Marco Community Bancorp 10-Q 2008 Q2 Quarterly report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

 X  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2008

Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from  __________ to __________

Commission file number    333-103651  

MARCO COMMUNITY BANCORP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Florida	84-1620092
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

1770 San Marco Road

Marco Island, Florida 34145

(Address of Principal Executive Offices)

                                   (239) 389-5200                                   

(Issuer's Telephone Number, Including Area Code)

_____________________________________________________

(Former Name, Former Address and Former Fiscal Year, if Changed

Since Last Report)

Check whether the registrant: (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 the past 90 days:

YES    X       NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	[   ]	Accelerated filer	[   ]
Non-accelerated filer	[   ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ___  NO     X

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date;

Common stock, par value $.01 per share	3,222,608 shares
(class)	Outstanding at July 31, 2008

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	Page
Condensed Consolidated Balance Sheets -At June 30, 2008 (unaudited) and at December 31, 2007	2
Condensed Consolidated Statements of Operations - Three and Six Months ended June 30, 2008 and 2007 (unaudited)	3-4
Condensed Consolidated Statements of Changes in Stockholders' Equity -Six Months ended June 30, 2008 and 2007 (unaudited)	5
Condensed Consolidated Statements of Cash Flows – Six Months ended June 30, 2008 and 2007 (unaudited)	6-7
Notes to Condensed Consolidated Financial Statements (unaudited)	8-14
Review by Independent Registered Public Accounting Firm	15
Report of Independent Registered Public Accounting Firm	16
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	17-22
Item 4T.  Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1.  Legal Proceedings	24
Item 4.  Submission of Matters to a Vote of Security Holders	24
Item 5.  Other Information	25
Item 6.  Exhibits	26
SIGNATURES	27

1

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

($ in thousands, except per share amounts)

	June 30,			December 31,
Assets	2008			2007
	(Unaudited)
Cash and due from banks	$	2,952			2,479
Federal funds sold		9,286			8,695
Total cash and cash equivalents		12,238			11,174
Security available for sale		1,007			1,009
Securities held to maturity (fair value of $10,809 and $5,606)		10,923			5,561
Loans, net of allowance for loan losses of $6,050 in 2008
and $3,794 in 2007		110,099			119,876
Other real estate owned		3,218			2,857
Premises and equipment, net		3,237			3,360
Federal Reserve Bank stock, at cost		527			468
Federal Home Loan Bank stock, at cost		262			293
Accrued interest receivable		703			602
Deferred income taxes		3,452			2,020
Other assets		146			2,311
Total assets	$	145,812			149,531
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits		3,775			4,068
Savings, NOW and money-market deposits		38,747			38,342
Time deposits		78,846			81,303
Total deposits		121,368			123,713
Repurchase agreements		2,490			1,232
Official checks		907			797
Dividends payable		93			35
Accrued interest payable and other liabilities		661			936
Total liabilities		125,519			126,713
Stockholders' equity:
Preferred stock, no par value; 1,000,000 shares authorized,
none issued or outstanding		-			-
Preferred stock, series B, $51,000 liquidation value; 125 shares
authorized, 96 shares outstanding		4,896			4,896
Common stock, $.01 par value; 9,000,000 shares authorized,
3,222,608 shares issued and outstanding
in 2008 and 2007		32			32
Additional paid-in capital		20,738			20,874
Accumulated deficit		(5,378	)		(2,993	)
Accumulated other comprehensive income		5			9
Total stockholders' equity		20,293			22,818
Total liabilities and stockholders' equity	$	145,812			149,531

See Accompanying Notes to Condensed Consolidated Financial Statements.

2

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Interest income:
Loans	$	1,833			2,633			3,849			5,309
Securities		115			82			201			136
Other interest-earning assets		125			294			272			673
Total interest income		2,073			3,009			4,322			6,118
Interest expense:
Deposits		1,124			1,494			2,391			2,969
Other borrowings		6			3			16			3
Total interest expense		1,130			1,497			2,407			2,972
Net interest income		943			1,512			1,915			3,146
Provision for loan losses		2,905			5,295			3,005			5,295
Net interest expense after
provision for loan losses		(1,962	)		(3,783	)		(1,090	)		(2,149	)
Noninterest income:
Service charges on deposit accounts		6			6			12			13
CLCC loan brokerage fees		-			248			-			828
Other service charges and fees		37			48			78			97
Total noninterest income		43			302			90			938
Noninterest expenses:
Salaries and employee benefits		586			720			1,245			1,519
Occupancy and equipment		154			174			313			336
Advertising		35			67			77			123
Insurance		18			15			42			30
Data processing		64			61			131			128
Regulatory assessments		101			-			199			26
Telephone		18			20			37			42
Professional fees		144			107			255			141
Stationary and supplies		8			14			18			26
Director fees		-			32			-			49
Other real estate expense		213			-			256			-
Other		111			135			251			227
Total noninterest expenses		1,452			1,345			2,824			2,647
Loss before income taxes		(3,371	)		(4,826	)		(3,824	)		(3,858	)
Income tax benefit		(1,268	)		(1,811	)		(1,439	)		(1,431	)
Net loss		(2,103	)		(3,015	)		(2,385	)		(2,427	)
Dividends on preferred stock		69			-			136			-
Net loss available to common
stockholders	$	(2,172	)		(3,015	)		(2,521	)		(2,427	)

(continued)

3

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited), Continued

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Net loss per common share, basic and diluted	$	(0.67	)		(0.95	)		(0.78	)		(0.77	)
Weighted-average number of common shares
outstanding, basic and diluted		3,223			3,168			3,223			3,162
Dividends per common share	$	-			-			-			0.12

See Accompanying Notes to Condensed Consolidated Financial Statements.

4

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity

Six Months Ended June 30, 2008 and 2007

($ in thousands)

											Accumulated
								Retained			Other
					Additional			Earnings			Compre-			Total
	Preferred		Common		Paid-In			(Accumulated			hensive			Stockholders'
	Stock		Stock		Capital			Deficit)			Income			Equity
Balance at December 31, 2006	$	-		32		20,165			2,481			-			22,678
Exercise of stock options (60,600 shares),
including tax benefit of $220
(unaudited)		-		-		601			-			-			601
Share-based compensation (unaudited)		-		-		57			-			-			57
Cash dividends paid (unaudited)		-		-		-			(378	)		-			(378	)
Net loss (unaudited)		-		-		-			(2,427	)		-			(2,427	)
Balance at June 30, 2007 (unaudited)	$	-		32		20,823			(324	)		-			20,531
Balance at December 31, 2007	$	4,896		32		20,874			(2,993	)		9			22,818
Comprehensive loss:
Net loss (unaudited)		-		-		-			(2,385	)		-			(2,385	)
Net change in unrealized gain
on security available for
sale, net of tax effect
(unaudited)		-		-		-			-			(4	)		(4	)
Comprehensive loss
(unaudited)															(2,389	)
Dividends declared-preferred (unaudited)		-		-		(136	)		-			-			(136	)
Balance at June 30, 2008 (unaudited)	$	4,896		32		20,738			(5,378	)		5			20,293

See Accompanying Notes to Condensed Consolidated Financial Statements.

5

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2008			2007
Cash flows from operating activities:
Net loss	$	(2,385	)		(2,427	)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation		147			135
Share-based compensation		-			57
Provision for loan losses		3,005			5,295
Deferred income tax benefit		(1,431	)		(2,384	)
Amortization of loan fees and costs, net		(31	)		19
(Increase) decrease in accrued interest receivable		(101	)		91
Decrease (increase) in other assets		2,165			(53	)
Write down of other real estate owned		30			-
Loss on sale of foreclosed asset		105			-
(Decrease) increase in official checks, accrued interest payable
and other liabilities		(165	)		23
Net cash provided by operating activities		1,339			756
Cash flows from investing activities:
Purchase of security held to maturity		(6,007	)		(3,924	)
Principal payment of security held to maturity		645			170
Redemption of Federal Home Loan Bank Stock		31			52
Purchase of Federal Reserve Bank Stock		(59	)		-
Net decrease (increase) in loans		5,794			(4,851	)
Proceeds from sale of other real estate owned		513			-
Purchase of premises and equipment		(24	)		(41	)
Net cash provided by (used in) investing activities		893			(8,594	)
Cash flows from financing activities:
Net (decrease) increase in deposits		(2,345	)		1,650
Net increase in repurchase agreements		1,258			441
Net proceeds from exercise of common stock options		-			381
Cash dividends paid		-			(378	)
Preferred dividends paid		(81	)		-
Tax benefit from exercise of stock options		-			220
Net cash (used in) provided by financing activities		(1,168	)		2,314
Net increase (decrease) in cash and cash equivalents		1,064			(5,524	)
Cash and cash equivalents at beginning of period		11,174			26,905
Cash and cash equivalents at end of period	$	12,238			21,381
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest	$	2,508			2,909
Income taxes	$	(2,116	)		660

(continued)

6

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited), Continued

(In thousands)

	Six Months Ended
	June 30,
	2008			2007
Noncash transactions:
Preferred dividends payable at beginning of period	$	35			-
Preferred dividends payable at end of period	$	93			-
Transfer of loans to other real estate owned	$	1,009			-
Net change in unrealized gain on security available for sale, net of tax effect	$	(4	)		-

See Accompanying Notes to Condensed Consolidated Financial Statements.

7

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.             Description of Business and Basis of Presentation

General. Marco Community Bancorp, Inc. (the "Holding Company") which was incorporated on January 28, 2003 owns 100% of the outstanding common stock of Marco Community Bank (the "Bank") and Commercial Lending Capital Corp. ("CLCC") (collectively the "Company").   The Holding Company's only business activity is the operation of the Bank and CLCC.  The Bank is a state (Florida) chartered commercial bank. The Bank offers a variety of community banking services to individual and corporate customers through its banking office located in Marco Island, Florida. The deposits of the Bank are insured up to the applicable limits by the Federal Deposit Insurance Corporation. CLCC was incorporated to provide commercial loans to customers that would otherwise seek financing elsewhere because of credit limit constraints.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at June 30, 2008, the results of operations for the three- and six-month periods ended June 30, 2008 and 2007 and cash flows for the six month periods ended June 30, 2008 and 2007.  The results of operations for the three- and six- month periods ended June 30, 2008 are not necessarily indicative of the results to be expected for the year ending December 31, 2008.

2.             Loan Impairment and Loan Losses

Impaired collateral dependent loans were as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2008		2007		2008		2007
Balance at end of period	$	9,129		13,520		9,129		13,520
Total related allowance for losses	$	2,735		1,119		2,735		1,119
Average investment in impaired loans	$	10,859		3,450		10,719		2,916
Interest income recognized on impaired loans	$	102		-		102		-
Interest income received on impaired loans	$	-		-		-		-

At June 30, 2008, the Company had $10.8 million in nonaccrual loans and no loans which were over ninety days past due and still accruing interest.  At June 30, 2007, the Company had $14.8 million in nonaccrual loans and no loans which were ninety days past due but still accruing interest.

(continued)

8

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

2.             Loan Impairment and Loan Losses, Continued

The activity in the allowance for loan losses follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Beginning balance	$	3,759			2,047			3,794			2,047
Charge-offs		(614	)		(4,381	)		(749	)		(4,381	)
Provision for loan losses		2,905			5,295			3,005			5,295
Ending balance	$	6,050			2,961			6,050			2,961

At June 30, 2008 the Company has eleven loan pools with original terms of one year.  At June 30, 2008, $3.6 million was outstanding compared to $9.5 million at June 30, 2007.  The Company did not charge-off any portions of these loan pools in 2008, compared to a charge-off of $3.2 million for the three and six month periods ended June 30, 2007.

3.            Other Real Estate Owned

Other real estate owned ("OREO") is comprised of real estate properties obtained in partial or total satisfaction of loan obligations.  At June 30, 2008 OREO totaled $3.2 million which was comprised of nine residential real estate lots and four residential properties recorded at estimated fair value less estimated selling costs.  Changes in the value subsequent to transfer are recorded in non-interest expense along with direct operating expenses.  Gains or losses not previously recognized resulting from the sale of OREO is recognized in non-interest expense on the date of sale.  During the six months ended June 30, 2008 the Company wrote down $30,000, recorded $513,000 in proceeds from the sale of one residential property and expensed $105,000 for the loss on the sale.  The Company also recorded $151,000 in expenses to refurbish or maintain the properties held.

4.             Loss Per Common Share

Loss per share of common stock has been computed on the basis of the weighted-average number of shares of common stock outstanding. Outstanding stock options are not considered dilutive securities for the three and six month periods ended June 30, 2008 and 2007 due to the net losses incurred by the Company.

(continued)

9

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

5.             Regulatory Capital

The Bank is required to maintain certain minimum regulatory capital requirements.  The following is a summary at June 30, 2008 of the regulatory capital requirements for a well capitalized financial institution and the Bank's actual capital on a percentage basis:

				Regulatory
	Actual			Requirement
Total capital to risk-weighted assets		14.47	%		10.00	%
Tier I capital to risk-weighted assets		13.18	%		6.00	%
Tier I capital to total assets - leverage ratio		10.10	%		5.00	%

6.            Share-Based Compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), Share-Based Payment ("SFAS 123(R)"), using the modified-prospective-transition method.  Under that transition method, compensation cost recognized includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value calculated in accordance with the original provisions of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R).  The directors advisory stock option plan is being expensed over the vesting period based on the fair value of the option on the date the options become fully vested.  The Company recognizes stock-based compensation expense in salaries and employee benefits in the accompanying consolidated statements of operations on an accelerated basis over the vesting period.

In 2004, the Company adopted three stock option plans.  The Employees' Stock Option Plan is for the benefit of officers and other key employees of the Holding Company, the Bank and CLCC.  Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant.  These options have ten year terms and vest 20% a year over a five year period.

The Directors' Stock Option Plan is for the benefit of directors of the Holding Company, the Bank and CLCC.  Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant.  These options have ten year terms and have various vesting schedules.

(continued)

10

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

6.            Share-Based Compensation, Continued

The Advisory Directors' Stock Option Plan is for the benefit of advisory directors of the Company.  Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant.  These options have six year terms and begin vesting one year after the date of grant at 25% a year over a four year period.

The plans were amended in 2007 to increase the size of the three Company plans so that the number of shares of common stock reserved for issuance under all three Company plans is a collective amount equal to 15% of the common stock outstanding, up to a maximum of 1,500,000 shares.  At June 30, 2008, an aggregate of 103,327 options remain available for grant in all three plans.

A summary of the plans is as follows (in thousands, except for share and per share information):

				Weighted-		Weighted-
				Average Per		Average
	Number			Share		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
The Employees' Plan:
Options outstanding at December 31, 2007		188,200		$	9.35
Options granted		12,000			7.97
Options forfeited		(64,750	)		11.03
Options outstanding at June 30, 2008		135,450		$	8.42		8.60	$	-
Options exercisable at June 30, 2008		34,250		$	7.21		6.88	$	-
The Directors' Plan:
Options outstanding at December 31, 2007		56,250			7.78
Options granted		33,750			7.24
Options outstanding at June 30, 2008		90,000		$	7.63		4.61	$	-
Options exercisable at June 30, 2008		50,250		$	6.60		5.82	$	-
The Advisory Directors' Plan:
Options outstanding at December 31, 2007
and June 30, 2008		20,251		$	8.78		2.50	$	-
Options exercisable at June 30, 2008		8,228		$	6.00		.50	$	-

There were no options exercised during the six months ended June 30, 2008.  The total intrinsic value of options exercised during the six months ended June 30, 2007 was $687,000.  There was a $220,000 tax benefit recognized for the six months ended June 30, 2007.  At June 30, 2008, there was $326,000 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the plans.  The cost is expected to be recognized over a weighted-average period of 4.1 years.  Due to the effect of forfeited options, there was no compensation expense recognized during the six month period ended June 30, 2008.  The total fair value of shares vested and recognized as compensation expense was $57,000 for the six month period ended June 30, 2007, and no income tax benefit was recognized.

(continued)

11

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

6. Share-Based Compensation, Continued

The fair value of each option granted for the three and six months ended June 30, 2008 and 2007 is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions ($ in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Weighted-average risk-free
interest rate		4.53	%		4.82	%		3.93	%		4.80	%
Weighted-average dividend yield		-	%		1.36	%		-	%		1.37	%
Weighted-average expected
stock volatility		68.18	%		32.33	%		33.72	%		32.33	%
Expected life in years	6.5 years			6.5 years			6.5 years			6.5 years
Per share weighted-average grant-
date fair value of options issued
during the period	$	1.53			6.44			1.53			6.17

As part of its adoption of SFAS 123(R), the Company examined its historical pattern of option exercises in an effort to determine if there were any pattern based on certain employee populations.  From this analysis, the Company could not identify any patterns in the exercise of options.  As such, the Company used the guidance in Staff Accounting Bulletin No. 107 to determine the estimated life of options issued subsequent to the adoption of SFAS 123(R).  Expected volatility is based on historical volatility of the Company's stock.  The risk –free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.  The dividend yield assumption is based on the Company's history and expectation of dividend payments.

7.             Fair Value Measurements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements for financial assets and liabilities.  This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.  This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.  This standard does not apply to measurements related to share-based payments.

(continued)

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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

7.             Fair Value Measurements, Continued

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.  The following is a brief description of those three levels:

- Level 1:  Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities that are not active.  Such inputs may include interest rates and yield curves, volatilities, prepayment speeds, credit risks, and default rates.

- Level 3:  Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort.

Valuation of Available for Sale Security. The value of the security available for sale is determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific security but rather by relying on the security's relationship to the other benchmark quoted security.  Accordingly, the fair value estimate for the available for sale security is classified as Level 2.

Valuation of Impaired Loans. A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  The Company's impaired loans are normally collateral dependent and, as such, are carried at the lower of the Company's net recorded investment in the loan or the estimated fair value of the collateral less estimated selling costs. Adjustments to the recorded investment are made through specific valuation allowances that are recorded as part of the overall allowance for loan losses.  Estimates of fair value are determined based on a variety of information, including the use of available appraisals, estimates of the market value by licensed appraisers or local real estate brokers and the knowledge and experience of the Company's management related to values of properties in the Company's market areas.  These officers take into consideration the type and location of the property as well as current economic conditions in the area the property is located in assessing estimates of fair value.  Accordingly, the fair value estimates for impaired loans is classified as Level 3.

(continued)

13

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

7.             Fair Value Measurements, Continued

Valuation of Other Real Estate Owned. Other real estate owned represents real estate acquired by the Company as a result of foreclosure or by deed in lieu of foreclosure and is carried, net of any allowance for losses if any, at the lower of cost or estimated fair value less estimated selling costs.  Fair value is estimated in the same manner as impaired loans and, as such, is also classified as Level 3.  As these properties are actively marketed, estimated fair value may be periodically adjusted through an allowance for losses to reflect changes in values resulting from changing market conditions.

Our listing of financial assets and liabilities subject to fair value measurements on a recurring basis are as follows (in thousands):

	Fair Value Measurements at Reporting Date Using
			Quoted Prices
			In Active		Significant
	Fair Value		Markets for		Other		Significant
	as of		Identical		Observable		Unobservable
	June 30,		Assets		Inputs		Inputs
	2008		(Level 1)		(Level 2)		(Level 3)
Available for sale security	$	1,007		-	$	1,007		-

Assets measured at fair value on a non-recurring basis are summarized below (in thousands):

	Net Carrying Value at June 30, 2008								Total Losses
									Three			Six
									Months			Months
									Ended			Ended
									June 30,			June 30,
	Total		Level 1		Level 2		Level 3		2008			2008
Impaired loans	$	9,129		-		-		9,129		1,466	(1)		1,494	(1)
Other real estate owned	$	3,218		-		-		3,218		30			30

(1) Represents a specific valuation allowance (recorded as part of the overall allowance for loan losses) for thirteen nonaccrual loans totaling $6,824 in accordance with SFAS 114.

 (continued)

14

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Review by Independent Registered Public Accounting Firm

Hacker, Johnson & Smith PA, the Company's independent registered public accounting firm, have made a limited review of the financial data as of June 30, 2008, and for the three- and six- month periods ended June 30, 2008 and 2007 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.

Their report furnished pursuant to Article 10 of Regulation S-X is included herein. 

15

Report of Independent Registered Public Accounting Firm

Marco Community Bancorp, Inc.

Marco Island, Florida:

We have reviewed the accompanying interim condensed consolidated balance sheet of Marco Community Bancorp, Inc. and Subsidiaries (the "Company") as of June 30, 2008, the related interim condensed consolidated statements of operations for the three- and six- month periods ended June 30, 2008 and 2007 and the related interim condensed consolidated statements of cash flows and changes in stockholders’ equity for the six-month periods ended June 30, 2008 and 2007. These interim condensed financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim condensed consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of the Company as of December 31, 2007, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated March 12, 2008, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2007, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA

Tampa, Florida

August 13, 2008

16

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis

of Financial Condition and Results of Operations

Comparison of June 30, 2008 and December 31, 2007

General

Marco Community Bancorp, Inc. (the "Holding Company"), which was incorporated on January 28, 2003, owns 100% of the outstanding common stock of Marco Community Bank (the "Bank") and Commercial Lending Capital Corp. ("CLCC") (collectively the "Company"). The Holding Company's only business is the ownership and operation of the Bank and CLCC.  The Bank is a Florida state-chartered commercial bank and its deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation.  CLCC was incorporated to provide commercial loans to customers that would otherwise seek financing elsewhere because of credit limit constraints.

The Company is exposed to the weakening real estate conditions in the Florida markets including Orlando, Naples, Fort Myers and Tampa.  With the general economic down turn, the Company has focused its lending resources on nominal loan growth and specifically upon addressing any asset challenges presented by its existing loan portfolios.  Pricing of loans remain competitive and current lending initiatives are focused on Marco Island opportunities.

Liquidity and Capital Resources

The Company's primary source of cash during the six months ended June 30, 2008 was from a decrease in loans of $5.8 million.  Cash was used primarily to fund the net decrease in deposits of $2.3 million and to purchase securities of $6.0 million.

Off-Balance Sheet Arrangements

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include unused lines of credit.  These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet.  The contract or notional amounts of those instruments reflect the extent of the Company's involvement in particular classes of financial instruments.

The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instruments for unused lines of credit is represented by the contractual amount of those instruments.  The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements.  The Company evaluates each customer's credit worthiness on a case-by-case basis.  The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counterparty.

17

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis

of Financial Condition and Results of Operations, Continued

Off-Balance Sheet Arrangements, Continued

Unused lines of credit typically result in loans with a market interest rate when funded.

A summary of the Company's financial instruments with off-balance sheet risk at June 30, 2008 follows (in thousands):

	Contract
	Amount
Unused lines of credit	$	20,238

Management believes that the Company has adequate resources to fund all of its commitments.

The following table shows selected ratios for the periods ended or at the dates indicated:

	Six Months						Six Months
	Ended			Year Ended			Ended
	June 30,			December 31,			June 30,
	2008			2007			2007
Average equity as a percentage
of average assets		14.20	%		13.53	%		13.30	%
Total equity to total assets at end of period		13.92	%		15.26	%		12.37	%
Return on average assets (1)		(3.02	)%		(3.08	)%		(2.86	)%
Return on average common stockholders
equity (1)		(27.24	)%		(24.12	)%		(21.48	)%
Noninterest expense to average assets (1)		3.58	%		3.90	%		3.12	%

____________________________________________
(1)         Annualized for the six months ended June 30, 2008 and 2007.

18

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Results of Operations

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average costs; (iii) net interest/dividend income; (iv) interest-rate spread; and (v) net interest margin. Yields and costs were derived by dividing annualized income or expense by the average balance of assets or liabilities, respectively, for the periods shown.

	Three Months Ended June 30,
	2008							2007
			Interest		Average					Interest		Average
	Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Cost			Balance		Dividends		Cost
	($ in thousands)
Interest-earning assets:
Loans	$	116,957		1,833		6.29	%	$	137,409		2,633		7.69	%
Investment securities		9,143		115		5.04			6,169		82		5.33
Other interest-earning assets (1)		21,908		125		2.29			22,452		294		5.25
Total interest-earning assets		148,008		2,073		5.62			166,030		3,009		7.27
Noninterest-earning assets		8,778							5,551
Total assets	$	156,786						$	171,581
Interest-bearing liabilities:
Savings		9,849		45		1.83			14,402		89		2.48
Money market and NOW deposits		32,886		134		1.63			30,576		164		2.15
Time deposits		85,118		945		4.45			97,175		1,241		5.12
Total interest-bearing deposits		127,853		1,124		3.53			142,153		1,494		4.22
Repurchase agreements		1,081		6		2.23			316		3		3.81
Total interest-bearing liabilities		128,934		1,130		3.52			142,469		1,497		4.21
Noninterest-bearing liabilities		6,308							6,649
Stockholders' equity		21,544							22,463
Total liabilities and stockholders' equity	$	156,786						$	171,581
Net interest income			$	943						$	1,512
Interest-rate spread (2)						2.10	%						3.06	%
Net interest-earning assets, net margin (3)	$	19,074				2.56	%	$	23,561				3.65	%
Ratio of interest-earning assets to
interest-bearing liabilities		1.15							1.17

____________________________

(1) Includes interest-earning deposits, federal funds sold and Federal Reserve Bank stock and Federal Home Loan Bank Stock.

(2) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(3) Net interest margin is annualized net interest income divided by average interest-earning assets.

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MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average costs; (iii) net interest/dividend income; (iv) interest-rate spread; and (v) net interest margin. Yields and costs were derived by dividing annualized income or expense by the average balance of assets or liabilities, respectively, for the periods shown.

	Six Months Ended June 30,
	2008							2007
			Interest		Average					Interest		Average
	Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Cost			Balance		Dividends		Cost
	($ in thousands)
Interest-earning assets:
Loans	$	120,225		3,849		6.42	%	$	134,679		5,309		7.95	%
Investment securities		7,826		201		5.15			5,078		136		5.40
Other interest-earning assets (1)		20,503		272		2.66			25,933		673		5.23
Total interest-earning assets		148,554		4,322		5.83			165,690		6,118		7.45
Noninterest-earning assets		9,184							5,601
Total assets	$	157,738						$	171,291
Interest-bearing liabilities:
Savings		9,998		101		2.03			14,941		184		2.48
Money market and NOW deposits		31,478		279		1.78			32,920		406		2.49
Time deposits		86,929		2,011		4.64			94,201		2,379		5.09
Total interest-bearing deposits		128,405		2,391		3.73			142,062		2,969		4.21
Repurchase agreements		953		16		3.37			158		3		3.83
Total interest-bearing liabilities		129,358		2,407		3.73			142,220		2,972		4.21
Noninterest-bearing liabilities		5,975							6,289
Stockholders' equity		22,405							22,782
Total liabilities and stockholders' equity	$	157,738						$	171,291
Net interest income			$	1,915						$	3,146
Interest-rate spread (2)						2.10	%						3.24	%
Net interest-earning assets, net margin (3)	$	19,196				2.59	%	$	23,470				3.83	%
Ratio of interest-earning assets to
interest-bearing liabilities		1.15							1.17

__________________________

(1) Includes interest-earning deposits, federal funds sold and Federal Reserve Bank stock and Federal Home Loan Bank Stock.

(2) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(3) Net interest margin is annualized net interest income divided by average interest-earning assets.

20

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Comparison of the Three-Month Periods Ended June 30, 2008 and 2007

General.  Net losses for the three months ended June 30, 2008 were $2.1 million or a net loss of $0.67 per basic and diluted share compared to net a net loss of $3.0 million or a net loss of $0.95 per basic and diluted share for the three months ended June 30, 2007. The decrease in net loss is primarily due to the decrease in the provision for loan losses from $5.3 million for the second quarter of 2007 to $2.9 million for the comparable 2008 period.

Interest Income and Expense.  Interest income totaled $2.1 million for the three months ended June 30, 2008 compared to $3.0 million for the three months ended June 30, 2007.  Interest income on loans decreased $800,000 due to lower yields in the portfolio as a result of higher levels of nonaccrual loans.

Interest expense decreased to $1.1 million for the three months ended June 30, 2008 compared to $1.5 million, for the three months ended June 30, 2007.  Interest expense decreased primarily due to a decrease of $2.3 million in deposits and a decrease in the weighted average interest rate paid on deposits.

Provision for Loan Losses.  The provision for loan losses is determined based on management's estimates of the appropriate level of allowance for loan losses needed to absorb probable losses inherent in the existing loan portfolio, after giving consideration to charge-offs and recoveries for the period.

The provision for loan losses was $2.9 million for the three months ended June 30, 2008 compared to $5.3 million for the six months ended June 30, 2007.  The allowance for loan losses is $6.1 million at June 30, 2008.

Real estate loans continue to be the primary source of loan charge-offs.  The Company charged off $614,000 for the three month period ended June 30, 2008, compared to $4.4 million for the comparable 2007 period.

While management believes that its allowance for loan losses is adequate as of June 30, 2008, future adjustments to the Company's allowance for loan losses may be necessary if economic conditions differ substantially from the assumptions used in making the initial determination.

Noninterest Income.  Noninterest income decreased to $43,000 during the three month period ended June 30, 2008 compared to $302,000 for the same period in 2007 primarily due to a decrease in loan brokerage fees earned in 2008.

Noninterest Expenses.  Noninterest expenses increased to $1.5 million during the three-month period ended June 30, 2008 compared to $1.3 million for the same period in 2007.  Noninterest expense increased primarily due to increases in other real estate expense and regulatory assessment fees partially offset by decreases in salaries and employee benefits.

Income Taxes.  The Company recorded an income tax benefit of $1.3 million for the three-month period ended June 30, 2008 (an effective rate of 37.6%) compared to an income tax provision of $1.8 million for the 2007 period (an effective rate of 37.5%).

21

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Comparison of the Six-Month Periods Ended June 30, 2008 and 2007

General.  Net losses for the six months ended June 30, 2008 were $2.4 million or a net loss of $0.78 per basic and diluted share compared to a net loss of $2.4 million or a net loss of $0.77 per basic and diluted share for the six months ended June 30, 2007.

Interest Income and Expense.  Interest income decreased to $4.3 million for the six months ended June 30, 2008 from $6.1 million for the six months ended June 30, 2007.  Interest income decreased primarily due to lower yields in the portfolio as a result of higher levels of nonaccrual loans.

Interest expense decreased to $2.4 million for the six months ended June 30, 2008 compared to $3.0 million, for the six months ended June 30, 2007.  Interest expense decreased due to a decrease in the average balance of deposits in 2008 and a decrease in the weighted average interest rate paid on deposits.

Provision for Loan Losses.  The provision for loan losses is determined based on management's estimates of the appropriate level of allowance for loan losses needed to absorb probable losses inherent in the existing loan portfolio, after giving consideration to charge-offs and recoveries for the period.

The provision for loan losses was $3.0 million for the six months ended June 30, 2008 a decrease of $2.3 million from the comparable 2007 period.    The increased provision during the 2007 period was necessary to establish an appropriate level of allowance for loan losses and was primarily due to actions taken relating to portions of loan pools purchased through Allen C. Ewing & Company issued by Atlantic Capital Associates, Inc., Jacksonville, Florida.

Real estate loans continue to be the primary source of loan charge-offs.  The Company charged off $749,000 for the period ended June 30, 2008, compared to $4.4 million for the comparable 2007 period.

While management believes that its allowance for loan losses is adequate as of June 30, 2008, future adjustments to the Company's allowance for loan losses may be necessary if economic conditions differ substantially from the assumptions used in making the initial determination.

Noninterest Income.  Noninterest income decreased to $90,000 during the six month period ended June 30, 2008 compared $938,000 for the same period in 2007 primarily due to a decrease in loan brokerage fees earned in 2008.

Noninterest Expenses.  Noninterest expenses increased to $2.8 million during the six-month period ended June 30, 2008 compared to $2.6 million for the same period in 2007.  Noninterest expense increased primarily due to increased other real estate expenses, professional fees and regulatory assessments, partially offset by decreases in salaries and employee benefits.  The Company transferred $1.0 million to other real estate owned from loans during the period ended June 30, 2008.  The Company wrote down $30,000, recorded $513,000 in proceeds from the sale and expensed $105,000 for loss on sale for a total balance of $3.2 million in other real estate owned at June 30, 2008.

Income Taxes.  The Company recorded an income tax benefit of $1.4 million for the six-month period ended June 30, 2008 (an effective rate of 37.6%) compared to an income tax benefit of $1.4 million for the 2007 period (an effective rate of 36.9%).

22

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Item 4T.  Controls and Procedures

(a)   Evaluation of Disclosure Controls and Procedures

We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon management's evaluation of those controls and procedures performed within the 90 days preceding the filing of this Report, our Principal Executive Officer and Principal Financial Officer concluded that, subject to the limitations noted below, the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms.

(b)   Changes in Internal Controls

We have made no significant changes in its internal controls over financial reporting during the quarter ended June 30, 2008 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

(c)   Limitations on the Effectiveness of Controls

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

23

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

There are no material pending legal proceedings to which Marco Community Bancorp, Inc. or its Subsidiaries is a party or to which any property is subject.

Item 4.   Submission of Matters to a Vote of Security Holders

On April 26, 2008, Marco Community Bancorp, Inc. held its Annual Meeting of Shareholders.  At this Annual Meeting, the following proposals were considered and acted upon:

PROPOSAL I.  To elect nine directors:

	For		Withheld
John V. (Jack) Cofer		2,017,558		272,904
Joel M. Cox		2,248,439		42,023
Bruce G. Fedor		2,041,964		248,498
Jamie B. Greusel		2,211,401		79,061
Robert A. Marks		2,211,401		79,061
Stephen A. McLaughlin2,041,214		249,248
E. Terry Skone		2,248,439		42,023
Richard Storm, Jr.		2,041,964		248,498

PROPOSAL II. The amendments to Marco Community Bancorp, Inc.'s three Stock Option and Limited Rights Plans:

For	Against	Abstain
2,237,640	43,350	4,455

PROPOSAL III. The ratification of the appointment of Hacker, Johnson & Smith PA as the independent auditors for the Company for the fiscal year ending December 31, 2008:

For	Against	Abstain
1,982,955	248,985	4,505

24

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Item 5. Other Information

On August 14, 2007, the Bank entered into a Written Agreement with the Federal Reserve Bank of Atlanta ("FRB") and the Florida Office of Financial Regulation ("OFR"). The purpose of the Written Agreement is for the Bank to address the FRB's and OFR's supervisory and regulatory concerns primarily related to the volume of certain loan pools which are described elsewhere in this Form 10-Q, as well as other loan quality issues. Pursuant to the Written Agreement, the Bank must take corrective actions within specified time frames, which may be extended with the consent of the FRB and the OFR although the Bank has not yet had to request any extensions.  When the FRB and OFR have determined that the Bank is in full compliance with the Written Agreement and that the issues that precipitated the Written Agreement are unlikely to occur, we expect that they will release the Bank from the Written Agreement. Failure to comply with the terms of the Written Agreement could result in the assessment of civil money penalties against the Bank and its Board of Directors. The actions to be taken include an evaluation by the Bank's Board of Directors of its current management and staffing to determine if any additional or replacement personnel are needed; the preparation and implementation of a strategic business plan and budget designed to improve the Bank's financial condition and credit risk management; a review and adoption of any necessary revisions to the Bank's loan policy and loan review/grading program; a reduction of the Bank's volume of adversely classified assets; and the continual monitoring of the Bank's allowance for loan and lease losses. In addition, the Bank may not make any loans to borrowers who previously had loans charged-off by the Bank; must prepare a plan to effectively manage the Bank's capital relative to its volume of adversely classified assets, anticipated growth and risk profile; and may not pay any dividends without regulatory consent.

Since entering into this agreement, the Company believes they are substantially in compliance with the written agreement; however, the Company has not received a written target report from the FRB.  The Bank has added three additional directors and added a credit analyst/portfolio manager.  The Bank has also instituted a new form of loan underwriting which is more focused on cash flow and project specific.  Also aggregate debt obligations are underwritten in the new format.  Additional reserves of $1.5 million have been set aside for the Atlantic Capital Pools.  The allowance for loan loss amount was developed utilizing the FAS 114 analysis of specific loans and the FAS 5 analysis of the pool loans.

25

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

Item 6. Exhibits

(a) Exhibits

 The exhibits denominated with (a) were filed with the Company's Form SB-2 which was filed with the Securities and Exchange Commission on March 7, 2003, those denominated with (b) were filed with the Company's Form 10-Q which was filed with the Securities and Exchange Commission on August 14, 2007, those denominated with (c) were filed with the Company's Form 10-K which was filed with the Securities and Exchange Commission on March 19, 2008 and those denominated with (d) were filed with the Company's Definitive Schedules 14-A which was filed with the Securities and Exchange Commission on March 21, 2007 and March 20, 2008.

Exhibit No.		Description of Exhibit
(a)	3.1	Articles of Incorporation of Marco Community Bancorp, Inc. as filed with the Florida Department of State
(a)	3.2	Bylaws of Marco Community Bancorp, Inc.
(a)	4.1	Specimen Common Stock Certificate
(d)	10.1	Employees' Stock Option Plan, as amended
(d)	10.2	Directors' Stock Option Plan, as amended
(d)	10.3	Advisory Directors' Stock Option Plan, as amended
(c)	10.4	Employee Severance Agreement with Paul Nidasso
(c)	10.5	Employee Severance Agreement with Anthony Iannotta
(c)	10.6	Employee Severance Agreement with David Klein
(b)	10.8	Written Agreement with the Federal Reserve Bank of Atlanta and the Florida Office of Financial Regulation
	31.1	Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
	31.2	Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002
	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002

26

MARCO COMMUNITY BANCORP, INC. AND SUBSIDIARIES

SIGNATURES

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

	MARCO COMMUNITY BANCORP, INC.
	(Registrant)
Date:  August 13, 2008	By:	/s/Richard Storm, Jr.
		Richard Storm, Jr., Chief Executive Officer
Date:  August 13, 2008	By:	/s/Laura A. Witty
		Laura A. Witty, Interim Chief Financial Officer,
		Vice President and Controller

27