FLORIDAFIRST BANCORP, INC.

Corporate Profile

FloridaFirst  Bancorp,  Inc. is the parent  company of and conducts  most of its
business  operations  through  FloridaFirst  Bank  (the  "Bank").  The  Bank,  a
federally-chartered  savings  bank  headquartered  in  Lakeland,  Florida,  is a
community-oriented retail savings bank offering a full range of deposit services
to both consumers and commercial entities. The Bank's lending activities include
residential  real estate  mortgage loans,  commercial  real estate loans,  other
commercial  loans and consumer  loans.  The Bank has operated  within its market
areas since 1934 and delivers its products and services  through  eleven offices
located in Florida's Polk and Manatee Counties.

On  April  6,  1999,   FloridaFirst  Bank  reorganized  from  a  mutual  savings
association  into a mutual holding  company named  FloridaFirst  Bancorp MHC and
formed FloridaFirst Bancorp, a middle-tier holding company, whereby FloridaFirst
Bank became a wholly-owned  subsidiary of  FloridaFirst  Bancorp.  In connection
with the  reorganization,  FloridaFirst  Bancorp  sold  2,703,851  shares of its
Common  Stock to the  public and the  remaining  3,049,024  shares  were held by
FloridaFirst Bancorp MHC. On December 21, 2000,  FloridaFirst Bancorp, Inc. (the
"Company")  completed its stock  offering in connection  with the conversion and
reorganization  of  FloridaFirst  Bank (the  "Bank")  and its  holding  company,
FloridaFirst  Bancorp, from the mutual holding company form of organization to a
full stock company.  As part of the conversion  and  reorganization,  the shares
formerly  held by  FloridaFirst  Bancorp MHC were  cancelled,  the Company  sold
3,147,952  new  shares to the  public and the  shares  held by  stockholders  of
FloridaFirst Bancorp were exchanged for 2,372,048 shares of the Company.


Stock Market Information and Dividends

Since its issuance on April 6, 1999,  the  Company's  common stock has traded on
the  Nasdaq  National  Market  under the symbol  FFBK.  Upon  completion  of the
conversion and  reorganization  on December 21, 2000, the common stock continues
to trade  on the  Nasdaq  National  Market  under  the same  symbol,  FFBK.  The
following table sets forth market price information, based on closing prices, as
reported by the Nasdaq  National  Market for the common stock high and low sales
prices for the periods  indicated.  The stock  prices prior to December 22, 2000
are adjusted to reflect the exchange  ratio of 1.0321 after the  conversion  and
reorganization.  See  Note 17 of the  consolidated  financial  statements  for a
summary of quarterly financial data.

                                                               Cash Dividends
                                        High         Low      Per Share Declared
                                        ----         ---      ------------------

Fiscal 2001
-----------
First Quarter................          $12.56       $10.62               $.04
Second Quarter...............           15.00        12.31                .05
Third Quarter................           16.10        14.53                .05
Fourth Quarter...............           17.48        13.75                .05

Fiscal 2000
-----------
First Quarter................           $9.09        $8.24               $.04
Second Quarter...............            8.60         7.08                .04
Third Quarter................            7.99         7.02                .04
Fourth Quarter...............           11.87         7.63                .04

The number of  stockholders  of record of common stock as of September  30, 2001
was  approximately  756,  which do not include the number of persons or entities
who held stock in nominee or "street" name through various brokerage firms.

                                       3
<PAGE>
<TABLE>
<CAPTION>
                          Selected Financial Highlights
                      (In thousands except per share data)

                                           2001       2000        1999    1998(3)      1997
                                         --------   --------   --------   --------   --------
<S>                                     <C>        <C>        <C>        <C>        <C>
At September 30:
Assets ...............................   $660,369   $582,180   $498,358   $414,472   $466,765
Loans, net ...........................    474,155    440,386    397,910    338,610    355,551
Securities ...........................    129,534    106,348     80,876     60,961     74,573
Cash and cash equivalents ............     21,676      6,734      2,598        647     21,842
Deposits .............................    399,537    354,554    339,224    352,180    429,714
FHLB advances and other borrowings ...    160,548    160,937     92,472     21,000       --
Stockholders' equity .................     93,814     61,081     61,337     36,107     33,588

Actual number (not in thousands):
Real estate loans outstanding ........      4,481      4,615      4,696      4,433      5,149
Deposit accounts .....................     36,168     36,747     38,409     38,409     46,012
Full service offices .................         11          9          9          9         14

For the year ended September 30:
   Interest income ...................   $ 44,846   $ 39,840   $ 32,648   $ 32,141   $ 33,865
   Interest expense ..................     25,895     23,575     17,128     18,966     19,702
                                         --------   --------   --------   --------   --------
   Net interest income ...............     18,951     16,265     15,520     13,175     14,163
   Provision for loan losses .........        615        630        540        405        317
                                         --------   --------   --------   --------   --------
   Net interest income after provision
        for loan losses ..............     18,336     15,635     14,980     12,770     13,846
   Noninterest income ................      2,744      2,114      1,473      4,347      1,189
   Noninterest expenses ..............     13,776     11,813     11,448     13,581     11,209
                                         --------   --------   --------   --------   --------
   Income before income taxes ........      7,304      5,936      5,005      3,536      3,826
   Income taxes ......................      2,273      2,094      1,748      1,151      1,299
                                         --------   --------   --------   --------   --------
   Net income ........................   $  5,031   $  3,842   $  3,257   $  2,385   $  2,527
                                         ========   ========   ========   ========   ========

   Basic earnings per share (1) (2)...   $    .95   $    .71   $    .33         --         --
                                         ========   ========   ========   ========   ========
   Diluted earnings per share (1) (2).   $    .93   $    .70   $    .33         --         --
                                         ========   ========   ========   ========   ========

   Weighted average common and common
      Equivalent shares
        outstanding: (1) (2)
         Basic (4)....................      5,293      5,424      5,727         --         --
         Diluted(4)...................      5,429      5,516      5,727         --         --
</TABLE>
-----------------
(1)    Year 2001  includes  $30.6  million in net proceeds  from the issuance of
       common stock in  connection  with the  conversion  from a mutual  holding
       company to a full stock company on December 21, 2000.
 (2)   Years  2000 and 1999  include  $25.7  million  in net  proceeds  from the
       reorganization  on April 6, 1999.  Prior to April 6, 1999, the Bank was a
       mutual  institution.  Therefore,  earnings per share and weighted average
       shares  outstanding  in 1999 are for the six months ended  September  30,
       1999 (period subsequent to the reorganization.)
(3)    During  fiscal year 1998,  the Bank sold five branches (and $55.5 million
       in related  deposits) that were not contiguous to its primary market area
       for a  pre-tax  gain of $3.0  million.  In  connection  with  the sale of
       branches,  the Bank  transferred  $44.6  million in loans.  In  addition,
       noninterest  expenses  includes  special benefit plan adjustments of $2.2
       million.
(4)    Shares  outstanding  for the years ended 2000 and 1999 have been adjusted
       as of the beginning of the periods to give effect to the 1.0321  exchange
       ratio of previously issued shares in conjunction with the conversion that
       was effective December 21, 2000.

                                       4
<PAGE>

                            Selected Financial Ratios
<TABLE>
<CAPTION>

                                                     At or For the Year Ended September 30,
                                              ---------------------------------------------------
                                                   2001      2000      1999      1998      1997
                                                   ----      ----      ----      ----      ----
<S>                                            <C>       <C>       <C>       <C>       <C>
 Performance Ratios:

 Return on average assets (net income
     divided by average total assets) .....         .82%      .70%      .72%      .55%      .56%

 Return on average equity (net income
     divided by average equity) ...........        5.80      6.43      6.65      6.55      7.71

 Net interest-rate spread .................        2.51      2.54      2.95      2.65      2.87

 Net interest margin on average
     interest-earnings assets .............        3.30      3.13      3.56      3.10      3.23

 Average interest-earning assets to
     average interest-bearing liabilities .         118       113       116       110       108

 Efficiency  ratio  (noninterest  expense,
     other  than the $2.5  million  SAIF
     special assessment in 1997, divided
     by the sum of net interest income and
     noninterest income) ..................          63        64        67        78        74


Asset Quality Ratios:

 Nonperforming loans to total loans, net ..         .20       .17       .21       .25

 Nonperforming assets to total assets .....         .29       .17       .21       .32       .53

 Net charge-offs to average loans
      outstanding .........................         .06       .06       .04       .14       .02

 Allowance for loan losses to total loans .         .76       .75       .74       .76       .74


 Capital Ratios:

 Average equity to average assets
     (average equity divided by average
       total assets) ......................       14.17     10.94     10.84      8.31      7.25

 Equity to assets at period end ...........       14.21     10.49     12.31      8.62      7.20

 Dividend payout ratio ....................          20        22        12        --        --

</TABLE>
                                       5
<PAGE>
         Management's Discussion and Analysis of Financial Condition and
                              Results of Operations

The  following  discussion  should  be read in  conjunction  with  the  Selected
Financial Highlights,  Selected Financial Ratios and the Consolidated  Financial
Statements and related notes beginning at page 17.

General

On  April  6,  1999,   FloridaFirst  Bank  reorganized  from  a  mutual  savings
association  into a mutual holding  company named  FloridaFirst  Bancorp MHC and
formed FloridaFirst Bancorp, a middle-tier holding company, whereby FloridaFirst
Bank became a wholly-owned  subsidiary of  FloridaFirst  Bancorp.  In connection
with the  reorganization,  FloridaFirst  Bancorp  sold  2,703,851  shares of its
Common  Stock to the  public and the  remaining  3,049,024  shares  were held by
FloridaFirst Bancorp MHC.

On December 21, 2000,  FloridaFirst  Bancorp, Inc. (the "Company") completed its
stock  offering  in  connection  with  the  conversion  and   reorganization  of
FloridaFirst  Bank (the "Bank") and its holding company,  FloridaFirst  Bancorp,
from the mutual holding company form of organization to a full stock company. As
part  of  the  conversion  and  reorganization,  the  shares  formerly  held  by
FloridaFirst  Bancorp MHC were cancelled,  the Company sold 3,147,952 new shares
to the public and the shares held by stockholders  of FloridaFirst  Bancorp were
exchanged for 2,372,048 shares of the Company. The conversion and reorganization
was  accounted for in a manner  similar to a pooling of  interests,  whereby the
assets and liabilities of FloridaFirst  Bancorp became the Company's  assets and
liabilities.

Forward-Looking Statements

The following discussions contain  forward-looking  statements that are based on
assumptions and describe future plans, strategies,  and expectations of the Bank
and the Company.  These  forward-looking  statements are generally identified by
use  of the  words  "believe,"  "expect,"  "intend,"  "anticipate,"  "estimate,"
"project," or similar  expressions.  The Company's ability to predict results or
the actual effect of future plans or strategies is inherently uncertain. Factors
that could have a material  adverse  effect on the operations of the Company and
its  subsidiaries  include,  but are not limited to, changes in interest  rates,
general economic conditions, legislative/regulatory changes, monetary and fiscal
policies of the U.S. Government, including policies of the U.S. Treasury and the
Federal  Reserve Board,  the quality and  composition of the loan and investment
portfolios,  demand for loan products,  deposit flows,  competition,  demand for
financial  services  in the  Company's  market  area,  and  changes in  relevant
accounting  principles.  These risks and  uncertainties  should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. The Company does not undertake--and specifically disclaims--any
obligation to publicly  release the results of any  revisions  after the date of
the  statements or to reflect the  occurrence of  anticipated  or  unanticipated
events.


Business Strategy

The Board of  Directors  and  management  have  developed  expansion  plans that
include three de novo retail sales offices within its existing market areas (two
were opened  during the current  year) and  continued  deployment of a strategic
technology  plan.  By seeking to broaden the range of its  products and services
offered,  the Company believes its strategies will offset the declining  margins
in the competitive  market for one- to four-family  residential  mortgage loans.
The strategic plan includes:

>    increasing  the percentage of higher  yielding and more interest  sensitive
     assets;
>    increasing  the  percentage of commercial and consumer loans and commercial
     deposit accounts;
>    utilizing alternative sources of funding at reasonable rates;
>    increasing sources of non-interest income;
>    utilizing  our computer  network for enhanced  sales,  service and security
     features; and
>    utilizing  alternative  delivery  systems,  including our internet  banking
     product, and investigating an enhanced customer care center strategy.

                                       6
<PAGE>

Highlights of the business strategy are as follows:

Community-Oriented  Institution.  Based on total assets, the Bank is the largest
independent  financial  institution  headquartered in Polk County,  Florida. The
Bank is committed to meeting the financial  needs of the communities in which it
operates.  Management  believes  that the Bank is large enough to provide a full
range of personal and business  financial  services,  and yet is small enough to
provide such services in a personalized and efficient  manner.  It is the Bank's
current plan to deliver the  products  and  services  that meet the needs of its
customers, including the recent introduction of an Internet banking product.

Commercial  Banking.  The Bank  continues  to expand its  lending  programs  for
commercial  business and commercial  real estate loans in an effort to satisfy a
perceived need within its market area and increase its loan portfolio.  The Bank
continues  to  realize  a  positive  impact  on its net  interest  margin  since
commercial customers generally provide a higher loan yield and a source of lower
cost funds. The risks of commercial lending relate to the source of repayment of
the loan which is weighted  toward the ability to repay versus  being  primarily
collateral  dependent.  In recent  years,  the Bank has  assembled a very strong
commercial lending team to support its increased  activities in this area and to
increase its  penetration  into the smaller  businesses  operating in its market
areas.


Management of Interest Rate-Risk and Market Risk

Qualitative Analysis. Because the majority of the Company assets and liabilities
are sensitive to changes in interest rates,  its most significant form of market
risk is  interest-rate  risk,  or  changes in  interest  rates.  The  Company is
vulnerable to an increase in interest rates to the extent that  interest-bearing
liabilities  mature or reprice more rapidly than  interest-earning  assets.  Its
lending  activities have  historically  emphasized the origination of long-term,
fixed-rate  loans secured by  single-family  residences.  The primary  source of
funds has been  deposits with  substantially  shorter  maturities.  While having
interest-bearing  liabilities that reprice more frequently than interest-earning
assets  is  generally  beneficial  to net  interest  income  during a period  of
declining  interest  rates,  such  an  asset/liability   mismatch  is  generally
detrimental during periods of rising interest rates. In addition, the customers'
optionality  to repay a loan or  renegotiate  the interest rate on the loan when
interest  rates move in their favor creates an  additional  variable in managing
the asset/liability structure of the Bank.

The  Board of  Directors  has  established  an  asset/liability  committee  that
consists of the Company's  president and senior banking officers.  The committee
meets on a monthly  basis to review  loan and  deposit  pricing  and  production
volumes,  interest rate risk  analysis,  liquidity and  borrowing  needs,  and a
variety of other asset and liability management issues.

To reduce the  effect of  interest  rate  changes on net  interest  income,  the
Company   has  adopted   various   strategies   to  improve   the   matching  of
interest-earning asset maturities to interest-bearing  liability maturities. The
principal elements of these strategies include:

>    the  origination  of  commercial  and consumer  loans with  adjustable-rate
     features or fixed-rate loans with shorter term maturities;
>    lengthening  the  maturities  of  liabilities  when deemed  cost  effective
     through  the  pricing  and  promotion  of   certificates   of  deposit  and
     utilization of Federal Home Loan Bank advances;
>    attracting low cost checking and transaction accounts which tend to be less
     sensitive to rising rates; and
>    when market  conditions  permit,  to  originate  and hold in its  portfolio
     adjustable-rate   mortgage   loans  which  have   periodic   interest  rate
     adjustments.  The  Company  also  maintains  a  securities  portfolio  that
     provides a stable cash flow, thereby providing  investable funds in varying
     interest rate cycles.

The Company has also made a  significant  effort to maintain  its level of lower
cost deposits as a method of enhancing profitability. At September 30, 2001, the
Company  had  29.1% of its  deposits  in  savings,  checking  and  money  market
accounts.  These deposits have traditionally  remained relatively stable and are
expected to be only  moderately  affected in a period of rising  interest rates.
This  stability  has enabled the Company to offset the impact of rising rates in
other deposit accounts.

                                       7
<PAGE>

Quantitative  Analysis.  Exposure to interest rate risk is actively monitored by
management.  The  Company's  objective  is to  maintain  a  consistent  level of
profitability  within  acceptable  risk  tolerances  across  a  broad  range  of
potential  interest  rate  environments.  The Company uses the OTS Net Portfolio
Value  ("NPV")  Model to monitor  its  exposure  to  interest  rate risk,  which
calculates  changes  in  NPV.  The  NPV  Model  measures  interest-rate  risk by
computing estimated changes in the NPV of cash flow from assets, liabilities and
off-balance  sheet  items in the event of a range of  assumed  changes in market
interest rates. The NPV Model shows the degree to which balance sheet line items
and NPV are potentially  affected by a 100 to 300 basis point change.  One basis
point equals 1/100th of a percentage  point.  Reports generated by the NPV Model
are reviewed by the  Asset/Liability  Management  Committee  and reported to the
Board of Directors quarterly.

The NPV Model uses an option-based pricing approach to value one- to four-family
mortgages,  mortgages  serviced by or for others,  and firm  commitments to buy,
sell,  or  originate  mortgages.  This  approach  makes use of an interest  rate
simulation  program to generate  numerous  random  interest  rate paths that, in
conjunction with a prepayment  model, are used to estimate  mortgage cash flows.
Prepayment  options and interest rate caps and floors contained in mortgages and
mortgage-related  securities introduce significant uncertainty in estimating the
timing  of cash  flows  for  these  instruments  that  warrants  the use of this
sophisticated  methodology.  All other financial  instruments are valued using a
static  discounted cash flow method.  Under this approach,  the present value is
determined by discounting  the cash flows the instrument is expected to generate
by the yields currently  available to investors from an instrument of comparable
risk and duration.

Future  interest rates and their effects on NPV and net interest  income are not
predictable.  Computations of prospective effects of hypothetical  interest rate
changes are based on numerous  assumptions,  including relative levels of market
interest rates, prepayments, and deposit run-offs, and should not be relied upon
as  indicative  of actual  results.  Certain  shortcomings  are inherent in such
computations.  Although certain assets and liabilities may have similar maturity
or periods of  repricing,  they may react at  different  times and in  different
degrees to changes in the market  interest  rates.  The interest rate on certain
types of assets and  liabilities  may  fluctuate in advance of changes in market
interest  rates,  while rates on other types of assets and  liabilities  may lag
behind changes in market interest rates. Certain assets, such as adjustable rate
mortgages,  generally have features that restrict changes in interest rates on a
short-term  basis and over the life of the  asset.  After a change  in  interest
rates,  prepayments and early withdrawal levels could deviate significantly from
those assumed in making calculations set forth above. Additionally, an increased
credit  risk may result if our  borrowers  are  unable to meet  their  repayment
obligations as interest rates increase.

The  following  table  presents  our NPV as of September  30, 2001.  The NPV was
calculated  by the OTS,  based upon the above model  assumptions  and  financial
information   provided  by  the  Company.  As  illustrated  in  the  table,  the
calculations  show that the Company would be adversely  affected by increases in
interest  rates and would  benefit  slightly  by  decreases  in  interest  rates
(dollars in thousands).


            Net Portfolio Value ("NPV")      NPV as % of Present Value of Assets
          ---------------------------------  -----------------------------------
 Change                                                            Basis Point
In Rates  $ Amount     $ Change    % Change           NPV Ratio       Change
--------  --------     --------    --------           ---------       ------
 +300 bp    32,642      (42,790)      (57)%             5.30%        (584) bp
 +200 bp    47,080      (28,352)      (38)%             7.40%        (373) bp
 +100 bp    61,954      (13,478)      (18)%             9.43%        (171) bp
    0 bp    75,432                                     11.14%
 -100 bp    83,708        8,276        11%             12.07%          93  bp
 -200 bp    85,886       10,455        14%             12.19%         105  bp

The OTS  defines the  sensitivity  measure as the change in NPV ratio with a 200
basis point shock. Our sensitivity measure reflects a 373 basis point decline in
NPV ratio as of  September  30, 2001  compared to a  sensitivity  measure of 437
basis  points as of September  30,  2000.  The  improvement  in our  sensitivity
measure at September 30, 2001  primarily  reflects the  significant  decrease in
short-term interest rates from September 30, 2000.

                                       8
<PAGE>

Comparison of Financial Condition at September 30, 2001 and September 30, 2000

Assets.  Total assets  increased  $78.2 million,  or 13.4%, to $660.4 million at
September 30, 2001 from $582.2  million at September  30, 2000.  The increase in
total assets resulted primarily from a $33.8 million,  or a 7.7% increase in the
loan  portfolio  attributable  to steady  loan demand in our market  areas,  and
funding of construction loans. In addition,  securities increased $23.2 million.
Management  plans to focus on loan growth to  effectively  leverage its capital.
The capital  leveraging  strategy  will  include the purchase of  securities  to
complement its loan origination efforts.

Cash and cash  equivalents  increased  $14.9  million  due to: (a) excess  funds
resulting from $11.0 million in a treasury  borrowings program that placed funds
in the Bank  late in the year;  and (b)  higher  mortgage  loan  prepayments  in
September 2001.

Premises and equipment  increased $2.0 million primarily due to the construction
of a new office,  equipment for two offices,  renovations at several offices and
capital  expenditures  to implement  certain phases of the strategic  technology
plan.

Other assets  increased  primarily due to the cash surrender value of bank owned
life insurance policies that were purchased in January 2001.

Liabilities.  Total  liabilities  increased  $45.5  million,  or 8.7%, to $566.6
million at September  30, 2001 from $521.1  million at September  30, 2000.  The
increase in total liabilities  resulted primarily from a net deposit increase of
$45.0  million.  The increase in deposits in the last half of the year  reflects
renewed  consumer  interest in insured  deposit  accounts as the equity  markets
declined  significantly.  In addition,  our  checking and money market  accounts
continue to grow through expansion of our customer base.

Management  continues to evaluate the available funding sources.  The attributes
of the alternative  funding  sources that  management  considers in its analysis
include  the   interest   and  other  costs  of  such   funding,   the  maturity
considerations and the nature and characteristics of assets being funded.

On December 6, 2001,  the Bank signed a definitive  agreement with SunTrust Bank
("SunTrust")  to purchase seven Florida  branches from SunTrust  coincident with
SunTrust's   acquisition  of  such  branches  from   Huntington   National  Bank
("Huntington").  Four  of the  Huntington  branches  are  located  in  Lakeland,
Florida,  and one each in Avon Park and  Sebring in  Highlands  County,  and one
branch  in  Wildwood,  Florida.  The  transaction  will  include  assumption  of
approximately  $165 million in deposits and the  purchase of  approximately  $25
million in loans related to the seven branches.

Stockholder's  Equity.  The $32.7 million increase in the  stockholders'  equity
reflects the $30.6  million in net proceeds  from the issuance of common  stock,
and $5.0 million in net income. The net increase in stockholders' equity for the
year also reflects:

>    repurchase of 35,000 shares of the Company's stock at a cost of $481,000;
>    purchase of 51,889 shares of the Company's  stock for the restricted  stock
     plan at a cost of $733,000,  less shares issued at a cost of  approximately
     $157,000;
>    repayment of $325,000 on the Employee Stock Ownership Plan ("ESOP") loan;
>    purchase of 251,836 shares of the Company's stock for the ESOP at a cost of
     $3.9 million; and
>    dividends paid that totaled $921,000.


Liquidity and Capital Resources

The liquidity of a savings institution  reflects its ability to provide funds to
meet loan requests,  to accommodate  possible outflows in deposits,  and to take
advantage  of  market  opportunities.   Funding  loan  requests,  providing  for
liability outflows,  and managing interest rate fluctuations  require continuous
analysis in order to match the  maturities of short-term  loans and  investments
with specific types of deposits and borrowings.  An  institution's  liquidity is
normally considered in terms of the nature and mix of the institution's  sources
and uses of funds.

                                       9
<PAGE>

Assets providing liquidity are generated through loan repayments,  loan sale and
the management of maturity distributions for loans and securities.  An important
aspect of liquidity  management lies in maintaining  sufficient  levels of loans
and mortgage-backed securities that generate monthly cash flows.

Cash and cash equivalents  increased $14.9 million to $21.7 million for the year
ended  September  30, 2001.  Significant  cash flows or uses  (amounts  shown in
parentheses) were as follows (in millions):

<TABLE>
<CAPTION>
<S>                                                                                <C>
        Cash provided by operations................................................. $  7.2
        Federal Home Loan Bank advances and other borrowings........................    (.4)
        Increase in net deposits....................................................   45.0
        Sales, maturities of and repayments on securities...........................   46.6
        Net purchases of securities and FHLB stock..................................  (65.2)
        Net purchases of premises and equipment.....................................   (3.4)
        Net increase in loans.......................................................  (34.7)
        Purchase of bank owned life insurance.......................................   (5.0)
        Payments to acquire treasury stock, ESOP and restricted stock plan shares...   (5.1)
        Net proceeds from the issuance of common stock..............................   30.6
        Dividends paid..............................................................    (.9)
        Other - net.................................................................     .2
                                                                                     ------
        Net increase in cash and cash equivalents................................... $ 14.9
                                                                                     ======
</TABLE>

The  Company is  subject to federal  regulations  that  impose  certain  minimum
capital  requirements.  For a discussion on such capital levels,  see Note 10 in
the consolidated financial statements.

Management is not aware of any known trends,  events or uncertainties  that will
have  or are  reasonably  likely  to have a  material  effect  on the  Company's
liquidity,  capital  or  operations  nor is  management  aware  of  any  current
recommendation by regulatory authorities,  which if implemented, would have such
an effect.


Analysis of Net Interest Income

Historically, the Company's earnings have depended primarily on its net interest
income,  which is the difference between interest income earned on its loans and
securities ("interest-earning assets") and interest paid on its deposits and any
borrowed funds ("interest-bearing liabilities"). Net interest income is affected
by:

>    the interest-rate  spread - the difference between rates of interest earned
     on  interest-earning   assets  and  rates  paid  on  its   interest-bearing
     liabilities; and
>    the aggregate amounts of its  interest-earning  assets and interest-bearing
     liabilities.

                                       10
<PAGE>
Average  Balance  Sheet.  The  following  table sets forth  certain  information
relating to the Company for the periods indicated.  The average yields and costs
are  derived by dividing  income or expense by the average  balance of assets or
liabilities,  respectively,  for the periods presented.  Similar  information is
provided as of  September  30,  2001.  Average  balances  are derived from daily
average balances.

<TABLE>
<CAPTION>
                                                                              Year ended September 30,
                                             ---------------------------------------------------------------------------------------
                         September 30, 2001               2001                         2000                        1999
                         ------------------  ----------------------------  ---------------------------  ----------------------------
                                                                 Average                       Average                      Average
                                              Average             Yield/   Average             Yield/    Average             Yield/
                            Balance   Rate    Balance   Interest   Cost    Balance   Interest  Cost      Balance  Interest    Cost
                            -------   ----    -------   --------   ----    -------   --------  ----      -------  --------    ----
                                                               (Dollars in thousands)
<S>                     <C>         <C>    <C>        <C>        <C>    <C>        <C>         <C>   <C>        <C>         <C>
Interest-earning assets:
Mortgage                  $ 322,569   7.42%  $ 322,388  $ 24,544   7.61%  $ 305,854  $ 22,686    7.42% $ 270,939  $ 20,442    7.54%
Consumer                     86,199   8.53      82,966     7,233   8.72      78,438     6,487    8.27     64,025     5,340    8.34
Commercial                   69,039   7.72      58,215     4,894   8.41      39,117     3,297    8.43     33,549     2,700    8.05
                          ---------          ---------   -------          ---------   -------          ---------   -------
     Total loans (1)        477,807   7.66     463,569    36,671   7.91     423,409    32,470    7.67    368,513    28,482    7.73
Securities and
  other (2) (6)             151,791   6.57     121,925     8,552   7.01     102,800     7,592    7.39     71,557     4,314    6.03
                          ---------          ---------   -------          ---------   -------          ---------   -------
     Total interest-
       earning assets       629,598   7.40     585,494    45,223   7.72     526,209    40,062    7.61    440,070    32,796    7.45
                                                         -------                      -------                      -------
Noninterest-earning
  assets                     30,771             26,915                       19,890                       11,606
                          ---------          ---------                    ---------                    ---------
     Total assets         $ 660,369          $ 612,409                    $ 546,099                    $ 451,676
                          =========          =========                    =========                    =========

Interest-bearing
  liabilities:
Checking accounts         $  34,705   1.67   $  32,937       590   1.79   $  31,416       576    1.83  $  27,193       486    1.79
Savings accounts             27,547   1.51      27,940       486   1.74      31,012       581    1.87     36,469       612    1.68
Money market accounts        33,768   3.19      28,766     1,205   4.19      25,008     1,068    4.27     20,740       796    3.84
Certificate accounts        283,211   5.64     263,512    15,519   5.89     245,754    13,519    5.50    245,915    12,833    5.22
                          ---------          ---------   -------          ---------   -------          ---------   -------
     Total deposits         379,231   4.76     353,155    17,800   5.04     333,190    15,744    4.73    330,317    14,727    4.46
FHLB advances and other
  borrowings                160,548   5.20     142,536     8,018   5.63     132,054     7,831    5.93     49,884     2,401    4.81
                          ---------          ---------   -------          ---------   -------          ---------   -------
     Total interest-
       bearing
       liabilities          539,779   4.89     495,691    25,818   5.21     465,244    23,575    5.07    380,201    17,128    4.50
                                                                                      -------                      -------
Noninterest-
  bearing
  liabilities (3)(7)         26,776             29,960        77             21,094                       22,491
                          ---------          ---------   -------          ---------                    ---------
     Total liabilities      566,555            525,651    25,895            486,338                      402,692
Stockholders' equity         93,814             86,758                       59,761                       48,984
                          ---------          ---------                    ---------                    ---------
   Total liabilities and
     stockholders' equity $ 660,369          $ 612,409                    $ 546,099                    $ 451,676
                          =========          =========                    =========                    =========

Net interest income (6)                                  $19,328                     $ 16,487                     $ 15,668
                                                         =======                     ========                     ========

Interest rate spread (4)              2.51%                        2.51%                         2.54%                        2.95%
                                      ====                         ====                          ====                         ====

Net margin on interest-
  earning assets (5)                  3.20%                        3.30%                         3.13%                        3.56%
                                      ====                         ====                          ====                         ====

Average interest-earning
  assets to average
  interest-bearing
  liabilities                          117%                         118%                         113%                          116%
                                      ====                         ====                          ====                         ====

</TABLE>

--------------------
(1)  Average balances include non-accrual loans.
(2)  Securities includes both securities that are available for sale and held to
     maturity.   Includes   interest-bearing   deposits   in   other   financial
     institutions and FHLB stock.
(3)  Includes noninterest-bearing checking accounts.
(4)  Interest-rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(5)  Net margin on  interest-earning  assets represents net interest income as a
     percentage of average interest-earning assets.
(6)  Interest  income and net interest  income do not agree to the  consolidated
     statement of earnings because the tax equivalent income (based on effective
     tax rate of 34%) on municipal bonds is included in this schedule.
(7)  Interest  includes interest expense on $80.9 million of funds received from
     the public stock offering.

                                       11
<PAGE>

Rate/Volume  Analysis.  The  relationship  between  the  volume and rates of the
Company's  interest-earning assets and interest-bearing  liabilities affects the
Company's net interest  income.  The following table reflects the sensitivity of
the Company's  interest income and interest  expense to changes in volume and in
prevailing  interest rates during the periods indicated.  Each category reflects
the:  (1) changes in volume  (changes  in volume  multiplied  by old rate);  (2)
changes in rate (changes in rate multiplied by old volume);  and (3) net change.
The net change  attributable  to the combined impact of volume and rate has been
allocated proportionally to the absolute dollar amounts of change in each.

<TABLE>
<CAPTION>
                                          Year Ended September 30,        Year Ended September 30,
                                       -----------------------------    -----------------------------
                                              2001 vs. 2000                    2000 vs. 1999
                                       -----------------------------    -----------------------------
                                        Increase (Decrease) Due to       Increase (Decrease) Due to
                                       -----------------------------    -----------------------------
                                        Volume      Rate        Net      Volume      Rate        Net
                                       -------    -------    -------    -------    -------    -------
                                                           (Dollars in thousands)
<S>                                  <C>        <C>        <C>        <C>        <C>        <C>
Interest income:
Loans...............................   $ 3,153    $ 1,048    $ 4,201    $ 4,208    $  (220)   $ 3,988
Securities and other ...............     1,315       (355)       960      2,163      1,115      3,278
                                       -------    -------    -------    -------    -------    -------
     Total interest income .........   $ 4,468    $   693    $ 5,161    $ 6,371    $   895    $ 7,266
                                       =======    =======    =======    =======    =======    =======

Interest expense:
Checking accounts ..................   $    27    $   (13)   $    14    $    77    $    13    $    90
Savings accounts ...................       (55)       (40)       (95)      (140)       109        (31)
Money market accounts ..............       157        (20)       137        176         96        272
Certificates of deposit ............     1,011        989      2,000         (8)       694        686
FHLB advances and other borrowings..       567       (303)       264      4,760        670      5,430
                                       -------    -------    -------    -------    -------    -------
     Total interest expense ........   $ 1,707    $   613    $ 2,320    $ 4,865    $ 1,582    $ 6,447
                                       =======    =======    =======    =======    =======    =======
Change in net interest income ......   $ 2,761    $    80    $ 2,841    $ 1,506    $  (687)   $   819
                                       =======    =======    =======    =======    =======    =======
</TABLE>

                                       12
<PAGE>
Comparison  of  Operating  Results  for the Years Ended  September  30, 2001 and
September 30, 2000

Net Income.  Net income for the year ended  September  30, 2001  increased  $1.2
million, or 30.9% to $5.0 million,  compared to $3.8 million for the same period
in 2000.  Net income for the year ended  September 30, 2001  benefited  from the
deployment  of $30.6  million  in new  capital  received  from  stock  issued in
December 2000.

>    Net interest income  increased $2.7 million,  or 16.5%,  for the year ended
     September  30,  2001  compared to the same  period in 2000.  This  increase
     resulted primarily from interest income increasing $5.0 million,  offset by
     an increase in interest expense of $2.3 million,
>    Noninterest  income  increased by $630,000  from 2000 to 2001 due mainly to
     increase in cash surrender  value on the bank owned life insurance  product
     and gains on sale of mortgage loans, and
>    Noninterest  expenses  increased $2.0 million to $13.8 million for the year
     ended  September 30, 2001 from $11.8  million for the year ended  September
     30,  2000,  due  to an  accumulation  of  several  expense  categories,  as
     discussed below.

Interest  Income.  The following  discussion  highlights  the major factors that
impacted the changes in interest income during the year ended September 30, 2001
when compared to the prior year.  Details are contained in the table at page 11.

>    Loan growth  reflected  strong  commercial  loan demand over the past year.
     While the  Company's  major  emphasis was on  commercial  and consumer loan
     origination efforts, mortgage originations remained strong throughout 2001.
>    The yield on loans  increased due to the emphasis  placed on commercial and
     consumer  loans in our market  areas.  New  mortgage  loan rates  decreased
     throughout  the  latter  half of 2001.  Although  new  mortgage  loan rates
     decreased  throughout  most of the  year,  about 54% of the  Company's  new
     originations were  construction  loans that were not fully disbursed during
     the year. The result of the timing on the construction  loan  disbursements
     kept the  yields on  mortgage  loans from  decreasing  in  relation  to the
     overall decrease in mortgage loan pricing.
>    The average balances in the securities portfolio grew 5.2% primarily due to
     the  Company's  strategy to leverage  capital  that was raised in the stock
     offering.
>    The yield in the  securities  portfolio  decreased  as a result of a steady
     decrease in market  interest  rates  throughout  fiscal 2001.  In addition,
     securities  growth  followed a strategy that saw securities  purchased that
     had slightly shorter average lives.


Interest  Expense.  The following  discussion  highlights the major factors that
impacted the changes in interest  expense  during the year ended  September  30,
2001 when  compared to the prior year.  Detailed  changes are  contained  in the
table at page 11.

>    Deposits  grew 6.0%  because  the  Company  pursued a  slightly  aggressive
     pricing strategy as interest rates fell and the equity markets  experienced
     significant volatility.
>    FHLB  advances  grew  because the Company  considers  the  advances to be a
     cost-effective  funding  alternative.  Although  the costs of the  advances
     exceed the cost of  certificate  accounts,  funding  asset  growth  through
     certificate  accounts  was  deemed  to be  more  expensive  than  wholesale
     funding. In addition, FHLB advances provide a funding vehicle to assist the
     Company in extending the duration of its liabilities.
>    The  reduction in cost of funds  related to the FHLB advances is reflective
     of the drop in interest rates over the past year. The reduction in the cost
     of the  advances  was not as  significant  as the overall  drop in interest
     rates because of certain higher rate  convertible  advances taken in fiscal
     2000 that have extended liability duration as rates have dropped.

                                       13
<PAGE>

Provision  for  Loan  Losses.  The  provision  for loan  losses  is  charged  to
operations  to bring  the  total  allowance  for  loan  losses  to a level  that
represents  management's best estimates of the losses inherent in the portfolio,
based on  historical  experience,  volume and type of lending  conducted  by the
Company,  industry standards, the level and status of past due and nonperforming
loans, the general economic  conditions in the Company's  lending area and other
factors affecting the collectibility of the loans in its portfolio. For the year
ended September 30, 2001, the provision for loan losses was $615,000 compared to
$630,000 for fiscal 2000.  The  allowance  for loan losses at September 30, 2001
increased $331,000 from September 30, 2000. Our  non-performing  loans increased
$198,000  for the  period,  classified  assets  increased  $2.0  million and our
commercial and consumer loans increased in the aggregate of approximately  $22.5
million  from  September  30,  2000.  Such  increases  in  classified  loans and
commercial  and consumer  loans  precipitated  the increase in the provision for
loan  losses.  The  allowance  for  loan  loss is  maintained  at a  level  that
represents  management's  best  estimates of losses in the loan portfolio at the
balance sheet date.  However,  there can be no assurance  that the allowance for
losses will be adequate to cover  losses which may be realized in the future and
that additional provisions for losses will not be required.

Noninterest Income. Noninterest income increased by $630,000 to $2.7 million for
the year ended September 30, 2001. The major  components of the increase was due
to the following:

>    Gains of  $228,000  recognized  on the sale of $13.9  million  in long term
     fixed-rate mortgage loans.
>    Increase of $331,000 in cash surrender value of bank-owned life insurance.
>    Increase of $60,000 in checking and savings account service fees.
>    Increase of $64,000 in income from increased debit card and ATM usage.


Noninterest  Expenses.  Noninterest  expenses increased by $2.0 million to $13.8
million for the year ended  September  30, 2001 from $11.8  million for the year
ended  September 30, 2000.  The major  components of the increase was due to the
following:

>    Compensation and employee benefits increased $1.4 million due primarily to:
     o    an approximate 10% increase in staffing;
     o    annual salary adjustments;
     o    increased health insurance claims during the year;
     o    increased  expenses  related  to the ESOP due to the  increase  in the
          Company's stock price.

>    Occupancy and equipment costs of $410,000, due primarily to:
     o    new customer delivery software, including an internet banking package;
     o    the opening of two new branch office locations;
     o    remodeling costs at the main office.

>    Other expenses increased by $303,000 primarily due to the following:
     o    increased   telephone   expense  due  to   enhanced   data  and  voice
          communications;
     o    increase in ATM and debit card usage;
     o    increased  check  clearing  charges due to  increased  volume of items
          processed;

>    Offsetting the increase in noninterest  expenses was a $116,000 decrease in
     marketing expense due to:
     o    a bidding  process  instituted  for vendors in order to better control
          costs;
     o    emphasis on  community  support  programs  versus  media  advertising,
          providing greater exposure within the communities we serve.

                                       14
<PAGE>

Comparison  of  Operating  Results  for the Years Ended  September  30, 2000 and
September 30, 1999

Net Income.  Net income for the year ended September 30, 2000 increased 18.0% to
$3.8 million,  compared to $3.3 million for the same period in 1999.  Net income
for the year ended  September 30, 2000  benefited  from the  deployment of $23.5
million in new capital received from stock issued in April 1999.

>    Net  interest  income  increased  $745,000,  or 4.8%,  for the  year  ended
     September  30,  2000  compared to the same  period in 1999.  This  increase
     resulted primarily from interest income increasing $7.2 million,  offset by
     an increase in interest expense of $6.4 million,
>    Noninterest  income  increased by $641,000  from 1999 to 2000 due mainly to
     increase in cash surrender  value on the bank owned life insurance  product
     and an increase in fees from consumer related products, and
>    Noninterest  expenses  increased  to  $11.8  million  for  the  year  ended
     September  30,  2000 from $11.4  million for the year ended  September  30,
     1999, due to an accumulation of several  expense  categories,  as discussed
     below.

Interest  Income.  The following  discussion  highlights  the major factors that
impacted the changes in interest income during the year ended September 30, 2000
when compared to the prior year.  Details are contained in the table at page 11.

>    Loan  growth  reflects  strong  loan  demand  over  the  past  year and the
     Company's increased emphasis on loan origination efforts.
>    The yield on loans decreased  slightly due to the  competitive  pricing for
     commercial  and consumer  loans in our market areas.  Although new mortgage
     loan  rates  increased  throughout  most  of  the  year,  about  50% of the
     Company's  new  originations  were  construction  loans that were not fully
     disbursed  during  the year.  In  addition,  construction  loans  that were
     originated  in 1999 when  mortgage loan rates were lower were funded during
     2000. The result of the timing on the construction loan  disbursements kept
     the yields on  mortgage  loans from  increasing  in relation to the overall
     increase in mortgage loan pricing.
>    The  average  balances  in the  investment  securities  portfolio  grew 44%
     primarily due to the Company's strategy to leverage capital that was raised
     in the stock offering.
>    The higher yield in the investment  portfolio  resulted from the leveraging
     strategy in the latter part of fiscal 1999 and throughout  fiscal 2000 when
     rates had  risen  significantly  over the  prior  year.  In  addition,  the
     investment  growth  occurred in securities that had slightly longer average
     lives with higher yields.


Interest  Expense.  The following  discussion  highlights the major factors that
impacted the changes in Interest  Expense  during the year ended  September  30,
2000 when  compared to the prior year.  Detailed  changes are  contained  in the
table at page 11.

>    Deposits  remained  fairly level  primarily by  maintaining a  conservative
     deposit   pricing   strategy,   utilizing  more  cost   effective   funding
     alternatives  that are available  for the terms the Company has  considered
     appropriate to fit its interest rate management  strategies.  This strategy
     was offset however, by special promotions to increase certificate accounts.
     The growth in  checking  account  average  balances  has helped  offset the
     slight decline in certificate accounts.
>    FHLB advances grew because the Company considered the advances to be a more
     cost-effective  funding alternative during the course of the year. Although
     the costs of the advances exceed the cost of certificate accounts,  funding
     asset growth through  certificate  accounts was deemed to be more expensive
     than wholesale funding.
>    The higher cost of funds  related to the FHLB advances is reflective of the
     significant rise in interest rates over the past year.

                                       15
<PAGE>

Provision  for  Loan  Losses.  The  provision  for loan  losses  is  charged  to
operations  to bring  the  total  allowance  for  loan  losses  to a level  that
represents  management's best estimates of the losses inherent in the portfolio,
based on  historical  experience,  volume and type of lending  conducted  by the
Company,  industry standards, the level and status of past due and nonperforming
loans, the general economic  conditions in the Company's  lending area and other
factors affecting the collectibility of the loans in its portfolio. For the year
ended September 30, 2000, the provision for loan losses was $630,000 compared to
$540,000  for the  comparable  1999  period.  The  allowance  for loan losses at
September  30, 2000  increased  $380,000  from  September  30, 1999.  Though our
non-performing  loans decreased  $68,000 for the period,  our classified  assets
increased  slightly  and our  commercial  and  consumer  loans  increased in the
aggregate of approximately $16.7 million from September 30, 1999. Such increases
in classified loans and commercial and consumer loans  precipitated the increase
in the provision for loan losses.

Noninterest  Expenses.  Noninterest  expenses  increased  by  $365,000  to $11.8
million for the year ended  September  30, 2000 from $11.4  million for the year
ended  September 30, 1999.  The major  components of the increase was due to the
following:

>    Compensation and employee benefits  increased  $505,000 due primarily to an
     approximate  5% increase  in staffing  and annual  salary  adjustments  and
     $180,000 in expenses relating to the restricted stock plan.

>    Other expenses increased by $202,000 primarily due to the following:
     o    certain Year 2000 costs totaling $50,000;
     o    direct costs related to stockholder  meetings,  communications,  legal
          matters and new financial  reporting  requirements as a public company
          totalling $45,000;
     o    increased  effort  on  charging  off  uncollected  fees and  overdrawn
          accounts totalling $90,000;
     o    accelerated vesting of restricted stock due to the death of a director
          totalling $35,000.

>    Offsetting the increase in noninterest expenses was a decrease of:
     o    occupancy  and  equipment  costs  of  $126,000  primarily  due  to the
          elimination of franchise taxes  previously  accrued in property taxes;
          and
     o    federal insurance  premiums of $111,000 due to the decrease in premium
          rates by the FDIC on January 1, 2000.


Impact of Inflation and Changing Prices

The consolidated financial statements and accompanying notes presented elsewhere
in this  prospectus  have been prepared in accordance  with  generally  accepted
accounting  principles  which  generally  requires the  measurement of financial
position  and  operating   results  in  terms  of  historical   dollars  without
considering the change in the relative  purchasing  power of money over time and
due to inflation.  The impact of inflation is reflected in the increased cost of
the Company's operations.  As a result,  interest rates have a greater impact on
the Company's  performance  than do the effects of general  levels of inflation.
Interest  rates do not  necessarily  move in the same  direction or, to the same
extent, as prices of goods and services.

                                       16
<PAGE>


                    FLORIDAFIRST BANCORP, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS


                            For the Three Years Ended

                               SEPTEMBER 30, 2001




                                       17
<PAGE>
                    FLORIDAFIRST BANCORP, INC. and SUBSIDIARY
                 Consolidated Statements of Financial Condition
                      (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                           At September 30,
                                                                        ----------------------
ASSETS                                                                     2001         2000
                                                                        ---------    ---------
<S>                                                                   <C>          <C>
Cash and due from banks                                                 $   7,439    $   6,189
Interest-bearing deposits                                                  14,237          545
                                                                        ---------    ---------
            Total cash and cash equivalents                                21,676        6,734

Securities available for sale, at fair value                              129,534       96,661
Securities held to maturity, market value of $9,391                            --        9,687
Loans, net of allowance for loan losses of $3,652 and $3,321              474,155      440,386
Premises and equipment, net                                                10,944        8,935
Federal Home Loan Bank stock, at cost                                       7,670        7,925
Cash surrender value of bank-owned life insurance                          10,795        5,232
Other assets                                                                5,595        6,620
                                                                        ---------    ---------
            TOTAL ASSETS                                                $ 660,369    $ 582,180
                                                                        =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Deposits                                                            $ 399,537    $ 354,554
    Federal Home Loan Bank advances                                       149,500      158,000
    Other borrowings                                                       11,048        2,937
    Other liabilities                                                       6,470        5,608
                                                                        ---------    ---------
            Total liabilities                                             566,555      521,099
                                                                        ---------    ---------

Commitments and contingencies (Notes 4, 5, 14 and 15)                          --           --

Stockholders' equity:
    Preferred stock, $ .10 par value,
         20,000,000 shares authorized, none issued or outstanding              --           --
    Common stock, $ .10 par value,
         80,000,000 shares authorized, 5,521,850 and 5,937,542 issued         552          575
    Additional paid-in capital                                             52,059       25,085
    Retained earnings                                                      46,616       42,506
    Treasury stock, at cost, 35,000 and 418,597 shares                       (481)      (3,606)
    Unallocated shares held by the employee stock ownership plan           (5,410)      (1,838)
    Unallocated shares held by the restricted stock plan                     (986)        (410)
    Accumulated other comprehensive income (loss)                           1,464       (1,231)
                                                                        ---------    ---------
            Total stockholders' equity                                     93,814       61,081
                                                                        ---------    ---------
            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $ 660,369    $ 582,180
                                                                        =========    =========
</TABLE>

See notes to consolidated financial statements.

                                       18
<PAGE>
                    FLORIDAFIRST BANCORP, INC. and SUBSIDIARY
                       Consolidated Statements of Earnings
                    (In thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                               Year ended September 30,
                                                                             ------------------------------
                                                                               2001       2000       1999
                                                                             --------   --------   --------
<S>                                                                        <C>        <C>        <C>
Interest and dividend income:
    Loans                                                                    $ 36,671   $ 32,470   $ 28,482
    Securities                                                                  7,526      6,837      3,671
    Other                                                                         649        533        495
                                                                             --------   --------   --------
            Total interest and dividend income                                 44,846     39,840     32,648
                                                                             --------   --------   --------
Interest expense:
    Deposits                                                                   17,800     15,744     14,727
    Federal Home Loan Bank advances and other borrowings                        8,095      7,831      2,401
                                                                             --------   --------   --------
            Total interest expense                                             25,895     23,575     17,128
                                                                             --------   --------   --------
            Net interest income                                                18,951     16,265     15,520

Provision for loan losses                                                         615        630        540
                                                                             --------   --------   --------
            Net interest income after provision for loan losses                18,336     15,635     14,980
                                                                             --------   --------   --------
Noninterest income:
    Fees and service charges                                                    1,264      1,147        991
    Gain (loss) on sale of loans and securities                                   232         16        (22)
    Increase in cash surrender value of bank-owned life insurance                 563        232       --
    Other, net                                                                    685        719        504
                                                                             --------   --------   --------
            Total noninterest income                                            2,744      2,114      1,473
                                                                             --------   --------   --------
Noninterest expenses:
    Compensation and employee benefits                                          7,689      6,325      5,820
    Occupancy and equipment costs                                               2,165      1,755      1,881
    Marketing                                                                     336        452        534
    Data processing costs                                                         500        498        521
    Other                                                                       3,086      2,783      2,692
                                                                             --------   --------   --------
            Total noninterest expenses                                         13,776     11,813     11,448
                                                                             --------   --------   --------
Income before income taxes                                                      7,304      5,936      5,005
Income taxes                                                                    2,273      2,094      1,748
                                                                             --------   --------   --------
NET INCOME                                                                   $  5,031   $  3,842   $  3,257
                                                                             ========   ========   ========

Basic earnings per share (1) (2)                                             $   0.95   $   0.71   $   0.33
                                                                             ========   ========   ========
Diluted earnings per share (1) (2)                                           $   0.93   $   0.70   $   0.33
                                                                             ========   ========   ========
Weighted-average common and common equivalents shares outstanding: (1) (2)
    Basic                                                                       5,293      5,424      5,727
                                                                             ========   ========   ========
    Diluted                                                                     5,429      5,516      5,727
                                                                             ========   ========   ========
</TABLE>

(1)  FloridaFirst  converted  from a  mutual  holding  company  to a full  stock
     company on December 21, 2000.

(2)  FloridaFirst  converted to a stock  company on April 6, 1999.  Earnings per
     share and weighted  average shares  outstanding  for 1999 represent the six
     months ended September 30, 1999 (period subsequent to the conversion.)

See notes to consolidated financial statements.

                                       19
<PAGE>
                    FLORIDAFIRST BANCORP, INC. and SUBSIDIARY
    Consolidated Statements of Stockholders' Equity and Comprehensive Income
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                                              Accumu-
                                                                              lated
                                                                              other
                                                                              compre-                                      Total
                                 Number         Additional                    hensive   Compre-  Unallocated  Unallocated  stock-
                                   of    Common  paid-in   Retained Treasury  income    hensive  shares held  shares held  holders'
                                 shares  stock   capital   earnings  Stock    (loss)    income   by the ESOP    by RSP     equity
                                -------- ------ ---------- -------- --------  ----------------  ------------  ----------- ----------
<S>                             <C>     <C>    <C>       <C>       <C>      <C>       <C>       <C>          <C>         <C>
Balance at September 30, 1998                             $ 35,887            $   220                                       $36,107
Stock issuance, net
  of issuance costs of $1,239     5,753  $ 575   $ 25,124                                         $ (2,163)                  23,536
Comprehensive income:
    Net income                                               3,257                      $ 3,257                               3,257
    Change in unrealized loss
      on securities available
      for sale, net                                                            (1,456)   (1,456)                             (1,456)
                                                                                        -------
Total comprehensive income                                                              $ 1,801
                                                                                        =======
Dividends ($ .04 per share)                                   (107)                                                            (107)
                                -------- -----   -------- --------            -------              -------       ------     -------
Balance at September 30, 1999     5,753    575     25,124   39,037             (1,236)              (2,163)                  61,337
Shares repurchased, at cost                                         $(3,606)                                                 (3,606)
Fair value of ESOP shares
  allocated                                           (39)                                             325                      286
Shares acquired for RSP,
  at cost                                                                                                        $ (410)       (410)
Comprehensive income:
    Net income                                               3,842                      $ 3,842                               3,842
    Change in unrealized gain
      (loss) on securities
      available for sale, net                                                       5         5                                   5
                                                                                        -------
Total comprehensive income                                                              $ 3,847
                                                                                        =======
Dividends ($ .16 per share)                                   (373)                                                            (373)
                                -------- -----   -------- --------  -------   -------              -------       ------     -------
Balance at September 30, 2000     5,753    575     25,085   42,506   (3,606)   (1,231)              (1,838)        (410)     61,081
Stock issuance, net of
  issuance costs of $1,007        3,148    315     30,245                                                                    30,560
Convert common and retire
  treasury stock                 (3,381)  (338)    (3,268)            3,606                                                       -
Proceeds from exercise of
  stock options                       2                18                                                                        18
Shares repurchased, at cost         (35)                               (481)                                                   (481)
Fair value of ESOP and RSP
  shares allocated                                    (21)                                             325          157         461
Shares acquired for ESOP
  and RSP, at cost                                                                                  (3,897)        (733)     (4,630)
Comprehensive income:
    Net income                                               5,031                      $ 5,031                               5,031
    Change in unrealized gain
      (loss) on securities
      available for sale, net                                                   2,695     2,695                               2,695
                                                                                        -------
Total comprehensive income                                                              $ 7,726
                                                                                        =======
Dividends ($ .19 per share)                                   (921)                                                            (921)
                                -------- -----   -------- --------  -------   -------              -------       ------     -------
Balance at September 30, 2001     5,487  $ 552   $ 52,059 $ 46,616  $  (481)  $ 1,464              $(5,410)      $ (986)    $93,814
                                ======== =====   ======== ========  =======   =======              =======       ======     =======
</TABLE>

See notes to consolidated financial statements.

                                       20
<PAGE>
                    FLORIDAFIRST BANCORP, INC. and SUBSIDIARY
                      Consolidated Statements of Cash Flows
                             (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                                    Year ended September 30,
                                                                                --------------------------------
                                                                                  2001        2000        1999
                                                                                --------    --------    --------
<S>                                                                           <C>         <C>         <C>
Cash flows from operating activities:
    Net income                                                                  $  5,031    $  3,842    $  3,257
    Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
       Provision for loan losses                                                     615         630         540
       Deferred income tax benefit                                                  (183)       (187)        (39)
       Depreciation                                                                  995         700         759
       (Gain) loss on sale of securities available for sale                          (35)         (5)         22
       Loss of sale of securities held to maturity                                    12          --          --
       Originations of loans held for sale                                       (14,989)         --          --
       Gain on sale of loans held for sale                                          (209)        (14)         --
       Proceeds from sale of loans held for sale                                  15,258          --          --
       Allocation of shares held by ESOP and RSP                                     461         286          --
       Increase in cash surrender value of life insurance policies                  (563)       (232)         --
       Increase in accrued interest receivable                                      (281)       (962)       (366)
       Decrease in other assets                                                      205         210          95
       Increase (decrease) in other liabilities                                      862         104        (338)
                                                                                --------    --------    --------
                   Net cash provided by operating activities                       7,179       4,372       3,930
                                                                                --------    --------    --------
Cash flows from investing activities:
    Proceeds from calls, maturities, sales and
      repayments of securities available for sale                                 36,879      16,353      24,069
    Proceeds from calls, maturities, sales and
      repayments of securities held to maturity                                    9,675       3,037       6,012
    Net increase in loans                                                        (34,742)    (42,813)    (59,782)
    Purchases of securities available for sale                                   (65,440)    (44,845)    (52,358)
    Purchase of bank owned life insurance                                         (5,000)     (5,000)         --
    Net redemption (purchase) of FHLB stock                                          255      (3,450)     (1,611)
    Purchases of premises and equipment                                           (3,408)     (2,843)       (883)
    Proceeds on sale of premises and equipment                                       404          26         520
                                                                                --------    --------    --------
                   Net cash used in investing activities                         (61,377)    (79,535)    (84,033)
                                                                                --------    --------    --------
Cash flows from financing activities:
    Net increase (decrease) in deposits                                           44,983      15,330     (12,956)
    Net increase (decrease) in FHLB advances                                      (8,500)     70,400      66,600
    Net increase (decrease) in other borrowings                                    8,111      (1,935)      4,874
    Payments to acquire treasury stock                                              (481)     (3,606)         --
    Payments to acquire shares held by the ESOP                                   (3,897)         --          --
    Payments to acquire shares held by the RSP                                      (733)       (410)         --
    Net proceeds received from issuance of common stock                           30,578          --      23,536
    Dividends paid                                                                  (921)       (480)         --
                                                                                --------    --------    --------
                   Net cash provided by financing activities                      69,140      79,299      82,054
                                                                                --------    --------    --------
                   Net increase in cash and cash equivalents                      14,942       4,136       1,951
Cash and cash equivalents at beginning of year                                     6,734       2,598         647
                                                                                --------    --------    --------
Cash and cash equivalents at end of year                                        $ 21,676    $  6,734    $  2,598
                                                                                ========    ========    ========

Supplemental disclosure of cash flow information -
    Cash paid during the year for:
       Interest                                                                 $ 25,948    $ 22,966    $ 15,963
                                                                                ========    ========    ========
       Taxes                                                                    $  2,374    $  2,099    $  1,406
                                                                                ========    ========    ========

Supplemental disclosure of non-cash information:
    Additions to real estate acquired through foreclosure                       $    298    $    221    $     76
                                                                                ========    ========    ========
    Transfer loans to loans held for sale                                       $  1,253          --          --
                                                                                ========
    Change in unrealized gain (loss) on securities available for sale,
       net of deferred taxes (benefit) of $1,582, $3 and $(852), respectively   $  2,695    $      5    $ (1,456)
                                                                                ========    ========    ========
    Dividends declared                                                                --          --    $    107
                                                                                                        ========

</TABLE>

See notes to consolidated financial statements.

                                       21
<PAGE>

                    FLORIDAFIRST BANCORP, INC. and SUBSIDIARY
                   Notes to Consolidated Financial Statements

September 30, 2001 and 2000 and each of the years in the three-year period ended
September 30, 2001

(1)    General, Reorganization and Summary of Significant Accounting Policies

       General.  FloridaFirst Bancorp, Inc. (the "Company") is the parent of and
       conducts  its business  principally  through the  FloridaFirst  Bank (the
       "Bank").  The Bank, a  federally-chartered  savings bank headquartered in
       Lakeland,  Florida,  is a  community-oriented  savings  institution  that
       delivers  retail and  commercial  banking  services  through  eleven full
       service  locations.  Principal  sources  of income  are  derived  through
       interest  earned on loans and  investments.  The primary sources of funds
       are customer  deposits and Federal Home Loan Bank  advances.  The Bank is
       subject to various  regulations  governing  savings  institutions  and is
       subject to periodic examination by its primary regulator, the OTS.

       Reorganization.  On April 6,  1999,  the Bank  reorganized  from a mutual
       savings  association  into a mutual  holding  company named  FloridaFirst
       Bancorp MHC ("MHC") and formed  FloridaFirst  Bancorp (the "Bancorp"),  a
       middle-tier  holding  company,  whereby  the Bank  became a  wholly-owned
       subsidiary of the Bancorp (the "Reorganization").  In connection with the
       Reorganization,  the Bancorp sold 2,703,851 shares of its Common Stock to
       the  public  and the  remaining  3,049,024  shares  were held by MHC.  On
       December 21, 2000, the Company completed its stock offering in connection
       with the  conversion  and  reorganization  of the  Bank  and its  holding
       company,   the  Bancorp,   from  the  mutual  holding   company  form  of
       organization to a full stock company (the  "Conversion").  As part of the
       conversion  and  reorganization,  the  shares  formerly  held by MHC were
       cancelled,  the Company sold  3,147,952  new shares to the public and the
       shares held by  stockholders  of the Bancorp were exchanged for 2,372,048
       shares of the Company.

       At the time of the Conversion, the Bank established a liquidation account
       in an  amount  equal to its  equity  as  reflected  in the  statement  of
       financial  condition  used  in  the  final  Conversion  prospectus.   The
       liquidation  account  will be  maintained  for the  benefit  of  eligible
       account holders and supplemental eligible account holders who continue to
       maintain their accounts at the Bank after the Conversion. The liquidation
       account  will be  reduced  annually,  to the  extent  that  eligible  and
       supplemental  eligible  account  holders  have reduced  their  qualifying
       deposits as of each anniversary  date.  Subsequent  increases in balances
       will not restore an eligible or supplemental  eligible  account  holder's
       interest  in  the  liquidation  account.  In  the  event  of  a  complete
       liquidation of the Bank, each eligible and supplemental  eligible account
       holder will be entitled to receive a  distribution  from the  liquidation
       account in an amount  proportionate  to the current  adjusted  qualifying
       balances for accounts then held.

       Subsequent  to the  Conversion,  the  Bank  may not  declare  or pay cash
       dividends on its shares of common stock if the effect thereof would cause
       equity to be reduced  below  applicable  regulatory  capital  maintenance
       requirements or if such  declaration and payment would otherwise  violate
       regulatory requirements.

       Principles of Consolidation.  The consolidated  financial statements have
       been prepared in conformity with accounting principles generally accepted
       in the United  States of America and include the  accounts of the Company
       and the  Bank.  All  intercompany  transactions  and  balances  have been
       eliminated in consolidation.

                                       22
<PAGE>

       Use of Estimates.  The preparation of financial  statements in conformity
       with  accounting  principles  generally  accepted  in the  United  States
       requires  management to make  estimates and  assumptions  that affect the
       reported  amounts of assets and  liabilities and disclosure of contingent
       assets and liabilities at the date of the financial  statements,  and the
       reported amount of revenues and expenses during the reporting period. The
       major  estimate  by  management  that  is  critical  to the  consolidated
       financial  statements  is the  appropriate  level of  allowance  for loan
       losses which can be significantly impacted by future industry, market and
       economic  trends and  conditions.  Actual results could differ from these
       estimates.  Regulatory agencies,  as a part of their examination process,
       periodically  review  the  Company's  allowance  for  loan  losses.  Such
       agencies  may require the Company to recognize  changes in the  allowance
       based on their judgements of information available to them at the time of
       their examination.

       Cash and Cash Equivalents.  For financial statement purposes, the Company
       considers  cash,  due  from  banks  and  interest-bearing  accounts  with
       original   maturities  of  three  months  or  less  in  other   financial
       institutions to be cash and cash equivalents.

       Securities.  Securities  available  for sale are  stated  at fair  value.
       Unrealized  gains and losses on  securities  available  for sale,  net of
       taxes, are included in accumulated other comprehensive  income or loss in
       the consolidated  statements of financial  condition until these gains or
       losses are  realized.  Securities  available  for sale that  experience a
       decline in fair value that is other than  temporary  are written  down to
       fair value and the  resultant  losses are  reflected in the  consolidated
       statements  of  earnings.  Gains  and  losses  on the sale of  securities
       available  for sale are recorded on the trade date and  determined  using
       the specific identification method.

       Securities  held to  maturity  are  securities  that  management  has the
       intent, and the Company has the ability at the time of purchase,  to hold
       until maturity. Securities in this category are carried at amortized cost
       adjusted for accretion of discounts and  amortization  of premiums  using
       the level-yield  method over the estimated life of the  securities.  If a
       security  has a decline in fair value  below its  amortized  cost that is
       other than  temporary,  then the security will be written down to its new
       cost  basis  by  recording  a loss  in  the  consolidated  statements  of
       earnings.

       Capital  stock in the Federal Home Loan Bank of Atlanta  ("FHLB") is held
       in  accordance  with  certain  requirements  of the FHLB.  The  Company's
       investment is carried at cost and serves as collateral for FHLB advances.

       Loans Held For Sale.  Loans  originated  and held for sale by the Company
       are  carried  at  the  lower  of  cost  or  market   using  the  specific
       identification  method.  Gains and  losses on the sale of such  loans are
       recognized  using the specific  identification  method.  The Company held
       $1.2  million and $-0- of loans held for sale at  September  30,  2001and
       September 30, 2000, respectively.

       Mortgage  Loan  Interest  Income.  The Company  provides an allowance for
       uncollected  interest  generally on all accrued interest related to loans
       90 days or more  delinquent.  This  allowance is netted  against  accrued
       interest receivable for financial statement disclosure. Such interest, if
       ultimately collected, is credited to income in the period of recovery.

       Loan Fees. Loan origination and commitment fees and certain related costs
       are deferred and amortized over the contractual maturities,  adjusted for
       anticipated prepayments,  as an adjustment to yield using the level-yield
       method. For loans on non-accrual, such amortization ceases.

                                       23
<PAGE>

       Loans and  Provisions  for Losses.  Loans are stated at unpaid  principal
       balances, less loans in process and an allowance for loan losses.

       The Company follows a consistent  procedural  discipline and accounts for
       loan  loss  contingencies  in  accordance  with  Statement  of  Financial
       Accounting  Standards  (SFAS) No. 5,  Accounting for  Contingencies,  and
       accounts for impaired loans in conformity  with SFAS No. 114,  Accounting
       by  Creditors  for  Impairment  of a Loan,  as amended  by SFAS No.  118,
       Accounting by Creditors for Impairment of a Loan - Income Recognition and
       Disclosure.  The  following is a  description  of how each portion of the
       allowance for loan losses is determined.

       The Company segregates the loan portfolio for loan loss purposes into the
       following  broad  segments:  commercial  real  estate,  residential  real
       estate, and consumer. The Company provides for an allowance for losses in
       the portfolio by the above categories,  which consists of two components:
       general loss percentages and specific loss analysis.

       General loss percentages are calculated based upon historical analyses. A
       portion  of  the  allowance  is  calculated  for  inherent  losses  which
       management  believes  exist as of the  evaluation  date even  though they
       might not have been identified by the more objective processes used. This
       is due to the risk of error and/or  inherent  imprecision in the process.
       This portion of the  allowance is  particularly  subjective  and requires
       judgments  based on qualitative  factors which do not lend  themselves to
       exact  mathematical  calculations  such as: trends in  delinquencies  and
       nonaccruals;  migration trends in the portfolio; trends in volume, terms,
       and portfolio mix; new credit  products  and/or changes in the geographic
       distribution  of  those  products;   changes  in  lending   policies  and
       procedures;   loan   review   reports  on  the   efficacy   of  the  risk
       identification  process;  changes in the outlook for local,  regional and
       national economic  conditions;  concentrations of credit;  and peer group
       comparison.

       Allowances  are also  provided in the event that the specific  collateral
       analysis on a loan indicates that the estimated loss upon  liquidation of
       collateral would be in excess of the general percentage  allocation.  The
       provision  for loan  losses is debited or  credited in order to state the
       allowance for loan losses to the required level as determined above.

       The Company  considers a loan to be impaired when it is probable that the
       Company will be unable to collect all amounts  due,  both  principal  and
       interest,  according to the contractual terms of the loan agreement. When
       a loan is impaired,  the Company may measure  impairment based on (a) the
       present  value of the  expected  future cash flows of the  impaired  loan
       discounted  at the  loan's  original  effective  interest  rate;  (b) the
       observable  market price of the impaired  loan;  or (c) the fair value of
       the collateral of a  collateral-dependent  loan. The Company  selects the
       measurement    method   on   a    loan-by-loan    basis,    except    for
       collateral-dependent  loans for which  foreclosure  is  probable  must be
       measured  at  the  fair  value  of the  collateral.  In a  troubled  debt
       restructuring   involving  a  restructured  loan,  the  Company  measures
       impairment by  discounting  the total  expected  future cash flows at the
       loan's original effective rate of interest.

       Premises  and  Equipment.  Depreciation  of  premises  and  equipment  is
       accumulated  using the  straight-line  method over the  estimated  useful
       lives of the  related  assets.  Estimated  lives  are 10 to 50 years  for
       buildings and leasehold  improvements,  and 3 to 10 years for  furniture,
       fixtures and equipment.

       Maintenance   and  repairs  are   charged  to  expense   when   incurred.
       Expenditures for renewals and betterments generally are capitalized.  The
       costs and  accumulated  depreciation  relating to office  properties  and
       equipment  retired  or  otherwise  disposed  of are  eliminated  from the
       accounts,  and any  resulting  gains  and  losses  are  reflected  in the
       consolidated statements of earnings.

                                       24
<PAGE>

       Foreclosed Assets. Assets acquired through foreclosure or deed in lieu of
       foreclosure are recorded at the lower of cost  (principal  balance of the
       former  mortgage  loan) or estimated fair value,  less estimated  selling
       expenses.  The carrying value of real estate owned properties was $57,000
       and  $113,000  at  September  30,  2001 and 2000 and is included in Other
       Assets in the consolidated statements of financial condition. The Company
       reported net income  (costs)  related to real estate owned  activities of
       $15,000,  $6,000  and  $(10,000)  in  operations  in fiscal  years  ended
       September 30, 2001, 2000 and 1999, respectively.

       Transfer of Financial Assets. Transfers of financial assets are accounted
       for as sales, when control over the assets has been surrendered.  Control
       over  financial  assets is deemed to be  surrendered  when (1) the assets
       have been isolated from the Company, (2) the transferee obtains the right
       (free of  conditions  that  constrain  it from taking  advantage  of that
       right) to pledge or exchange the transferred  assets, and (3) the Company
       does not maintain  effective control over the transferred  assets through
       an agreement to repurchase them before their maturity.

       Income Taxes.  Deferred tax assets and liabilities are recognized for the
       future tax consequences attributable to temporary differences between the
       financial  statement  carrying amounts of existing assets and liabilities
       and their  respective tax bases.  Deferred tax assets and liabilities are
       measured  using enacted tax rates  expected to apply to taxable income in
       the  years  in which  those  temporary  differences  are  expected  to be
       recovered or settled.  The effect on deferred tax assets and  liabilities
       of a change in tax rates is  recognized  in  income  in the  period  that
       include the enactment date.

       Financial Instruments With Off-Balance Sheet Risk. In the ordinary course
       of  business,  the  Company  is a party  to  financial  instruments  with
       off-balance sheet risk. These financial  instruments  include commitments
       to extend credit at both fixed and variable rates and standby  letters of
       credit. These instruments involve, to varying degrees, elements of credit
       risk in excess of the  amount  recognized,  if any,  in the  consolidated
       statements of financial condition.  The Company's exposure to credit loss
       for  commitments  to  extend  credit  and  standby  letters  of credit is
       represented by the contractual amount of these  instruments.  The Company
       uses the same  credit  policies  in making  commitments  and  conditional
       obligations as it does for on-balance sheet instruments.

       Commitments to extend credit are agreements to lend to a customer as long
       as there is no violation of any  condition  established  in the contract.
       Commitments  generally have fixed expiration  dates or other  termination
       clauses and may require  payment of a fee.  The  Company  evaluates  each
       customer's credit worthiness on a case-by-case basis.

       Standby  letters  of credit  are  conditional  commitments  issued by the
       Company to guarantee the performance of a customer to a third party.  The
       credit risk involved in issuing letters of credit is essentially the same
       as that involved in extending loan facilities to customers.

       Self-Insurance.  The Company is  self-insured  for  employee  medical and
       dental  benefits,  but has a reinsurance  contract to limit the amount of
       liability for these benefits in any plan year.  Benefits are administered
       through a third  party  administrator  and the  related  liabilities  are
       reflected in the consolidated financial statements. The Company accrues a
       liability  based on  average  claims  paid  over the  past  three  years,
       historical information and certain assumptions regarding future events.

       The  self-insured  plan operates on a calendar  year basis.  For the plan
       years ended  December  31,  2000 and 1999,  claims  paid,  net of amounts
       received  under the  reinsurance  contract  and  premiums  received  from
       dependent and COBRA coverage,  were $379,000 and $441,000,  respectively.
       The plan covers only active employees as defined in the plan.

                                       25
<PAGE>

       Derivative  Instruments.  The Company does not purchase,  sell  or  enter
       into  derivative   financial   instruments   or   derivative    commodity
       instruments  as  defined  by SFAS No. 119,  Disclosures  About Derivative
       Financial Instruments and  Fair  Value  of Financial  Instruments,  other
       than fixed-rate loan commitments.

       Stock Compensation  Plans.  Statement of Financial  Accounting  Standards
       (SFAS) No. 123, Accounting for Stock-Based  Compensation,  encourages all
       entities to adopt a fair value based  method of  accounting  for employee
       stock compensation  plans,  whereby  compensation cost is measured at the
       grant  date  based on the value of the award and is  recognized  over the
       service  period,  which is usually the vesting period.  However,  it also
       allows an entity to continue to measure compensation cost for those plans
       using the  intrinsic  value  based  method of  accounting  prescribed  by
       Accounting  Principles Board Opinion No. 25,  Accounting for Stock Issued
       to Employees,  whereby  compensation  cost is the excess,  if any, of the
       quoted market price of the stock at the grant date (or other  measurement
       date) over the amount an employee  must pay to acquire  the stock.  Stock
       options  issued under the  Company's  stock option plan have no intrinsic
       value at the grant date, and under Opinion No. 25 no compensation cost is
       recognized  for them.  The  Company  has  elected  to  continue  with the
       accounting  methodology in Opinion No. 25 and, as a result,  has provided
       pro forma  disclosures  of net  income and  earnings  per share and other
       disclosures,  as if the fair value based  method of  accounting  had been
       applied (See note 12).

       Earnings Per Share of Common Stock. The Company follows the provisions of
       SFAS No. 128, "Earnings Per Share".  SFAS No. 128 provides accounting and
       reporting  standards for calculating  earnings per share.  Basic earnings
       per share of common  stock has been  computed by dividing  the net income
       for the year by the weighted-average number of shares outstanding. Shares
       of common stock  purchased by the ESOP (see Note 11) are only  considered
       outstanding  when the shares are released or committed to be released for
       allocation to  participants.  For the years ended  September 30, 2001 and
       2000,  shares  released for  allocation to  participants  each month were
       2,707 and 1,801.  Diluted  earnings per share is computed by dividing net
       income by the weighted-average number of shares outstanding including the
       dilutive  effect  of stock  options  (see Note 12) and  shares  needed to
       satisfy the requirements of the restricted stock plan, computed using the
       treasury  stock method  prescribed by SFAS No. 128. The  following  table
       presents the calculation of earnings per share of common stock:

<TABLE>
<CAPTION>

                                                                                         Year Ended September 30,
                                                                              ---------------------------------------------
                                                                                  2001             2000              1999
                                                                                  ----             ----              ----
<S>                                                                          <C>               <C>              <C>
       Weighted-average shares of common stock issued and
           outstanding before adjustments for ESOP and stock options           5,520,047         5,602,021        5,937,542
       Adjustment to reflect the effect of unallocated ESOP shares              (226,935)         (177,670)        (210,228)
                                                                               ---------         ---------        ---------
       Weighted-average shares for basic earnings per share                    5,293,112         5,424,351        5,727,314
                                                                               =========         =========        =========

       Basic earnings per share                                                   $ .95            $ .71             $ .33
                                                                                  =====            =====             =====

       Weighted-average shares for basic earnings per share                    5,293,112         5,424,351        5,727,314

       Additional  dilutive shares using the average market value for the period
          utilizing  the  treasury  stock  method  regarding  stock  options and
          outstanding restricted stock shares                                    136,046            92,209                0
                                                                               ---------         ---------        ---------
       Weighted-average common shares and equivalents
          outstanding for diluted earnings per share                           5,429,158         5,516,560        5,727,314
                                                                               =========         =========        =========

       Diluted earnings per share                                                 $ .93             $ .70            $ .33
                                                                                  =====             =====            =====
</TABLE>

                                       26
<PAGE>

       Comprehensive  Income.   Accounting  principles  generally  require  that
       recognized revenue, expenses, gains and losses be included in net income.
       Although  certain changes in assets and  liabilities,  such as unrealized
       gains and losses on  available-for-sale  securities,  are  reported  as a
       separate  component of the equity  section of the statements of financial
       condition,   such  items,   along  with  net  income  are  components  of
       comprehensive  income. The components of other  comprehensive  income and
       related tax effects are as follows (in thousands):
<TABLE>
<CAPTION>
                                                                                     2001       2000        1999
                                                                                     ----       ----        ----
<S>                                                                               <C>         <C>      <C>
       Unrealized gain (loss) on securities available for sale arising
          during year, net of taxes                                                 $2,710      $   8    $(1,470)
       Less reclassification adjustment for gain (loss) included in
           net income                                                                   23          5        (22)
       Income taxes (benefit)                                                            8          2         (8)
                                                                                    ------      -----    -------
       Reclassification adjustment for gain (loss), net of taxes                        15          3        (14)
                                                                                    ------      -----    -------
       Unrealized gain (loss) on securities available for sale, net of taxes        $2,695      $   5    $(1,456)
                                                                                    ======      =====    =======
</TABLE>

       Reclassifications.  Certain  amounts  in  the  2000 and 1999 consolidated
       financial  statements have been reclassified to conform to the 2001
       presentation.


(2)    Securities Available for Sale

       The amortized cost and estimated fair values of securities  available for
       sale are as follows:

<TABLE>
<CAPTION>

                                                                     Gross             Gross
                                                 Amortized        unrealized         unrealized        Fair
                                                   cost              gains             losses          Value
                                               --------------     ------------      -------------    ---------
                                                                         (In thousands)
<S>                                            <C>                <C>               <C>             <C>
          September 30, 2001:
          Obligations of U.S. government
              agencies                           $   8,504          $  346            $     0         $  8,850
          Collateralized mortgage
              obligations                           43,429             653                (37)          44,045
          Mortgage-backed securities                28,644             907                  0           29,551
          Corporate bonds                           29,219             999               (663)          29,555
          Municipal bonds                           17,415             262               (144)          17,533
                                                 ---------          ------            -------         --------
               Total                             $ 127,211          $3,167            $  (844)        $129,534
                                                 =========          ======            =======         ========
          September 30, 2000:
          Obligations of U.S. government
              agencies                           $  19,861                          $    (504)        $ 19,357
          Collateralized mortgage
              obligations                           18,172          $   76               (176)          18,072
          Mortgage-backed securities                29,928              61               (339)          29,650
          Corporate bonds                           20,930             160               (904)          20,186
          Municipal bonds                            9,725             138               (467)           9,396
                                                 ----------         ------          ---------         --------
               Total                             $  98,616          $  435          $  (2,390)        $ 96,661
                                                 =========          =======         =========         ========
</TABLE>

       Approximately  88% and  70% of the  collateralized  mortgage  obligations
       ("CMOs") and mortgage-backed  securities ("MBS") as of September 30, 2001
       and 2000, respectively,  were issues of Ginnie Mae, Fannie Mae or Freddie
       Mac.

                                       27

<PAGE>
       The maturity  distribution for the portfolio of securities  available for
sale at September 30, 2001 is as follows:

                                                           Amortized      Fair
                                                              cost        Value
                                                           ---------    --------
                                                                (In thousands)
            Due in one year or less                         $    997    $  1,026
            Due after one year through five years             12,925      13,105
            Due after five years through ten years             9,390       9,951
            Due after ten years                               75,255      75,901
                                                            --------    --------
                                                              98,567      99,983

            Mortgage-backed securities                        28,644      29,551
                                                            --------    --------

            Total                                           $127,211    $129,534
                                                            ========    ========

       Proceeds  from sales of  securities  available  for sale during the years
       ended September 30, 2001, 2000 and 1999 were $10.3 million,  $5.7 million
       and $6.0 million,  respectively.  Gross gains of $51,000 and gross losses
       of $16,000  were  realized on those  sales  during  2001.  Gross gains of
       $5,000 were  realized on those sales during  2000.  Gross gains of $8,000
       and gross losses of $30,000 were realized on those sales during 1999.

       Securities  available  for sale with a fair  value of $33.3  million  and
       $10.4 million were pledged as collateral to secure public funds, Treasury
       Investment  Program funds and Federal Reserve discount window advances at
       September 30, 2001 and 2000, respectively.


(3)    Securities Held to Maturity

       The  amortized  cost and  estimated  fair  values of  securities  held to
       maturity are as follows:

<TABLE>
<CAPTION>
                                                             September 30, 2000
                                          -------------------------------------------------
                                                           Gross       Gross
                                            Amortized   unrealized   unrealized      Fair
                                              cost         gains       losses        Value
                                          -----------   ----------   ----------    --------
                                             (In thousands)
<S>                                         <C>         <C>         <C>           <C>
          Obligations of U.S. government
              agencies                        $ 1,000          --          --       $ 1,000
          Collateralized mortgage
              obligations                       8,687     $    33     $  (329)        8,391
                                             --------     -------     --------     --------

               Total                          $ 9,687     $    33     $  (329)      $ 9,391
                                              =======     =======     ========      =======
</TABLE>

       In August 2001 the entire securities held to maturity portfolio was sold.
       The  decision  to sell the  entire  portfolio  was based on a variety  of
       reasons  including price  compression due to balance  decline,  a lagging
       index,  which is  unpopular  in today's  falling  rate  environment,  and
       recently  increased  values,  resulting  from  the  recent  falling  rate
       environment.  As a result of the sale of the held to maturity  portfolio,
       SEC regulations prohibit further  classification of securities as held to
       maturity for a period of two years.

       Proceeds  from sales of  securities  held to maturity for the years ended
       September  30,  2001,  2000 and 1999 were $8.6  million,  $-0-,  and $-0-
       respectively.  Gross  gains of $34,000 and gross  losses of $46,000  were
       realized on those sales during 2001.

                                       28
<PAGE>
(4)    Loans

       Loans consist of the following:
<TABLE>
<CAPTION>
                                                                   September 30,
                                                               ---------------------
                                                                  2001        2000
                                                               ---------    --------
                                                               (Dollars in thousands)
<S>                                                          <C>         <C>
              Loans secured by first mortgages on real estate:
                 Residential 1-4:
                    Permanent                                  $ 312,309   $ 304,419
                    Construction                                  35,516      27,996
                 Multi-family                                      2,306       3,610
                 Commercial real estate                           56,065      28,176
                 Land                                              8,907      12,886
                                                               ---------   ---------

                    Total first mortgage loans                   415,103     377,087
                                                               ---------   ---------
              Other loans:
                 Consumer loans                                   85,932      81,039
                 Other loans                                       5,061       2,533
                                                               ---------   ---------

                    Total other loans                             90,993      83,572
                                                               ---------   ---------

                    Total loans                                  506,096     460,659

              Allowance for loan losses                           (3,652)     (3,321)
              Loans in process                                   (28,289)    (16,952)
                                                               ---------   ---------

                        Loans, net                             $ 474,155   $ 440,386
                                                               =========   =========

              Weighted-average yield on loans at year end        7.66%      7.83%
                                                                 =====      =====
</TABLE>


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

              Balance at September 30, 1998           $ 2,564
                   Provision for loan losses              540
                   Charge-offs                           (251)
                   Recoveries                              88
                                                      -------

              Balance at September 30, 1999             2,941
                   Provision for loan losses              630
                   Charge-offs                           (288)
                   Recoveries                              38
                                                      -------

              Balance at September 30, 2000             3,321
                   Provision for loan losses              615
                   Charge-offs                           (386)
                   Recoveries                             102
                                                      -------

              Balance at September 30, 2001           $ 3,652
                                                      =======

                                       29
<PAGE>

       Outstanding  mortgage loan commitments,  generally with terms of 30 days,
       were  approximately  $1.7 million and $672,000 for fixed-rate  loans, and
       $203,000 and $214,000 for variable  rate loans at September  30, 2001 and
       2000,  respectively.  There was a $2,000 letter of credit  outstanding at
       September 30, 2001 and September 30, 2000.  Furthermore,  the Company was
       servicing approximately $11.2 million, $14.1 million and $16.7 million in
       loans for the benefit of others in 2001, 2000 and 1999, respectively. The
       Company holds custodial escrow deposits for these serviced loans totaling
       approximately  $127,000  and  $149,000  at  September  30, 2001 and 2000,
       respectively.  The  range  of  interest  rates  on the  fixed  rate  loan
       commitments as of September 30, 2001 was 6.13% to 8.50%.

       The Company makes loans to certain  executive  officers and directors and
       their  related  interests  and  associates.  These loans were made in the
       ordinary  course of business at prevailing  terms and  conditions.  As of
       September 30, 2001, these loans amounted to approximately $317,000.

       Impaired  loans  have  been  recognized in conformity  with SFAS No. 114,
       as amended by SFAS No. 118.  Impaired loans and related  information  are
       as follows:

                                                               September 30,
                                                         ---------------------
                                                          2001    2000    1999
                                                          ----    ----    ----
                                                              (In thousands)

       Impaired loans at year end                        $  960  $ 762   $ 830
       Average balance of impaired loans for the year     1,028    454     957
       Allowance for loan losses for impaired loans         192    189     166
       Interest income recognized during the year            14     43      72



(5)    Premises and Equipment

       Premises and equipment consists of the following:

                                                              September 30,
                                                           -------------------
                                                            2001         2000
                                                           -------     -------
                                                             (In thousands)

       Land                                                $ 3,629     $ 2,992
       Buildings and leasehold improvements                  8,167       6,571
       Furniture, fixtures and equipment                     5,205       4,562
       Other projects in progress                              589         905
                                                           -------     -------

       Total                                                17,590      15,030
       Less accumulated depreciation and amortization       (6,646)     (6,095)
                                                           -------     -------

       Premises and equipment, net                         $10,944     $ 8,935
                                                           =======     =======

       The Company  conducts a portion of its operations from leased  facilities
       and leases certain  equipment under operating leases. As of September 30,
       2001, the Company was committed to  noncancelable  operating  leases with
       annual minimum lease payments  approximating  $174,000 through  September
       30, 2009 and  approximately  $75,000 per year  thereafter  through fiscal
       year 2020.  Rent expense  under all  operating  leases was  approximately
       $159,000,  $106,000 and $136,000 for the years ended  September 30, 2001,
       2000 and 1999, respectively.

                                       30
<PAGE>
(6)    Deposits

       Deposits and weighted-average interest rates are as follows:

                                       September 30, 2001     September 30, 2000
                                      ---------------------   ------------------
                                                   Weighted             Weighted
                                                   Average               Average
                                         Amount      Rate       Amount    Rate
                                         ------      ----       ------    ----

                                     (In thousands)        (In thousands)

      Noninterest-bearing checking    $  20,306       --     $  16,292     --
      Interest-bearing checking          34,705      1.67%      31,460    1.86%
      Savings accounts                   27,547      1.51%      29,167    2.08%
      Money-market accounts              33,768      3.19%      24,325    5.10%
      Certificate accounts:
         4.00% - 4.99%                   98,731                 19,999
         5.00% - 5.99%                   73,605                 81,625
         6.00% - 6.99%                  104,345                144,575
         7.00% - 7.99%                    6,530                  7,111
                                      ---------              ---------

            Total certificates          283,211      5.64%      53,310    5.89%
                                      ---------              ---------

            Total deposits            $ 399,537      4.33%   $ 354,554    4.90%
                                      =========              =========

       Certificate accounts in amounts of $100,000 or more totaled approximately
       $85.7  million  and  $57.3  million  at  September  30,  2001  and  2000,
       respectively.  Deposits in excess of $100,000 are not federally  insured.
       The Company had  certificate  accounts  totaling  $35.5 million and $17.1
       million under the State of Florida public  deposits  program at September
       30,  2001 and  September  30,  2000,  respectively.  Deposits  under this
       program are collateralized with securities with a carrying value of $18.3
       million and $9.9 million at September 30, 2001 and 2000, respectively, in
       accordance with applicable regulations.

       Interest expense on deposits is summarized as follows:

                                                      Year ended September 30,
                                                     ---------------------------
                                                       2001      2000     1999
                                                     -------   -------  -------
                                                           (In thousands)
       Interest on interest-bearing
         checking and money-market accounts          $ 1,795   $ 1,648  $ 1,257
       Interest on savings and certificate accounts   16,086    14,173   13,550
       Less early withdrawal penalties                   (81)      (77)     (80)
                                                     -------   -------  -------
       Total interest expense                        $17,800   $15,744  $14,727
                                                     =======   =======  =======

       Certificate accounts by year of scheduled maturity are as follows:

                                               September 30,
                                         ---------------------------
                     Fiscal Year           2001               2000
                     -----------         --------           --------
                                               (In thousands)
                         2001                  --           $164,802
                         2002            $191,523             62,280
                         2003              54,409             11,477
                         2004              20,012             14,751
                    2005 and after         17,267                 --
                                         --------           --------
                        Total            $283,211           $253,310
                                         ========           ========


                                       31
<PAGE>

(7)    Advances From Federal Home Loan Bank and Other Borrowings

       The Company had $149.5  million and $158.0  million in FHLB advances with
       weighted-average  interest rates of 5.22% and 6.27% at September 30, 2001
       and 2000,  respectively.  The advances as of  September  30, 2001 include
       $94.5 million in convertible  advances whereby the FHLB has the option at
       a predetermined  time to convert the fixed interest rate to an adjustable
       rate tied to LIBOR (London interbank offering rate). The Company then has
       the option to prepay the advances  without  penalty if the FHLB  converts
       the interest  rate.  Should the Company  elect to otherwise  prepay these
       borrowings  prior to  maturity,  prepayment  penalties  may be  incurred.
       Advances from the FHLB are collateralized with a blanket floating lien on
       qualifying first mortgage loans and all the Company's FHLB stock.

       The Company's borrowings from the FHLB are as follows:

<TABLE>
<CAPTION>
                                               Conversion
                         Year                    Option      Rate       Maturity      Rate
                         ----                  ----------    ----       --------      ----
                                             (In thousands)         (In thousands)
<S>                    <C>                     <C>         <C>        <C>           <C>
                At September 30, 2001:
                         2002                    $ 56,000    5.86%      $ 40,000      4.54%
                         2003                      15,000    5.29         10,000      5.67
                         2004                       5,000    5.13          5,000      5.72
                         2005                       5,000    6.10         10,000      6.49
                         2006                      13,500    4.94         15,000      5.33
                         2008                          --                 15,000      5.07
                         2009                          --                  5,000      3.15
                         2010                          --                 26,000      6.11
                         2011                          --                 23,500      5.06
                                                 --------               --------
           Total and weighted-average rate       $ 94,500    5.61%      $149,500      5.22%
                                                 ========               ========

               At September 30, 2000:

                         2001                    $ 61,000     5.74%     $ 72,000      6.75%
                         2003                       5,000     5.02         5,000      6.41
                         2004                          --                 15,000      4.91
                         2005                       5,000     6.10        10,000      6.49
                         2008                          --                 15,000      5.07
                         2009                          --                 15,000      6.67
                         2010                          --                 26,000      6.11
                                                 --------               --------
           Total and weighted-average rate       $ 71,000     5.71%     $158,000      6.27%
                                                 ========               ========
</TABLE>

       As of September 30, 2001 the Company's $11.0 million in other  borrowings
       are overnight  borrowings utilizing the Treasury Investment Program (TIP)
       bearing interest at 2.50% per annum.  These borrowings are collateralized
       by  various  types  of  securities,  such as  municipal  bonds,  CMOs and
       corporate bonds,  with a carrying value of $11.0 million at September 30,
       2001.

                                       32
<PAGE>

(8)    Income Taxes

       Income taxes consists of the following:

                                               Current   Deferred     Total
                                              --------  ---------    -------
                                                      (In thousands)
        Year ended September 30, 2001:
             Federal                          $ 2,074   $   (156)    $ 1,918
             State                                382        (27)        355
                                              --------  ---------    -------
                                              $ 2,456   $   (183)    $ 2,273
                                              =======   ========     =======

        Year ended September 30, 2000:
             Federal                          $ 1,943   $   (160)    $ 1,783
             State                                338        (27)        311
                                              -------    -------     -------
                                              $ 2,281   $   (187)    $ 2,094
                                              =======   ========     =======
        Year ended September 30, 1999
             Federal                          $ 1,606   $    (33)    $ 1,573
             State                                181         (6)        175
                                              -------   --------     -------

                                              $ 1,787   $    (39)    $ 1,748
                                              =======   ========     =======

The tax effects of temporary  differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
                                                                            September 30,
                                                                         ------------------
                                                                           2001      2000
                                                                         -------    -------
                                                                           (In thousands)
<S>                                                                    <C>        <C>
            Deferred tax assets:
               Allowance for loan losses, net                            $ 1,305    $ 1,252
               Pension asset                                                  --        202
                 Unrealized loss on securities available for sale             --        735
                 Self-insurance reserve                                      132        299
                 Deferred compensation plans                                 354         --
               Other                                                         101         46
                                                                        --------    -------
                    Total deferred tax assets                              1,892      2,534
                                                                        --------    -------
            Deferred tax liabilities:
               FHLB stock                                                  (365)       (432)
               Unrealized gain on securities available for sale            (859)         --
               Depreciation                                                 (53)        (76)
                                                                        -------     -------
                    Total deferred tax liabilities                       (1,277)       (508)
                                                                        -------     -------
                    Net deferred tax assets                             $   615     $ 2,026
                                                                        =======     =======
</TABLE>

       Net deferred tax assets are included in other assets in the  consolidated
       statements of financial condition.

                                       33
<PAGE>
       The Company's  effective rate on pretax income differs from the statutory
       Federal income tax rate as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                          Year ended September 30,
                                                         -------------------------------------------------------
                                                           2001        %        2000       %       1999      %
                                                           -------   ------    ------    -----    ------   -----

<S>                                                      <C>          <C>    <C>         <C>    <C>        <C>
      Tax provision at statutory rate                      $2,483       34%    $2,018      34%    $1,702     34%
      Increase (decrease) in tax
        resulting from:
           Tax-exempt income, net                            (356)      (5)      (148)     (2)       (70)    (1)

           State income taxes, net of Federal income
           tax benefit                                        234        3        205       3        116      2

           Other, net                                         (88)      (1)        19      --         --     --
                                                           ------  -------     ------   -----     ------  -----
      Total                                                $2,273       31%    $2,094      35%    $1,748     35%
                                                           ======  =======     ======   =====     ======  =====
</TABLE>

       Until 1997, the Internal  Revenue Code (the "Code") allowed the Company a
       special bad debt  deduction  for  additions to bad debt  reserves for tax
       purposes.  Provisions in the Code  permitted the Company to determine its
       bad debt deduction by either the  experience  method or the percentage of
       taxable income  method.  The statutory  percentage  used to calculate bad
       debt  deductions by the percentage of taxable income method was 8% before
       such deduction.  The experience  method was calculated  using actual loss
       experience of the Company.

       The Small  Business Job Protection Act of 1996 repealed the percentage of
       taxable income method of accounting for bad debts for tax years beginning
       after  1995.  The  Company  switched to the  experience  method  above to
       compute its bad debt  deduction in 1997 and future years.  As a result of
       the change in the Code, the Company is required to recapture into taxable
       income the  portion of its bad debt  reserves  that  exceeds its bad debt
       reserves  calculated under the experience  method since 1987; a recapture
       of approximately $366,000 ratably over six years beginning in 1999.

       Retained  earnings at  September  30, 2001  includes  approximately  $5.8
       million  base  year,  tax basis bad debt  reserve  for which no  deferred
       Federal and state income tax liability  has been  accrued.  These amounts
       represent an allocation of income to bad debt deductions for tax purposes
       only.  Reduction of amounts so allocated for purposes  other than tax bad
       debt losses or adjustments arising from carryback of net operating losses
       would create income for tax purposes only,  which would be subject to the
       then current  corporate  income tax rate. The unrecorded  deferred income
       tax  liability  on the above  amounts was  approximately  $2.2 million at
       September 30, 2001.  Certain events,  as defined,  will still trigger the
       recapture of the base year  reserve.  The base year  reserves also remain
       subject to income tax  penalty  provisions  which,  in  general,  require
       recapture  upon certain  stock  redemptions  or excess  distributions  to
       stockholders.


 (9)   Concentration of Credit Risk

       The Company  originates  real  estate,  consumer,  and  commercial  loans
       primarily in its Central Florida market area.  Although the Company has a
       diversified  loan  portfolio,  a  substantial  portion of its  borrowers'
       ability to honor their  contracts  depends on the economic  conditions of
       Central Florida.  The Company does not have a significant exposure to any
       individual customer or counterparty.

       The  Company  manages its credit  risk by  limiting  the total  amount of
       arrangements  outstanding  with individual  customers,  by monitoring the
       size  and  maturity  structure  of  the  loan  portfolio,   by  obtaining
       collateral based on management's credit assessment of the customers,  and
       by applying a uniform credit process for all credit exposures.

                                       34
<PAGE>

(10)  Regulatory Matters

       The  Bank  is  subject  to  various   regulatory   capital   requirements
       administered  by the federal  banking  agencies.  Failure to meet minimum
       capital  requirements  can  initiate  certain  mandatory  - and  possibly
       additional  discretionary  - actions by regulators  that, if  undertaken,
       could have a direct material effect on the Bank's  financial  statements.
       Under capital adequacy guidelines and the regulatory framework for prompt
       corrective  action,  the Bank must meet specific capital  guidelines that
       involve  quantitative  measures of the Bank's  assets,  liabilities,  and
       certain off-balance sheet items as calculated under regulatory accounting
       practices. The Bank's capital amounts and classification are also subject
       to  qualitative  judgments  by  the  regulators  about  components,  risk
       weightings, and other factors.

       Quantitative   measures  established  by  regulation  to  ensure  capital
       adequacy  require  the Bank to maintain  minimum  amounts and ratios (set
       forth in the table below) of risk-based and Tier I capital (as defined in
       the regulations) to risk-weighted assets (as defined).

       As of  September  30,  2001,  the most recent  notification  from the OTS
       categorized the Bank as "well capitalized" under the regulatory framework
       for prompt corrective  action.  To be categorized as "well  capitalized,"
       the Bank must maintain minimum total risk-based,  Tier I risk-based,  and
       Tier I leverage ratios as set forth in the table. There are no conditions
       or events since that notification  that management  believes have changed
       the Bank's category.

The Bank's actual capital amounts and percentages are as follows:

<TABLE>
<CAPTION>
                                                                                           "Well capitalized"
                                                                      For capital             under prompt
                                                                        adequacy           corrective action
                                                   Actual               purpose                provisions
                                             -------------------  ---------------------  ----------------------
                                             Amount      Ratio       Amount      Ratio       Amount      Ratio
                                             ------      -----       ------      -----       ------      -----
                                                                  (Dollars in thousands)
<S>                                       <C>          <C>        <C>          <C>        <C>           <C>
              September 30, 2001:
                Risk-based capital
                  (to risk-weighted assets) $ 73,029     17.0%      $ 34,432     8.0%       $ 43,040      10.0%

                Tier I capital (to risk-
                  weighted assets)          $ 69,377     16.1%      $ 17,216     4.0%       $ 25,824       6.0%

                Tier I capital
                  (to average assets)       $ 69,377     11.3%      $ 24,496     4.0%       $ 30,620       5.0%

              September 30, 2000:
                Risk-based capital
                  (to risk-weighted assets) $ 56,470     15.5%      $ 29,158     8.0%       $ 36,448      10.0%

                Tier I capital (to risk-
                  weighted assets)          $ 53,149     14.6%      $ 14,579     4.0%       $ 21,869       6.0%

                Tier I capital
                  (to average assets)       $ 53,149      9.7%      $ 21,844     4.0%       $ 27,305       5.0%
</TABLE>

                                       35
<PAGE>

       The payment of dividends by the Bank to the Company are  restricted.  OTS
       regulations  impose  limitations on all capital  distributions by savings
       institutions.  Capital distributions include cash dividends,  payments to
       repurchase or otherwise acquire the institution's capital stock, payments
       to  stockholders  of another  institution in a cash-out  merger and other
       distributions  charged against capital.  A savings  institution that is a
       subsidiary of a savings and loan holding company,  such as the Bank, must
       file an  application  or a notice  with  the OTS at least 30 days  before
       making a capital  distribution.  Savings institutions are not required to
       file an  application  for permission to make a capital  distribution  and
       need only file a notice if the following conditions are met: (1) they are
       eligible for expedited  treatment under OTS  regulations,  (2) they would
       remain  adequately  capitalized  after the  distribution,  (3) the annual
       amount of capital  distribution  does not exceed net income for that year
       to date added to retained net income for the two preceding years, and (4)
       the capital distribution would not violate any agreements between the OTS
       and the savings  institution or any OTS regulations.  Any other situation
       would require an application to the OTS.


(11)   Benefit Plans

       Director  Retirement Plan. The Company sponsors a non-qualified  Director
       Retirement  Plan  ("Retirement  Plan").  The Retirement Plan will pay all
       Directors  that have  served on the board at least ten  years,  an amount
       equal  to  the  regular  board  fee  as of the  date  of  the  directors'
       retirement  (currently  $1,000 per month) for 120 months beginning at the
       end  of  their  final  three-year  term.  If a  Director  dies  prior  to
       retirement  or prior to receipt of all monthly  payments  under the plan,
       the Company has no further  financial  obligations to the Director or his
       or her estate.  For the years  ended  September  30,  2001 and 1999,  the
       Company   recognized  costs  of  $25,000  and  $37,000  related  to  this
       Retirement  Plan.  For the year  ended  September  30,  2000 the  Company
       recognized a net reduction in expense of $34,000 related to adjusting the
       remaining  liability  after the death of a  director.  The  amounts  were
       determined by discounting  the anticipated  cash flow required,  based on
       the  years  of  service   rendered   by  each   covered   director.   The
       weighted-average discount rate used to measure the expense was 5.50%.

       Employee Stock  Ownership  Plan.  The Company  sponsors an employee stock
       ownership  plan  ("ESOP").  The ESOP covers  eligible  employees who have
       completed twelve months of continuous  employment with the Company during
       which they worked at least 1,000 hours and who have  attained  the age of
       21. As part of the  Reorganization  in April 1999, the ESOP borrowed $2.2
       million from the Company to purchase  223,250  shares of the common stock
       of the Company.  After the Conversion in December 2000, the ESOP acquired
       an additional  251,836 shares at a total cost of $3.9 million.  The funds
       were  obtained  through  a loan  from  the  Company.  Since  the  ESOP is
       internally  leveraged,  the Company  does not report the loan  receivable
       from the ESOP as an asset and does not report the loan  payable  from the
       ESOP  as a  liability.  The  Company's  accounting  for  its  ESOP  is in
       accordance  with AICPA Statement of Position 93-6,  Employers  Accounting
       for  Employee  Stock  Ownership  Plans,  which  requires  the  Company to
       recognize compensation expense equal to the fair value of the ESOP shares
       during the  periods in which they became  committed  to be  released.  As
       shares are committed to be released,  the shares become  outstanding  for
       earnings per share computations. To the extent that the fair value of the
       ESOP shares differs from the cost of such shares,  this differential will
       be  charged  or  credited  to  equity  as  additional   paid-in  capital.
       Management  expects  the  recorded  amount of  expense  to  fluctuate  as
       continuing  adjustments  are made to reflect changes in the fair value of
       the ESOP  shares.  As of September  30, 2001 and 2000,  32,481 and 33,440
       shares were committed for release and the Company  recorded  compensation
       and employee  benefit expense of $480,000,  $284,000 and $286,000 for the
       years ended September 30, 2001, 2000 and 1999, respectively,  relating to
       the ESOP.

       Dividends  paid by the Company that relate to  unallocated  shares of the
       ESOP are used to make  payments  on the ESOP loan.  As of  September  30,
       2001, the fair value of the 408,654  unallocated  shares held by the ESOP
       was $6.8 million.

                                       36
<PAGE>

       401(k) Retirement Plan.  Effective January 1, 1999, the Company adopted a
       401(k)  plan for  eligible  employees.  Subject to certain  restrictions,
       eligible  employees may voluntarily  contribute up to 15% of their annual
       compensation and the Company may authorize discretionary contributions to
       eligible  participants.  For the years ended September 30, 2001, 2000 and
       1999 the Company recognized $117,900,  $94,000 and $65,000  respectively,
       of employee  benefits  expense for the  Company's  matching  contribution
       under the plan.

       Supplemental  Executive  Retirement Plan ("SERP").  Effective  January 1,
       1999, the Company  adopted a nonqualified  defined  contribution  plan to
       provide supplemental  retirement benefits for certain executive officers.
       For the  years  ended  September  30,  2001,  2000 and  1999 the  Company
       recognized  $144,000,  $130,000  and  $94,000  respectively,  of employee
       benefits expense related to the SERP.


(12)   Stock-Based Compensation Plans

       Restricted  Stock Plan ("RSP").  On October 19, 1999 the Company adopted,
       and the stockholders approved, a RSP for directors and officers to enable
       the Bank to attract and retain experienced and qualified personnel. Under
       the RSP,  directors and officers of the Bank were awarded  111,625 shares
       of the  Company's  stock.  Restricted  shares are earned at a rate of 20%
       each year of continued  service to the Company.  In the event of death or
       disability  of a  participant,  all shares  awarded  to that  participant
       become  immediately  vested.  The fair  value of the shares  awarded  was
       $919,000,  using the market  closing price of $8.24 on the date of grant.
       This amount is being  amortized over a five-year  period to  compensation
       and employee  benefits  expense,  commencing  October 1, 1999. All shares
       awarded under the RSP are considered as shares  outstanding  for purposes
       of calculating earnings per share.

       The shares  earned  under this plan are  entitled to all voting and other
       stockholder  rights,  except that, while  restricted,  the shares must be
       held in escrow and cannot be sold,  pledged or  otherwise  conveyed.  The
       Company  acquired the shares for the plan through open market  purchases.
       During  2001,  the RSP  purchased  51,889  shares at an average  price of
       $14.13 per share. At September 30, 2001 the plan held 85,509 shares at an
       average price of $11.53 per share

       Stock Option Plan.  The Company has a Stock Option Plan  ("Option  Plan")
       under  which  279,053  common  shares  are  authorized  to be  granted to
       directors,  officers and employees of the Bank.  Shares granted under the
       Option Plan are exercisable at the market price at the date of the grant.
       The stock  options  granted to  directors,  officers and  employees  upon
       approval  of the plan by  stockholders  on October  19, 1999 vest 20% per
       year, with the first installment  becoming exercisable one year after the
       date of grant.  Incentive options expire at the earlier of ten years from
       the date of  grant  or three  months  following  the date an  officer  or
       employee  terminates the employment  relationship  for reasons other than
       disability  (options  expire  in one  year  after  disability)  or  death
       (options  expire in two year after death).  Non-incentive  options expire
       ten  years  from  the  date  of  grant.  All  non-incentive  options  are
       immediately vested in the event of death or disability.

       During the year ended  September  30, 2001, no options were granted under
       the Option Plan.  SFAS No. 123 requires pro forma fair value  disclosures
       if the intrinsic  value method is being  utilized.  In order to calculate
       the fair value of the options, it was assumed that the risk-free interest
       rate was 6.0% for each period,  an annualized  dividend of  approximately
       2.75% would apply over the exercise  period,  an estimated  volatility of
       65% and the  expected  life of the options  would be the entire  exercise
       period. For purposes of pro forma  disclosures,  the estimated fair value
       was included in expense in the period vesting occurs, using September 30,
       2000 as the first  vesting  period.  The pro forma  information  has been
       determined  as if the Company had  accounted  for its stock options under
       the fair value  method of SFAS No. 123 and is as follows  (in  thousands,
       except per share amounts):

                                       37
<PAGE>

<TABLE>
<CAPTION>
                                                                   Year ended September 30,
                                                                  ----------------------------
                                                                    2001         2000     1999
                                                                    ----         ----     ----
<S>                                                             <C>         <C>         <C>
       Weighted-average grant-date fair value of options issued
       during the year                                                --      $ 16.07       --
       Proforma net income                                        $4,782      $ 3,399       --
       Pro forma basic earnings per share                         $ 0.90      $  0.63       --
</TABLE>

       The following is a summary of option transactions:

<TABLE>
<CAPTION>

                                                                 Range of Per    Weighted
                                                     Number of   Share Option   Average Per
                                                      Shares        Price       Share Price
                                                      -------       -----       -----------
<S>                                                 <C>        <C>              <C>
        Initial shares granted on October 19, 1999    279,053    $7.63-$10.23     $8.23
           Forfeited                                     (516)       8.24          8.24
                                                      -------
        Outstanding, September 30, 2000               278,537        8.23          8.23
           Exercised                                   (2,229)       8.24          8.24
           Forfeited                                   (2,683)       8.24          8.24
                                                      -------
        Outstanding, September 30, 2001               273,625    $7.63-$10.23      8.23
                                                      =======
</TABLE>

       The  weighted  average  remaining  contractual  life  of the  outstanding
       options at September 30, 2001 was 6.8 years.  The outstanding  options at
       September 30, 2001 were exercisable as follows:

                        Number    Weighted Average   Weighted Average Remaining
        Year Ending     Shares    Exercise Price         Contractual Life
        -----------     ------    --------------         ----------------
          2002          114,505       $ 8.23                    8.0
          2003           53,040       $ 8.23                    7.0
          2004           53,040       $ 8.23                    6.0
          2005           53,040       $ 8.23                    5.0
                        -------
          Total         273,625       $ 8.23
                        =======

(13)     (13)     Subsequent Event, Deposit and Branch Acquisition

       On December 6, 2001, the Bank signed a definitive agreement with SunTrust
       Bank  ("SunTrust")  to purchase  seven  Florida  branches  from  SunTrust
       coincident with  SunTrust's  acquisition of such branches from Huntington
       National Bank ("Huntington"). Four of the Huntington branches are located
       in Lakeland,  Florida, and one each in Avon Park and Sebring in Highlands
       County, and one branch in Wildwood, Florida. The transaction will include
       assumption of approximately  $165 million in deposits and the purchase of
       approximately $25 million in loans related to the seven branches.

                                       38
<PAGE>

(14)   Fair Values of Financial Instruments

       Fair value estimates, methods and assumptions are set forth below.

       Cash  and  Cash  Equivalents:  The  carrying  amounts  of cash  and  cash
       equivalents    (demand   deposits   maintained   at   various   financial
       institutions) represent fair value.

       Securities:  The  Company's  securities  represent  investments  in  U.S.
       government agency  obligations,  CMOs, MBS, corporate bonds and municipal
       bonds.  The fair value of these  securities was estimated based on quoted
       market prices or bid quotations received from securities dealers.

       FHLB  Stock:  The FHLB  stock is not  publicly  traded  and the  carrying
       amounts were used to estimate the fair value.

       Loans: Fair values are estimated for the Company's  portfolio of loans by
       grouping  loans with similar  financial  characteristics.  The loans have
       been  segregated by type,  such as fixed and variable rate first mortgage
       loans  and  other  loans.  The  fair  value  of  loans  is  estimated  by
       discounting  the future cash flows using  current  rates at which similar
       loans would be made to  borrowers  with  similar  credit  ratings and for
       similar maturities.

       Deposit  Liabilities:  The fair value of deposits with no stated maturity
       (i.e.,  interest and  noninterest-bearing  checking  accounts and savings
       accounts)  is equal to the amount  payable as of year end. The fair value
       of certificate  accounts is based on the discounted  value of contractual
       cash flows.  The  discount  rate is estimated  using the rates  currently
       offered by the Company for deposits of similar remaining maturities.

       FHLB Advances and Other  Borrowings:  The fair value of FHLB advances and
       other  borrowings are based on the discounted  value of contractual  cash
       flows.  The discount rate is estimated using the rates currently  offered
       by creditors for advances of similar remaining maturities.

       Commitments:  The  Company  makes  commitments  in the  normal  course of
       business to originate  loans.  All such  commitments  are for  relatively
       short periods of time, so the market value of the loans on the commitment
       date and origination or delivery date is seldom materially different.

       The estimated fair values of the Company's  financial  instruments are as
       follows:

<TABLE>
<CAPTION>
                                                               Carrying  Estimated
                                                                Amount   Fair value
                                                              ---------  ----------
                                                                 (In thousands)
<S>                                                         <C>        <C>
        September 30, 2001:
              Financial assets:
                 Cash and cash equivalents                    $  21,676  $ 21,676
                 Securities available for sale                  129,534   129,534
                 Federal Home Loan Bank stock                     7,670     7,670
                 Loans                                          474,155   485,300
                                                              =========  ========
              Financial liabilities:
                 Deposits:
                    Without stated maturities                  $116,326  $116,326
                    With stated maturities                      283,211   289,854
                 Federal Home Loan Bank advances                149,500   157,076
                 Other borrowings                                11,048    11,048
                                                             ==========   =======
              Commitments:
                 Loan commitments and letters of credit              --   $ 1,969
                                                             ==========   =======
</TABLE>

                                       39
<PAGE>

        September 30, 2000:
              Financial assets:
                 Cash and cash equivalents              $   6,734       $  6,734
                 Securities available for sale             96,661         96,661
                 Securities held to maturity                9,687          9,391
                 Federal Home Loan Bank stock               7,925          7,925
                 Loans                                    440,386        433,631

              Financial liabilities:
                 Deposits:
                    Without stated maturities            $101,244       $101,244
                    With stated maturities                253,310        251,196
                   Federal Home Loan Bank advances        158,000        157,537
                   Other borrowings                         2,937          2,937
                                                         ========       ========

              Commitments:
                 Loan commitments and letters of credit        --       $    888
                                                         ========       ========

 (15)  Commitments and Contingencies

       In the ordinary course of business,  the Company has various  outstanding
       commitments  and  contingent  liabilities  that are not  reflected in the
       accompanying  financial  statements.   In  addition,  the  Company  is  a
       defendant  in certain  claims and legal  actions  arising in the ordinary
       course of business. In the opinion of management, after consultation with
       legal counsel,  the ultimate disposition of these matters is not expected
       to have a material  adverse effect on the financial  condition or results
       of operations of the Company.


 (16)  Parent Company Only Financial Statements

       Condensed  financial  statements  of  FloridaFirst  Bancorp, Inc. are  as
       follows (in thousands):

       Condensed Statements of Financial Condition
       -------------------------------------------

                                                            At September 30,
                                                       -------------------------
       Assets                                             2001           2000
                                                          ----           ----
       Cash and cash equivalents                       $     86        $     50
       Loans to subsidiary                               20,547           6,786
       Securities available for sale                      2,402           2,263
       Investment in subsidiary                          70,769          51,918
       Other assets                                          52              64
                                                       --------        --------

         Total assets                                  $ 93,856        $ 61,081
                                                       ========        ========

       Liabilities and Stockholders' Equity
       Other liabilities                                     42              --
                                                       --------        --------
       Stockholders' equity                              93,814          61,081
                                                       --------        --------
         Total liabilities and stockholders' equity    $ 93,856        $ 61,081
                                                       ========        ========

                                       40
<PAGE>
<TABLE>
<CAPTION>
                                                                    Year ended September 30,
                                                                    ------------------------
       Condensed Statements of Earnings                                   2001        2000
       --------------------------------                                   ----        ----
<S>                                                                  <C>         <C>
       Interest income:
       Securities available for sale                                   $   209     $   135
       Loans to subsidiary                                                 976         500
                                                                       -------     -------
         Total income                                                    1,185         635
                                                                       -------     -------
       Operating expenses                                                  212         102
                                                                       -------     -------
       Income before income taxes and equity
         in undistributed earnings of subsidiary                           973         533
       Income taxes                                                        340         191
                                                                       -------     -------
       Income before equity in undistributed earnings of subsidiary        633         342
       Equity in undistributed earnings of subsidiary                    4,398       3,500
                                                                       -------     -------

       Net income                                                      $ 5,031     $ 3,842
                                                                       =======     =======
</TABLE>

<TABLE>
<CAPTION>
                                                                                  Year ended September 30,
                                                                                  ------------------------
      Condensed Statements of Cash Flows                                            2001          2000
      ----------------------------------                                           -----          ----
<S>                                                                            <C>             <C>
      Cash flows from operating activities:
      Net income                                                                 $   5,031       $ 3,842
         Adjustments  to reconcile  net income to
         net cash provided by operating activities:
                 Equity in undistributed earnings of subsidiary                     (4,398)       (3,500)
                 Increase in other - net                                               (12)         (126)
                                                                                 ---------       -------
                    Net cash provided by operating activities                          621           216
                                                                                 ---------       -------
      Cash flows from investing activities:
         Capital contribution to subsidiary                                        (16,000)           --
         Purchase of investment securities                                              --        (2,263)
         Repayment (issuance) of loans to subsidiary                               (13,761)        6,133
                                                                                 ---------       -------
                    Net cash provided by (used in) investing activities            (29,761)        3,870
                                                                                 ---------       -------

      Cash flows from financing activities:
           Payments to acquire treasury stock                                         (481)       (3,606)
           Dividends paid                                                             (921)         (480)
           Net proceeds from stock issuances                                        30,578            --
                                                                                 ---------       -------
                     Net cash provided by (used in) financing activities            29,176        (4,086)
                                                                                 ---------       -------
      Increase in cash                                                                  36            --
      Cash at beginning of year                                                         50            50
                                                                                 ---------       -------
      Cash at end of year                                                        $      86       $    50
                                                                                 =========       =======
</TABLE>

                                       41
<PAGE>

(17)   Quarterly Financial Data (Unaudited)

       Unaudited quarterly financial data (in thousands except share data) is as
follows:

<TABLE>
<CAPTION>
                                 Year ended September 30, 2001           Year ended September 30, 2000
                             -------------------------------------- --------------------------------------
                              First    Second    Third     Fourth    First     Second    Third     Fourth
                              Quarter  Quarter   Quarter   Quarter   Quarter   Quarter   Quarter   Quarter
                              -------  -------   -------   -------   -------   -------   -------   -------

<S>                        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Interest income              $10,947   $11,025   $11,385   $11,489   $ 9,151   $ 9,741   $10,271   $10,677
Interest expense               6,761     6,334     6,431     6,369     5,034     5,574     6,212     6,755
                             -------   -------   -------   -------   -------   -------   -------   -------
Net interest income            4,186     4,691     4,954     5,120     4,117     4,167     4,059     3,922
Provision for loan losses        180       135       150       150       120       150       180       180
                             -------   -------   -------   -------   -------   -------   -------   -------
Net interest income after
   provision for loan
   losses                      4,006     4,556     4,804     4,970     3,997     4,017     3,879     3,742
                             -------   -------   -------   -------   -------   -------   -------   -------

Non-interest income              573       677       729       765       446       504       523       641
Non-interest expense           3,124     3,535     3,459     3,658     3,039     3,052     2,904     2,818
                             -------   -------   -------   -------   -------   -------   -------   -------

Income before taxes            1,455     1,698     2,074     2,077     1,404     1,469     1,498     1,565
Provision for income taxes       483       520       640       630       494       517       530       553
                             -------   -------   -------   -------   -------   -------   -------   -------

Net income                   $   972   $ 1,178   $ 1,434   $ 1,447   $   910   $   952   $   968   $ 1,012
                             =======   =======   =======   =======   =======   =======   =======   =======

Basic earnings per share     $  0.18   $  0.22   $  0.27   $  0.28   $  0.16   $  0.18   $  0.18   $  0.19
                             =======   =======   =======   =======   =======   =======   =======   =======
Diluted earnings per share   $  0.18   $  0.21   $  0.26   $  0.28   $  0.16   $  0.17   $  0.18   $  0.19
                             =======   =======   =======   =======   =======   =======   =======   =======

</TABLE>
                                       42
<PAGE>

[LOGO]  HACKER, JOHNSON & SMITH PA
        ========================================================================
        Fort Lauderdale                             Certified Public Accountants
        Orlando
        Tampa

                          Independent Auditors' Report


Board of Directors
FloridaFirst Bancorp, Inc.
Lakeland, Florida:

     We have  audited the  accompanying  consolidated  statements  of  financial
condition of  FloridaFirst  Bancorp,  Inc. (the "Company") at September 30, 2001
and 2000,  and the related  consolidated  statements of earnings,  stockholders'
equity  and  comprehensive  income  and cash  flows for each of the years in the
three-year  period ended September 30, 2001. These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects,  the financial position of the Company
at September 30, 2001 and 2000, and the results of its operations,  and its cash
flows for each of the years in the three-year period ended September 30, 2001 in
conformity with accounting principles accepted in the United States of America.


/s/HACKER, JOHNSON & SMITH PA
-----------------------------

HACKER, JOHNSON & SMITH PA
Tampa, Florida
November 2, 2001, except for Note 13
     which is December 6, 2001

<TABLE>
<CAPTION>
<S>                           <C>
500 North Westshore Boulevard, Post Office Box 20368, Tampa, Florida 33622-0368, (813) 286-2424
Member of American Institute of Certified Public Accountants SEC Practice Section
</TABLE>

                                       43