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Comptroller of the Currency

Administrator of National Banks

Southeastern District

Marquis One Tower, Suite 600

245 Peachtree Center Ave., N.E.

Atlanta, Georgia 30303

#### Conditional Approval #464

April 24, 2001 **May 2001**

Halcyon E. Skinner, Esq.

McGuire Woods LLP

Bank of America Tower

50 North Laura Street, Suite 3300

Jacksonville, Florida 32202-3661

Re: Purchase of Two Branches of Republic Bank, St. Petersburg, Florida
by CNB National

Bank, Lake City, Florida CAIS \# 2001-SE-02-0003

Dear Mr. Skinner:

This is to inform you that on April 24, 2001, the Office of the
Comptroller of the Currency ("OCC") conditionally approved the proposal
for CNB National Bank, Lake City, Florida ("CNB") to purchase certain
assets and assume certain liabilities of the Live Oak, Florida branch
and the Lake City, Florida branch of Republic Bank, St. Petersburg,
Florida ("Republic"). A copy of the OCC's decision document is enclosed.

This conditional approval is granted based on a thorough review of all
information available, including commitments and representations made in
the application, the merger agreement, and those of your
representatives. This conditional approval and the activities and
communications by OCC employees in connection with the filing, do not
constitute a contract, express or implied, or any other obligation
binding upon the OCC, the U.S., any agency or entity of the U.S., or an
officer or employee of the U.S., and do not affect the ability of the
OCC to exercise its supervisory, regulatory and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the U.S.

This application is subject to the condition that CNB shall comply with
its agreement with the Department of Justice dated March 19, 2001.

Halcyon E. Skinner, Esq.

April 24, 2001

Page 2

The condition of this approval is a condition "imposed in writing by the
agency in connection with the granting of any application or other
request" within the meaning of 12 USC 1818. As such, the condition is
enforceable under 12 USC 1818.

If the bank is subject to 12 CFR 11, you are reminded to submit any
required preliminary proxy materials or information statement to the
OCCs Securities and Corporate Practices Division.

Otherwise, you are reminded to submit definitive copies of the proxy
materials or information statement sent to the appropriate district
office at the same time they are distributed to the shareholders.

The steps to complete the purchase and assumption are contained in the
Business Combination booklet.

As a reminder, the district office must be advised in writing in advance
of the desired effective date for the purchase and assumption so that
the OCC may issue the necessary certification letter.

The effective date must be after the applicable Department of Justice
injunction period (i.e., 15 days after the date of this letter) and
after receipt of any other required regulatory approvals.

The OCC will issue a letter certifying consummation of the transaction
when we receive:

1\) A Secretarys Certificate for each institution, certifying that a
majority of the board of directors approved.

2\) An executed purchase and assumption agreement with Articles of
Association for the resulting bank attached.

3\) A Secretarys Certificate from each institution, certifying that the
shareholder approvals have been obtained, if required.

If the purchase and assumption is not consummated within one year from
the approval date, the approval shall automatically terminate unless the
OCC grants an extension of the time period.

If you have questions, please contact Debra M. Burke at 404-588-4525.

Sincerely,

-signed-

John O. Stein, II

Licensing Manager

**Decision Document**

DECISION OF THE COMPTROLLER OF THE CURRENCY ON THE APPLICATION TO
PURCHASE AND ASSUME TWO BRANCHES OF REPUBLIC BANK, ST. PETERSBURG,
FLORIDA BY CNB NATIONAL BANK, LAKE CITY, FLORIDA, UNDER THE CHARTER AND
TITLE OF CNB NATIONAL BANK.

**Introduction**

On January 22, 2001, application was made to the Comptroller of the
Currency for prior authorization to purchase and assume two branches of
Republic Bank, St. Petersburg, Florida by CNB National Bank, Lake City,
Florida, under the charter and title of CNB National Bank. This
application was based on an agreement entered into between the
proponents on December 20, 2000.

**Participating Financial Institutions**

As of October 31, 2000, the two branches of Republic Bank ("Republic"),
a state-chartered institution, subject to the Purchase and Assumption
Agreement, had total deposits of \$64 million. On November 30, 2000, CNB
National Bank ("CNB") had total deposits of \$356 million and operated
13 offices. CNB is 100% owned and controlled by CNB Florida Bancshares,
Inc., a one-bank holding company.

**Competitive Analysis**

The relevant geographic markets for this proposal are Columbia and
Suwannee Counties, Florida. These counties are relevant and separate
banking markets (as defined by the Federal Reserve Bank of Atlanta,
Georgia), where competition between CNB and Republic is direct and
immediate.

As of June 30, 2000, in Columbia County, CNB ranks first with
approximately \$112 million in deposits or 28 percent market share of
total deposits. Republic ranks fifth with approximately \$35 million in
deposits or 9 percent market share of total deposits. After the
transaction, CNB will have a 37 percent market share of total deposits
and continue to rank first. After the elimination of Republic from the
Columbia market CNB will compete with five other banking alternatives.
These alternatives include one large institution and four local banks.

As of June 30, 2000, in Suwannee County, CNB ranks third with
approximately \$47 million in deposits or 16 percent market share of
total deposits. Republic ranks last with approximately \$31 million in
deposits or 10 percent market share of total deposits. After the
transaction, CNB will have a 27 percent market share of total deposits
and rank second in the market. After the elimination of Republic from
the Suwannee market CNB will compete with three other banking
alternatives. These alternatives include one large institution and two
local banks.

For each County, the OCC carefully considered the report of the
Department of Justice, which similarly found the proposed transaction
would not have a significant adverse effect on competition subject to
its letter of agreement with CNB.[^1] Therefore, consummation of this
proposal will not have a significantly adverse effect on competition in
the relevant geographic market provided that CNB complies with its
agreement with the Department of Justice.

# Banking Factors 

The Bank Merger Act requires the OCC to consider "\...the financial and
managerial resources and future prospects of the existing and proposed
institutions, and the convenience and needs of the community to be
served." We find that the financial and managerial resources of Republic
and CNB do not raise concerns that would cause the application to be
disapproved. The future prospects of the proponents, individually and
combined, are considered favorable and the resulting bank is expected to
meet the convenience and needs of the community to be served. The
customers of CNB and Republic will benefit from access to a larger
branch network in Columbia and Suwannee Counties. In addition, the
customers of Republic will have access to additional products/services
that are not currently offered by Republic. There will be at least two
branch closings as a result of the transaction. The branches have not
been identified as of this date. Written notice of the closings was
provided in the newspaper notice to the public in accordance with OCC
policy.

**Community Reinvestment Act**

A review of the record of this application and other information
available to the OCC as a result of its regulatory responsibilities has
revealed no evidence that the applicants' records of helping to meet the
credit needs of their communities, including low‑and moderate‑income
neighborhoods, is less than satisfactory.

**Conclusion**

We have analyzed this proposal pursuant to the Bank Merger Act (12 USC
1828(c)) and/or 12 CFR 5.33, and find that it will not significantly
lessen competition in any relevant market. Other factors considered in
evaluating this proposal are satisfactory. Accordingly, the application,
2001-SE-02-0003, is approved subject to the condition noted in a
separate letter to CNB from the OCC, dated April 24, 2001.

-signed-

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

John O. Stein, II

Licensing Manager

Dated: [04-24-01\_\_\_\_\_\_\_\_]{.underline}

ACN #2001 SE 02 0003

[^1]: In reaching this conclusion, the Department of Justice relied on
    commitments by CNB in a March 19, 2001 letter of agreement. CNB
    agreed that, for a period of three months prior to selecting a buyer
    or lessor for a branch closed as a result of the subject
    transaction, it will issue a notice on a weekly or bi-weekly basis
    in a relevant industry publication(s), as approved by the Department
    of Justice, for the sale or lease of the branch. CNB agrees that it
    will provide a copy of the notice to the Department before
    publication. CNB further agrees that, during the notice period, it
    will accept offers from commercial banks that are equivalent to, or
    better than, offers from non-bank bidders, and will give interested
    banks an opportunity to meet or exceed outstanding offers from
    non-bank bidders. In addition, CNB will not impose any conditions in
    deeds or lease agreements that would preclude the future use of any
    of the closed branches by a commercial bank. These commitments apply
    to any of the branches closed in Columbia and Suwannee Counties,
    Florida, and will remain in effect for a period of three years
    following the consummation of the subject transaction.

    In addition, CNB agrees that it will suspend the operation of any
    existing non-compete agreements and to not enter into any new
    non-compete agreements with any current CNB or Republic loan officer
    or branch manager in Columbia and Suwannee Counties, Florida. These
    commitments will remain in effect for a period of 180 days following
    consummation of the subject transaction.