Chesapeake Financial Shares, Inc.
Consolidated Statements of Earnings

Twelve Months Ended December 31, 2002

Interest Income		2002		2001
		(Unaudited)
Interest and Fees on loans		$13,569,513		$14,501,980
Interest on federal funds sold		162,966		116,514
Interest on time deposits with banks		7,374		19,428
Interest on obligations of U.S. Agency Obligations		1,048,586		1,313,546
Interest on obligations of state and political subs		1,013,065		898,910
Total interest income		15,801,504		16,850,378
		---------------		---------------
Interest Expense
Interest on savings and interest bearing deposits		1,273,856		1,692,610
Interest on certificates of deposit		3,782,904		5,440,099
Interest on federal funds purchased		242,160		347,050
Other interest expense		58,769		44,452
Total interest expense		5,357,689		7,524,211
Net interest income		10,443,815		9,326,167
Provision for loan losses		1,017,835		696,664
Net interest income after provision for loan losses		9,425,980		8,629,503
Noninterest Income
Income from fiduciary activities		1,181,470		1,097,876
Service charges on deposit accounts		930,861		823,583
Securities gains (losses)-net		(2,335)		(1,625)
Merchant card income		1,214,228		984,379
ATM income		338,717		275,176
Business manager income		2,619,332		1,953,979
Other income		828,095		656,753
Total noninterest income		7,110,368		5,790,121
Noninterest Expense
Salaries		4,408,833		4,040,311
Employee benefits		892,789		874,951
Occupancy expenses		2,063,620		1,803,340
Merchant card expense		1,054,277		874,798
ATM expense		300,005		244,502
Business manager expense		912,831		635,471
Other expenses		2,796,711		2,372,017
Total noninterest expense		12,429,066		10,845,390
Income before income taxes		4,107,282		3,574,234
Applicable income taxes		1,059,886		933,805
Net income		3,047,396		2,640,429
		========		========
Earnings per share, primary		2.39		2.12
Earnings per share, assuming dilution		2.34		2.07
Dividends per share		0.49		0.45

See Notes to Consolidated Financial Statements.

* Unaudited Financial Information