##### Table of Contents

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

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



For the quarterly period ended September 30, 2004



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



For the transition period from  to



Commission file number 333-70231



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SUNCOAST BANCORP, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 65-0827141                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



8592 Potter Park
Drive, Suite 200

Sarasota, Florida 34238

(Address of Principal Executive Offices)



(941) 923-0500

(Issuers Telephone Number, Including Area Code)





(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)



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Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days:    YES  x    NO ̈



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



|                                       |  |                                
|-------------------------------------- |  | -------------------------------
|Common stock, par value $.01 per share |  | 734,981 shares                 
|(class)                                |  | Outstanding at November 8, 2004



Transitional Small Business Format
(Check One):    YES ̈NO  x



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##### Table of Contents

SUNCOAST BANCORP, INC. AND SUBSIDIARY



INDEX



|                                                                                                                                 |  |      
|-------------------------------------------------------------------------------------------------------------------------------- |  | -----
|                                                                                                                                 |  | Page 
|PART I.
FINANCIAL INFORMATION                                                                                                    |  |      
|                                                                                                                                 | 
|Item 1.
Financial Statements                                                                                                     |  |      
|                                                                                                                                 | 
|Condensed Consolidated Balance Sheets - At September 30, 2004 (unaudited) and At December 31, 2003                               |  | 2    
|                                                                                                                                 | 
|Condensed Consolidated Statements of Earnings - Three and Nine Months Ended September 30, 2004 and 2003 (unaudited)              |  | 3    
|                                                                                                                                 | 
|Condensed Consolidated Statements of Changes in Stockholders Equity - Nine Months Ended September 30, 2004 and 2003 (unaudited) |  | 4    
|                                                                                                                                 | 
|Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2004 and 2003 (unaudited)                      |  | 5    
|                                                                                                                                 | 
|Notes to Condensed Consolidated Financial Statements (unaudited)                                                                 |  | 6-10 
|                                                                                                                                 | 
|Review by Independent Registered Public Accounting Firm                                                                          |  | 11   
|                                                                                                                                 | 
|Report of Independent Registered Public Accounting Firm                                                                          |  | 12   
|                                                                                                                                 | 
|Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations                                    |  | 13-19
|                                                                                                                                 | 
|Item 3.
Controls and Procedures                                                                                                  |  | 20   
|                                                                                                                                 | 
|PART II.
OTHER INFORMATION                                                                                                       |  |      
|                                                                                                                                 | 
|Item 6.
Exhibits                                                                                                                 |  | 21   
|                                                                                                                                 | 
|SIGNATURES                                                                                                                       |  | 22   



1



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##### Table of Contents

SUNCOAST BANCORP, INC. AND SUBSIDIARY



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



Condensed Consolidated Balance Sheets

($ in thousands, except per share amounts)



|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | ------ | -
|                                                                                                                                                                                       |  | September 30, 2004 |        |   | December 31, 2003 |       
|                                                                                                                                                                                       |  | (Unaudited)        |        |   |                   |       
|Assets                                                                                                                                                                                 |  |                    |        |   |                   |        |  
|Cash and due from banks                                                                                                                                                                |  | $                  | 4,328  |   |                   | 3,580  |  
|Interest-bearing deposits with banks                                                                                                                                                   |  |                    | 18     |   |                   | 507    |  
|Federal funds sold                                                                                                                                                                     |  |                    | 9,303  |   |                   | 6,326  |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total cash and cash equivalents                                                                                                                                                        |  |                    | 13,649 |   |                   | 10,413 |  
|                                                                                                                                                                                       |  |                   
|Securities available for sale                                                                                                                                                          |  |                    | 9,805  |   |                   | 10,133 |  
|Loans, net of allowance for loan losses of $813 and $654                                                                                                                               |  |                    | 73,468 |   |                   | 60,460 |  
|Premises and equipment, net                                                                                                                                                            |  |                    | 395    |   |                   | 344    |  
|Federal Reserve Bank stock, at cost                                                                                                                                                    |  |                    | 225    |   |                   | 219    |  
|Federal Home Loan Bank stock, at cost                                                                                                                                                  |  |                    | 204    |   |                   | 151    |  
|Accrued interest receivable                                                                                                                                                            |  |                    | 330    |   |                   | 250    |  
|Deferred tax assets                                                                                                                                                                    |  |                    | 514    |   |                   | 673    |  
|Other assets                                                                                                                                                                           |  |                    | 180    |   |                   | 123    |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total assets                                                                                                                                                                           |  | $                  | 98,770 |   |                   | 82,766 |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Liabilities and Stockholders Equity                                                                                                                                                   |  |                    |        |   |                   |        |  
|Liabilities:                                                                                                                                                                           |  |                    |        |   |                   |        |  
|Noninterest-bearing demand deposits                                                                                                                                                    |  |                    | 9,937  |   |                   | 6,284  |  
|Savings and NOW deposits                                                                                                                                                               |  |                    | 6,519  |   |                   | 5,680  |  
|Money-market deposits                                                                                                                                                                  |  |                    | 36,815 |   |                   | 38,587 |  
|Time deposits                                                                                                                                                                          |  |                    | 37,591 |   |                   | 24,126 |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total deposits                                                                                                                                                                         |  |                    | 90,862 |   |                   | 74,677 |  
|                                                                                                                                                                                       |  |                   
|Other borrowings                                                                                                                                                                       |  |                    |       |   |                   | 501    |  
|Other liabilities                                                                                                                                                                      |  |                    | 151    |   |                   | 136    |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total liabilities                                                                                                                                                                      |  |                    | 91,013 |   |                   | 75,314 |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Stockholders equity:                                                                                                                                                                  |  |                    |        |   |                   |        |  
|Preferred stock, $.01 par value, 3,000,000 shares authorized, of which 300,000 designated as convertible preferred stock, $10 liquidation
value, 240,975 shares issued and outstanding |  |                    | 2      |   |                   | 2      |  
|Common stock, $.01 par value 10,000,000 shares authorized, 734,981 shares issued and outstanding                                                                                       |  |                    | 7      |   |                   | 7      |  
|Additional paid-in capital                                                                                                                                                             |  |                    | 9,202  |   |                   | 8,611  |  
|Accumulated deficit                                                                                                                                                                    |  |                    | (1,416 | ) |                   | (1,125 | )
|Accumulated other comprehensive income (loss)                                                                                                                                          |  |                    | (38    | ) |                   | (43    | )
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total stockholders equity                                                                                                                                                             |  |                    | 7,757  |   |                   | 7,452  |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  
|Total liabilities and stockholders equity                                                                                                                                             |  | $                  | 98,770 |   |                   | 82,766 |  
|                                                                                                                                                                                       |  |                    |        |   |                   |        |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



2



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##### Table of Contents

SUNCOAST BANCORP, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Earnings (Unaudited)

($ in thousands, except per share amounts)



|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|---------------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------ | --- | - | ---- | ----- | - | ---- | ----- | -
|                                                     |  | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, |    
|                                                     |  | 2004                            |       |   | 2003                           |     |   | 2004 |       |   | 2003 |      
|Interest income:                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Loans                                                |  | $                               | 1,100 |   |                                | 761 |   |      | 3,007 |   |      | 2,163 |  
|Securities                                           |  |                                 | 93    |   |                                | 94  |   |      | 285   |   |      | 280   |  
|Other interest-earning assets                        |  |                                 | 26    |   |                                | 7   |   |      | 56    |   |      | 36    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Total interest income                                |  |                                 | 1,219 |   |                                | 862 |   |      | 3,348 |   |      | 2,479 |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Interest expense:                                    |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Deposits                                             |  |                                 | 432   |   |                                | 297 |   |      | 1,199 |   |      | 923   |  
|Other borrowings                                     |  |                                 |      |   |                                | 8   |   |      | 1     |   |      | 11    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Total interest expense                               |  |                                 | 432   |   |                                | 305 |   |      | 1,200 |   |      | 934   |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Net interest income                                  |  |                                 | 787   |   |                                | 557 |   |      | 2,148 |   |      | 1,545 |  
|                                                     |  |                                 |       |  
|Provision for loan losses                            |  |                                 | 37    |   |                                | 18  |   |      | 159   |   |      | 58    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Net interest income after provision for loan losses  |  |                                 | 750   |   |                                | 539 |   |      | 1,989 |   |      | 1,487 |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Noninterest income:                                  |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Service charges on deposit accounts                  |  |                                 | 12    |   |                                | 9   |   |      | 36    |   |      | 28    |  
|Other service charges and fees                       |  |                                 | 17    |   |                                | 16  |   |      | 46    |   |      | 36    |  
|Gain (loss) on sale of securities available for sale |  |                                 |      |   |                                |    |   |      | 2     |   |      | (1    | )
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Total noninterest income                             |  |                                 | 29    |   |                                | 25  |   |      | 84    |   |      | 63    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Noninterest expense:                                 |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Salaries and employee benefits                       |  |                                 | 335   |   |                                | 276 |   |      | 947   |   |      | 789   |  
|Occupancy expense                                    |  |                                 | 101   |   |                                | 89  |   |      | 298   |   |      | 254   |  
|Professional fees                                    |  |                                 | 38    |   |                                | 32  |   |      | 127   |   |      | 114   |  
|Data processing                                      |  |                                 | 32    |   |                                | 27  |   |      | 106   |   |      | 94    |  
|Stationery and supplies                              |  |                                 | 23    |   |                                | 18  |   |      | 67    |   |      | 52    |  
|Advertising                                          |  |                                 | 6     |   |                                | 4   |   |      | 14    |   |      | 14    |  
|Other                                                |  |                                 | 36    |   |                                | 25  |   |      | 104   |   |      | 122   |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Total noninterest expense                            |  |                                 | 571   |   |                                | 471 |   |      | 1,663 |   |      | 1,439 |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Earnings before income taxes                         |  |                                 | 208   |   |                                | 93  |   |      | 410   |   |      | 111   |  
|                                                     |  |                                 |       |  
|Income tax provision                                 |  |                                 | 79    |   |                                | 35  |   |      | 156   |   |      | 42    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Net earnings                                         |  |                                 | 129   |   |                                | 58  |   |      | 254   |   |      | 69    |  
|Accrued preferred stock dividends                    |  |                                 | (34   | ) |                                | (27 | ) |      | (109  | ) |      | (27   | )
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Net earnings applicable to common stockholders       |  | $                               | 95    |   |                                | 31  |   |      | 145   |   |      | 42    |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Earnings per share:                                  |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Basic                                                |  | $                               | .13   |   |                                | .04 |   |      | .20   |   |      | .06   |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Diluted                                              |  | $                               | .12   |   |                                | .04 |   |      | .20   |   |      | .06   |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  
|Dividends per share                                  |  | $                               |      |   |                                |    |   |      |      |   |      |      |  
|                                                     |  |                                 |       |   |                                |     |   |      |       |   |      |       |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



3



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##### Table of Contents

SUNCOAST BANCORP, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Changes in Stockholders Equity (Unaudited)



For the Nine Months Ended September 30, 2004 and 2003

(In thousands)



|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|---------------------------------------------------------------------------------------- |  | -------------- | - | ----------- | - | ------------------------ | ----- | ------------------ | ------ | - | ------------------------------------------ | ---- | - | ------------------------ | ----- | -
|                                                                                         |  | PreferredStock |   | CommonStock |   | AdditionalPaid-InCapital |       | AccumulatedDeficit |        |   | AccumulatedOtherComprehensiveIncome (Loss) |      |   | TotalStockholdersEquity |      
|Balance at December 31, 2002                                                             |  | $              |  |             | 7 |                          | 6,394 |                    | (1,224 | ) |                                            | 80   |   |                          | 5,257 |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Comprehensive income (loss):                                                             |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Net earnings (unaudited)                                                                 |  |                |  |             |  |                          |      |                    | 69     |   |                                            |     |   |                          | 69    |  
|Net change in unrealized gain on securities available for sale, net of taxes (unaudited) |  |                |  |             |  |                          |      |                    |       |   |                                            | (148 | ) |                          | (148  | )
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Comprehensive income (loss) (unaudited)                                                  |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          | (79   | )
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Sale of preferred stock (net of issuance costs of $35) (unaudited)                       |  |                | 2 |             |  |                          | 2,217 |                    |       |   |                                            |     |   |                          | 2,219 |  
|Preferred stock dividend payable (unaudited)                                             |  |                |  |             |  |                          |      |                    | (27    | ) |                                            |     |   |                          | (27   | )
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Balance at September 30, 2003 (unaudited)                                                |  | $              | 2 |             | 7 |                          | 8,611 |                    | (1,182 | ) |                                            | (68  | ) |                          | 7,370 |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Balance at December 31, 2003                                                             |  | $              | 2 |             | 7 |                          | 8,611 |                    | (1,125 | ) |                                            | (43  | ) |                          | 7,452 |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Comprehensive income:                                                                    |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Net earnings (unaudited)                                                                 |  |                |  |             |  |                          |      |                    | 254    |   |                                            |     |   |                          | 254   |  
|Net change in unrealized loss on securities available for sale, net of taxes (unaudited) |  |                |  |             |  |                          |      |                    |       |   |                                            | 5    |   |                          | 5     |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Comprehensive income (unaudited)                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          | 259   |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Common stock dividend (unaudited)                                                        |  |                |  |             |  |                          | 436   |                    | (436   | ) |                                            |     |   |                          |      |  
|Preferred stock dividend (unaudited)                                                     |  |                |  |             |  |                          | 155   |                    | (109   | ) |                                            |     |   |                          | 46    |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  
|Balance at September 30, 2004 (unaudited)                                                |  | $              | 2 |             | 7 |                          | 9,202 |                    | (1,416 | ) |                                            | (38  | ) |                          | 7,757 |  
|                                                                                         |  |                |   |             |   |                          |       |                    |        |   |                                            |      |   |                          |       |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



4



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##### Table of Contents

SUNCOAST BANCORP, INC. AND SUBSIDIARY



Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)



|                                                                                                               |  |                                |         |   |      |         |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | ------- | -
|                                                                                                               |  | Nine Months EndedSeptember 30, |        
|                                                                                                               |  | 2004                           |         |   | 2003 |        
|Cash flows from operating activities:                                                                          |  |                                |         |   |      |         |  
|Net earnings                                                                                                   |  | $                              | 254     |   |      | 69      |  
|Adjustments to reconcile net earnings to net cash provided by operating activities:                            |  |                                |         |   |      |         |  
|Depreciation and amortization                                                                                  |  |                                | 109     |   |      | 89      |  
|Provision for loan losses                                                                                      |  |                                | 159     |   |      | 58      |  
|Net amortization of loan fees, premiums and discounts                                                          |  |                                | 15      |   |      | 14      |  
|Provision for deferred income taxes                                                                            |  |                                | 156     |   |      | 42      |  
|Loss on sale of securities available for sale                                                                  |  |                                |        |   |      | 1       |  
|Write down of foreclosed real estate                                                                           |  |                                |        |   |      | 17      |  
|Increase in accrued interest receivable                                                                        |  |                                | (80     | ) |      | (31     | )
|(Increase) decrease in other assets                                                                            |  |                                | (57     | ) |      | 1       |  
|Increase in other liabilities                                                                                  |  |                                | 61      |   |      | 48      |  
|                                                                                                               |  |                                |         |   |      |         |  
|Net cash provided by operating activities                                                                      |  |                                | 617     |   |      | 308     |  
|                                                                                                               |  |                                |         |   |      |         |  
|Cash flows from investing activities:                                                                          |  |                                |         |   |      |         |  
|Purchase of securities available for sale                                                                      |  |                                | (1,991  | ) |      | (9,070  | )
|Principal repayments of securities available for sale                                                          |  |                                | 1,327   |   |      | 2,393   |  
|Proceeds from sale of securities available for sale                                                            |  |                                | 1,000   |   |      | 4,644   |  
|Purchase of FHLB stock                                                                                         |  |                                | (53     | ) |      | (68     | )
|Purchase of FRB stock                                                                                          |  |                                | (6      | ) |      |        |  
|Net increase in loans                                                                                          |  |                                | (13,182 | ) |      | (11,281 | )
|Purchase of premises and equipment                                                                             |  |                                | (160    | ) |      | (12     | )
|                                                                                                               |  |                                |         |   |      |         |  
|Net cash used in investing activities                                                                          |  |                                | (13,065 | ) |      | (13,394 | )
|                                                                                                               |  |                                |         |   |      |         |  
|Cash flows from financing activities:                                                                          |  |                                |         |   |      |         |  
|Net increase in deposits                                                                                       |  |                                | 16,185  |   |      | 6,886   |  
|Net decrease in other borrowings                                                                               |  |                                | (501    | ) |      | (526    | )
|Net proceeds from sale of preferred stock                                                                      |  |                                |        |   |      | 2,219   |  
|                                                                                                               |  |                                |         |   |      |         |  
|Net cash provided by financing activities                                                                      |  |                                | 15,684  |   |      | 8,579   |  
|                                                                                                               |  |                                |         |   |      |         |  
|Net increase (decrease) in cash and cash equivalents                                                           |  |                                | 3,236   |   |      | (4,507  | )
|                                                                                                               |  |                               
|Cash and cash equivalents at beginning of period                                                               |  |                                | 10,413  |   |      | 9,983   |  
|                                                                                                               |  |                                |         |   |      |         |  
|Cash and cash equivalents at end of period                                                                     |  | $                              | 13,649  |   |      | 5,476   |  
|                                                                                                               |  |                                |         |   |      |         |  
|Supplemental disclosure of cash flow information:                                                              |  |                                |         |   |      |         |  
|Cash paid during the period for:                                                                               |  |                                |         |   |      |         |  
|Interest                                                                                                       |  | $                              | 1,166   |   |      | 937     |  
|                                                                                                               |  |                                |         |   |      |         |  
|Income taxes                                                                                                   |  | $                              |        |   |      |        |  
|                                                                                                               |  |                                |         |   |      |         |  
|Noncash transactions:                                                                                          |  |                                |         |   |      |         |  
|Transfer from foreclosed real estate to loans                                                                  |  | $                              |        |   |      | 136     |  
|                                                                                                               |  |                                |         |   |      |         |  
|Preferred stock dividend payable                                                                               |  | $                              |        |   |      | 27      |  
|                                                                                                               |  |                                |         |   |      |         |  
|Preferred stock dividend paid                                                                                  |  | $                              | 155     |   |      |        |  
|                                                                                                               |  |                                |         |   |      |         |  
|Preferred stock dividend accrued, beginning of period                                                          |  | $                              | 46      |   |      |        |  
|                                                                                                               |  |                                |         |   |      |         |  
|Accumulated other comprehensive income, change in unrealized gain on securities available for sale, net of tax |  | $                              | 5       |   |      | (148    | )
|                                                                                                               |  |                                |         |   |      |         |  



See Accompanying Notes to Condensed
Consolidated Financial Statements.



5



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (unaudited)



|(1) | Description of Business and Basis of Presentation
|--- | -------------------------------------------------



In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting principally of normal
recurring accruals) necessary to present fairly the financial position at September 30, 2004, the results of operations for the three- and nine-month periods ended September 30, 2004 and 2003 and cash flows for the nine month periods ended September
30, 2004 and 2003. The results of operations for the three- and nine- month periods ended September 30, 2004 are not necessarily indicative of the results to be expected for the year ending December 31, 2004.



SunCoast Bancorp, Inc. (the Holding Company) owns 100% of the
outstanding common stock of SunCoast Bank (the Bank) (collectively the Company). The Holding Company was organized simultaneously with the Bank and its only business is the ownership and operation of the Bank. The Bank was
incorporated under the laws of the United States and received its charter from the Comptroller of the Currency. However, the Bank converted to a state (Florida) chartered commercial bank and became a member of the Federal Reserve System on January
1, 2003. The Banks deposits are insured by the Federal Deposit Insurance Corporation. The Bank provides a variety of community banking services to businesses and individuals through its two banking offices located in Sarasota County, Florida.



|(2) | Loan Impairment and Loan Losses
|--- | -------------------------------



No loans were identified as impaired at or during the three and nine months ended September 30, 2004 and 2003. The activity in the allowance for loan
losses is as follows (in thousands):



|                               |  |                                 |     |                                |     |      |     |      |    
|------------------------------ |  | ------------------------------- | --- | ------------------------------ | --- | ---- | --- | ---- | ---
|                               |  | Three Months EndedSeptember 30, |     | Nine Months EndedSeptember 30,
|                               |  | 2004                            |     | 2003                           |     | 2004 |     | 2003
|Balance at beginning of period |  | $                               | 776 |                                | 558 |      | 654 |      | 518
|Provision charged to earnings  |  |                                 | 37  |                                | 18  |      | 159 |      | 58 
|                               |  |                                 |     |                                |     |      |     |      |    
|Balance at end of period       |  | $                               | 813 |                                | 576 |      | 813 |      | 576
|                               |  |                                 |     |                                |     |      |     |      |    



There were no nonaccrual loans or
loans past due ninety days or more, but still accruing at September 30, 2004 or 2003.



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (unaudited),
Continued



|(3) | Earnings Per Share
|--- | ------------------



Earnings per share (EPS) of common stock has been computed on the basis of the weighted-average number of shares of common stock outstanding.
In 2004, outstanding common stock options were considered dilutive securities for purposes of calculating diluted EPS which is computed using the treasury stock method. In 2003, because of prior year loss stock options were antidilutive, there were
734,981 shares outstanding during the 2003 periods. For the nine months ended September 30, 2004, the preferred stock is not considered dilutive using the if converted method. All per share amounts reflect the 5% stock dividend paid on September 30,
2004 (See Note 7). The following table presents the calculations of the weighted-average number of shares for diluted EPS (dollars in thousands, except share amounts):



|                                                                      |  |          |     |                         |           |                |   |    
|--------------------------------------------------------------------- |  | -------- | --- | ----------------------- | --------- | -------------- | - | ---
|                                                                      |  | Earnings |     | Weighted- AverageShares |           | PerShareAmount
|Three Months Ended September 30, 2004:                                |  |          |     |                         |           |                |   |    
|Basic EPS:                                                            |  |          |     |                         |           |                |   |    
|Net earnings available to common stockholders                         |  | $        | 95  |                         | 734,981   |                | $ | .13
|                                                                      |  |          |     |                         |           |                |   |    
|Effect of dilutive securities:                                        |  |          |     |                         |           |                |   |    
|Incremental shares from assumed conversion of options                 |  |          |    |                         | 9,005     |                |   |    
|                                                                      |  |          |    
|Incremental shares from assumed conversion of preferred stock         |  |          | 34  |                         | 297,500   |                |   |    
|                                                                      |  |          |     |                         |           |                |   |    
|Diluted EPS:                                                          |  |          |     |                         |           |                |   |    
|Net earnings available to common stockholders and assumed conversions |  | $        | 129 |                         | 1,041,486 |                | $ | .12
|                                                                      |  |          |     |                         |           |                |   |    
|Nine Months Ended September 30, 2004:                                 |  |          |     |                         |           |                |   |    
|Basic EPS:                                                            |  |          |     |                         |           |                |   |    
|Net earnings available to common stockholders                         |  | $        | 145 |                         | 734,981   |                | $ | .20
|                                                                      |  |          |     |                         |           |                |   |    
|Effect of dilutive securities-                                        |  |          |     |                         |           |                |   |    
|Incremental shares from assumed conversion of options                 |  |          |    |                         | 6,700     |                |   |    
|                                                                      |  |          |     |                         |           |                |   |    
|Diluted EPS:                                                          |  |          |     |                         |           |                |   |    
|Net earnings available to common stockholders and assumed conversions |  | $        | 145 |                         | 741,681   |                | $ | .20
|                                                                      |  |          |     |                         |           |                |   |    



For the three and nine
months ended September 30, 2004 the following options were excluded from the calculation due to the average market price being higher than the exercise price:



|                                      |  |                 |  |                |             |             |      |              |     
|------------------------------------- |  | --------------- |  | -------------- | ----------- | ----------- | ---- | ------------ | ----
|                                      |  | Number ofShares |  | Exercise Price |             | YearGranted |      | YearExpiring
|Nine months ended September 30, 2004  |  | 18,900          |  | $              | 11.38-11.90 |             | 2004 |              | 2014
|                                      |  |                 |  |                |             |             |      |              |     
|Three months ended September 30, 2004 |  | 2,100           |  | $              | 11.38       |             | 2004 |              | 2014
|                                      |  |                 |  |                |             |             |      |              |     



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (unaudited),
Continued



|(4) | Stock Options
|--- | -------------



The Company has both an Employee and Director Stock Option Plan. Under the Employee Stock Option Plan, the exercise price of the stock options must at
least equal the fair market value of the common stock at the date of grant. Options granted under this plan are exercisable for 10 years from date of grant and vest in increments of 20% per year commencing one year from grant date. A total of 58,800
shares of common stock have been reserved under this Plan. At September 30, 2004, option to purchase 46,200 shares have been granted under this plan.



Under the Director Stock Option Plan, the exercise price of the stock options is the fair market value of the common stock at the date of grant. The
options have a ten year term. These options vest in increments of 20% per year commencing one year from grant date. A total of 44,100 shares of common stock have been reserved under this Plan. All per share amounts reflect the 5% stock dividend paid
on September 30, 2004 (See Note 7). At September 30, 2004, all stock options have been granted under this plan ($ in thousands except per share information).



|                                  |  |                 |  |                                 |             |                                 |       |                      |    
|--------------------------------- |  | --------------- |  | ------------------------------- | ----------- | ------------------------------- | ----- | -------------------- | ---
|                                  |  | Number ofShares |  | Range of Per Share Option Price |             | Weighted- AveragePer SharePrice |       | AggregateOptionPrice
|Outstanding at December 31, 2003  |  | 71,400          |  | $                               | 9.52        |                                 | 9.52  |                      | 680
|Options granted                   |  | 18,900          |  |                                 | 11.38-11.90 |                                 | 11.45 |                      | 216
|                                  |  |                 |  |                                 |             |                                 |       |                      |    
|Outstanding at September 30, 2004 |  | 90,300          |  | $                               | 9.52-11.90  |                                 | 9.93  |                      | 896
|                                  |  |                 |  |                                 |             |                                 |       |                      |    



The Company accounts
for its stock option plans under the recognition and measurement principles of APB No. 25. No stock-based employee compensation cost is reflected in net earnings, as all options granted under these plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. The preferred stock is only considered dilutive for the three months ended September 30, 2004. The following table illustrates the effect on net earnings and earnings per share if the
Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation
Transition and Disclosure (collectively SFAS No. 123) to stock-based employee compensation (dollars in thousands, except per share information).



|                                                                                                                                       |  |                                 |     |   |                                |    |   |      |     |   |      |     |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | --- | - | ------------------------------ | -- | - | ---- | --- | - | ---- | --- | -
|                                                                                                                                       |  | Three Months EndedSeptember 30, |     |   | Nine Months EndedSeptember 30, |   
|                                                                                                                                       |  | 2004                            |     |   | 2003                           |    |   | 2004 |     |   | 2003 |    
|Net earnings applicable to common stockholders, as reported                                                                            |  | $                               | 95  |   |                                | 31 |   |      | 145 |   |      | 42  |  
|Deduct: Total stock-based employee compensation determined under the fair value based method for all awards, net of related tax
effect |  |                                 | (14 | ) |                                | (4 | ) |      | (18 | ) |      | (12 | )
|                                                                                                                                       |  |                                 |     |   |                                |    |   |      |     |   |      |     |  
|Proforma net earnings applicable to common stockholders                                                                                |  |                                 | 81  |   |                                | 27 |   |      | 127 |   |      | 30  |  
|Add: Accrued preferred stock dividend as reported In net earnings applicable to common stockholders                                    |  |                                 | 34  |   |                                |   |   |      |    |   |      |    |  
|                                                                                                                                       |  |                                 |     |   |                                |    |   |      |     |   |      |     |  
|Proforma net earnings                                                                                                                  |  | $                               | 115 |   |                                | 27 |   |      | 127 |   |      | 30  |  
|                                                                                                                                       |  |                                 |     |   |                                |    |   |      |     |   |      |     |  



(continued)

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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (unaudited),
Continued



|(4) | Stock Options, Continued
|--- | ------------------------



|                             |  |                                 |     |                                |     |      |     |      |    
|---------------------------- |  | ------------------------------- | --- | ------------------------------ | --- | ---- | --- | ---- | ---
|                             |  | Three Months EndedSeptember 30, |     | Nine Months EndedSeptember 30,
|                             |  | 2004                            |     | 2003                           |     | 2004 |     | 2003
|Earnings per share:          |  |                                 |     |                                |     |      |     |      |    
|Basic                        |  | $                               | .13 |                                | .04 |      | .20 |      | .06
|                             |  |                                 |     |                                |     |      |     |      |    
|Diluted                      |  | $                               | .12 |                                | .04 |      | .20 |      | .06
|                             |  |                                 |     |                                |     |      |     |      |    
|Proforma earnings per share: |  |                                 |     |                                |     |      |     |      |    
|Basic                        |  | $                               | .11 |                                | .04 |      | .17 |      | .04
|                             |  |                                 |     |                                |     |      |     |      |    
|Diluted                      |  | $                               | .11 |                                | .04 |      | .17 |      | .04
|                             |  |                                 |     |                                |     |      |     |      |    



The fair value of each
option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions; there were no options granted during the nine months ended September 30, 2004:



|                                                                           |  |                                      |      |   |                                     |      |  
|-------------------------------------------------------------------------- |  | ------------------------------------ | ---- | - | ----------------------------------- | ---- | -
|                                                                           |  | Three Months EndedSeptember 30, 2004 |      |   | Nine Months EndedSeptember 30, 2004 |     
|Weighted-average risk-free interest rate                                   |  |                                      | 4.52 | % |                                     | 4.52 | %
|Dividend yield                                                             |  |                                      |     | % |                                     |     | %
|Volatility                                                                 |  |                                      | 30   | % |                                     | 30   | %
|Expected life in years                                                     |  |                                      | 10   |   |                                     | 10   |  
|                                                                           |  |                                     
|Weighted-average grant date fair value of options issued during the period |  | $                                    | 5.76 |   |                                     | 5.76 |  
|                                                                           |  |                                      |      |   |                                     |      |  



|(5) | Regulatory Capital
|--- | ------------------



The Bank is required to maintain certain minimum regulatory capital requirements. The following is a summary at September 30, 2004 of the regulatory
capital requirements and the Banks actual capital on a percentage basis:



|                                                |  |        |   |  |                                                  |  
|----------------------------------------------- |  | ------ | - |  | ------------------------------------------------ | -
|                                                |  | Actual |   |  | RegulatoryRequirement for Well- CapitalizedBanks |  
|Total capital to risk-weighted assets           |  | 9.90   | % |  | 10.00                                            | %
|Tier I capital to risk-weighted assets          |  | 8.94   | % |  | 6.00                                             | %
|Tier I capital to total assets - leverage ratio |  | 8.07   | % |  | 5.00                                             | %



At September 30, 2004,
management believes the Bank is adequately capitalized.



In
connection with its conversion to a state bank on January 1, 2003, the Bank agreed that until December 31, 2004, it will maintain a Tier 1 capital ratio of at least 8%. In addition, the Bank also agreed that it would raise a minimum of $500,000 of
Tier 1 capital no later than June 30, 2003, and an additional minimum of $1.0 million of Tier 1 capital no later than September 30, 2003. The Bank complied with these requirements.



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Notes to Condensed Consolidated Financial Statements (unaudited),
Continued



|(6) | Preferred Stock
|--- | ---------------



In 2003, the Company sold 225,400 shares of cumulative convertible preferred stock for $2,219,000, net of issuance cost of approximately $35,000.
Preferred stock dividends are cumulative and will accrue from the original issue date whether or not declared by the Board of Directors. The Company issued 15,575 shares of preferred stock as dividends on September 30, 2004. The cumulative
convertible preferred stock is manditorily convertible into common stock at a conversion price of $8.10 per share (subject to antidilution adjustments) on the earlier of September 30, 2005 or a change of control of the Company, and will pay share
cumulative dividends in shares of preferred stock computed at 6% per annum on September 30, 2004 and 2005.



|(7) | Stock Dividend
|--- | --------------



On August 10, 2004 the Board of Directors declared a 5% stock dividend to all common shareholders of record September 20, 2004. The dividend was paid on
September 30, 2004.



|(8) | Subsequent Events
|--- | -----------------



On November 4, 2004 the Bank purchased land on State Road 64 in Bradenton, Florida for a future branch site. The total cost including closing costs for
the land was $1,543,000. The Bank expects to open the branch in the fourth quarter of 2005.



In the fourth quarter of 2004 the Company plans to sell 480,000 shares of cumulative convertible preferred stock for a total of $6,000,000. Issuance costs of approximately $90,000 will be netted from the proceeds. The
cumulative convertible preferred stock is manditorily convertible into common stock at a conversion price of $10.50 per share on the earlier of December 31, 2006 or a change of control of the Company, and will pay share cumulative dividends in
shares of preferred stock computed at 6% per annum on December 31, 2005 and 2006.

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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Review by Independent Registered Public Accounting Firm



Hacker, Johnson & Smith PA, the Companys independent registered public accounting firm, have made a limited review of the financial data as of September 30, 2004, and for the three- and nine- month periods ended September 30, 2004
and 2003 presented in this document, in accordance with standards established by the Public Company Accounting Oversight Board.



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



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Report of Independent Registered Public Accounting Firm



SunCoast Bancorp, Inc.

Sarasota, Florida:



We have reviewed the accompanying condensed consolidated balance sheet of SunCoast Bancorp, Inc. and Subsidiary (the Company) as of September
30, 2004, and the related condensed consolidated statements of earnings for the three- and nine- month periods ended September 30, 2004 and 2003, the related condensed consolidated statements of cash flows and stockholders equity for the
nine-month periods ended September 30, 2004 and 2003. These interim condensed financial statements are the responsibility of the Companys management.



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



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



We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the
consolidated balance sheet of the Company as of December 31, 2003, and the related consolidated statements of earnings, stockholders equity and cash flows for the year then ended (not presented herein); and in our report dated January 9, 2004
we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2003, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been derived.



|                              
|------------------------------
|/s/ Hacker, Johnson & Smith PA
|                              
|HACKER, JOHNSON & SMITH PA    
|Tampa, Florida                
|October 29, 2004              



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Item 2. Managements Discussion and Analysis

of Financial Condition and Results of Operations



Comparison of September 30, 2004 and December 31, 2003



General



SunCoast Bancorp, Inc. (the Holding Company) owns 100% of the outstanding common stock of SunCoast Bank (the
Bank) (collectively the Company). The Holding Company was organized simultaneously with the Bank and its only business is the ownership and operation of the Bank. The Bank is a state (Florida) chartered commercial bank that
provides a variety of community banking services to businesses and individuals through its two banking offices located in Sarasota County, Florida.



Critical Accounting Policy



The Companys financial condition and results of operations are sensitive to accounting measurements and estimates of matters that are inherently
uncertain. When applying accounting policies in areas that are subjective in nature, the Company must use its best judgment to arrive at the carrying value of certain assets. The most critical accounting policy applied is related to the valuation of
the loan portfolio.



The Bank has structured a methodology for
monitoring and analyzing the adequacy of its Allowance for Loan and Lease Losses. The Analysis Methodology is predicated on guidelines contained in the Comptrollers Manual section Allowance for Loan and Lease Losses.



The Banks management realizes that the recognition of problem loans in
a timely fashion is very important to the process. As such, the Bank maintains a loan review process, along with continuous monitoring of past due loans, changes in economic conditions and other events that may negatively impact a borrower or the
borrowing base collectively.



The Banks risk rating
system is in-place and includes the Risk Rating of all new or renewed commercial loans, or commercial mortgages where the customers aggregate exposure is $25,000 or more. It also requires a risk rating on all residential mortgages of $150,000
or more. There are also homogenous categories such as consumer, home equity lines and residential real estate loans below $150,000. These homogenous categories are monitored solely on the basis of performance.



All loans with specific risk ratings are monitored for performance and the
ratings are subject to change based on: 1) the deterioration of performance regarding timely payments, 2) changes in the financial condition of the borrowers as reflected in financial statements, tax returns, credit bureau reports, etc.



Pass credits by definition, present no inherent loss. But, even in banks
with loan review systems that generally provide timely problem loan identification, a lack of information or misjudgment will sometimes result in a failure to recognize adverse developments affecting a pass credit. Banks must provide for these
probable but unidentified losses by providing an allowance portion for pass loans.



Because the calculation of the allowance for loan losses relies on estimates and judgments relating to inherently events, results may differ from the Companys estimates.



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Item 2. Managements Discussion and Analysis of Financial Condition

and Results of Operations, Continued



Liquidity and Capital Resources



The Companys primary sources of cash during the nine months ended September 30, 2004 were from net deposit inflows of $16.2 million, proceeds from
the sale and repayment of securities available for sale of $2.3 million and net cash provided by operations of $617,000. Cash was used primarily to originate loans, net of principal repayments, totaling $13.2 million and to purchase securities of
$2.0 million.



Off-Balance-Sheet Arrangements and Aggregate Contractual
Obligations



The Company is a party to financial
instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused line of credit and construction loans in process and
standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the condensed consolidated balance sheet. The contract amounts of those instruments reflect
the extent of the Companys involvement in particular classes of financial instruments.



The Companys exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, unused line of credit and construction loans in process and
standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.



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



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 loans to customers.



A summary of the Companys financial instruments, which approximates fair value, with off-balance-sheet risk at September 30, 2004 follows (in
thousands):



|                                       |  |                |       
|-------------------------------------- |  | -------------- | ------
|                                       |  | ContractAmount
|Commitments to extend credit           |  | $              | 2,148 
|                                       |  |                |       
|Unused line of credit and construction |  | $              | 15,940
|                                       |  |                |       
|Standby letters of credit              |  | $              | 687   
|                                       |  |                |       



Management believes
that the Company has adequate resources to fund all of its commitments and that substantially all its existing commitments will be funded within the next twelve months.



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Item 2. Managements Discussion and Analysis of Financial Condition

and Results of Operations, Continued



Results of Operations



The following rates are presented for the dates and periods indicated:



|                                                                                                |  |                                     |   |  |                            |   |  |                                     |  
|----------------------------------------------------------------------------------------------- |  | ----------------------------------- | - |  | -------------------------- | - |  | ----------------------------------- | -
|                                                                                                |  | Nine Months EndedSeptember 30, 2004 |   |  | Year EndedDecember 31,2003 |   |  | Nine Months EndedSeptember 30, 2003 |  
|Average equity as a percentage of average assets                                                |  | 8.55                                | % |  | 8.98                       | % |  | 9.86                                | %
|Equity to total assets at end of period                                                         |  | 7.86                                | % |  | 9.00                       | % |  | 10.60                               | %
|Return on average assets (1)                                                                    |  | 0.39                                | % |  | 0.22                       | % |  | 0.14                                | %
|Return on average equity (1)                                                                    |  | 4.49                                | % |  | 2.43                       | % |  | 1.46                                | %
|Noninterest expenses to average assets (1)                                                      |  | 2.51                                | % |  | 2.87                       | % |  | 3.00                                | %
|Nonperforming loans and foreclosed real estate as a percentage of total assets at end of period |  | N/A                                 |   |  | N/A                        |   |  | N/A                                 |  

---

|(1) | Annualized for the nine months ended September 30.
|--- | --------------------------------------------------



(continued)



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income
of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; and
(v) net interest margin.



|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|-------------------------------------------------------------------------------- |  | -------------------------------- | ------ | -------------------- | ---- | ----------------- |  | ---- | -------------- |  | -------------------- | ------ | ----------------- | - | --- |  | ---- | -
|                                                                                 |  | Three Months Ended September 30, |       
|                                                                                 |  | 2004                             |        |                      | 2003 |                  
|                                                                                 |  | AverageBalance                   |        | InterestandDividends |      | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |        | AverageYield/Rate |  
|                                                                                 |  | (Dollars in thousands)           |       
|Interest-earning assets:                                                         |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Loans                                                                            |  | $                                | 72,642 |                      |      | 1,100             |  | 6.06 | %              |  | $                    | 48,847 |                   |   | 761 |  | 6.23 | %
|Securities                                                                       |  |                                  | 9,914  |                      |      | 93                |  | 3.76 |                |  |                      | 11,192 |                   |   | 94  |  | 3.36 |  
|Other interest-earning assets (1)                                                |  |                                  | 6,164  |                      |      | 26                |  | 1.69 |                |  |                      | 2,290  |                   |   | 7   |  | 1.22 |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Total interest-earning assets                                                    |  |                                  | 88,720 |                      |      | 1,219             |  | 5.50 |                |  |                      | 62,329 |                   |   | 862 |  | 5.53 |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Noninterest-earning assets                                                       |  |                                  | 5,038  |                      |      |                   |  |      |                |  |                      | 4,914  |                   |   |     |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Total assets                                                                     |  | $                                | 93,758 |                      |      |                   |  |      |                |  | $                    | 67,243 |                   |   |     |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Interest-bearing liabilities:                                                    |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Savings, NOW, money-market deposit accounts                                      |  |                                  | 41,380 |                      |      | 163               |  | 1.58 |                |  |                      | 33,749 |                   |   | 133 |  | 1.58 |  
|Time deposits                                                                    |  |                                  | 37,221 |                      |      | 269               |  | 2.89 |                |  |                      | 19,077 |                   |   | 164 |  | 3.44 |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Total interest-bearing deposits                                                  |  |                                  | 78,601 |                      |      | 432               |  | 2.20 |                |  |                      | 52,826 |                   |   | 297 |  | 2.25 |  
|                                                                                 |  |                                  |        |                      |      |                  
|Other interest-bearing liabilities (2)                                           |  |                                  | 174    |                      |      |                  |  |     |                |  |                      | 1,745  |                   |   | 8   |  | 1.83 |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Total interest-bearing liabilities                                               |  |                                  | 78,775 |                      |      | 432               |  | 2.20 |                |  |                      | 54,571 |                   |   | 305 |  | 2.24 |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Noninterest-bearing liabilities                                                  |  |                                  | 7,389  |                      |      |                   |  |      |                |  |                      | 5,781  |                   |   |     |  |      |  
|Stockholders equity                                                             |  |                                  | 7,594  |                      |      |                   |  |      |                |  |                      | 6,891  |                   |   |     |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Total liabilities and stockholders equity                                       |  | $                                | 93,758 |                      |      |                   |  |      |                |  | $                    | 67,243 |                   |   |     |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Net interest income                                                              |  |                                  |        |                      | $    | 787               |  |      |                |  |                      |        |                   | $ | 557 |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Interest-rate spread (3)                                                         |  |                                  |        |                      |      |                   |  | 3.30 | %              |  |                      |        |                   |   |     |  | 3.29 | %
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Net interest margin (4)                                                          |  |                                  |        |                      |      |                   |  | 3.55 | %              |  |                      |        |                   |   |     |  | 3.57 | %
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                                  | 1.13   |                      |      |                   |  |      |                |  |                      | 1.14   |                   |   |     |  |      |  
|                                                                                 |  |                                  |        |                      |      |                   |  |      |                |  |                      |        |                   |   |     |  |      |  

---

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

|(2) | Includes securities sold under agreements to repurchase.
|--- | --------------------------------------------------------

|(3) | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average rate of interest-bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Net interest margin is net interest income divided by average interest-earning assets.
|--- | --------------------------------------------------------------------------------------



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income
of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; and
(v) net interest margin.



|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|-------------------------------------------------------------------------------- |  | ------------------------------- | ------ | -------------------- | ---- | ----------------- |  | ---- | -------------- |  | -------------------- | ------ | ----------------- | - | ----- |  | ---- | -
|                                                                                 |  | Nine Months Ended September 30, |       
|                                                                                 |  | 2004                            |        |                      | 2003 |                  
|                                                                                 |  | AverageBalance                  |        | InterestandDividends |      | AverageYield/Rate |  |      | AverageBalance |  | InterestandDividends |        | AverageYield/Rate |  
|                                                                                 |  | (Dollars in thousands)          |       
|Interest-earning assets:                                                         |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Loans                                                                            |  | $                               | 67,651 |                      |      | 3,007             |  | 5.93 | %              |  | $                    | 45,377 |                   |   | 2,163 |  | 6.36 | %
|Securities                                                                       |  |                                 | 10,275 |                      |      | 285               |  | 3.70 |                |  |                      | 9,630  |                   |   | 280   |  | 3.88 |  
|Other interest-earning assets (1)                                                |  |                                 | 5,340  |                      |      | 56                |  | 1.40 |                |  |                      | 4,268  |                   |   | 36    |  | 1.12 |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-earning assets                                                    |  |                                 | 83,266 |                      |      | 3,348             |  | 5.37 |                |  |                      | 59,275 |                   |   | 2,479 |  | 5.58 |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-earning assets                                                       |  |                                 | 5,119  |                      |      |                   |  |      |                |  |                      | 4,749  |                   |   |       |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total assets                                                                     |  | $                               | 88,385 |                      |      |                   |  |      |                |  | $                    | 64,024 |                   |   |       |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-bearing liabilities:                                                    |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Savings, NOW, money-market deposit accounts                                      |  |                                 | 40,818 |                      |      | 476               |  | 1.55 |                |  |                      | 33,749 |                   |   | 429   |  | 1.69 |  
|Time deposits                                                                    |  |                                 | 32,600 |                      |      | 723               |  | 2.96 |                |  |                      | 18,268 |                   |   | 494   |  | 3.61 |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-bearing deposits                                                  |  |                                 | 73,418 |                      |      | 1,199             |  | 2.18 |                |  |                      | 52,017 |                   |   | 923   |  | 2.37 |  
|                                                                                 |  |                                 |        |                      |      |                  
|Other interest-bearing liabilities (2)                                           |  |                                 | 428    |                      |      | 1                 |  | .32  |                |  |                      | 1,269  |                   |   | 11    |  | 1.16 |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total interest-bearing liabilities                                               |  |                                 | 73,846 |                      |      | 1,200             |  | 2.17 |                |  |                      | 53,286 |                   |   | 934   |  | 2.34 |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Noninterest-bearing liabilities                                                  |  |                                 | 6,989  |                      |      |                   |  |      |                |  |                      | 4,424  |                   |   |       |  |      |  
|Stockholders equity                                                             |  |                                 | 7,550  |                      |      |                   |  |      |                |  |                      | 6,314  |                   |   |       |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Total liabilities and stockholders equity                                       |  | $                               | 88,385 |                      |      |                   |  |      |                |  | $                    | 64,024 |                   |   |       |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest income                                                              |  |                                 |        |                      | $    | 2,148             |  |      |                |  |                      |        |                   | $ | 1,545 |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Interest-rate spread (3)                                                         |  |                                 |        |                      |      |                   |  | 3.20 | %              |  |                      |        |                   |   |       |  | 3.24 | %
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Net interest margin (4)                                                          |  |                                 |        |                      |      |                   |  | 3.45 | %              |  |                      |        |                   |   |       |  | 3.48 | %
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                                 | 1.13   |                      |      |                   |  |      |                |  |                      | 1.11   |                   |   |       |  |      |  
|                                                                                 |  |                                 |        |                      |      |                   |  |      |                |  |                      |        |                   |   |       |  |      |  

---

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

|(2) | Includes securities sold under agreements to repurchase.
|--- | --------------------------------------------------------

|(3) | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average rate of interest-bearing liabilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Net interest margin is net interest income divided by average interest-earning assets.
|--- | --------------------------------------------------------------------------------------



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Comparison of the Three-Month Periods Ended September 30, 2004 and 2003



General. Net earnings applicable to common
stockholders for the three months ended September 30, 2004 were $95,000, or $.13 basic and $.12 diluted earnings per share, compared to a net loss of $31,000, or $.04 basic and diluted loss per share, for the three months ended September 30, 2003.
The increase in the Companys net earnings applicable to common stockholders was primarily due to an increase in net interest income, partially offset by an increase in noninterest expenses.



Interest Income and Expense. Interest income increased by
$357,000 from $862,000 for the three months ended September 30, 2003 to $1,219,000 for the three months ended September 30, 2004. Interest income on loans increased $339,000 primarily due to an increase in the average loan portfolio balance from
$48.8 million for the three months ended September 30, 2003 to $72.6 million for the comparable period in 2004 which was partially offset by a decrease in the weighted-average yield from 6.23% in 2003 to 6.06% in 2004. Interest on securities
decreased $1,000 primarily due to a increase in the average securities balance to $9.9 million in 2004 from $11.2 million in 2003 which was partially offset by a increase in the weighted average yield from 3.36% in 2003 to 3.76% in 2004.



Interest expense on interest-bearing deposits increased to $432,000 for
the three months ended September 30, 2004 compared to $297,000 for the three months ended September 30, 2003. Interest expense on interest-bearing deposits increased due to an increase in the average balance from $52.8 million in 2003 to $78.6
million in 2004 which was partially offset by a decrease in the weighted rate paid from 2.25% in 2003 to 2.20% in 2004.



Provision for Loan Losses. The provision for loan losses is charged to earnings to bring the total allowance to a level deemed appropriate
by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Companys
market areas, and other factors related to the collectibility of the Companys loan portfolio. The provision for loan losses was $37,000 for the three months ended September 30, 2004 compared to $18,000 for the comparable period in 2003.
Management believes the balance in the allowance for loan losses of $813,000 at September 30, 2004 is adequate.



Noninterest Income.Noninterest income increased $4,000 during the three month period ended September 30, 2004 compared to the same period
in 2003.



Noninterest Expenses. Noninterest
expenses increased $100,000 during the three-month period ended September 30, 2004 compared to the same period in 2003. Noninterest expense increased primarily due to the growth of the Company.



Income Taxes. The income tax provision for the three months
ended September 30, 2004 was $79,000 (an effective rate of 38.0%) compared to an income tax provision of $35,000 (an effective rate of 37.6%) for the comparable 2003 period.



18



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Comparison of the Nine-Month Periods Ended September 30, 2004 and 2003



General. Net earnings applicable to common
stockholders for the nine months ended September 30, 2004 were $145,000, or $.20 basic and diluted earnings per share, compared to $42,000, or $.06 basic and diluted loss per share, for the nine months ended September 30, 2003. The increase in the
Companys net earnings applicable to common stockholders was primarily due to an increase in net interest income, partially offset by an increase in noninterest expenses.



Interest Income and Expense. Interest income increased by $869,000, from $2.5 million for the nine months
ended September 30, 2003 to $3.3 million for the nine months ended September 30, 2004. Interest income on loans increased $844,000 primarily due to an increase in the average loan portfolio balance from $45.4 million for the nine months ended
September 30, 2003 to $67.7 million for the comparable period in 2004 which was partially offset by a decrease in the weighted-average yield from 6.36% in 2003 to 5.93% in 2004. Interest on securities increased $5,000 primarily due to a increase in
the average securities balance to $10.3 million in 2004 from $9.6 million in 2003 which was partially offset by a decrease in the weighted-average yield from 3.88% in 2003 to 3.70% in 2004.



Interest expense on interest-bearing deposits increased to $1,199,000 for
the nine months ended September 30, 2004 compared to $923,000 for the nine months ended September 30, 2003. Interest expense on interest-bearing deposits increased due an increase in the average balance from $52.0 million in 2003 to $73.4 million in
2004 which was partially offset by a decrease in the weighted average paid from 2.37% in 2003 to 2.18% in 2004.



Provision for Loan Losses. The provision for loan losses is charged to earnings to bring the total allowance to a level deemed appropriate
by management and is based upon historical experience, the volume and type of lending conducted by the Company, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to the Companys
market areas, and other factors related to the collectibility of the Companys loan portfolio. The provision for loan losses was $159,000 for the nine months ended September 30, 2004 compared to $58,000 for the comparable period in 2003.
Management believes the balance in the allowance for loan losses of $813,000 at September 30, 2004 is adequate.



Noninterest Income.Noninterest income increase $21,000 during the nine month period ended September 30, 2004 compared to the same period in
2003.



Noninterest Expenses. Noninterest
expenses increased $224,000 during the nine-month period ended September 30, 2004 compared to the same period in 2003. Noninterest expense increased primarily due to an increase in salaries and employee benefits due to the growth of the Company.



Income Taxes. The income tax provision for the
nine months ended September 30, 2004 was $156,000 (an effective rate of 38.0%) compared to an income tax provision of $42,000 (an effective rate of 37.8%) for the comparable 2003 period.



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



Item 3. Controls and Procedures



|a. | Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports
that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their
evaluation of those controls and procedures as of September 30, 2004, the Chief Executive and Chief Financial officers of the Company concluded that the Companys disclosure controls and procedures were adequate.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b. | Changes in internal controls. There were no significant changes in the Companys internal control over financial reporting during the Companys last fiscal quarter
that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



PART II. OTHER INFORMATION



Item 6. Exhibits



|The | following exhibits are files with this report:
|--- | ----------------------------------------------



|            |  |                                                                                                                                                                                                                                                                           
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                    
|3.1         |  | Restated Articles of Incorporation of SunCoast Bancorp, Inc. (Incorporated by reference to Exhibit 3.1 to SunCoasts Registration Statement No. 333-70231 (the Registration
Statement).                                                                                 
|            | 
|3.2         |  | Bylaws of SunCoast Bancorp, Inc. (Incorporated by reference to Exhibit 3.2 to the Registration Statement).                                                                                                                                                                
|            | 
|3.3         |  | Articles of Amendment of the Restated Articles of Incorporation of SunCoast Bancorp, Inc. filed with the Florida Secretary of State on June 23, 2003. (Incorporated by reference to Exhibit 3.3
of the Form 10-QSB filed by SunCoast for the quarter ended June 30, 2003).
|            | 
|31.1        |  | Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                                                                                                                                                      
|            | 
|31.2        |  | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                                                                                                                                                      
|            | 
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                             
|            | 
|32.2        |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002                                                                                                                             

|
|

|
|



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SUNCOAST BANCORP, INC. AND SUBSIDIARY



SIGNATURES



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



|                        |  |                        |  |                                                        
|----------------------- |  | ---------------------- |  | -------------------------------------------------------
|                        |  | SUNCOAST BANCORP, INC.
|                        |  | (Registrant)          
|                        |  |                       
|Date: November 15, 2004 |  | By:                    |  | /s/ John T. Stafford                                   
|                        |  |                        |  | John T. Stafford, President and Chief Executive
Officer
|                        |  |                       
|Date: November 15, 2004 |  | By:                    |  | /s/ John S. Wilks                                      
|                        |  |                        |  | John S. Wilks, Chief Financial Officer                 
|                        |  |                        |  | (Principal Financial Officer and Principal             
|                        |  |                        |  | Accounting Officer)                                    



22