 SUPERVISION AND REGULATION OF THE COMPANY. - As a bank holding company, the
Company is subject to the Bank Holding Company Act of 1956, as amended (the
"BHCA"). The BHCA is administered by the Board of Governors of the Federal
Reserve System (the "Board of Governors"), and the Company is required to file
with the Board of Governors such reports and information as may be required
pursuant to the BHCA. The Board of Governors also may examine the Corporation
and any of its nonbank subsidiaries. The BHCA requires every bank holding
company to obtain the prior approval of the Board of Governors before: (i) it or
any of its subsidiaries (other than a bank) acquires substantially all of the
assets of any bank; (ii) it acquires ownership or control of any voting shares
of any bank if after such acquisition it would own or control, directly or
indirectly, more than five percent of the voting shares of such bank; or
(iii) it merges or consolidates with any other bank holding company.

 Under the BHCA, a bank holding company is generally prohibited from engaging
in, or acquiring direct or indirect control of more than five percent of the
voting shares of any company engaged in non-banking activities. A major
exception to this prohibition is for activities the Board of Governors finds, by
order or regulation, 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 Board of Governors has determined by regulation to be properly incident
to the business of a bank holding company are: making or servicing loans and
certain types of leases; engaging in certain investment advisory and discount
brokerage activities; performing certain data processing services; acting in
certain circumstances as a fiduciary or as an investment or financial advisor;
ownership of certain types of savings associations; engaging in certain
insurance activities; and making investments in certain corporations or projects
designed primarily to promote community welfare.

 Certain provisions of the Federal Deposit Insurance Corporation Improvements
Act of 1991

                                      6
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("FDICIA") also may impact the operations of the Company. FDICIA requires that
the Board of Governors adopt regulations establishing safety and soundness
standards for bank holding companies relating to: (i) internal controls,
information systems and internal audit systems; (ii) loan documentation;
(iii) credit underwriting; (iv) interest rate exposure; (v) asset growth; and
(vi) compensation and benefit standards for officers, directors, employees and
principal shareholders. The Board of Governors proposed regulations to implement
this requirement in April 1993. FDICIA also requires any bank holding company
which controls an undercapitalized insured bank to act as a "source of strength"
to such bank. See "Holding Company Guaranty" below. Finally, FDICIA permits the
appropriate federal bank regulatory agency to require a bank holding company to
divest itself of a bank subsidiary in certain circumstances. See "Prompt
Corrective Action" below.

 The Company is an "affiliate" of the Bank under the Federal Reserve Act, which
imposes certain restrictions on: (i) loans by the Bank to the Company;
(ii) investments in the stock or securities of the Company; and (iii) the Bank
taking stock or securities of the Company as collateral for loans by it to a
borrower. See "Transactions with Affiliates" below.

 The Company also is an affiliate of the Bank under the Maryland Financial
Institutions Article of the Annotated Code of Maryland (the "Financial
Institutions Article"). As such, the Commissioner of Financial Regulation for
the State of Maryland (the "Commissioner") has the same authority to examine the
business of the Company that it has to examine the business of the Bank.

 Federal law generally prohibits the current acquisition of banks or bank
holding companies in Maryland by out-of-state banks or bank holding companies,
although the Financial Institutions Article allows regional interstate banking
by permitting banking organizations in certain states to acquire Maryland
banking organizations if Maryland banking associations are allowed to acquire
banking organizations in their states. As a result of this provision, banking
organizations in other states, most significantly North Carolina, Pennsylvania
and Virginia, have entered the Maryland market through acquisitions of Maryland
institutions. Those acquisitions are subject to federal and Maryland approval.
The so-called "Douglas Amendment" to the Bank Holding Company Act was amended
effective September 29, 1995 to allow an "adequately capitalized and adequately
managed" bank holding company to acquire a bank or substantially all of its
assets located in any other state regardless of whether the acquisition is
expressly authorized under state law.

 President Clinton also signed into law a bill on June 1, 1997, which among
other things, allows interstate branching by banking organizations subject to
each states' separate decision to allow interstate branch banking within the
state. As a result of such legislation, it is anticipated that competition by
financial institutions within Maryland may increase due to entrance into the
market place by branches of out-of-state banks. Such legislation could also spur
increased acquisition activity of Maryland institutions by out-of-state
organizations. During the 1995 legislative session, the State of Maryland passed
legislation to allow interstate branch banking within Maryland.

 SUPERVISION AND REGULATION OF THE BANK. - The Bank is the only direct
subsidiary of the Company. The Bank operates as a banking institution
incorporated under the laws of the State of Maryland and is subject to
examination by the Commissioner. The Bank is not a member of the Federal Reserve
System (an "insured nonmember bank") and as such, its primary federal regulator
is the Federal Deposit Insurance Corporation (the "FDIC"). Deposits in the Bank
are insured by the FDIC. The Commissioner and the FDIC regulate or monitor all
areas of the Bank's operations, including reserves, loans, loans to directors,
officers or principal shareholders, loans to one borrower, capital, investments,
borrowings, deposits, mergers, issuance of securities, payment of dividends,
interest rates payable on deposits, interest rates or fees chargeable on loans,
establishment of branches, corporate reorganizations and maintenance of books
and records.

 EXAMINATIONS. - Pursuant to FDICIA, and subsequent amendments thereto,
examinations of insured nonmember banks having assets of $250,000,000 or more
must be conducted no less frequently than every 12 months. The Bank is subject
to assessments by the FDIC to cover the costs of such examinations. As a result
of such examinations, the FDIC may revalue assets of the Bank and require
establishment of specific reserves in amounts equal to the difference between
such revaluation and the book value of the assets.

 SAFETY AND SOUNDNESS. - The FDIC is authorized to promulgate regulations to
ensure the safe and sound operations of insured nonmember banks and may impose
various requirements and restrictions on the activities of insured nonmember
banks. Additionally, under FDICIA, the FDIC was required to prescribe safety and
soundness regulations relating to: (i) internal controls, information systems,
and internal audit systems; (ii) loan documentation; (iii) credit underwriting;
(iv) interest rate exposure; (v) asset growth; and (vi) compensation and benefit
standards for officers, directors, employees and principal shareholders.

 LOANS AND DEPOSIT PRODUCTS. - Interest and certain other charges collected or
contracted for by the Bank are subject to state usury and consumer protection
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 Truth-in-Lending Act (governing disclosures of credit
terms to consumer

                                      7
<PAGE>
borrowers), 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 (governing the use of information from and provision of
information to credit reporting agencies and others), the Fair Debt Collection
Practices Act (governing the manner in which consumer debts may be collected),
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 Electronic Funds Transfer Act (governing 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), the Truth-in-Savings Act (governing disclosures of
terms applicable to deposit accounts), the Expedited Funds Availability Act
(governing the availability of certain funds deposited into transaction
accounts), and the rules and regulations of the Board of Governors implementing
such acts.

 Pursuant to FDICIA, the FDIC has adopted regulations prescribing standards for
extensions of credit by insured nonmember banks secured by liens on or interests
in real estate and made for the purpose of financing the construction of a
building or other improvements to real estate. The FDIC regulations require
insured nonmember banks to establish and maintain written internal real estate
lending policies consistent with safe and sound banking practices and
appropriate to the size of the bank. These policies must include loan portfolio
diversification standards, prudent underwriting standards (including clear and
measurable loan-to-value limits), loan administration procedures, and
documentation, approval and reporting requirements to monitor compliance with
the policies. Finally, the regulations require insured nonmember banks to
monitor conditions in its real estate market to ensure that its lending policies
continue to be appropriately based on current market conditions.

 CAPITAL REQUIREMENTS. - Under regulations promulgated by the FDIC, insured
nonmember banks currently are required to maintain "core" or "tier 1" capital of
at least 3% of total assets (the "Leverage Ratio"). For all but the most highly
rated banks, the minimum Leverage Ratio requirement will be 4% to 5% of total
assets. Tier 1 capital consists of: (i) common shareholders' equity,
noncumulative perpetual preferred stock and minority interests in consolidated
subsidiaries; (ii) minus intangible assets (other than certain purchased
mortgage and credit card servicing rights); (iii) minus certain losses, and
minus investments in certain securities subsidiaries.

 In addition, each insured nonmember bank also must maintain a "tier 1
risk-based capital ratio" of 4%. The "tier 1 risk-based capital ratio" is
defined in FDIC regulations as the ratio of tier 1 capital to "risk-weighted
assets." A bank's total risk-weighted assets are determined by: (i) converting
each of its off-balance sheet items to an on-balance sheet credit equivalent
amount; (ii) assigning each on-balance sheet asset and the credit equivalent
amount of each off-balance sheet item to one of the five risk categories
established in the FDIC's regulations; and (iii) multiplying the amounts in each
category by the risk factor assigned to that category. The sum of the resulting
amounts constitutes total risk-weighted assets.

 Finally, each insured nonmember bank is required to maintain a "total
risk-based capital ratio" of at least 8%. The "total risk-based capital ratio"
is defined in FDIC regulations as the ratio of total qualifying capital to
risk-weighted assets (as defined above). Total capital, for purposes of the
risk-based capital requirement, consists of the sum of tier 1 capital (as
defined for purposes of the Leverage Ratio) and supplementary capital.
Supplementary capital includes such items as cumulative perpetual preferred
stock, long-term and intermediate-term preferred stock, term subordinated debt
and general valuation loan and lease loss allowances (but only in an amount of
up to 1.25% of total risk-weighted assets). The maximum amount of supplementary
capital that may be counted towards satisfaction of the total capital
requirement is limited to 100% of core capital. Additionally, term subordinated
debt and intermediate-term preferred stock only may be included in supplementary
capital up to 50% of tier 1 capital.

 Capital requirements higher than the generally applicable minimum requirements
may be established for a particular insured nonmember bank if the FDIC
determines that the bank's capital is or may become inadequate in view of its
particular circumstances. Individual minimum capital requirements may be imposed
where a bank is receiving special supervisory attention, has a high degree of
exposure to interest rate risk, or poses other safety or soundness concerns.
Deficient capital may result in the suspension of an institution's deposit
insurance.

 Under FDICIA, the FDIC was required to revise its risk-based capital standard
to ensure that such standard takes adequate account of: (i) interest rate risk;
(ii) concentration of credit risk; and (iii) the risk of nontraditional
activities and to adequately reflect the actual performance and expected risk of
loss on multifamily mortgages. Although the FDIC, together with the Office of
the Comptroller of the Currency and the Board of Governors published a joint
notice of proposed rule making addressing the interest rate risk issue, no final
action has occurred with respect thereto nor has the FDIC taken any action to
date with respect to concentration of credit risk, the risk of nontraditional
activities or the expected risk on multifamily mortgages.

 PROMPT CORRECTIVE ACTION. - Under FDIC regulations, any insured nonmember bank
that receives

                                      8
<PAGE>
notice from the FDIC that it is undercapitalized, significantly undercapitalized
or critically undercapitalized must file a capital restoration plan with the
FDIC addressing, among other things, the manner in which the bank will increase
its capital to comply with all applicable capital standards. Under the prompt
corrective action regulation adopted by the FDIC, an institution will be
considered: (i) "well capitalized" if the institution has a total risk-based
capital ratio of 10% or greater, a tier 1 risk-based capital ratio of 6% or
greater, and a leverage ratio of 5% or greater (provided the institution is not
subject to an order, written agreement, capital directive or prompt corrective
action to meet and maintain a specified capital level for any capital measure);
(ii) "adequately capitalized" if the institution has a total risk-based capital
ratio of 8% or greater, a tier 1 risk-based capital ratio of 4% or greater, and
a leverage ratio of 4% or greater (3% or greater if the institution is rated
composite 1 in its most recent report of examination); (iii) "undercapitalized"
if the institution has a total risk-based capital ratio of less than 8%, or a
tier 1 risk-based capital ratio of less than 4%, or a leverage ratio of less
than 4% (3% if the institution is rated composite 1 in its most recent report of
examination); (iv) "significantly undercapitalized" if the institution has a
total risk-based capital ratio of less than 6%, or a tier 1 risk-based capital
ratio of less than 3%, or a leverage ratio that is less than 3%; and
(v) "critically undercapitalized" if the institution has a ratio of tangible
equity to total assets that is less than 2%. The regulation also permits the
FDIC to determine that an institution should be placed in a lower category based
on the existence of an unsafe and unsound condition or on other information,
such as the institution's examination report, after written notice.

 The degree of regulatory intervention mandated by FDICIA and the prompt
corrective action regulation is tied to an insured nonmember bank's capital
category, with increasing scrutiny and more stringent restrictions being imposed
as a bank's capital declines. The prompt corrective actions specified by FDICIA
for undercapitalized banks include increased monitoring and periodic review of
capital compliance efforts, a requirement to submit a capital restoration plan,
restrictions on dividends and total asset growth, and limitations on certain new
activities (such as opening new branches and engaging in acquisitions and new
lines of business) without FDIC approval. Banks that are significantly
undercapitalized or critically undercapitalized may be required to raise
additional capital so that the bank will be adequately capitalized or be
acquired by, or combined with, another bank if grounds exist for appointing a
receiver. Further, the FDIC may restrict such banks from (i) entering into any
material transaction without the prior approval of the FDIC; (ii) making
payments on subordinated debt; (iii) extending credit for any highly leveraged
transaction; (iv) making any material change in accounting methods;
(v) engaging in certain affiliate transactions; (vi) paying interest on deposits
in excess of the prevailing rates of interest in the region where the
institution is located; (vii) paying excess compensation or bonuses; and
(viii) accepting deposits from correspondent depository institutions. In
addition, the FDIC may require that such banks: (a) hold a new election for
directors, dismiss any director or senior executive officer who held office for
more than 180 days immediately before the institution became undercapitalized,
or employ qualified senior executive officers; and (b) divest or liquidate any
subsidiary which the FDIC determines poses a significant risk to the
institution.

 Any company which controls a significantly undercapitalized insured nonmember
bank may be required to: (i) divest or liquidate any affiliate other than an
insured depository institution; or (ii) divest the bank if the FDIC determines
that divestiture would improve the bank's financial condition and future
prospects. Generally a conservator or receiver must be appointed for a
critically undercapitalized bank no later than 90 days after the bank becomes
critically undercapitalized, subject to a limited exception for banks which are
in compliance with an approved capital restoration plan and which the FDIC
certifies as not likely to fail. Additionally, the FDIC may impose such other
restrictions on a capital-deficient bank as the FDIC deems necessary or
appropriate for the safety and soundness of the bank, its depositors and
investors, including limitations on investments and lending activities. The
failure by a bank to materially comply with an approved capital plan constitutes
an unsafe or unsound practice.

 HOLDING COMPANY GUARANTY. - FDICIA and the regulations promulgated by the FDIC
pursuant thereto also require any company that has control of an
"undercapitalized" insured nonmember bank, in conjunction with the submission of
a capital restoration plan by the bank, to guarantee that the bank will comply
with the plan and provide appropriate assurances of performance. The aggregate
liability of any such controlling company under such guaranty is limited to the
lesser of: (i) 5% of the bank's assets at the time it became undercapitalized;
or (ii) the amount necessary to bring the bank into capital compliance at the
time the bank fails to comply with the terms of its capital plan.

 BROKERED AND OTHER DEPOSITS. - Under applicable FDIC regulations, only
well-capitalized depository institutions may solicit, accept, renew or roll over
any brokered deposit. Adequately-capitalized depository institutions may accept,
renew or roll over brokered deposits only after obtaining a waiver from the
FDIC. Adequately-capitalized institutions are subject to limits on rates of
interest they may pay on brokered deposits. Undercapitalized institutions are
subject to limits on rates of interest they may pay on deposits in general.

                                      9
<PAGE>
 LIMITATION ON BANK ACTIVITIES. - The scope of activities in which an insured
nonmember bank may engage and the permissible investments which an insured
nonmember bank may make are subject to federal and Maryland law. Further,
pursuant to FDICIA and the regulations of the FDIC promulgated pursuant thereto,
an insured nonmember bank may engage only in those activities, and make only
those investments, as are permissible for national banks. National banks
generally are permitted to engage in certain enumerated banking functions and
all such activities as are incidental thereto. Further, national banks, and as a
result of FDICIA, insured nonmember banks are severely limited as to the types
of debt and equity securities in which such banks may invest.

 TRANSACTIONS WITH AFFILIATES. - Transactions engaged in by an insured nonmember
bank or one of its subsidiaries with affiliates of such bank are subject to the
affiliate transactions restrictions contained in Section 23A and 23B of the
Federal Reserve Act in the same manner and to the same extent as such
restrictions apply to transactions engaged in by a Federal Reserve System member
bank or one of its subsidiaries with affiliates of that member bank.
Section 23A of the Federal Reserve Act imposes both quantitative and qualitative
restrictions on transactions engaged in by a member bank or one of its
subsidiaries with an affiliate, while Section 23B of the Federal Reserve Act
requires, among other things, that all transactions with affiliates be on terms
substantially the same, or at least as favorable to the member bank or the
subsidiary, as the terms that would apply, or would be offered in, a comparable
transaction with an unaffiliated party.

 Loans made by an insured nonmember bank to its directors, executive officers
and principal shareholders, to the directors, executive officers and principal
shareholders of its affiliates, or to the related interests of any of the
foregoing (collectively, "insiders") must comply with Maryland law and the
requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and certain
of the regulations of the Board of Governors promulgated pursuant thereto,
except to the extent more stringent requirements are established by the FDIC.
Among other things, Sections 22(g) and 22(h) of the Federal Reserve Act require
that all loans to insiders be made on substantially the same terms as those
prevailing at the time for comparable transactions with unaffiliated borrowers
and not involve more than the normal risk of repayment or present other
unfavorable features. Maryland law further requires that such loans with limited
exceptions be approved by the board of directors or executive committee and be
reviewed every six months by the board. Additionally, the aggregate amount of
loans or extensions of credit outstanding to any insider may not exceed the
loans to one borrower limitation applicable to national banks. Further, FDICIA
limits the aggregate amount of loans or extension of credit outstanding to all
insiders to 100% of the amount of unimpaired capital and unimpaired surplus of
the institution.

 REGULATORY RESTRICTIONS ON THE PAYMENT OF DIVIDENDS BY THE BANK TO THE
COMPANY. - FDICIA restricts the ability of federally-insured banks to pay any
dividend (other than a dividend in the form of additional shares, or options to
purchase additional shares, of the bank) if, after paying the dividend, the bank
would be undercapitalized.

 COMMUNITY REINVESTMENT. - The Community Reinvestment Act (the "CRA") and the
regulations of the FDIC promulgated pursuant thereto require each insured
nonmember bank to delineate its local community, adopt a CRA statement listing
the local community and the types of credit the bank is prepared to extend in
that community and to make its CRA statement available for public inspection.
The FDIC periodically evaluates performance and compliance with the CRA
statement. The failure to adequately perform community reinvestment activities
could result in the denial of applications to acquire banking and non-banking
institutions, establish branches, obtain deposit insurance for newly-chartered
banks, or to relocate the main office or a branch office of a bank.

 INSURANCE OF DEPOSITS. - The Bank's deposits are insured by the FDIC through
the Bank Insurance Fund (the "BIF") up to a maximum of $100,000 for each insured
depositor. The insurance premium payable by each BIF member is based on the
institution's assessment base (generally total deposit accounts subject to
certain adjustments). The premiums are paid in quarterly assessments. The FDIC
promulgated regulations establishing a risk-based assessment system commencing
in 1993.

 Insurance of deposits may be terminated by the FDIC after notice and hearing,
upon a finding by the FDIC that an insured nonmember bank has engaged in unsafe
or unsound practices, is in an unsafe or unsound condition to continue
operations, or has violated any applicable law, rule, regulation, order or
condition imposed by, or written agreement with, the FDIC. Additionally, the
FDIC may temporarily suspend insurance on new deposits received by an insured
nonmember bank that has no tangible capital and no goodwill includible in core
capital.

 INCOME TAXES. - The Company and its subsidiaries are required to file annual
income tax returns with both the Internal Revenue Service (the "IRS") and the
taxing authorities in any state in which they are qualified to do business.
Because the Bank is under $500 million in asset size, it is permitted to use the
reserve method of tax accounting for determining bad debt deductions for income
tax purposes. At December 31, 2000, the Bank had a tax bad debt reserve of
$932,691 and a book bad debt reserve of $3.0 million. The Bank has provided a
deferred tax asset on its books for the difference between its tax and book bad
debt reserves. If the Bank were to grow to a size of

                                      10
<PAGE>
$500 million or greater, it would be required to recapture its tax bad debt
reserve over a four year period and pay taxes on that amount. For financial
accounting purposes, the payment of these taxes would be offset by an increase
in the deferred tax asset related to the difference between tax and book bad
debt reserves, potentially subject to a total deferred tax asset limitation
based on reasonable recovery under current accounting literature.

 Although the Company currently pays income taxes based on current marginal
rates, the Bank has a portfolio of state and municipal securities which earn
interest which is not taxed for federal income tax purposes. For that reason,
the Bank may be subject to the Alternative Minimum Tax ("AMT") provisions of the
Internal Revenue Code. The AMT provisions in general limit the benefit available
from investing in tax free obligations, and require companies to pay the higher
of taxes computed at 34% of income less the tax free income, or 20% of total
income. Any amounts paid under the AMT are carried over and are available as a
credit in future years.

 SECURITIES LAWS. - The Company and certain of its directors, officers and
shareholders are subject to the Securities Act of 1934 and a broad range of both
federal and state securities laws including, by way of example, the obligation
to file annual, quarterly and other periodic reports with the appropriate
authorities, soliciting proxies and conducting shareholders' meetings in
accordance with the 1934 Act's proxy rules, and complying with the reporting and
"short-swing" profit recovery provisions imposed by 1934 Act Section 16.

 MONETARY POLICIES. - Banking is a business which depends on interest rate
differentials. In general, the differences between the interest paid by a bank
on its deposits and other borrowings and the interest received by the bank on
loans extended to its customers and securities held in its investment portfolio
constitute the major portion of a bank's earnings. Consequently, the earnings
growth of the Bank is influenced by economic conditions generally, both domestic
and foreign, and also on the monetary and fiscal policies of the United States
and its agencies, particularly the Federal Reserve Board, which regulates the
supply of money through various means, including open market transactions in
United States government securities. The nature and timing of changes in such
policies and their impact on the Bank cannot be predicted, although this
instrument of monetary policy may cause volatile fluctuations in short term
interest rates, and it can have a direct, adverse effect on the operating
results of financial institutions generally. Consequently, Federal Reserve
monetary policies have had a significant effect on the operating results of
commercial banks in the past and are expected to continue to do so in the
future.

 During the last several years, federal legislation and actions by various
federal regulatory authorities have significantly increased the competition
among commercial banks, savings and loan associations, savings bank, and other
financial institutions through, among other things, the elimination of virtually
all rate ceilings on interest-bearing deposits.

ITEM 2: DESCRIPTION OF PROPERTY

 Both the Bank's main branch and certain of the Company's executive and
administrative offices are located in the Bank's headquarters building which it
owns in downtown Baltimore, Maryland. The Bank owns buildings for three of its
other branch office locations as well. The Bank leases space for the remaining
seven branches, and for its operations center which primarily houses support
functions. Current lease terms expire in 2001 through 2009 and contain renewal
options ranging from 4 to 24 years.

 The Bank has purchased the furniture and fixtures required for its
headquarters, operations center and branch network. The Bank has purchased the
computer/teller equipment in its branch network and the equipment used for
administrative functions. The Bank purchased new computer equipment used in the
data processing department which supports its operations in early 1998.

ITEM 3: LEGAL PROCEEDINGS

 There are no pending legal proceedings in which the Company or any of its
subsidiaries is a defendant for claims or damages which exceed $50,000.

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

 Not applicable.

                                      11
<PAGE>
PART II
-------------------

ITEM 5: MARKET FOR COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS

TRADING AND DIVIDENDS

 As of December 31, 2000, there were approximately 549 shareholders of record of
the Company. Since May 1994, the Company's Common Stock has traded on the NASDAQ
National Market Tier of The NASDAQ Stock Market under the symbol "CRRB".
Currently, there are two broker-dealers who make a market in the Common Stock.

 The table below sets forth the high and low sales price for each quarter in the
last two years, and cash dividends paid per share, adjusted to reflect the
effect of the 2 for 1 stock split declared in May, 1999.

 The ability of the Company to pay dividends in the future will be dependent on
the earnings, if any, financial condition and business of the Company, as well
as other relevant factors, such as regulatory requirements. No assurance can be
given either that the Company's future earnings, if any, will be sufficient to
enable it to pay dividends, or that if such earnings are sufficient, that the
Company will not decide to retain such earnings for general working capital and
other funding needs. In addition, the Company is highly dependent on dividends
received from the Bank to enable it to pay dividends to shareholders. No
assurance can be given that the Bank will continue to generate sufficient
earnings to enable it to pay dividends to the Company, or that it will continue
to meet regulatory capital requirements which, if not met, could prohibit
payment of dividends to the Company.

<TABLE>
<CAPTION>
                                                                                               CASH DIVIDENDS
                                                                                                    PAID
PERIOD                                                        PRICE PER SHARE                     PER SHARE
                                                        2000                  1999             2000       1999
                                                   HIGH       LOW        HIGH       LOW
<S>                                              <C>        <C>        <C>        <C>        <C>        <C>
----------------------------------------------------------------------------------------------------------------
1st Quarter                                      $15.875    $13.500    $18.000    $16.250    $0.0850    $0.0725
2nd Quarter                                       14.438     13.188     18.000     16.125     0.0900     0.0725
3rd Quarter                                       14.500     13.125     19.250     17.250     0.0900     0.0800
4th Quarter                                       14.125     11.375     18.000     14.250     0.0900     0.0825
</TABLE>

ITEM 6: SELECTED FINANCIAL DATA

 The following statistical information should be read in conjunction with the
Audited Consolidated Financial Statements contained in Item 8 of this document
and Management's Discussion and Analysis of Financial Condition and Results of
Operations. The following statistical information contained herein is presented
to help the reader gain additional insight to information and discussion
presented in the Audited Consolidated Financial Statements and in Management's
Discussion and Analysis.

ITEM 6A: DISTRIBUTION OF ASSETS,
LIABILITIES, AND SHAREHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL

AVERAGE BALANCES, INTEREST AND YIELDS

 The following chart contains average balance sheet information for 2000, 1999
and 1998, and indicates the related interest income or expense and calculated
yield. Non-accruing loans are included in the average balance amounts of the
applicable portfolio, but only the amount of interest actually recorded as
income on non-accrual loans is included in the interest income column.

                                      12
<PAGE>
2000 AVERAGE BALANCES, INTEREST, AND YIELDS

<TABLE>
<CAPTION>
                                                                                2000
                                                              AVERAGE BALANCE    INTEREST      YIELD
<S>                                                           <C>               <C>           <C>
------------------------------------------------------------------------------------------------------

ASSETS
Federal funds sold                                             $  7,133,152     $   510,601     7.16%

Investment securities
U.S. Treasury                                                       922,791          61,984     6.72
U.S. Government agency                                           43,411,997       2,829,542     6.52
State and municipal                                              12,519,336         826,993     6.61
Mortgage-backed securities                                        4,018,020         279,006     6.94
Other                                                             6,545,933         455,529     6.96
                                                               ------------     -----------    -----
                                                                 67,418,077       4,453,054     6.61
                                                               ------------     -----------    -----
Loans
Demand and time                                                  26,519,768       2,636,511     9.94
Residential mortgage                                            192,901,840      14,644,161     7.59
Commercial mortgage and construction                             47,172,991       4,134,491     8.76
Installment and credit card                                       5,814,850         579,160     9.96
Lease financing                                                   2,402,565         237,414     9.88
                                                               ------------     -----------    -----
                                                                274,812,014      22,231,737     8.09
                                                               ------------     -----------    -----
Total interest-earning assets                                   349,363,243      27,195,392     7.78
Non-interest-bearing cash                                        21,169,927
Premises and equipment                                            8,348,640
Other assets                                                      4,751,394
Allowance for loan losses                                        (2,942,829)
Unrealized gains/losses of available for sale securities         (1,719,865)
                                                               ------------     -----------
                                                               $378,970,510     $27,195,392
                                                               ============     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits
Savings and NOW                                                $ 81,124,906     $ 2,159,277     2.66%
Money market                                                     47,198,465       2,411,846     5.11
Other time                                                      108,823,949       6,885,914     6.33
                                                               ------------     -----------    -----
                                                                237,147,320      11,457,037     4.83
Borrowed funds                                                   71,810,671       4,464,647     6.22
                                                               ------------     -----------    -----
                                                                308,957,991      15,921,684     5.15
Non-interest bearing deposits                                    39,350,269
Other liabilities                                                   896,285
Shareholders' equity                                             29,765,965
                                                               ------------     -----------
Total liabilities and equity                                   $378,970,510     $15,921,684
                                                               ============     ===========
NET YIELD ON INTEREST-EARNING ASSETS                           $349,363,243     $11,273,708     3.23%
                                                               ============     ===========    =====
</TABLE>

INTEREST ON INVESTMENTS AND LOANS IS PRESENTED ON A FULLY TAXABLE EQUIVALENT
BASIS, USING REGULAR INCOME TAX RATES.

                                      13
<PAGE>
1999 AVERAGE BALANCES, INTEREST, AND YIELDS

<TABLE>
<CAPTION>
                                                                                1999
                                                              AVERAGE BALANCE    INTEREST      YIELD
<S>                                                           <C>               <C>           <C>
------------------------------------------------------------------------------------------------------

ASSETS
Federal funds sold                                             $  1,828,582     $   100,572     5.50%

Investment securities
U.S. Treasury                                                     1,566,850          97,391     6.22
U.S. Government agency                                           33,942,948       2,264,792     6.67
State and municipal                                              25,626,795       1,807,008     7.05
Mortgage-backed securities                                        7,944,031         498,237     6.27
Other                                                             6,397,245         311,266     4.87
                                                               ------------     -----------    -----
                                                                 75,477,869       4,978,694     6.60
                                                               ------------     -----------    -----
Loans
Demand and time                                                  26,641,534       2,518,184     9.45
Residential mortgage                                            144,647,615      10,618,154     7.34
Commercial mortgage and construction                             42,565,422       3,851,809     9.05
Installment and credit card                                       7,071,784         672,279     9.51
Lease financing                                                   3,664,060         334,229     9.12
                                                               ------------     -----------    -----
                                                                224,590,415      17,994,655     8.01
                                                               ------------     -----------    -----
Total interest-earning assets                                   301,896,866      23,073,921     7.64
Non-interest-bearing cash                                        22,658,844
Premises and equipment                                            7,709,859
Other assets                                                      5,084,922
Allowance for loan losses                                        (2,633,176)
Unrealized gains/losses of available for sale securities            978,015
                                                               ------------     -----------
                                                               $335,695,330     $23,073,921
                                                               ============     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits
Savings and NOW                                                $ 75,424,807     $ 1,488,646     1.97%
Money market                                                     52,409,615       2,164,581     4.13
Other time                                                       78,044,054       4,331,174     5.55
                                                               ------------     -----------    -----
                                                                205,878,476       7,984,401     3.88
Borrowed funds                                                   58,298,888       2,969,248     5.09
                                                               ------------     -----------    -----
                                                                264,177,364      10,953,649     4.15
Non-interest bearing deposits                                    38,549,704
Other liabilities                                                 1,873,242
Shareholders' equity                                             31,095,020
                                                               ------------     -----------
Total liabilities and equity                                   $335,695,330     $10,953,649
                                                               ============     ===========
NET YIELD ON INTEREST-EARNING ASSETS                           $301,896,866     $12,120,272     4.01%
                                                               ============     ===========    =====
</TABLE>

INTEREST ON INVESTMENTS AND LOANS IS PRESENTED ON A FULLY TAXABLE EQUIVALENT
BASIS, USING REGULAR INCOME TAX RATES.

                                      14
<PAGE>
1998 AVERAGE BALANCES, INTEREST, AND YIELDS

<TABLE>
<CAPTION>
                                                                                1998
                                                              AVERAGE BALANCE    INTEREST      YIELD
<S>                                                           <C>               <C>           <C>
------------------------------------------------------------------------------------------------------

ASSETS
Federal funds sold                                             $  1,762,230     $   115,545     6.56%

Investment securities
U.S. Treasury                                                     1,963,488         134,260     6.84
U.S. Government agency                                           24,681,036       1,678,398     6.80
State and municipal                                              24,570,127       1,755,723     7.15
Mortgage-backed securities                                       14,277,000         915,588     6.41
Other                                                             4,838,476         268,689     5.55
                                                               ------------     -----------     ----
                                                                 70,330,127       4,752,658     6.76
                                                               ------------     -----------     ----
Loans
Demand and time                                                  26,357,879       2,610,069     9.90
Residential mortgage                                            114,356,278       8,907,738     7.79
Commercial mortgage and construction                             37,011,680       3,518,657     9.51
Installment and credit card                                       9,718,837         906,869     9.33
Lease financing                                                   3,764,111         311,464     8.27
                                                               ------------     -----------     ----
                                                                191,208,785      16,254,797     8.50
                                                               ------------     -----------     ----
Total interest-earning assets                                   263,301,142      21,123,000     8.02
Non-interest-bearing cash                                        22,365,140
Premises and equipment                                            6,816,953
Other assets                                                      5,029,286
Allowance for loan losses                                        (2,250,497)
Unrealized gains on available for sale securities                 1,669,556
                                                               ------------     -----------
                                                               $296,931,580     $21,123,000
                                                               ============     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing deposits
Savings and NOW                                                $ 73,497,430     $ 1,566,593     2.13%
Money market                                                     55,545,497       2,404,556     4.33
Other time                                                       69,855,240       3,950,261     5.65
                                                               ------------     -----------     ----
                                                                198,898,167       7,921,410     3.98
Borrowed funds                                                   32,087,248       1,675,312     5.22
                                                               ------------     -----------     ----
                                                                230,985,415       9,596,722     4.15
Non-interest-bearing deposits                                    32,968,381
Other liabilities                                                 2,339,801
Shareholders' equity                                             30,637,983
                                                               ------------     -----------
  Total liabilities and equity                                 $296,931,580     $ 9,596,722
                                                               ============     ===========
NET YIELD ON INTEREST-EARNING ASSETS                           $263,301,142     $11,526,278     4.38%
                                                               ============     ===========     ====
</TABLE>

INTEREST ON INVESTMENTS AND LOANS IS PRESENTED ON A FULLY TAXABLE EQUIVALENT
BASIS, USING REGULAR INCOME TAX RATES.

                                      15
<PAGE>
RATE AND VOLUME VARIANCE

The following chart shows the changes in interest income and interest expense
for the last two years resulting from changes in volume and changes in rates.

<TABLE>
<CAPTION>
                                            2000 Compared to 1999                   1999 Compared to 1998
                                          CHANGE DUE TO VARIANCE IN               CHANGE DUE TO VARIANCE IN
                                       RATES       VOLUMES       TOTAL         RATES       VOLUMES       TOTAL
<S>                                 <C>           <C>          <C>          <C>           <C>          <C>
-----------------------------------------------------------------------------------------------------------------

INTEREST EARNED ON
Federal funds sold                  $   118,278   $  291,751   $  410,029   $   (19,324)  $    4,351   $  (14,973)

INVESTMENT SECURITIES
U.S. Treasury                             4,626      (40,033)     (35,407)       (9,748)     (27,121)     (36,869)
U.S. Government agency                  (67,058)     631,808      564,750       (43,449)     629,843      586,394
State and municipal                     (55,776)    (924,239)    (980,015)      (24,222)      75,507       51,285
Mortgage-backed securities               27,002     (246,233)    (219,231)      (11,216)    (406,135)    (417,351)
Other                                   137,028        7,235      144,263       (43,984)      86,561       42,577
                                    -----------   ----------   ----------   -----------   ----------   ----------
                                         45,822     (571,462)    (525,640)     (132,619)     358,655      226,036
                                    -----------   ----------   ----------   -----------   ----------   ----------

LOANS
Demand and time                         129,836      (11,509)     118,327      (119,974)      28,089      (91,885)
Residential mortgage                    483,807    3,542,200    4,026,007      (649,116)   2,359,532    1,710,416
Commercial mortgage and
 construction                          (134,264)     416,946      282,682      (194,836)     527,988      333,152
Installment and credit card              26,371     (119,490)     (93,119)       12,408     (246,998)    (234,590)
Lease financing                          18,256     (115,071)     (96,815)       31,044       (8,279)      22,765
                                    -----------   ----------   ----------   -----------   ----------   ----------
                                        524,006    3,713,076    4,237,082      (920,474)   2,660,332    1,739,858
                                    -----------   ----------   ----------   -----------   ----------   ----------

TOTAL INTEREST EARNED                   688,106    3,433,365    4,121,471    (1,072,417)   3,023,338    1,950,921
                                    -----------   ----------   ----------   -----------   ----------   ----------

INTEREST EXPENSE ON
DEPOSITS
Savings and NOW                         558,129      112,502      670,631      (119,029)      41,082      (77,947)
Money market                            462,492     (215,227)     247,265      (104,223)    (135,752)    (239,975)
Other time                              846,563    1,708,177    2,554,740       (82,158)     463,071      380,913
BORROWED FUNDS                          807,224      688,175    1,495,399       (74,604)   1,368,540    1,293,936
                                    -----------   ----------   ----------   -----------   ----------   ----------

TOTAL INTEREST EXPENSE                2,674,408    2,293,627    4,968,035      (380,014)   1,736,941    1,356,927
                                    -----------   ----------   ----------   -----------   ----------   ----------

NET INTEREST INCOME                 $(1,986,302)  $1,139,738   $ (846,564)  $  (692,403)  $1,286,397   $  593,994
                                    ===========   ==========   ==========   ===========   ==========   ==========
</TABLE>

INTEREST ON INVESTMENTS AND LOANS IS PRESENTED ON A FULLY TAXABLE EQUIVALENT
BASIS, USING REGULAR INCOME TAX RATES.

                                      16
<PAGE>
ITEM 6B: INVESTMENT PORTFOLIO

AMORTIZED COST OF INVESTMENTS

 Reference is made to Note 3 of Notes to Consolidated Financial Statements for
the amortized cost of investments at the end of 2000 and 1999. The carrying
value of investments at the end of 1998 was as follows:

<TABLE>
<S>                                                                <C>
AVAILABLE FOR SALE
U.S. Treasury                                                      $    500,567
U.S. Government agency                                               20,447,524
Mortgage backed securities                                            9,122,671
State and municipal                                                  19,152,428
Federal Home Loan Bank stock                                          1,750,000
Equity securities                                                     3,814,822
                                                                   ------------
                                                                   $ 54,788,012
                                                                   ============
HELD TO MATURITY
U.S. Treasury                                                      $  1,298,856
State and municipal                                                   7,038,054
Foreign bonds                                                            50,000
                                                                   ------------
                                                                   $  8,386,910
                                                                   ============
</TABLE>

--------------------------
Note: Investments classified as available for sale are carried at market value
      whereas investments classified as held to maturity are carried at
      amortized cost.

MATURITY AND WEIGHTED AVERAGE YIELDS

 The following charts show the maturity distribution for amortized cost and
weighted average yields of debt securities in the Company's investment portfolio
at December 31, 2000. Separate charts are presented for securities classified as
available for sale and held to maturity. Because the amortized cost is shown and
not market value, the totals of the available for sale securities will not agree
with the amount shown on the Consolidated Balance Sheet for 2000 in Part II,
Item 8.

MATURITY DISTRIBUTION--AMORTIZED COST

<TABLE>
<CAPTION>
                                                        LESS                                       GREATER
                                                        THAN           AVAILABLE FOR SALE           THAN
DESCRIPTION                                             1 YEAR    1 TO 5 YEARS   5 TO 10 YEARS     10 YEARS
<S>                                                   <C>          <C>            <C>             <C>
-------------------------------------------------------------------------------------------------------------
U.S. Treasury                                         $  799,959   $        --     $        --    $        --
U.S. Government agency                                 8,951,103    26,606,785      19,859,229             --
Mortgage backed securities (1)                                --         4,997         718,174      4,519,136
State and municipal                                           --       536,566       1,892,084      3,774,833
                                                      ----------   -----------     -----------    -----------
                                                      $9,751,062   $27,148,348     $22,469,487    $ 8,293,969
                                                      ==========   ===========     ===========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                        LESS                                      GREATER
                                                        THAN                  HELD TO MATURITY     THAN
DESCRIPTION                                             1 YEAR   1 TO 5 YEARS   5 TO 10 YEARS     10 YEARS
<S>                                                     <C>        <C>            <C>             <C>
-------------------------------------------------------------------------------------------------------------
U.S. Treasury                                           $    --    $        --     $        --    $        --
U.S. Government agency                                       --             --              --             --
Mortgage backed securities (1)                               --             --              --             --
State and municipal                                          --             --              --             --
Foreign                                                  25,000         25,000              --             --
                                                        -------    -----------     -----------    -----------
                                                        $25,000    $    25,000     $        --    $        --
                                                        =======    ===========     ===========    ===========
</TABLE>

------------------------------

(1) Mortgage backed securities are included in the maturity distribution table
    based on the average life of the security using anticipated prepayment
    rates.

                                      17
<PAGE>
WEIGHTED AVERAGE YIELD

<TABLE>
<CAPTION>
                                                          LESS                                       GREATER
                                                          THAN            AVAILABLE FOR SALE           THAN
DESCRIPTION                                               1 YEAR    1 TO 5 YEARS   5 TO 10 YEARS     10 YEARS
<S>                                                     <C>         <C>            <C>             <C>
--------------------------------------------------------------------------------------------------------------
U.S. Treasury                                               5.71%            --              --             --
U.S. Government agency                                      6.23%          6.43%           6.39%            --
Mortgage backed securities                                    --           7.03%           6.02%          7.25%
State and municipal (1)                                       --           5.82%           6.27%          6.26%
                                                        --------    -----------     -----------    -----------
                                                            6.18%          6.42%           6.36%          6.81%
                                                        ========    ===========     ===========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                          LESS                                      GREATER
                                                          THAN            HELD TO MATURITY            THAN
DESCRIPTION                                               1 YEAR   1 TO 5 YEARS   5 TO 10 YEARS     10 YEARS
<S>                                                     <C>        <C>            <C>             <C>
-------------------------------------------------------------------------------------------------------------
U.S. Treasury                                               --              --              --             --
U.S. Government agency                                      --              --              --             --
Mortgage backed securities                                  --              --              --             --
State and municipal (1)                                     --              --              --             --
Foreign                                                   5.50%           5.50%             --             --
                                                          ----     -----------     -----------    -----------
                                                          5.50%           5.50%             --             --
                                                          ====     ===========     ===========    ===========
</TABLE>

------------------------------

(1) Yields on state and municipal obligations are computed on a tax equivalent
    basis using a 34% federal income tax rate.

 There are no securities of any issuer in the investment portfolio which exceeds
ten percent of shareholders' equity.

ITEM 6C: LOAN PORTFOLIO

CLASSIFICATION OF LOANS

 Reference is made to Note 4 of Notes to Consolidated Financial Statements for
the classification of loans at the end of 2000 and 1999. In addition to that
information, the following information concerning loans is presented.

<TABLE>
<CAPTION>
                                                                  1998            1997            1996
<S>                                                           <C>             <C>             <C>
-----------------------------------------------------------------------------------------------------------
Real Estate:
  Residential                                                 $137,646,465    $ 97,681,753    $ 82,576,975
  Commercial                                                    37,227,415      34,247,855      30,761,597
  Construction and land development                                227,800       1,862,298       1,942,861
Demand and time                                                 20,957,194      22,586,144      19,937,561
Installment and credit card                                      8,014,130      10,583,871      13,410,083
Lease financing                                                  3,233,883       3,872,327       3,365,075
                                                              ------------    ------------    ------------
                                                               207,306,887     170,834,248     151,994,152
Allowance for loan losses                                        2,387,732       2,302,981       2,241,148
                                                              ------------    ------------    ------------
Loans, net                                                    $204,919,155    $168,531,267    $149,753,004
                                                              ============    ============    ============
</TABLE>

MATURITIES AND INTEREST RATE SENSITIVITIES

 The maturities and sensitivities to changes in interest rates for commercial
demand and time loans and real estate--construction loans at December 31, 2000
is presented below:

<TABLE>
<CAPTION>
                                                                     CONTRACTUALLY DUE
                                                                       AFTER ONE YEAR
                                                      ONE YEAR OR       THROUGH FIVE
                                                         LESS               YEARS             AFTER FIVE YEARS
                                                                     VARIABLE     FIXED      VARIABLE     FIXED
<S>                                                   <C>           <C>          <C>        <C>          <C>
-----------------------------------------------------------------------------------------------------------------
Construction and land development                     $ 1,763,863           --        --            --         --
Commercial demand and time                            $10,126,663    9,622,678        --     1,604,507         --
</TABLE>

                                      18
<PAGE>
RISK ELEMENTS

 Reference is made to Note 4 of Notes to Consolidated Financial Statements for
nonaccrual, past due and restructured loans at the end of 2000, 1999 and 1998.
In addition to that information, the following information concerning risk
elements is presented.

<TABLE>
<CAPTION>
                                                                1997         1996
<S>                                                           <C>         <C>
------------------------------------------------------------------------------------
Nonaccrual                                                    $ 84,312    $   84,312
Restructured                                                   408,565       812,072
                                                              --------    ----------
                                                              $492,877    $  896,384
                                                              ========    ==========
Accruing loans past due more than 90 days                     $268,931    $   62,988
                                                              ========    ==========
</TABLE>

 There are no other interest-bearing assets that would be required to be
reported under this section if such assets were loans.

ITEM 6D: SUMMARY OF LOAN LOSS EXPERIENCE

 The following charts show the level of loan losses recorded by the Company for
the past five years, management's allocation of the allowance for loan losses by
type of loan as of the end of each year, and other statistical information. The
allocation of the allowance reflects management's analysis of economic risk
potential by type of loan, and is not intended as a forecast of loan losses.

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31
DESCRIPTION                                     2000         1999         1998         1997         1996
<S>                                          <C>          <C>          <C>          <C>          <C>
-----------------------------------------------------------------------------------------------------------
Balance at beginning of year                 $2,836,291   $2,387,732   $2,302,981   $2,241,148   $2,243,472
Charge-offs:
  Commercial                                     30,015      148,636      225,900       35,914           --
  Lease financing                                    --       31,677       68,532           --           --
  Real Estate:
    Residential                                  96,961           --           --           --       52,613
    Commercial                                       --           --      102,300           --           --
    Construction                                     --           --           --           --           --
  Installment                                   257,423      122,512      276,951      221,855      218,950
                                             ----------   ----------   ----------   ----------   ----------
                                                384,399      302,825      673,683      257,769      271,563
                                             ----------   ----------   ----------   ----------   ----------
Recoveries:
  Commercial                                     51,115      105,227       51,690       12,051           --
  Lease financing                                    --        4,065        6,020           --           --
  Real Estate:
    Residential                                  30,317           --           --           --        2,000
    Commercial                                       --           --       22,258           --        6,406
    Construction                                     --           --           --           --           --
  Installment                                    42,966       44,252       63,466       67,551       73,333
                                             ----------   ----------   ----------   ----------   ----------
                                                124,398      153,544      143,434       79,602       81,739
                                             ----------   ----------   ----------   ----------   ----------
Net charge-offs                                 260,001      149,281      530,249      178,167      189,824
                                             ----------   ----------   ----------   ----------   ----------
Provision charged to operations                 448,000      597,840      615,000      240,000      187,500
                                             ----------   ----------   ----------   ----------   ----------
Balance at end of the year                   $3,024,290   $2,836,291   $2,387,732   $2,302,981   $2,241,148
                                             ==========   ==========   ==========   ==========   ==========
Ratio of net charge-offs to average loans
  outstanding                                       .09%         .07%         .28%         .11%         .13%
</TABLE>

 The provision charged to operations for 2000, 1999 and 1998 is discussed in the
section on Management's Discussion and Analysis of Financial Condition and
Results of Operations. The Company's provisions in 1997 and 1996 related to the
level of net losses incurred and to loan portfolio growth in each year.

                                      19
<PAGE>

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

ALLOCATED AMOUNT OF THE ALLOWANCE--YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
PORTFOLIO                                       2000         1999         1998         1997         1996
<S>                                          <C>          <C>          <C>          <C>          <C>
-----------------------------------------------------------------------------------------------------------
Commercial(a)                                $  910,445   $  565,474   $  739,235   $  423,782   $  563,820
Real Estate:
  Residential                                   763,017      434,500      508,999      565,113      433,873
  Commercial                                    349,594      356,711      955,747      682,604      386,825
  Construction                                       --           --        6,767        9,311        7,610
Installment                                     207,061      341,190      116,312      211,704      269,147
Unallocated                                     794,173    1,138,416       60,672      410,467      579,873
                                             ----------   ----------   ----------   ----------   ----------
                                             $3,024,290   $2,836,291   $2,387,732   $2,302,981   $2,241,148
                                             ==========   ==========   ==========   ==========   ==========
</TABLE>

PERCENT OF LOANS IN EACH CATEGORY TO TOTAL LOANS--YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
PORTFOLIO                                                       2000       1999       1998       1997       1996
<S>                                                           <C>        <C>        <C>        <C>        <C>
------------------------------------------------------------------------------------------------------------------
Commercial (a)                                                  10.5%      12.2%      14.7%      15.5%      15.3%
Real Estate:
  Residential                                                   70.0       68.8       63.0       57.2       54.4
  Commercial                                                    17.0       15.7       16.0       20.0       20.2
  Construction                                                   0.3        0.7        0.6        1.1        1.3
Installment                                                      2.2        2.6        5.7        6.2        8.8
                                                               -----      -----      -----      -----      -----
                                                               100.0%     100.0%     100.0%     100.0%     100.0%
                                                               =====      =====      =====      =====      =====
</TABLE>

------------------------------

(a) Commercial loans includes lease financing.

ITEM 6E: DEPOSITS

 Reference is made to the tables for Average Balances, Interest and Yields under
Item 6A of this section. Reference is made to Note 8 of Notes to Consolidated
Financial Statements for additional information concerning deposits.

ITEM 6F: RETURN ON EQUITY AND ASSETS

<TABLE>
<CAPTION>
DESCRIPTION                                                          2000           1999           1998
<S>                                                                <C>            <C>            <C>
---------------------------------------------------------------------------------------------------------
Return on average assets                                              .46%           .85%          1.00%
Return on average equity                                             5.87%          9.15%          9.71%
Dividend payout ratio                                               55.58%         30.37%         27.63%
Average equity to average assets                                     7.85%          9.26%         10.32%
</TABLE>

ITEM 6G: SHORT-TERM BORROWINGS

Reference is made to Note 10 of Notes to Consolidated Financial Statements for a
description of the general terms of short-term borrowings, and for information
related to repurchase agreements.

Other short term borrowings, consisting of the combined amounts for Advances
from the Federal Home Loan Bank and Notes Payable-U.S. Treasury, are as follows.

<TABLE>
<CAPTION>
OTHER SHORT-TERM BORROWINGS:                                     2000          1999          1998
<S>                                                           <C>           <C>           <C>
-----------------------------------------------------------------------------------------------------
Total outstanding at period-end                               $50,984,859   $67,830,856   $35,414,906
Average amount outstanding during period                       56,867,533    43,553,054    19,414,143
Maximum amount outstanding at any period-end                   65,129,886    67,830,856    35,414,906
Weighted average interest rate at period-end                         6.61%         5.17%         5.11%
Weighted average interest rate for the period                        6.44%         5.34%         5.68%
</TABLE>

                                      20
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

EARNINGS 2000 AS COMPARED TO 1999

SUMMARY

 Carrollton Bancorp reported net income for 2000 of $1,748,000, or $0.64 per
share, representing a 39% decrease from 1999 net income of $2,846,000, or $1.01
per share. Part of the earnings decrease was due to nonrecurring gains. In 1999,
a non-recurring gain on the sale of the merchant services unit amounted to
$823,000 or $0.29 per share on an after tax basis. The loan portfolio grew 7% to
$278,020,000 as a result of residential and commercial loan production. The loan
portfolio growth contributed to a 20% increase in interest income over 1999.
Non-interest income from fees, decreased by 14% compared to 1999. Fees generated
by the ATM network of 174 machines and income from national point of sale
sponsorships grew significantly during 2000, however, total fee income decreased
due to the sale of the merchant services unit in 1999. Included in expense were
the variable cost components of fee income which grew in relation to fee growth,
but saw a reduction due to the elimination of the merchant services processing
costs.

NET INTEREST INCOME

 Net interest income is the principal source of earnings for a banking company.
It represents the difference between the interest income earned on loans and
other investments, and the interest paid on deposits and borrowed funds. For
analysis, net interest income is measured on a fully taxable equivalent basis.
To determine the taxable equivalent basis, an adjustment is made to income from
investments in state and municipal securities which achieve a federal or state
tax benefit, to dividends from equity stocks which achieve a dividend exclusion,
and to certain loans which are tax exempt.

  In 2000, net interest income on a taxable equivalent basis decreased by
$847,000 to $11.3 million as a net result of increased volume in the loan
portfolio and an increase in the rates paid on deposit accounts. On average, the
loan portfolio increased 22% over 1999 while the investment portfolio decreased
by 11%. The yield on the loan portfolio increased from 8.01% in 1999 to 8.09% in
2000. Changes in loan portfolio mix and a very competitive loan market caused
the loan yield to remain steady. The yield on investment securities also
increased slightly to 6.61% in 2000 from 6.60% in 1999. The growth in the loan
portfolio and increased yields, caused total interest income on a tax equivalent
basis to rise from $23.1 million in 1999 to $27.2 million in 2000.

  Interest expense increased $4.9 million to $15.9 million in 2000 from
$11.0 million in 1999. Interest expense increased due to an increase in both
interest bearing liabilities and rates. Interest expense on deposits increased
in 2000 from 1999 due to higher deposit levels and the increased cost of
interest-bearing deposits, which increased from 3.88% in 1999 to 4.83% in 2000.
The cost of borrowed funds increased due to changes in the composition of
funding sources to 6.22% in 2000 from 5.09% in 1999. The table for Rate and
Volume Variance Analysis included in this report shows the increase in interest
expense resulted from increased volume and rate on deposits and borrowings. The
growth in interest-bearing liabilities supported loan portfolio growth.

PROVISION FOR LOAN LOSSES

 The provision for loan losses was $448,000 for 2000 compared to $597,840 for
1999. Non accrual, restructured, and delinquent loans over 90 days to total
loans increased to 0.91% at the end of 2000 compared to 0.54% in 1999. This
increase was due to increased delinquencies. As of December 31, 2000, there was
an increase of loan delinquencies of $445,000 and an increase of impaired loans
of $302,000. The Company elected to buy a participation back on a commercial
loan, classified as impaired, at a discount. The loan continues to pay in
accordance with the restructured terms, and the bank expects no loss on the
borrowing. The ratio of loan losses to average loans also increased in 2000 to
0.09% compared to 0.07% for 1999.

  On a monthly basis, management reviews all loan portfolios to determine trends
and monitor asset quality. For consumer loan portfolios, this review generally
consists of reviewing delinquency levels on an aggregate basis with timely
follow-up on accounts that become delinquent. In commercial loan portfolios,
delinquency information is monitored and periodic reviews of business and
property leasing operations are performed on an individual loan basis to
determine potential collection and repayment problems.

NON-INTEREST INCOME

 For 2000, non-interest income excluding securities gains, gains on the sale of
a business unit, and gains on loan sales decreased by 14% compared to 1999, due
to the sale of the merchant services in 1999. Brokerage commissions increased
$261,000 or 26% in 2000 due to increased sales. Other fees and commissions
decreased $1.4 million principally as a result of the sale of merchant services.
ATM fee income growth came through additional machines placed in service.

  During the third quarter of 1999, the Company sold the contracts to process
merchant credit card transactions for business customers, and a small amount of
related equipment, for a gain of $1,554,526. The merchant services unit was part
of the Company's Electronic Banking segment that management felt was becoming
less profitable due

                                      21
<PAGE>
to competitive pressures in the business of offering merchant credit card
discount services.

  Net securities gains in 2000 were $256,000 compared to $240,000 in 1999.

  The Company continued to sell loans generated by its mortgage unit, which was
inactivated during the second quarter of 2000, as well as other loans held in
its portfolio. These transactions generated gains of $18,000 in 2000 compared to
$250,000 in 1999. At December 31, 2000, the Company serviced loans for others
totaling $13,107,093.

NON-INTEREST EXPENSES

 In 2000, non-interest expenses decreased by $1.9 million or 11%. Salaries and
benefits decreased by $134,000, or 2%. In certain areas of the Company, staff
reductions occurred through attrition and the positions were eliminated. Full
time equivalent staff decreased from 155 positions at the end of 1999 to 149
positions at December 31, 2000. Occupancy expenses increased $115,000 to
$1,705,000 in 2000, due to a write-down of premises approximately $190,000 in
2000. Furniture and equipment expense increased primarily due to the
depreciation of ATM machines purchased plus the related maintenance contracts
expense. Other operating expenses decreased $2.1 million, or 27%. A significant
portion of this decrease relates to merchant services and ATM transactions
costs.

INCOME TAX PROVISION

 For 2000, the effective tax rate for the Company increased to 25% compared to
24% for 1999. This increase was primarily due to a decrease in tax exempt income
associated with the investment portfolio.

FINANCIAL CONDITION

SUMMARY

  Total assets of the Company increased by 3% to $388.0 million at December 31,
2000 versus $375.6 million at the end of 1999. Investment securities decreased
to $73.4 million at December 31, 2000. Total loans at December 31, 2000 grew 7%
to $278.0 million compared to $260.0 million at the end of 1999. Interest
earning assets increased to $351.8 million and were 90.4% of total assets at
December 31, 2000.

INVESTMENT SECURITIES

 Securities decreased to $73.4 million at December 31, 2000 from $75.8 million
at December 31, 1999. The portfolio consists primarily of U.S. Treasury
securities, U.S. Government agency securities, mortgage-backed securities, and
state and municipal obligations. The income from state and municipal obligations
is exempt from federal income tax. Certain agency securities are exempt from
state income taxes. The Company uses its investment portfolio as a source of
both liquidity and earnings.

  The Company liquidated $22.9 million of available for sale securities during
2000. These transactions were principally undertaken to increase liquidity and
reduce interest rate risk.

LOANS

 Total loans increased $18 million or 7% from 1999 to $278.0 million at
December 31, 2000. Loan growth was primarily in real estate lending, equity
loans and lines of credit with other consumer products declining during the
year. Both the residential mortgage and equity loan units are principally
wholesale operations. Commercial loans equaled 30% of total loans at the end of
the year and amounted to $82 million. Consumer loans amounted to $196 million
and were 70% of total loans.

ALLOWANCE FOR LOAN LOSSES

 At December 31, 2000, the allowance for loan losses was $3.0 million, a 7%
increase from the end of 1999. The ratio of the allowance to total loans was
1.09% at December 31, 2000 and 1999. The ratio of net loan losses to average
loans outstanding for 2000 was 0.09% compared to 0.07% for 1999. The ratio of
non-accrual loans, restructured loans, and loans delinquent more than 90 days to
total loans increased to 0.91% at December 31, 2000 from .54% at the end of
1999. The ratio of real estate secured loans to total loans increased to 87% at
the end of 2000 from 85% at the end of 1999.

  An allowance for loan losses is maintained sufficient to absorb losses in the
existing loan portfolio. The allowance is a function of specific loan
allowances, general loan allowances based on historical loan loss experience and
current trends, and allowances based on general economic conditions that affect
the collectibility of the loan portfolio. These can include, but are not limited
to exposure to an industry experiencing problems, changes in the nature or
volume of the portfolio and delinquency and nonaccrual trends. The portfolio
review and calculation of the allowance is performed by management on a
continuing basis.

  All loan reserves are subject to regulatory examinations and determination as
to the appropriateness of the methodology and adequacy on an annual basis.

  The specific allowance is based on regular analysis of the loan portfolio and
is determined by analysis of collateral value, cash flow and guarantor capacity,
as applicable. The specific allowance was $1,007,408 and $721,717 as of
December 31, 2000 and 1999, respectively.

  The general allowance is calculated using internal loan grading results and
appropriate allowance factors on approximately 10 classes of loans. This process
is reviewed on a regular basis. The allowance factors may be revised whenever
necessary to address current credit quality trends

                                      22
<PAGE>
or risks associated with particular loan types. Historic trend analysis is
utilized to obtain the factors to be applied. The general allowance was
$1,222,709 and $976,158 as of December 31, 2000 and 1999, respectively.

  Allocation of a portion of the allowance does not preclude its availability to
absorb losses in other categories. An unallocated reserve is maintained to
recognize the imprecision in estimating and measuring loss when evaluating the
allowance for individual loans or pools of loans. The unallocated portion of
allowance was lower at December 31, 2000, than it was at December 31, 1999. This
was due to an increase in the ratio of non-accrual loans, restructured loans,
and loans delinquent more than 90 days from December 31, 1999 to December 31,
2000. As that ratio increased, the unallocated portion of the allowance
decreased.

  During the years ended December 31, 1996 through 2000, the unallocated portion
of the allowance for loan losses has fluctuated with the specific and general
allowances so that the total allowance for loan losses would be at a level that
management believes is the best estimate of possible future credit losses at the
balance sheet date. The specific allowance may fluctuate from period to period
if the balance of what management considers problem loans changes. The general
allowance will fluctuate with changes in the mix of the Company's loan
portfolio, economic conditions, or specific industry conditions. The
requirements of the Company's federal regulators, or infrequent situations such
as potential effects of the Year 2000 conversion on its borrowers, are
considerations in determining the required total allowance.

  The lower level of loan charge-offs in 2000 and 1999 compared to 1998, was due
to two commercial loans that the Company charged-off in 1998 totaling
approximately $328,000.

  Management believes that it has adequately assessed the risk of loss in the
loan portfolios based on a subjective evaluation and has provided an allowance
which is appropriate based on that assessment. Because the allowance is an
estimate based on current conditions, any change in the economic conditions of
the Company's market area or change within a borrower's business could result in
a revised evaluation which could alter the Company's earnings.

FUNDING SOURCES

 Total deposits at December 31, 2000 increased by $29.6 million to
$292.0 million from the end of 1999. Interest-bearing accounts increased by
$33.6 million and non-interest bearing deposits decreased by $4.0 million.
Overall deposit growth is attributed primarily to new account relationships
within the existing market area.

  Due to significant growth in deposits, as noted above, accompanied by security
sales, other borrowings were reduced. Advances from the Federal Home Loan Bank
decreased to $50 million at the end of 2000 compared to $66 million at the end
of 1999. Borrowings for federal funds purchased, securities sold under
agreements to repurchase and notes payable to the US Treasury decreased by
$2.1 million from December 31, 1999 to 2000.

CAPITAL

 At December 31, 2000, shareholders' equity was $30.5 million, an increase of
$0.6 million from 1999. The increase in stockholders' equity was largely due to
the fair market value adjustment of the investment portfolio as required by
Statement No. 115 of the Financial Accounting Standards Board. The Company paid
shareholders dividends totaling $971,347, and net income for 2000 was
$1.7 million. In addition, the Company purchased and retired common stock for
$1.0 million in 2000. The company declared a 2 for 1 stock split in 1999 and
restructured the par value of the stock from $10 to $1. Stockholders' equity
amounted to 7.86% of total assets at December 31, 2000 compared to 7.96% at the
end of 1999. The decrease in this ratio was caused by asset growth, but remains
at a very strong level.

  Bank holding companies and banks are required by the Federal Reserve and FDIC
to maintain minimum levels of Tier 1 (or Core) and Tier 2 capital measured as a
percentage of assets on a risk-weighted basis. Capital is primarily represented
by shareholders' equity, adjusted for the allowance for loan losses and certain
issues of preferred stock, convertible securities, and subordinated debt,
depending on the capital level being measured. Assets and certain off-balance
sheet transactions are assigned to one of five different risk-weighting factors
for purposes of determining the risk-adjusted asset base. The minimum levels of
Tier 1 and Tier 2 capital to risk-adjusted assets are 4% and 8%, respectively,
under the regulations.

  In addition, the Federal Reserve and the FDIC require that bank holding
companies and banks maintain a minimum level of Tier 1 (or Core) capital to
average total assets excluding intangibles for the current quarter. This measure
is known as the leverage ratio. The current regulatory minimum for the leverage
ratio for institutions to be considered adequately capitalized is 4%, but could
be required to be maintained at a higher level based on the regulator's
assessment of an institution's risk profile. The following chart shows the
regulatory capital levels for the Company and Bank at December 31, 2000 and
1999. The Company's subsidiary bank also exceeded the FDIC required minimum
capital levels at those dates by a

                                      23
<PAGE>
substantial margin. Based on the levels of capital, the Company and the Bank are
well capitalized.

<TABLE>
<CAPTION>
                                               At December 31
                                      Carrollton            Carrollton
                                        Bancorp                Bank
RATIO                  MINIMUM      2000       1999       2000       1999
---------------------------------------------------------------------------
<S>                    <C>        <C>        <C>        <C>        <C>
Leverage Ratio            4%         7.8%       7.3%       7.4%       7.0%
Risk-based
  Capital:
  Tier 1 (Core)           4%        11.0%      11.0%       9.7%      10.6%
  Tier 2 (Total)          8%        12.2%      12.4%      10.8%      11.7%
</TABLE>

LIQUIDITY

 Liquidity management ensures that funds are available when required to meet
deposit withdrawals, loan commitments, and operating expenses. These funds are
supplied by deposits, loan repayments, security maturities and can be raised by
liquidating assets or through additional borrowings. Securities classified as
available for sale can be liquidated or pledged to secure borrowed funds to
provide necessary liquidity. In addition, the Company has unsecured lines of
credit outstanding under which it could borrow $4 million, and has borrowing
capacity with the Federal Home Loan Bank of $61 million which is collateralized
by a blanket security interest in the Company's residential first mortgage
loans.

  At December 31, 2000, the Company had outstanding loan commitments and unused
lines of credit totaling $95.6 million. Of this total, management places a high
probability for funding within 1 year on approximately $23.0 million. The
remaining amount is mainly unused home equity lines of credit on which
management places a low probability for required funding.

INTEREST RATE RISK

 The level of income of a financial institution can be affected by the repricing
characteristics of its assets and liabilities due to changes in interest rates.
This is referred to as interest rate risk. Financial institutions allocate
significant time and resources to managing interest rate risk because of the
impact that interest rate changes can have on the net interest margin and
earnings. Management continues to seek reasonable ways to reduce its exposure to
interest rate shifts. A static gap analysis is used by the Company as one tool
to monitor interest rate risk. A static gap analysis measures the difference, or
the "gap", between the amount of assets and liabilities repricing within a given
time period. The Company also performs rate shock analyses which estimate
changes in the net interest margin for parallel rising and falling interest rate
environments. Management also calculates and monitors other ratios on a monthly
basis that provide additional information relating to certain aspects of
asset/liability management. This information, together with information about
forecasted future interest rate trends, is used to manage the Company's asset
and liability positions. Management uses this information as a factor in
decisions made about maturities for investment of cash flows, classification of
investment securities purchases as available for sale or held to maturity,
emphasis of variable rate or fixed rate loans and short or longer term deposit
products in marketing campaigns, and deposit account pricing to alter asset and
liability repricing characteristics.

  At December 31, 2000, the Company was in a liability sensitive position
amounting to 5.0% of assets within a one year time horizon. This is within the
targets as established by the Asset/Liability Management Policy approved by the
Board of Directors. Although the Company was at a negative asset/liability
position at December 31, 2000, the Company can experience significant volatility
in its asset/liability position by virtue of its funding of longer term mortgage
loans with relatively short repricing borrowings while it works to sell the
loans. Management continues to work to structure borrowing terms that more
closely match asset repricing characteristics, keeping in mind the overall
balance sheet strategy of the Company. Theoretically, a liability sensitive
position is preferable in a falling interest rate climate since more liabilities
will reprice downward as interest rates fall than will assets, and an asset
sensitive position is preferable in a rising rate environment.

  The following chart shows the static gap position for interest sensitive
assets and liabilities of the Company as of December 31, 2000. The chart is as
of a point in time, and reflects only the contractual terms of the loan or
deposit accounts in assigning assets and liabilities to the various repricing
periods except that deposit accounts with no contractual maturity, such as money
market, NOW and savings accounts, have been allocated evenly over a five year
period. In addition, the maturities of investments shown in the gap table will
differ from contractual maturities due to anticipated calls of certain
securities based on current interest rates. While this chart indicates the
opportunity to reprice assets and liabilities within certain time frames, it
does not reflect the fact that interest rate changes occur in disproportionate
increments for various assets and liabilities.

                                      24
<PAGE>
  PERIOD FROM DECEMBER 31, 2000 IN WHICH ASSETS AND
LIABILITIES REPRICE

<TABLE>
<CAPTION>
                                                                                                GREATER
                                               0 TO 90    91 TO 365     1 TO 2      2 TO 5      THAN 5
                                                 DAYS       DAYS        YEARS       YEARS       YEARS
<S>                                            <C>        <C>          <C>         <C>         <C>
-------------------------------------------------------------------------------------------------------
ASSETS:
Short term investments                         $   309     $    --     $    --     $     --    $    --
Securities                                      13,540         713       4,450       25,377     29,302
Loans                                           72,765      24,820      13,714       48,379    118,342
                                               -------     -------     -------     --------    -------
                                                86,614      25,533      18,164       73,756    147,644
                                               -------     -------     -------     --------    -------
LIABILITIES:
Deposits                                        27,299      85,816      39,878      139,000         28
Borrowings                                      18,357                               45,000
                                               -------     -------     -------     --------    -------
                                                45,656      85,816      39,878      184,000         28
                                               -------     -------     -------     --------    -------
Gap position:
  Period                                        40,958     (60,283)    (21,714)    (110,244)   147,616
  % of Assets                                     10.6%      (15.5)%      (5.6)%      (28.4)%     38.1%
  Cumulative                                    40,958     (19,325)    (41,039)    (151,283)    (3,667)
  % of Assets                                     10.6%       (5.0)%     (10.6)%      (39.0)%     (0.9)%
Cumulative risk sensitive assets to risk
  sensitive liabilities                           1.90        0.85        0.76         0.57       0.99
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

 The Financial Accounting Standards Board issued three standards and one
interpretation during 2000. FASB Statement No. 137, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES--DEFERRAL OF THE EFFECTIVE DATE OF FASB
STATEMENT NO. 133, is an amendment of FASB Statement No. 133. FASB Statement
No. 138, ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING
ACTIVITIES, is also an amendment of FASB Statement No. 133. Both were effective
in the first quarter of the fiscal year beginning after June 15, 2000. The
Company does not own or trade derivative instruments. The Company does not
transact in hedging activities.

  FASB Statement No. 140, ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL
ASSETS AND EXTINGUISHMENT OF LIABILITIES, is a replacement of FASB Statement
No. 125. It is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The Statement is
intended to develop standards to aid in resolving existing financial accounting
and reporting issues when transfers of financial assets occur. The Company
complies with the provisions of the Statement.

  FASB Interpretation No. 44, ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING
STOCK COMPENSATION, clarifies the application of APB Opinion No. 25. Among other
items, the Statement clarifies that in issues involving stock compensation
awards, a director of an organization is treated in a similar manner to an
employee. It was effective July 1, 2000. The Company complies with the
provisions of the interpretation.

  Management does not expect these statements to have any material effect on the
Company's financial position or results of operations.

THE YEAR 2000 ISSUE

 Carrollton Bancorp is pleased to report to our shareholders and depositors that
due to our efforts to prepare for the operational challenges associated with the
millennium change, we experienced no issues that affected the way we manage the
bank or service our customers.

EARNINGS 1999 AS COMPARED TO 1998

SUMMARY

 Carrollton Bancorp reported net income for 1999 of $2,846,000, or $1.01 per
share, representing a 4% decrease from 1998 net income of $2,974,000, or $1.04
per share. Part of the earnings decrease was due to the difference between
nonrecurring gains. In 1998 a nonrecurring gain amounted to $1,250,000, or $0.44
per share, on an after tax basis. In 1999, a non-recurring gain on the sale of
the merchant services unit amounted to a $823,000 or $0.29 per share on an after
tax basis. The loan portfolio grew 23% to $260,005,000 as a result of
residential and commercial loan production. The loan portfolio growth
contributed to a 9% increase in interest income over 1998. Non-interest income
from fees continued its trend, increasing by 39% over 1998. In addition to fees
generated by the ATM network of 164 machines, income from merchant services and
national point of sale sponsorships grew significantly during 1999. Included in
expense growth in 1999 were the variable cost components of fee income which
grew in relation to fee growth.

NET INTEREST INCOME

 Net interest income is the principal source of earnings for a banking company.
It represents the difference between the interest income earned on loans and
other investments, and the interest paid on deposits and borrowed funds. For
analysis, net

                                      25
<PAGE>
interest income is measured on a fully taxable equivalent basis. To determine
the taxable equivalent basis, an adjustment is made to income from investments
in state and municipal securities which achieve a federal or state tax benefit,
to dividends from equity stocks which achieve a dividend exclusion, and to
certain loans which are tax exempt.

  In 1999, net interest income on a taxable equivalent basis increased by
$594,000 over 1998 to $12.1 million as a result of increased volume in the loan
portfolio and a reduction of the rates paid on deposit accounts. On average, the
loan portfolio increased 17% over 1998 while the investment portfolio decreased
by 7%. The yield on the loan portfolio decreased from 8.50% in 1998 to 8.01% in
1999. The average balance of mortgage loans increased by $37,624,900. The
average yield on the mortgage loans in 1999 was 7.34%. Changes in loan portfolio
mix and a very competitive loan market caused the loan yield to fall. The yield
on investment securities also decreased to 6.60% in 1999 from 6.76% in 1998. The
growth in the loan portfolio overshadowed the falling yields to cause total
interest income on a tax equivalent basis to rise from $21.1 million in 1998 to
$23.1 million in 1999.

  Interest expense increased $1.4 million to $11.0 million in 1999 from
$9.6 million in 1998. Interest expense increased primarily due to increased
borrowings, which increased on average by 82%. Interest expense on deposits
increased in 1999 from 1998 due to higher deposit levels while the cost of
interest-bearing deposits fell from 3.98% in 1998 to 3.88% in 1999. The cost of
borrowed funds decreased due to changes in the composition of funding sources to
5.09% in 1999 from 5.22% in 1998. The table for Rate and Volume Variance
Analysis included in this report shows the increase in interest expense resulted
from increased volume of borrowings. The growth in interest-bearing liabilities
supported loan portfolio growth.

PROVISION FOR LOAN LOSSES

 The provision for loan losses was $597,840 for 1999 compared to $615,000 for
1998. Non accrual, restructured, and delinquent loans over 90 days to total
loans decreased to .54% at the end of 1999 compared to 1.02% in 1998. This
decline was from decreased delinquencies. As of December 31, 1998, there were
commercial loans to one borrower totaling approximately $1,272,000 that were
over 90 days past due that were paid off during the first quarter of 1999.
During 1998 the Company charged-off two commercial loans totalling approximately
$328,000. The amount of the charge-off was significant for the Company. The
ratio of loan losses to average loans also decreased in 1999 to .07% compared to
 .28% for 1998. This decrease was attributable to a reduction in commercial loan
losses recognized.

  On a monthly basis, management reviews all loan portfolios to determine trends
and monitor asset quality. For consumer loan portfolios, this review generally
consists of reviewing delinquency levels on an aggregate basis with timely
follow-up on accounts that become delinquent. In commercial loan portfolios,
delinquency information is monitored and periodic reviews of business and
property leasing operations are performed on an individual loan basis to
determine potential collection and repayment problems.

NON-INTEREST INCOME

 For 1999, non-interest income excluding securities gains, gains on the sale of
a business unit, and gains on loan sales increased by 28% over 1998. Brokerage
commissions increased $92,000 or 10% in 1999 due to the continued strong stock
market. Other fees and commissions increased $1.8 million principally as a
result of increased merchant services income, POS fees, and ATM fees. Merchant
services income rose due to an increase in the number of merchants receiving
credit card deposit services. ATM fee income growth came about from an increase
in the convenience fee in August, 1998 and by additional machines placed in
service.

  During the third quarter of 1999, the Company sold the contracts to process
merchant credit card transactions for business customers, and a small amount of
related equipment, for a gain of $1,554,526. The merchant services unit was part
of the Company's Electronic Banking segment that management felt was becoming
less profitable due to competitive pressures in the business of offering
merchant credit card discount services.

  Net securities gains in 1999 were $240,000 compared to $2,404,000 in 1998. The
gains in 1998 included $2,036,000 on the sale of an equity position in a
non-public company that operated as a regional switch for electronic banking
transactions, such as ATM and point of sale transactions.

  The Company continued to sell loans generated by its mortgage unit, as well as
other loans held in its portfolio. These transactions generated gains of
$250,000 in 1999 compared to $449,000 in 1998. At December 31, 1999, the Company
serviced loans for others totaling $11,658,098.

NON-INTEREST EXPENSES

 In 1999, non-interest expenses increased by $2.0 million or 13%. Salaries and
benefits increased by $438,000, or 7% due to loan officer additions and merit
increases. In certain areas of the Company, staff reductions occurred through
attrition and the positions were eliminated. Full time equivalent staff
decreased from 161 positions at the end of 1998 to 155 positions at
December 31, 1999. Occupancy expenses decreased $55,000 to $1,590,000 in 1999.
Furniture and equipment expense increased primarily due to the depreciation

                                      26
<PAGE>
of ATMs purchased plus the related maintenance contracts expense. Other
operating expenses increased $1.4 million, or 22%. A significant portion of this
increase relates to increased volumes of fee generating activities, in
particular merchant services and ATM transactions. Other expenses also increased
during 1999 related to the Company's growth, such as data processing, telephone
and carrier services.

INCOME TAX PROVISION

 For 1999, the effective tax rate for the Company decreased to 24% compared to
27% for 1998. This decrease was primarily due to a decrease in taxable income
associated with the gains on the non-recurring items. During 1999 and 1998, the
Company increased the benefit from tax exempt income by increasing its
investment in municipal bonds. In addition, the Maryland tax laws for banks were
revised in 1996 to provide an exemption from state tax on the income earned on
certain qualifying investments, which was 100% effective for 1999 and 1998
compared to 75% effective for 1997.

FINANCIAL CONDITION

SUMMARY

  Total assets of the Company increased by 18% to $375.6 million at
December 31, 1999 versus $317.9 million at the end of 1998. Investment
securities increased to $75.8 million at December 31, 1999. Total loans at
December 31, 1999 grew 23% to $260.0 million compared to $210.8 million at the
end of 1998. Interest earning assets increased to $340.0 million and were 90.5%
of total assets at December 31, 1999.

INVESTMENT SECURITIES

 Securities increased to $75.8 million at December 31, 1999 from $65.1 million
at December 31, 1998. The portfolio consists primarily of U.S. Treasury
securities, U.S. Government agency securities, mortgage-backed securities, and
state and municipal obligations. The income from state and municipal obligations
is exempt from federal income tax. Certain agency securities are exempt from
state income taxes. The Company uses its investment portfolio as a source of
both liquidity and earnings.

  The Company liquidated $14.5 million of available for sale securities during
the fourth quarter of 1999. These transactions were principally undertaken to
increase liquidity and reduce interest rate risk.

  The company transferred securities from the held to maturity classification to
the available for sale classification on its balance sheet as permitted by
Financial Accounting Standards No. 133 in the fourth quarter of 1999. The amount
of the assets reclassified as available for sale was $6,657,271.

LOANS

 Total loans increased $49 million or 23% from 1998 to $260.0 million at
December 31, 1999. Loan growth was primarily in commercial real estate lending,
equity loans and lines of credit with other consumer products declining during
the year. Both the residential mortgage and equity loan units are principally
wholesale operations. Commercial loans equaled 29% of total loans at the end of
the year and amounted to $76 million. Consumer loans amounted to $184 million
and were 71% of total loans.

ALLOWANCE FOR LOAN LOSSES

 At December 31, 1999, the allowance for loan losses was $2.8 million, a 19%
increase from the end of 1998. At December 31, 1999, the ratio of the allowance
to total loans was 1.09% compared to 1.13% at December 31, 1998. This ratio fell
as a result of portfolio growth. The ratio of net loan losses to average loans
outstanding for 1999 was .07% compared to .28% for 1998. The ratio of
non-accrual loans, restructured loans, and loans delinquent more than 90 days to
total loans decreased to .41% at December 31, 1999 from 1.02% at the end of
1998. The ratio of real estate secured loans to total loans increased to 85% at
the end of 1999 from 82% at the end of 1998.

  An allowance for loan losses is maintained sufficient to absorb losses in the
existing loan portfolio. The allowance is a function of specific loan
allowances, general loan allowances based on historical loan loss experience and
current trends, and allowances based on general economic conditions that affect
the collectibility of the loan portfolio. These can include, but are not limited
to exposure to an industry experiencing problems, changes in the nature or
volume of the portfolio and delinquency and nonaccrual trends. The portfolio
review and calculation of the allowance is performed by management on a
continuing basis.

  All loan reserves are subject to regulatory examinations and determination as
to the appropriateness of the methodology and adequacy on an annual basis.

  The specific allowance is based on regular analysis of the loan portfolio and
is determined by analysis of collateral value, cash flow and guarantor capacity,
as applicable. The specific allowance was $721,717 and $1,599,037 as of
December 31, 1999 and 1998, respectively.

  The general allowance is calculated using internal loan grading results and
appropriate allowance factors on approximately 10 classes of loans. This process
is reviewed on a regular basis. The allowance factors may be revised whenever
necessary to address current credit quality trends or risks associated with
particular loan types. Historic trend analysis is utilized to obtain the factors
to be applied. The general allowance was

                                      27
<PAGE>
$976,158 and $728,024 as of December 31, 1999 and 1998, respectively.

  Allocation of a portion of the allowance does not preclude its availability to
absorb losses in other categories. An unallocated reserve is maintained to
recognize the imprecision in estimating and measuring loss when evaluating the
allowance for individual loans or pools of loans. The unallocated portion of
allowance was significantly higher at December 31, 1999, than it was at
December 31, 1998. This was due to the drop in the ratio of non-accrual loans,
restructured loans, and loans delinquent more than 90 days from December 31,
1998 to December 31, 1999. As that ratio decreased, the unallocated portion of
the allowance increased. At December 31, 1998, the Bank had commercial loans to
one borrower with a balance of approximately $1,272,000 that were over 90 days
past due. Those loans were paid-off by the borrower in the quarter ended
March 31, 1999.

  During the years ended December 31, 1995 through 1999, the unallocated portion
of the allowance for loan losses has fluctuated with the specific and general
allowances so that the total allowance for loan losses would be at a level that
management believes is the best estimate of possible future credit losses at the
balance sheet date. The specific allowance may fluctuate from period to period
if the balance of what management considers problem loans changes. The general
allowance will fluctuate with changes in the mix of the Company's loan
portfolio, economic conditions, or specific industry conditions. The
requirements of the Company's federal regulators, or infrequent situations such
as potential effects of the Year 2000 conversion on its borrowers, are
considerations in determining the required total allowance.

  The increase in loan charge-offs in 1998 compared to 1997 and 1999, was due to
two commercial loans that the Company charged-off in 1998 totaling approximately
$328,000.

  Management believes that it has adequately assessed the risk of loss in the
loan portfolios based on a subjective evaluation and has provided an allowance
which is appropriate based on that assessment. Because the allowance is an
estimate based on current conditions, any change in the economic conditions of
the Company's market area or change within a borrower's business could result in
a revised evaluation which could alter the Company's earnings.

FUNDING SOURCES

 The increase in short term borrowings of approximately $33.2 million were a
large source of funding for the $49 million increase in total loans and
$10.7 million increase in investment securities. For the year-ended
December 31, 1999, the average yield on the short-term borrowings was 5.09%
while the tax-equivalent yields on loans and investment securities were 8.01%
and 6.60% respectively.

  Total deposits at December 31, 1999 increased by $25.5 million to
$262.4 million from the end of 1998. Interest-bearing accounts increased by
$21.3 million and non-interest bearing deposits increased by $4.1 million.
Deposit growth is attributed primarily to new account relationships resulting
from the opening of a new branch in a new market area, and implementation of a
retail division sales force.

  Other borrowings increased significantly in 1999 to fund loan and investment
growth. Advances from the Federal Home Loan Bank increased to $66 million at the
end of 1999 compared to $35 million at the end of 1998. Borrowings for federal
funds purchased, securities sold under agreements to repurchase and notes
payable to the US Treasury increased by $2.2 million from December 31, 1998 to
1999.

CAPITAL

 At December 31, 1999, shareholders' equity was $29.9 million, a decrease of
$1.0 million from 1998. The decrease in stockholders' equity was largely due to
the fair market value adjustment of the investment portfolio as required by
Statement No. 115 of the Financial Accounting Standards Board. The Company paid
shareholders dividends totaling $864,393, and net income for 1999 was
$2.8 million. In addition, the Company purchased and retired common stock for
$.9 million in 1999. The company declared a 2 for 1 stock split in 1999 and
restructured the par value of the stock from $10 to $1. Stockholders' equity
amounted to 7.96% of total assets at December 31, 1999 compared to 9.71% at the
end of 1998. The decrease in this ratio was caused by asset growth and a
negative change in the unrealized holding gains (losses) on available for sale
securities, but remains at a very strong level.

  Bank holding companies and banks are required by the Federal Reserve and FDIC
to maintain minimum levels of Tier 1 (or Core) and Tier 2 capital measured as a
percentage of assets on a risk-weighted basis. Capital is primarily represented
by shareholders' equity, adjusted for the allowance for loan losses and certain
issues of preferred stock, convertible securities, and subordinated debt,
depending on the capital level being measured. Assets and certain off-balance
sheet transactions are assigned to one of five different risk-weighting factors
for purposes of determining the risk-adjusted asset base. The minimum levels of
Tier 1 and Tier 2 capital to risk-adjusted assets are 4% and 8%, respectively,
under the regulations.

  In addition, the Federal Reserve and the FDIC require that bank holding
companies and banks maintain a minimum level of Tier 1 (or Core) capital to
average total assets excluding intangibles for the current quarter. This measure
is known as

                                      28
<PAGE>
the leverage ratio. The current regulatory minimum for the leverage ratio for
institutions to be considered adequately capitalized is 4%, but could be
required to be maintained at a higher level based on the regulator's assessment
of an institution's risk profile. The following chart shows the regulatory
capital levels for the Company and Bank at December 31, 1999 and 1998. The
Company's subsidiary bank also exceeded the FDIC required minimum capital levels
at those dates by a substantial margin. Based on the levels of capital, the
Company and the bank are well capitalized.

<TABLE>
<CAPTION>
                                               At December 31
                                      Carrollton            Carrollton
                                        Bancorp                Bank
RATIO                  MINIMUM      1999       1998       1999       1998
<S>                    <C>        <C>        <C>        <C>        <C>
---------------------------------------------------------------------------
Leverage Ratio            4%         7.3%       9.4%       7.0%       8.1%
Risk-based Capital:
  Tier 1 (Core)           4%        11.0%      15.0%      10.6%      13.3%
  Tier 2 (Total)          8%        12.4%      16.8%      11.7%      14.6%
</TABLE>

LIQUIDITY

 Liquidity management ensures that funds are available when required to meet
deposit withdrawals, loan commitments, and operating expenses. These funds are
supplied by deposits, loan repayments, security maturities and can be raised by
liquidating assets or through additional borrowings. Securities classified as
available for sale can be liquidated or pledged to secure borrowed funds to
provide necessary liquidity. In addition, the Company has unsecured lines of
credit outstanding under which it could borrow $4 million, secured lines of
$20 million, and has borrowing capacity with the Federal Home Loan Bank of
$90 million which is collateralized by a blanket security interest in the
Company's residential first mortgage loans.

  At December 31, 1999, the Company had outstanding loan commitments and unused
lines of credit totaling $92.2 million. Of this total, management places a high
probability for funding within 1 year on approximately $23.0 million. The
remaining amount is mainly unused home equity lines of credit on which
management places a low probability for required funding.

INTEREST RATE RISK

 The level of income of a financial institution can be affected by the repricing
characteristics of its assets and liabilities due to changes in interest rates.
This is referred to as interest rate risk. Financial institutions allocate
significant time and resources to managing interest rate risk because of the
impact that interest rate changes can have on the net interest margin and
earnings. Management continues to seek reasonable ways to reduce its exposure to
interest rate shifts. A static gap analysis is used by the Company as one tool
to monitor interest rate risk. A static gap analysis measures the difference, or
the "gap", between the amount of assets and liabilities repricing within a given
time period. The Company also performs rate shock analyses which estimate
changes in the net interest margin for parallel rising and falling interest rate
environments. Management also calculates and monitors other ratios on a monthly
basis that provide additional information relating to certain aspects of
asset/liability management. This information, together with information about
forecasted future interest rate trends, is used to manage the Company's asset
and liability positions. Management uses this information as a factor in
decisions made about maturities for investment of cash flows, classification of
investment securities purchases as available for sale or held to maturity,
emphasis of variable rate or fixed rate loans and short or longer term deposit
products in marketing campaigns, and deposit account pricing to alter asset and
liability repricing characteristics.

  At December 31, 1999, the Company was in a liability sensitive position
amounting to 7.1% of assets within a one year time horizon. This is within the
targets as established by the Asset/Liability Management Policy approved by the
Board of Directors. Although the Company was at a negative asset/liability
position at December 31, 1999, the Company can experience significant volatility
in its asset/liability position by virtue of its funding of longer term mortgage
loans with relatively short repricing borrowings while it works to sell the
loans. Management continues to work to structure borrowing terms that more
closely match asset repricing characteristics, keeping in mind the overall
balance sheet strategy of the Company. Theoretically, a liability sensitive
position is preferable in a falling interest rate climate since more liabilities
will reprice downward as interest rates fall than will assets, and an asset
sensitive position is preferable in a rising rate environment.

  The following chart shows the static gap position for interest sensitive
assets and liabilities of the Company as of December 31, 1999. The chart is as
of a point in time, and reflects only the contractual terms of the loan or
deposit accounts in assigning assets and liabilities to the various repricing
periods except that deposit accounts with no contractual maturity, such as money
market, NOW and savings accounts, have been adjusted based on account age. All
accounts open less than two years are reflected in the one year time horizon in
the gap table. Accounts that have been open between two and five years are
reflected in the 1 to 2 year time horizon in the table. Accounts open over five
years are reflected in the 2 to 5 year horizon. In addition, the maturities of
investments shown in the gap table will differ from contractual maturities due
to anticipated calls of certain securities based on current interest rates.
While this chart indicates the opportunity to reprice assets and liabilities
within certain time frames, it does not reflect the fact that

                                      29
<PAGE>
interest rate changes occur in disproportionate increments for various assets
and liabilities.

  PERIOD FROM DECEMBER 31, 1999 IN WHICH ASSETS AND LIABILITIES REPRICE

<TABLE>
<CAPTION>
                                                                         GREATER     GREATER
                                                                         THAN        THAN        GREATER
                                                0 TO 90    91 TO 365     1 TO 2      2 TO 5      THAN 5
($000)                                            DAYS       DAYS        YEARS       YEARS       YEARS
<S>                                             <C>        <C>          <C>         <C>         <C>
--------------------------------------------------------------------------------------------------------
ASSETS:
Short term investments                          $ 2,840     $    --     $    --     $    --     $    --
Securities                                       27,407      13,159       5,969       5,640      23,622
Loans                                            78,521      14,616       9,065      48,116     107,129
                                                -------     -------     -------     -------     -------
                                                108,768      27,775      15,034      53,756     130,751
                                                -------     -------     -------     -------     -------
LIABILITIES:
Deposits                                         33,382      63,243      62,921      60,699         247
Borrowings                                       66,481          --      10,000       5,000          --
                                                -------     -------     -------     -------     -------
                                                 99,863      63,243      72,921      65,699         247
                                                -------     -------     -------     -------     -------
Gap position:
  Period                                          8,905     (35,468)    (57,887)    (11,943)    130,504
  % of Assets                                       2.4%       (9.4)%     (15.4)%      (3.2)%      34.7%
  Cumulative                                      8,905     (26,563)    (84,450)    (96,393)     34,111
  % of Assets                                       2.4%       (7.1)%     (22.5)%     (25.7)%       9.1%
Cumulative risk sensitive assets to risk
  sensitive liabilities                            1.09         .84        0.64        0.68        1.11
</TABLE>

NEW ACCOUNTING PRONOUNCEMENTS

 The Financial Accounting Standards Board (FASB) issued three standards during
1998, and one in early 1999. Statement No. 132, EMPLOYERS' DISCLOSURES ABOUT
PENSIONS AND OTHER POSTRETIREMENT BENEFITS--AN AMENDMENT OF FASB STATEMENTS
NO. 87, 88 AND 106, is effective for the accompanying financial statements, and
the Company has complied with the provisions of this statements where
applicable. Statement No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES, and Statement No. 134, ACCOUNTING FOR MORTGAGE-BACKED SECURITIES
RETAINED AFTER THE SECURITIZATION OF MORTGAGE LOANS HELD FOR SALE BY A MORTGAGE
BANKING ENTERPRISE, become effective for fiscal quarters beginning after
June 15, 1999 and December 15, 1998, respectively. Statement No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position, and measure those
instruments at fair value and provides for a one time reclassification of assets
which the bank elected in the fourth quarter of 1999. Statement No. 134 amends
Statements No. 65 and 115 regarding accounting for mortgage backed securities.
Statement No. 135, RESCISSION OF FASB STATEMENT NO 75 AND TECHNICAL CORRECTIONS,
is effective for fiscal years beginning after February 15, 1999, and rescinds
FASB Statement No. 75. Management does not expect these statements to have any
material effect on the Company's financial position or results of operations.

                                      30
<PAGE>
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT AUDITORS

                                                                          [LOGO]

To the Board of Directors and Shareholders
Carrollton Bancorp and Subsidiary
Baltimore, Maryland

 We have audited the accompanying consolidated balance sheets of Carrollton
Bancorp and Subsidiary as of December 31, 2000 and 1999, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for the three years ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

 We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

 In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Carrollton Bancorp
and Subsidiary as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for the three years ended December 31, 2000, in
conformity with generally accepted accounting principles.

Rowles & Company, LLP

/s/ Rowles & Company LLP

Baltimore, Maryland
February 28, 2001

                                      31
<PAGE>
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                            December 31
                                                                      2000               1999
<S>                                                               <C>                <C>
--------------------------------------------------------------------------------------------------

ASSETS
Cash and due from banks                                           $ 26,249,660       $ 24,795,534
Federal funds sold                                                     309,168          2,840,365
Investment securities:
  Available for sale                                                73,332,186         75,747,478
  Held to maturity                                                      50,000             50,000
Loans held for sale                                                  1,652,863          2,557,922
Loans, less allowance for loan losses of $3,024,290 and
 $2,836,291                                                        273,342,745        254,611,044
Premises and equipment                                               7,888,541          8,456,257
Accrued interest receivable                                          2,602,151          2,381,008
Deferred income taxes                                                  316,436            880,010
Prepaid income taxes                                                        --            525,627
Other assets                                                         2,202,820          2,773,956
                                                                  ------------       ------------
                                                                  $387,946,570       $375,619,201
                                                                  ============       ============

LIABILITES AND SHAREHOLDERS' EQUITY
Deposits
  Noninterest bearing                                             $ 37,953,473       $ 41,957,674
  Interest-bearing                                                 254,070,668        220,492,191
                                                                  ------------       ------------
Total deposits                                                     292,024,141        262,449,865
Federal funds purchased and securities sold under agreement
 to repurchase                                                      12,372,519         13,650,176
Advances from the Federal Home Loan Bank                            50,000,000         66,000,000
Notes payable -- U.S. Treasury                                         984,859          1,830,856
Accrued interest payable                                               698,270            491,728
Accrued income taxes                                                    83,392                 --
Other liabilities                                                    1,301,385          1,311,999
                                                                  ------------       ------------
                                                                   357,464,566        345,734,624
                                                                  ------------       ------------
Shareholders' equity
Common stock, par $1.00 per share; authorized 10,000,000
 shares; issued and outstanding 2,707,733 in 2000 and
 2,776,904 in 1999                                                   2,707,733          2,776,904
Surplus                                                             17,090,011         18,016,419
Retained earnings                                                   10,722,132          9,945,947
Accumulated other comprehensive income                                 (37,872)          (854,693)
                                                                  ------------       ------------
                                                                    30,482,004         29,884,577
                                                                  ------------       ------------
                                                                  $387,946,570       $375,619,201
                                                                  ============       ============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      32
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                      Years Ended December 31
                                                                 2000          1999          1998
<S>                                                           <C>           <C>           <C>
-----------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans                                    $22,161,116   $17,909,278   $16,196,046
Interest and dividends on securities:
  Taxable interest income                                       3,061,959     2,695,068     2,619,672
  Nontaxable interest income                                      589,515     1,246,279     1,207,758
  Dividends                                                       144,729       119,588       110,140
Interest on federal funds sold and other interest income          768,729       285,683       225,586
                                                              -----------   -----------   -----------
Total interest income                                          26,726,048    22,255,896    20,359,202
                                                              -----------   -----------   -----------

INTEREST EXPENSE
Deposits                                                       11,457,037     7,984,401     7,921,410
Other                                                           4,464,647     2,969,248     1,675,312
                                                              -----------   -----------   -----------
Total interest expense                                         15,921,684    10,953,649     9,596,722
                                                              -----------   -----------   -----------
Net interest income                                            10,804,364    11,302,247    10,762,480

PROVISION FOR LOAN LOSSES                                         448,000       597,840       615,000
                                                              -----------   -----------   -----------
Net interest income after provision for loan losses            10,356,364    10,704,407    10,147,480
                                                              -----------   -----------   -----------

OTHER OPERATING INCOME
Service charges on deposit accounts                             1,201,836     1,331,611     1,305,099
Brokerage commissions                                           1,273,855     1,013,251       921,048
Other fees and commissions                                      5,162,891     6,522,446     4,678,062
Gain on sale of merchant services unit                                 --     1,554,526            --
Gains on security sales                                           256,252       239,669     2,404,348
Gains on loan sales                                                18,212       249,940       448,831
                                                              -----------   -----------   -----------
Total other operating income                                    7,913,046    10,911,443     9,757,388
                                                              -----------   -----------   -----------

OTHER EXPENSES
Salaries                                                        5,658,923     5,579,917     5,261,730
Employee benefits                                               1,090,372     1,303,254     1,183,459
Occupancy                                                       1,705,230     1,590,417     1,645,755
Furniture and equipment                                         1,734,149     1,498,386     1,279,403
Other operating expenses                                        5,756,673     7,892,580     6,456,389
                                                              -----------   -----------   -----------
Total other expenses                                           15,945,347    17,864,554    15,826,736
                                                              -----------   -----------   -----------
Income before income taxes                                      2,324,063     3,751,296     4,078,132

INCOME TAXES                                                      576,531       905,249     1,103,783
                                                              -----------   -----------   -----------
NET INCOME                                                    $ 1,747,532   $ 2,846,047   $ 2,974,349
                                                              ===========   ===========   ===========

NET INCOME PER SHARE-BASIC                                    $      0.64   $      1.01   $      1.04
                                                              ===========   ===========   ===========

NET INCOME PER SHARE-DILUTED                                  $      0.64   $      1.01   $      1.04
                                                              ===========   ===========   ===========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      33
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                   ACCUMULATED
                                                                                                      OTHER
                                              Common Stock                           RETAINED     COMPREHENSIVE   COMPREHENSIVE
                                          SHARES      PAR VALUE       SURPLUS        EARNINGS        INCOME          INCOME
<S>                                     <C>          <C>            <C>            <C>            <C>             <C>
-------------------------------------------------------------------------------------------------------------------------------

BALANCE, DECEMBER 31, 1997               1,454,275   $ 14,542,750   $  8,593,801   $  5,811,861    $   843,822

Net Income                                                     --             --      2,974,349             --     $ 2,974,349
Changes in net unrealized holding
 gains (losses) on available for sale
 securities, net of tax                                        --             --             --        357,836         357,836
                                                                                                                   -----------
Comprehensive Income                                                                                               $ 3,332,185
                                                                                                                   ===========
Shares acquired and cancelled              (39,531)      (395,310)    (1,034,664)            --             --
Cash dividends, $0.285                                         --             --       (821,917)            --
                                        ----------   ------------   ------------   ------------    -----------

BALANCE, DECEMBER 31, 1998               1,414,744     14,147,440      7,559,137      7,964,293      1,201,658

Net Income                                                     --             --      2,846,047             --     $ 2,846,047
Changes in net unrealized holding
 gains (losses) on available for sale
 securities, net of tax                                        --             --             --     (2,056,351)     (2,056,351)
                                                                                                                   -----------
Comprehensive Income                                                                                               $   789,696
                                                                                                                   ===========
Shares acquired and cancelled              (47,334)      (101,406)      (811,848)            --             --
Stock split in the form of a 100%
 stock dividend                          1,409,494     14,094,940    (14,094,940)            --             --
Change Par Value from $10 to $1                       (25,364,070)    25,364,070             --             --
Cash dividends, $0.3075                                        --             --       (864,393)            --
                                        ----------   ------------   ------------   ------------    -----------

BALANCE, DECEMBER 31, 1999               2,776,904      2,776,904     18,016,419      9,945,947       (854,693)

Net Income                                                     --             --      1,747,532             --     $ 1,747,532
Changes in net unrealized holding
 gains (losses) on available for sale
 securities, net of tax                                        --             --             --        816,821         816,821
                                                                                                                   -----------
Comprehensive Income                                                                                               $ 2,564,353
                                                                                                                   ===========
Shares acquired and cancelled              (69,171)       (69,171)      (926,408)            --             --
Cash dividends, $0.355                                         --             --       (971,347)            --
                                        ----------   ------------   ------------   ------------    -----------

BALANCE, DECEMBER 31, 2000               2,707,733   $  2,707,733   $ 17,090,011   $ 10,722,132    $   (37,872)
                                        ==========   ============   ============   ============    ===========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      34
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       Years Ended December 31
                                                                  2000           1999           1998
<S>                                                           <C>            <C>            <C>
--------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received                                             $ 26,492,522   $ 21,978,252   $ 20,506,896
Fees and commissions received                                    7,670,305     10,912,726      6,429,072
Interest paid                                                  (15,715,142)   (10,697,617)    (9,565,643)
Cash paid to suppliers and employees                           (13,810,326)   (17,534,032)   (13,817,726)
Proceeds from sale of loans held for sale                        8,191,350     19,229,922     24,377,361
Origination of loans held for sale                              (7,268,079)   (18,043,944)   (27,442,490)
Income taxes paid                                                  (71,992)      (731,108)    (1,082,194)
                                                              ------------   ------------   ------------
                                                                 5,488,638      5,114,199       (594,724)
                                                              ------------   ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities held to maturity                 --        870,000      3,926,155
Purchase of securites held to maturity                                  --             --       (499,688)
Proceeds from sales of securities available for sale            22,875,393     14,728,042     11,817,767
Proceeds from maturities of securities available for sale        9,600,000     10,004,025     34,661,946
Purchase of securites available for sale                       (28,460,972)   (39,170,091)   (28,055,686)
Loans made, net of principal collected                         (13,936,533)   (41,660,723)   (28,359,430)
Puchase of loans, net of principal collected                    (5,243,168)    (8,878,946)    (9,071,839)
Purchase of premises and equipment                                (884,125)    (2,859,938)    (2,098,608)
                                                              ------------   ------------   ------------
                                                               (16,049,405)   (66,967,631)   (17,679,383)
                                                              ------------   ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in time deposits                        31,568,708     25,567,546     (3,578,200)
Net increase (decrease) in other deposits                       (1,994,432)       (96,706)     6,086,820
Net increase (decrease) in other borrowed funds                (18,123,654)    33,249,673     25,500,663
Common stock repurchase and retirement                            (995,414)      (913,254)    (1,429,974)
Dividends paid                                                    (971,512)      (864,393)      (821,917)
                                                              ------------   ------------   ------------
                                                                 9,483,696     56,942,866     25,757,392
                                                              ------------   ------------   ------------
Net increase (decrease) in cash and cash equivalents            (1,077,071)    (4,910,566)     7,483,285
Cash and cash equivalents at beginning of year                  27,635,899     32,546,465     25,063,180
                                                              ------------   ------------   ------------
Cash and cash equivalents at end of year                      $ 26,558,828   $ 27,635,899   $ 32,546,465
                                                              ============   ============   ============
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
 OPERATING ACTIVITES
Net income                                                    $  1,747,532   $  2,846,047   $  2,974,349
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
 OPERATING ACTIVITES
Provision for loan losses                                          448,000        597,840        615,000
Deprecation and amortization                                     1,260,377      1,238,373      1,079,583
Deferred income taxes                                               49,634        (13,111)       109,694
Amortization of premiums and discounts                             111,443         42,618         60,639
Gains on disposal of securities                                   (256,252)      (239,669)    (2,404,348)
Loans held for sale made, net of principal sold                    923,271      1,185,978     (3,065,129)
Gains on loans held for sale                                       (18,212)      (249,940)      (448,831)
Loss on sale and write-down of premises and equipment              274,172             --             --
(Increase) decrease in:
Accrued interest receivable                                       (221,143)      (320,262)        87,055
Prepaid income taxes                                               525,627             --             --
Other assets                                                       364,869         92,255       (124,914)
Increase (decrease) in:
Accrued interest payable                                           206,542        256,032         31,079
Income taxes payable                                                83,392       (338,182)       (88,105)
Other liabilities                                                  (10,614)        16,220        579,204
                                                              ------------   ------------   ------------
                                                              $  5,488,638   $  5,114,199   $   (594,724)
                                                              ============   ============   ============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                      35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies reflected in the financial statements
conform to generally accepted accounting principles and to general practices
within the banking industry. Management makes estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
commitments and contingent liabilities at the date of the financial statements
and revenues and expenses during the year. Actual results could differ from
those estimates.

 BUSINESS - The Company provides commercial banking and brokerage services to
businesses and individuals in Baltimore and surrounding areas of central
Maryland, and also makes residential mortgage loans in Virginia, Pennsylvania
and Delaware.

 PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of Carrollton Bancorp (the Company) and its subsidiary Carrollton Bank
(the Bank). Intercompany balances and transactions have been eliminated.

 The Parent Only financial statements of the Company account for the Bank using
the equity method of accounting.

 CASH EQUIVALENTS - For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, amounts due from banks, and federal funds
sold. Generally, federal funds are purchased and sold for one-day periods.

 INVESTMENT SECURITIES - Investment securities in the portfolio are classified
as either available for sale or held to maturity. The Company does not currently
conduct short term purchase and sale transactions of investment securities which
would be classified as trading securities.

 The Company classifies investments as available for sale based principally on
the Company's asset/liability position and potential liquidity needs. These
securities are available for sale in response to changes in market interest
rates or in the event the Company needs funds to meet loan demand or deposit
withdrawals. Securities classified as available for sale are carried at market
value. The unrealized holding gain or loss, net of taxes, related to securities
classified as available for sale is reflected as a component of shareholders'
equity. Gains or losses on securities sales are determined by the
specific-identification method.

 The remaining securities in the investment portfolio are classified as held to
maturity. These securities are carried at amortized cost. The Company has the
ability and the intent to hold these securities to maturity.

 LOANS HELD FOR SALE - Loans held for sale are carried at the lower of aggregate
cost or market value. Market value is determined based on outstanding investor
commitments or, in the absence of such commitments, based on current investor
yield requirements. Gains and losses on loan sales are determined using the
specific-identification method.

 LOANS AND ALLOWANCE FOR LOAN LOSSES - Loans are stated at face value, plus
deferred origination costs, less unearned discount, deferred origination fees,
and the allowance for loan losses. Interest on loans is credited to income based
on the principal amounts outstanding. Origination fees and costs are deferred
and amortized to income over the estimated terms of the loans. Accrual of
interest is discontinued generally when the collection of principal or interest
reaches 90 days past due, or earlier if collection becomes uncertain based upon
the financial weakness of the borrower or the realizable value of the
collateral. Management may grant a waiver from nonaccrual status for a 90 day
past due loan that is well secured or in the process of collection. Nonaccrual
loans are returned to accrual status when all past due principal and interest
has been collected, and the remainder of the loan is judged to be fully
collectible. Loans are considered impaired when, based on current information,
management considers it unlikely that the collection of principal and interest
payments will be made according to contractual terms. Generally, loans are not
reviewed for impairment until the accrual of interest has been discontinued. If
collection of principal is evaluated as doubtful, all payments are applied to
principal.

 In accordance with Statement of Financial Accounting Standards No. 114
"Accounting by Creditors for Impairment of a Loan" (SFAS No. 114), the Company
measures impaired loans (1) at the observable market price; (2) at the present
value of expected cash flows discounted at the loan's effective interest rate;
or (3) at the fair value of the collateral if the loan is collateral dependent.
If the measure of the impaired loan is less than the recorded investment in the
loan, an impairment is recognized through a valuation allowance and
corresponding provision for loan losses.

 The allowance for loan losses represents an estimate which, in management's
judgment, will be adequate to absorb probable losses on existing loans and other
extensions of credit that may become uncollectible. Management's judgment in
determining the adequacy of the allowance is based on evaluations of the
collectibility of loans. These evaluations take into consideration such factors
as changes in the nature and volume of the loan portfolio, current economic
conditions that may affect the borrowers' ability to pay, overall portfolio
quality, and review of specific problem areas. Actual loan performance may
differ from estimates used by management.

 PREMISES AND EQUIPMENT - Premises and equipment are recorded at cost less
accumulated depreciation and amortization. Depreciation and amortization are
computed over the estimated useful lives using the straight-line method.
Leasehold improvements are amortized over the terms of

                                      36
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the leases or the estimated useful lives of the improvements, whichever is
shorter. Accumulated depreciation includes provisions for declines in the value
of land and buildings.

 INTANGIBLE ASSETS - The premium paid for deposits acquired is being amortized
to expense on the straight line basis over 15 years. The Company capitalizes the
value of loan servicing retained on loan sales, and amortizes the value over the
estimated life of the portfolio of loans serviced. The amortization period is
adjusted quarterly for changes in the prepayment speed of the loans serviced.
Intangible assets are included in other assets on the Consolidated Balance
Sheets.

 INCOME TAXES - The provision for income taxes includes taxes payable for the
current year and deferred income taxes. The Company recognizes deferred tax
assets and liabilities for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Deferred tax assets may also include tax
credit carryovers that the Company expects to offset against future tax
obligations.

 PER SHARE DATA - Basic net income per common share are determined by dividing
net income by the weighted average shares of common stock outstanding giving
retroactive effect to any stock dividends and splits declared. Diluted earnings
per share is determined by adjusting average shares of common stock outstanding
by the potentially dilutive effects of stock options outstanding. The dilutive
effects of stock options are computed using the "treasury stock" method.

 COMPREHENSIVE INCOME - The Company adopted Statement No. 130 of the Financial
Accounting Standards Board, REPORTING COMPREHENSIVE INCOME, in 1998.
Comprehensive income includes net income and the unrealized gain (loss) on
investment securities available for sale, net of income taxes.

2. RESTRICTIONS ON CASH AND DUE FROM BANKS
 Banks are required to carry cash reserves with the Federal Reserve Bank or
maintain cash on hand of specified percentages of deposit balances. The Bank's
normal amount of cash on hand, which averaged $14.8 million and $16.1 million
during 2000 and 1999 respectively, is sufficient to satisfy the reserve
requirements.

 In order to cover the costs of services provided by correspondent banks, the
Company maintains compensating balance arrangements at these correspondent
banks, or pays fees in the event the credit earned on balances is not sufficient
to cover activity charges. During 2000 and 1999, the Company maintained average
compensating balances of approximately $1,000,000 and $1,369,000, respectively,
of which $1,000,000 in each year was maintained at the Federal Reserve Bank. In
addition, the Company paid $50,058, $63,667, and $31,144, respectively, in
account charges in 2000, 1999, and 1998.

3. INVESTMENT SECURITIES
 Investment securities are summarized as follows:

<TABLE>
<CAPTION>
                                                AMORTIZED         UNREALIZED        UNREALIZED
                                                  COST               GAINS            LOSSES         MARKET VALUE
<S>                                           <C>                 <C>               <C>              <C>
------------------------------------------------------------------------------------------------------------------
December 31, 2000
AVAILABLE FOR SALE
U.S. Treasury                                 $    799,959        $       416       $      625       $    799,750
U.S. Government agency                          55,414,430             13,035          439,980         54,987,485
Mortgage backed securities                       5,242,307             76,835           10,885          5,308,257
State and municipal                              6,206,170              5,129           83,475          6,127,824
Federal Home Loan Bank stock                     3,250,000                  -                -          3,250,000
Equity securities                                2,481,021            553,509          175,660          2,858,870
                                              ------------        -----------       ----------       ------------
                                              $ 73,393,887        $   648,924       $  710,625       $ 73,332,186
                                              ============        ===========       ==========       ============
HELD TO MATURITY
Foreign bonds                                 $     50,000        $         -       $        -       $     50,000
                                              ------------        -----------       ----------       ------------
                                              $     50,000        $         -       $        -       $     50,000
                                              ============        ===========       ==========       ============
</TABLE>

                                      37
<PAGE>
3. INVESTMENT SECURITIES (CONTINUED)

<TABLE>
<CAPTION>
                                                AMORTIZED         UNREALIZED        UNREALIZED
                                                  COST               GAINS            LOSSES         MARKET VALUE
<S>                                           <C>                 <C>               <C>              <C>
------------------------------------------------------------------------------------------------------------------
December 31, 1999
AVAILABLE FOR SALE
U.S. Treasury                                 $  1,299,778        $       698       $    4,316       $  1,296,160
U.S. Government agency                          40,552,503                  -        1,710,687         38,841,816
Mortgage backed securities                       6,355,114             21,607           90,410          6,286,311
State and municipal                             21,519,116             73,532          438,923         21,153,725
Federal Home Loan Bank stock                     3,300,000                  -                -          3,300,000
Equity securities                                4,113,427            929,861          173,822          4,869,466
                                              ------------        -----------       ----------       ------------
                                              $ 77,139,938        $ 1,025,698       $2,418,158       $ 75,747,478
                                              ============        ===========       ==========       ============
HELD TO MATURITY
Foreign bonds                                 $     50,000        $         -       $        -       $     50,000
                                              ------------        -----------       ----------       ------------
                                              $     50,000        $         -       $        -       $     50,000
                                              ============        ===========       ==========       ============
</TABLE>

 Contractual maturities of debt securities at December 31, 2000 and 1999 are
shown below. Actual maturities may differ from contractual maturities because
borrowers have the right to call or prepay obligations with or without call or
prepayment penalties.

<TABLE>
<CAPTION>
                                                                       December 31, 2000
                                                    Available for sale                     Held to maturity
                                                AMORTIZED           MARKET          AMORTIZED           MARKET
MATURING                                          COST               VALUE             COST              VALUE
<S>                                           <C>                 <C>               <C>              <C>
------------------------------------------------------------------------------------------------------------------
Within one year                               $  9,748,598        $ 9,750,853       $   25,000       $     25,000
Over one to five years                          27,143,351         27,001,153           25,000             25,000
Over five to ten years                          21,753,777         21,458,136                -                  -
Over ten years                                   3,774,833          3,704,917                -                  -
Mortgage backed securities                       5,242,307          5,308,257                -                  -
                                              ------------        -----------       ----------       ------------
                                              $ 67,662,866        $67,223,316       $   50,000       $     50,000
                                              ============        ===========       ==========       ============
</TABLE>

<TABLE>
<CAPTION>
                                                                       December 31, 1999
                                                    Available for sale                     Held to maturity
                                                AMORTIZED           MARKET          AMORTIZED           MARKET
MATURING                                          COST               VALUE             COST              VALUE
<S>                                           <C>                 <C>               <C>              <C>
------------------------------------------------------------------------------------------------------------------
Within one year                               $    754,334        $   755,984       $        -       $          -
Over one to five years                          19,720,247         19,270,911           50,000             50,000
Over five to ten years                          34,097,830         32,826,704                -                  -
Over ten years                                   8,798,986          8,438,102                -                  -
Mortgage backed securities                       6,355,114          6,286,311                -                  -
                                              ------------        -----------       ----------       ------------
                                              $ 69,726,511        $67,578,012       $   50,000       $     50,000
                                              ============        ===========       ==========       ============
</TABLE>

 At December 31, 2000 and 1999, securities with a cost basis of $20,415,830
(market value of $20,175,840), and $31,047,389 (market value of $29,696,333)
were pledged as collateral for government deposits and for securities sold under
repurchase agreements.

 In 2000, 1999, and 1998, the Company realized gains on sales of securities of
$491,480, $478,820, and $2,407,223, respectively, and losses of $235,228,
$239,151, and $2,875. Income taxes on net security gains were $99,356, $92,560,
and $928,556 in 2000, 1999, and 1998, respectively.

 The company transferred securities from held to maturity classification to
available for sale on its balance sheet as permitted by Financial Accounting
Standards No. 133 in the fourth quarter of 1999. The amount of the assets
reclassified as available for sale was $6,657,271.

                                      38
<PAGE>
4. LOANS
 Major classifications of loans are as follows:

<TABLE>
<CAPTION>
                                                                  2000            1999
<S>                                                           <C>             <C>
-------------------------------------------------------------------------------------------
Real estate
  Residential                                                 $188,658,857    $176,291,571
  Commercial                                                    50,811,936      40,925,099
  Construction and land development                                111,000       1,741,078
Demand and time                                                 28,981,256      28,514,699
Lease financing                                                  2,242,679       3,150,917
Installment and credit card                                      5,561,307       6,823,971
                                                              ------------    ------------
                                                               276,367,035     257,447,335
Allowance for loan losses                                        3,024,290       2,836,291
                                                              ------------    ------------
Loans, net                                                    $273,342,745    $254,611,044
                                                              ============    ============
</TABLE>

 The Bank makes loans to customers located in Maryland, Virginia, Pennsylvania
and Delaware. Although the loan portfolio is diversified, its performance will
be influenced by the regional economy.

 The maturity and rate repricing distribution of the loan portfolio is as
follows:

<TABLE>
<S>                                                           <C>             <C>
Repricing or maturing within one year                         $ 86,207,845    $ 93,137,165
Maturing over one to five years                                 38,949,836      57,180,739
Maturing over five years                                       151,209,354     107,129,431
                                                              ------------    ------------
                                                              $276,367,035    $257,447,335
                                                              ============    ============
</TABLE>

 Loan balances have been adjusted by the following deferred amounts:

<TABLE>
<S>                                                           <C>             <C>
Deferred origination costs and premiums                       $  2,840,701    $  2,469,320
Deferred origination fees and unearned discounts                  (942,771)       (532,629)
                                                              ------------    ------------
Net deferred (fees) costs                                     $  1,897,930    $  1,936,691
                                                              ============    ============
</TABLE>

 Transactions in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
                                                                  2000            1999            1998
<S>                                                           <C>             <C>             <C>
-----------------------------------------------------------------------------------------------------------

Beginning balance                                             $  2,836,291    $  2,387,732    $  2,302,981
Provision charged to operations                                    448,000         597,840         615,000
Recoveries                                                         124,398         153,544         143,434
                                                              ------------    ------------    ------------
                                                                 3,408,689       3,139,116       3,061,415
Loans charged off                                                  384,399         302,825         673,683
                                                              ------------    ------------    ------------
Ending balance                                                $  3,024,290    $  2,836,291    $  2,387,732
                                                              ============    ============    ============
</TABLE>

 At December 31, 2000, 1999, and 1998, the accrual of interest has been
discontinued on loans of $622,392, $240,569, and $205,074, respectively. The
amount of interest income that would have been recorded in 2000, 1999 and 1998
on non-accrual loans if those loans had been handled in accordance with their
contractual terms totaled $28,689, $12,880 and $29,395 respectively. The amount
of interest income actually recorded on non-accrual loans totaled $3,892, $5,549
and $16,841 for 2000, 1999 and 1998, respectively.

 At December 31, 2000, 1999 and 1998, the Company had one impaired loan to the
same borrower amounting to $633,302, $330,987 and $408,565 respectively that was
classified as impaired because it had been restructured to accept interest only
payments for a period of time. The average balance of impaired loans amounted to
$342,416, $369,776, and $408,565 in 2000, 1999, and 1998, respectively. The
Company has not provided for a specific allowance for impaired loans. During
2000, 1999 and 1998, the Company received total payments on impaired loans of
$42,153, $100,837, and $7,612, respectively. Of these amounts, $27,817, $23,259,
and $7,612 were recorded as interest income for 2000, 1999 and 1998,
respectively. The remainder was applied to reduce principal.

 This loan is the Company's only restructured loan. During the year-ended
December 31, 2000 the Bank repurchased, at a discount, a portion of this loan
that had been sold to another financial institution. The discount will be
accreted over the remaining life of the loan. There is not a specific allowance
for this loan since the fair value of the collateral securing the loan is
considered adequate to cover all principal and interest due. The Company also
continues to accrue interest on this loan due to the adequacy of the collateral
value.

                                      39
<PAGE>
4. LOANS (CONTINUED)

 Amounts past due 90 days or more, excluding nonaccrual loans are as follows:

<TABLE>
<CAPTION>
                                                                 2000          1999          1998

-----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>           <C>
Mortgage                                                      $   434,346   $   306,394   $ 1,293,078
Demand and time                                                   847,360       530,804       232,167
Installment and credit card                                             -             -        11,557
                                                              -----------   -----------   -----------
                                                              $ 1,281,706   $   837,198   $ 1,536,802
                                                              ===========   ===========   ===========
</TABLE>

 The Company continues to accrue interest on these loans since either the fair
value of the collateral is considered adequate to assure collection of all
principal and interest amounts due or the loan is in the process of collection.
LOANS WITH A BALANCE OF $81,961,376 WERE PLEDGED AS COLLATERAL TO THE FEDERAL
HOME LOAN BANK OF ATLANTA AS OF DECEMBER 31, 2000.

5. CREDIT COMMITMENTS
 Outstanding loan commitments, unused lines and letters of credit were as
follows:

<TABLE>
<CAPTION>
                                                                 2000          1999          1998

-----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>           <C>
LOAN COMMITMENTS
  Mortgage loans                                              $   254,467   $17,367,687   $16,589,977
  Construction and land development                               256,743             -     2,375,000
  Commercial loans                                             16,564,000     1,390,000       300,000
  Installment loans                                                92,376        10,100        43,186
                                                              -----------   -----------   -----------
                                                              $17,167,586   $18,767,787   $19,308,163
                                                              ===========   ===========   ===========
UNUSED LINES OF CREDIT
  Home equity lines                                           $56,579,164   $58,693,062   $49,051,584
  Commercial lines                                             19,664,069    13,102,535    13,753,319
  Unsecured consumer lines                                      2,170,715     1,613,248     2,259,443
                                                              -----------   -----------   -----------
                                                              $78,413,948   $73,408,845   $65,064,346
                                                              ===========   ===========   ===========

LETTERS OF CREDIT                                             $ 1,392,352   $ 1,488,000   $ 1,487,000
                                                              ===========   ===========   ===========
</TABLE>

 Loan commitments and lines of credit are agreements to lend to a customer as
long as there is no violation of any condition to the contract. Loan commitments
generally have interest rates fixed at current market amounts, fixed expiration
dates, and may require payment of a fee. Lines of credit generally have variable
interest rates. Such lines do not represent future cash requirements because it
is unlikely that all customers will draw upon their lines in full at any time.
Letters of credit are commitments issued to guarantee the performance of a
customer to a third party.

 The Company's exposure to credit loss in the event of nonperformance by the
borrower is the contract amount of the commitment. Loan commitments, lines and
letters of credit are made on the same terms, including collateral, as
outstanding loans. The Company is not aware of any accounting loss it would
incur by funding the above commitments.

6. RELATED PARTY TRANSACTIONS
 The Company's executive officers and directors, or other entities to which they
are related, enter into loan transactions with the Bank in the ordinary course
of business. The terms of these transactions are similar to the terms provided
to other borrowers entering into similar loan transactions and do not involve
more than normal risk of collectibility. During the years ended December 31,
2000, 1999 and 1998, transactions in related party loans were as follows:

<TABLE>
<CAPTION>
                                                                 2000          1999          1998

-----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>           <C>
Beginning balance                                             $ 2,031,292   $ 2,533,672   $ 2,776,990
Additions                                                         197,290       859,354     1,619,154
Repayments                                                       (312,598)     (241,861)   (1,862,472)
Changes in executive officers and directors                             -      (562,033)            -
Adjustment to treat loans guaranteed by multiple directors
 as a single indebtedness                                               -      (557,840)            -
                                                              -----------   -----------   -----------
                                                              $ 1,915,984   $ 2,031,292   $ 2,533,672
                                                              ===========   ===========   ===========
</TABLE>

                                      40
<PAGE>
6. RELATED PARTY TRANSACTIONS (CONTINUED)
 A director of the Company is a partner in a law firm that provides legal
services to the Company and its subsidiary. During the years ended December 31,
2000, 1999 and 1998, amounts paid to the law firm in connection with those
services were $166,522, $146,250, and $192,861, respectively.

 A director of the Company is President of an insurance brokerage through which
the Company and its subsidiary place various insurance policies. During the
years ended December 31, 2000, 1999, and 1998, amounts paid to the insurance
brokerage for insurance premiums were $57,656, $110,528, and $88,077,
respectively.

7. PREMISES AND EQUIPMENT
 A summary of premises and equipment is as follows:

<TABLE>
<CAPTION>
                                                                 2000          1999

---------------------------------------------------------------------------------------
<S>                                                           <C>           <C>
Land and improvements                                         $   864,474   $   864,474
Buildings                                                       3,418,861     3,599,698
Leasehold improvements                                          2,867,347     2,962,716
Equipment and fixtures                                         10,416,975     9,719,869
                                                              -----------   -----------
                                                               17,567,657    17,146,757
Accumulated depreciation and amortization                       9,679,116     8,690,500
                                                              -----------   -----------
                                                              $ 7,888,541   $ 8,456,257
                                                              ===========   ===========
</TABLE>

 Depreciation and amortization of premises and equipment was $1,136,243,
$1,128,263, and $1,025,796 for 2000, 1999, and 1998, respectively. Amortization
of intangible assets, excluding amortization of deposit premiums, was $124,134,
$110,110 and $53,787, for 2000, 1999, and 1998, respectively.

 During the year-ended December 31, 2000, the Company reduced the book value of
its Baltimore Street branch to its estimated fair value of $140,000. The
write-down of $189,745 is included in occupancy expense on the Consolidated
Statements of Income. The fair value of the property represents the agreed-upon
sale price of the property. The sale is expected to take place in the second
quarter of 2001.

8. DEPOSITS
 Major classifications of interest-bearing deposits are as follows:

<TABLE>
<CAPTION>
                                                                  2000            1999

-------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
NOW and SuperNOW                                              $ 36,235,651    $ 30,124,529
Money market                                                    48,074,964      49,125,185
Savings                                                         42,961,679      46,011,819
Certificates of deposit of $100,000 or more                     34,142,844      21,635,453
Other time deposits                                             92,655,530      73,595,205
                                                              ------------    ------------
                                                              $254,070,668    $220,492,191
                                                              ============    ============
</TABLE>

 Certificates of deposit of $100,000 or more mature as follows:

<TABLE>
<S>                                                           <C>             <C>
Three months or less                                          $  7,415,536    $  8,177,178
Over three through twelve months                                11,457,285       6,573,672
Over one to five years                                          15,270,023       6,884,603
                                                              ------------    ------------
                                                              $ 34,142,844    $ 21,635,453
                                                              ============    ============
</TABLE>

 Interest expense associated with certificates of deposit of $100,000 or more
was $1,756,939, $795,285, and $531,200 for the years ended December 31, 2000,
1999, and 1998, respectively.
 Other time deposits mature as follows:

<TABLE>
<CAPTION>
                                                                 2000          1999

---------------------------------------------------------------------------------------
<S>                                                           <C>           <C>
Maturing within one year                                      $63,459,805   $57,912,109
Maturing over one to five years                                29,167,881    15,435,569
Maturing over five years                                           27,844       247,527
                                                              -----------   -----------
                                                              $92,655,530   $73,595,205
                                                              ===========   ===========
</TABLE>

                                      41
<PAGE>
9. BRANCH ACQUISITION

On June 23, 1995, the Company acquired a branch office from First Union National
Bank of Maryland. This branch had total deposits at the date of acquisition of
$22,765,077. The Company also acquired related real estate and equipment of
$530,000 and loans of $17,303. The deposit premium of $1,847,663 is being
amortized using the straight line method over 15 years. Amortization expense
recorded amounted to $123,180 for 2000, 1999 and 1998, respectively. The
remaining unamortized balance at December 31, 2000 and 1999 was $1,170,173 and
$1,293,353, respectively. This amount is included in other assets in the
Consolidated Balance Sheets.

10. BORROWINGS
 Federal funds purchased and securities sold under agreements to repurchase
represent transactions with customers for correspondent or commercial account
cash management services, and borrowings by the Company under lines of credit
with other institutions. The transactions with customers are overnight borrowing
arrangements with interest rates discounted from the federal funds sold rate.
Securities underlying the customer repurchase agreements are maintained in the
Company's control. Additional information is as follows:

<TABLE>
<CAPTION>
                          2000          1999          1998

--------------------------------------------------------------
<S>                    <C>           <C>           <C>
Total outstanding at
 period end            $12,372,519   $13,650,176   $12,816,453
Average amount
 outstanding during
 period                 14,943,138    14,584,035    11,138,269
Maximum amount
 outstanding at any
 month end              20,116,442    18,912,001    15,425,304
Weighted average
 interest rate at
 period end                   5.47%         4.80%         4.07%
Weighted average
 interest rate for
 the period                   5.37%         4.42%         5.18%
</TABLE>

 Notes payable - U.S. Treasury are Federal Treasury Tax and Loan deposits
accepted by the Bank from its customers to be remitted to the Federal Reserve
Bank on a periodic basis. The Company pays interest on these deposits at a
slight discount to the federal funds sold rate.

 Advances from the Federal Home Loan Bank (FHLB) of Atlanta amounted to
$50,000,000 and $66,000,000 at December 31, 2000 and 1999, respectively.
Advances averaged $56,191,257 and $42,916,040 for 2000 and 1999, respectively,
with weighted average costs of 6.45% for 2000 and 5.34% for 1999. At December
31, 2000, the advances carried a weighted average interest rate of 6.58%, and
matured at dates ranging from March 19, 2001 to May 24, 2005. At December 31,
1999, the advances carried a weighted average interest rate of 4.81%, and
matured at dates ranging from September 5, 2000 through August 6, 2009. The Bank
has a total secured line of $61 million with the FHLB for which the Bank granted
the FHLB a blanket security interest in its residential first mortgage loans.

 As noted above, the Company borrows under available unsecured federal funds
lines of credit of $4 million with other institutions. The balance outstanding
under these lines was $700,000 and $0 at December 31, 2000 and 1999,
respectively. These lines bear interest at the then current federal funds rate
of the correspondent bank.

                                      42
<PAGE>
11. OTHER OPERATING EXPENSES
 Other operating expenses include the following:

<TABLE>
<CAPTION>
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
ATM services                                                  $2,039,858   $2,088,009   $1,366,754
Data processing services                                         745,849      684,306      677,113
Marketing                                                        584,446      661,751      730,554
Professional services                                            374,330      274,178      257,644
Telephone                                                        234,371      247,679      212,148
Printing, stationery, and supplies                               214,406      275,829      315,911
Postage and freight                                              153,807      180,630      187,508
Liability insurance                                              130,550       90,319       76,123
Directors' fees                                                  124,893      132,025      116,750
Software amortization                                            124,134      110,110       53,787
Deposit premium amortization                                     123,180      123,180      123,180
Merchant credit card services                                     22,036    1,465,476    1,234,137
Other                                                            884,813    1,559,088    1,104,780
                                                              ----------   ----------   ----------
                                                              $5,756,673   $7,892,580   $6,456,389
                                                              ==========   ==========   ==========
</TABLE>

12. STOCK OPTIONS
The Company adopted a stock option incentive plan in 1998, which provides for
the granting of common stock options to directors and key employees. These stock
option awards contain a serial feature whereby one third of the options granted
vest and can be exercised after each year. Option prices are equal to the
estimated fair market value of the common stock at the date of the grant.
Options expire ten years after the date of grant if not exercised.

 Information with respect to options outstanding is as follows for the year
ended December 31:

<TABLE>
<CAPTION>
                                   2000                            1999                            1998
                        SHARES    OPTION PRICE RANGE    SHARES    OPTION PRICE RANGE    SHARES    OPTION PRICE RANGE

--------------------------------------------------------------------------------------------------------------------
<S>                    <C>        <C>                  <C>        <C>                  <C>        <C>
Outstanding at
  beginning of year    104,600                          70,400                              --
  Granted               36,100     $14.13               59,400     $16.13 to $16.25     70,400     $17.54 to $19.00
  Exercised                  -                               -                              --
  Expired/ Canceled    (32,001)    $14.13 to $18.68    (25,200)                             --
                       -------                         -------                         -------
Outstanding at end of
  year                 108,699     $14.13 to $19.00    104,600     $16.13 to $19.00     70,400     $17.54 to $19.00
                       =======                         =======                         =======
Exercisable at
  December 31           47,928                          17,067                              --
                       =======                         =======                         =======
</TABLE>

 The value of each option is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions used for grants during the years ended December 31, 2000 and 1999,
and 1998.

<TABLE>
<CAPTION>
                                                               2000              1999              1998

-------------------------------------------------------------------------------------------------------------
<S>                                                       <C>               <C>               <C>
Dividend yield                                                     2.51%    1.97% to 1.98%    1.53% to 1.65%
Expected volatility                                               30.83%            25.47%            30.00%
Risk free rate                                            5.76% to 6.35%     5.68 to 6.42%             5.50%
Expected lives                                                  10 years          10 years          10 years
</TABLE>

                                      43
<PAGE>
 The Company uses the intrinsic value method to account for stock based
compensation plans. Because the option price of stock options granted was equal
to the market price of the common stock at the date of grant for all options
granted, no compensation expense related to the options was recognized. If the
Company had applied a fair value based method to recognize compensation cost for
the options granted, net income and net income per share would have been changed
to the following pro forma amounts for the years ended December 31, 2000, 1999,
and 1998.

<TABLE>
<CAPTION>
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
Net Income:
  As Reported                                                 $1,747,532   $2,846,047   $2,974,349
  Pro forma                                                   $1,669,531   $2,763,829   $2,769,375
Basic Earnings Per Share:
  As Reported                                                 $     0.64   $     1.01   $     1.04
  Pro forma                                                   $     0.61   $     0.99   $     0.96
Diluted Earnings Per Share:
  As reported                                                 $     0.64   $     1.01   $     1.04
  Pro forma                                                   $     0.61   $     0.99   $     0.96
</TABLE>

13. NET INCOME PER SHARE
 The calculation of net income per common share as restated giving retroactive
effect to any stock dividends and splits is as follows for the years ended
December 31:

<TABLE>
<CAPTION>
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
BASIC:
Net income (applicable to common stock)                       $1,747,532   $2,846,047   $2,974,349
Average common shares outstanding                              2,736,263    2,817,458    2,878,212
Basic net income per share                                    $     0.64   $     1.01   $     1.04
DILUTED:
Net income (applicable to common stock)                       $1,747,532   $2,846,047   $2,974,349
Average common shares outstanding                              2,736,263    2,817,458    2,878,212
Stock option adjustment                                                -            -            -
                                                              ----------   ----------   ----------
Average common shares outstanding-diluted                      2,736,263    2,817,458    2,878,212
Diluted net income per share                                  $     0.64   $     1.01   $     1.04
</TABLE>

14. COMPREHENSIVE INCOME
Comprehensive income is defined as net income plus transactions and other
occurrences which are the result of nonowner changes in equity. For the Company,
nonowner equity changes are comprised of unrealized gains or losses on available
for sale classified securities that will be accumulated with net income in
determining comprehensive income. Presented below is a reconcilement of net
income to comprehensive income for the years ended December 31:

<TABLE>
<CAPTION>
                                                                 2000          1999          1998

-----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>           <C>
Net Income                                                    $ 1,747,532   $ 2,846,047   $ 2,974,349
                                                              -----------   -----------   -----------
OTHER COMPREHENSIVE INCOME:
Unrealized holding gains (losses) during the period             1,587,011    (3,110,528)    2,987,333
Less: Adjustment for security gains                              (256,252)     (239,669)   (2,404,348)
                                                              -----------   -----------   -----------
Other comprehensive income before tax                           1,330,759    (3,350,197)      582,985
Income taxes on comprehensive income                             (513,938)    1,293,846      (225,149)
                                                              -----------   -----------   -----------
Other comprehensive income after tax                              816,821    (2,056,351)      357,836
                                                              -----------   -----------   -----------
Comprehensive income                                          $ 2,564,353   $   789,696   $ 3,332,185
                                                              ===========   ===========   ===========
</TABLE>

                                      44
<PAGE>
15. CAPITAL STANDARDS
The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC)
have adopted risk-based capital standards for banking organizations. These
standards require ratios of capital to assets for minimum capital adequacy and
to be classified as well capitalized under prompt corrective action provisions.
As of December 31, 2000 and 1999, the capital ratios and minimum capital
requirements are as follows.

<TABLE>
<CAPTION>
                                                                           MINIMUM
                                                                           CAPITAL                      TO BE WELL
                                              ACTUAL                       ADEQUACY                    CAPITALIZED
          (IN THOUSANDS)              AMOUNT           RATIO        AMOUNT           RATIO        AMOUNT           RATIO
--------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>               <C>         <C>               <C>         <C>               <C>

DECEMBER 31, 2000
Total Capital (to risk-weighted
assets)
Consolidated                        $32,328,465        12.17%     $21,250,668         8.0%      $26,563,317         10.0%
Carrollton Bank                     $28,590,100        10.79%     $21,198,800         8.0%      $26,498,500         10.0%
Tier 1 Capital
(to risk-weighted assets)
Consolidated                        $29,311,831        11.03%     $10,625,334         4.0%      $15,937,990          6.0%
Carrollton Bank                     $25,565,811         9.65%     $10,599,400         4.0%      $15,899,100          6.0%
Tier 1 Capital
(to average assets)
Consolidated                        $29,311,831         7.75%     $15,130,280         4.0%      $18,912,850          5.0%
Carrollton Bank                     $25,565,811         7.40%     $13,817,827         4.0%      $17,519,427          5.0%

DECEMBER 31, 1999
Total Capital
(to risk-weighted assets)
Consolidated                        $30,097,294        12.38%     $19,448,427         8.0%      $24,310,533         10.0%
Carrollton Bank                     $28,093,224        11.74%     $19,138,051         8.0%      $23,922,564         10.0%
Tier 1 Capital
(to risk-weighted assets)
Consolidated                        $26,710,969        10.99%     $ 9,724,213         4.0%      $14,586,320          6.0%
Carrollton Bank                     $25,256,933        10.56%     $ 9,569,026         4.0%      $14,353,538          6.0%
Tier 1 Capital
(to average assets)
Consolidated                        $26,710,969         7.30%     $14,627,602         4.0%      $18,284,503          5.0%
Carrollton Bank                     $25,256,933         7.02%     $14,387,894         4.0%      $17,984,867          5.0%
</TABLE>

 Tier 1 capital consists of capital stock, surplus, and undivided profits. Total
capital includes a limited amount of the allowance for loan losses. In
calculating risk-weighted assets, specified risk percentages are applied to each
category of asset and off-balance sheet items.

 Failure to meet the capital requirements could affect the Company's ability to
pay dividends and accept deposits and may significantly affect the operations of
the Company.

 As of December 31, 2000, the most recent notification from the FDIC categorized
the Bank as well capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized the Bank must maintain
minimum total risk based, Tier 1 risk based, and Tier 1 leverage ratios as set
forth in the table. There are no conditions or events since that notification
that management believes have changed the Bank's category.

                                      45
<PAGE>
16. PENSION PLANS
The Company has a defined benefit pension plan covering substantially all of the
employees. Benefits are based on years of service and the employee's highest
average rate of earnings for the three consecutive years during the last five
full years before retirement. The Company's funding policy is to contribute
annually the amount recommended by the Plan's independent actuarial consultants.
Assets of the plan are held in a trust fund managed by an insurance company.
Approximately 50% of the trust assets are invested in an immediate participation
guarantee fund, and the balance is invested in equity funds.

 The following table sets forth the financial status of the plan:

<TABLE>
<CAPTION>
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
CHANGE IN BENEFIT OBLIGATION:
  Benefit obligation at beginning of year                     $6,105,017   $6,215,846   $5,707,644
  Service cost                                                   368,350      411,073      313,141
  Interest cost                                                  452,403      431,592      402,508
  Actuarial gain                                                 136,939     (656,826)      40,515
  Benefits paid                                                 (302,761)    (296,668)    (247,962)
                                                              ----------   ----------   ----------
  Benefit obligation at end of year                           $6,759,948   $6,105,017   $6,215,846
                                                              ==========   ==========   ==========
CHANGE IN PLAN ASSETS:
  Fair value of plan assets at beginning of year              $6,666,006   $5,961,647   $5,021,786
  Actual return on plan assets                                   (26,632)   1,001,027      858,086
  Employer contribution                                          654,119            -      329,737
  Benefits paid                                                 (302,761)    (296,668)    (247,962)
                                                              ----------   ----------   ----------
  Fair value of plan assets at end of year                    $6,990,732   $6,666,006   $5,961,647
                                                              ==========   ==========   ==========
  Funded status                                               $  230,784   $  560,989   $ (254,199)
  Unrecognized net actuarial loss                               (106,226)    (915,047)     218,677
  Unrecognized prior service cost                                200,690      251,755      302,820
  Unrecognized net transition (asset)                                  -       (6,504)     (52,983)
                                                              ----------   ----------   ----------
  Prepaid (accrued) benefit cost                              $  325,248   ($ 108,807)  $  214,315
                                                              ==========   ==========   ==========
ASSUMPTIONS USED IN MEASURING THE PROJECTED BENEFIT
  OBLIGATION WERE AS FOLLOWS:
  Discount rates                                                    7.50%        7.75%        7.00%
  Rates of increase in compensation levels                          5.50%        5.50%        5.50%
  Long-term rate of return on assets                                9.00%        9.00%        9.00%
NET PENSION EXPENSE INCLUDES THE FOLLOWING COMPONENTS:
  Service cost                                                $  368,350   $  411,073   $  313,141
  Interest cost                                                  452,403      431,592      402,508
  Estimated return on assets                                    (617,835)    (524,129)    (441,167)
  Net amortization and deferral                                   17,146        4,586        4,586
                                                              ----------   ----------   ----------
Net pension expense                                           $  220,064   $  323,122   $  279,068
                                                              ==========   ==========   ==========
</TABLE>

 The Company has a contributory thrift plan qualifying under Section 401(k) of
the Internal Revenue Code. Employees with one year of service are eligible for
participation in the plan. The Company's contributions to this plan, included in
expenses, were $94,143, $83,872 and $85,518, for 2000, 1999, and 1998,
respectively.
17. CONTINGENCIES
 The Company is involved in various legal actions arising from normal business
activities. Management believes that the ultimate liability or risk of loss
resulting from these actions will not materially affect the Company's financial
position.

18. INCOME TAXES
 The components of income tax expense are as follows:

<TABLE>
<CAPTION>
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
CURRENT
Federal                                                       $  488,351   $  801,771   $  823,249
State                                                             38,546      116,589      170,840
                                                              ----------   ----------   ----------
                                                                 526,897      918,360      994,089
DEFERRED                                                          49,634      (13,111)     109,694
                                                              ----------   ----------   ----------
                                                              $  576,531   $  905,249   $1,103,783
                                                              ==========   ==========   ==========
</TABLE>

                                      46
<PAGE>
18. INCOME TAXES (CONTINUED)
 The components of the deferred tax charge (benefits) were as follows:

<TABLE>
<S>                                                           <C>          <C>          <C>
Provision for loan losses                                     $  (72,450)  $ (173,234)  $  (32,731)
Deferred origination costs                                      (100,027)     208,052       75,896
Deferred compensation plan                                       (11,116)      (9,689)      (8,805)
Depreciation                                                     141,486       81,732       45,523
Discount accretion                                                (3,917)      (1,539)      (2,096)
Retirement benefits                                              167,632     (118,433)      31,848
Ground rent losses                                                53,443            -           59
Write-down of building                                           (73,280)           -            -
Early retirement benefits                                        (52,137)           -            -
                                                              ----------   ----------   ----------
                                                              $   49,634   $  (13,111)  $  109,694
                                                              ==========   ==========   ==========
</TABLE>

 The components of the net deferred tax asset (liability) were as follows:

<TABLE>
<S>                                                           <C>          <C>          <C>
DEFERRED TAX ASSETS
Allowance for loan losses                                     $  932,691   $  860,241   $  687,007
Accrued retirement benefits                                            -       41,461            -
Deferred compensation plan                                       205,380      194,264      184,575
Unrealized losses on available for sale investment
  securities                                                      23,828      537,768            -
Allowance for loss on building                                    73,280            -            -
Allowance for ground rent losses                                       -       53,443       53,443
Early retirement benefits                                         52,137            -            -
                                                              ----------   ----------   ----------
                                                               1,287,316    1,687,177      925,025
                                                              ----------   ----------   ----------
DEFERRED TAX LIABILITIES
Accrued retirement benefits                                      126,171            -       76,972
Deferred origination costs                                       373,225      473,252      265,200
Unrealized gains on available for sale investment securities           -            -      756,078
Depreciation                                                     462,127      320,641      238,909
Discount accretion                                                 7,338       11,255       12,794
FHLB Stock dividends                                               2,019        2,019        2,019
                                                              ----------   ----------   ----------
                                                                 970,880      807,167    1,351,972
                                                              ----------   ----------   ----------
NET DEFERRED TAX ASSET (LIABILITY)                            $  316,436   $  880,010   $ (426,947)
                                                              ==========   ==========   ==========
</TABLE>

 The differences between the federal income tax rate of 34 percent and the
effective tax rate for the Company are reconciled as follows:

<TABLE>
<CAPTION>
                                                                2000       1999       1998

--------------------------------------------------------------------------------------------
<S>                                                           <C>        <C>        <C>
Statutory federal income tax rate                               34.0%      34.0%      34.0%
INCREASE (DECREASE) RESULTING FROM:
Tax-exempt income                                              (13.9)     (12.4)     (10.5)
State income taxes, net of federal income tax benefit            3.1        2.0        2.9
Other                                                            1.6         .5         .7
                                                               -----      -----      -----
                                                                24.8%      24.1%      27.1%
                                                               =====      =====      =====
</TABLE>

19. LEASE COMMITMENTS
 The Company leases various branch and general office facilities to conduct its
operations. The leases have remaining terms which range from a period of
3 months to 9 years. Most leases contain renewal options which are generally
exercisable at increased rates. Some of the leases provide for increases in the
rental rates at specified times during the lease terms, prior to the expiration
dates.

 The leases generally provide for payment of property taxes, insurance, and
maintenance costs by the Company. The total rental expense for all real property
leases amounted to $631,618, $570,502, and $716,525 for 2000, 1999, and 1998,
respectively.

 Lease obligations will require rent payments as follows:

<TABLE>
<CAPTION>
PERIOD                 MINIMUM RENTALS

--------------------------------------
<S>                    <C>
2001                     $  505,972
2002                        514,887
2003                        519,301
2004                        416,042
2005                        276,758
Remaining years             542,128
                         ----------
                         $2,775,088
                         ==========
</TABLE>

                                      47
<PAGE>
20. PARENT COMPANY FINANCIAL INFORMATION
 The balance sheets for 2000 and 1999 and statements of income and cash flows
for Carrollton Bancorp (Parent Only) for 2000, 1999, and 1998, are presented
below:

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     December 31
                                                                 2000          1999

---------------------------------------------------------------------------------------
<S>                                                           <C>           <C>
ASSETS
Cash                                                          $   552,232   $    13,867
Interest-bearing deposits in subsidiary                           871,777       113,299
Investment in subsidiary                                       26,474,295    25,207,100
Investment securities available for sale                        2,858,870     4,869,467
Other assets                                                       28,175         3,474
                                                              -----------   -----------
                                                              $30,785,349   $30,207,207
                                                              ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities                                                   $   303,345   $   322,630
                                                              -----------   -----------

SHAREHOLDERS' EQUITY
Common Stock                                                    2,707,733     2,776,904
Surplus                                                        17,090,011    18,016,419
Retained earnings                                              10,722,132     9,945,947
Accumulated other comprehensive income                            (37,872)     (854,693)
                                                              -----------   -----------
                                                               30,482,004    29,884,577
                                                              -----------   -----------
                                                              $30,785,349   $30,207,207
                                                              ===========   ===========
</TABLE>

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                    Years Ended December 31
                                                                 2000         1999         1998

--------------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>          <C>
INCOME
Dividends from subsidiary                                     $1,300,082   $1,511,862   $1,617,751
Interest and dividends                                           158,643      126,255      129,491
Security gains                                                   324,645      227,593    2,308,818
                                                              ----------   ----------   ----------
                                                               1,783,370    1,865,710    4,056,060
EXPENSES                                                         183,218      133,466      116,517
                                                              ----------   ----------   ----------
Income before income taxes and equity in undistributed net
  income of subsidiary                                         1,600,152    1,732,244    3,939,543
Income tax expense                                                70,860       61,538      870,763
                                                              ----------   ----------   ----------
                                                               1,529,292    1,670,706    3,068,780
Equity in undistributed net income of subsidiary                 218,240    1,175,341      (94,431)
                                                              ----------   ----------   ----------
NET INCOME                                                    $1,747,532   $2,846,047   $2,974,349
                                                              ==========   ==========   ==========
</TABLE>

                                      48
<PAGE>
20. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      Years Ended December 31
                                                                 2000          1999          1998
-----------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Cash dividends from subsidiary                                $ 1,300,082   $ 1,511,862   $ 1,617,751
Interest and dividends received                                   133,942       127,912       143,268
Cash paid to suppliers                                           (125,687)     (136,241)     (112,818)
Income taxes paid                                                  (1,619)       42,240      (889,950)
                                                              -----------   -----------   -----------
                                                                1,306,718     1,545,773       758,251
                                                              -----------   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest-bearing deposits             (680,858)      524,917      (429,852)
Proceeds from sales of securities available for sale            2,120,158     1,885,184     2,630,807
Purchases of securities available for sale                       (240,727)   (2,170,701)     (727,072)
                                                              -----------   -----------   -----------
                                                                1,198,573       239,400     1,473,883
                                                              -----------   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid                                                   (971,347)     (864,393)     (821,917)
Common stock repurchase and retirement                           (995,579)     (913,254)   (1,429,974)
                                                              -----------   -----------   -----------
                                                               (1,966,926)   (1,777,647)   (2,251,891)
                                                              -----------   -----------   -----------
Net (decrease) increase in cash                                   538,365         7,526       (19,757)
Cash at beginning of year                                          13,867         6,341        26,098
                                                              -----------   -----------   -----------
Cash at end of year                                           $   552,232   $    13,867   $     6,341
                                                              ===========   ===========   ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
  OPERATING ACTIVITIES
Net income                                                    $ 1,747,532   $ 2,846,047   $ 2,974,349

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
  OPERATING ACTIVITIES
Equity in undistributed income of subsidiary                     (218,240)   (1,175,341)       94,431
Security gains                                                   (324,646)     (227,593)   (2,308,818)
Decrease (increase) in accounts receivable                        (24,701)        1,656        14,739
Increase (decrease) in accounts payable                           126,773       101,004       (16,450)
                                                              -----------   -----------   -----------
                                                              $ 1,306,718   $ 1,545,773   $   758,251
                                                              ===========   ===========   ===========
</TABLE>

                                      49
<PAGE>
21. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are summarized
below. The fair values of a significant portion of these financial instruments
are estimates derived using present value techniques prescribed by the FASB and
may not be indicative of the net realizable or liquidation values. Also, the
calculation of estimated fair values is based on market conditions at a specific
point in time and may not reflect current or future fair values.

<TABLE>
<CAPTION>
                                                       December 31, 2000               December 31, 1999
                                                   CARRYING                        CARRYING
                                                    AMOUNT        FAIR VALUE        AMOUNT        FAIR VALUE

--------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>             <C>             <C>
FINANCIAL ASSETS
Cash and due from banks                          $ 26,249,660    $ 26,249,660    $ 24,795,534    $ 24,795,534
Federal funds sold                                    309,168         309,168       2,840,365       2,840,365
Investment securities (total)                      73,382,186      73,382,186      75,797,478      75,797,478
Loans held for sale                                 1,652,863       1,652,863       2,557,922       2,557,922
Loans, net                                        273,342,745     253,835,273     254,611,044     247,304,439
Accrued interest receivable                         2,602,151       2,602,151       2,381,008       2,381,008

FINANCIAL LIABILITIES
Noninterest-bearing deposits                     $ 37,953,473    $ 37,953,473    $ 41,957,674    $ 41,957,674
Interest-bearing deposits                         254,070,668     256,139,705     220,492,191     222,194,798
Federal funds purchased                             1,857,867       1,857,867       1,115,923       1,115,923
Notes payable-U.S. Treasury                           984,859         984,859       1,830,856       1,830,856
Securities sold under agreements to repurchase     10,514,652      10,514,652      12,534,253      12,534,253
Advances from the Federal Home Loan Bank           50,000,000      46,617,098      66,000,000      62,076,053
Accrued interest payable                              698,270         698,270         491,728         491,728
</TABLE>

 The fair values of U.S. Treasury and Government agency securities and listed
equity securities are determined using market quotations. For state and
municipal securities, the fair values are estimated using a matrix that
considers yield to maturity, credit quality, and marketability.

 The fair value of fixed-term loans is estimated to be the present value of
scheduled payments, and anticipated prepayments in the case of residential
mortgages, discounted using interest rates currently in effect for loans of the
same class and term. The fair value of variable-rate loans is estimated to equal
the carrying amount. The valuations of fixed-term and variable-rate loans are
adjusted for possible loan losses.

 The fair value of interest-bearing checking, savings, and money market deposit
accounts is equal to the carrying amount. The fair value of fixed-maturity time
deposits is estimated based on interest rates currently offered for deposits of
similar remaining maturities.

 Generally, the Company charges fees for commitments to extend credit. Interest
rates on commitments to extend credit are normally committed for periods of less
than one month. Fees charged on standby letters of credit are deemed to be
immaterial and these guarantees are expected to be settled at face amount or
expire unused. It is impractical to assign any fair value to these commitments.

22. SEGMENT INFORMATION
 The Company has reportable segments that are strategic business units offering
complimentary products and services to the core business of banking. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company provides the accounting
for all segments and charges a management fee for this service to the other
segments. The Company has also lent money to various segments with terms similar
to those offered third parties.

 The Commercial/Retail Bank segment provides full service retail and business
banking services, including lending and deposit services, investment activities
and other customary services associated with a bank.

 The Electronic Banking segment provides off-site ATM services, point of sale
transaction originations, home banking, and debit card transaction processing.

 The Brokerage segment provides full service brokerage services for stocks,
bonds, mutual funds and annuities.

 The Mortgage Unit segment provides residential mortgage lending products and
services.

                                      50
<PAGE>
22. SEGMENT INFORMATION (CONTINUED)
 Segment information for the Company for 2000 is as follows:

<TABLE>
<CAPTION>
                        COMMERCIAL/    ELECTRONIC                  MORTGAGE        SEGMENT
                        RETAIL BANK      BANKING     BROKERAGE       UNIT          TOTALS       ELIMINATIONS   CONSOLIDATED

----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>           <C>          <C>           <C>             <C>            <C>
Interest income        $ 26,016,287    $     9,832   $    8,363   $ 5,289,780   $ 31,324,262    $ (4,598,214)  $ 26,726,048
Interest expense        (15,841,666)      (115,132)           -    (4,563,100)   (20,519,898)      4,598,214    (15,921,684)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Net interest income      10,174,621       (105,300)       8,363       726,680     10,804,364               -     10,804,364
Provision for loan
 losses                    (400,000)             -            -       (48,000)      (448,000)              -       (448,000)
Other income              4,915,146      1,705,833    1,273,855        18,212      7,913,046               -      7,913,046
Intersegment income          67,742                           -             -         67,742         (67,742)             -
Operating expenses      (13,755,668)    (1,087,922)    (816,975)     (352,524)   (16,013,089)         67,742    (15,945,347)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Income before tax         1,001,841        512,611      465,243       344,368      2,324,063               -      2,324,063
Tax provision               (65,888)      (197,971)    (179,677)     (132,995)      (576,531)              -       (576,531)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Net income             $    935,953    $   314,640   $  285,566   $   211,373   $  1,747,532    $          -   $  1,747,532
                       ============    ===========   ==========   ===========   ============    ============   ============
Segment assets         $370,404,020    $18,136,079   $  576,273   $70,937,014   $460,053,386    $(72,106,816)  $387,946,570
Expenditures for
 segment purchases of
 premises, equipment
 and software          $    496,814    $   364,171   $   23,140   $         -   $    884,125    $          -   $    884,125
</TABLE>

 A reconciliation of total segment assets to consolidated total assets follows:

<TABLE>
<S>                                                           <C>
Total segment assets                                          $460,053,386
Elimination of intersegment loans                              (69,830,054)
Elimination of intersegment deposit accounts                    (2,276,762)
                                                              ------------
                                                              $387,946,570
                                                              ============

 Segment information for the Company for 1999 is as follows:
</TABLE>

<TABLE>
<CAPTION>
                        COMMERCIAL/    ELECTRONIC                  MORTGAGE        SEGMENT
                        RETAIL BANK      BANKING     BROKERAGE       UNIT          TOTALS       ELIMINATIONS   CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>           <C>          <C>           <C>             <C>            <C>

Interest income        $ 22,017,371    $     9,595   $    5,088   $ 3,518,639   $ 25,550,693    $ (3,294,797)  $ 22,255,896
Interest expense        (10,919,058)      (519,375)           -    (2,810,013)   (14,248,446)      3,294,797    (10,953,649)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Net interest income      11,098,313       (509,780)       5,088       708,626     11,302,247               -     11,302,247
Provision for loan
 losses                    (501,240)             -            -       (96,600)      (597,840)              -       (597,840)
Other income              2,330,386      7,417,913    1,013,251       149,893     10,911,443               -     10,911,443
Intersegment income          65,985              -            -             -         65,985         (65,985)             -
Operating expenses      (11,566,639)    (5,297,546)    (696,778)     (369,576)   (17,930,539)         65,985    (17,864,554)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Income before tax         1,426,805      1,610,587      321,561       392,343      3,751,296               -      3,751,296
Tax provision              (295,761)      (333,821)    (124,187)     (151,480)      (905,249)              -       (905,249)
                       ------------    -----------   ----------   -----------   ------------    ------------   ------------
Net income             $  1,131,044    $ 1,276,766   $  197,374   $   240,863   $  2,846,047    $          -   $  2,846,047
                       ============    ===========   ==========   ===========   ============    ============   ============
Segment assets         $363,418,659    $12,466,038   $  302,127   $69,737,134   $445,923,958    $(70,304,757)  $375,619,201
Expenditures for
 segment purchases of
 premises, equipment
 and software          $  1,759,022    $ 1,088,819   $    2,719   $     9,378   $  2,859,938                   $  2,859,938
</TABLE>

                                      51
<PAGE>
22. SEGMENT INFORMATION (CONTINUED)

 Other income for the commercial/retail bank includes $239,669 in gains on
security sales.

 Other income for electronic banking includes $1,554,526 in gain on sale of
merchant services unit.

 A reconciliation of total segment assets to consolidated total assets follows:

<TABLE>
<S>                                                           <C>
Total segment assets                                          $445,923,958
Elimination of intersegment loans                              (69,892,058)
Elimination of intersegment deposit accounts                      (412,699)
                                                              ------------
                                                              $375,619,201
                                                              ============
</TABLE>

 Segment information for the Company for 1998 is as follows:

<TABLE>
<CAPTION>
                        COMMERCIAL/    ELECTRONIC                 MORTGAGE        SEGMENT
                        RETAIL BANK      BANKING     BROKERAGE      UNIT          TOTALS       ELIMINATIONS   CONSOLIDATED

---------------------------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>           <C>         <C>           <C>             <C>            <C>
Interest income        $ 20,336,274    $         -   $   5,112   $ 1,837,418   $ 22,178,804    $ (1,819,602)  $ 20,359,202
Interest expense         (9,626,450)      (333,925)          -    (1,455,949)   (11,416,324)      1,819,602     (9,596,722)
                       ------------    -----------   ---------   -----------   ------------    ------------   ------------
Net interest income      10,709,824       (333,925)      5,112       381,469     10,762,480               -     10,762,480
Provision for loan
 losses                    (570,000)             -           -       (45,000)      (615,000)              -       (615,000)
Other income              4,502,718      4,141,367     921,048       192,255      9,757,388               -      9,757,388
Intersegment income          49,694              -           -             -         49,694         (49,694)             -
Operating expenses      (11,144,772)    (3,826,799)   (614,860)     (289,999)   (15,876,430)         49,694    (15,826,736)
                       ------------    -----------   ---------   -----------   ------------    ------------   ------------
Income before tax         3,547,464        (19,357)    311,300       238,725      4,078,132               -      4,078,132
Tax provision              (898,836)         7,476    (120,226)      (92,197)    (1,103,783)              -     (1,103,783)
                       ------------    -----------   ---------   -----------   ------------    ------------   ------------
Net income (loss)      $  2,648,628    $   (11,881)  $ 191,074   $   146,528   $  2,974,349    $          -   $  2,974,349
                       ============    ===========   =========   ===========   ============    ============   ============
Segment assets         $304,271,843    $13,804,997   $ 288,326   $42,958,314   $361,323,480    $(43,469,491)  $317,853,989
Expenditures for
 segment purchases of
 premises, equipment
 and software          $  1,732,065    $   341,198   $  17,685   $    60,534   $  2,151,482                   $  2,151,482
</TABLE>

 Other income for the commercial/retail bank includes $2,404,348 in gains on
security sales.

 A reconciliation of total segment assets to consolidated total assets follows:

<TABLE>
<S>                                                           <C>
Total segment assets                                          $361,323,480
Elimination of intersegment loans                              (42,025,412)
Elimination of intersegment deposit accounts                    (1,444,079)
                                                              ------------
                                                              $317,853,989
                                                              ============
</TABLE>

                                      52
<PAGE>
23. CONSOLIDATED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    Year Ended December 31, 2000
                                                           FIRST        SECOND         THIRD        FOURTH
                                                          QUARTER       QUARTER       QUARTER       QUARTER

-------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>
Interest income                                         $ 6,457,036   $ 6,464,307   $ 6,873,508   $ 6,931,197
Interest expense                                         (3,616,351)   (3,743,274)   (4,258,980)   (4,303,079)
                                                        -----------   -----------   -----------   -----------
Net interest income                                       2,840,685     2,721,033     2,614,528     2,628,118
Provision for loan losses                                  (112,000)     (112,000)     (112,000)     (112,000)
Security gains (losses)                                      53,959        70,207       (49,730)      181,816
Gains on loan sales                                          15,621             -             -         2,591
Other income                                              1,801,599     1,866,597     2,028,104     1,942,282
Operating expenses                                       (4,101,810)   (3,932,063)   (3,855,599)   (4,055,875)
                                                        -----------   -----------   -----------   -----------
Income before taxes                                         498,054       613,774       625,303       586,932
Income taxes                                                (72,492)     (152,924)     (176,753)     (174,362)
                                                        -----------   -----------   -----------   -----------
Net income                                              $   425,562   $   460,850   $   448,550   $   412,570
                                                        ===========   ===========   ===========   ===========
Earnings per share                                            $0.15         $0.17         $0.16         $0.16
                                                        ===========   ===========   ===========   ===========
Cash dividends per share                                     $0.085         $0.09         $0.09         $0.09
                                                        ===========   ===========   ===========   ===========
Market prices: high                                          $15.88        $14.44        $14.50        $14.13
                                                        ===========   ===========   ===========   ===========
               low                                           $13.50        $13.19        $13.13        $11.38
                                                        ===========   ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                    Year Ended December 31, 1999
                                                           FIRST        SECOND         THIRD        FOURTH
                                                          QUARTER       QUARTER       QUARTER       QUARTER

-------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>
Interest income                                         $ 4,861,233   $ 5,312,781   $ 5,848,495   $ 6,233,387
Interest expense                                         (2,258,178)   (2,445,523)   (2,941,912)   (3,308,036)
                                                        -----------   -----------   -----------   -----------
Net interest income                                       2,603,055     2,867,258     2,906,583     2,925,351
Provision for loan losses                                  (144,900)     (144,900)     (149,450)     (158,590)
Security gains                                               41,780        35,950         7,995       153,944
Gains on loan sales                                         249,940             -             -             -
Gains on sale of merchant services                                -             -     1,554,526             -
Other income                                              2,056,530     2,368,532     2,326,404     2,115,842
Operating expenses                                       (4,174,950)   (4,447,843)   (4,658,417)   (4,583,344)
                                                        -----------   -----------   -----------   -----------
Income before taxes                                         631,455       678,997     1,987,641       453,203
Income taxes                                               (124,038)     (108,107)     (622,150)      (50,954)
                                                        -----------   -----------   -----------   -----------
Net income                                              $   507,417   $   570,890   $ 1,365,491   $   402,249
                                                        ===========   ===========   ===========   ===========
Earnings per share                                            $0.18         $0.19         $0.50         $0.14
                                                        ===========   ===========   ===========   ===========
Cash dividends per share                                    $0.0725       $0.0725         $0.08       $0.0825
                                                        ===========   ===========   ===========   ===========
Market prices: high                                          $18.00        $18.00        $19.25        $18.00
                                                        ===========   ===========   ===========   ===========
               low                                           $16.25        $16.13        $17.25        $14.25
                                                        ===========   ===========   ===========   ===========
</TABLE>

 All earnings per share amounts have been adjusted to reflect the 2 for 1 stock
split in July, 1999.

                                      53
<PAGE>
ITEM 9: CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS

 At no time whatsoever during the Company's two most recent fiscal years or any
subsequent interim period, has an independent accountant who was previously
engaged as the principal accountant to audit the Company's financial statements,
or an independent accountant who was previously engaged to audit a significant
subsidiary and on whom the principal accountant expressed reliance in its
report, resigned, declined to stand for reelection or been dismissed.

PART III
-------------------

ITEM 10: DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT

 The Directors and Executive Officers of the Corporation are as follows:

Directors whose terms expire in 2001

 Robert J. Aumiller - Mr. Aumiller, age 52, currently is serving as a director
of the Bank and Company beginning with his appointment in 2001. He has been the
Executive Vice President of MacKenzie Commercial Real Estate Services, involved
in brokerage and real estate development of various commercial real estate
projects, since 1983.

 Ben F. Mason - Mr. Mason, age 63, currently is serving as a director of the
Bank and Company beginning with his appointment in 2001. He has been the
Executive Director of the Baltimore City Chamber of Commerce, a member business
association that promotes business development within Baltimore City, since
1993.

 Charles E. Moore, JR. - Mr. Moore, age 51, currently is serving as a director
of the Bank and Company beginning with his appointment in 2001. He has been the
Co-Founder, Director, President and CFO of TelAtlantic, a consolidation of rural
telephone companies across the United States, since 1999. Mr. Moore has been the
Co-Founder, Director, and CFO of GoEbusiness.com, which specialize in the
development of customized E-Commerce solutions, since 1998.

 John Paul Rogers - Mr. Rogers, age 65, has served as director of the Bank since
1970 and of the Company since its inception in 1990. Mr. Rogers has been
Chairman of the Bank since February 1994. He was a partner of the law firm of
Rogers, Moore and Rogers, counsel of the Bank, from 1970 until 1992.
Mr. Rogers was senior title officer of The Security Title Guarantee Corporation
of Baltimore from May 1991 until December 1992, having served as President from
March 1989 until May 1991, and as Executive Vice President from March 1970 until
March 1989. He is the brother of William C. Rogers, Jr. a director of the Bank
and the Company.

Directors whose terms expire in 2002

 Steven K. Breeden - Mr. Breeden, age 42, has served as a director of the Bank,
since June 1994, and of the Company since October 1995. Mr. Breeden is currently
Vice President and Secretary of Security Development Corporation, a real estate
development company, a position he has held since 1980. (2)

 Thelma T. Daley - Dr. Daley, age 69, has served as a director of the Bank since
November 1995, and of the Company since May 1998. Dr. Daley retired as the
Coordinator of Counseling and Guidance for The Baltimore County Board of
Education.

 Howard S. Klein - Mr. Klein, age 41, has served as a director of the Bank since
March 1999 and of the Company since April 1999. Mr. Klein has been Vice
President and General Counsel for Klein's Super Markets, a family-operated chain
of five full serve supermarkets and related development and operating companies
since 1987.

 Leo A. O'Dea - Mr. O'Dea, age 70, has served as a director of the Bank since
1983 and of the Company since its inception in 1990. Mr. O'Dea was elected
Chairman of the Company in February 1994. He was President of Hamilton &
Spiegel, Inc., a sheet metal contractor, from 1979 until his retirement in 1997.
(2)

Directors whose terms expire in 2003

 Albert R. Counselman - Mr. Counselman, age 52, has served as a director of the
Bank since April 1985, and of the Company since its inception in 1990. He has
been President of Riggs, Counselman, Michaels & Downes, Inc., an insurance
brokerage firm, since September 1987, and served in various executive positions
with that firm from 1972 to September 1987. (1)(2)

 John P. Hauswald - Mr. Hauswald, age 78, has served as a director of the Bank
since 1964 and of the Company since its inception in 1990. He was, until his
retirement in October 1989, President of The Hauswald Bakery. (1)(2)

 David P. Hessler - Mr. Hessler, age 44, has served as a director of the Bank
since March 1999, and the Company since May 1999. He has been President and CEO
of Eastern Sales & Engineering, an electrical contracting and service
maintenance firm, since 1987 and was Vice president from 1986 to 1987. Mr.
Hessler has been Vice President of Advanced Petroleum Equipment, a
distributorship, since its inception in 1998. (1)

--------------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee

                                      54
<PAGE>
 William C. Rogers, Jr. - Mr. Rogers, age 74, has served as a director of the
Bank since 1955 and of the Company since its inception in 1990. He has been a
partner in the law firm of Rogers, Moore and Rogers, counsel to the Bank, since
1970. He has been Chairman of the Board of The Security Title Guarantee
Corporation of Baltimore since 1970 and a director since 1952, and was President
from 1970 until March 1989. Mr. Rogers is President of Maryland Mortgage Company
where he has been a director since 1953. He is also President of Moreland
Memorial Park Cemetery, Inc. where he has been a director since 1959. He is the
brother of John Paul Rogers, a director of the Bank and the Company.

 The Board of Directors of the Company met 7 times and the Board of Directors of
the bank 17 times during the year ended December 31, 2000. The Board of
Directors of the bank meets 12 times each year. No director attended fewer than
75% of the total number of meetings of both Boards and committees to which they
were assigned during the year ended December 31, 2000.

 As of the date of this Proxy Statement, the Board of Directors does not have a
standing nominating committee.

 The Audit Committee held 3 meetings during 2000. Its current members are
Messrs. Counselman, Hauswald and Hessler. Only nonemployee directors are
eligible to serve on the Audit Committee. The duties of the Audit Committee
include reviewing the annual financial statements of the Company and the scope
of the independent annual audit and internal audits. It also reviews the
independent accountant's letter to management concerning the effectiveness of
the Company's internal financial and accounting controls and management's
response to that letter. In addition, the Committee reviews and recommends to
the Board the firm to be engaged as the Company's independent accountants. The
Committee may also examine and consider other matters relating to the financial
affairs of the Company as it determines appropriate.

 The Compensation Committee met 2 times during 2000. Its current members are
Messrs. Breeden, Counselman, Hauswald, and O'Dea. The purpose of the
Compensation Committee is to review and approve major compensation and benefit
policies of the Company and the Bank. In addition, the committee recommends to
the Board the compensation to be paid to all officers, Senior Vice President and
above, of the bank.

 Directors who are not employees of the Bank receive a monthly fee of $900 for
Board meetings, and between $75 and $150 per committee meeting attended. The
Chairman of the Board of the Bank receives a monthly fee of $1,100. Directors do
not receive additional fees for their service as directors of the Company.

OTHER EXECUTIVE OFFICERS AND
DIRECTORS OF THE BANK

 Certain information regarding directors and significant employees of the Bank
other than those previously mentioned is set forth below.

 Robert A. Altieri - Mr. Altieri, age 39, has been President and Chief Executive
Officer of both the Bank and Company since his appointment in February 2001.
Mr. Altieri previously had been the Senior Vice President--Lending of the Bank
since June 1994, and Vice President--Commercial Lending since September 1991.

 Edward R. Bootey - Mr. Bootey, age 54, has been Senior Vice
President--Automation & Technology since October, 1995, and was Senior Vice
President--Operations of the Bank from June 1994 to October 1995. Mr. Bootey
previously served as Vice President--Operations from January 1991. He served as
Assistant Vice President--Operations from December 1987 until January 1991.

 Randall M. Robey - Mr. Robey, age 43, has been Executive Vice President and
Chief Financial Officer of both the Bank and Company, since November 2000.
Previously he had been the Senior Vice President and Chief Financial Officer and
Treasurer since October 1999. Prior to joining Carrollton Bank, Mr. Robey was
Vice President of Financial Services of Mercantile Bank & Trust of Baltimore,
Maryland from June of 1998 to October 1999, and prior to that Senior Vice
President and Chief Financial Officer of Annapolis Bank & Trust from March
of 1989 to June 1998.

 Gary M. Jewell - Mr. Jewell, age 54, has been Senior Vice President and Retail
Delivery Group Manager since July 1998. He was previously Senior Vice President
Electronic Banking from March 1996 to July 1998. Prior to joining Carrollton
Bank, Mr. Jewell was Director of Product Management and Point of Sale Services
for the MOST EFT network in Reston, Virginia from March 1995 to March 1996 and
prior to that Director/Manager of Merchant Services for the Farmers and
Mechanics National Bank from 1993 to March 1995.

COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT

 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Company's Common Stock ("a Section 16 Insider") to file monthly and annual
reports with both the Securities and Exchange Commission and the National
Association of Securities Dealers. Based on a review of the reports submitted to
the Company, the Company believes that all Section 16(a) reporting requirements
applicable to the Company's directors, officers and 10% shareholders were
satisfied on a timely basis.

                                      55
<PAGE>
ITEM 11: EXECUTIVE COMPENSATION

 The following table sets forth the compensation paid or allocated for services
rendered to the Company in all capacities during the years ended December 31,
1998, 1999 and 2000 to the chief executive officer of the Company. The
compensation of the other members of executive management does not exceed
$100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                     LONG-TERM INCENTIVE PLAN
                                                       STOCK OPTION GRANTS
NAME AND PRINCIPAL POSITION    YEAR     SALARY ($)           (SHARES)           BONUS ($)   OTHER COMPENSATION ($)
------------------------------------------------------------------------------------------------------------------
<S>                          <C>        <C>          <C>                        <C>         <C>
Dallas R. Arthur               2000      $138,764              8,000             $    0            $164.000
President and Chief            1999      $132,912             16,000             $7,500
Executive Officer*             1998      $126,757             16,000             $    0
Robert A. Altieri              2000      $104,026              3,000             $1,800
President and Chief            1999      $102,908              6,000             $5,000
Executive Officer              1998      $ 90,699              6,000             $    0
</TABLE>
--------------------------------------------------------------------------------
*   Dallas R. Arthur retired as President & CEO as of November 22, 2000. Mr.
    Altieri was named as his successor.

  The Company had no employment agreements, termination of employment, or
change-in-control agreements or understandings with any of its directors,
executive officers or any other party whatsoever, except that the past president
of Carrollton Mortgage Services, Inc. a subsidiary of the Bank, had an
employment contract that provided for a termination settlement of $50,000 upon
his termination which was effective in 2000.

  Mr. Arthur retired as president and chief executive officer of the Bank and
Company, receiving an early retirement package which is comprised of one years
base salary compensation, funding for continuing education, and the transfer of
the title to his company automobile.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 The following table sets forth, as of December 31, 2000, certain information
concerning shares of the Common Stock of the Company beneficially owned by
(i) the chief executive officer of the Company; (ii) all directors and nominees
for directors of the Company and the Bank; (iii) all directors and officers of
the Company and the Bank as a group; and (iv) other significant shareholders.

<TABLE>
<CAPTION>
                                                              AMOUNT AND NATURE
NAME AND ADDRESS OF                                             OF BENEFICIAL
BENEFICIAL OWNER(1)(17)                                           OWNERSHIP                PERCENT OF CLASS
-----------------------------------------------------------------------------------------------------------
<S>                                                           <C>                          <C>

DIRECTORS:
Robert J. Aumiller                                                     100                          *
Steven K. Breeden                                                    7,620(3)                       *
Albert R. Counselman                                                33,987(4)                       *
Thelma T. Daley                                                      1,310(5)                       *
John P. Hauswald                                                    13,402(6)                       *
David P. Hessler                                                     1,000(7)                       *
C. Edward Hoerichs                                                   8,266(8)                       *
Howard S. Klein                                                      3,200(9)                       *
Ben F. Mason                                                           100                          *
Charles E. Moore, Jr.                                                2,546(16)                      *
Leo A. O'Dea                                                        12,816(10)                      *
Allen Quille                                                         5,490(11)                      *
John Paul Rogers                                                   195,012(11)                   7.14%
William C. Rogers, Jr.                                             258,372(12)(13)(14)           9.51%
All Directors and Executive
  Officers of the Company as a Group (14 persons)                  558,596(2)                   19.45%
OTHER SIGNIFICANT SHAREHOLDER:
Patricia A. Rogers                                                 224,782(15)                   8.30%
</TABLE>
--------------------------
*   Less than 1%

                                      56
<PAGE>
(1) Unless otherwise indicated, the named person has sole voting and investment
    power with respect to all shares.

(2) Includes 166 shares Mr. Altieri holds as trustee for minor children under
    the Maryland Uniform Gifts to Minors Act, and 10,000 fully vested options to
    purchase shares at an exercise price of between $16.19 and $18.68 per share.

(3) Includes 2,698 shares owned jointly by Mr. Breeden and his wife and 1,800
    fully vested options to purchase shares at an exercise price of between
    $14.13 and $19.00 per share.

(4) Includes 1,800 fully vested options to purchase shares at an exercise price
    of between $14.13 and $19.00 per share, but excludes 2,000 shares owned by
    Mr. Counselman's wife.

(5) Includes 1,200 fully vested options to purchase shares at an exercise price
    of between $14.13 and $18.68 per share.

(6) Includes 11,490 shares owned jointly by Mr. Hauswald and his wife and 1,600
    fully vested options to purchase shares at an exercise price of between
    $14.13 and $19.00 per share. Excludes 10,530 shares owned by Mr. Hauswald's
    wife.

(7) Includes 600 fully vested options to purchase shares at an exercise price of
    between $14.13 and $19.00 per share.

(8) Includes 1,600 fully vested options to purchase shares at an exercise price
    of between $14.13 and $19.00 per share.

(9) Includes 400 shares owned jointly by Mr. Klein and his wife. Also includes
    1,600 shares owned by Colgate Investments, LLP, of which Mr. Klein is a
    shareholder and 600 shares Mr. Klein holds as trustee for minor children
    under the Maryland Uniform Gift to Minors Act. Also includes 600 fully
    vested options to purchase shares at an exercise price of between $14.13 and
    $16.13 per share.

(10) Includes 1,600 fully vested options to purchase shares at an exercise price
    of between $14.13 and $19.00 per share but excludes 15,754 shares owned by
    Mr. O'Dea's wife.

(11) Includes 1,600 fully vested options to purchase shares at an exercise price
    of between $14.13 and $19.00 per share.

(12) Includes 63,904 shares owned by The Security Title Guarantee Corporation of
    Baltimore and of which William C. Rogers, Jr. is Chairman and President,
    respectively, as well as a director. Includes 1,600 fully vested options to
    purchase shares at an exercise price of between $14.13 and $19.00 per share.

(13) Includes 6,494 shares owned by the Moreland Memorial Park Cemetery Bronze
    Perpetual Care Trust Agreement, Inc., 11,750 shares owned by the Moreland
    Memorial Park Cemetery Inc. Perpetual Care Trust Agreement, 3,226 shares
    owned by the Moreland Memorial Park, Inc. Bronze Marker Perpetual Care Trust
    Fund, 32,414 shares owned by the Moreland Memorial Park Cemetery, Inc.
    Perpetual Care Trust Agreement for which William C. Rogers, Jr. serves as
    trustee, and 9,506 shares owned by Maryland Mortgage Company of which
    William C. Rogers, Jr. is Chairman and President, as well as a Director.

(14) Includes 128,598 shares owned jointly by Mr. Rogers and his wife. Excludes
    11,548 shares owned by Mr. Roger's wife.

(15) Includes 151,372 shares owned by Mrs. Rogers. Also, includes 63,904 shares
    owned by The Security Title Guarantee Corporation of Baltimore and 9,506
    shares owned by Maryland Mortgage Company of which Mrs. Rogers is a
    principal shareholder.

(16) Excludes 16,296 shares owned by Mr. Moore's wife.

(17) All directors, executive officers and other significant shareholders may be
    contacted at the Company's corporate offices by addressing correspondence to
    the appropriate person, care of Carrollton Bancorp, 344 North Charles
    Street, Suite 300, Baltimore, Maryland 21201.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 During the past year the Bank has had banking transactions in the ordinary
course of its business with: (i) its directors and nominees for directors;
(ii) its executive officers; (iii) its 5% or greater shareholders; (iv) members
of the immediate family of its directors, nominees for directors or executive
officers and 5% shareholders; and (v) the associates of such persons on
substantially the same terms, including interest rates, collateral, and
repayment terms on loans, as those prevailing at the same time for comparable
transactions with others. The extensions of credit by the Bank to these persons
have not and do not currently involve more than the normal risk of
collectibility or present other unfavorable features. At December 31, 2000, the
balance of loans outstanding to directors, executive officers, owners of 5% or
more of the outstanding Common Stock, and their associates, including loans
guaranteed by such persons, aggregated $1,915,984,

                                      57
<PAGE>
which represented approximately 6.3% of the Company's equity capital accounts.

 William C. Rogers, Jr. - a director of both the Company and the Bank, is a
partner of the law firm of Rogers, Moore and Rogers which performs legal
services for the Company and its subsidiaries. Management believes that the
terms of these transactions which totaled $166,522 in 2000 were at least as
favorable to the Company as could have been obtained elsewhere.

 Albert R. Counselman - a director of both the Company and the Bank, is
President and Chief Executive Officer of Riggs, Counselman, Michaels &
Downes, Inc., an insurance brokerage firm through which the Company and the Bank
place various insurance policies. The Company and the Bank paid total premiums
for insurance policies placed by Riggs, Counselman, Michaels & Downes, Inc. in
2000 of $57,656. Management believes that the terms of these transactions were
at least as favorable to the Company as could have been obtained elsewhere.

PART IV
-------------------

ITEM 14: EXHIBITS LIST AND REPORTS
ON FORM 8-K

    a)  List of Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                  DESCRIPTION
<C>                     <S>
         3(i)           Articles of Incorporation of Carrollton
                        Bancorp *
        3(ii)           By-Laws of Carrollton Bancorp *
         10.1           Lease dated January 24, 1989 by and
                        between Hill Management Services, Inc.
                        and The Carrollton Bank of Baltimore. *
         10.2           Lease dated July 21, 1989 by and
                        between Hill Management Services, Inc.
                        and The Carrollton Bank of Baltimore. *
         10.3           Lease dated October 30, 1959 between
                        Arbutus Shopping Plaza, Inc. and The
                        Carrollton Bank of Baltimore, as
                        amended. *
         10.4           Lease dated August 3, 1976 between
                        Arbutus Shopping Plaza, Inc. and The
                        Carrollton Bank of Baltimore. *
         10.5           Lease dated May 20, 1971 by and between
                        Home Mutual Life Insurance Company and
                        The Carrollton Bank of Baltimore. *
         10.6           Lease dated April 17, 1974 by and
                        between Liberty Plaza Enterprises, Inc.
                        and The Carrollton Bank of Baltimore. *
         10.7           Lease dated July 19, 1988 by and
                        between Northway Limited Partnership
                        and The Carrollton Bank of Baltimore. *
         10.8           Lease dated August 11, 1994 by and
                        between Kensington Associates Limited
                        Partnership and Carrollton Bank. **
         10.9           Lease dated October 11, 1994 by and
                        between Ridgeview Associates Limited
                        Partnership and Carrollton Bank. **
         21.1           Subsidiaries of Carrollton Bancorp
           23           Consent of Accountant
</TABLE>

-----------------------
*   Incorporated by reference from Registration Statement dated January 12, 1990
    on SEC Form S-4 (1933 Act File No.: 33-33027).

**  Incorporated by reference from Annual Report on Form 10-KSB for the fiscal
    year ended December 31, 1994 (1934 Act File No.:0-23090).

    b)  Reports on Form 8-K:

    No reports on Form 8-K were filed during the last quarter of the period
      covered by this report.

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.

CARROLLTON BANCORP

March 22, 2001 By: /s/ ROBERT A. ALTIERI
               -------------------------------------
               Robert A. Altieri
               President and Chief Executive Officer

  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
capacity and on the dates indicated.

PRINCIPAL EXECUTIVE OFFICER

<TABLE>
<S>             <C>
March 22, 2001  By: /s/ ROBERT A. ALTIERI
                -------------------------
                Robert A. Altieri
                President and Chief Executive
                Officer
</TABLE>

PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

<TABLE>
<S>             <C>
March 22, 2001  By: /s/ RANDALL M. ROBEY
                -------------------------
                Randall M. Robey
                Executive Vice President and
                Treasurer
</TABLE>

                                      58
<PAGE>
<TABLE>
                BOARD OF DIRECTORS
<S>             <C>

March 22, 2001  /s/ ROBERT J. AUMILLER
                --------------------------
                Robert J. Aumiller
                Director

March 22, 2001  /s/ STEVEN K. BREEDEN
                --------------------------
                Steven K. Breeden
                Director

March 22, 2001  /s/ ALBERT R. COUNSELMAN
                --------------------------
                Albert R. Counselman
                Director

March 22, 2001  /s/ THELMA T. DALEY
                --------------------------
                Thelma T. Daley
                Director

March 22, 2001  /s/ JOHN P. HAUSWALD
                --------------------------
                John P. Hauswald
                Director

March 22, 2001  /s/ DAVID P. HESSLER
                --------------------------
                David P. Hessler,
                Director

March 22, 2001  /s/ C. EDWARD HOERICHS
                --------------------------
                C. Edward Hoerichs
                Director

March 22, 2001  /s/ HOWARD S. KLEIN
                --------------------------
                Howard S. Klein,
                Director

March 22, 2001  /s/ BEN F. MASON
                --------------------------
                Ben F. Mason
                Director

March 22, 2001  /s/ LEO A. O'DEA
                --------------------------
                Leo A. O'Dea
                Director

March 22, 2001  /s/ JOHN PAUL ROGERS
                --------------------------
                John Paul Rogers
                Director

March 22, 2001  /s/ WILLIAM C. ROGERS, JR.
                --------------------------
                William C. Rogers,
                Director
</TABLE>

                                      59
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
       EXHIBIT                                                                         SEQUENTIALLY
       NUMBER                                   DESCRIPTION                           NUMBERED PAGE

 ---------------------------------------------------------------------------------------------------
<S>                     <C>                                                           <C>

  3(i)                  Articles of Incorporation of Carrollton Bancorp                      *
  3(ii)                 By-Laws of Carrollton Bancorp                                        *
 10.1                   Lease dated January 24, 1989 by and between Hill Management
                        Services, Inc. and The Carrollton Bank of Baltimore.                 *
 10.2                   Lease dated July 21, 1989 by and between Hill Management
                        Services, Inc. and The Carrollton Bank of Baltimore.                 *
 10.3                   Lease dated October 30, 1959 between Arbutus Shopping Plaza,
                        Inc. and The Carrollton Bank of Baltimore, as amended.               *
 10.4                   Lease dated August 3, 1976 between Arbutus Shopping Plaza,
                        Inc. and The Carrollton Bank of Baltimore.                           *
 10.5                   Lease dated May 20, 1971 by and between Home Mutual Life
                        Insurance Company and The Carrollton Bank of Baltimore.              *
 10.6                   Lease dated April 17, 1974 by and between Liberty Plaza
                        Enterprises, Inc. and The Carrollton Bank of Baltimore.              *
 10.7                   Lease dated July 19, 1988 by and between Northway Limited
                        Partnership and The Carrollton Bank of Baltimore.                    *
 10.8                   Lease dated August 11, 1994 by and between Kensington
                        Associates Limited Partnership and Carrollton Bank.                 **
 10.9                   Lease dated October 11, 1994 by and between Ridgeview
                        Associates Limited Partnership and Carrollton Bank.                 **
 21.1                   Subsidiaries of Carrollton Bancorp
 23                     Consent of Accountant
</TABLE>

-----------------------
*   INCORPORATED BY REFERENCE FROM REGISTRATION STATEMENT DATED JANUARY 12, 1990
    ON SEC FORM S-4 (1933 ACT FILE NO.: 33-33027).

**  INCORPORATED BY REFERENCE FROM ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
    YEAR ENDED DECEMBER 31, 1994 (1934 ACT FILE NO.: 0-23090).

                                      60