As filed with the Securities and Exchange Commission on June 13, 2007

Registration No. 333-__________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Bradford Bancorp, Inc.

Bradford Bank 401(k) Profit Sharing Plan

(Exact name of registrant as specified in its charter)

Maryland		6035		26-0223245
State or other jurisdiction of incorporation or organization		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

6910 York Road

Baltimore, Maryland 21212

(410) 377-9600

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Dallas R. Arthur

President and Chief Executive Officer

Bradford Bancorp, Inc.

6910 York Road

Baltimore, Maryland 21212

(410) 377-9600

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

	Copies to:
Gary R. Bronstein, Esq.		Raymond A. Tiernan, Esq.
Sean P. Kehoe, Esq.		P. Ross Bevan, Esq.
Muldoon Murphy & Aguggia LLP		Elias Matz Tiernan & Herrick, LLP
5101 Wisconsin Avenue, NW		734 15th Street, NW, 12th Floor
Washington, DC 20016		Washington, DC 20005
202.362.0840		202.347.0300

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Calculation of Registration Fee

Title of each class of securities to be registered	Amount to be registered		Proposed maximum offering price per unit	Proposed maximum Aggregate offering price(2)	Amount of registration fee
Common Stock $.01 par value	11,783,874	(1)	Not Applicable	$ 118,328,163	$	3,633
Participation Interests	(3)		—	$ 1,785,863	(3)

(1) Represents the maximum number of shares of common stock of Bradford Bancorp, Inc., that may be issued pursuant to the transactions described herein, based on (a) 9,532,500 shares of common stock of Bradford Bancorp, Inc., which is the maximum number of shares of common stock of Bradford Bancorp, Inc. that may be outstanding upon the completion of the offering described herein, including shares contributed to Bradford Bank Foundation, a private foundation, (b) 1,957,716 shares of common stock of Patapsco Bancorp, Inc., which is the maximum number of shares of Patapsco Bancorp, Inc. common stock that may be outstanding immediately before the consummation of merger described herein, assuming the exercise of 68,297 options to purchase shares of common stock of Patapsco Bancorp, Inc. and (c) an assumed exchange ratio of 2.3 shares of common stock of Bradford Bancorp, Inc. for each outstanding share of common stock of Patapsco Bancorp, Inc. for 50% of the outstanding shares of Patapsco Bancorp, Inc. common stock.

(2) Estimated solely for the purpose of calculating the registration fee. Pursuant to Rules 457(f)(1), 457(f)(3) and 457(c) under the Securities Act of 1933, the registration fee has been calculated based on (a) a price of $10.00 per share of common stock of Bradford Bancorp, Inc., which is the purchase price in the offering, and (b)(i) a price of $23.25 per share of Patapsco Bancorp, Inc. common stock, which equals the average of the high and low price per share of Patapsco Bancorp common stock as reported on OTC Bulletin Board on June 8, 2007 less (ii) the payment by Bradford Bancorp, Inc. of the cash component of the merger consideration of $23.00 per share for 50% of the outstanding shares of Patapsco Bancorp, Inc. common stock.

(3) The securities of Bradford Bancorp, Inc. to be purchased by the Bradford Bank 401(k) Profit Sharing Plan are included in the amount shown for the common stock. Accordingly, no separate fee is required for the participation interests. In accordance with Rule 457(h) of the Securities Act of 1933, as amended, the registration fee has been calculated on the basis of the number of shares of common stock that may be purchased with the current assets of such Plan.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

Prospectus Supplement

INTERESTS IN

BRADFORD BANK

401(K) PROFIT SHARING PLAN

AND

OFFERING OF [ ] SHARES OF

BRADFORD BANCORP, INC.

COMMON STOCK ($.01 PAR VALUE)

This prospectus supplement relates to the offer and sale to participants in the Bradford Bank 401(k) Profit Sharing Plan (the “401(k) Plan”) of participation interests and shares of common stock of Bradford Bancorp, Inc.

401(k) Plan participants may direct the trustee, as appointed by the 401(k) Plan, to use a portion of their current account balances to subscribe for and purchase shares of Bradford Bancorp, Inc. common stock to be held in the Bradford Bancorp, Inc. Stock Fund. Based upon the value of the 401(k) Plan assets as of _____________, 2007, 401(k) Plan participants may purchase up to _________ shares of Bradford Bancorp, Inc. common stock, assuming a purchase price of $10.00 per share. This prospectus supplement relates to the election of 401(k) Plan participants to invest up to fifty percent (50%) of their 401(k) Plan accounts in Bradford Bancorp, Inc. common stock.

The prospectus dated _____________, 2007 of Bradford Bancorp, Inc., which accompanies this prospectus supplement, includes detailed information regarding the conversion of Bradford Bank into the stock form of ownership and the offering of Bradford Bancorp, Inc. common stock, and the financial condition, results of operations and business of Bradford Bank. This prospectus supplement provides information regarding the 401(k) Plan. You should read this prospectus supplement, together with the prospectus, and keep both for future reference.

Please refer to “Risk Factors” beginning on page 18 of the prospectus.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, nor any other state or federal agency or any state securities commission, has approved or disapproved these securities. Any representation to the contrary is a criminal offense.

These securities are not deposits or accounts and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

This prospectus supplement may be used only in connection with offers and sales by Bradford Bancorp, Inc. of interests or shares of common stock under the 401(k) Plan to employees of Bradford Bank. No one may use this prospectus supplement to reoffer or resell interests or shares of common stock acquired through the 401(k) Plan.

You should rely only on the information contained in this prospectus supplement and the attached prospectus. Bradford Bancorp, Inc., Bradford Bank and the 401(k) Plan have not authorized anyone to provide you with information that is different.

This prospectus supplement does not constitute an offer to sell or solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. Neither the delivery of this prospectus supplement and the prospectus nor any sale of common stock shall under any circumstances imply that there has been no change in the affairs of Bradford Bank or the 401(k) Plan since the date of this prospectus supplement, or that the information contained in this prospectus supplement or incorporated by reference is correct as of any time after the date of this prospectus supplement.

The date of this Prospectus Supplement is_______________, 2007.

TABLE OF CONTENTS

THE OFFERING		1
Securities Offered		1
Election to Purchase Bradford Bancorp, Inc. Common Stock in the Conversion		1
Value of Participation Interests		2
Method of Directing Transfer		2
Time for Directing Transfer		2
Irrevocability of Transfer Direction		3
Purchase Price of Bradford Bancorp, Inc. Common Stock		3
Nature of a Participant’s Interest in Bradford Bancorp, Inc. Common Stock		3
Voting and Tender Rights of Bradford Bancorp, Inc. Common Stock		3

DESCRIPTION OF THE 401(k) PLAN		4
Introduction		4
Eligibility and Participation		4
Contributions Under the 401(k) Plan		4
Limitations on Contributions		5
401(k) Plan Investments		6
Benefits Under the 401(k)Plan		7
Withdrawals and Distributions From the 401(k) Plan		8
401(k) Plan Trustee		8
401(k) Plan Administrator		9
Reports to 401(k) Plan Participants		9
Amendment and Termination		9
Merger, Consolidation or Transfer		9
Federal Income Tax Consequences		9
Restrictions on Resale		11
SEC Reporting and Short-Swing Profit Liability		11

LEGAL OPINION		12

THE OFFERING

Securities Offered

The securities offered in connection with this prospectus supplement are participation interests in the 401(k) Plan. Assuming a purchase price of $10.00 per share, participants may acquire up to _______ shares of Bradford Bancorp, Inc. common stock for the new Bradford Bancorp, Inc. Stock Fund. The participation interests offered under this prospectus supplement are conditioned on the completion of the conversion of Bradford Bank to the stock form of ownership and the stock offering of Bradford Bancorp, Inc. Your investment in the Bradford Bancorp, Inc. Stock Fund in connection with the conversion of Bradford Bank is also governed by the purchase priorities contained in the plan of conversion and stock issuance. See “The Conversion and Stock Offering - Subscription Offering and Rights” and “Limitations on Purchases of Shares” sections of the prospectus attached to this prospectus supplement for a discussion of the purchase priorities contained in the plan of conversion.

This prospectus supplement contains information regarding the 401(k) Plan. The attached prospectus contains information regarding the conversion of Bradford Bank and the financial condition, results of operations and business of Bradford Bank. The address of the principal executive office of Bradford Bank is 6910 York Road, Baltimore, Maryland 21212. The telephone number of Bradford Bank is (410) 377-9600.

Election to Purchase Bradford Bancorp, Inc. Common Stock in the Conversion

In connection with the conversion of Bradford Bank, the 401(k) Plan will permit you to direct the transfer up to fifty percent (50%) of the funds which represent your current beneficial interest in the assets of the 401(k) Plan to the Bradford Bancorp, Inc. Stock Fund. The trustee of the Bradford Bancorp, Inc. Stock Fund will subscribe for Bradford Bancorp, Inc. common stock offered for sale in connection with the conversion. However, please note that, in order to maintain a cash buffer within the Bradford Bancorp, Inc. Stock Fund, [approximately ____ percent (__%) of your investment direction will be held in cash.] [confirm cash buffer/unitized fund] [Approximately ________ percent (__%) of the total amount that you transfer will be used to purchase common stock in the offering, rounded down to the nearest $10.00 increment, with any remainder also held in cash within the Bradford Bancorp, Inc. Stock Fund.] Prior to the completion of the conversion and stock offering, the funds you elect to transfer to the Bradford Bancorp, Inc. Stock Fund will be transferred to the 401(k) Plan’s [______________] Fund. If there is not enough common stock in the conversion to fill all subscriptions, the common stock will be apportioned and the trustee for the 401(k) Plan may not be able to purchase all of the common stock you requested. [In such a case, all or a portion of the funds you elected to transfer will not be used to purchase common stock, and will instead remain in the [______________] Fund. After the close of the offering, you may reinvest in the funds held in the [______________] Fund among the 401(k) Plan’s other investment funds, including the Bradford Bancorp, Inc. Stock Fund. Please note that open market purchases may be made at prices higher or lower than the initial public offering price of $10.00 per share.] [CONFIRM]

401(k) Plan participants may direct a transfer of funds to the Bradford Bancorp, Inc. Stock Fund. However, as mentioned above, your transfer directions are subject to subscription rights and purchase priorities. Your order for shares in the stock offering will be filled based on your purchase priority in the offering. Bradford Bank has granted subscription rights to the

following persons in the following order of priority: (1) persons with $50.00 or more on deposit as of December 31, 2005 at the following institutions: Bradford Bank; American Bank (provided the deposit account in American Bank was acquired by Bradford Bank pursuant to the Purchase Agreement by and between American Bank and Bradford Bank, dated June 7, 2006); Valley Bank of Maryland; Golden Prague Federal Savings and Loan Association; and Senator Bank; (2) the Bradford Bank Employee Stock Ownership Plan; (3) persons with $50.00 or more on deposit at Bradford Bank as of __________, 2007; and (4) depositors of Bradford Bank as of [______________], who were not able to subscribe under categories (1) and (3) and the following borrowers: (1) borrowers of Bradford Bank as of December 14, 1987, whose loans continued to be outstanding as of __________, 1007; (2) borrowers of Golden Prague Federal Savings and Loan Association as of September 27, 1990, whose loans continued to be outstanding at Bradford Bank as of __________, 2007; and (3) borrowers of Senator Bank as of September 29, 1988, whose loans continued to be outstanding with Bradford Bank as of ___________, 2007. No individual may purchase more than $100,000 of Bradford Bancorp, Inc. common stock in the subscription offering, and no individual, no individual together with any associates, and no group of persons acting in concert, may purchase more than $500,000 of Bradford Bancorp, Inc. common stock in the offering. If you fall into one of the above subscription offering categories, you have subscription rights in the offering and you may use up to 50% of the funds in your 401(k) Plan account to purchase shares of Bradford Bancorp, Inc. common stock in the offering.

In addition to using funds allocated to your 401(k) Plan accounts, you may also purchase Bradford Bancorp, Inc. common stock in the offering using other funds. If you are eligible to purchase stock in the offering, you have or will soon receive stock offering materials in the mail, including a Stock Order Form. If you choose to place an order for stock in the offering using funds other than those in your 401(k) Plan accounts, you must complete and submit a separate Stock Order Form to the location and by the deadline indicated on that form.

Value of Participation Interests

As of ______________, 2007, the market value of the assets of the 401(k) Plan equaled approximately $_________. Bradford Bank has informed each participant of the value of his or her beneficial interest in the 401(k) Plan as of ______________, 2007. The value of 401(k) Plan assets represents past contributions to the 401(k) Plan on your behalf, plus or minus earnings or losses on the contributions, less previous withdrawals and loans.

Method of Directing Transfer

The last [two] pages of this prospectus supplement contain a form for you to direct a transfer to the Bradford Bancorp, Inc. Stock Fund (the “Investment Form”). If you wish to transfer up to 50% of your beneficial interest in the assets of the 401(k) Plan to the Bradford Bancorp, Inc. Stock Fund, you should complete the Investment Form. If you do not wish to invest in the Bradford Bancorp, Inc. Stock Fund through the 401(k) Plan, you do not need to take any action. The minimum investment in the Bradford Bancorp, Inc. Stock Fund during the initial public offering is $250.

Time for Directing Transfer

The deadline for submitting the Investment Form with your directions to transfer amounts from your other investment funds to the Bradford Bancorp, Inc. Stock Fund in connection with the conversion is ______________, 2007. You must submit the Investment Form to _____________ at Bradford Bank by 4:00 p.m. on __________, 2007.

Irrevocability of Transfer Direction

Once you submit your Investment Form to transfer amounts credited to your account in the 401(k) Plan to the Bradford Bancorp, Inc. Stock Fund, you cannot change your investment direction prior to the completion of the conversion and stock offering. You may be able to change your investments in other investment funds under the 401(k) Plan, subject, however, to the terms of the 401(k) Plan and any “blackout” notices to the contrary that you receive from the Plan Administrator. Following the closing of the stock offering and your initial purchase of [units/shares] in the Bradford Bancorp, Inc. Stock Fund, and subject to the terms and requirements of the 401(k) Plan, including any “blackout” notices, you may direct the investment of additional funds into the Bradford Bancorp, Inc. Stock Fund (subject to the 50% maximum), which will continue to be an investment option under the 401(k) Plan. [confirm]

Purchase Price of Bradford Bancorp, Inc. Common Stock

The trustee will use the funds transferred to the Bradford Bancorp, Inc. Stock Fund to purchase shares of Bradford Bancorp, Inc. common stock in the conversion. [As discussed above, the Bradford Bancorp, Inc. Stock Fund will be comprised of stock units and a cash buffer.] The trustee will pay the same price for shares of Bradford Bancorp, Inc. common stock in the offering, $10.00 per share, as all other persons who purchase shares of Bradford Bancorp, Inc. common stock in the offering.

Nature of a Participant’s Interest in Bradford Bancorp, Inc. Common Stock

The 401(k) Plan trustee will hold Bradford Bancorp, Inc. common stock in the name of the 401(k) Plan. [Units/shares] of the Bradford Bancorp, Inc. Stock Fund acquired at your investment direction will be credited to your account under the 401(k) Plan.

Voting and Tender Rights of Bradford Bancorp, Inc. Common Stock

The 401(k) Plan trustee (based on instructions received from 401(k) Plan participants) generally will exercise voting and tender rights attributable to all Bradford Bancorp, Inc. common stock held by the Bradford Bancorp, Inc. Stock Fund as directed by participants with interests in the Bradford Bancorp, Inc. Stock Fund. [confirm pass-through voting of shares held in Stock Fund.] With respect to each matter as to which holders of Bradford Bancorp, Inc. common stock have a right to vote, you will be given voting instruction rights reflecting your proportionate interest in the Bradford Bancorp, Inc. Stock Fund. The number of shares of Bradford Bancorp, Inc. common stock held in the Bradford Bancorp, Inc. Stock Fund that are voted for and against each matter will be proportionate to the number of voting instruction rights exercised by participants. If there is a tender offer for Bradford Bancorp, Inc. common stock, the 401(k) Plan provides that each participant will be allotted a number of tender instruction rights reflecting the participant’s proportionate interest in the Bradford Bancorp, Inc. Stock Fund. The percentage of shares of Bradford Bancorp, Inc. common stock held in the Bradford Bancorp, Inc. Stock Fund that will be tendered will be the same as the percentage of the total number of tender instruction rights that are exercised in favor of the tender offer. The remaining shares of Bradford Bancorp, Inc. common stock held in the Bradford Bancorp, Inc. Stock Fund will not be tendered. The 401(k) Plan makes provisions for participants to exercise their voting and tender instruction rights on a confidential basis.

DESCRIPTION OF THE 401(k) PLAN

Introduction

Effective ____________, 2007, Bradford Bank amended and restated the Bradford Bank 401(k) Profit Sharing Plan, originally effective as of ______________, in its entirety. Bradford Bank intends for the 401(k) Plan to comply, in form and in operation, with all applicable provisions of the Internal Revenue Code of 1986, as amended, and the Employee Retirement Income Security Act of 1974, as amended, or “ERISA.” Bradford Bank may change the 401(k) Plan from time to time in the future to ensure continued compliance with these laws. Bradford Bank may also amend the 401(k) Plan from time to time in the future to add, modify, or eliminate certain features of the 401(k) Plan, as it sees fit. As a 401(k) Plan governed by ERISA, federal law provides you with various rights and protections as a 401(k) Plan participant. Although the 401(k) Plan is governed by many of the provisions of ERISA, the Pension Benefit Guaranty Corporation does not guarantee your retirement benefits under the 401(k) Plan.

Reference to Full Text of the 401(k) Plan. The following portions of this prospectus supplement provide an overview of the material provisions of the 401(k) Plan. Bradford Bank qualifies this overview in its entirety, however, by reference to the full text of the 401(k) Plan. You may obtain copies of the full 401(k) Plan document by contacting ______________ at Bradford Bank. You should carefully read the full text of the 401(k) Plan document to understand your rights and obligations under the 401(k) Plan.

Eligibility and Participation

Eligible employees of Bradford Bank may participate in the 401(k) Plan as of the first day of the month coinciding with or next following their satisfaction of the eligibility requirements. Generally, employees who are at least [21] years of age may participate in the 401(k) Plan upon their completion of [three (3) months] of service.

As of ______________, 2007, ___ of the ___ employees of Bradford Bank elected to participate in the 401(k) Plan.

Contributions Under the 401(k) Plan

401(k) Plan Participant Contributions. Subject to certain Internal Revenue Code limitations, the 401(k) Plan permits each participant to contribute up to [___%] of their annual compensation to the 401(k) Plan (See “Limitations on Contributions” below.). Participants may change their rate of contribution with respect to pre-tax deferrals upon providing [______________] days’ notice to Bradford Bank.

Bradford Bank Contributions. The 401(k) Plan provides that Bradford Bank may make matching contributions. Bradford Bank currently matches [100%] of each participant’s salary deferrals, [up to 3% of compensation, and 50% of deferrals in excess of 3% of compensation], up to a maximum of [5%] of annual compensation. Bradford Bank may also make discretionary contributions on behalf of 401(k) Plan participants. [confirm] Employer contributions (matching and discretionary) are allocated to each participant who has completed [____ hours] of service during the Plan Year (i.e., the calendar year) or who terminated employment during the Plan Year due to disability, retirement or death. [confirm]

Limitations on Contributions

Limitations on Employee Salary Deferrals. Although the 401(k) Plan permits you to defer up to [___%] of your compensation, by law your total deferrals under the 401(k) Plan, together with similar plans, may not exceed $15,500 for 2007. Employees who are age 50 and over may make additional catch-up contributions to the 401(k) Plan, in amounts up to $5,000 for 2007. (The Internal Revenue Service will periodically increase these annual limitations.) Contributions in excess of these limitations, or “excess deferrals,” will be included in an affected participant’s gross income for federal income tax purposes in the year the contributions are made, provided they are distributed to the participant no later than the first April 15th following the close of the taxable year in which the excess deferrals were made. Excess deferrals distributed after that date will be treated, for federal income tax purposes, as earned and received by the participant in the taxable year of the distribution.

Limitations on Annual Additions and Benefits. Under the requirements of the Internal Revenue Code, the 401(k) Plan provides that the total amount of contributions and forfeitures (i.e., annual additions) credited to a participant during any year under all defined contribution plans of Bradford Bank (including the 401(k) Plan and the proposed Bradford Bank Employee Stock Ownership Plan) may not exceed the lesser of 100% of the participant’s compensation or $45,000 for 2007.

Limitations on 401(k) Plan Contributions for Highly Compensated Employees. Special provisions of the Internal Revenue Code limit the amount of salary deferrals and matching contributions that may be made to the 401(k) Plan in any year on behalf of highly compensated employees in relation to the amount of deferrals and matching contributions made by or on behalf of all other employees eligible to participate in the 401(k) Plan. If contributions to highly compensated employees exceed these limitations, the 401(k) Plan must adjust participant contribution levels under the 401(k) Plan.

In general, a highly compensated employee includes any employee who (1) was a five percent owner of the sponsoring employer at any time during the year or preceding year, or (2) had compensation for the preceding year in excess of $100,000 and, if the sponsoring employer so elects, was in the top 20% of employees by compensation for such year. These dollar amounts may be adjusted periodically by the Internal Revenue Service.

Top-Heavy Plan Requirements. If the 401(k) Plan is a “Top-Heavy Plan” for any calendar year, Bradford Bank may be required to make certain minimum contributions to the 401(k) Plan on behalf of non-key employees. In general, the 401(k) Plan will be treated as a “Top-Heavy Plan” for any calendar year if, as of the last day of the preceding calendar year, the aggregate balance of the accounts of participants who are Key Employees exceeds 60% of the aggregate balance of the accounts of all participants. A Key Employee generally includes any employee who, at any time during the calendar year or any of the four preceding years, is:

(1) an officer of Bradford Bank whose annual compensation exceeds $145,000;

(2) a 5% owner, meaning an employee who owns more than 5% of the outstanding stock of Bradford Bancorp, Inc., or who owns stock that possesses more than 5% of the total combined voting power of all stock of Bradford Bancorp, Inc.; or

(3) a 1% owner, meaning an employee who owns more than 1% of the outstanding stock of Bradford Bancorp, Inc. or who owns stock that possesses more than 1% of the combined voting power of the total stock of Bradford Bancorp, Inc. and whose annual compensation exceeds $150,000.

401(k) Plan Investments

Investment of Contributions. Prior to June __, 2007, contributions under the 401(k) Plan were invested in the funds described below, with John Hancock as the investment provider for the 401(k) Plan. The annual percentage return on these funds (net of fees) for the prior three years was as follows:

	Fund Name	2006	2005	2004

John Hancock Lifestyle Growth
John Hancock Lifestyle Balanced
John Hancock Lifestyle Moderate
T. Rowe Price Sci/Tech
Templeton Small Co.
American Europacific
Oppenheimer Global
T. Rowe Price Blue Chip
Mutual Discovery
Fidelity Advanced Dividend Growth
Weitz Partners
Pimco Total Return
Fixed Income Fund

[Confirm list above. Please provide performance information for 2004-2006 and provide a one paragraph description for each fund.]

Effective June ___, 2007, the 401(k) Plan changed investment providers to The Hartford and Charles Schwab, for purposes of the Bradford Bancorp, Inc. Stock Fund. Bradford Bank, as Plan Administrator, has selected, and the 401(k) Plan currently offers, the investment choices described below. The annual percentage return on these funds (net of fees) for the prior three years was:

	Fund Name	2006	2005	2004
Lifepath 2040
Lifepath 2030
Lifepath 2020
Hartford Global Tech
Oppenheimer Main St. Small Cap
American Funds EuroPacific Growth
Oppenheimer Global
Growth Fund of America
Mutual Discovery
Hartford Dividend and Growth
American Funds Capital Income Builder
Pimco Total Return
Fixed Income Fund

[Confirm list above. Please provide performance information for 2004-2006 and provide a one paragraph description for each fund.]

The 401(k) Plan now offers the Bradford Bancorp, Inc. Stock Fund as an additional choice to the investment alternatives described above. The Bradford Bancorp, Inc. Stock Fund invests primarily in the common stock of Bradford Bancorp, Inc. Participants in the 401(k) Plan may invest up to 50% [(subject to a __% cash buffer)] or a portion of their 401(k) Plan account balances in Bradford Bancorp, Inc. common stock.

The Bradford Bancorp, Inc. Stock Fund consists of investments in the common stock of Bradford Bancorp, Inc. [and cash.] Each participant’s proportionate undivided beneficial interest in the Bradford Bancorp, Inc. Stock Fund is measured by units. [confirm] The daily [unit] value is calculated by determining the market value of the common stock held and adding to that any cash held by the Stock Fund. This total will be divided by the number of [units] outstanding to determine the [unit value] of the Bradford Bancorp, Inc. Stock Fund.

Upon payment of a cash dividend, the [unit value] will be determined prior to distributing the dividend. The dividend will be used, to the extent practicable, to purchase shares of Bradford Bancorp, Inc. common stock. Pending investment in the common stock, assets held in the Bradford Bancorp, Inc. Stock Fund will be placed in bank deposits and other short-term investments. [confirm]

As of the date of this prospectus supplement, no shares of Bradford Bancorp, Inc. common stock have been issued or are outstanding and there is no established market for Bradford Bancorp, Inc. common stock. Accordingly, there is no record of the historical performance of the Bradford Bancorp, Inc. Stock Fund. The performance of the Bradford Bancorp, Inc. Stock Fund will depend on a number of factors, including the financial condition and profitability of Bradford Bancorp, Inc. and Bradford Bank and general market conditions for Bradford Bancorp, Inc. common stock.

Benefits Under the 401(k) Plan [confirm]

Vesting. 401(k) Plan participants are 100% vested in their elective salary deferrals and employer contributions. [confirm]

Withdrawals and Distributions From the 401(k) Plan

Withdrawals Before Termination of Employment. You may receive in-service distributions from the 401(k) Plan under limited circumstances in the form of hardship distributions and loans. In order to qualify for a hardship withdrawal, you must have an immediate and substantial need to meet certain expenses and have no other reasonably available resources to meet the financial need. If you qualify for a hardship distribution, the 401(k) Plan trustee will make the distribution proportionately from the investment funds in which you have invested your account balances. Participants and beneficiaries are also eligible for 401(k) Plan loans, subject to the procedures and requirements established by the Plan Administrator. You may obtain additional information from ________________ at Bradford Bank.

Distribution Upon Retirement or Disability. Upon retirement or disability, you may receive a full lump sum payment or installment payments from the 401(k) Plan equal to the value of your account.

Distribution Upon Death. If you die before your benefits are paid from the 401(k) Plan, your benefits will be paid to your surviving spouse or beneficiary under one or more of the forms available under the 401(k) Plan.

Distribution Upon Termination for Any Other Reason. If you terminate employment for any reason other than retirement, disability or death and your account balance exceeds $1,000, the 401(k) Plan trustee will make your distribution on your normal retirement date, unless you request otherwise. If your account balance does not exceed $1,000, the trustee will generally distribute your benefits to you as soon as administratively practicable following termination of employment. [confirm]

Distributions: Rollovers and Direct Transfers to Another Qualified Plan or to an IRA. You may roll over virtually all distributions from the 401(k) Plan to another qualified retirement plan or to an individual retirement account.

Nonalienation of Benefits. Except with respect to federal income tax withholding and as provided for under a qualified domestic relations order, benefits payable under the 401(k) Plan will not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any rights to benefits payable under the 401(k) Plan will be void.

Applicable federal tax law requires the 401(k) Plan to impose substantial restrictions on your right to withdraw amounts held under the 401(k) Plan before your termination of employment with Bradford Bank. Federal law may also impose an excise tax on withdrawals from the 401(k) Plan before you attain 59½ years of age, regardless of whether the withdrawal occurs during your employment with Bradford Bank or after your termination of employment.

401(k) Plan Trustee

The trustee of the 401(k) Plan is the named fiduciary of the 401(k) Plan for purposes of ERISA. The board of directors of Bradford Bank has appointed [________________] to serve as trustee for the 401(k) Plan. [separate trustee for Stock Fund?] The 401(k) Plan trustee receives, holds and invests the assets of the 401(k) Plan (including the Bradford Bancorp, Inc. Stock Fund) and provides for their distribution to participants and beneficiaries in accordance with the terms of the 401(k) Plan.

401(k) Plan Administrator

The current Plan Administrator is Bradford Bank. The Plan Administrator is responsible for the administration of the 401(k) Plan, selection of investment funds under the 401(k) Plan, interpretation of the provisions of the 401(k) Plan, prescribing procedures for filing applications for benefits, preparation and distribution of information explaining the 401(k) Plan, maintenance of records, books of account and all other data necessary for the proper administration of the 401(k) Plan, preparation and filing of all returns and reports required to be filed with the U.S. Department of Labor and the Internal Revenue Service, and for all disclosures to participants, beneficiaries and others required under ERISA.

Reports to 401(k) Plan Participants

Bradford Bank, as Plan Administrator, will furnish you a statement at least quarterly showing the balance in your account as of the end of that period, the amount of contributions allocated to your account for that period, and any adjustments to your account to reflect earnings or losses.

Amendment and Termination

Bradford Bank expects to continue the 401(k) Plan indefinitely. Nevertheless, Bradford Bank may terminate the 401(k) Plan at any time. If Bradford Bank terminates the 401(k) Plan in whole or in part, regardless of any contrary provisions of the 401(k) Plan, all affected participants will become fully vested in their accounts. Bradford Bank reserves the right to make, from time to time, changes which do not cause any part of the trust to be used for, or diverted to, any purpose other than the exclusive benefit of participants or their beneficiaries; provided, however, that Bradford Bank may also amend the 401(k) Plan as it determines necessary or desirable, with or without retroactive effect, to comply with ERISA or the Internal Revenue Code.

Merger, Consolidation or Transfer

If the 401(k) Plan merges or consolidates with another plan or transfers the 401(k) Plan assets to another plan, and if either the 401(k) Plan or the other plan is then terminated, you would receive a benefit immediately after the merger, consolidation or transfer that would be equal to or greater than the benefit you would have been entitled to receive immediately before the merger, consolidation or transfer.

Federal Income Tax Consequences

The following summarizes only briefly the material federal income tax aspects of the 401(k) Plan. You should not rely on this summary as a complete or definitive description of the material federal income tax consequences relating to the 401(k) Plan. Statutory provisions change, as do their interpretations, and their application may vary in individual circumstances. Finally, the consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws. You should consult with your tax advisor with respect to any transaction involving the 401(k) Plan and any distribution from the 401(k) Plan.

As a “tax-qualified retirement plan,” the Internal Revenue Code affords the 401(k) Plan certain tax advantages, including the following:

(1) The sponsoring employer is allowed an immediate tax deduction for the amount contributed to the 401(k) Plan each year;

(2) Participants pay no current income tax on amounts contributed by the employer on their behalf; and

(3) Earnings of the 401(k) Plan are tax-deferred, thereby permitting the tax-free accumulation of income and gains on investments.

Bradford Bank administers the 401(k) Plan to comply with the operational requirements of the Internal Revenue Code as of the applicable effective date of any change in the law. If Bradford Bank should receive an adverse determination letter regarding the 401(k) Plan’s tax exempt status from the Internal Revenue Service, all participants would generally recognize income equal to their vested interest in the 401(k) Plan, the participants would not be permitted to transfer amounts distributed from the 401(k) Plan to an Individual Retirement Account or to another tax-qualified retirement plan, and Bradford Bank would be denied certain tax deductions with respect to the 401(k) Plan.

Lump Sum Distribution. A distribution from the 401(k) Plan to a participant or the beneficiary of a participant will qualify as a lump sum distribution if it is made within one taxable year, on account of the participant’s death, disability or separation from service, or after the participant attains age 59½, and consists of the balance credited to the participant under the 401(k) Plan and all other profit sharing plans, if any, maintained by Bradford Bank. The portion of any lump sum distribution included in taxable income for federal income tax purposes consists of the entire amount of the lump sum distribution, less the amount of after-tax contributions, if any, you have made to any other profit sharing plans maintained by Bradford Bank, if the distribution includes those amounts.

Bradford Bancorp, Inc. Common Stock Included in Lump Sum Distribution. If a lump sum distribution includes Bradford Bancorp, Inc. common stock, the distribution generally is taxed in the manner described above. The total taxable amount is reduced, however, by the amount of any net unrealized appreciation with respect to Bradford Bancorp, Inc. common stock; that is, the excess of the value of Bradford Bancorp, Inc. common stock at the time of the distribution over the cost or other basis of the securities to the 401(k) Plan. The tax basis of Bradford Bancorp, Inc. common stock, for purposes of computing gain or loss on its subsequent sale, equals the value of Bradford Bancorp, Inc. common stock at the time of distribution, less the amount of net unrealized appreciation. Any gain on a subsequent sale or other taxable disposition of Bradford Bancorp, Inc. common stock, to the extent of the amount of net unrealized appreciation at the time of distribution, is long-term capital gain, regardless of how long you hold the Bradford Bancorp, Inc. common stock, or the “holding period.” Any gain on a subsequent sale or other taxable disposition of Bradford Bancorp, Inc. common stock that exceeds the amount of net unrealized appreciation at the time of distribution is considered long-term capital gain, regardless of the holding period. The recipient of a distribution may elect to include the amount of any net unrealized appreciation in the total taxable amount of the distribution, to the extent allowed under Internal Revenue Service regulations.

We have provided you with a brief description of the material federal income tax aspects of the 401(k) Plan that are generally applicable under the Internal Revenue Code. We do not intend this to be a complete or definitive description of the federal income tax consequences of participating in or receiving distributions from the 401(k) Plan. Accordingly, you should consult a tax advisor concerning the federal, state and local tax consequences of participating in and receiving distributions from the 401(k) Plan.

Restrictions on Resale

Any “affiliate” of Bradford Bancorp, Inc. under Rules 144 and 405 of the Securities Act of 1933, as amended, who receives a distribution of common stock under the 401(k) Plan, may re-offer or resell such shares only under a registration statement filed under the Securities Act of 1933, as amended, assuming the availability of a registration statement, or under Rule 144 or some other exemption from the registration requirements. An “affiliate” of Bradford Bank is someone who, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, Bradford Bank. Generally, a director, principal officer or major shareholder of a corporation is deemed to be an “affiliate” of that corporation.

Any person who may be an “affiliate” of Bradford Bank may wish to consult with counsel before transferring any common stock they own. In addition, participants should consult with counsel regarding the applicability to them of Section 16 of the Securities Exchange Act of 1934, as amended, which may restrict the sale of Bradford Bancorp, Inc. common stock acquired under the 401(k) Plan or other sales of Bradford Bancorp, Inc. common stock.

Persons who are not deemed to be “affiliates” of Bradford Bank at the time of resale may resell freely any shares of Bradford Bancorp, Inc. common stock distributed to them under the 401(k) Plan, either publicly or privately, without regard to the registration and prospectus delivery requirements of the Securities Act of 1933, as amended, or compliance with the restrictions and conditions contained in the exemptions available under federal law. A person deemed an “affiliate” of Bradford Bank at the time of a proposed resale may publicly resell common stock only under a “re-offer” prospectus or in accordance with the restrictions and conditions contained in Rule 144 of the Securities Act of 1933, as amended, or some other exemption from registration, and may not use this prospectus supplement in connection with any such resale. In general, Rule 144 restricts the amount of common stock which an affiliate may publicly resell in any three-month period to the greater of one percent of Bradford Bancorp, Inc. common stock then outstanding or the average weekly trading volume reported on the Nasdaq Stock Market during the four calendar weeks before the sale. Affiliates may sell only through brokers without solicitation and only at a time when Bradford Bancorp, Inc. is current in filing all required reports under the Securities Exchange Act of 1934, as amended.

SEC Reporting and Short-Swing Profit Liability

Section 16 of the Securities Exchange Act of 1934, as amended, imposes reporting and liability requirements on officers, directors and persons who beneficially own more than ten percent of public companies such as Bradford Bancorp, Inc. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the filing of reports of beneficial ownership. Within ten days of becoming a person required to file reports under Section 16(a), a Form 3 reporting initial beneficial ownership must be filed with the Securities and Exchange Commission. Reporting persons must also report certain changes in beneficial ownership involving allocation or reallocation of assets held in their 401(k) Plan accounts, either on a Form 4 within two business days after a transaction, or annually on a Form 5 within 45 days after the close of a company’s fiscal year.

In addition to the reporting requirements described above, Section 16(b) of the Securities Exchange Act of 1934, as amended, provides for the recovery by Bradford Bancorp, Inc. of profits realized from the purchase and sale, or sale and purchase, of the common stock within any six-month period by any officer, director or any person who beneficially owns more than ten percent of the common stock.

The SEC has adopted rules that exempt many transactions involving the 401(k) Plan from the “short-swing” profit recovery provisions of Section 16(b). The exemptions generally involve restrictions upon the timing of elections to buy or sell employer securities for the accounts of any officer, director or other person who beneficially owns more than ten percent of the common stock.

Except for distributions of the common stock due to death, disability, retirement, termination of employment or under a qualified domestic relations order, persons who are governed by Section 16(b) may be required, under limited circumstances involving the purchase of common stock within six months of a distribution, to hold shares of the common stock distributed from the 401(k) Plan for six months after the distribution date.

LEGAL OPINION

The validity of the issuance of the common stock of Bradford Bancorp, Inc. will be passed upon by Muldoon Murphy & Aguggia LLP, Washington, D.C. Muldoon Murphy & Aguggia LLP acted as special counsel for Bradford Bank in connection with the conversion of Bradford Bank and the stock offering of Bradford Bancorp, Inc.

***SPECIAL ONE-TIME FORM FOR USE IN STOCK OFFERING***

BRADFORD BANK

401(k) Profit Sharing Plan

INVESTMENT FORM


Name of 401(k) Plan Participant:
(Please Print)

Social Security Number:

1. Instructions. In connection with the offering to the public of the common stock of Bradford Bancorp, Inc. (the “Common Stock”), the Bradford Bank 401(k) Profit Sharing Plan (the “401(k) Plan”) now permits participants to direct up to 50% of their 401(k) Plan account balances into a new fund: the Bradford Bancorp, Inc. Stock Fund (the “Stock Fund”). The percentages of your accounts that you direct to be transferred into the Stock Fund will be used to purchase shares of Common Stock in the offering. [Please note that approximately ____ percent (__%) of the total amount that you transfer into the Stock Fund will not be used to purchase shares of Common Stock in the offering, but will instead be held as cash, as discussed on Page 1 of the attached Prospectus Supplement. Approximately __________ percent (__%) of the total amount that you transfer will be used to purchase Common Stock in the offering, rounded down to the nearest $10.00 increment, with any remainder also held in cash within the Stock Fund.]

To transfer 401(k) Plan funds to the Stock Fund, you should complete and return this form to ___________________ at Bradford Bank. This form must be received no later than 4:00 p.m. on ____________, 2007. If you need any assistance in completing this form, please contact _____________ at (410) 377-9600. If you do not complete and return this form by 4:00 p.m. on __________, 2007, your 401(k) Plan funds will continue to be invested in accordance with your prior investment directions, or in accordance with the terms of the 401(k) Plan if you have not provided investment directions. You need not submit this form if you do not wish to purchase Common Stock in the offering with your 401(k) Plan funds. PLEASE KEEP A COPY OF THE COMPLETED FORM FOR YOUR RECORDS.

2. Purchaser Information. Your ability to purchase Common Stock in the offering and to direct your 401(k) Plan funds into the Stock Fund may be based upon your subscription rights. Please indicate only the earliest date that applies to you:

				Check here if you had $50.00 or more on deposit at one of the following as of December 31, 2005:

				· Bradford Bank
				· American Bank (provided the deposit account was acquired by Bradford Bank pursuant to the June 7, 2006 Purchase Agreement)
				· Valley Bank of Maryland
				· Golden Prague Federal Savings and Loan Association
				· Senator Bank

				Check here if you had $50.00 or more on deposit with Bradford Bank as of .

				Check here if you were one of the following borrowers:

				· a borrower of Bradford Bank as of December 14, 1987, whose loan continued to be outstanding as of ____________, 2007
				· a borrower of Golden Prague Federal Savings and Loan Association as of September 27, 1990, whose loan continued to be outstanding at Bradford Bank as of _____________, 2007
				· a borrower of Senator Bank as of September 29, 1988, whose loan continued to be outstanding with Bradford Bank at , 2007

3. Investment Directions. I hereby authorize the Plan Administrator to direct the trustee to transfer the following percentages (in whole percentages only) of each of my 401(k) Plan account balances into the Stock Fund (subject to the maximum total of 50%):

Investment Funds				Percentage
Lifepath 2040
Lifepath 2030
Lifepath 2020
Hartford Global Tech
Oppenheimer Main St. Small Cap
American Funds EuroPacific Growth
Oppenheimer Global
Growth Fund of America
Mutual Discovery
Hartford Dividend and Growth
American Funds Capital Income Builder
Pimco Total Return
Fixed Income Fund

I understand that, if there is not enough Common Stock available in the stock offering to fill my subscription in whole or in part pursuant to the investment directions above, any funds not used to purchase Common Stock will remain in the [ ] Fund until I provide directions to reinvest the funds in accordance with the terms of the 401(k) Plan. [confirm] [purchases on the open market]

4. Acknowledgment of Participant. I understand that this Investment Form shall be subject to all of the terms and conditions of the 401(k) Plan. I acknowledge that I have received a copy of the Prospectus and the Prospectus Supplement.

Signature of Participant			Date

Acknowledgment of Receipt by Plan Administrator. This Investment Form was received by Bradford Bank on the date noted below.

By:
			Date

THE PARTICIPATION INTERESTS REPRESENTED BY THE COMMON STOCK OFFERED HEREBY ARE NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND ARE NOT GUARANTEED BY BRADFORD BANCORP, INC. OR BRADFORD BANK. THE COMMON STOCK IS SUBJECT TO AN INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL INVESTED.

PROSPECTUS

	(Holding Company for Bradford Bank)
	Up to 8,050,000 Shares of Common Stock

This is the initial public offering of shares of common stock of Bradford Bancorp, Inc. Simultaneous with the completion of the offering, Bradford Bancorp will acquire Patapsco Bancorp, Inc. In connection with the merger, Bradford Bancorp will issue an aggregate of approximately 2,172,388 shares of common stock and pay approximately $23.4 million in cash to the stockholders of Patapsco Bancorp. At the maximum of the offering range, former Patapsco Bancorp stockholders will own approximately 20.7% of our outstanding shares of common stock. Additionally, we will contribute $250,000 in cash and 275,000 shares to Bradford Bank Foundation, a charitable foundation to be formed in connection with the initial public offering, which represents 2.6% of our outstanding common stock at the maximum of the offering range. We have applied to have our shares of common stock listed on the Nasdaq Global Market under the symbol “BRAD.”

If you are or were a depositor of Bradford Bank, Valley Bank of Maryland, Golden Prague Federal Savings and Loan Association, Senator Bank or American Bank (provided your American Bank deposit account was acquired by Bradford Bank) or if you are or were a borrower of Bradford Bank, Golden Prague or Senator Bank:

· You may have priority rights to purchase shares of common stock.

If you are a participant in the Bradford Bank 401(k) Profit Sharing Plan:

· You may direct that up to 50% of your account balances in this plan be invested in shares of common stock.

· You will receive a separate supplement to this prospectus that describes your rights under the 401(k) Profit Sharing Plan.

If you fit none of the categories above, but are interested in purchasing shares of our common stock:

· You may have an opportunity to purchase shares of common stock after priority orders are filled.

We are offering up to 8,050,000 shares of common stock for sale on a best efforts basis, subject to certain conditions. We must issue a minimum of 5,950,000 shares to complete the offering. The amount of capital being raised is based on an appraisal of Bradford Bancorp. Most of the terms of this offering are required by regulations of the Office of Thrift Supervision. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, the independent appraiser determines our market value has increased, we may sell up to 9,257,500 shares without giving you further notice or the opportunity to change or cancel your order.

The offering is scheduled to terminate at :00 .m., Eastern time, on [DATE1], 2007. We may extend this termination date without notice to you until [DATE2], 2007, unless the Office of Thrift Supervision approves a later date. Funds received before completion of the offering will be maintained in a segregated account at Bradford Bank or, at our discretion, in a segregated account at an independent insured depository institution. All subscriptions received will earn interest at our statement savings account interest rate, which is currently % per annum.

The minimum purchase is 25 shares. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond [DATE2], 2007. If we extend the offering beyond [DATE2], 2007, we will promptly return the funds of all subscribers who do not reconfirm their subscriptions. If we terminate the offering because we fail to sell the minimum number of shares, the merger is terminated, or for any other reason, we will promptly return your funds with interest at our statement savings account interest rate.

Sandler O’Neill & Partners, L.P. will use its best efforts to assist us in our selling efforts, but is not required to purchase any of the common stock that is offered for sale. Purchasers will not pay a commission to purchase shares of common stock in the offering. All shares offered for sale are offered at a price of $10.00 per share.

We expect our current directors and executive officers, together with their associates, to subscribe for 131,000 shares, which equals an aggregate 1.6% of the shares offered for sale at the maximum of the offering range.

The Office of Thrift Supervision conditionally approved our plan of conversion on , 2007. However, such approval does not constitute a recommendation or endorsement of this offering.

This investment involves a degree of risk, including the possible loss of principal.

Please read “Risk Factors” beginning on page 15.

OFFERING SUMMARY

Price Per Share: $10.00

	Minimum		Maximum		Maximum As Adjusted
Number of shares	5,950,000		8,050,000		9,257,500
Gross cash offering proceeds	$	59,500,00	$	80,500,000	$	92,575,000
Estimated offering expenses (excluding selling agent fees)	$	1,290,750	$	1,290,750	$	1,290,750
Estimated selling agent fees (1)	$	665,125	$	906,625	$	1,045,488
Estimated net cash proceeds	$	57,544,125	$	78,302,625	$	90,238,762
Estimated net cash proceeds per share	$	9.67	$	9.73	$	9.75

(1) For a description of the calculation of Sandler O’Neill & Partners, L. P.’s compensation for the stock offering, please see “The Conversion and Stock Offering—Marketing Arrangements.”

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision nor any state securities regulator has approved or disapproved of these securities or passed upon the accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Sandler O’Neill + Partners, L.P.

The date of this prospectus is , 2007

Table of Contents

	Page

Summary	1
Risk Factors	15
A Warning About Forward-Looking Statements	22
Selected Consolidated Financial and Other Data of Bradford Bank MHC	23
Selected Consolidated Financial and Other Data of Patapsco Bancorp	25
Summary Selected Pro Forma Condensed Consolidated Financial Data	27
Use of Proceeds	28
Our Dividend Policy	29
Market for Common Stock of Bradford Bancorp	30
Capitalization	31
Regulatory Capital Compliance	33
Pro Forma Data	34
Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation	66
Business of Bradford Bancorp	67
Management’s Discussion and Analysis of Bradford Bancorp	75
Business of Patapsco Bancorp	102
Management’s Discussion and Analysis of Patapsco Bancorp	110
Our Management	132
Subscriptions by Executive Officers and Directors	144
Regulation and Supervision	144
Federal and State Taxation	158
The Conversion and Stock Offering	159
The Acquisition of Patapsco Bancorp	178
Bradford Bank Foundation	181
Restrictions on Acquisition of Bradford Bancorp and Bradford Bank	184
Description of Bradford Bancorp Capital Stock	189
Transfer Agent and Registrar	190
Registration Requirements	190
Legal and Tax Opinions	190
Experts	190
Change Accountants	191
Where You Can Find More Information	191
Index to Consolidated Financial Statements	192

Summary

This summary highlights material information from this document and may not contain all the information that is important to you. To understand the stock offering and merger fully, you should read this entire document carefully. For assistance, please call our stock information center at .

The Companies

Bradford Bancorp, Inc.

Bradford Bank

Bradford Bank MHC

Bradford Mid-Tier Company

6910 York Road

Baltimore, Maryland 21212

(410) 377-9600

Bradford Bancorp, Inc. is a Maryland corporation that we recently formed to be the stock holding company for Bradford Bank. Bradford Bancorp has not engaged in any business to date. After the conversion, Bradford Bancorp will own all of Bradford Bank’s capital stock and will direct, plan and coordinate Bradford Bank’s business activities. In the future, Bradford Bancorp might also acquire or organize other operating subsidiaries, including other financial institutions or financial services companies, although it currently has no specific plans or agreements to do so other than the merger with Patapsco Bancorp.

Bradford Bank is a federally chartered savings bank that operates from its corporate headquarters and ten full-service locations in the greater Baltimore metropolitan area. We offer a variety of deposit and loan products to individuals and small businesses, most of which are located in our primary market area, which consists of Baltimore City and Anne Arundel, Baltimore and Howard Counties, Maryland. Since 2001, we have emphasized commercial lending and have grown our commercial loan portfolio (including commercial real estate, acquisition, development and construction, commercial construction and commercial business loans) to $163.2 million, or 41.0% of total loans at March 31, 2007. At March 31, 2007, Bradford Bank had total consolidated assets of $521.6 million, deposits of $428.2 million and total equity of $42.2 million.

Bradford Bank MHC is the federally chartered mutual holding company parent of Bradford Bank. As a mutual holding company, Bradford Bank MHC is a non-stock company. Bradford Bank MHC currently owns all of Bradford Mid-Tier Company’s capital stock. Upon completion of the offering and merger, Bradford Bank MHC will cease to exist.

Bradford Mid-Tier Company is the federally chartered mid-tier stock holding company for Bradford Bank. Bradford Mid-Tier Company currently owns all of Bradford Bank’s capital stock and directs, plans and coordinates Bradford Bank’s business activities. Upon completion of the offering and merger, Bradford Mid-Tier Company will cease to exist and will be succeeded by Bradford Bancorp.

Our website address is www.bradfordbank.net. Information on our website should not be considered a part of this prospectus.

Acquisition of Patapsco Bancorp

Simultaneous with the completion of the offering, Bradford Bancorp will acquire Patapsco Bancorp and its wholly owned subsidiary, The Patapsco Bank. Patapsco Bank is a Maryland chartered commercial bank that operates out of five locations in the greater Baltimore metropolitan area. In connection with the merger, Bradford Bancorp will issue an aggregate of approximately 2,172,388 shares of common stock and pay approximately $23.4 million in cash to the stockholders of Patapsco Bancorp. At the maximum of the offering range, former Patapsco Bancorp stockholders will own approximately 20.7% of Bradford Bancorp.

Completion of the merger is expected to increase Bradford Bank’s deposit base and its loan portfolio, and provide Bradford Bank with greater access to customers in the greater metropolitan Baltimore area, particularly in Baltimore County, Maryland. At March 31, 2007, Patapsco Bancorp had total consolidated assets of $254.7 million, deposits of $190.2 million and stockholders’ equity of $19.3 million.

Immediately following the merger with Patapsco Bancorp, the composition of our board of directors and executive management will change. One of our current directors, George K. Mister, Jr., has informed us that he will resign from our board of directors upon completion of the merger. At that time, we will also expand the size of the board and appoint Nicole N. Glaeser and Thomas P. O’Neill, currently directors of Patapsco Bancorp, to the boards of directors of Bradford Bancorp and Bradford Bank. In addition, we will appoint David L. Costello, III, our current Executive Vice President and Chief Financial Officer, as Executive Vice President and Chief Operating Officer and appoint Michael J. Dee, the current President, Chief Executive Officer and Chief Financial Officer of Patapsco Bancorp, as Senior Vice President and Chief Financial Officer of Bradford Bancorp and Bradford Bank.

We cannot complete the merger unless we have received the approval of the Office of Thrift Supervision and the Maryland Office of Financial Regulation. We made the necessary filings with both agencies and received the requisite approvals.

In addition, we cannot complete the merger unless Patapsco Bancorp’s stockholders approve the merger agreement. Patapsco Bancorp’s stockholders will vote on the merger at a meeting to be held on , 2007. Each director of Patapsco Bancorp has signed an agreement to vote his or her shares of Patapsco Bancorp common stock in favor of the merger. In the aggregate, Patapsco Bancorp directors owned % of the issued and outstanding shares of Patapsco Bancorp common stock as of the , 2007 record date for the Patapsco Bancorp meeting of stockholders.

Impact of the Termination of the Acquisition of Patapsco Bancorp on the Offering

Although the completion of the offering is not contingent on acquisition of Patapsco Bancorp, the timing and manner of the offering would be subject to significant modification in the event the acquisition is terminated. If the merger agreement with Patapsco Bancorp is terminated, the current offering may be canceled, a new offering range and price per share set and a new offering held. Under those circumstances, all funds would be promptly returned and all subscribers would be given the opportunity to place a new order. Any new valuation range must be approved by the Office of Thrift Supervision.

Recently Completed Acquisitions

Recently, we have sought to expand our franchise through acquisition opportunities. These acquisitions have extended our footprint to areas previously not served by our branch network. In particular, in 2006 and 2007, Bradford Bank acquired three financial institutions and acquired the deposits of a branch office of a fourth financial institution.

Senator Bank. On June , 2007, Bradford Bank completed a merger with Senator Bank, Cockeysville, Maryland, with Bradford Bank as the surviving financial institution. We retained Senator Bank’s one office located in Baltimore County, Maryland. At March 31, 2007, Senator Bank had total assets of $21.4 million, deposits of $20.1 million and total equity of $1.4 million. No purchase price was paid for the acquisition since Senator Bank was a federally chartered mutual savings bank with no stockholders.

Golden Prague Federal Savings and Loan Association. On June , 2007, Bradford Bank completed a merger with Golden Prague Federal Savings and Loan Association, Baltimore, Maryland, with Bradford Bank as the surviving financial institution. We expect to close both Golden Prague branch offices in Baltimore County and Baltimore City, Maryland due to the proximity of these offices to current Bradford Bank or Patapsco Bank branch offices. At March 31, 2007, Golden Prague had total assets of $29.3 million, deposits of $24.8 million and total equity of $2.3 million. No purchase price was paid for the acquisition since Golden Prague was a federally chartered mutual savings and loan association with no stockholders.

Valley Bancorp, Inc. In January 2007, Bradford Mid-Tier Company completed a $9.3 million acquisition of Valley Bancorp, Inc., Hunt Valley, Maryland, and merged Bradford Bank with Valley Bancorp’s wholly-owned subsidiary, Valley Bank of Maryland, with Bradford Bank as the surviving financial institution. We retained Valley Bank’s one full service office located in Baltimore County, Maryland and closed an administrative office. At December 31, 2006, Valley Bancorp had total assets of $50.9 million, deposits of $37.3 million and total equity of $5.4 million.

American Bank — Acquisition of Deposits of Ellicott City Branch. In October 2006, Bradford Bank completed the acquisition of $6.4 million of deposits located at the Ellicott City branch of American Bank, Silver Spring, Maryland.

The Conversion and our Corporate Structure

Currently, we are in the mutual holding company form of organization with no public stockholders. Our depositors and certain borrowers currently have the right to vote on certain matters such as the election of directors and this conversion.

The conversion process that we are now undertaking involves a series of transactions by which we will convert our organization from the mutual holding company form of organization with no public stockholders to the public stock holding company form of organization. In the public stock holding company structure, Bradford Bank will remain a federally chartered stock savings bank and all of its stock will be owned by Bradford Bancorp. All of Bradford Bancorp’s stock will be owned by the public, including our employee stock ownership plan, and by Bradford Bank Foundation. The normal business operations of Bradford Bank will continue without interruption during the conversion. After the conversion, Bradford Bank MHC and Bradford Mid-Tier Company will cease to exist and depositors and borrowers of Bradford Bank will no longer have any voting or membership rights.

The following diagram depicts our corporate structure after the offering and merger with Patapsco Bancorp:

Our Business Strategy (page )

Our business strategy is to operate and grow a profitable community-oriented financial institution. We plan to achieve this by executing our strategy of:

· expanding our franchise and footprint through acquisition opportunities, such as our merger with Patapsco Bancorp, and through the opening of additional branch offices;

· continuing to increase commercial relationships in our primary market area;

· selectively pursuing opportunities to increase our indirect automobile lending program;

· increasing our deposit market share in our expanding market area;

· growing non-interest income by continuing to increase our sale of non-deposit products and expanding the products and services we offer our customers; and

· applying conservative underwriting practices to maintain the high quality of our loan portfolio.

The Offering

Purchase Price

The purchase price is $10.00 per share. You will not pay a commission to buy any shares in the offering.

Number of Shares to be Sold

We are offering for sale between 5,950,000 and 8,050,000 shares of Bradford Bancorp common stock in this offering. The amount of capital being raised is based on an appraisal of Bradford Bancorp. Most of the terms of this offering are required by Office of Thrift Supervision regulations. With regulatory approval, we may increase the number of shares to be issued to 9,257,500 shares without giving you further notice or the opportunity to change or cancel your order. In considering whether to increase the offering size, the Office of Thrift Supervision will consider the level of subscriptions, the views of our independent appraiser, our financial condition and results of operations and changes in market conditions.

How We Determined the Offering Range (page )

We decided to offer between 5,950,000 and 8,050,000 shares, which is our offering range, based on an independent appraisal of our pro forma market value prepared by RP Financial, LC., an appraisal firm experienced in appraisals of financial institutions. RP Financial will receive fees totaling $90,000 for the preparation and delivery of the original appraisal report, plus reimbursement of out-of-pocket expenses and $10,000 for the preparation and delivery of each required updated appraisal report (of which there will be at least one). RP Financial estimates that as of May 29, 2007, our offering range was between $59.5 million and $80.5 million, with a midpoint of $70.0 million, and that our pro forma market value was between $84.0 million and $105.0 million, with a midpoint of $94.5 million, inclusive of shares issued to Patapsco Bancorp stockholders in connection with the merger and shares issued to the charitable foundation.

In preparing its appraisal, RP Financial considered the information in this prospectus, including our consolidated financial statements, as well as the impact of the merger with Patapsco Bancorp, the acquisition of Golden Prague and Senator Bank and the impact of the contribution of shares to the charitable foundation. RP Financial also considered the following factors, among others:

· our historical, present and projected operating results and financial condition and the economic and demographic characteristics of our market area;

· a comparative evaluation of the operating and financial statistics of Bradford Bank with those of other similarly-situated, publicly-traded savings bank and savings bank holding companies;

· the effect of the capital raised in this offering on our net worth and earnings potential; and

· the trading market for securities of comparable institutions and general conditions in the market for such securities.

Two measures that some investors use to analyze whether a stock might be a good investment are the ratio of the offering price to the issuer’s “tangible book value” and the ratio of the offering price to the issuer’s annual core earnings. RP Financial considered these ratios in preparing its appraisal, among other factors. Tangible book value is the same as total equity, less intangibles, and represents the difference between the issuer’s tangible assets and liabilities. Core earnings, for purposes of the appraisal, was defined as net earnings after taxes, excluding the after-tax portion of income from nonrecurring items. RP Financial’s appraisal also incorporates an analysis of a peer group of publicly traded fully converted savings banks and fully converted savings bank holding companies that RP Financial considered to be comparable to us.

The following table presents a summary of selected pricing ratios for the peer group companies and for us utilized by RP Financial in its appraisal. These ratios are based on earnings for the 12 months ended March 31, 2007 and book value as of March 31, 2007.

	Price To Earnings Multiple		Price To Book Value Ratio		Price to Tangible Book Value Ratio

Bradford Bancorp (pro forma):
Minimum	47.11	x	73.80	%	116.82	%
Maximum	51.03	x	79.49	%	117.10	%
Maximum, as adjusted	52.84	x	82.10	%	117.65	%

Peer group companies as of May 29, 2007:
Average	16.50	x	135.15	%	146.63	%

Compared to the average pricing ratios of the peer group at the maximum of the offering range, our stock would be priced at a premium of 209.3% to the peer group on a price-to-earnings basis, a discount of 41.2% to the peer group on a price-to-book basis and a discount of 20.1% to the peer group on a price-to-tangible book basis. This means that, at the maximum of the offering range, a share of our common stock would be more expensive than the peer group based on an earnings per share basis and less expensive than the peer group based on a book value per share basis and a tangible book value per share basis.

The independent appraisal does not indicate market value. You should not assume or expect that the valuation described above means that our common stock will trade at or above the $10.00 purchase price after the public offering.

Possible Change in Offering Range (page )

RP Financial will update its appraisal before we complete the offering. If, as a result of regulatory considerations, demand for the shares or changes in market conditions, RP Financial determines that our pro forma market value has increased, we may sell up to 9,257,500 shares without further notice to you. If our pro forma market value including shares issued to Patapsco Bancorp and contributed to Bradford Bank Foundation at that time is either below $84.0 million or above $117.0 million, then, after consulting with the Office of Thrift Supervision, we may: terminate the stock offering and promptly return all funds; promptly return all funds, set a new offering range and give all subscribers the opportunity to modify or rescind their purchase orders for shares of Bradford Bancorp’s common stock; or take such other actions as may be permitted by the Office of Thrift Supervision and the Securities and Exchange Commission.

Possible Termination of the Offering

We must sell a minimum of 5,950,000 shares to complete the offering. If we terminate the offering because the merger is terminated or because we fail to sell the minimum number of shares or for any other reason, we will promptly return your funds with interest at our statement savings account interest rate.

After-Market Performance of Mutual-to-Stock Conversion Offerings

The following table provides information regarding the after-market performance of the mutual-to-stock conversion offerings completed from January 1, 2005 through May 29, 2007.

		Appreciation From Initial Offering Price
Issuer (Market/Symbol)	Date of IPO	After 1 Day		After 1 Week		After One Month		Through 5/29/07
CMS Bancorp, Inc. (Nasdaq: CMSB)	04/04/07	5.5	%	4.7	%	3.0	%	5.5	%
Essa Bancorp, Inc. (Nasdaq: ESSA)	04/04/07	17.8		20.6		14.8		14.1
Hampden Bancorp, Inc. (Nasdaq: HBNK)	01/17/07	28.2		25.0		23.4		16.0
Chicopee Bancorp, Inc. (Nasdaq: CBNK)	07/20/06	44.6		42.5		45.2		56.0
Newport Bancorp, Inc. (Nasdaq: NFSB)	07/07/06	28.0		28.8		31.0		37.0
Legacy Bancorp, Inc. (Nasdaq: LEGC)	10/26/05	30.3		34.0		32.0		49.8
BankFinancial Corp. (Nasdaq: BFIN)	06/24/05	36.0		34.0		36.0		62.9
Benjamin Franklin Bancorp, Inc. (Nasdaq: BFBC)	04/05/05	0.6		3.9		2.5		54.0
OC Financial Inc. (OTCBB: OCFL)	04/01/05	20.0		8.0		10.0		8.1
Royal Financial Inc. (OTCBB: RYFL)	01/21/05	16.0		26.0		25.4		60.0
Average – all transactions		22.7		22.8		22.3		36.3
Average – Nasdaq listed companies		23.9		21.9		24.7		36.9
Average – OTCBB quoted companies		18.0		17.0		17.7		34.1

This table is not intended to be indicative of how our stock may perform. Furthermore, this table presents only short-term price performance with respect to several companies that only recently completed their initial public offerings and may not be indicative of the longer-term stock price performance of these companies. Stock price appreciation is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the company’s market area. The companies listed in the table above may not be similar to Bradford Bancorp, the pricing ratios for their stock offerings were in some cases different from the pricing ratios for Bradford Bancorp’s common stock and the market conditions in which these offerings were completed were, in some cases, different from current market conditions. In addition, none of the companies listed, other than Benjamin Franklin Bancorp, completed a conversion offering simultaneously with a merger with another financial institution. Any or all of these differences may cause our stock to perform differently from these other offerings. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the “Risk Factors” section.

You should be aware that, in certain market conditions, stock prices of thrift initial public offerings have decreased. We can give you no assurance that our stock will not trade below the $10.00 purchase price or that our stock will perform similarly to other recent mutual to stock conversions.

Conditions to Completing the Offering

We are conducting the offering under the terms of our plan of conversion. We cannot complete the offering unless we sell at least the minimum number of shares offered and we receive the final approval of the Office of Thrift Supervision to complete the offering.

Reasons for the Offering (page )

Our primary reasons for this offering are the following:

· The offering will facilitate the acquisition of Patapsco Bancorp by enabling us to issue stock and raise cash to pay the merger consideration.

· The proceeds from the offering will increase the capital of Bradford Bank, which will support future lending and operational growth, including future expansion through branching.

· The offering allows us to implement equity compensation plans to retain and attract qualified directors, officers and staff and to enhance our current compensation programs.

· The public stock holding company structure will give us greater flexibility in structuring further mergers and acquisitions, including the form of consideration that we can use to pay for an acquisition. Our current mutual holding company structure significantly limits our ability in offering shares of common stock as consideration in a merger or acquisition. Our new stock holding company structure will enhance our ability to compete with other bidders when acquisition opportunities arise by enhancing our ability to offer stock or cash consideration, or a combination of the two. Other than our agreement to acquire Patapsco Bancorp, we currently have no agreements or understandings as to any specific acquisition.

We Will Form Bradford Bank Foundation

To continue our long-standing commitment to our local communities, we intend to establish a charitable foundation, named “Bradford Bank Foundation,” as part of the offering. The charitable foundation will be funded with 275,000 shares of Bradford Bancorp common stock and $250,000 in cash. The common stock contributed to the charitable foundation is in addition to the shares being offered for sale and exchanged in the merger and will not be included in determining whether the minimum number of shares of common stock has been sold to complete the offering. Our contribution to the charitable foundation would reduce net earnings by up to $1.8 million, after tax, in the year in which the charitable foundation is established, which is expected to be fiscal 2007. Bradford Bank Foundation will make charitable grants and donations and support projects located within our market areas.

The amount of common stock that we would offer for sale would be greater if the offering were to be completed without the formation of Bradford Bank Foundation. For a further discussion of the financial impact of the charitable foundation, including its effect on those who purchase shares in the offering and on the shares issued to stockholders of Bradford Bancorp, see “Comparison of Independent Valuation and Pro Forma Financial Information With and Without the Foundation.”

Benefits of the Offering to Management (page )

We intend to adopt the benefit plans and employment agreements described below. Bradford Bancorp will recognize compensation expense related to the employee stock ownership plan and the equity incentive plan. The actual expense will depend on the market value of Bradford Bancorp’s common stock and, with respect to the employee stock ownership plan, will fluctuate in response to changes in the trading price of Bradford Bancorp’s

common stock, increasing if the trading price increases. As reflected under “Pro Forma Data,” based upon assumptions set forth therein, the annual expense related to the employee stock ownership plan and the equity incentive plan would be approximately $220,000 and $1.0 million, respectively, assuming shares are sold in the offering at the maximum of the offering range and that our shares are valued at $10.00 per share. See “Pro Forma Data” for a detailed analysis of the effects of each of these plans.

Employee Stock Ownership Plan. We intend to establish an employee stock ownership plan that will purchase an amount of shares equal to 8.00% of the shares sold in the offering, as well as shares contributed to Bradford Bank Foundation. However, if Bradford Bank’s tangible capital is not at least 10% following the offering, the amount of shares purchased by the employee stock ownership plan may be reduced to 7.0% of the shares sold in the offering, as well as shares contributed to Bradford Bank Foundation. The plan will use the proceeds from a 20-year loan from Bradford Bancorp to purchase these shares. As the loan is repaid and shares are released from collateral, the shares will be allocated to the accounts of employee participants. Allocations will be based on a participant’s individual compensation as a percentage of total plan compensation. Non-employee directors are not eligible to participate in the employee stock ownership plan.

Equity Incentive Plan. We intend to implement an equity incentive plan no earlier than six months after completion of the offering. Under current Office of Thrift Supervision regulations, if the plan is implemented within one year after the conversion, the plan must be approved by a majority of the total votes eligible to be cast and if the plan is implemented more than one year after the conversion, the plan must be approved by a majority of the total votes cast. Under this plan, if implemented within one year after the conversion, we may grant stock options in an amount up to 10.0% of the number of shares sold in the offering, as well as shares contributed to Bradford Bank Foundation and restricted stock awards in an amount equal to 4.0% of the shares issued in the offering, as well as shares contributed to Bradford Bank Foundation. However, if the plan is implemented within one year after the conversion and Bradford Bank’s tangible capital is not at least 10% at the time the plan is implemented, Office of Thrift Supervision regulations limit the amount of shares reserved for restricted stock eligible for award to 3.0% of the shares sold in the offering, as well as shares contributed to Bradford Bank Foundation. These limitations will not apply if the plan is implemented more than one year after the conversion. Shares of restricted stock will be awarded at no cost to the recipient. Stock options will be granted at an exercise price equal to 100% of the fair market value of our common stock on the option grant date.

The following table summarizes, at the maximum of the offering range, the total number and value of the shares of common stock that the employee stock ownership plan expects to acquire and the total value of all restricted stock awards and stock options that are expected to be available under the equity incentive plan, assuming the plan is implemented within one year after the conversion. At the maximum of the offering range, we will sell 8,050,000 shares and have 10,497,388 shares outstanding after the offering and merger. The number of shares reflected for the benefit plans in the table below assumes that Bradford Bank’s tangible capital will be 10% or more following the completion of the offering and the application of the net proceeds as described under “Use of Proceeds.”

	Number of Shares to be Granted or Purchased
(Dollars in thousands)	At Maximum of Offering Range	As a % of Common Stock Issued at Maximum of Offering Range (1)		As a % of Common Stock Outstanding After the Offering and Merger (2)		Total Estimated Value of Grants
						(In thousands)
Employee stock ownership plan (3)	666,000	8.00	%	6.34	%	$	6,660
Restricted stock awards (3)	333,000	4.00		3.17		3,330
Stock options (4)	832,500	10.00		7.93		3,222
Total	1,831,500	22.00	%	17.44	%	$	13,212

(1) Reflects the amount of shares in the respective plans as a percentage of total shares sold in the offering, as well as shares contributed to Bradford Bank Foundation. Does not reflect shares issued in the acquisition of Patapsco Bancorp.

(2) Reflects the amount of shares in the respective plans as a percentage of total shares sold in the offering, as well as shares contributed to Bradford Bank Foundation and issued in the acquisition of Patapsco Bancorp.

(3) Assumes the value of Bradford Bancorp common stock is $10.00 per share for purposes of determining the total estimated value of the grants.

(4) Assumes the value of a stock option is $3.87, which was determined using the Black-Scholes option-pricing formula assuming a share price of $10.00 as the date of grant. See “Pro Forma Data.”

Employment Agreements. We intend to enter into employment agreements with Dallas R. Arthur, our President and Chief Executive Officer, David L. Costello, III, who will serve as our Executive Vice President and Chief Operating Officer, and Michael J. Dee, who will serve as our Senior Vice President and Chief Financial Officer. These agreements will provide for severance benefits if the executives are terminated following a change in control of Bradford Bancorp or Bradford Bank. Based solely on cash compensation for the year ended December 31, 2006 and excluding any benefits that would be payable under any employee benefit plan, if a change in control of Bradford Bancorp occurred and we terminated all officers with employment agreements, the total cash payments due under the employment agreements would be approximately $2.5 million.

Employee Severance Compensation Plan. This plan will provide severance benefits to eligible employees if there is a change in control of Bradford Bancorp or Bradford Bank. Based solely on compensation and service levels as of December 31, 2006, the total payments due under the terms of the severance plan would be approximately $830,000.

The Offering Will Not Be Taxable to Persons Receiving Subscription Rights (page )

As a general matter, the offering will not be a taxable transaction for purposes of federal or state income taxes to persons who receive or exercise subscription rights. We have received an opinion from our counsel, Muldoon Murphy & Aguggia LLP that, for federal income tax purposes, it is more likely than not that the members of Bradford Bank MHC will not realize any income upon the issuance or exercise of the subscription rights.

Persons Who Can Order Stock in the Offering (page )

We have granted rights to subscribe for shares of Bradford Bancorp common stock in a “subscription offering” to the following persons in the following order of priority:

1. Persons with $50 or more on deposit as of December 31, 2005 at the following institutions:

· Bradford Bank;

· American Bank (provided the deposit account in American Bank was acquired by Bradford Bank pursuant to the Purchase Agreement by and between American Bank and Bradford Bank, dated June 7, 2006);

· Valley Bank of Maryland;

· Golden Prague Federal Savings and Loan Association; and

· Senator Bank.

2. Our employee stock ownership plan, which provides retirement benefits to our employees.

3. Persons with $50 or more on deposit as of , 2007 at Bradford Bank.

4. Bradford Bank’s depositors as of , 2007, who were not able to subscribe for shares under categories 1 and 3 and the following borrowers:

· borrowers of Bradford Bank as of December 14, 1987 whose loans continued to be outstanding at , 2007;

· borrowers of Golden Prague Federal Savings and Loan Association as of September 27, 1990 whose loans continued to be outstanding with Bradford Bank at , 2007; and

· borrowers of Senator Bank as of September 29, 1988 whose loans continued to be outstanding with Bradford Bank at , 2007.

If we receive subscriptions for more shares than are to be sold in this offering, we may be unable to fill or may only partially fill your order. Shares will be allocated in order of the priorities described above under a formula outlined in the plan of conversion. Generally, shares first will be allocated so as to permit each eligible subscriber, if possible, to purchase a number of shares sufficient to make the subscriber’s total allocation equal to 100 shares or the number of shares actually subscribed for, whichever is less. After that, unallocated shares will be allocated among the remaining eligible subscribers whose subscriptions remain unfilled in proportion to the amounts their respective qualifying deposits bear to the total qualifying deposits of all remaining eligible subscribers whose subscriptions remain unfilled. If we increase the number of shares to be sold in the offering above 8,050,000, Bradford Bank’s employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. See “The Conversion and Stock Offering—Subscription Offering and Subscription Rights” for a description of the allocation procedure.

We may offer shares not sold in the subscription offering to the general public in a “direct community offering” that can begin concurrently with, during or immediately following the subscription offering. Orders received in the direct community offering will be subordinate to subscription offering orders. Natural persons who are residents of Baltimore City and Anne Arundel, Baltimore and Howard Counties, Maryland will have first preference to purchase shares in the direct community offering. Shares of common stock not purchased in the subscription offering or the direct community offering may be offered for sale through a “syndicated community offering” managed by Sandler O’Neill & Partners, L.P. We have the right to accept or reject, in our sole discretion, orders we receive in the direct community offering and syndicated community offering.

Subscription Rights are Not Transferable

You are not allowed to transfer your subscription rights and we will act to ensure that you do not do so. You will be required to certify that you are purchasing shares solely for your own account and that you have no agreement or understanding with another person to sell or transfer subscription rights or the shares that you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. Eligible depositors who enter into agreements to allow ineligible investors to participate in the subscription offering may be violating federal and state law and may be subject to civil enforcement actions or criminal prosecution. With the exception of IRA and Keogh account stock purchases, shares purchased in the subscription offering must be registered in the names of all depositors on the qualifying account(s). Deleting names of depositors or adding non-depositors or otherwise altering the form of beneficial ownership of a qualifying account will result in the loss of your subscription rights.

How to Purchase Common Stock (page )

In the subscription offering and the community offering, you may pay for your shares by:

1. personal check, bank check or money order made payable directly to Bradford Bancorp (third-party checks of any type will not be accepted); or

2. authorizing us to withdraw money from your Bradford Bank deposit account(s) other than checking accounts or individual retirement accounts (“IRAs”). To use funds from accounts with check writing privileges, please submit a check payable directly to Bradford Bancorp. To use IRA funds, please see the next section.

Bradford Bank is not permitted to lend funds (including funds drawn on a Bradford Bank line of credit) to anyone for the purpose of purchasing shares of common stock in the offering. Also, payment may not be made by wire transfer.

Checks and money orders will be immediately cashed, so the funds must be available within the account when we receive your stock order form. Do not overdraw your account. The funds will be deposited by us into a Bradford Bank segregated account. We will pay interest at Bradford Bank’s statement savings account interest rate from the date those funds are received until completion or termination of the offering. Withdrawals from certificates

of deposit at Bradford Bank for the purpose of purchasing common stock in the offering may be made without incurring an early withdrawal penalty. All funds authorized for withdrawal from deposit accounts with Bradford Bank must be available within the deposit accounts at the time the stock order form is received. A hold will be placed on the amount of funds designated on your stock order form. Those funds will be unavailable to you during the offering; however, the funds will not be withdrawn from the accounts until the offering is completed and will continue to earn interest at the applicable contractual deposit account rate until the completion of the offering.

You may submit your order form in one of three ways: by mail, using the reply envelope provided; by overnight courier to the address indicated on the order form; or by taking the stock order form and payment to our stock information center, located at , , Maryland . Stock order forms may not be hand-delivered to our branch offices. Our branch offices will not have stock offering materials on hand. Once submitted, your order is irrevocable. We will not accept copies or facsimiles of order forms.

Using IRA Funds to Purchase Shares in the Offering (page )

You may be able to subscribe for shares of common stock using funds in your individual retirement account(s), or IRA, provided that such IRAs are not maintained at Bradford Bank. If you wish to use some or all of the funds in your Bradford Bank IRA, the applicable funds must first be transferred to a self-directed account maintained by an unaffiliated institutional trustee or custodian, such as a brokerage firm. If you do not have such an account, you will need to establish one and transfer your funds before placing your stock order. Our stock information center can give you guidance in this regard. Because processing this type of order takes additional time, we recommend that you contact our stock information center promptly, preferably at least two weeks before the [DATE1], 2007 offering deadline. Whether you may use retirement funds for the purchase of shares in the stock offering will depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

Purchase Limitations (page )

Our plan of conversion establishes limitations on the purchase of stock in the public offering. These limitations include the following:

· The minimum purchase is 25 shares.

· No individual (or individuals exercising subscription rights through a single deposit account held jointly) may purchase more than $100,000 of common stock (which equals 10,000 shares) in the public offering.

· No individual, together with any associates, and no group of persons acting in concert may purchase more than $500,000 of common stock (which equals 50,000 shares) in the public offering. For purposes of applying this limitation, your associates include:

· your spouse, or any relative of your spouse, who either lives in your home or who is a director or officer of Bradford Bank;

· companies or other entities in which you are a senior officer or partner or have a 10% or greater beneficial ownership interest; and

· trusts or other estates in which you have a substantial beneficial interest or as to which you serve as a trustee or in another fiduciary capacity.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to this overall purchase limitation. We have the right to determine, in our sole discretion, whether prospective purchasers are associates or acting in concert.

Subject to the Office of Thrift Supervision’s approval, we may increase or decrease the purchase limitations at any time. Our tax-qualified employee benefit plans, including our employee stock ownership plan, are

authorized to purchase in the aggregate up to 8.00% of the shares sold in the offering, as well as shares contributed to Bradford Bank Foundation without regard to these purchase limitations.

Deadline for Ordering Stock (page )

The subscription offering will end at :00 .m., Eastern time, on [DATE1], 2007. If you wish to purchase shares, a properly completed and signed original stock order form, together with full payment for the shares of common stock, must be received by us (not postmarked) no later than this time. We expect that the direct community offering, if held, will terminate at the same time, although it may continue for up to 45 days after the end of the subscription offering, or longer if regulators approve a later date. No single extension may be for more than 90 days. If we extend the offering beyond [DATE2], 2007, all subscribers will be notified and given the opportunity to confirm, change or cancel their orders. If you do not respond to this notice, we will promptly return your funds with interest at our passbook rate or cancel your deposit account withdrawal authorization. If we intend to sell fewer than 5,950,000 shares or more than 9,257,500 shares (in each case after taking into account shares to be exchanged in the merger), we will promptly return all funds, set a new offering range and all subscribers will be notified and given the opportunity to confirm, change or cancel their orders.

How We Will Use the Proceeds of this Offering (page )

The following table summarizes how we will use the proceeds of this offering, based on the sale of shares at the minimum and maximum of the offering range.

(In thousands)	5,950,000 Shares at $10.00 Per Share			8,050,000 Shares at $10.00 Per Share

Gross offering proceeds	$	59,500		$	80,500
Less: offering expenses	(1,956		)	(2,197		)
Net offering proceeds	57,544			78,303

Less:
Proceeds contributed to Bradford Bank (1)	(41,533		)	(60,612		)
Merger costs and restructuring charges (2)	(2,781		)	(2,781		)
Proceeds used for loan to employee stock ownership plan	(4,980		)	(6,660		)
Proceeds contributed to Bradford Bank Foundation	(250		)	(250		)
Proceeds used to pay The Bankers Bank loan	(3,000		)	(3,000		)
Proceeds remaining for Bradford Bancorp	$	5,000		$	5,000

(1) Approximately $23.4 million of the funds contributed to Bradford Bank will be used to fund the cash portion of the purchase price for Patapsco Bancorp.

(2) Includes $766,000, $1.6 million and $495,000 respectively of non-tax deductible merger costs, tax deductible merger costs and restructuring costs.

Bradford Bancorp also will use a portion of the proceeds that it retains to make quarterly payments on the $5.0 million of 6.465% junior subordinated debentures that it will assume in the merger of Patapsco Bancorp. Initially, Bradford Bancorp intends to invest the proceeds that it retains in short-term liquid investments. In the future, Bradford Bancorp may use the portion of the proceeds that it retains to, among other things, invest in securities, pay cash dividends or repurchase shares of common stock, subject to regulatory restrictions. Bradford Bank intends to use the proceeds it receives for investment in short-term liquid investments. In the future, Bradford Bank may use the portion of the proceeds that it receives to fund new loans, open new branches, invest in securities and expand its business activities. Bradford Bancorp and Bradford Bank may also use the proceeds of the offering to diversify their businesses and acquire other companies, although we have no specific plans to do so at this time.

Purchases and Stock Elections by Directors and Executive Officers (page )

We expect that our directors and executive officers, together with their associates, will subscribe for 131,000 shares, which equals 1.6% of the shares that are offered for sale at the maximum of the offering range. Our

directors and executive officers will pay the same $10.00 per share price as everyone else who purchases shares in the offering. Like all of our depositors, our directors and executive officers have subscription rights based on their deposits and, in the event of an oversubscription, their orders will be subject to the allocation provisions set forth in our plan of conversion. Purchases by our directors and executive officers will count towards the minimum number of shares we must sell to close the offering.

In addition, the two Patapsco Bancorp directors (Nicole N. Glaesser and Thomas P. O’Neill) and one Patapsco Bancorp executive officer (Michael J. Dee) who will be appointed as directors and executive officer, respectively, of Bradford Bancorp after the merger, could elect to receive in the merger up to 256,202 shares in the aggregate of Bradford Bancorp common stock in exchange for their Patapsco Bancorp common stock, based on the number of shares of Patapsco Bancorp they own as of May 29, 2007 and subject to the election and proration procedures set forth in the merger agreement. Mr. O’Neill and Mr. Dee are not eligible account holders and are therefore not eligible to purchase shares of Bradford Bancorp common stock in the subscription offering. Ms. Glaeser is an eligible account holder and, together with her associates, intends to subscribe for 400 shares, or $4,000, of Bradford Bancorp common stock. Including the new directors and executive officer from Patapsco Bancorp (and excluding Mr. Mister who will be resigning as a director of Bradford Bancorp upon completion of the merger), all directors and executive officers, together with their associates, would own, upon completion of the merger, approximately 4.6% of our outstanding shares at the minimum of the offering range and approximately 3.7% of our outstanding shares at the maximum of the offering range, based on the number of shares of Patapsco Bancorp they own as of May 29, 2007.

Market for Bradford Bancorp’s Common Stock (page )

We have applied to have the common stock of Bradford Bancorp listed on the Nasdaq Global Market. Sandler O’Neill currently intends to become a market maker in the common stock, but it is under no obligation to do so. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for our common stock will develop or, if developed, will be maintained. After shares of the common stock begin trading, you may contact a stock broker to buy or sell shares. There can be no assurance that persons purchasing the common stock in the offering will be able to sell their shares at or above the $10.00 offering price, and brokerage firms typically charge commissions related to the purchase or sale of securities.

Bradford Bancorp’s Dividend Policy (page )

We have not determined whether we will pay dividends on the common stock. After the offering, we will consider a policy of paying regular cash dividends. Our ability to pay dividends will depend on a number of factors, including capital requirements, regulatory limitations and our operating results and financial condition. Initially, our ability to pay dividends will be limited to the net proceeds of the offering retained by Bradford Bancorp and earnings from the investment of such proceeds. At the maximum of the offering range, Bradford Bancorp will retain approximately $5.0 million of the net proceeds. Additionally, funds could be contributed from Bradford Bank through dividends; however, the ability of Bradford Bank to dividend funds to Bradford Bancorp is subject to regulatory limitations described in more detail in “Our Dividend Policy.”

Delivery of Prospectus

To ensure that each purchaser in the subscription and community offering receives a prospectus at least 48 hours before the offering deadline in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, we will not mail a prospectus any later than five days prior to such date or hand-deliver a prospectus later than two days prior to that date. Stock order forms may only be delivered if accompanied or preceded by a prospectus. We are not obligated to deliver a prospectus or order form by means other than United States mail.

We will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights. The subscription offering and all subscription rights will expire at :00 .m., Eastern time, on [DATE1], 2007 whether or not we have been able to locate each person entitled to subscription rights.

Delivery of Stock Certificates (page )

Certificates representing shares of common stock issued in the offering will be mailed to purchasers at the address provided on the order form as soon as practicable following completion of the offering and receipt of all necessary regulatory approvals.

Stock Information Center

If you have any questions regarding the offering, please call the stock information center at to speak to a registered representative of Sandler O’Neill. The stock information center is open Monday through Friday, except bank holidays, from :00 a.m. to :00 p.m., Eastern time.

Risk Factors

You should consider carefully the following risk factors before purchasing Bradford Bancorp common stock.

Risks Related to Our Business

Our continued emphasis on commercial lending may expose us to increased lending risks.

At March 31, 2007, our loan portfolio consisted of $75.6 million, or 19.0%, of acquisition, development and construction loans, $55.4 million, or 13.9%, of commercial real estate loans, $11.4 million, or 2.9%, of commercial construction loans and $20.8 million, or 5.2%, of commercial business loans. We have grown these loan portfolios in recent years and intend to continue to emphasize these types of lending. In addition, at March 31, 2007, Patapsco Bancorp’s loan portfolio consisted of $34.8 million, or 15.5%, of commercial real estate loans, $20.9 million, or 9.3%, of construction loans, and $71.2 million, or 31.6%, of commercial loans and leases. As a result, our credit risk profile will be higher than traditional thrift institutions that have higher concentrations of one- to four-family residential loans. These types of loans generally expose a lender to greater risk of non-payment and loss than one- to four-family residential mortgage loans because repayment of the loans often depends on the successful operation of the property, the income stream of the borrowers and, for acquisition, development and construction loans, the accuracy of the estimate of the property’s value at completion of the project and the estimated cost of development and construction. Commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Commercial business loans expose us to additional risks since they typically are made on the basis of the borrower’s ability to make repayments from the cash flow of the borrower’s business and are generally secured by collateral that may depreciate over time. Primarily as a result of our continued emphasis on commercial loans, from December 31, 2005 to March 31, 2007, nonperforming loans increased $376,000, or 64.4%, to $959,000, classified and criticized assets increased $10.5 million, or 215.4%, to $15.4 million and delinquencies increased $5.6 million, or 115.1%, to $10.5 million. In addition, since commercial loans generally entail greater risk than one- to four-family residential mortgage loans, we may need to increase our allowance for loan losses in the future to account for the growth of our portfolio of such loans. At March 31, 2007, our allowance, which totaled $2.4 million, amounted to 0.60% of our total loan portfolio, and Patapsco Bancorp’s allowance, which totaled $1.0 million, amounted to 0.48% of its total loan portfolio. Also, many of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship may expose us to a greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan. Finally, as a result of this offering, our regulatory loans-to-one borrower limit will increase and we expect to increase our internal loans-to-one borrower limit. This ability to make larger loans may expose us to greater risk of loss.

High loan-to-value ratios on a significant portion of our acquisition, development and construction portfolio expose us to greater risk of loss.

Many of our acquisition, development and construction loans are secured by liens on properties in which the borrowers have little or no equity, or high loan-to-value ratios (as defined under regulatory guidelines). At March 31, 2007, approximately $22.5 million, or 29.8%, of our $75.6 million acquisition, development and construction loans have high loan-to-value ratios, and we had an additional $5.9 million of loan commitments for these loans. Loans with high loan-to-value ratios will be more sensitive to declining property values than would those with lower loan-to-value ratios and, therefore, may experience a higher incidence of default and severity of losses. In addition, if the borrowers sell the properties, such borrowers may be unable to repay their loans in full from the sale. All of our acquisition, development and construction loans have adjustable interest rates. As a result, these loans may experience a higher rate of default in a rising interest rate environment. For these reasons, these loans may experience higher rates of delinquencies, defaults and losses.

Our increased emphasis on indirect automobile lending and the unseasoned nature of these loans may expose us to increased lending risks.

Since implementing an indirect automobile lending program in 2006, our automobile loan portfolio has increased by $18.2 million from December 31, 2005, and at March 31, 2007, was $19.2 million, or 4.8%, of our total

loan portfolio. Indirect automobile lending accounted for $17.9 million of this automobile loan portfolio. Automobile loans tend to have a higher rate of default than mortgage loans and full repayment of defaulted loans is less likely when the loan is secured by a depreciating asset like an automobile. In addition, automobile loan collections depend on the borrower’s continuing financial stability, and thus are adversely affected by job loss, divorce, illness or personal bankruptcy. Indirect automobile lending (originating automobile loans through automobile dealers) presents additional risks, such as lack of familiarity with the borrower and dependence on dealers to verify that borrower information is accurate. Although we hired experienced automobile lenders, our indirect automobile loan portfolio is unseasoned and our limited experience with this type of lending does not provide us with a significant payment history pattern with which to judge future collectibility and profitability. As a result of our increased emphasis on indirect automobile lending and unseasoned nature of these loans, we may need to increase our allowance for loan losses in the future.

Rising interest rates may hurt our profits and asset values.

Between June 30, 2004 and June 30, 2006, the United States Federal Reserve increased its target for the federal funds rate 17 times in 25 basis point increments from 1.00% to 5.25%. The increase in the federal funds rate has had the effect of increasing short-term market interest rates. While short-term market interest rates (which we use as a guide to price our deposits) have increased, longer-term market interest rates (which we use as a guide to price our longer-term loans) have not. This “flattening” of the market yield curve has had a negative impact on our interest rate spread and net interest margin, which has reduced our profitability. For the three months ended March 31, 2007, our interest rate spread was 2.54% compared to 2.70% and 2.93% for the years ended December 31, 2006 and 2005, respectively. In addition, for the nine months ended March 31, 2007, Patapsco Bancorp’s interest rate spread was 3.52% compared to 3.96% and 4.03% for the years ended June 30, 2006 and 2005, respectively. If short-term interest rates continue to rise, and if rates on our deposits continue to reprice upwards faster than the rates on our long-term loans and investments, we would continue to experience compression of our interest rate spread and net interest margin, which would have a negative effect on our profitability. For further discussion of how changes in interest rates could impact us, see “Management’s Discussion and Analysis of Bradford Bancorp—Risk Management—Interest Rate Risk Management.”

Our business strategy, which includes growth plans, was only recently implemented and has not yet had the time to be proven successful. Our financial condition and results of operations could be negatively affected if our management fails to manage our growth effectively.

In 2006 and 2007, we made significant strides in our growth strategy. We acquired three financial institutions, acquired the deposits of a branch of a fourth institution and acquired a real estate title agency. In addition, we initiated an indirect automobile lending program, while continuing to increase our emphasis on commercial loans. Finally, in connection with this offering, we are acquiring Patapsco Bancorp. Upon completion of the offering, at the maximum, as adjusted, and merger, our assets will have increased on a pro forma basis $499.3 million, or 122.6%, from $407.1 million at December 31, 2005 to $906.3 million and we will have significantly expanded our footprint. We will operate out of 14 locations, an increase of eight offices from December 31, 2005, with plans to add two de novo branches by the first quarter of 2008. We expect to continue to experience growth in the amount of our assets, the level of our deposits and the scale of our operations. Our ability to successfully grow will depend on a variety of factors, including our ability to attract and retain experienced bankers, the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas and our ability to manage our future growth. While we believe we have the management resources and internal systems in place to successfully manage our growth, our management may not be able to do so successfully. If we do not manage our growth effectively, we may not be able to achieve our business plan, and our business and prospects could be harmed.

Bradford Bank may not be able to effectively integrate Patapsco Bancorp and other recently acquired financial institutions with and into its operations.

The future growth of Bradford Bank and Bradford Bancorp will depend, in part, on the success of the merger of Patapsco Bancorp with Bradford Bancorp. In addition, our future growth will depend, in part, on the success of our recent acquisitions of Valley Bancorp, Golden Prague and Senator Bank. The success of the merger and the other recent acquisitions will, in turn, depend on a number of factors, including: Bradford Bank’s ability to

integrate the acquired branches into the current operations of Bradford Bank; Bradford Bank’s ability to limit the outflow of deposits held by customers of Patapsco Bank and the recently acquired financial institutions; Bradford Bank’s ability to control the incremental increase in non-interest expense arising from the merger and other recent acquisitions in a manner that enables Bradford Bank to improve its overall operating efficiencies; and Bradford Bank’s ability to retain and integrate the appropriate personnel of Patapsco Bank and the other recently acquired financial institutions into the operations of Bradford Bank.

The building of market share through de novo branching could cause our expenses to increase faster than revenues.

We intend to continue to build market share in the Baltimore metropolitan area through de novo branching. We currently intend to expand our franchise northeast of Baltimore, by opening branch offices in White Marsh (eastern Baltimore County) and Aberdeen (Harford County), Maryland, which we expect to open in the fourth quarter of 2007 and the first quarter of 2008, respectively. There are considerable costs involved in opening branches and new branches generally require a period of time to generate the necessary revenues to offset their costs, especially in areas in which we do not have an established presence. Accordingly, any new branch can be expected to negatively impact our earnings for some period of time until the branch reaches certain economies of scale. Based on current estimates, we expect the total cost of the construction and equipment for the new White Marsh and Aberdeen locations to be approximately $2.0 million in the aggregate, $10,000 of which had been incurred at March 31, 2007. Our expenses could be further increased if we encounter delays in the opening of any of our new branches. Finally, we have no assurance our new branches will be successful even after they have been established.

Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.

We must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. As we continue to grow, we are likely to become more dependent on these sources, which include Federal Home Loan Bank advances, proceeds from the sale of loans and brokered certificates of deposit. At March 31, 2007, we had approximately $50.0 million of Federal Home Loan Bank advances outstanding with an additional $44.8 million of available borrowing capacity and we did not utilize brokered funds. Adverse operating results or changes in industry conditions could lead to difficulty or an inability to access these additional funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates. Finally, if we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, our operating margins and profitability would be adversely affected.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance. At March 31, 2007, our allowance for loan losses was 0.60% of total loans and 251.3% of non-performing loans and Patapsco Bancorp’s allowance for loan losses was 0.48% of total loans and 204.68% of non-performing loans. Material additions to our allowance could materially decrease our net income.

In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our allowance for loan losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities may have a material adverse effect on our financial condition and results of operations.

Remediation of a contaminated water well at a Bradford Bank branch could negatively impact earnings.

In the first quarter of 2006, a gas station located next to our Jacksonville branch experienced an underground gasoline leak. This leak has contaminated the drinking water well on our branch site. Currently the water well may not be used for drinking water or for domestic use. We have executed an access agreement with the lessee of the gas station that provides the gas station access to our property to facilitate the remediation of the leak. In addition, the lessee of gas station is supplying us with bottled water for drinking and domestic use. While the lessee of the gas station has coordinated the clean up of the gasoline leak, to date it has not assumed, in writing, responsibility for the remediation efforts. If the lessee of the gas station were to disclaim responsibility for all or part of the remediation of the leak, we may be required to bring a lawsuit against the lessee of gas station or to pay for the clean up costs for our water well. Expenses relating either to a lawsuit or environmental remediation efforts could negatively impact earnings.

A downturn in the local economy or a decline in real estate values could hurt our profits.

Unlike larger financial institutions that are more geographically diversified, our profitability depends on the general economic conditions in the Baltimore metropolitan area. Local economic conditions have a significant impact on our commercial real estate and construction and consumer loans, the ability of the borrowers to repay these loans and the value of the collateral securing these loans. As of March 31, 2007, $391.1 million, or 98.3%, of our loans were made to borrowers or secured by collateral located in Maryland. As a result of this concentration, a downturn or a recession in the local economy could cause significant increases in nonperforming loans, which could lead to operating losses, impaired liquidity and eroding capital. In recent years, there has been a significant increase in real estate values in our market area. As a result of rising real estate prices in recent years, our real-estate based loans have generally been well collateralized. A decline in real estate values could cause some of our mortgage loans to become inadequately collateralized, which would expose us to a greater risk of loss. Additionally, a decline in real estate values could adversely impact our portfolio of commercial real estate loans and could result in a decline in the origination of such loans.

If the population or income growth in the Baltimore metropolitan area is slower than projected, income levels, deposits and housing starts could be adversely affected and could result in the curtailment of our expansion, growth and profitability. Moreover, a significant decline in general economic conditions, caused by inflation, recession, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, unemployment or other factors beyond our control could impact these local economic conditions and could negatively affect the financial results of our banking operations. For a discussion of our market areas, see “Business of Bradford Bancorp—Market Area.”

Strong competition within our market area could hurt our profits and slow growth.

We face intense competition in making loans, attracting deposits and hiring and retaining experienced employees. This competition has made it more difficult for us to make new loans and attract deposits. Price competition for loans and deposits sometimes results in us charging lower interest rates on our loans and paying higher interest rates on our deposits, which reduces our net interest income. Competition also makes it more difficult and costly to attract and retain qualified employees. We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Our profitability depends upon our continued ability to compete successfully in our market area. For more information about our market area and the competition we face, see “Our Business—Market Area” and “Business of Bradford Bancorp—Competition.”

We operate in a highly regulated environment and we may be adversely affected by changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision as our primary regulator and by the Federal Deposit Insurance Corporation, as insurer of our deposits. Such regulation and supervision governs the activities in which an institution and its holding company may engage and are intended primarily for the protection of the insurance fund and the depositors and borrowers of Bradford Bank rather than for

holders of Bradford Bancorp common stock. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations.

Risks Related to this Offering

Additional expenses following the offering from new equity benefit plans will adversely affect our profitability.

Following the offering, we will recognize additional annual employee compensation expenses stemming from options and shares granted to employees, directors and executives under new benefit plans. These additional expenses will adversely affect our profitability. We cannot determine the actual amount of these new stock-related compensation expenses at this time because applicable accounting practices generally require that they be based on the fair market value of the options or shares of common stock at the date of the grant; however, we expect them to be material. We will recognize expenses for our employee stock ownership plan when shares are committed to be released to participants’ accounts and will recognize expenses for restricted stock awards and stock options over the vesting period of awards made to recipients. The before tax benefit expenses in the first year following the offering have been estimated to be approximately $1.6 million at the maximum of the offering range, as set forth in the pro forma financial information under “Pro Forma Data” assuming the $10.00 per share purchase price as fair market value. Actual expenses, however, may be higher or lower, depending on the price of our common stock, the number of shares awarded under the plans and the timing of the implementation of the plans. For further discussion of these plans, see “Our Management—Benefit Plans” and “—Future Equity Incentive Plan.”

We will need to implement additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements, which will increase our operating expenses and affect our profitability.

As a result of the completion of this offering, we will become a public reporting company. The federal securities laws and the regulations of the Securities and Exchange Commission require that we file annual, quarterly and current reports and that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. Compliance with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify the adequacy of our internal controls and procedures, which will require us to upgrade our accounting systems. These reporting and compliance obligations will increase our operating expenses.

Our return on equity will initially be low compared to other publicly traded financial institutions. A low return on equity may negatively impact the trading price of our common stock.

Net income divided by average equity, known as “return on equity,” is a ratio used by many investors to compare the performance of a financial institution with its peers. For the year ended December 31, 2006, our return on equity was 4.29%. Although we expect that our net income will increase following the offering, as well as the merger, we expect that our return on equity will be reduced as a result of the additional capital that we will raise in the offering. For example, our pro forma return on equity for the twelve months ended March 31, 2007 is 1.56%, assuming the sale of shares at the maximum of the offering range and giving effect to the merger. In comparison, the peer group used by RP Financial in its appraisal had an average return on equity of 7.59% for the twelve months ended March 31, 2007. Over time, we intend to use the net proceeds from this offering to increase earnings per share and book value per share, with the goal of achieving a return on equity that is competitive with other publicly held companies. This goal could take a number of years to achieve, and we cannot assure you that it will be attained. Consequently, you should not expect a competitive return on equity in the near future. Failure to achieve a competitive return on equity might make an investment in our common stock unattractive to some investors and might cause our common stock to trade at lower prices than comparable companies with higher returns on equity. See “Pro Forma Data” for an illustration of the financial impact of the offering and merger.

Subscribers who purchase shares in the offering will experience dilution of their investment as a result of the intangible assets resulting from the merger.

The acquisition of Patapsco Bancorp will result in the recording of new intangible assets totaling approximately $32.4 million and, combined with the existing intangible assets of Bradford Bank MHC, will result in total pro forma intangible assets of $42.8 million. As a result, subscribers to the offering will experience per share dilution in tangible capital of $5.10, $4.53, $4.08 and $3.66 at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range.

Subscribers who purchase shares in the offering will have their interests diluted by the issuance of shares in the merger.

In connection with the merger, Bradford Bancorp will issue an aggregate of approximately 2,172,388 shares of common stock and pay $23.4 million in cash to the stockholders of Patapsco Bancorp. At the maximum of the offering range, the issuance of the shares in the merger would dilute the interests of purchasers in the offering by approximately 20.7%.

Issuance of shares for benefit programs may dilute your ownership interest.

We intend to adopt an equity incentive plan following the offering. If stockholders approve the new equity incentive plan, we intend to issue shares to our officers, employees and directors through this plan. We may fund the equity incentive plan through the purchase of common stock in the open market, subject to regulatory restrictions, by a trust established in connection with the plan, or from authorized but unissued shares of Bradford Bancorp common stock. If the restricted stock awards under the equity incentive plan are funded from authorized but unissued stock, your ownership interest in the shares could be diluted by up to approximately 3.1% at the maximum of the offering range, assuming awards of common stock equal to 4.0% of the shares issued in the offering, including shares contributed to Bradford Bank Foundation. If the shares issued upon the exercise of stock options under the equity incentive plan are issued from authorized but unissued stock, your ownership interest in the shares could be diluted by up to approximately 7.3% at the maximum of the offering range, assuming stock option grants equal to 10.0% of the shares issued in the offering, including shares contributed to Bradford Bank Foundation are granted under the plan. See “Pro Forma Data” and “Our Management—Future Equity Incentive Plan.”

The contribution of shares to the charitable foundation will dilute your ownership interests and adversely affect net income in fiscal year 2007.

We intend to establish a charitable foundation in connection with the stock offering. We will make a contribution to the charitable foundation of 275,000 shares of Bradford Bancorp common stock and will contribute $250,000 in cash. The contribution of cash and shares of common stock will total $3.0 million. The aggregate contribution will also have an adverse effect on our net income for the quarter and year in which we make the issuance and contribution to the charitable foundation. The after-tax expense of the contribution will reduce net income in our 2007 fiscal year by approximately $1.8 million. Persons purchasing shares in the stock offering will have their ownership and voting interests in Bradford Bancorp diluted by up to 2.6% at the maximum of the offering range due to the issuance of shares of common stock to the charitable foundation.

Under the Internal Revenue Code, an entity is permitted to deduct up to 10% of its taxable income (income before income taxes) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal income tax purposes over each of the five years following the year in which the charitable contribution was made. Accordingly, a charitable contribution by an entity to a charitable foundation could, if necessary, be deducted over a six-year period. Based on $2.8 million of income before income tax expense for the fiscal year ended December 31, 2006, and assuming that our income before income tax expense remained at that level in future years following the stock offering, we estimate that we would only be able to deduct for federal income tax purposes $1.7 million of the contribution to the charitable foundation. This would result in after-tax expense of $2.3 million and not $1.8 million as we currently estimate.

Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits.

We believe that the contribution to Bradford Bank Foundation will be deductible for federal income tax purposes. However, we cannot assure you that the Internal Revenue Service will grant tax-exempt status to the charitable foundation. If the contribution is not deductible, we would not receive any tax benefit from the contribution. In addition, even if the contribution is tax deductible, we may not have sufficient profits to be able to use the deduction fully. The value of the contribution would be $3.0 million in cash and shares of common stock, which would result in after-tax expense of approximately $1.8 million during the fiscal year ended December 31, 2007. In the event that the Internal Revenue Service does not grant tax-exempt status to the charitable foundation or the contribution to the charitable foundation is otherwise not tax deductible, we would recognize as after tax expense the value of the entire contribution, or $3.0 million.

Our stock price may decline when trading commences.

You may not be able to sell the shares you purchase in the offering at or above the $10.00 purchase price. After the shares of our common stock begin trading, the trading price of the common stock will be determined by the marketplace, and will be influenced by many factors outside of our control, including prevailing interest rates, investor perceptions, securities analyst research reports and general industry, geopolitical and economic conditions. Publicly traded stocks, including stocks of financial institutions, often experience substantial market price volatility. These market fluctuations might not be related to the operating performance of particular companies whose shares are traded.

A Warning About Forward-Looking Statements

This prospectus contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions. Forward-looking statements include:

· statements of goals, intentions and expectations;

· statements regarding business plans, prospects, growth and operating strategies;

· statements regarding the quality of loan and investment portfolios; and

· estimates of risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

· general economic conditions, either nationally or locally, that are worse than expected;

· changes in the interest rate environment that reduce interest margins or reduce the fair value of financial instruments;

· increased competitive pressures among financial services companies;

· changes in consumer spending, borrowing and savings habits;

· legislative or regulatory changes that adversely affect business;

· Bradford Bancorp’s ability to integrate successfully the operations of Patapsco Bancorp and the other recently acquired financial institutions;

· adverse changes in the securities markets; and

· changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board.

Any of the forward-looking statements made in this prospectus and in other public statements may later prove incorrect because of inaccurate assumptions, the factors illustrated above or other factors that cannot be foreseen. Consequently, no forward-looking statement can be guaranteed.

Selected Consolidated Financial and Other Data of Bradford Bank MHC

The summary financial information presented below is derived in part from our consolidated financial statements. The following is only a summary and you should read it in conjunction with our consolidated financial statements and notes beginning on page F-1. The information at December 31, 2006 and 2005 and for each of the three years in the period ended December 31, 2006 is derived in part from our audited consolidated financial statements that appear in this prospectus. The information at December 31, 2004 and December 31, 2003 is derived in part from our audited consolidated financial statements that do not appear in this prospectus. The information at March 31, 2007, for the three months ended March 31, 2007 and 2006, at December 31, 2002 and for the years ended December 31, 2003 and 2002 was not audited, but in the opinion of management, reflects all adjustments necessary for a fair presentation. The results of operations for the three months ended March 31, 2007 are not necessarily indicative of the results of operations that may be expected for the entire year. The information at or for periods ending prior to July 15, 2005 is for Bradford Bank only.

	March 31,		December 31,
(Dollars in thousands)	2007		2006		2005		2004		2003		2002
Financial Condition Data:
Total assets	$	522,310	$	472,923	$	407,102	$	399,341	$	390,225	$	307,168
Investment securities	90,359		85,567		80,117		99,079		122,498		118,877
Loans receivable, net	396,031		352,666		308,060		272,910		244,831		176,725
Cash and cash equivalents	10,273		17,653		3,698		13,125		6,383		3,609
Goodwill	8,892		3,904		3,904		3,904		4,195		—
Intangible assets	1,578		1,273		711		881		1,052		—
Deposits	424,046		384,806		344,546		344,336		341,651		263,060
Federal Home Loan Bank advances	50,000		45,000		18,800		15,000		—		—
Other borrowings	3,000		—		2,600		—		10,000		3,500
Total retained earnings	40,441		39,933		38,338		36,607		34,856		36,693

	For the Three Months Ended March 31,				For the Year Ended December 31,
(Dollars in thousands)	2007		2006		2006		2005		2004		2003			2002
Operating Data:
Interest and dividend income (non-tax adjusted)	$	8,033	$	6,069	$	26,643	$	21,651	$	19,428	$	17,764		$	17,437
Tax equivalent adjustment	72		41		241		154		124		319			124
Interest and dividend income (tax equivalent basis) (1)	$	8,105	$	6,110	$	26,884	$	21,805	$	19,552	$	18,083		$	17,561
Interest expense	4,754		2,982		14,076		9,497		8,061		8,506			10,345
Net interest income	3,351		3,128		12,808		12,308		11,491		9,577			7,216
Provision for loan losses	20		60		940		347		315		459			100
Net interest income after provision for loan losses	3,331		3,068		11,868		11,961		11,176		9,118			7,116
Other income	352		214		868		600		549		584			4,473
Other expenses	3,090		2,343		10,172		9,320		8,733		11,214			5,601
Income (loss) before income taxes	593		939		2,564		3,241		2,992		(1,512		)	5,988
Tax equivalent adjustment	72		41		241		154		124		319			124
Income taxes	156		298		653		720		1,037		(644		)	2,011
Net income (loss)	$	365	$	600	$	1,670	$	2,367	$	1,831	$	(1,187	)	$	3,853

	At or For the Three Months Ended March 31				At or For the Year Ended December 31,
	2007		2006		2006		2005		2004		2003		2002
Performance Ratios:
Return on average assets	0.29	%	0.57	%	0.38	%	0.59	%	0.47	%	(0.33	)%	1.29	%
Return on average equity	3.87		6.29		4.29		6.33		5.10		(3.37	)	11.59
Interest rate spread (2)	2.54		2.84		2.70		2.93		2.85		2.62		2.14
Net interest margin (3)	2.80		3.12		3.02		3.17		3.04		2.82		2.52
Noninterest expense to average assets	2.45		2.23		2.33		2.32		2.23		3.14		1.88
Efficiency ratio (4)	83.45		70.11		74.38		71.86		72.41		112.09		50.75
Average interest-earning assets to average interest-bearing liabilities	106.67		109.55		109.69		109.79		109.07		107.83		110.68
Average equity to average assets	7.48		9.10		8.92		9.33		9.16		9.89		11.15

Capital Ratios (5):
Tier 1 capital to average assets	6.48		8.15		7.62		8.47		8.26		8.62		12.26
Tier 1 capital to risk-weighted assets	9.49		12.53		11.18		12.82		13.31		16.86		31.94
Total capital to risk-weighted assets	10.21		12.97		11.87		13.24		13.70		17.24		32.15

Asset Quality Ratios:
Allowance for loan losses as a percent of total loans	0.60		0.39		0.60		0.37		0.35		0.27		0.14
Allowance for loan losses as a percent of nonperforming loans	251.30		73.68		199.06		197.26		122.87		81.42		93.87
Net charge-offs (recoveries) to average outstanding loans during the period	0.00		(0.01	)	(0.01	)	0.01		0.00		0.01		0.00
Nonperforming loans as a percent of total loans	0.24		0.54		0.30		0.19		0.29		0.33		0.15
Nonperforming assets as a percent of total assets	0.18		0.40		0.23		0.14		0.19		0.21		0.08

Other Data:
Number of:
Loans outstanding	3,962		3,122		3,158		3,133		3,044		3,017		2,441
Deposit Accounts	22,588		21,134		21,766		20,399		21,134		21,515		17,066
Offices	7		6		6		6		6		6		4

(1) Interest and rates are presented on a tax equivalent basis utilizing a tax rate of 34%. See “Management’s Discussion and Analysis of Bradford Bancorp—Explanation of Use of Non-GAAP Financial Measures.”

(2) Represents the difference between the weighted average yield on average interest-earning assets on a tax equivalent basis and the weighted average cost of interest-bearing liabilities.

(3) Represents net interest income on a tax equivalent basis as a percent of average interest-earning assets.

(4) Represents noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income.

(5) Ratios are for Bradford Bank.

Selected Consolidated Financial and Other Data of Patapsco Bancorp

The summary financial information presented below is derived in part from Patapsco Bancorp’s consolidated financial statements. The following is only a summary and you should read it in conjunction with the Patapsco Bancorp consolidated financial statements and notes that appear in this document. The information at June 30, 2006 and 2005 and for each of the two years ended June 30, 2006 is derived in part from the audited consolidated financial statements of Patapsco Bancorp that appear in this prospectus. The information at and for the years ended June 30, 2004, 2003 and 2002 is derived in part from audited consolidated financial statements of Patapsco Bancorp that do not appear in this prospectus. The information at March 31, 2007 and for the nine months ended March 31, 2007 and 2006 was not audited, but in the opinion of management, reflects all adjustments necessary for a fair presentation. The results of operations for the nine months ended March 31, 2007 are not necessarily indicative of the results of operations that may be expected for the entire year.

	March 31,		June 30,
(Dollars in thousands)	2007		2006		2005		2004		2003		2002
Financial Condition Data:
Total assets	$	254,707	$	228,070	$	204,704	$	210,616	$	157,805	$	158,736
Loans receivable, net	216,324		190,589		161,094		151,413		113,252		118,350
Cash, federal funds sold and other interest bearing deposits	9,110		8,793		8,267		19,134		14,207		14,857
Investment securities	14,809		16,667		24,800		29,227		24,385		18,711
Deposits	190,178		166,833		164,320		168,132		119,655		119,593
Borrowings	42,800		40,050		20,233		22,900		20,174		22,616
Stockholders’ equity	19,317		18,288		17,587		16,380		15,905		14,602

	Nine Months Ended March 31,				Year Ended June 30,
(Dollars in thousands)	2007		2006		2006		2005		2004		2003		2002
Operating Data:
Interest income	$	12,131	$	9,871	$	13,556	$	11,811	$	10,519	$	10,764	$	11,445
Interest expense	5,468		3,481		4,949		3,754		3,726		3,992		5,580
Net interest income before provision for loan losses	6,663		6,390		8,607		8,057		6,793		6,772		5,865
Provision for loan losses	285		40		65		225		42		531		560
Net interest income after provision for loan losses	6,378		6,350		8,542		7,832		6,751		6,241		5,305
Noninterest income	625		642		871		684		579		568		866
Noninterest expenses	5,641		5,453		7,202		6,411		5,009		4,676		4,316
Income before provision for income taxes	1,362		1,539		2,211		2,105		2,321		2,133		1,855
Income tax provision	505		574		823		759		852		788		718
Net income	$	857	$	965	$	1,388	$	1,346	$	1,469	$	1,345	$	1,137
Earnings per share of common stock
Basic	$	0.45	$	0.57	$	0.80	$	0.81	$	0.92	$	0.84	$	0.71
Diluted	$	0.44	$	0.50	$	0.72	$	0.70	$	0.77	$	0.72	$	0.62

	At or For the Nine Months Ended March 31,				At or For the Year Ended June 30,
	2007		2006		2006		2005		2004		2003		2002

Performance Ratios:
Return on average assets	0.47	%	0.60	%	0.64	%	0.66	%	0.80	%	0.86	%	0.73	%
Return on average equity (1)	6.03		7.22		7.75		7.87		9.11		8.77		8.20
Interest rate spread (2)	3.52		4.02		3.96		4.03		3.92		4.19		3.54
Net interest margin (3)	3.80		4.27		4.22		4.21		4.06		4.52		3.90
Noninterest expenses to average assets	3.10		3.41		3.32		3.13		2.86		3.01		2.76
Efficiency ratio (4)	77.40		77.54		75.99		73.34		67.94		66.30		64.12
Average interest-earning assets to average interest-bearing liabilities	108.39		109.16		110.62		109.18		106.31		112.21		109.58

Capital Ratios:
Tier 1 capital to average assets (5)	7.56		7.64		7.66		7.87		6.13		8.56		8.18
Tier 1 capital to risk-weighted assets (5)	9.82		10.34		10.63		11.37		10.17		13.43		12.85
Total capital to risk-weighted assets (5)	10.37		10.92		11.25		12.05		10.91		14.58		14.10
Stockholders’ equity to total assets at end of period (1)	7.58		7.88		8.02		8.59		7.75		10.08		9.22
Average stockholders’ equity to average assets (1)	7.81		8.36		8.25		8.36		9.21		9.78		8.86
Dividends declared per share to diluted net income per share	46.02		37.50		34.72		32.86		27.71		23.24		26.92

Asset Quality Ratios:
Allowance for loan losses as a percent of total loans	0.48		0.50		0.52		0.58		0.61		1.00		1.20
Allowance for loan losses as a percent of non-performing loans	204.68		408.29		409.84		2,487.45		188.01		348.32		206.48
Net charge-offs to average outstanding loans during the period	0.15		0.03		0.01		0.14		0.20		0.72		0.23
Non-performing loans as a percent of total loans	0.23		0.12		0.11		0.05		0.24		0.22		0.58
Non-performing assets as a percent of total assets	0.20		0.10		0.13		0.02		0.33		0.29		0.52

(1) Stockholders’ equity includes temporary equity consisting of employee stock ownership shares subject to a put option.

(2) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost on average interest-bearing liabilities.

(3) Represents net interest income as a percent of average interest-earning assets.

(4) Represents noninterest expenses divided by the sum of net interest income and noninterest income.

(5) Ratios are for Patapsco Bank.

Summary Selected Pro Forma
Condensed Consolidated Financial Data

The following table shows selected financial information on a pro forma condensed consolidated basis giving effect to the merger and the stock offering assuming the offering is completed at the maximum of the offering range based on the assumptions set forth below. The pro forma unaudited consolidated financial data as of March 31, 2007 and December 31, 2006 also give effect to the acquisitions of Golden Prague and Senator Bank. The pro forma financial data as of December 31, 2006 also gives effect to the acquisition of Valley Bancorp which was completed in January 2007. The pro forma unaudited consolidated financial statements give effect to the merger and the other recent acquisitions using the purchase method of accounting as required by accounting principles generally accepted in the United States of America. The pro forma unaudited consolidated financial statements give effect to the merger and the other recent acquisitions as if these transactions had become effective at the end of the period presented, in the case of balance sheet information, and at the beginning of the period presented, in the case of income statement information.

We anticipate that the merger and the other recent acquisitions will provide the combined company with financial benefits that include, on a combined basis, operating expenses that would be less than the institutions operating independently and the opportunity to earn more revenue. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect these benefits and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies and financial institutions been combined as of the date and during the period presented.

You should read this summary pro forma information in conjunction with the information under “Pro Forma Data.”

(In thousands)	March 31, 2007		December 31, 2006
Pro Forma Combined Financial Condition Data:
Total assets	$	895,786	$	863,817
Cash and cash equivalents	66,521		64,929
Investment securities available-for-sale	99,371		96,042
Investment securities held-to-maturity	17,753		24,571
Loans receivable, net	640,478		608,459
Intangible assets	42,385		43,043
Deposits	659,495		633,704
Federal Home Loan Bank advances	91,681		87,918
Other borrowed funds	4,975		4,975
Stockholders’ equity	132,052		130,352

	Three Months Ended March 31, 2007			Year Ended December 31, 2006
Pro Forma Combined Operating Data:
Interest income	$	13,641		$	49,555
Interest expense	(7,107		)	(22,278		)
Net interest income	6,534			27,277
Provision for loan losses	(207		)	(1,013		)
Net interest income after provision for loan losses	6,327			26,264
Other income	499			1,951
Operating expenses	(6,337		)	(23,427		)
Income before income taxes	489			4,788
Income taxes	(299		)	(1,910		)
Net income	$	190		$	2,878

Use of Proceeds

The following table shows how we intend to use the net proceeds of the offering. The actual net proceeds will depend on the number of shares of common stock sold in the offering and the expenses incurred in connection with the offering and merger. Payments for shares made through withdrawals from deposit accounts at Bradford Bank will reduce Bradford Bank’s deposits and will not result in the receipt of new funds for investment. See “Pro Forma Data” for the assumptions used to arrive at these amounts.

	Minimum of Offering Range					Midpoint of Offering Range					Maximum of Offering Range					15% Above Maximum of Offering Range
(Dollars in thousands)	5,950,000 Shares at $10.00 Per Share			Percent of Net Proceeds		7,000,000 Shares at $10.00 Per Share			Percent of Net Proceeds		8,050,000 Shares at $10.00 Per Share			Percent of Net Proceeds		9,257,500 Shares at $10.00 Per Share			Percent of Net Proceeds

Gross offering proceeds	$	59,500				$	70,000				$	80,500				$	92,575
Less: offering expenses	(1,956		)			(2,077		)			(2,197		)			(2,336		)
Net offering proceeds	$	57,544		100.00	%	$	67,923		100.00	%	$	78,303		100.00	%	$	90,239		100.00	%

Less:
Proceeds contributed to Bradford Bank (1)	$	(41,533	)	(72.18	)	$	(51,072	)	(75.19	)	$	(60,612	)	(77.41	)	$	(71,582	)	(79.32	)
Merger costs and restructuring charges (2)	(2,781		)	(4.83	)	(2,781		)	(4.09	)	(2,781		)	(3.55	)	(2,781		)	(3.08	)
Proceeds used for loan to employee stock ownership plan	(4,980		)	(8.65	)	(5,820		)	(8.57	)	(6,660		)	(8.51	)	(7,626		)	(8.45	)
Proceeds contributed to The Bradford Bank Foundation	(250		)	(0.43	)	(250		)	(0.37	)	(250		)	(0.32	)	(250		)	(0.28	)
Proceeds used to repay the Bankers Bank loan	(3,000		)	(5.21	)	(3,000		)	(4.42	)	(3,000		)	(3.83	)	(3,000		)	(3.32	)
Proceeds remaining for Bradford Bancorp	$	5,000		8.69	%	$	5,000		7.36	%	$	5,000		6.39	%	$	5,000		5.54	%

(1) Approximately $23.4 million of the funds contributed to Bradford Bank will be used to fund the cash portion of the purchase price for Patapsco Bancorp.

(2) Includes $766,000, $1.6 million and $445,000, respectively, of non-tax deductible merger costs, tax deductible merger costs and restructuring costs.

Bradford Bancorp also will use a portion of the proceeds that it retains to make quarterly payments on the $5.0 million of 6.465% junior subordinated debentures that it will assume in the merger with Patapsco Bancorp. Initially, Bradford Bancorp intends to invest the proceeds it retains in short-term, liquid investments, such as United States treasury and government agency securities, mortgage-backed securities and cash and cash equivalents, in order to supplement the interest income of Bradford Bank and increase consolidated interest income. The actual amounts to be invested in different instruments will depend on the interest rate environment and Bradford Bancorp’s liquidity requirements. In the future, Bradford Bancorp may liquidate its investments and use those funds:

· to pay dividends to stockholders;

· to repurchase shares of its common stock, subject to regulatory restrictions;

· to finance the possible acquisition of financial institutions or other businesses that are related to banking, although Bradford Bancorp has no specific plans to do so at this time; and

· for general corporate purposes.

Under current Office of Thrift Supervision regulations, Bradford Bancorp may not repurchase shares of its common stock during the first year following the offering, except to fund equity benefit plans or, with prior regulatory approval, when extraordinary circumstances exist.

Bradford Bank initially intends to invest the proceeds it receives from the offering, which is shown in the table above as the amount contributed to Bradford Bank, in short-term, liquid investments. Over time, Bradford Bank may use the proceeds that it receives from the offering:

· to fund new loans;

· to invest in securities;

· to finance the possible expansion of its business activities, including developing new branch locations; and

· for general corporate purposes.

We may need regulatory approvals to engage in some of the activities listed above. We currently have no specific plans or agreements regarding any expansion activities or acquisitions other than the merger with Patapsco Bancorp and the branch office openings disclosed in “Management’s Discussion and Analysis of Bradford Bancorp—Business Strategy.” The new branches are expected to be funded by cash generated by our business. We do not expect to borrow funds for these expansion projects. Based on current estimates, we expect the total cost of construction and equipment for the new White Marsh and Aberdeen locations to be $2.0 million in the aggregate, $10,000 of which had been incurred at March 31, 2007. Funding for these branches is not contingent on this offering.

Except as described above, neither Bradford Bancorp nor Bradford Bank has any specific plans for the investment of the proceeds of this offering and has not allocated a specific portion of the proceeds to any particular use. For a discussion of our business reasons for undertaking the offering, see “The Conversion and Stock Offering—Reasons for the Conversion Offering.”

Our Dividend Policy

We have not yet determined whether we will pay a dividend on the common stock. After the offering, our board of directors will consider a policy of paying regular cash dividends. The board of directors may declare and pay periodic special cash dividends in addition to, or in lieu of, regular cash dividends. In determining whether to declare or pay any dividends, whether regular or special, the board of directors will take into account our financial condition and results of operations, tax considerations, capital requirements, industry standards and economic conditions. The regulatory restrictions that affect the payment of dividends by Bradford Bank to us discussed below will also be considered. We cannot guarantee that we will pay dividends or that, if paid, we will not reduce or eliminate dividends in the future.

We will not be subject to Office of Thrift Supervision regulatory restrictions on the payment of dividends. However, our ability to pay dividends may depend, in part, upon dividends we receive from Bradford Bank because we initially will have no source of income other than dividends from Bradford Bank and earnings from the investment of the net proceeds from the offering that we retain. We expect that Bradford Bancorp will retain approximately $5.0 million from the net proceeds raised in the offering at the maximum of the offering range based upon our estimate of offering and merger-related expenses and other assumptions described in “Pro Forma Data.” Office of Thrift Supervision regulations limit dividends and other distributions from Bradford Bank to us. In addition, Bradford Bank may not make a distribution that would constitute a return of capital during the three-year term of the business plan submitted in connection with the offering. No insured depository institution may make a capital distribution if, after making the distribution, the institution would be undercapitalized. See “Regulation and Supervision—Regulation of Bradford Bancorp and Bradford Bank—Federal Savings Institution Regulation—Limitation on Capital Distributions.”

Any payment of dividends by Bradford Bank to us that would be deemed to be drawn out of Bradford Bank’s bad debt reserves would require Bradford Bank to pay federal income taxes at the then current income tax rate on the amount deemed distributed. See “Federal and State Taxation—Federal Income Taxation” and note 11 of the notes to the consolidated financial statements included in this prospectus. We do not contemplate any distribution by Bradford Bank that would result in this type of tax liability.

Market for Common Stock of Bradford Bancorp

We have not previously issued common stock and there is currently no established market for the common stock. We have applied to have our shares of common stock listed on the Nasdaq Global Market under the symbol “BRAD.” Sandler O’Neill intends to become a market maker in our common stock following the offering, but it is under no obligation to do so. We cannot assure you that other market makers will be obtained or that an active and liquid trading market for the common stock will develop or, if developed, will be maintained.

The development of a public market having the desirable characteristics of depth, liquidity and orderliness depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of our common stock at any particular time may be limited, which may have an adverse effect on the price at which our common stock can be sold. There can be no assurance that persons purchasing the common stock will be able to sell their shares at or above the $10.00 price per share in the offering. Purchasers of our common stock should have a long-term investment intent and should recognize that there may be a limited trading market in the common stock.

Capitalization

The following table presents the historical capitalization of Bradford Bank MHC and Patapsco Bancorp at March 31, 2007 and the capitalization of Bradford Bancorp after giving effect to the offering proceeds and the merger (referred to as “pro forma” information). The table depicts adjustments to capitalization resulting first from the merger with Patapsco Bancorp and the acquisitions of Golden Prague and Senator Bank and then depicts Bradford Bancorp’s capitalization following the offering, the merger and the other acquisitions at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range. The pro forma capitalization gives effect to the assumptions listed under “Pro Forma Data,” based on the sale of the number of shares of common stock indicated in the table. This table does not reflect the issuance of additional shares as a result of the exercise of options granted under the proposed equity incentive plan. A change in the number of shares to be issued in the offering may materially affect pro forma capitalization. We are offering our common stock on a best efforts basis. We must sell a minimum of 5,950,000 shares to complete the offering. This minimum issuance may include shares allocated to Patapsco Bancorp stockholders as merger consideration.

																				Pro Forma Capitalized Based Upon the Sale of (1)
(Dollars in thousands)	Bradford Bank MHC- Historical			Senator Bank Adjustments		Golden Prague Adjustments		Offering Adjustments at Minimum of Offering Range			Bradford Bancorp Pro Forma As Converted			Patapsco Bancorp Historical			Merger Adjustments			Minimum 5,950,000 Shares at $10.00 per share (2)			Midpoint 7,000,000 Shares at $10.00 per share (2)			Maximum 8,050,000 Shares at $10.00 per share (2)			Maximum, as adjusted, 9,257,500 Shares at $10.00 per share (2)

Deposits (3)	$	424,046		$	20,154	$	24,940	—			$	469,140		$	190,178		$	177		$	659,495		$	659,495		$	659,495		$	659,495
Borrowings	53,000			—		1,890		—			54,890			37,800			(1,009		)	91,681			91,681			91,681			91,681
Subordinated debt	—			—		—		—			—			5,000			(25		)	4,975			4,975			4,975			4,975
Total deposits and borrowed funds	477,046			20,154		26,830		—			524,030			232,978			(857		)	756,151			756,151			756,151			756,151

Stockholders’ equity:
Preferred stock	—			—		—		—			—			—			—			—			—			—			—
Common stock (4)	—			—		—		62			62			19			3			84			94			105			117
Additional paid-in capital	—			—		—		60,232			60,232			6,393			15,309			81,934			92,302			102,672			114,596
Retained earnings (4)	41,183			518		580		—			42,281			10,796			(11,090		)	41,987			41,987			41,987			41,987
Accumulated other comprehensive income	(742		)	—		—		—			(742		)	(214		)	214			(742		)	(742		)	(742		)	(742		)
Treasury shares
Less: Contribution to foundation (5)	—			—		—		(3,000		)	(3,000		)	—			—			(3,000		)	(3,000		)	(3,000		)	(3,000		)
Plus: Tax benefit of contribution to foundation (6)	—			—		—		1,020			1,020			—			—			1,020			1,020			1,020			1,020
Less: Common stock acquired by employee stock ownership plan (7)	—			—		—		(4,980		)	(4,980		)	2,401			(2,401		)	(4,980		)	(5,820		)	(6,660		)	(7,626		)
Less: Common stock acquired by equity incentive plan (8)	—			—		—		(2,490		)	(2,490		)	(78		)	78			(2,490		)	(2,910		)	(3,330		)	(3,813		)
Total stockholders’ equity	$	40,441		$	518	$	580	$	50,844		$	92,383		$	19,317		$	2,113		$	113,813		$	122,932		$	133,052		$	142,539

(1) For a discussion of the assumptions used in calculating the expenses of the offering, see “Pro Forma Data.” Shares issued and outstanding total 8,397,388, 9,447,388, 10,497,388 and 11,704,888, respectively, at the minimum, midpoint, maximum and maximum, as adjusted, of the offering range including shares sold in the offering, issued to Patapsco Bancorp stockholders, and contributed to Bradford Bank Foundation.

(2) Reflects total shares issued, including shares sold in the offering, as well as all shares to be issued in the merger, and contributed to Bradford Bank Foundation.

(3) Does not reflect withdrawals from deposit accounts for the purchase of common stock in the offering. Withdrawals to purchase common stock will reduce pro forma deposits by the amounts of the withdrawals.

(4) Retained earnings are restricted by applicable regulatory capital requirements.

(5) Reflects the contribution of 275,000 shares at a value of $10.00 per share and $250,000 in cash.

(6) Reflects a tax benefit at a 34.0% effective tax rate.

(7) Assumes that 8.0% of the common stock issued in the offering, including shares contributed to Bradford Bank Foundation, will be acquired by the employee stock ownership plan in the offering with funds borrowed from Bradford Bancorp. Under United States generally accepted accounting principles, the amount of common stock to be purchased by the employee stock ownership plan represents unearned compensation and is, accordingly, reflected as a reduction of capital. As shares are released to plan participants’ accounts, a compensation expense will be charged, along with a related tax benefit, and a reduction in the charge against capital will occur in the amount of the compensation expense recognized. Since the funds are borrowed from Bradford Bancorp, the borrowing will be eliminated in consolidation and no liability or interest expense will be reflected in the consolidated financial statements of Bradford Bancorp. See “Our Management—Benefit Plans—Employee Stock Ownership Plan.”

(8) Assumes the purchase in the open market at $10.00 per share, for restricted stock awards under the proposed equity incentive plan, of a number of shares equal to 4.0% of the common stock issued in the offering, including shares contributed to Bradford Bank Foundation. The shares are reflected as a reduction of stockholders’ equity. The equity incentive plan will be submitted to stockholders for approval at a meeting following the offering. See “Risk Factors—Issuance of shares for benefit programs may dilute your ownership interest,” “Pro Forma Data” and “Our Management—Benefit Plans—Future Equity Incentive Plan.”

Regulatory Capital Compliance

At March 31, 2007, Bradford Bank exceeded all regulatory capital requirements. The following table presents Bradford Bank’s regulatory capital position relative to the regulatory capital requirements at March 31, 2007, on a historical and a pro forma basis assuming completion of the acquisitions of both Golden Prague and Senator Bank, completion of the merger with Patapsco Bancorp and completion of the offering. The table reflects receipt by Bradford Bank of a percentage of the net proceeds of the offering as set forth in “Use of Proceeds.” For purposes of the table, the amount expected to be borrowed by the employee stock ownership plan (8.0% of the shares of common stock issued in the offering, including shares contributed to Bradford Bank Foundation) are deducted from pro forma regulatory capital. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “Use of Proceeds,” “Capitalization” and “Pro Forma Data.” For a discussion of the capital standards applicable to Bradford Bank and Patapsco Bank, see “Regulation and Supervision—Regulation of Bradford Bancorp and Bradford Bank—Federal Savings Institution Regulation—Capital Requirements.”

					Pro Forma (giving effect to the offering, merger and other acquisitions) at March 31, 2007 (2)
	Bradford Bank Historical at March 31, 2007				Minimum of Offering Range 5,950,000 Shares at $10.00 Per Share				Midpoint of Offering Range 7,000,000 Shares At $10.00 Per Share				Maximum of Offering Range 8,050,000 Shares at $10.00 Per Share				15% Above Maximum of Offering Range 9,257,500 Shares at $10.00 Per Share
(Dollars in thousands)	Amount		Percent of Assets (1)		Amount		Percent of Assets		Amount		Percent of Assets		Amount		Percent of Assets		Amount		Percent of Assets

Capital under generally accepted accounting principles	$	42,223	8.26	%	$	106,762	12.91	%	$	115,461	13.80	%	$	124,161	14.67	%	$	134,165	15.65	%

Tangible Capital:
Actual	$	32,135	6.29	%	$	64,154	7.76	%	$	72,853	8.71	%	$	81,553	9.64	%	$	91,557	10.68	%
Requirement	7,668		1.50		12,407		1.50		12,550		1.50		12,693		1.50		12,858		1.50
Excess	$	24,467	4.79	%	$	51,747	6.26	%	$	60,303	7.21	%	$	68,860	8.14	%	$	78,699	9.18	%

Core Capital:
Actual	$	32,135	6.29	%	$	64,154	7.76	%	$	72,853	8.71	%	$	81,553	9.64	%	$	91,557	10.68	%
Requirement	15,336		3.00		24,814		3.00		25,100		3.00		25,387		3.00		25,716		3.00
Excess	$	16,799	3.29	%	$	39,340	4.76	%	$	47,753	5.71	%	$	56,167	6.64	%	$	65,842	7.68	%

Risk-Based Capital:
Actual (3)	$	34,545	10.21	%	$	67,847	12.32	%	$	76,546	13.85	%	$	85,246	15.38	%	$	95,250	17.11	%
Requirement	27,077		8.00		44,047		8.00		44,200		8.00		44,353		8.00		44,528		8.00
Excess	$	7,468	2.21	%	$	23,800	4.32	%	$	32,346	5.85	%	$	40,894	7.38	%	$	50,722	9.11	%

(1) Shown as a percent of assets under generally accepted accounting principles, adjusted total, or adjusted risk-weighted assets as appropriate.

(2) Reflects the issuance of 2,172,388 shares in the merger with Patapsco Bancorp.

(3) Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 20% risk-weighting.

(4) Reconciliation of capital adjustment for Bradford Bank:

(Dollars in thousands)	Minimum			Midpoint			Maximum			Maximum, as Adjusted
Gross offering proceeds	$	59,500		$	70,000		$	80,500		$	92,575
Less: offering expenses	(1,956		)	(2,077		)	(2,197		)	(2,336		)
Less: cash funding of foundation	(250		)	(250		)	(250		)	(250		)
Less: cash to fund the merger	(23,428		)	(23,428		)	(23,428		)	(23,428		)
Less: loan to the ESOP	(4,980		)	(5,820		)	(6,660		)	(7,626		)
Less: retirement of Bankers Bank loan	(3,000		)	(3,000		)	(3,000		)	(3,000		)
Less: cash retained by the holding company	(5,000		)	(5,000		)	(5,000		)	(5,000		)
Net cash infused into Bradford Bank	20,886			30,425			39,965			50,935
Less: ESOP adjustment at Bradford Bank	(4,980		)	(5,820		)	(6,660		)	(7,626		)
Net increase in capital resulting from the offering	15,906			24,605			33,305			43,309
Net increase in capital resulting from the mergers
Senator Bank and Golden Prague Federal	1,098			1,098			1,098			1,098
Patapsco Bancorp*	47,535			47,535			47,535			47,535
Increase in GAAP capital	64,539			73,238			81,938			91,942
Less: increase in disallowed intangible assets	(32,399		)	(32,399		)	(32,399		)	(32,399		)
Less: increase in disallowed assets	(121		)	(121		)	(121		)	(121		)
Increase in Tier 1 capital	32,019			40,718			49,418			59,422
Plus: increase in allowable Tier 2 capital	1,283			1,283			1,283			1,283
Increase in risk-based capital	$	33,302		$	42,001		$	50,701		$	60,705

* Includes purchase price of $45.2 million, effect on Bradford Bank capital of trust preferred securities assumed in the merger with Patapsco Bancorp and other accounting entries related to the application of purchase accounting.

Pro Forma Data

The following pro forma unaudited condensed consolidated statements of financial condition and the pro forma unaudited consolidated statements of income give effect to the proposed offering and the merger with Patapsco Bancorp, based on the assumptions set forth below. As a result, the pro forma data assumes the completion of the offering and the merger with Patapsco Bancorp. The condensed pro forma unaudited consolidated financial statements are based, in part, on the audited consolidated financial statements of Bradford Bancorp for the year ended December 31, 2006, the audited consolidated financial statements of Patapsco Bancorp for the year ended June 30, 2006 and the unaudited consolidated financial statements of Bradford Bancorp and Patapsco Bancorp for the three months ended March 31, 2007. In addition, the condensed pro forma unaudited consolidated financial statements include, where appropriate, the impact of the mergers of Senator Bank, Golden Prague and Valley Bancorp including merger and purchase accounting adjustments. Financial information for Senator Bank, Golden Prague and Valley Bancorp includes March 31, 2007 financial results and the most recent audited financial statements for each company. The pro forma unaudited condensed consolidated financial statements give effect to the offering at historical cost and the merger using purchase accounting as required by accounting principles generally accepted in the United States of America.

The pro forma adjustments in the tables assume the issuance of 5,950,000 shares, which is the minimum of the offering range, and 9,257,500 shares, which is the maximum of the offering range, as adjusted, in the offering and the merger. Patapsco Bancorp stockholders will receive in the merger $23.00 in cash, 2.3 shares of Bradford Bancorp common stock for each share of Patapsco Bancorp stock, or a combination thereof with the aggregate amount of common stock being issued in the merger equal to 50.0% of the merger consideration based on the terms of the merger agreement. The remainder of the merger consideration will consist of cash. For a more detailed discussion of how many shares will be issued in connection with the offering and the merger, see the analysis set forth below. The purchase price for purposes of the pro forma presentation for Patapsco Bancorp was calculated as follows:

	March 31, 2007
	(In thousands)
Net assets acquired before purchase accounting	$	19,317
Purchase accounting adjustments:
Estimated non-tax deductible merger costs (1)	(766		)
Estimated tax deductible merger costs (1)	(1,570		)
Loans (2)	(763		)
Deposits (2)	(177		)
Borrowings (2)	1,009
Subordinated debt (2)	25
Increase in core deposit intangible asset (3)	4,436
Tax impact of purchase accounting adjustments at 34%	(1,006		)
Increase in goodwill	24,647
Purchase price	$	45,152

(1) The non-tax deductible merger costs and the tax deductible merger costs have been or will be incurred in the first twelve months following consummation of the offering and merger.

(2) Loans, deposits and borrowings adjustments reflect the market value adjustment assigned to each class of these items. For loans receivable, the purchase accounting adjustments were calculated as the present value difference between the yields of acquired loans and market rates for similar loans as of March 31, 2007. For deposits and borrowings, the purchase accounting adjustments were calculated as the present value difference between the interest costs of the acquired liabilities and market interest costs for liabilities with comparable maturities as of March 31, 2007. For subordinated debt, the purchase accounting adjustment was based on a market quote of fair value as of March 31, 2007 for the trust preferred securities acquired in the merger with Patapsco Bancorp. Purchase accounting adjustments are amortized using the estimated lives of the respective assets and liabilities.

(3) Core deposit intangible was calculated to be $4.8 million. Figure shown is the net increase to the $361,000 core deposit intangible currently reported by Patapsco Bancorp. Core deposit intangible reflects the present value benefit to Bradford Bancorp of utilizing the acquired core deposits as a funding source relative to wholesale funding costs based on the rates of

Federal Home Loan Bank advances. The core deposit intangible is calculated using deposit balances and interest rates as of March 31, 2007. Costs of the acquired core deposits include interest costs, plus estimated operating expenses, less estimated non-interest income to be derived from the core deposits. Acquired core deposits are projected to decay based on assumptions promulgated by the Office of Thrift Supervision. The yield benefit for each period is discounted to present value using a weighted average cost of capital. The core deposit intangibles are amortized over the estimated lives of the core deposits using a straight line amortization method.

The net proceeds are based upon the following assumptions:

· Bradford Bancorp will sell all shares of common stock offered in the subscription offering;

· Bradford Bancorp’s employee stock ownership plan will purchase a number of shares equal to 8.0% of the shares sold in the offering and contributed to the charitable foundation, with the employee stock ownership plan purchase funded by a loan from Bradford Bancorp;

· Bradford Bancorp’s equity incentive plan will purchase, in open market purchases, a number of shares equal to 4.0% of the shares sold in the offering and contributed to the charitable foundation, with such purchases assumed to occur at $10.00 per share;

· Bradford Bancorp will contribute 275,000 shares and $250,000 in cash to the charitable foundation;

· expenses of the offering, other than the fees to be paid to Sandler O’Neill, are estimated to be $1,291,000;

· 131,000 shares of common stock will be purchased by Bradford Bancorp’s executive officers and directors, and their immediate families; and

· Sandler O’Neill will receive fees equal to 1.25% of the aggregate purchase price of the shares of stock sold in the offering, excluding any shares purchased by any employee benefit plans, the charitable foundation established by Bradford Bancorp and any of Bradford Bancorp’s directors, officers or employees or members of their immediate families.

In addition, the expenses of the offering and the merger may vary from those estimated, and the fees paid to Sandler O’Neill will vary from the amounts estimated if the amount of shares of Bradford Bancorp common stock sold varies from the amounts assumed above or if a syndicated community offering becomes necessary. These items, net of income tax effects, are shown as a reduction in stockholders’ equity in the following tables, but are not shown as a reduction in net income for the periods shown in the following tables.

The unaudited condensed consolidated pro forma balance sheets assume the offering and merger were consummated on March 31, 2007 and on December 31, 2006. The March 31, 2007 and December 31, 2006 pro forma balance sheets include the pro forma effects of mergers of Senator Bank and Golden Prague with and into Bradford Bancorp, including estimated purchase accounting and merger adjustments. In addition, the December 31, 2006 pro forma balance sheets include the pro forma effects of the merger of Valley Bancorp, completed in January 2007, with and into Bradford Bancorp including the purchase accounting and merger adjustments.

The stockholders’ equity represents the resulting book value of the common stockholders’ ownership of Bradford Bancorp and Patapsco Bancorp computed in accordance with accounting principles generally accepted in the United States of America. Pro forma stockholders’ equity and book value are not intended to represent the fair market value of the common stock and, due to the existence of the tax bad debt reserve and intangible assets, may be different than amounts that would be available for distribution to stockholders in the event of liquidation.

The pro forma unaudited statements are provided for informational purposes only. The pro forma financial information presented is not necessarily indicative of the actual results that would have been achieved had the offering and merger been consummated on March 31, 2007 or on December 31, 2006, and is not indicative of future results. The pro forma unaudited condensed consolidated financial statements should be read in conjunction with the

consolidated financial statements and the notes thereto of Bradford Bancorp and Patapsco Bancorp contained elsewhere in this document.

Pro forma net earnings has been calculated for the three months ended March 31, 2007 and for the year ended December 31, 2006 as if the shares of Bradford Bancorp common stock to be issued in the offering had been sold and the merger exchange shares had been issued as of the beginning of the period. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of Bradford Bancorp common stock.

The unaudited pro forma net earnings and common stockholders’ equity derived from the above assumptions are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Bradford Bancorp common stock or the actual results of operations of Bradford Bancorp and Patapsco Bancorp for any period. Such pro forma data may be materially affected by the actual gross proceeds from the sale of shares of Bradford Bancorp in the offering and the actual expenses incurred in connection with the offering and the merger. Pro forma merger adjustments to stockholders’ equity include $445,000 of one-time restructuring expenses estimated to be incurred to consolidate the operations of the merged companies including Patapsco Bancorp as follows:

		Amount
		(in thousands)
Conversion of EDP systems:
Patapsco Bancorp		$

Bradford Bancorp Inc /MD S-1