<PAGE>   1

================================================================================
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB

  [X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                                       OR

  [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-27474

                           AMERICAN BANCSHARES, INC.
                 (Name of Small Business Issuer in its Charter)

          FLORIDA                                       65-0624640
(State or Other Jurisdiction of                        (IRS Employer
Incorporation or Organization)                       Identification No.)

         4702 CORTEZ ROAD WEST                           34210-2801
          BRADENTON, FLORIDA                             (Zip Code)
(Address of Principal Executive Offices)

                                 (941) 795-3050
                (Issuer's Telephone Number, Including Area Code)

                           -------------------------

      SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:

                                                     NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                   ON WHICH REGISTERED
-------------------                                  ----------------------

       None                                                   None

      SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:

                   Common Shares, par value $1.175 per share

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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
           ---     ---

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB.  [ X ]

The issuer's revenues for its most recent fiscal year was $23,334,463

The aggregate market value of the Common Shares of the issuer held by
non-affiliates as of February 27, 1998, was approximately $43,924,690, as
computed by reference to the closing price of the Common Shares as quoted on
the Nasdaq National Market System on such date.  As of February 27, 1998, there
were 4,070,458 issued and outstanding Common Shares of the issuer.

Transitional Small Business Disclosure Format (check one): Yes      No  X
                                                               ---     ---

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement of American Bancshares, Inc. for the
1998 Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission no later than 120 days after the end of the issuer's 1997
fiscal year are incorporated by reference into Part III of this Form 10-KSB.
================================================================================
<PAGE>   2

                           AMERICAN BANCSHARES, INC.

                                  FORM 10-KSB

                      Fiscal Year Ended December 31, 1997



<TABLE>
<CAPTION>
ITEM NUMBER IN
 FORM 10-KSB                                                                                                           PAGE
---------------                                                                                                        ----
       <S>       <C>                                                                                                   <C>
                                                          PART I
                                                          ------

        1.       Description of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

        2.       Description of Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

        3.       Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

        4.       Submission of Matters to a Vote of Security-Holders  . . . . . . . . . . . . . . . . . . . . . . . .  18


                                                         PART II
                                                         -------

        5.       Market for Common Equity and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . .  18

        6.       Management's Discussion and Analysis or Plan of Operation  . . . . . . . . . . . . . . . . . . . . .  19

        7.       Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40

        8.       Changes in and Disagreements with Accountants on Accounting
                     and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40

                                                         PART III
                                                         --------

        9.       Directors, Executive Officers, Promoters and Control Persons;
                     Compliance with Section 16(a) of the Exchange Act  . . . . . . . . . . . . . . . . . . . . . . .  41

       10.       Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41

       11.       Security Ownership of Certain Beneficial
                                  Owners and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41

       12.       Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .  41

       13.       Exhibits and Reports on Form 8-K  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>





<PAGE>   3

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS


GENERAL

         American Bancshares, Inc. (the "Company"), a Florida corporation
organized on June 30, 1995, is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended (the "BHCA"), and, on December 1, 1995,
became the bank holding company for American Bank, Bradenton, Florida (the
"Bank").  The Bank is the largest independent bank in Manatee County, Florida,
based on 1997 year-end asset size.  The Bank, whose capital stock is
wholly-owned by the Company, is the Company's primary subsidiary and principal
asset.  Through its ownership of the Bank, the Company is engaged in a general
commercial banking business and its primary source of earnings is derived from
income generated by the Bank.  The Company currently engages in no substantial
business activities other than activities related to its ownership of the Bank.
However, the Company does intend to commence the operation of a finance company
early in the second quarter of 1998.  As of December 31, 1997, the Company, on
a consolidated basis, had total assets of approximately $289,940,000, net
portfolio loans of approximately $172,618,000, total deposits of approximately
$244,559,000, and shareholders' equity of approximately $20,998,000.  Unless
the context otherwise requires, references herein to the Company include the
Company and the Bank on a consolidated basis.

         The Bank, which commenced operations in 1989, is a Florida
state-chartered commercial bank and is not a member of the Federal Reserve
System.  The Bank is a general commercial bank which provides a variety of
corporate and personal banking services to consumers and small to mid-sized
businesses in its primary market areas from seven banking offices located in
Manatee and Charlotte counties, Florida.  In 1997, the Bank's operations were
conducted only through the banking offices located in Manatee County, Florida.
During the first quarter of 1998, the Company expanded its operations in the
State of Florida to Charlotte County through the acquisition of Murdock Florida
Bank ("Murdock").  On March 23, 1998, the Company acquired Murdock in a
transaction pursuant to which Murdock was merged into the Bank and its sole
office was converted into a branch of the Bank.  As part of the merger
transaction, the Bank changed its name from the "American Bank of Bradenton" to
"American Bank".  The Bank plans further Florida expansion to Hillsborough
County through the anticipated opening of an additional full service branch in
Ruskin, Florida during the second quarter of 1998.

         The business of the Bank consists of attracting deposits from the
general public in areas served by its banking offices and using those deposits,
together with funds derived from other sources, to originate a variety of
commercial, consumer, and residential real estate loans.  In addition, the Bank
offers customized accounts receivable financing and billing services, and
credit card merchant services.  The Bank presently does not provide fiduciary,
trust, or appraisal services.  The Bank, however, has entered into an
arrangement with Advest, Inc. whereby its customers may obtain trust services.

         The Bank also maintains a separate Mortgage Banking Division which
generates, closes, and services single family residential home mortgages.  Its
primary function is to originate fixed and adjustable rate construction-to-
permanent residential real estate mortgage loans which fit the needs of
borrowers for the purchase and construction of homes.  These loans are
originated, approved, and serviced from the Bank's Mortgage Banking Division
offices located in Bradenton, Florida.  Since the establishment of the Mortgage
Banking Division in 1994, the Bank has substantially expanded its mortgage
banking operations by emphasizing the origination of construction-to-permanent
residential real estate mortgage loans for sale in the secondary mortgage market
while retaining or packaging for sale the fee generating mortgage servicing
rights associated with such loans.  A majority of the mortgage loans made by
the Bank since 1994 have been sold in the secondary market to the Federal
National Mortgage Association ("FNMA") and other institutional investors.
Consideration may be given to making such sales to other governmental agencies
in the future.  Similarly, most of the associated mortgage servicing rights
also have been sold to third parties.





                                      -1-
<PAGE>   4

         During the fiscal year ended December 31, 1997, the Mortgage Banking
Division originated approximately $58,452,000 in mortgage loans and sold in the
secondary market approximately $44,113,000 of such loans, including those held
in inventory from the previous year.  Servicing fee income was $63,000.  During
1997, the Bank also packaged and sold mortgage servicing rights with respect to
approximately $20.6 million in unpaid principal amount FNMA loans originated by
the Bank for approximately $411,000, or a 2.0% premium on the unpaid balance of
the loan portfolio servicing rights sold.

         In 1997, the Bank acquired a Bradenton based mortgage brokerage
company, DesChamps & Gregory Mortgage Company, Inc. ("DesChamps"), which
originates residential mortgage loans with business operations concentrated in
Manatee and Sarasota Counties.

         The revenues of the Bank are primarily derived from interest on, and
fees received in connection with, real estate and other loans, from the sales
of loans, and from interest and dividends from investment securities and short-
term investments.  The principal sources of funds for the Bank's lending
activities are its deposits, amortization and prepayment of loans, sales of
loans, and the sale of investment securities.  The principal expenses of the
Bank are the interest paid on deposits and operating and general administrative
expenses.

         As is the case with banking institutions generally, the Bank's
operations are materially and significantly influenced by general economic
conditions and by related monetary and fiscal policies of financial institution
regulatory agencies, including the Board of Governors of the Federal Reserve
System (the "FRB") and the Federal Deposit Insurance Corporation (the "FDIC").
Deposit flows and cost of funds are influenced by interest rates on competing
investments and general market rates of interest.  Lending activities are
affected by the demand for financing of real estate and other types of loans,
which in turn is affected by the interest rates at which such financing may be
offered and other factors affecting local demand and availability of funds.

MARKET AREA

         The Company's primary market areas now consists of the Florida counties
of Manatee and Charlotte and, with the anticipated opening of the Ruskin branch,
Hillsborough.  Six of the seven banking offices of the Bank currently are
located in Manatee County, and its Murdock branch is located in Charlotte
County.  These market areas have all experienced substantial growth during
recent decades.  This population growth has resulted in continued construction
of residential housing and related commercial support facilities. While changing
conditions involving the infrastructural requirements of various geographic
locations around the country have limited economic growth and population
expansion, management believes that the Bank's primary market areas have
continued to grow because of the ability of Florida, and these areas in
particular, to attract new residents to its favorable year round climate and its
relatively stable economic environment.  Although the major economic bases in
the primary market areas are service, retail, and manufacturing, there also has
been a growth of tourism.  The Company believes that it is situated to take
advantage of the expected economic and demographic growth in the Bank's primary
market areas.

         The Company will continue to evaluate and identify areas into which it
can further expand its operations and improve market share and, in the future,
may consider further strategic expansion through branching and/or acquisitions
of banks or banking assets in those geographic areas that management believes
will complement its existing business and would most effectively achieve market
penetration within its primary market areas or expand its existing markets.
The Company believes that it can continue to improve its market share and
long-term profitability by identifying locations for opening or acquiring
additional branch offices.  Further, the Company will consider and evaluate
potential strategic market expansion and acquisitions which are brought to its
attention to determine whether such opportunities are in the best interests of
the Company and should be pursued.  Although the Company has identified certain
financial institutions that it believes would be suitable acquisition
candidates, it does not have any understandings, arrangements, or agreements,
whether written or oral, with respect to any specific acquisitions prospect,
and is not presently negotiating with any party with respect thereto.
Accordingly, there is no assurance that any acquisition candidate will be
interested in such a transaction, and if not, that the Company will be able to
identify any additional acquisition





                                      -2-
<PAGE>   5

candidates, or to the extent that suitable acquisition candidates have been or
are identified, that an acquisition will receive regulatory approval or be
consummated.

MARKET FOR SERVICES

         Management believes that the Bank's principal markets are: (i) the
established and expanding commercial and small business market within its
primary market areas; (ii) the real estate mortgage market within the primary
market areas for retail lending and throughout Florida and parts of Georgia for
wholesale lending; and (iii) the growing consumer loan market.

         Businesses are solicited through the personal efforts of the Bank's
directors and officers.  Management believes a locally-based independent bank
is often perceived by the local business community as possessing a clearer
understanding of local commerce and its needs.  Consequently, the Company
expects that the Bank will be able to make prudent lending decisions quickly
and more equitably than its competitors without compromising asset quality or
the Bank's profitability.

         The Bank focuses on the smaller commercial customer because management
believes that this segment offers the greatest concentration of potential
business.  Also, the small to mid-size commercial market segment has
historically shown a willingness to borrow and carry larger balances.  Finally,
the Company believes that this market segment tends to be more loyal in its
banking relationships.

LENDING ACTIVITIES

         GENERAL

         The primary source of income generated by the Bank is from the
interest earned from both the loan and investment portfolios.  The Bank
maintains diversification when considering investments and the granting of loan
requests.

         Lending activities include commercial and consumer loans, and loans
for residential purposes.  Commercial loans are originated for commercial
construction, acquisition, remodeling, and general business purposes.  In this
regard, the Bank, among other things, also originates loans to small businesses
in association with the Small Business Administration.  In addition, the Bank
offers customized accounts receivable financing and billing services that
enable customers to convert their receivables into cash on a daily basis and
eliminate the expense of billing.  Consumer loans include those for the
purchase of automobiles, boats, home improvements and personal investments.
The Bank also offers credit card merchant services which are competitive with
credit card agencies but provide the merchant with the local attention of the
Bank's representatives.  Residential loans include the origination of
conventional mortgages and residential acquisition, development, and
construction loans for the purchase or construction of single-family homes.

         The Bank primarily enters into lending arrangements for its portfolio
loans with individuals who are familiar to the Bank and are residents of the
Bank's primary market areas.  Emphasis is placed on the borrower's ability to
generate cash flow to supports its debt obligations and other cash related
expenses.  The Bank aggressively pursues quality indirect lending through local
automobile dealerships, small to medium sized commercial business loans, and
direct residential loans.  Also, through its Mortgage Banking Division, the
Bank has focused efforts on residential loan originations that can be sold in
the secondary market while it retains or packages for sale the servicing
rights.  The Mortgage Banking Division of the Bank maintains relationships with
correspondent lenders throughout the State of Florida, ensuring continued
lending efforts without a concentration in any one area.  Management believes
this to be a prudent practice in the mortgage banking area as it minimizes
risks associated with the localized economic downturns.  The Mortgage Banking
Division originates primary construction-to-permanent financing loans, which
are considered to have less risk of nonpayment than construction only
financings.

         At December 31, 1997, the Bank's total loans included portfolio loans
of approximately $212,206,000, representing approximately 73% of its total
assets.  As of such date, the loan portfolio consisted of





                                      -3-
<PAGE>   6

59.5% commercial and financial loans, 14.2% real-estate mortgage loans, and
26.3% installment loans.  In addition, at December 31, 1997, approximately
$39.6 million of residential real estate mortgage loans were being held for
sale.

         COMMERCIAL LENDING

         The Bank offers a variety of commercial loan services including term
loans, lines of credit, and equipment receivables financing.  A broad range of
short-to-medium term commercial loans, both collateralized and
uncollateralized, are made available to businesses for working capital
(including inventory and receivables), business expansion (including
acquisitions of real estate and improvements), and the purchase of equipment
and machinery.  The purpose of a particular loan generally determines its
structure.

         The Bank's commercial loans primarily are underwritten in the Bank's
primary market area on the basis of the borrowers' ability to service such debt
from income.  As a general practice, the Bank takes as collateral a security
interest in any available real estate, equipment, or other chattel, although
such loans may be made on an uncollateralized basis.  Collateralized working
capital loans are primarily collateralized by short term assets whereas term
loans are primarily collateralized by long term assets.

         Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his employment and other
income and which are collateralized by real property whose value tends to be
easily ascertainable, commercial loans typically are made on the basis of the
borrower's ability to make repayment from the cash flow of their business and
generally are collateralized by business assets, such as accounts receivable,
equipment, and inventory.  As a result, the availability of funds for the
repayment of commercial loans may be substantially dependent on the success of
the business itself.  Further, the collateral underlying the loans which may
depreciate over time, occasionally cannot be appraised with as much precision as
residential real estate, and may fluctuate in value based on the success of the
business.

         RESIDENTIAL LENDING

         A large portion of the Bank's lending activities consist of the
origination of single-family residential mortgage loans collateralized by
owner-occupied property located in the Bank's primary service areas.  The Bank
also offers adjustable rate mortgages ("ARMs") and either retains these ARMs in
its portfolio or sells them in the secondary market.  The ability to retain the
ARMs in the Bank's portfolio allows the Bank the opportunity to originate loans
to borrowers who may not meet the underwriting criteria of strict secondary
market standards (but are still quality credits).

         The Bank offers one-year ARMs with rate adjustments tied to the weekly
average rate of U.S. Treasury securities adjusted to a constant one-year
maturity with specified minimum and maximum interest rate adjustments.  The
interest rates on a majority of these mortgages are adjusted yearly with
limitations on upward adjustments of 2% per adjustment period and 6% over the
life of the loan.  The Bank also originates 15-year and 30-year fixed-rate
mortgage loans on single-family residential real estate.  The Bank generally
charges a higher interest rate if the property is not owner-occupied.
Fixed-rate mortgage loans are generally underwritten according to FNMA or
Federal Home Loan Mortgage Corporation ("FHLMC") guidelines so that the loans
qualify for sale in the secondary market to FNMA or FHLMC.  It has been the
Bank's experience that the proportion of fixed-rate and adjustable-rate loan
originations depend in large part on the level of interest rates.  As interest
rates fall, there is generally a reduced demand for ARMs and, as interest rates
rise, there is generally an increased demand for ARMs.

         Fixed rate and adjustable rate mortgage loans collateralized by single
family residential real estate generally have been originated in amounts of no
more than 80% of appraised value.  The Bank may, however, lend up to 95% of the
value of the property collateralizing the loan, but if such loans are required
to be made in excess of 80% of the value of the property, they must be insured
by private or federally guaranteed mortgage insurance.  In the case of mortgage
loans, the Bank will procure mortgagee's title insurance to protect against
defects in its lien on the property which may collateralize the loan.  The Bank
in most cases requires title, fire, and extended casualty insurance to be
obtained by the borrower, and, where required by





                                      -4-
<PAGE>   7

applicable regulations, flood insurance.  The Bank maintains its own errors and
omissions insurance policy to protect against loss in the event of failure of a
mortgagor to pay premiums on fire and other hazard insurance policies.
Although the contractual loan payment period for single-family residential real
estate loans is generally for a 15 to 30 year period, such loans often remain
outstanding for significantly shorter periods than their contractual terms.  In
addition, the Bank charges no penalty for prepayment of mortgage loans.
Mortgage loans originated by the Bank customarily include a "due on sale"
clause giving the Bank the right to declare a loan immediately due and payable
in the event, among other matters, that the borrower sells or otherwise
disposes of the real property subject to a mortgage.  In general, the Bank
enforces due on sale clauses.  Borrowers are typically permitted to refinance
or prepay loans at their option without penalty.

         CONSUMER LOANS

         Consumer loans made by the Bank have included automobiles, recreation
vehicles, boats, second mortgages, home improvements, home equity lines of
credit, personal (collateralized and uncollateralized), and deposit account
collateralized loans.  The Bank's consumer loan portfolio consists primarily of
loans to individuals for various consumer purposes, but includes some business
purpose loans which are payable on an installment basis.  A majority of these
loans are for terms of less than 60 months and although generally
collateralized by liens on various personal assets of the borrower may be made
uncollateralized.  Consumer loans are made at fixed and variable interest rates
and may be made based on up to a 10 year amortization schedule.

         Consumer loans are attractive to the Bank because they typically have
a shorter term and carry higher interest rates than that charged on other types
of loans.  Consumer loans, however, do pose additional risks of collectability
when compared to traditional types of loans granted by commercial banks such as
residential mortgage loans.  In many instances, the Bank is required to rely on
the borrower's ability to repay since the collateral may be of reduced value at
the time of collection.  Accordingly, the initial determination of the
borrower's ability to repay is of primary importance in the underwriting of
consumer loans.

         CONSTRUCTION LOANS

         The Bank originates residential construction contractor loans to
finance the construction of single-family dwellings.  Most of the residential
construction loans are made to individuals who intend to erect owner-occupied
housing on a purchased parcel of real estate.  The Bank's construction loans to
individuals typically range in size from $100,000 to $200,000.  Construction
loans also are made to contractors to erect single-family dwellings for resale.
At December 31, 1997, approximately 3.2% of the Bank's construction loans have
been made to contractors.  Construction loans are generally offered on the same
basis as other residential real estate loans, except that a larger percentage
down payment is typically required.

         The Bank may also make residential construction loans to real estate
developers for the acquisition, development, and construction of residential
subdivisions.  The Bank has limited involvement with this type of loan.  Such
loans may involve additional risk attributable to the fact that funds will be
advanced to fund the project under construction, which is of uncertain value
prior to completion and because it is relatively difficult to evaluate
accurately the total amount of funds required to complete a project.

         The Bank finances the construction of individual, owner-occupied
houses on the basis of written underwriting and construction loan management
guidelines.  Construction loans are structured either to be converted to
permanent loans with the Bank at the end of the construction phase or to be
paid off upon receiving financing from another financial institution.
Construction loans on residential properties are generally made in amounts up
to 80% of appraised value.  Construction loans to developers generally have
terms of up to 12 months.  Loan proceeds on builders' projects are disbursed in
increments as construction progresses and as inspections warrant.  The maximum
loan amounts for construction loans are based on the lesser of the current
appraisal value or the purchase price for the property.

         Construction loans are generally considered to involve a higher degree
of risk than long-term financing collateralized by improved, occupied real
estate.  A lender's risk of loss on a construction loan is





                                      -5-
<PAGE>   8

dependent largely upon the accuracy of the initial estimate of the property's
value at the completion of construction and estimated cost (including interest)
of construction.  If the estimate of construction cost proves to be inaccurate,
the lender could be required to advance funds beyond the amount originally
committed in order to permit completion of the project.  If the estimate of
anticipated value proves to be inaccurate, the lender may have collateral which
has value insufficient to assure full repayment.

         Loans collateralized by subdivisions and multi-family residential real
estate generally are larger than loans collateralized by single-family,
owner-occupied housing and also generally involve a greater degree of risk.
Payments on these loans depend to a large degree on the results of operations
and management of the properties, and repayment of such loans may be more
subject to adverse conditions in the real estate market or the economy.

LOAN SOLICITATION AND PROCESSING

         Loan originations are derived from a number of sources.  Residential
loan originations can be attributed to real estate broker referrals, mortgage
loan brokers, direct solicitation by the Bank's loan officers, present savers
and borrowers, builders, attorneys, walk-in customers and, in some instances,
other lenders.  Loan applications, whether originated through the Bank or
through mortgage brokers, are underwritten and closed based on the same
standards, which generally meet FNMA underwriting guidelines.  Consumer and
commercial real estate loan originations emanate from many of the same sources.
The legal lending limit of the Bank, as of December 31, 1997, was $4,739,727.

         The loan underwriting procedures followed by the Bank conform to
regulatory specifications and are designed to assess with the borrower's
ability to make principal and interest payments and the value of any assets or
property serving as collateral for the loan.  Generally, as part of the
process, a bank loan officer meets with each applicant to obtain the
appropriate employment and financial information as well as any other required
loan information.  Upon receipt of the borrower's completed loan application,
the Bank then obtains reports with respect to the borrower's credit record, and
orders and reviews an appraisal of any collateral for the loan (prepared for
the Bank through an independent appraiser).  The loan information supplied by
the borrower is independently verified.  Loan officers or other loan production
personnel in a position to directly benefit monetarily through loan
solicitation fees from individual loan transactions do not have approval
authority.  Once a loan application has been completed and all information has
been obtained and verified, the loan request is submitted to a final review
process.  As part of the loan approval process, all uncollateralized loans of
$100,000 or more and all collateralized loans of $500,000 or more require
preapproval by the Bank's loan committee, which is currently comprised of five
directors of the Bank and meets on such basis as is deemed necessary to
promptly service loan demand.  All loans of $2,000,000 or more require
preapproval by the Bank's Board of Directors, and borrowers requesting amounts
which will result in a loan relationship of $2,000,000 or more also must be
approved by the Board of Directors of the Bank.

         Loan applicants are notified promptly of the decision of the Bank by
telephone and a letter.  If the loan is approved, the commitment letter
specifies the terms and conditions of the proposed loan including the amount of
the loan, interest rate, amortization term, a brief description of the required
collateral, and required insurance coverage.  Prior to closing any long-term
loan, the borrower must provide proof of fire and casualty insurance on the
property serving as collateral which insurance must be maintained during the
full term of the loan.  Title insurance is required on loans collateralized by
real property.  Interest rates on committed loans are normally locked in at the
time of application for a 30 to 45 day period.  The commitment issued at the
time of approval will be for the time remaining, based on the application date.

MORTGAGE BANKING AND RESIDENTIAL LENDING OPERATIONS

         The Company provides mortgage banking services through the Bank's
Mortgage Banking Division and residential lending services from its Retail
Residential Lending Division.  The Retail Residential Lending Division was
formed in connection with the acquisition of DesChamps in 1997.  Both the
Mortgage Banking Division and the Retail Residential Lending Division were
established for the purpose of increasing the Bank's





                                      -6-
<PAGE>   9

residential loan portfolio and resulting interest income, and to increase
non-interest income through sales of loans in the secondary market and the
retention or sale of the fee generating mortgage servicing rights.  The Bank
also established the Mortgage Banking Division in an effort to pursue the
strong residential mortgage loan demand that management believes exists outside
of its primary market areas in Florida and established the Retail Residential
Lending Division to pursue the residential mortgage loan demand that the Bank
believes exists in its primary market areas.

         The Mortgage Banking Division's lending efforts are widely disbursed
throughout Florida and parts of Georgia and are not reliant on a specific
region.  Management considers this to be a prudent business practice by
reducing risks inherent in localized economic down turns or adverse weather
conditions.  Such loans are originated through a variety of contacts that the
staff has in the mortgage banking industry throughout Florida and parts of
Georgia.  Furthermore, the Mortgage Banking Division is not dependent on any
single source for a significant portion of its volume of loan originations.
This division originates, underwrites, closes, and services a broad line of
residential mortgage loan products, including construction-to-permanent
mortgages, both for the Bank's loan portfolio and for resale in the secondary
mortgage market.  The division's primary function is to originate fixed and
adjustable rate construction-to-permanent residential real estate mortgage
loans which fit the needs of borrowers for the purchase and construction of
homes.  These loans are originated, approved, and serviced from the Mortgage
Banking Division's offices in Bradenton.

         The Mortgage Banking Division has expanded significantly during the
past three years by emphasizing the origination of loans for sale in the
secondary market while retaining or packaging for sale the fee generating
mortgage servicing rights associated with such loans.  A majority of the
mortgage loans made by the Bank since 1994 have been sold in the secondary
market to FNMA and other institutional investors.  The Bank is an approved
lender and seller servicer for FNMA.  Consideration may be given to making
sales of such loans to other governmental agencies in the future.

         The construction phase of loans made by the Mortgage Banking Division
has certain risks, including the viability of the contractor, the contractor's
ability to complete the project and changes in interest rates.  The goal of the
Mortgage Banking Division is to take a residential mortgage loan from the
construction stage to permanent financing with a fixed interest rate, then to
sell the permanent financing in the secondary market.  The sale of the loans in
the secondary market allows the Bank to hedge against the interest rate risks
related to such lending operations.  Since the Bank intends to sell these loans
in the secondary market upon conversion to permanent financing, these
construction loans have been included in the classification "loans held for
sale" on the Company's balance sheet.

         In addition to the fees collected at the closing of a loan, the Bank
attempts to sell the loan for a gain at completion of construction.  Such a
brokerage arrangement permits the Bank to accommodate its client's demands
while eliminating the interest rate risk for the fixed 15-to-30 year term of
the loan.  By selling the mortgage while retaining the servicing rights, the
Bank will receive servicing fees and ancillary fees associated with the
servicing rights.  The Bank has elected to group the servicing rights of a
selection of loans together and sell those rights for a lump sum periodically
throughout the year.

         In addition to interest earned on loans and fees generated from
mortgage servicing activities, the Bank receives loan origination fees or
"points" for originating loans.  Origination fees are calculated as a
percentage of the principal amount of the mortgage loan and are charged to the
borrower for creation of the loan.  Loan origination fees are volatile sources
of income, and are affected by the volume and types of loans and commitments
made, competitive conditions in the mortgage markets, and the demand for and
availability of money.

         All Mortgage Banking Division loans of $250,000 to $500,000 must be
approved by the President or Senior Vice President of Lending for the Bank.
Such loans of $500,000 to $2,000,000 must be approved by the Bank's loan
committee, and such loans over $2,000,000 must be approved by the Bank's Board
of Directors.  The Bank does not intend to significantly increase the size of
its Mortgage Banking Division operations, but intends to continue to originate
a significant volume of loans for sale in the secondary market.





                                      -7-
<PAGE>   10


FINANCE COMPANY OPERATIONS

         The Company has organized a wholly-owned Florida subsidiary
corporation, Freedom Finance Company (the "Finance Company"), pursuant to which
it intends to engage in full service consumer financing.  It is anticipated that
the Finance Company will offer consumer-driven products and services ranging
from mortgages to automobile loans, home equity loans, and education financing.
The Finance Company will have the ability to extend financing to individuals and
entities which may not be able to satisfy the Bank's underwriting requirements
or loan standards.  The Bank anticipates extending a loan to the Finance Company
in order to provide the funds necessary to commence operations in the second
quarter of 1998.  The Company believes that all necessary Florida licensing
requirements for the Finance Company have been satisfied.

SUPERVISION AND REGULATION

         The banking industry is extensively regulated under both federal and
state law, and is undergoing significant change.  These laws and regulations
are intended primarily to protect depositors and the federal deposit insurance
funds, and not for the protection of shareholders.  The following discussion
summarizes certain aspects of the banking laws and regulations that affect the
Company or the Bank.  Proposals to change the laws and regulations governing
the banking industry are frequently raised in Congress, in state legislatures,
and before the various banking agencies.  The likelihood and timing of any
changes, and the impact that such changes might have on the Company, are
impossible to predict with any certainty.  A change in the applicable laws or
regulations, or a change in the way such laws or regulations are interpreted by
regulatory agencies or the courts, may have a material impact on the business
or prospects of the Company and the Bank.

         To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions.

         BANK HOLDING COMPANY REGULATION

         General.  As a bank holding company registered under the BHCA, the
Company is subject to the regulation and supervision of, and inspection by, the
FRB.  The Company is required to file with the FRB annual reports and other
information regarding its business operations and those of its subsidiaries.
Under the BHCA, the Company's activities and those of its subsidiaries are
limited to banking, managing or controlling banks, furnishing services to or
performing services for its subsidiaries or engaging in any other activity
which the FRB determines to be so closely related to banking or managing or
controlling banks as to be properly incident thereto.  In this regard, the BHCA
prohibits a bank holding company, with certain limited exceptions, from (i)
acquiring or retaining direct or indirect ownership or control of more than 5%
of the outstanding voting stock of any company which is not a bank or bank
holding company, or (ii) engaging directly or indirectly in activities other
than those of banking, managing or controlling banks, or performing services
for its subsidiaries; unless such nonbanking business is determined by the FRB
to be so closely related to banking or managing or controlling banks as to be
properly incident thereto.  In making such determinations, the FRB is required
to weigh the expected benefit to the public, such as greater convenience,
increased competition, or gains in efficiency, against the possible adverse
effects such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices.  Generally,
bank holding companies, such as the Company, are required to obtain prior
approval of the FRB to engage in any new activity not previously approved by
the FRB.

         The enactment of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 ("EGRPRA") streamlines the nonbanking activities
application process for well-capitalized and well managed bank holding
companies.  Under EGRPRA, qualified bank holding companies may commence a
regulatory approved nonbanking activity without prior notice to the FRB;
written notice is merely required within ten business days after commencing the
activity.  Also under EGRPRA, the prior notice period is reduced to twelve
business days in the event of any nonbanking acquisition or share purchase,
assuming the size of the acquisition does not exceed 10% of risk-weighted
assets of the acquiring bank holding company and the consideration does not
exceed 15% of Tier I capital.  This prior notice requirement also applies to





                                      -8-
<PAGE>   11

commencing a nonbanking activity de novo which has been previously approved by
order of the FRB, but not yet implemented by regulations.

         The BHCA also requires, among other things, the prior approval of the
FRB in any case where a bank holding company proposes to (i) acquire all or
substantially all of the assets of any bank, (ii) acquire direct or indirect
ownership or control of more than 5% of the outstanding voting stock of any
bank (unless it owns a majority of such bank's voting shares) or (iii) merge or
consolidate with any other bank holding company.  The FRB will not approve any
acquisition, merger, or consolidation that would result in a monopoly, or which
would be in the furtherance of any attempt to monopolize the business of
banking in any part of the United States, or which would have a substantially
anti-competitive effect, unless the anti-competitive impact of the proposed
transaction is clearly outweighed by a greater public interest in meeting the
convenience and needs of the community to be served.  The FRB also considers
capital adequacy and other financial and managerial factors when reviewing
acquisitions or mergers.  As described in greater detail below, pursuant to the
Riegle-Neal Interstate Banking and Branch Efficiency Act of 1994 (the
"Interstate Banking and Branching Act"), a bank holding company is permitted to
acquire banks in states other than its home state.  See "Item 1. Business -
Supervision and Regulation-Bank Holding Company Regulation--Interstate Banking"
below for additional information.

         There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by law and
regulatory policies that are designed to minimize potential loss to the
depositors of such depository institutions and the FDIC insurance funds in the
event the depository institution becomes in danger of default or is in default.
For example, under the Federal Deposit Insurance Company Improvement Act of 1991
("FDICIA"), in order to avoid receivership of an insured depository institution
subsidiary, a bank holding company is required to guarantee the compliance of
any insured depository institution subsidiary that may become "undercapitalized"
with the terms of any capital restoration plan filed by such subsidiary with its
appropriate federal banking agency up to the lesser of (i) an amount equal to 5%
of the institution's total assets at the time the institution became
undercapitalized or (ii) the amount that is necessary (or would have been
necessary) to bring the institution into compliance with all applicable capital
standards as of the time the institution fails to comply with such capital
restoration plan.  See "Item 1. Business - Supervision and Regulation - -
Capital Adequacy Guidelines."

         Under a policy of the FRB with respect to bank holding company
operations, a bank holding company is required to serve as a source of
financial strength to its subsidiary depository institutions and to commit all
available resources to support such institutions in circumstances where it
might not do so absent such policy.  Although this "source of strength" policy
has been challenged in litigation, the FRB continues to take the position that
it has authority to enforce it.  The FRB under the BHCA also has cease and
desist authority pursuant to which it may require a bank holding company to
terminate any activity or to relinquish control of a nonbank subsidiary (other
than a nonbank subsidiary of a bank) upon the FRB's determination that such
activity or control constitutes a serious risk to the financial soundness and
stability of any bank subsidiary of the bank holding company.

         In addition, the "cross-guarantee" provisions of the Federal Deposit
Insurance Act ("FDI Act") require insured depository institutions which are
under common control to reimburse the FDIC for any loss suffered by the Bank
Insurance Fund ("BIF") of the FDIC as a result of the default of a commonly
controlled insured depository institution or for any assistance provided by the
FDIC to a commonly controlled insured depository institution in danger of
default.  Accordingly, the cross-guarantee provisions enable the FDIC to access
a bank holding company's healthy BIF members.  The FDIC may decline to enforce
the cross-guarantee provisions if it determines that a waiver is in the best
interest of the BIF.  The FDIC's claims are superior to claims of stockholders
of the insured depository institution or its holding company, but are
subordinate to claims of depositors, secured creditors, and holders of
subordinated debt (other than affiliates) of the commonly controlled insured
depository institutions.

         The FRB and the FDIC collectively have extensive enforcement authority
over commercial banks, which authority was enhanced substantially by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")
and the FDICIA.  This enforcement authority includes, among other things, the





                                      -9-
<PAGE>   12

ability to assess civil money penalties, to issue cease and desist or removal
orders, to initiate injunctive actions, and, in extreme cases, to terminate
deposit insurance.  In general, these enforcement actions may be initiated for
violations of laws and regulations and unsafe or unsound practices.  Other
actions or inactions may provide the basis for enforcement action, including
misleading or untimely reports filed with the federal banking agencies.  FIRREA
significantly increased the amount of and the grounds for civil money penalties
and generally requires public disclosure of final enforcement actions.

         Community Reinvestment Act.  Bank holding companies and their
subsidiary banks are subject to the provisions of the Community Reinvestment
Act of 1977 ("CRA") and the regulations promulgated thereunder by the
appropriate bank regulatory agency.  Under the terms of the CRA, a state bank
has a continuing and affirmative obligation consistent with its safe and sound
operation to help meet the credit needs of its entire community, including low
and moderate income neighborhoods.  The CRA does not establish specific lending
requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The CRA requires the FDIC, in connection with its examination of a state bank,
to assess the association's record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain applications
by such association.  The CRA also requires all institutions to make public
disclosure of their CRA ratings.  Further, such assessment also is required of
any state bank that, among other things, has applied to merge or consolidate
with, or acquire the assets or assume the liabilities of, a federally regulated
financial institution, or to open or relocate a branch office.  In the case of
a bank holding company applying for approval to acquire a bank or a bank
holding company, the FRB will assess the record of each subsidiary bank of the
applicant bank holding company in considering the application.

         Pursuant to current CRA regulations, an institution's CRA rating is
based on its actual performance in meeting community needs.  In particular, the
rating system focuses on three tests: (i) a lending test, which evaluates the
institution's record of making loans in its service areas; (ii) an investment
test, which evaluates the institution's record of investing in community
development projects, affordable housing, and programs benefitting low or
moderate income individuals and business; and (iii) a service test, which
evaluates the institution's delivery of services through its branches, ATMs,
and other offices.  The current CRA regulations also clarify how an
institution's CRA performance will be considered in the application process.

         Interstate Banking.  Prior to the Interstate Banking and Branching
Act, the BHCA prohibited the FRB from approving a bank holding company's
application to acquire a bank or a bank holding company located outside the
state in which the operations of its banking subsidiaries are principally
conducted, unless such acquisition is specifically authorized by statute of the
state in which the bank or bank holding company to be acquired is located.  The
Interstate Banking and Branching Act significantly altered interstate banking
rules.  Under the Interstate Banking and Branching Act, regardless of any
previously applicable state law, bank holding companies which meet specified
capital and management adequacy standards are eligible to acquire banks in
states other than their home states, but will need to retain a separate bank
charter in each state where subsidiaries conduct banking business.  Various
restrictions on interstate acquisitions will continue to apply, including: (1)
federal and state antitrust laws, as currently in effect; (2) prohibitions on a
single holding company system accounting for more than 10% of all deposits
nationwide or, subject to various opt-in and opt-out provisions for various
states on a nondiscriminatory basis, accounting for more than 30% or more of
deposits in any state; (3) state-imposed prohibitions on acquiring banks within
up to five years after they commence operations; and (4) compliance by the
acquirer with the CRA and fair lending laws.

         Furthermore, beginning June 1, 1997, the Interstate Banking and
Branching Act authorized adequately capitalized and managed banks to cross
state lines to merge with other banks, thereby creating interstate branches,
subject to individual state's adoption of various nondiscriminatory opt-in and
opt-out provisions.  Under such legislation, each state had the opportunity to
"opt-in" at an earlier time thereby allowing interstate banking in that state
prior to 1997, or to "opt-out".  Furthermore a state may opt-in with respect to
de novo branching thereby permitting a bank to open new branches in a state in
which the bank does not already have a branch.  Without de novo branching, an
out-of-state bank can enter the state only by acquiring an existing bank.
Antitrust and anti-concentration restrictions will apply as described above.
It will not be necessary to keep multiple state charters in effect or to have a
holding company system.  Generally, all banks that are





                                      -10-
<PAGE>   13

parties to a proposed post-1997 merger must satisfy applicable CRA, management
quality, and capital adequacy standards.

         Florida Interstate Banking Laws.  In this context, the Florida
legislature enacted legislation in 1996, the Florida Interstate Banking Act
("FIBA"), which specifically authorizes out-of-state bank holding companies
located in any state or the District of Columbia that meet certain prescribed
criteria to acquire Florida bank holding companies or banks which have been in
existence and continuously operated as a bank for more than three years,
subject to the prior approval of the Florida Department of Banking and Finance
(the "Department").  Entry into the State of Florida by interstate branching or
by means other than such an acquisition is expressly prohibited by the FIBA.
Furthermore, except for initial entry into the State of Florida by an
out-of-state bank or bank holding company, no acquisition of a Florida bank or
Florida bank holding company is permitted if the resulting bank holding company
and its affiliates would control 30% or more of total deposits in the state.

         In addition, the Florida legislature also enacted the Florida
Interstate Branching Act ("Florida Branching Act") which permits interstate
branching in Florida by a merger transaction and grants Florida state-chartered
banks the same interstate branching opportunities as will be afforded to
national banks under the newly enacted federal law.

         An out-of-state bank that does not operate a branch in the State of
Florida is prohibited from establishing a de novo branch in Florida.
Accordingly an out-of-state bank or bank holding company can only enter Florida
by acquiring an existing Florida bank which has been operating continuously for
at least three years.  The same deposit concentration limits referred to above
apply.  Any out-of-state bank or bank holding company that has acquired a
Florida bank under either the FIBA or the Florida Branching Act, may establish
additional branches in Florida to the same extent as any Florida bank may do
so.

         Proposals to change the laws and regulations governing the banking
industry are frequently introduced in Congress, in state legislatures, and
before the various bank regulatory agencies.  The likelihood and timing of any
such changes and the potential impact of such changes on the Company or the
Bank cannot be determined at this time.

         BANK REGULATION

         General.  The Bank is a Florida state-chartered bank and, as such, is
subject to the primary supervision, examination, and regulation by the
Department and the FDIC.  It is not a member of the Federal Reserve System.

         As a state-chartered commercial bank, the Bank is subject to the
applicable provisions of Florida law and the regulations adopted by the
Department.  The Bank must file various reports with, and is subject to
periodic examinations by the Department.  Florida law and the Department
regulate (in conjunction with applicable federal laws and regulations), among
other things, the Bank's capital, permissible activities, reserves,
investments, lending authority, branching, the issuance of securities, payment
of dividends, transactions with affiliated parties, and borrowing.

         The FDIC insures the deposits of the Bank to the current maximum
allowed by law.  Applicable statutes and regulations administered by the FDIC
also relate to required reserves against deposits, investments, loans, mergers
and consolidations, issuance of securities, payment of dividends, establishment
of branches, and other aspects of the Bank's operations.  Various consumer laws
and regulations also affect the operations of the Bank, including state usury
laws, laws relating to fiduciaries, consumer credit and equal credit, and fair
credit reporting.

         Transactions with Affiliates.  There are various legal restrictions on
the event to which the Company and any future nonbank subsidiaries can borrow
or otherwise obtain credit from the Bank.  There also are legal restrictions on
the Bank's purchase of or investments in the securities of and purchases of
assets from the Company and any of its future nonbank subsidiaries, a bank's
loans or extensions of credit to third parties





                                      -11-
<PAGE>   14

collateralized by the securities or obligations of the Company and any of its
future nonbank subsidiaries, the issuance of guaranties, acceptances and
letters of credit on behalf of the Company and any of its future nonbank
subsidiaries, or with respect to which the Company and nonbank subsidiaries,
act as agent, participate or have a financial interest.  Subject to certain
limited exception, the Bank may not extend credit to the Company or to any
other affiliate in an amount which exceeds 10% of the Bank's capital stock and
surplus and may not extend credit in the aggregate to such affiliates in an
amount which exceeds 20% of its capital stock and surplus.  Further, there are
legal requirement as to the type, amount and quality of collateral which must
secure such extensions of credit transactions between the Bank and the Company
or such affiliates, and such transactions must be on terms and under
circumstances, including credit standards, that are substantially the same or
at least as favorable to the Bank as those prevailing at the time for
comparable transactions with non-affiliated companies.  These regulations and
restrictions may limit the Company's ability to obtain funds from the Bank for
its cash needs, including funds for acquisitions, and the payment of dividends,
interest and operating expenses.

         Further, the Bank and the Company are prohibited from engaging in
certain tie-in arrangements in connection with any extension of credit, lease
or sale of property, or furnishing of services.  For example, the Bank may not
generally require a customer to obtain other services from the Bank or the
Company, and may not require the customer to promise not to obtain other
services from a competitor, as a condition to an extension of credit.

         The Bank also is subject to certain restrictions imposed by the
Federal Reserve Act on extensions of credit to executive officers, directors,
principal shareholders or any related interest of such persons. Extensions of
credit (i) must be made on substantially the same terms, including interest
rates and collateral as, and following credit underwriting procedures that are
not less stringent than those prevailing at the time for comparable
transactions with persons not covered above and who are not employees and (ii)
must not involve more than the normal risk of repayment or present other
unfavorable features.  The Bank also is subject to certain lending limits and
restrictions on overdrafts to such persons.  A violation of these restrictions
may result in the assessment of substantial civil monetary penalties on the
Bank or any officer, director, employee, agent or other person participating in
the conduct of the affairs of the Bank or the imposition of a cease and desist
order.

         Dividend Restrictions and Transfers of Funds.  Under various banking
laws, the declaration and payment of dividends by a state banking institution
is subject to certain restrictions, including those relating to the amount and
frequency of such dividends.  Under the FDICIA, an insured depository
institution is prohibited from making any capital distribution to its owner,
including any dividend, if, after making such distribution, the depository
institution fails to meet the required minimum level for any relevant capital
measure, including the risk-based capital adequacy and leverage standards
described below.

         If, in the opinion of the applicable federal bank regulatory
authority, a depository institution or holding company is engaged in or is
about to engage in an unsafe or unsound practice (which, depending on the
financial condition of the depository institution or holding company, could
include the payment of dividends), such authority may require, after notice and
hearing (except in the case of an emergency proceeding where there is no notice
or hearing), that such institution or holding company cease and desist  from
such practice.  The federal banking agencies have indicated that paying
dividends that deplete a depository institution's or holding company's capital
base to an inadequate level would be such an unsafe and unsound banking
practice.  Moreover, the FRB and the FDIC have issued policy statements which
provide that bank holding companies and insured depository institutions
generally should only pay dividends out of current operating earnings.

         In addition, Florida law places certain restrictions on the
declaration of dividends form state chartered banks to their holding companies.
Pursuant to the Florida Banking Code, the Board of Directors of state-chartered
banks, after charging off bad debts, depreciation, and other worthless assets,
if any, and making provisions for reasonably anticipated future losses on loans
and other assets, may quarterly, semiannually or annually declare a dividend of
up to the aggregate net profits of that period combined with bank's retained
net profits for the preceding two years and, with the approval of the
Department, declare a





                                      -12-
<PAGE>   15

dividend from retained net profits which accrued prior to the preceding two
years.  Before declaring such dividends, 20% of the net profits for the
preceding period as is covered by the dividend must be transferred to the
surplus fund of the bank until the fund becomes equal to the amount of the
bank's common stock then issued and outstanding.  A state-chartered bank may
not declare any dividend if (i) its net income from the current year combined
with the retained net income from the preceding two years is a loss, or (ii)
the payment of such dividend would cause the capital account of the bank to
fall below the minimum amount required by law, regulation, order, or any
written agreement with the Department or a federal regulatory agency.

         CAPITAL ADEQUACY GUIDELINES

         Minimum Capital Requirements.  The federal banking agencies, including
the FRB and the FDIC, have adopted substantially similar risk-based capital
guidelines for bank holding companies and banks under their supervision.  The
risk-based capital guidelines are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance sheet exposure, and to minimize
disincentives for holding liquid assets.  Under these guidelines, assets and
off-balance sheet items are assigned to broad risk categories each with
appropriate weights.  The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance sheet items.  In
addition, these regulatory agencies may from time to time require that a
banking organization maintain capital above the minimum limits, whether because
of its financial condition or actual or anticipated growth.

         These risk-based capital guidelines define a two-tier capital
framework.  Under these regulations, the minimum ratio of total capital to
risk-weighted assets (including certain off-balance sheet activities, such as
stand-by letters of credit) is 8%.  At least half of the total capital must be
"Tier I Capital," consisting of common shareholders' equity, noncumulative
perpetual preferred stock, and a limited amount of cumulative perpetual
preferred stock, less certain goodwill items and other intangible assets (i.e.,
at least 4% of the risk weighted assets).  The remainder ("Tier II Capital")
may consist of (a) the allowance for loan losses of up to 1.25% of
risk-weighted risk assets, (b) excess of qualifying perpetual preferred stock,
(c) hybrid capital instruments, (d) perpetual debt, (e) mandatory convertible
securities, and (f) subordinated debt and intermediate term-preferred stock up
to 50% of Tier I capital.  Total capital is the sum of Tier I and Tier II
capital less reciprocal holdings of other banking organizations' capital
instruments and investments in unconsolidated subsidiaries and any other
deductions as determined on a case by case basis or as a matter of policy after
formal rule making.

         In computing total risk-weighted assets, an institution's assets are
given risk-weights of 0%, 20%, 50% and 100%.  In addition, certain off-balance
sheet items are given similar credit conversion factors to convert them to
asset equivalent amounts to which an appropriate risk-weight will apply.  These
computations result in the total risk-weighted assets.  Most loans will be
assigned to the 100% risk category, except for first mortgage loans fully
collateralized by residential property which carry a 50% risk rating.  Most
investment securities (including, primarily, general obligation claims on
states or other political subdivisions of the United States) will be assigned
to the 20% category, except for municipal or state revenue bonds, which have a
50% risk-weight, and direct obligations of the U.S. treasury or obligations
backed by the full faith and credit of the U.S. Government, which have a 0%
risk-weight.  In converting off-balance sheet items, direct credit substitutes
including general guarantees and standby letters of credit backing financial
obligations, are given a 100% conversion factor.  Transaction related
contingencies such as bid bonds, standby letters of credit backing
non-financial obligations, and undrawn commitments (including commercial credit
lines with an initial maturity or more than one year) have a 50% conversion
factor.  Short term or trade letters of credit are converted at 20% and certain
short-term unconditionally cancelable commitments have a 0% factor.

         As of December 31, 1997, the total risk-based capital ratio of the
Company and the Bank were 10.9% and 10.0%, respectively.  In addition to the
risk-based capital guidelines, the FRB and the FDIC also have adopted a
leverage standard to supplement the risk-based ratios.  This leverage standard
focuses on the institution's ratio of Tier I capital to average total assets,
adjusted for goodwill and certain other items.  Under these guidelines,
institutions which have received the highest regulatory rating and exhibit
certain other high standards, must maintain a minimum level of Tier I capital
to average consolidated assets of at least 3%.  All other institutions are
expected to maintain a ratio of at least 1% or 2% above the stated minimum.  As
of





                                      -13-
<PAGE>   16

December 31, 1997, the leverage capital ratio of the Company and the Bank were
7.2% and 6.7%, respectively.

         Federal banking agencies also have adopted regulations which require
regulators to take into consideration concentrations of audit risk and risks
from non-traditional activities, as well as an institution's ability to manage
those risks.  This evaluation will be made as part of the institution's regular
safety and soundness examination.  In addition, pursuant to the requirements of
the FDICIA, federal banking agencies all have adopted regulations requiring
regulators to consider interest rate risk (when interest rate sensitivity of an
institution's assets does not match its liabilities or its off-balance sheet
position) in the evaluation of a bank's capital adequacy.  Concurrently, the
federal banking agencies have prepared a new methodology for evaluating
interest rate risk.

         Classification of Banking Institutions.  FDICIA substantially revised
the bank regulatory and funding provisions of the FDI Act and made revisions to
several other federal banking statutes.  Among other things, the FDICIA
provided federal banking agencies broad powers to take "prompt corrective
action" in respect of depository institutions that do not meet minimum capital
requirements.  The extent of those powers depend upon whether the institutions
in question are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," or "critically
undercapitalized."  A depository institution's capital tier will depend upon
where its capital levels are in relation to various relevant capital measures,
which include a risk-based capital measure and a leverage ratio capital
measure, and certain other factors.

         Under implementing regulations adopted by the federal banking
agencies, a bank would be considered "well capitalized" if it has (i) a total
risk-based capital ratio of 10% or greater, (ii) a Tier I risk-based capital
ratio of 6% or greater, (iii) a leverage ratio of 5% or greater and (iv) is not
subject to any order or written directive to meet and maintain a specific
capital level for any capital measure.  An "adequately capitalized" bank would
be defined as one that has (i) a total risk-based capital ratio of 8% or
greater, (ii) a Tier I risk-based capital ratio of 4% of greater, and (iii) a
leverage ratio of 4% or greater (or 3% or greater in the case of a bank with a
composite CAMEL rating of 1).  A bank would be considered (A)
"undercapitalized" if it has (i) a total risk-based capital ratio of less than
8%, (ii) a Tier I risk-based capital ratio of less than 4%, or (iii) a leverage
ratio of less than 4% (or 3% in the case of a bank with a composite CAMEL
rating of 1); (B) "significantly undercapitalized" if the bank has (i) a total
risk-based capital ratio of less than 6%, or (ii) a Tier I risk-based capital
ratio of less than 3%, or (iii) a leverage ratio of less than 3%; and (C)
"critically undercapitalized" if the bank has a ratio of tangible equity to
total assets equal to or less than 2%.  The FRB may reclassify a "well
classified" bank as "adequately capitalized" or subject an "adequately
capitalized" or "undercapitalized" institution to supervisory actions
applicable to the next lower capital category if it determines that the bank is
in an unsafe or unsound condition or deems the bank to be engaged in an unsafe
or unsound practice and not have corrected the deficiency.  The Bank currently
meets the definition of a "well capitalized" institution.

         FDICIA

         FDICIA was enacted on December 19, 1991.  Some of the more significant
provisions of FDICIA are outlined below:

         Real Estate Lending Policies.  Pursuant to FDICIA, the FDIC and the
other federal banking agencies adopted real estate lending guidelines pursuant
to which each insured depository institution is required to adopt and maintain
written real estate lending policies in conformity with the prescribed
guidelines.  Under these guidelines, each institution is expected to set loan
to value ratios not exceeding the supervisory limits set forth in the
guidelines.  A loan to value  ratio is generally defined as the total loan
amount divided by the appraised value of the property at the time the loan is
originated.  The guidelines also require that the institution's real estate
policy require proper loan documentation and that it establishes prudent
under-writing standards.

         Brokered Deposits.  The FDICIA also amended the prior law with respect
to the acceptance of brokered deposits by insured depository institutions to
permit only a "well capitalized" depository institution to accept brokered
deposits without prior regulatory approval.  Under implementing regulations,
"well





                                      -14-
<PAGE>   17

capitalized" banks may accept brokered deposits without restriction,
"adequately capitalized" banks may accept brokered deposits with a waiver from
the FDIC (subject to certain restrictions on payments of rates), while
"undercapitalized" banks may not accept brokered deposits.  The regulations
contemplate that the definitions of "well capitalized," "adequately
capitalized" and "undercapitalized" will be the same as the definitions adopted
by the agencies to implement the prompt corrective action provisions of the
FDICIA (as described above).

         Other FDICIA Provisions.  FDICIA contains numerous other provisions,
including new accounting, audit, and reporting requirements, termination of the
"too big to fail" doctrine except in special cases, limitations on the FDIC's
payment of deposits at foreign branches, new regulatory standards in such areas
as asset quality, earnings and compensation and revised regulatory standards
for, among other things, powers of state banks, real estate lending and capital
adequacy.  FDICIA also requires that a depository institution provide 90 days
prior notice of the closing of any branches.  Complete regulations have not yet
been issued under FDICIA.

         FDIC INSURANCE PREMIUMS

         The Bank is required to pay semiannual FDIC deposit insurance
assessments.  Under the FDIC's risk-based insurance system, BIF-insured
institutions are currently assessed premiums of between zero and $0.27 per $100
of insured deposits, depending on the institution's capital position and other
supervisory factors.  Each financial institution is assigned to one of three
capital groups - well capitalized, adequately capitalized or undercapitalized -
and further assigned to one of three subgroups - within a capital group, on the
basis of supervisory evaluations by the institution's primary federal and, if
applicable, state supervisors and other information relevant to the
institution's financial condition and the risk posed to the applicable FDIC
deposit insurance fund.  The actual assessment rate applicable to a particular
institution (and any applicable refund) will, therefore, depend in part upon
the risk assessment classification so assigned to the institution by the FDIC.

         Under EGRPRA, BIF-insured institutions will be assessed for certain
payments to be used to pay certain Financing Corporation ("FICO") obligations.
In addition to any BIF Insurance assessments, BIF-insured banks are expected to
make payments from the FICO obligations equal to an estimated $0.0129 per $100
of eligible deposits each year during 1997 through 1999, and an estimated
$0.024 per $100 of eligible deposits thereafter.

         DEPOSITOR PREFERENCE

         The Omnibus Budget Reconciliation Act of 1993 provides that deposits
and certain claims for administrative expenses and employee compensation
against an insured depository institution would be afforded a priority over
other general unsecured claims against such an institution, including federal
funds and letters of credit, in the "liquidation or other resolution" of such
an institution by any receiver.

         MONETARY POLICY AND ECONOMIC CONTROL

         The commercial banking business in which the Bank engages is affected
not only by general economic conditions, but also by the monetary policies of
the FRB.  Changes in the discount rate on member bank borrowing, availability
of borrowing at the "discount window," open market operations, the imposition
of changes in reserve requirements against members banks' deposits and assets
of foreign branches and the imposition of and changes in reserve requirements
against certain borrowings by banks and their affiliates are some of the
instruments of monetary policy available to the FRB.  These monetary policies
are used in varying combinations to influence overall growth and distributions
of bank loans, investments and deposits, and this use may affect interest rates
charged on loans or paid on deposits.  The monetary policies of the FRB have
had a significant effect on the operating results of commercial banks and are
expected to do so in the future.  The monetary policies of these agencies are
influenced by various factors, including inflation, unemployment, short-term
and long-term changes in the international trade balance and in the fiscal
policies of the United





                                      -15-
<PAGE>   18

States Government.  Future monetary policies and the effect of such policies on
the future business and earnings of the Company cannot be predicted.

COMPETITION

         The Bank encounters strong competition both in making loans and
attracting deposits.  The deregulation of the banking industry and the
widespread enactment of state laws which permit multi-bank holding companies as
well as the availability of nationwide interstate banking has created a highly
competitive environment for financial services providers in the Bank's primary
service areas.  In one or more aspects of its business, the Bank competes with
other commercial banks, savings and loan associations, credit unions, finance
companies, mutual funds, insurance companies, brokerage and investment banking
companies, and other financial intermediaries operating in the Bradenton area
and elsewhere.  Most of the Bank's primary competitors, some of which are
affiliated with large bank holding companies, have substantially greater
resources and lending limits, and may offer certain services, such as trust
services, that the Bank does not currently provide.  In addition, many of the
Company's non-bank competitors are not subject to the same extensive federal
regulations that govern bank holding companies and state chartered and
federally insured banks.

         Management believes that the Company and the Bank are well positioned
to compete successfully in their primary market areas, although no assurances
can be given.  Competition among financial institutions generally is based upon
interest rates offered on deposit accounts, interest rates charged on loans and
other credit and service charges, the quality of the services rendered, the
convenience of banking facilities, and, in the case of loans to commercial
borrowers, relative lending limits.  Management believes that the Bank's
commitment to personal service, innovation, and involvement in the community
and its primary market areas, as well as its commitment to quality, are factors
that contribute to the Bank's competitiveness.

EMPLOYEES

         At December 31, 1997, the Company and the Bank together employed 137
full-time and 16 part-time employees.  None of these employees are covered by a
collective bargaining agreement and the Company believes that its employee
relations are good.

RECENT MERGER AND ACQUISITION

         In accordance with the terms of an Agreement and Plan of Merger, dated
September 23, 1997, as amended on October 8, 1997 (the "Merger Agreement"), the
Company acquired Murdock and merged it with and into the Bank.  Pursuant to the
merger, stockholders of Murdock are entitled to receive 2.4 Common Shares of
the Company for each share of Murdock common stock held by them.  In lieu of
the issuance of fractional Common Shares, cash will be paid for each such
fraction.  In addition, the 14,000 outstanding options to acquire Murdock
common stock existing prior to the merger have been converted at the same
exchange ratio into options to acquire the Company's Common Shares, with the
exercise prices adjusted accordingly.

         See "Subsequent Events" footnote in the Notes to Consolidated
Financial Statements on page F-28 of the financial statements provided pursuant
to Item 7 of this Form 10-KSB, "Financial Statements", which is incorporated
herein by reference.

STATISTICAL DISCLOSURES REQUIRED BY INDUSTRY GUIDE 3

         The statistical information contained in Item 6 of this Form 10-KSB,
"Management's Discussion and Analysis or Plan of Operations" is incorporated
herein by reference.





                                      -16-
<PAGE>   19

ITEM 2.  DESCRIPTION OF PROPERTY

         The executive and administrative offices of both the Company and the
Bank are located at 4702 Cortez Road West, Bradenton, Florida 34210 and consist
of approximately 7,700 square feet on two floors, containing a lobby, executive
and customer service offices, teller stations, safe deposit booths and related
non-vault area and vault operations.  A drive through facility and adequate
paved parking also is on the premises.  Both the land and all improvements are
owned by the Company.

         The Bank has seven banking office locations.  Four of these offices,
the main office, two full service branches and a drive-thru branch, are in
Bradenton.  The Bank also maintains a separate office for its Mortgage Banking
Division in Bradenton.  The remaining offices include a full service branch in
Palmetto and in Ellenton, both in Manatee County, and the recently acquired
branch in Murdock, Florida which is located in Charlotte County.  All of the
branch offices and the Mortgage Banking Division offices are owned in fee
simple by the Bank, with the exception of the Murdock branch.  In connection
with the acquisition of Murdock, the Bank assumed Murdock's lease.  The Murdock
facility, consisting of approximately 10,300 square feet, is subject to a lease
which expires on July 31, 2000, with an option to renew the lease for two
additional five-year terms.  The Murdock lease requires rental payments of
$145,000 per year.

         In addition, the offices which house the accounting and operations
departments of the Bank are on a six month lease which commenced in October
1995, with one month renewals, at a rate of $3,200 per month.  These leased
offices are expected to be a temporary location until such time as the Company
completes the construction of facilities for the administrative offices of the
Company and the Bank.  The Company has acquired the site on which
administrative offices are being built and the building is expected to be
available for occupation prior to the end of April 1998.   In addition, it is
anticipated that the Mortgage Banking Division will be moved to the new
administrative offices.  Upon completion of the construction of the
administrative building, both the land and the improvements, including the
administrative building, will be transferred by the Company to the Bank.

         Upon relocation of the Mortgage Banking Division to the new
administrative offices, the Bank intends to seek approval to convert the
vacated facility into a new full service branch location.

         The Finance Company has recently assumed a lease for a 1,700 square
foot facility located in Bradenton from which it will conduct its operations.
The Finance Company lease, which was assumed as of February 10, 1998, expires
on April 1, 2002, with an option to renew the lease for two additional
three-year terms, and requires an annual rent of $16,662 payable in monthly
installments.

         Management believes that each of its banking locations provide
sufficient parking for its customers as well as visibility from highly
travelled thoroughfares.


ITEM 3.  LEGAL PROCEEDINGS

         The Company and the Bank are periodically parties to or otherwise
involved in legal proceedings arising in the normal course of business, such as
claims to enforce liens, foreclose on loan defaults, claims involving the
making and servicing of real property loans, and other issues incident to the
Bank's business.  Except as described below, management does not believe that
there is any proceeding threatened or pending against the Company or the Bank
which, if determined adversely, would have a material effect on the business or
financial position of the Company or the Bank.

         On January 15, 1997, Theresa Moss, an employee of the Bank, filed a
claim with the Equal Employment Opportunity Commission ("EEOC") alleging that
such employee was demoted by the Bank in retaliation for complaining against a
co-employee for offensive comments which caused a hostile work environment
leading to her resignation from the Bank.  It is alleged that this conduct
violated her rights under Title VII of the Civil Rights Act of 1964.  The EEOC
claim does not request any specific relief or remedies sought in connection
therewith.  On March 19, 1998, the EEOC issued a Dismissal and Notice of Rights





                                      -17-
<PAGE>   20

stating that the EEOC was unable to conclude that the Bank violated applicable
statutes.  Under the terms of the Dismissal and Notice of Rights, Ms. Moss has
the right to file a lawsuit against the Bank but must do so within ninety days
of such notice.  The Company believes that the Bank acted appropriately and
that this action is without merit and it intends to defend this action
vigorously.

         On March 27, 1997, James J. Bazata, a former employee of the Bank,
filed a suit in the United States District Court, Tampa Division, alleging that
he was illegally discriminated against in connection with the termination of
his employment with the Bank.  The suit alleges that Mr. Bazata was terminated
from his employment in violation of his rights under the Americans with
Disabilities Act of 1990.  The suit makes a claim for unspecified monetary
damages and seeks the reinstatement of Mr. Bazata's employment with the Bank.
Discovery is near completion and a trial date has been scheduled for June 1998.
The Company believes that the Bank acted appropriately in connection with its
termination of Mr. Bazata and that this action is without merit.  The Company
intends to defend this action vigorously.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

         There were no matters submitted to a vote of the Company's
security-holders during the fourth quarter of its fiscal year ended December 31,
1997.


                                    PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


MARKET FOR COMMON SHARES

         The Company's Common Shares are quoted on the Nasdaq National Market
System ("Nasdaq-NMS") under the symbol ABAN.  At the close of business on
February 27, 1998, there were outstanding 4,070,458 Common Shares which were
held by approximately 960 shareholders of record.

         The following table sets forth the high and low closing sales prices
for the Common Shares as quoted by Nasdaq-NMS for the periods indicated:


<TABLE>
<CAPTION>
                                                                       HIGH          LOW
                                                                       ----          ---
    <S>                                                             <C>             <C>
    YEAR ENDED DECEMBER 31, 1997:
    First Quarter   . . . . . . . . . . . . . . . . . . . . .       $  9.25         $  7.50
    Second Quarter  . . . . . . . . . . . . . . . . . . . . .       $  9.625        $  8.00
    Third Quarter   . . . . . . . . . . . . . . . . . . . . .       $ 12.75         $  9.00
    Fourth Quarter  . . . . . . . . . . . . . . . . . . . . .       $ 13.25         $ 11.625

    YEAR ENDED DECEMBER 31, 1998:

    First Quarter (through March 25, 1998)  . . . . . . . . .       $ 13.125         $11.625

</TABLE>

         On March 25, 1998, the last reported sale price of the Common Shares
as quoted by Nasdaq-NMS was $12.25 per share.

         Since completion of its initial public offering in February 1996
through February 1997, the Company has sold approximately 225,290 Common Shares
pursuant to exercise of its Series B Warrants which were outstanding prior to
the Company's initial public offering.  The exercise prices of the Series B
Warrants were $6.00 per share, generating aggregate proceeds to the Company in
the amount of $1,351,740.  No commissions or fees were paid in connection with
the issuance of Common Shares upon exercise of the





                                      -18-
<PAGE>   21

Series B Warrants.  As of February 28, 1997, no warrants remained outstanding.
In addition, in early 1997 the Company issued 7,119 Common Shares having a
total aggregate fair market value of $55,000, in connection with its
acquisition of DesChamps.  The shares were issued pursuant to the exemption
from registration afforded under Sections 3(b) and 4(2) of the Securities Act
of 1933.

         In connection with the merger with Murdock, the Company will issue up
to 924,025 Common Shares.  These shares have been registered with the
Commission under the Securities Act and qualified for listing on Nasdaq-NMS.
In addition, options to acquire Murdock common stock have been converted into
options to acquire up to 33,600 of the Company's Common Shares upon the terms
and conditions of the Merger Agreement.

         Holders of the Company's Common Shares are entitled to receive
dividends when and if declared by its Board of Directors out of funds legally
available therefor.  The Company however, has never declared any cash dividends
on its Common Shares and does not anticipate the payment of cash dividends in
the foreseeable future.

         The Company is a legal entity separate and distinct from the Bank and
its revenues are derived principally from the Bank.  Accordingly, the ability
of the Company to pay cash dividends on its Common Shares in the future
generally will be largely dependent upon the earnings of the Bank and the
ability of the Bank to pay dividends to the Company.  The Bank, as a Florida
state chartered bank, is subject to certain legal restrictions on the amount of
dividends it is permitted to pay.  The amount of cash dividends that may be
paid is based on the Bank's net profits during the current year combined with
the Bank's retained net profits of the preceding two years, as defined by
applicable Florida Department of Banking regulations.  At December 31, 1997,
the Bank had approximately $3,704,000 available for the payment of cash
dividends to the Company as determined by applicable regulations.

         The payment of dividends by the Bank is subject to a determination by
the Bank's Board of Directors and will depend upon a number of factors,
including capital requirements, regulatory limitations, the Bank's results of
operations and financial condition, tax considerations, and general economic
conditions.  National banking laws regulate and restrict the ability of the
Bank to pay dividends to the Company.  The Florida Department of Banking, which
regulates the Bank, not only has established certain financial and capital
requirements that affect the ability of the Bank to pay dividends, but it also
has the general authority to prohibit the Bank from engaging in an unsafe or
unsound practice in conducting  its business.  Depending upon the financial
condition of the Bank, the payment of cash dividends could be deemed to
constitute such an unsafe or unsound practice.  See "Item 1. Business -
Supervision and Regulation -- Bank Regulation."


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


GENERAL

         The Company's principal asset is its ownership of the Bank.
Accordingly, the Company's results of operations is primarily dependent on the
results of the operations of the Bank.  The Bank conducts a commercial banking
business which consists of attracting deposits from the general public and
applying those funds to the origination of loans for commercial, consumer, and
real estate loans (including commercial loans collateralized by real estate).
The Bank's profitability depends primarily on net interest income, which is the
difference between interest income generated from interest-earning assets
(i.e., loans and investments) less the interest expense incurred on
interest-bearing liabilities (i.e., customer deposits and borrowed funds).  Net
interest income is affected by the relative amounts of interest-earning assets
and interest-bearing liabilities, and the interest rate paid on these balances.





                                      -19-
<PAGE>   22

         Net interest income is dependent upon the Bank's interest rate spread,
which is the difference between the average yield earned on its
interest-earning assets and the average rate paid on its interest-bearing
liabilities.  When interest-earning assets approximate or exceed
interest-bearing liabilities, any positive interest rate spread will generate
net interest income.  The interest rate spread is impacted by interest rates,
deposit flows, and loan demands.  Additionally, and to a lesser extent, the
Bank's profitability is affected by such factors as the level of non-interest
income and expenses, the provision for loan losses, and the effective tax rate.
Non-interest income consists primarily of loan and other fees and income from
the sale of loans, servicing rights, and investment securities.  Non-interest
expenses consist of compensation and benefits, occupancy related expenses,
deposit insurance premiums paid to the FDIC, expenses of opening branch
offices, and other operating expenses.

         The Bank enjoys an excellent reputation in its market areas and strives
for quality customer service.  During 1997, the Bank opened a new full service
branch in Palmetto, Florida and, in the first quarter of 1998, completed its
merger with Charlotte County-based Murdock Florida Bank located in Murdock,
Florida.  The former Murdock Florida Bank has been converted into a full service
branch of the Bank.  As part of its continued growth, the Bank has obtained
approval to open a new full service banking office in Ruskin, Florida located in
Hillsborough County.  All necesssary regulatory approvals have been obtained and
this new office is scheduled to open in the second quarter of 1998.  There can
be no assurance, however, that the branch will open in the anticipated quarter.

         This Management's Discussion and Analysis or Plan of Operations
discusses material changes in the financial condition of the Company from
December 31, 1996 to December 31, 1997, and material changes in the results of
operations with respect to the year ended December 31, 1997 compared to the
year ended December 31, 1996.  This discussion and analysis is intended to
assist in understanding the financial condition and results of operation of the
Company and the Bank.  This section should be read in conjunction with the
consolidated financial statements and the related notes and the other
statistical information contained herein.

                             RESULTS OF OPERATIONS

         COMPARISON OF FISCAL YEARS ENDED DECEMBER 1997 AND 1996

         For the year ended December 31, 1997, the Company reported net income
of $1,631,000, or $0.40 per share, as compared to net income of $883,000 or
$.24 per share for 1996.  From 1996 to 1997, net interest income increased by
$2,134,000 and non-interest income increased by $1,810,000.  The increase in
non-interest income from 1996 to 1997 is primarily attributable to increases in
collection of service charges on deposits of $568,000 credit card merchant fee
income of $217,000, and gains on sale of loan servicing of $250,000.  These
changes contributing to income were offset by increases in start-up costs in
the form of general and administrative expenses associated with the opening of
a new full service branch in early 1997 and an increase of $463,000 in the
provision for loan losses.  Management believes the long term benefits
associated with the new branch will provide additional income which will
contribute to the growth and profitability of the Bank.

         The Company's total assets at December 31, 1997 were $289,940,000, an
increase of $77,975,000 or approximately 37% from December 31, 1996.  The
majority of the increase was invested in loans receivable and in U.S.
government agency securities.  Asset growth was funded by an increase in
deposits from the opening of new branches as well as continued growth at
existing branches.

         The Bank's loans at December 31, 1997 totalled $212,206,000, net, or
approximately 73% of total assets.  Of this total, portfolio loans consisted of
$49,632,000 in commercial loans, $53,531,000 in commercial real estate,
$24,591,000 in residential real estate, and $45,664,000 in consumer loans, net
of deferred costs and allowance for loan losses of $457,000.  Loans held for
sale were $21,127,000 in residential real estate loans and $18,118,000 in real
estate construction loans, net of deferred costs and allowance for loan





                                      -20-
<PAGE>   23
 losses of $343,000.  The allowance for loan losses increased from $1,000,000 at
December 31, 1996 to $1,381,000 at December 31, 1997.  The allowance for loan
losses represented approximately 0.60% of total loans, down from 0.64% at
December 31, 1996.  However, the allowance for loan losses represents 0.80% of
portfolio loans at December 31, 1997, as compared to 0.74% at December 31, 1996.

         COMPARISON OF FISCAL YEARS ENDED DECEMBER 1996 AND 1995

         For the year ended December 31, 1996, the Company reported net income
of $883,000 or $.24 per share, as compared to net income of $1,018,000 or $.46
per share for 1995.  Per share results reflect the effect of the 67% increase
in the weighted average number of shares outstanding resulting from the public
offering completed in February 1996.  From 1995 to 1996, net interest income
increased by $1,740,000 and non-interest income and non-interest income
increased by $361,000.  The increase in non-interest income from 1995 to 1996
is primarily attributable to increases in collection of service charges on
deposits of $177,000 credit card merchant fee income of $165,000, and gains on
sale of securities of $70,000.  In addition, loan loss provision expense
decreased by $196,000 from 1995 to 1996.  These changes contributing to income
were offset by increases in start-up costs in the form of general and
administrative expenses associated with two new full service branches which
were opened by the Bank in March and September of 1996.  Management believes
the long term benefits associated with these two branches will provide
additional income which will contribute to the growth and profitability of the
Bank.

         The Company's total assets at December 31, 1996 were $211,965,000, an
increase of $57,017,000 or approximately 37% from December 31, 1995.  This
increase was due primarily to the increase in loans originated by the Bank.

         The Bank's loans at December 31, 1996 totalled $155,460,000, net, or
approximately 73% of total assets.  Of this total, portfolio loans consisted of
$41,382,000 in commercial loans, $33,156,000 in commercial real estate,
$18,695,000 in residential real estate, and $42,271,000 in consumer loans, net
of deferred costs and allowance for loan losses of $395,000.  Loans held for
sale were $4,335,000 in residential real estate loans and $16,016,000 in real
estate construction loans, net of deferred costs and allowance for loan losses
of $112,000.  The allowance for loan losses increased from $946,000 at December
31, 1995 to $1,000,000 at December 31, 1996.  The allowance for loan losses
represented approximately .64% of total loans, down from .79% at December 31,
1995.

NET INTEREST INCOME

         Net interest income, which constitutes the principal source of income
for the Bank, represents the difference between interest income on
interest-earning assets and interest expense on interest-bearing liabilities.
The principal interest-earning assets are loans made to businesses and
individuals.  Interest-bearing liabilities primarily consist of time deposits,
interest-paying check accounts ("NOW Accounts"), retail savings deposits, and
money market accounts.  Funds deposited to these interest-bearing liabilities
are invested in interest-earning assets.  Accordingly, net interest income
depends on the volume of average interest-earning assets and average
interest-bearing liabilities and the interest rates earned or paid on them.

         The growth in loans resulted in a steady increase in net interest
income during 1997.  Net interest income for the year ended December 31, 1997
amounted to $9,271,000 on a $234,343,000 average outstanding balance of
interest-earning assets, an increase of $2,134,000 over the $7,137,000 recorded
in 1996 on average interest-earning assets of $169,259,000.  Interest income
from loans during the same period comprised 84.3% and 86.5%, respectively, of
the total interest income and earned an average yield of 8.89% and 9.18%,
respectively, while interest income from investments and federal funds sold
earned an average yields of 6.53% and 6.10%, respectively.  Total interest
expense for 1997 was $10,419,000 on average outstanding balances of
interest-bearing liabilities of $199,976,000 compared to interest expense of
$7,411,000 on average interest-bearing liabilities of $143,001,000 for the same
period in 1996.  The average cost of interest-bearing liabilities for 1997 and
1996 was 5.21% and 5.18%, respectively.  The Bank experienced a decrease in the
net yield on average earning assets to 3.96% in 1997, from 4.22% in 1996, due
in part to a decrease in the average yield on interest-earning assets due to
changes in the marketplace.





                                      -21-
<PAGE>   24


         The following tables show for each category of interest-earning assets
and interest-bearing liabilities, the average amount outstanding, the interest
earned or paid on such amount, and the average rate earned or paid for the
years ended December 31, 1997, 1996, and 1995.  These tables also show the
average rate earned on all interest-earning assets, the average rate paid on
all interest-bearing liabilities, and the net yield on average interest-earning
assets for the same periods.

           COMPARATIVE AVERAGE BALANCES, INTEREST, AND AVERAGE YIELDS

<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                    ----------------------------------------------------------------------------------------
                                                 1997                          1996                           1995
                                    ---------------------------  -------------------------------  ---------------------------
                                               INTEREST                      INTEREST                       INTEREST
                                     AVERAGE   INCOME/   YIELD/   AVERAGE     INCOME/     YIELD/   AVERAGE   INCOME/   YIELD/
                                    BALANCE(1) EXPENSE    RATE   BALANCE(1)   EXPENSE      RATE   BALANCE(1) EXPENSE    RATE
                                    ---------- -------   ------  ----------   -------     ------  ---------  --------  -----
                                                                       (DOLLARS IN THOUSANDS)
<S>                                 <C>        <C>       <C>     <C>          <C>         <C>     <C>        <C>       <C>
Cash and due from banks . . . . . .  $  7,716                      $   5,699                      $   5,258
Bank premises and equipment, net  .     6,618                          5,670                          3,619
Other assets. . . . . . . . . . . .     3,294                          2,155                          1,332
                                     --------                      ---------                      ---------
   Total non-interest earning
       assets . . . . . . . . . . .    17,628                         13,524                         10,209
                                     --------                      ---------                      ---------

INTEREST-EARNING ASSETS:
Federal funds sold  . . . . . . . .  $  7,225  $    399     5.52%  $   4,382  $    237     5.41%  $   3,236  $   196    6.06%
Investment securities (2) . . . . .    40,027     2,686     6.71      27,689     1,720     6.21      21,372    1,298    6.07
Loans, net (3)(4) . . . . . . . . .   187,091    16,606     8.89     137,188    12,591     9.18     107,860    9,915    9.19
                                     --------  --------   ------   ---------  --------     ----   ---------  -------    ----
Total interest-earning assets/
    interest/income average rates
    paid  . . . . . . . . . . . . .  $234,343  $ 19,691     8.40%  $ 169,259  $ 14,548     8.60%  $ 132,468  $11,409    8.61%
                                     ========  ========   ======   =========  ========     ====   =========  =======    ====
Total assets  . . . . . . . . . . .  $251,971                      $ 182,783                      $ 142,677
                                     ========                      =========                      =========
Other liabilities . . . . . . . . .  $ 35,712                      $  22,914                      $  16,906
                                     --------                      ---------                      ---------
Total non-interest bearing
    liabilities  . .  . . . . . . .  $ 35,712                       $ 22,914                      $  16,906
                                     --------                       --------                      ---------

INTEREST-BEARING LIABILITIES:
NOW . .   . . . . . . . . . . . . .  $ 14,537  $    209     1.41%  $  12,271  $    185     1.51%  $   9,311  $   152    1.63%
Money market  . . . . . . . . . . .    55,737     2,621     4.70      32,756     1,550     4.73      29,911    1,377    4.60
Savings . . . . . . . . . . . . . .     7,657       164     2.14       6,963       154     2.21       6,252      139    2.22
Time. . . . . . . . . . . . . . . .   102,088     6,422     6.29      80,344     5,038     6.27      63,868    3,988    6.24
                                     --------  --------   ------    --------  --------     ----   ---------  -------    ----
   Total interest-bearing deposits    180,019     9,416     5.23     132,334     6,927     5.23     109,342    5,656    5.17
Securities sold under agreement
     to repurchase  . . . . . . . .    14,375       654     4.55       8,628       352     4.08       7,123      293    4.11
Federal funds purchased . . . . . .        77         4     5.19          47         3     6.38         630       37    5.87
FHLB advances . . . . . . . . . . .     5,505       345     6.27       1,992       130     6.53         562       25    4.45
                                     --------  --------   ------    --------  --------     ----   ---------  -------    ----
Total interest-bearing liabilities/
     interest/expense/average
      rate paid . . . . . . . . . .  $199,976    10,419     5.21%  $ 143,001  $  7,412     5.18%  $ 117,657  $ 6,011    5.11%
                                     ========  ========   ======   =========  ========     ====   =========  =======    ====
Total liabilities . . . . . . . . .  $235,688                      $ 165,915                      $ 134,563
Shareholders' equity  . . . . . . .    16,283                         16,868                          8,114
                                     --------                      ---------                      ---------

   Total liabilities and
       shareholders' equity . . . .  $251,971                      $ 182,783                      $ 142,677
                                     ========                      =========                      =========


Net interest income . . . . . . . .            $  9,272                       $  7,136                       $ 5,398
                                               ========                       ========                       =======
Net yield on average earning
     assets (5) . . . . . . . . . .                         3.96%                          4.22%                        4.07%
------------------------------                          ========                           ====                         ====
</TABLE>
(1)     Average balances represent the average daily balance year to date.
(2)     Principally taxable
(3)     Non-accruing loans included in computation of average balance.
(4)     Interest income on loans includes fees of $340,000 in 1997, $525,000 in
        1996, and $131,000 for 1995.
(5)     The net yield on average earning assets is the net interest income
        divided by average interest-earning assets.




                                      -22-
<PAGE>   25


         The effect on interest income, interest expense, and net interest
income for the periods indicated, of changes in average balance and rate, is
shown below for the Bank.  The effect of a change in average balance has been
determined by applying the average rate at the year-end for the earlier period
to the change in average balance at the year-end for the later period.  Changes
resulting from average balance/rate variances are included in changes resulting
from volume.

                         RATE/VOLUME INTEREST ANALYSIS


<TABLE>
<CAPTION>

                                                                     YEAR ENDED
                                    ------------------------------------------------------------------------------
                                            1997 COMPARED TO 1996                    1996 COMPARED TO 1995
                                    INCREASE (DECREASE) DUE TO CHANGE IN:    INCREASE (DECREASED DUE TO CHANGE IN:
                                    ------------------------------------     -------------------------------------
                                       AVERAGE    AVERAGE    TOTAL               AVERAGE    AVERAGE  TOTAL
                                       VOLUME (1)  RATE     CHANGE              VOLUME (1)   RATE    CHANGE
                                       ---------- -------  --------             ----------  -------  ------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                    <C>       <C>       <C>                  <C>         <C>      <C>
INTEREST EARNING ASSETS:
   Federal funds sold   . . . . . .    $   155   $     7   $    162              $    68    $  (28)  $    40
   Investment securities  . . . . .        766       200        966                  384        38       422
   Loans, net (2)   . . . . . . . .      4,570      (555)     4,015                2,697       (20)    2,677
                                       -------   -------   --------              -------    ------   -------
     Total interest income  . . . .    $ 5,491   $  (348)  $  5,143              $ 3,149    $  (10)  $ 3,139
                                       =======   =======   ========              =======    ======   =======

INTEREST BEARING LIABILITIES:
   NOW  . . . . . . . . . . . . . .    $    35   $   (11)  $     24              $    48       (15)       33
   Money market   . . . . . . . . .      1,087       (16)     1,071                  131        42       173
   Savings  . . . . . . . . . . . .         16        (6)        10                   16        (1)       15
   Time   . . . . . . . . . . . . .      1,363        21      1,384                1,028        22     1,050
                                       -------   -------   --------              -------    ------   -------
     Total interest on deposits   .      2,501       (12)     2,489                1,223        48     1,271

Securities sold under agreement to
   repurchase and borrow funds  . .        466        52        518                  108        22       130
                                       -------   -------   --------              -------    ------   -------
     Total interest expense   . . .      2,967   $    40   $  3,007              $ 1,331    $   70   $ 1,401
                                       =======   =======   ========              =======    ======   =======

     Change in net interest income       2,524   $  (388)  $  2,136              $ 1,818    $  (80)  $ 1,738
                                       =======   =======   ========              =======    ======   =======
</TABLE>

-------------
(1)  Non-accruing loans are excluded form the average volumes used in
     calculating this table.
(2)  Includes loan fees of $340,000 in 1997 and $525,000 in 1996.

PROVISION FOR LOAN LOSSES

         For the year ended December 31, 1997, $750,000 was recorded to the
loan loss provision, compared to the $286,654 recorded to the provision during
the year ended 1996.

         The targeted level of loan loss allowance is based on management's
continual review of the loan portfolio.  Management reviews the loan by type
and nature of collateral and establishes an appropriate provision for loan
losses based upon industry standards, management's experience, historical
charge-off experience, the present and prospective financial condition of
specific borrowers, industry concentrations within the loan portfolio, size of
the credit, existence and quality of any collateral, profitability, and general
economic conditions.  The Bank has experienced relative low delinquency and
default rates in its portfolio due in part to adherence to established
underwriting guidelines.  Management believes the allowance for loan





                                      -23-
<PAGE>   26

losses is adequate based on its assessment of the risks of loan defaults.
However, the Bank intends to review its allowance for loan losses on a monthly
basis and to provide increases in the allowance, if necessary, based on the
results of this review.

         The total allowance for loan losses increased from $1,000,000 in 1996
to $1,381,000 in 1997.  During 1997, the Bank experienced $439,000 in
charge-offs and $70,000 in recoveries on previously charged-off loans.  As of
December 31, 1997, the Bank had $437,000 of loans in non-accrual status.  The
year end 1997 and 1996 loan loss provisions reflect the growth in the Bank's
loan portfolio and management's philosophy of maintaining adequate loan loss
reserves.

         Although management uses the best information available to make
determinations with respect to the allowance for loan losses, future
adjustments may be necessary if economic conditions differ substantially from
the assumptions used or adverse developments arise with respect to the Bank's
nonperforming or performing loans.

NON-INTEREST INCOME

         For the years ended December 31, 1997 and 1996, non-interest income
totalled $3,644,000 and $1,834,000, respectively, an increase of approximately
99%.  During 1997, service fees on customer deposits contributed $1,301,000,
mortgage banking operations contributed $901,000, fees on credit card merchant
services contributed $479,000 gains from sales of securities contributed
$148,000, and other income increased to $336,000.  For the year ended 1996,
mortgage banking operations contributed $598,000, service fees on customer
deposits $773,000, fees on credit card merchant services $262,000, and
miscellaneous other income $136,000.  This increase reflects the Company's
increase in its mortgage banking operations through its acquisition of
DesChamps in early 1997, a full year of credit card merchant service fees in
1997 versus a partial year in 1996 and continued sales of both its mortgage
loans held for sale and the mortgage servicing rights.

NON-INTEREST EXPENSE

         Non-interest expense for the years ended December 31, 1997 and 1996,
totaled $9,594,000 and $7,279,000, respectively, substantially all of which was
general and administrative expenses.  The increase in non-interest expense is
due primarily to the opening of the new full service banking office in Palmetto
replacing the prior drive-thru facility located there, additional lending
staff, and additional support staff for backroom operations and the related
costs associated with these areas.  For the years ended December 31, 1997 and
1996, general and administrative expenses were 3.79% and 3.98%, respectively,
of average assets.  The largest component, salaries and employee benefit,
amounted to $4,370,000, or 46%, and $3,470,000, or 48%, respectively, of total
general and administrative expense for the years ended 1997 and 1996.
Management continuously monitors general and administrative expenses and the
efficiency ratio to maintain non-interest expenses at a level within industry
standards.

INCOME TAX EXPENSE

         For the year ended December 31, 1997, an income tax provision totaling
$940,000 was recorded, compared to a $522,000 provision for the year ended 1996
as a result of increased earnings during the 1997 period.  The effective tax
rate was 37% for the years ended 1996 and 1997.





                                      -24-
<PAGE>   27

ASSET/LIABILITY MANAGEMENT

         One of the Bank's primary objectives is to control fluctuations in net
interest income caused by changes in interest rates.  To manage interest rate
risk, the Bank's Board of Directors has established interest rate risk policies
and procedures which delegate to the Asset/Liability Management Committee
("ALCO") the responsibility to monitor and report on interest rate risk, devise
strategies to manage interest rate risk, monitor loan origination and deposit
activity, and approve all pricing strategies.

         The management of interest rate risk is one of the most significant
factors affecting the Bank's ability to achieve future earnings.  The principal
measure of the Bank's exposure to interest rate risk is the difference between
interest rate sensitive assets and liabilities for the periods being measured,
commonly referred to as the "gap" for such period.  An asset or liability is
considered interest rate sensitive if it will reprice or mature within the time
period being analyzed.  Controlling the maturity or repricing of an
institution's liabilities and assets in order to minimize interest rate risk is
commonly referred to as gap management.  A gap is considered positive when the
amount of interest rate assets exceed the amount of interest rate sensitive
liabilities.  When the opposite occurs, the gap is considered to be negative.
During periods of increasing interest rates, negative gap would tend to
adversely affect income while a positive gap would tend to result in net
interest income.  During periods of decreasing interest rates, the inverse
would tend to occur.  If the maturities of interest rate sensitive assets and
liabilities were equally flexible and moved concurrently, the impact of any
material or prolonged increase or decrease in interest rates or net interest
income on existing assets or liabilities would be minimal.  It is common to
focus on the one year gap, which is the difference between the dollar amount of
assets and the dollar amount of liabilities maturing or repricing within the
next twelve months.

         ALCO uses an external asset/liability modeling service to analyze the
Bank's current financial position and develop strategies prior to
implementation.  The systems attempt to simulate the Bank's asset and liability
base and project future operating results under several interest rate and
spread assumptions.

         Under asset/liability management guidelines, the Bank's policy is to
maintain a cumulative one-year gap of no more than 15% of total assets,
primarily by managing the maturity distribution of its investment portfolio and
emphasizing loan originations tied to interest sensitive indices.
Additionally, the Bank has joined the FHLB to enhance its liquidity position
and provide the ability to utilize fixed rate advances to improve the match
between interest-earning assets and interest-bearing liabilities in certain
periods.

         The Bank's cumulative one year gap at December 31, 1997 was a negative
$35,821,000 (or -12.41%, expressed as a percentage of total assets).  This
represents a significant shift from the positive cumulative one year gap at
December 31, 1996 of $17,235,000.  This $53,000,000 shift is reflected
primarily in the $30,000,000 increase in certificates of deposits which mature
in 1 year or less and the increase in NOW and money market accounts of
$17,000,000.  Management believes its negative gap position is mitigated by its
$61,000,000 in NOW, money market, and savings deposits, the majority of which
it considers to be core deposits.

         The following table presents the interest rate-sensitive assets and
liabilities of the Bank at December 31, 1997, which are expected to mature or
are subject to repricing in each of the time periods indicated.  The tables may
not be indicative of the Bank's rate sensitive position at other points in
time.  The balances have been derived based on the financial characteristics of
the various assets and liabilities.  Adjustable and floating rate assets are
included in the period in which interest rates are next scheduled to adjust
rather than their scheduled maturity dates.  Fixed rate loans are shown in the
periods in which they are





                                      -25-
<PAGE>   28

scheduled to be repaid.  Repricing of time deposits is based on their scheduled
maturities.  Deposits without a stated maturity are shown as repricing within
ninety (90) days.


           INTEREST RATE SENSITIVITY ANALYSIS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>

                                                                                  TERM TO REPRICING
                                                    --------------------------------------------------------------------------
                                                              90-180  181 DAYS      1-2      2-3      3-4        4+
                                                    90 DAYS    DAYS  TO 365 DAYS   YEARS    YEARS    YEARS     YEARS    TOTAL
                                                    -------  ------- -----------  -------  -------  -------   ------- --------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                 <C>      <C>     <C>          <C>      <C>      <C>       <C>     <C>
Federal funds sold  . . . . . . . . . . . . . . .     5,120        0        0           0        0        0         0    5,120
Interest-bearing due from banks . . . . . . . . .     1,857        0        0           0        0        0         0    1,857
Fixed rate loans  . . . . . . . . . . . . . . . .    35,179   10,383    5,944       7,525   17,002   20,257    35,772  132,062
Variable rate loans . . . . . . . . . . . . . . .    49,458    9,253   10,049       2,735    3,407      795     4,904   80,601
Treasuries  . . . . . . . . . . . . . . . . . . .         0        0    1,002       1,512    1,005        0         0    3,519
Governmental agencies . . . . . . . . . . . . . .         0      500      496       3,998    5,000    4,332    30,507   44,833
State and municipal . . . . . . . . . . . . . . .         0        0      501           0        0        0         0      501
Federal Home Loan Bank Stock  . . . . . . . . . .     1,333        0        0           0        0        0         0    1,133
                                                    -------  -------  -------     -------  -------  -------   ------- --------
    Total interest-earning assets . . . . . . . .    92,747   20,136   17,992      15,770   26,414   25,384    71,183  269,626

NOW . . . . . . . . . . . . . . . . . . . . . . .    15,041        0        0           0        0        0         0   15,041
Money market  . . . . . . . . . . . . . . . . . .    57,420        0        0           0        0        0         0   57,420
Savings . . . . . . . . . . . . . . . . . . . . .     8,295        0        0           0        0        0         0    8,295
Certificates/IRS's<$100,000 . . . . . . . . . . .    13,974   12,067   26,531      28,164    8,216   16,773     3,463  109,188
Certificates/IRS's>$100,000 . . . . . . . . . . .     3,916    2,216    4,708       2,646      254      930         0   14,670
Securities sold under agreements to repurchase  .    17,528        0        0           0        0        0         0   17,528
Federal Home Loan Bank advances . . . . . . . . .         0        0    5,000           0        0        0         0    5,000
                                                    -------  -------  -------     -------  -------  -------   ------- --------
Total interest-bearing liabilities  . . . . . . .   116,174   14,283   36,239      30,810    8,470   17,703     3,463  227,142
                                                    -------  -------  -------     -------  -------  -------   ------- --------
Interest sensitivity gap  . . . . . . . . . . . .   (23,427)   5,853  (18,247)    (15,040)  17,944    7,681    67,720   42,484
                                                    =======  =======  =======     =======  =======  =======   ======= ========
Cumulative gap  . . . . . . . . . . . . . . . . .   (23,427) (17,574) (35,821)    (50,861) (32,917) (25,236)   42,484
                                                    =======  =======  =======     =======  =======  =======   =======
Cumulative gap ratio  . . . . . . . . . . . . . .      0.80     0.87     0.79        0.74     0.84     0.89      1.19
                                                    =======  =======  =======     =======  =======  =======   =======
Cumulative gap as a percentage of total assets  .     -8.12%   -6.09%  -12.41%     -17.62%  -11.40%   -8.74%    14.72%
                                                    =======  =======  =======     =======  =======  =======   =======
</TABLE>


                             FINANCIAL CONDITION

LENDING ACTIVITIES

         The Bank offers a broad range of personal and business loans and
mortgage loan products.  The Bank aggressively pursues quality indirect lending
through local automobile dealerships, small to medium sized commercial business
loans, and direct residential loans.  Also, through its Mortgage Banking
Division, the Bank has focused efforts on residential loan originations that
can be sold in the secondary market while it retains or packages for sale the
servicing rights.  The Mortgage Banking Division of the Bank maintains
relationships with correspondent lenders throughout the State of Florida,
ensuring continued lending efforts without a concentration in any one area.
Management believes this to be a prudent practice in the mortgage banking area
as it minimizes risks associated with the localized economic downturns.  The
Mortgage Banking Division originates primary construction-to-permanent
financing loans, which are considered to have less risk of nonpayment than
construction only financings.  In addition, with its acquisition of DesChamps &
Gregory Mortgage Company, Inc., a Bradenton based residential mortgage
brokerage company, in early 1997, the Bank also increased its origination of
residential mortgage loans in Manatee and Sarasota counties.





                                      -26-
<PAGE>   29

         LOAN PORTFOLIO COMPOSITION.  At December 31, 1997, total loans
included portfolio loans of approximately $173.4 million and loans held for
sale of approximately $39.6 million.  Total loans represent approximately 73.9%
of the Bank's total assets.  Management's objective is to maintain its
one-to-four family residential and construction loans at 30% of total loans.
At December 31, 1997, approximately 30.1%, or $64.2 million, of its total loans
were in one-to-four family residential and construction loans, including
approximately $21 million in mortgage loans held for sale and $18.6 million of
construction loans held for sale.  The remainder of the Bank's loans included
in its loan portfolio was commercial and commercial real estate loans of $103
million and consumer and other loans of $45.7 million.

         The following table summarizes the composition of Bank's loan
portfolio (excluding loans held for sale) by type of loan on the dates
indicated.

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                        -------------------------------------------------------------------------------------
                                              1997              1996               1995             1994            1993
                                        ----------------   ---------------    --------------   -------------   --------------
                                          AMOUNT    %       AMOUNT     %       AMOUNT    %      AMOUNT    %     AMOUNT    %
                                        --------- ------   --------  -----    -------  -----   -------  ----   -------  -----
                                                                       (DOLLARS IN THOUSANDS)
<S>                                     <C>       <C>      <C>       <C>      <C>      <C>     <C>      <C>    <C>     <C>
TYPE OF LOAN:
  Residential mortgage (1)  . . . . . . $  24,591   14.2%   $18,695   13.8%   $14,723   15.0%  $11,370   15.3% $ 9,486   18.3%
  Commercial (2)  . . . . . . . . . . .   103,163   59.5     74,539   55.0     52,600   53.7    39,505   53.1   28,902   55.7
  Consumer and other loans (3)  . . . .    45,664   26.3     42,270   31.2     30,650   31.3    23,579   31.6   13,463   26.0
                                        --------- ------   --------  -----    -------  -----   -------  -----  -------  -----
    Total loans   . . . . . . . . . . . $ 173,418  100.0%  $135,504  100.0%   $97,973  100.0%  $74,454  100.0% $51,851  100.0%
                                                  ======             =====             =====            =====           =====

LESS:
  Allowance for loan losses . . . . . .    (1,381)           (1,000)             (946)            (625)           (505)
  Net deferred costs (losses) . . . . .       581               604               453              427             (17)
                                        ---------          --------           -------          -------         -------
    Total loans, net  . . . . . . . . . $ 172,618          $135,108           $97,480          $74,256         $51,329
                                        =========          ========           =======          =======         =======

</TABLE>
---------------
(1) Substantially all single family loans.  Real estate construction loans are
    included in loans held for sale.
(2) Commercial consists of commercial real estate and other commercial loans.
(3) Includes consumer installment loans.


         LOAN MATURITY SCHEDULE.  The following table sets forth the maturities
of loans outstanding as of December 31, 1997.

<TABLE>
<CAPTION>
                                                                          AT DECEMBER 31, 1997
                                                          --------------------------------------------------
                                                                         DUE AFTER 1
                                                            DUE IN 1      YEAR BUT     DUE AFTER
                                                          YEAR OR LESS  BEFORE 5 YEARS  5 YEARS      TOTAL
                                                          ------------  -------------- ---------   ---------
                                                                         (DOLLARS IN THOUSANDS)
<S>                                                       <C>           <C>            <C>         <C>
1-4 Family Residential  . . . . . . . . . . . . . . .       $   3,922     $   6,857    $  13,812   $  24,591
Other loans collateralized by real estate . . . . . .           9,193        23,665       20,673      53,531
Commercial and consumer loans . . . . . . . . . . . .          30,972        54,186       10,138      95,296
                                                            ---------     ---------    ---------   ---------
    Total loans (1) . . . . . . . . . . . . . . . . .       $  44,087     $  84,708    $  44,623   $ 173,418
                                                            =========     =========    =========   =========
</TABLE>

---------------
(1) Excluding deferred fees, allowance for loan losses, and loans held for
    sale.





                                      -27-
<PAGE>   30

         SENSITIVITY OF LOANS TO CHANGES IN INTEREST RATES.  The following
table sets forth as of December 31, 1997, the dollar amounts of loans due after
one year which had predetermined interest rates and loans due after one year
which had floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                                                                 DOLLAR AMOUNT OF LOANS
                                                                              ----------------------------
                                                                                    DECEMBER 31, 1997
                                                                              ----------------------------
                                                                                  (DOLLARS IN THOUSANDS)
<S>                                                                           <C>
Type of Interest Rate:
    Predetermined rate, maturity greater than one year  . . . . . . . . . . . .        $   80,445
    Floating or adjustable rate due after one year  . . . . . . . . . . . . . .            48,886
                                                                                       ----------
        Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $  129,331
                                                                                       ==========
</TABLE>


LOAN CLASSIFICATION

         Management seeks to maintain a level of high quality assets through
conservative underwriting and sound lending practices.  Management intends to
follow this policy even though it may result in foregoing the funding of higher
yielding loans.  Approximately 28% of the Bank's loan portfolio, including
loans held for sale, is collateralized by first liens on primarily
owner-occupied residential homes which have historically carried a relatively
low credit risk.  The Bank also maintains a commercial real estate portfolio
comprised primarily of owner-occupied commercial businesses.  The Bank has
experienced low delinquency and default rates since opening in 1989.

         In an effort to maintain the quality of the loan portfolio, management
seeks to minimize higher risk types of lending and additional precautions have
been taken when such loans are made in order to reduce the Bank's risk of loss.
Generally, construction loans present a higher degree of risk to a lender
depending upon, among other things, whether the borrower has permanent
financing at the end of the loan period, whether the project is an income
producing transaction in the interim, and the nature of changing economic
conditions including changing interest rates.  While there is no assurance that
the Bank will not suffer losses on its construction loans or its commercial
real estate loans, management believes that it has reduced the risks associated
therewith because, among other things, primarily all such loans relate to
owner-occupied projects where the borrower has demonstrated to the Bank's
management that its business will generate sufficient income to repay the loan.
The Bank primarily enters into agreements with individuals who are familiar to
Bank personnel, are residents of the Bank's primary market area and are
believed by management to be good credit risks.

         Commercial and financial loans also entail certain risks since they
usually involve large loan balances to single borrowers or a related group of
borrowers, resulting in a more concentrated loan portfolio.  Further, since
their repayment is usually dependent upon the successful operation of the
commercial enterprise, they also are subject to adverse conditions in the
economy.  Commercial loans are generally riskier than residential mortgages
because they are typically made on the basis of the ability to repay from the
cash flow of a business rather than on the ability of the borrower or guarantor
to repay.  Further, the collateral underlying commercial loans may depreciate
over time, and occasionally cannot be appraised with as much precision as
residential real estate, and may fluctuate in value based on the success of the
business.

         While there is no assurance that the Bank will not suffer any losses
on its construction loans or its commercial real estate loans, management
believes that it has reduced the risks associated therewith because, among
other things, substantially all of such loans relate to owner-occupied
projects, projects where the





                                      -28-
<PAGE>   31

borrower has received permanent financing commitments from which the Bank will
be repaid, and projects where the borrower has demonstrated to management that
its business will generate sufficient income to repay the loan.

         In addition to maintaining high quality assets, management attempts to
limit the Banks' risk exposure to any one borrower or borrowers with similar or
related entities.  As of December 31, 1997, the Bank has extended credit in
excess of $1.3 million to 20 borrowers.

         Loan concentrations are defined as amounts loaned to a number of
borrowers engaged in similar activities which would cause them to be similarly
impacted by economic or other conditions.  The Company, on a routine basis,
evaluates these concentrations for purposes of policing its concentrations and
to make necessary adjustments in its lending practices  that most clearly
reflect the economic times, loan to deposit ratios, and industry trends.  As of
December 31, 1997, total loans to any particular group of customers engaged in
similar activities or having similar economic characteristics did not exceed
10% of total loans.

         The Board of Directors of the Bank concentrates its efforts and
resources, and that of its senior management and lending officials, on loan
review and underwriting procedures.  The Bank utilizes the services of an
independent consultant to perform periodic loan documentation and compliance
reviews as well as deposit and operations compliance reviews.  Internal
controls include a loan review specialist employed by the Bank, who performs
on-going reviews of new and existing loans to monitor documentation and ensure
the existence and valuations of collateral.  Senior loan officers of the Bank
have established a review process with the objective of quickly identifying,
evaluating, and initiating necessary corrective action for substandard loans.
The goal of the loan review process is to address the watch list, and
substandard and non-performing loans as early as possible.  Combined, these
components are integral elements of the Bank's loan program which has resulted
in its loan portfolio performance to date.  Nonetheless, management maintains a
cautious outlook in anticipating the potential effects of uncertain economic
conditions (both locally and nationally) and the possibility of more stringent
regulatory standards.

         Loans, including impaired loans, are generally classified by the Bank
as non-accrual loans if they are past due as to maturity or payment of
principal or interest for a period of more than ninety days, unless such loans
are well collateralized and in the process of collection.  If a loan or a
portion of a loan is classified as doubtful or is partially charged off, the
loan is classified as a non-accrual loan.  Loans that are on a current payment
status or past due less than ninety days may also be classified as non-accrual
if repayment in full of principal and/or interest is in doubt.

         While a loan is classified as non-accrual and the future
collectability of the recorded loan balance is doubtful, collections of
interest and principal are generally applied as a reduction to principal
outstanding.  When the future collectability of the recorded loan balance is
expected, interest income may be recognized on a cash basis.  In the case where
a non-accrual loan had been partially charged off, recognition of interest on a
cash basis is limited to that which would have been recognized on the recorded
loan balance at the contractual interest rate.  Cash interest receipts in
excess of that amount are recorded as recoveries to the allowance for credit
losses until prior charge-offs have been fully recovered.

         As of December 31, 1997, the Bank had 17 loans on non-accrual status
totaling $437,000, or 0.20% of total loans.  As of December 31, 1997, the Bank
had other real estate owned ("OREO") of approximately $314,000 represented by
three loans collateralized by a single family residences.  The Bank has not
acquired any other real estate owned by means of foreclosure.





                                      -29-
<PAGE>   32


         In addition, the Bank performs ongoing reviews of its new and existing
loans to identify, evaluate, and initiate corrective action for substandard
loans.  As of December 31, 1997, the Bank has identified approximately 104
loans to 58 borrowers to be monitored on its watch list and substandard list of
loans, representing aggregate borrowings of approximately $5,722,000.  Of this
aggregate amount, management has assessed the maximum risk of loss to be
$785,000 based on management's assessment of the ability of such borrowers to
comply with their present loan repayment terms and assuming that the collateral
for such loans must be liquidated.  These loans have been considered by
management in its assessment of the allowance for loan losses and none of these
borrowers have failed to comply with their present loan repayment terms.

         The following table sets forth certain information, as of the date
indicated, regarding non-accrual loans, restructured loans and loans 90 days or
more past due.

<TABLE>
<CAPTION>
                                                                  AT DECEMBER 31,
                                                -------------------------------------------------
                                                  1997       1996      1995      1994      1993
                                                --------   --------  --------  --------  --------
                                                               (DOLLARS IN THOUSANDS)
<S>                                             <C>        <C>       <C>       <C>        <C>
NON-ACCRUAL LOANS:
   Residential mortgage . . . . . . . .         $   283    $   720   $     0   $    18    $    9
   Commercial and commercial
          real estate . . . . . . . . .              83        118         0         3        14
   Consumer . . . . . . . . . . . . . .              71         67        19        71         4
      Total non-accrual loans . . . . .             437        905        19        92        27
   Total non-performing loans (1) . . .             140          0         0         0         0
   Restructured loans . . . . . . . . .              22         24         0         0         0
</TABLE>

---------
(1) Accruing loans which are contractually past due 90 days or more as to
    principal or interest.


         The Bank has experienced relatively low default rates and low
delinquency as a percent of total loans.  As of December 31, 1997, the total
amount of loans over 30 days past due totalled $2,050,000, or 0.96% of total
loans.  The approximate amount of interest on non-accrual loans which would
have been recorded as income under the original terms was $42,000 and $60,000
for the fiscal years ended December 31, 1997 and 1996, respectively.  The
amount of interest income collected on non-accrual loans, that was included in
net income for the year ended December 31, 1997 was approximately $25,600.  At
December 31, 1997 the amount of interest income accrued on loans contractually
past due 90 days or more was approximately $4,500.

ALLOWANCE FOR CREDIT LOSSES

         In originating loans, the Bank recognizes that credit losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan and, in the case of a collateralized loan, the quality of the
collateral for the loan as well as general economic conditions.  It is
management's policy to maintain an adequate allowance for loan losses based on,
among other things, the Bank's historical loan loss experience, evaluation of
economic conditions and regular reviews of delinquencies and loan portfolio
quality.

         Management continues to actively monitor the Bank's asset quality and
to charge-off loans against the allowance for credit losses when appropriate or
to provide specific loss allowances when necessary.  Although management
believes it uses the best information available to make determinations with
respect to the allowance for credit losses, future adjustments may be necessary
if economic conditions differ from the





                                      -30-
<PAGE>   33

economic conditions in the assumptions used in making the initial
determinations.  The Bank increased its allowance to $1,381,000 as of December
31, 1997, reflecting management's intent to maintain the level of the Bank's
allowance for credit losses at a level management believes to be adequate to
cushion it against the reasonably expected economic conditions.  Excluding
loans held for sale of $39,588,000 for the period ended December 31, 1997, the
allowance for loan losses represented 0.80% of portfolio loans held as of such
date.  Total loan charge-offs for the fiscal year ended December 31, 1997 were
approximately $439,000 with recoveries on previously charged-off loans of
approximately $70,000.

         The Bank's allowance for loan losses at December 31, 1996 amounted to
$1,000,000 (or 0.64% of total loans).  Excluding loans held for sale of
$20,351,000 for the period ended December 31, 1996, the allowance for loan
losses represented 0.74% of portfolio loans as of December 31, 1996.  Total
loan charge-offs for the year ended December 31, 1996 were $279,000, with
recoveries on previously charged-off loans totalling $46,000.

         The Bank increased the allowance to $1,000,000 during the year ended
December 31, 1996, reflecting the growth in the loan portfolio and management's
assessment of risks inherent in the loan portfolio.

         The following table sets forth an analysis of the Bank's allowance for
loan losses for the periods indicated.


<TABLE>
<CAPTION>
                                                                           YEARS ENDED DECEMBER 31,
                                                          --------------------------------------------------------
                                                            1997         1996        1995      1994         1993
                                                          ---------   ----------  ---------  ---------   ---------
                                                                        (DOLLARS IN THOUSANDS)
<S>                                                       <C>          <C>         <C>        <C>        <C>
Total loans at end of period (1)  . . . . . . . .         $ 173,418   $  135,504  $  97,973 $   74,454  $   51,851
                                                          =========   ==========  ========= ==========  ==========
Allowance at beginning of period  . . . . . . . .         $   1,000   $      946  $     625 $      505   $     285
                                                          ---------   ----------  --------- ----------   ---------
Loans charged-off during the period . . . . . . .              (439)        (279)      (185)      (117)        (79)
Recoveries of loans previously charged-off  . . .                70           46         23         16           3
                                                          ---------   ----------  --------- ----------  ----------
Net loans charged-off during the period . . . . .              (369)        (233)      (162)      (101)        (76)
                                                          ---------   ----------  --------- ----------  ----------
Provisions charged to income  . . . . . . . . . .               750          287        483        221         296
                                                          ---------   ----------  --------- ----------  ----------
Allowance at end of period  . . . . . . . . . . .         $   1,381   $    1,000  $     946 $      625  $      505
                                                          =========   ==========  ========= ==========  ==========
Ratio of net charge-offs to
   average loans outstanding  . . . . . . . . . .              0.23%        0.17%      0.15%      0.14%       0.17%
                                                          =========   ==========  ========= ==========  ==========
Allowance as a percentage of total loans  . . . .              0.80%        0.74%      0.97%      0.84%       0.97%
                                                          =========   ==========  ========= ==========  ==========
</TABLE>
--------------
(1)    Excludes loans held for sale.





                                      -31-
<PAGE>   34

         The following table sets forth a breakdown of the allowance for credit
losses by loan category for the periods indicated.  Management believes that
the allowance can be allocated by category only on an approximate basis.  The
allocation of an allowance to each category is not necessarily indicative of
future losses and does not restrict the use of the allowance to absorb losses
in any other category.

<TABLE>
<CAPTION>
                                                                       AT DECEMBER 31,
                                     -------------------------------------------------------------------------------------
                                           1997             1996            1995              1994              1993
                                     ----------------  --------------- ---------------   --------------    ---------------
                                               % OF             % OF            % OF             % OF               % OF
                                             LOANS TO         LOANS TO        LOANS TO         LOANS TO           LOANS TO
                                               TOTAL           TOTAL           TOTAL             TOTAL              TOTAL
                                      AMOUNT   LOANS   AMOUNT  LOANS   AMOUNT  LOANS     AMOUNT  LOANS     AMOUNT   LOANS
                                     --------  -----   ------  -----   ------  -----     ------  -----     ------   -----
                                                                    (DOLLARS IN THOUSANDS)
<S>                                  <C>       <C>     <C>     <C>      <C>     <C>      <C>     <C>       <C>      <C>
Residential mortgage (1)  . . .      $    220   14.2%  $  185    13.8%  $   44    15.0%  $   14   15.3%    $   11    18.3%
Commercial and commercial
    real estate . . . . . . . .           675   59.5      494    55.0      458    53.7      306   53.1        280    55.7
Consumer loans  . . . . . . . .           450   26.3      290    31.2      166    31.3      157   31.6        149    26.0
Unallocated . . . . . . . . . .            36    0.0       31     0.0      278     0.0      148    0.0         65     0.0
                                     --------  -----   ------  ------   ------  ------   ------  -----     ------   -----
    Total allowance for
       loan losses  . . . . . .      $  1,381  100.0%  $1,000   100.0%  $  946   100.0%  $  625  100.0%    $  505   100.0%
                                     ========  =====   ======  ======   ======  ======   ======  =====     ======   =====
</TABLE>

-------
(1)    No allowance has been allocated to real estate construction since the
       amount such loans held in the Bank's loan portfolio at the periods
       indicated was not material.


         The measurement of impaired loans is based on the fair value of the
loan's collateral.  The measurement of non-collateral dependent loans is based
on the present value of expected future cash flows discounted at the historical
effective interest rate.  The components for the allowance for credit losses
are as follows:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                            -------------------------
                                                1997          1996
                                            ------------  -----------
<S>                                         <C>           <C>
Impaired loans  . . . . . . . . . . . . .   $   246,000   $   331,400
Other . . . . . . . . . . . . . . . . . .
                                              1,135,000       668,600
                                            -----------   -----------
                                            $ 1,381,000   $ 1,000,000
                                            ===========   ===========
</TABLE>

INVESTMENT ACTIVITIES

         At December 31, 1997 and 1996, the Bank's investment portfolio
totalled $49,986,000 and $26,111,000, respectively.  The investment portfolio
consists of U.S. Treasury and federal agency securities, municipal bonds, and
FHLB stock.  Maturities range from three months to seven years with a portfolio
average maturity of approximately 5 years.





                                      -32-
<PAGE>   35

         The following table summarizes the Bank's investment portfolio as of
the dates indicated.

                        INVESTMENT SECURITIES PORTFOLIO

<TABLE>
<CAPTION>
                                                                         AT DECEMBER 31,
                                                    --------------------------------------------------------
                                                      1997            1996            1995            1994
                                                    ---------       --------        --------        --------
                                                                         (DOLLARS IN THOUSANDS)
<S>                                                 <C>            <C>              <C>            <C>
HELD TO MATURITY (1):
  U.S. Treasury securities  . . . . . . . .         $       0       $      0        $      0        $  8,521
                                                    ---------       --------        --------        --------

AVAILABLE FOR SALE (2):
  U.S. Treasury securities  . . . . . . . .         $   3,519       $  6,924        $ 12,110        $  9,712
  U.S. Government Agencies  . . . . . . . .            44,833         13,105           4,986               0
  State and municipal   . . . . . . . . . .               501            498             498             453
                                                    ---------       --------        --------        --------
     Total debt securities  . . . . . . . .            48,853         20,527          17,594          10,165

  FHLB stock (restricted)   . . . . . . . .             1,133            499             490             352
  Mortgage-backed securities  . . . . . . .                 0          5,085           5,989             934
  Other investments   . . . . . . . . . . .                 0              0               0              37
                                                    ---------       --------        --------        --------
     Total available for sale . . . . . . .         $  49,986       $ 26,111        $ 24,073        $ 11,488
                                                    =========       ========        ========        ========
</TABLE>

--------------
(1)  Carried at amortized cost.
(2)  Carried at estimated market value.


         The following table summarizes the Bank's securities (excluding the
restricted FHLB Stock) by maturity and weighted average yields at December 31,
1997.  Yields on tax exempt securities are stated at their nominal rates and
have not been adjusted for tax rate differences.

<TABLE>
<CAPTION>
                                                     AFTER ONE YEAR     AFTER FIVE YEARS
                                                       BUT WITHIN          BUT WITHIN
                                 WITHIN ONE YEAR        5 YEARS             10 YEARS        AFTER 10 YEARS          TOTAL
                                 ---------------    ---------------     ----------------    ---------------    ----------------
                                  AMOUNT  YIELD      AMOUNT   YIELD      AMOUNT    YIELD     AMOUNT  YIELD      AMOUNT   YIELD
                                 -------- ------    -------- ------     --------  ------    -------  ------    --------  ------
<S>                              <C>      <C>       <C>      <C>        <C>       <C>       <C>      <C>       <C>       <C>
AT DECEMBER 31, 1997:
  U.S. Treasury securities  . . .$  1,003   5.19%   $  2,516   5.31%    $      0    0.00%   $     0    0.00%   $  3,519    5.27%
  U.S. Government agencies  . . .     996   5.16      13,329   6.24       28,510    6.99      1,998    7.39      44,833    6.75
  State and municipals  . . . . .     501   5.75           0   0.00            0    0.00          0    0.00         501    5.75
                                 -------- ------    -------- ------     --------  ------    -------  ------    --------  ------
                                 $  2,500   5.29%   $ 15,845   6.10%    $ 28,510    6.99%   $ 1,998    7.39%   $ 48,853    6.63%
                                 ======== ======    ======== ======     ========  ======    =======  ======    ========  ======
</TABLE>


DEPOSIT ACTIVITIES AND OTHER SOURCE OF FUNDS

         GENERAL.  Deposit accounts are the primary source of funds of the Bank
for use in lending and other investment purposes.  In addition to deposits, the
Bank draws funds from interest payments, loan principal payments, loan and
security sales, and funds from operations (including various types of loan
fees).  Scheduled loan payments of principal and interest are a relatively
stable source of funds, while deposit inflows and outflows are significantly
influenced by general interest rates and money market conditions.  The Bank and
the Company may use borrowings on a short-term basis if necessary to compensate
for reductions in the availability of other sources of funds, or borrowings may
be used on a longer term basis for general business purposes.





                                      -33-
<PAGE>   36

         DEPOSIT ACTIVITIES.  Deposits are attracted principally from within
the Bank's primary market area through the offering of a broad variety of
deposit instruments, including checking accounts, money market accounts,
savings accounts, certificates of deposit (including jumbo certificates in
denominations of $100,000 or more), and retirement savings plans.  Total
deposits were $244,559,000 at December 31, 1997, compared to $177,200,000 at
December 31, 1996.  The introduction of new products and the continued focus on
quality customer service have contributed to strong deposit growth.  The Bank
continues to develop consumer and commercial deposit relationships through
referrals and additional contacts within its market area.  As of December 31,
1997 and December 31, 1996, jumbo certificates accounted for $32,570,000 and
$21,482,000, respectively, of the Bank's deposits.  The Bank has not
aggressively attempted to obtain large denomination, high interest-bearing
certificates except to address a particular funding need.  In an effort to fund
the rapid growth of the loan volume originated by the Mortgage Banking Division
during the fourth quarter of 1994, the Bank offered a five year certificate of
deposit and money market product at above market rates at that time.  In
addition, in an effort to fund strong loan demand during 1996, the Bank offered
a five year certificate and money market product at above market rates at that
time.  Although all of such deposits were originated within the Bank's market
area and substantially all were not jumbo products, the regulators required the
Bank to classify these deposits as brokered deposits because the rate exceeded
75 basis points over the then existing market rate.

         Maturity terms, service fees, and withdrawal penalties are established
by the Bank on a periodic basis.  The determination of rates and terms is
predicated on funds acquisition and liquidity requirements, rates paid by
competitors, growth goals and federal regulations.

         DEPOSIT FLOWS AND AVERAGE BALANCE AND RATES.  The following table sets
forth the average balance and weighted average rates for the Bank's categories
of deposits for the period indicated.

<TABLE>
<CAPTION>
                                                                   AT DECEMBER 31,
                         ----------------------------------------------------------------------------------------------------
                                       1997                               1996                               1995
                         -------------------------------     ----------------------------         ---------------------------
                         AVERAGE     AVERAGE     % OF         AVERAGE    AVERAGE   % OF           AVERAGE    AVERAGE   % OF
                         BALANCE       RATE    DEPOSITS       BALANCE      RATE  DEPOSITS         BALANCE     RATE   DEPOSITS
                         -------     -------  ----------    ----------   ------- --------         ---------  ------- --------
                                                                (DOLLARS IN THOUSANDS)
<S>                      <C>          <C>       <C>         <C>          <C>       <C>            <C>         <C>     <C>
Non-interest checking .   $ 34,404    0.00%       16        $ 21,540     0.00%      14            $ 16,010    0.00%     13
Interest checking and
  money market  . . . .     70,274    4.03%       33          45,027     3.85%      29              39,222    3.90%     31
Savings . . . . . . . .      7,657    2.14%        4           6,963     2.21%       5               6,252    2.22%      5
Certificates of deposit    102,088    6.29%       47          80,344     6.27%      52              63,868    6.24%     51
                         ---------              ----        --------               ---            --------             ---
    Total   . . . . . .  $ 214,423               100        $153,874               100            $125,352             100
                         =========              ====        ========               ===            ========             ===
</TABLE>


         CERTIFICATES OF DEPOSIT.  At December 31, 1997, certificates of
deposit represented approximately 50.6% of the Bank's total deposits, as
compared to 50.5% of total deposits at December 31, 1996.  The Bank does not
have a concentration of deposits from any one source, the loss of which would
have a material adverse effect on the business of the Company.  Management
believes that substantially all of the Bank's depositors are residents, either
full or part time, in its primary market area.





                                      -34-
<PAGE>   37

         The following table summarizes the amount of the Bank's certificates
of deposit of $100,000 or more by time remaining until maturity at December 31,
1997 and December 31, 1996.

<TABLE>
<CAPTION>
                                                                        AT DECEMBER 31,     AT DECEMBER 31,
                                                                        ---------------     ---------------
                                                                             1997                1996
                                                                           ---------          ---------
MATURITY PERIOD                                                                (DOLLARS IN THOUSANDS)
---------------
<S>                                                                         <C>               <C>
Less than three months  . . . . . . . . . . . . . . . . . . . . . . . .     $  5,916          $  3,515
Over three months through six months  . . . . . . . . . . . . . . . . .        3,516             2,012
Over six months through twelve months . . . . . . . . . . . . . . . . .       10,208             4,930
Over twelve months  . . . . . . . . . . . . . . . . . . . . . . . . . .       12,930            11,025
                                                                            --------          --------
    Totals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $ 32,570          $ 21,482
                                                                            ========          ========
</TABLE>


         The following table indicates the scheduled maturities of time
deposits of the Bank as of December 31, 1997 and December 31, 1996.

<TABLE>
<CAPTION>
                                                                     AT DECEMBER 31,     AT DECEMBER 31,
                                                                     ---------------     ---------------
                                                                          1997                1996
                                                                        ---------          ---------
MATURITY PERIOD                                                             (DOLLARS IN THOUSANDS)
---------------
<S>                                                                       <C>                 <C>
Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . .   $ 63,413            $ 32,807
Due after one through two years . . . . . . . . . . . . . . . . . . . .     30,810              12,456
Due after two through three years . . . . . . . . . . . . . . . . . . .      8,470              18,905
Due after three through four years  . . . . . . . . . . . . . . . . . .     17,702               7,681
Due after four years  . . . . . . . . . . . . . . . . . . . . . . . . .      3,463              17,611
                                                                          --------            --------
                                                                          $123,858            $ 89,460
                                                                          ========            ========
</TABLE>


         DEPOSIT ACTIVITY.  The following table sets forth the deposit flows of
the Bank during the periods indicated.


<TABLE>
<CAPTION>
                                                                           YEARS ENDED DECEMBER 31,
                                                                  ----------------------------------------
                                                                     1997            1996         1995
                                                                  ---------        --------     ---------
                                                                             (DOLLARS IN THOUSANDS)
<S>                                                               <C>             <C>           <C>
Net increase before interest credited . . . . .                   $  58,145        $ 40,445     $   9,010
Net credited  . . . . . . . . . . . . . . . . .                       9,211           6,897         5,509
                                                                  ---------        --------     ---------
   Net deposit increase   . . . . . . . . . . .                   $  67,356        $ 47,342     $  14,519
                                                                  =========        ========     =========
</TABLE>


         BORROWINGS.  The Bank has borrowed funds during the past to fund
short-term cash requirements.  None of such funds were used to fund loan
activity.  In the future, if there are periods when the supply of funds from
deposits cannot meet the demand for loans, the Bank has the ability to seek a
portion of the needed funds through loans (advances) from the FHLB of Atlanta
where the Bank currently has a $25 million line of credit.  As of December 31,
1997, $5 million has been borrowed on the line and $20 million remained
available for future use.

         In addition, the Company has obtained a $5 million Commercial
Revolving Line of Credit (the "Credit Line") from Barnett Banks, N.A. South
Florida (now Nationsbank, N.A.).  Although this credit facility will





                                      -35-
<PAGE>   38

be used in part to fund the construction of the Company's new administrative
offices, the Company may utilize the credit facility for other general
corporate purposes as its Board of Directors or management shall determine from
time to time.  This Credit Line is collateralized with the all of the capital
stock of the Bank.  Interest is calculated quarterly on either a one or three
month LIBOR plus 175 basis points.  After two years the loan is converted into
a ten-year term note with a five-year balloon payment. See "Item 6.
Management's Discussion and Analysis or Plan of Operation - Recent Developments
-- Administrative Offices".

LIQUIDITY AND CAPITAL RESOURCES

         Liquidity is defined as the ability of the Company and the Bank to
generate sufficient cash to fund current loan demand, deposit withdrawals,
other cash demands and disbursement needs, and otherwise to operate on an
ongoing basis.  The Bank's principal sources of funds are deposits, principal
and interest payments on loans, sale of loans, interest on investments, the
sale of investments, and capital contributions from the Company.  During 1997,
the Company received $64.3 million from deposit growth, $17 million for the
sale of investments, and $8.9 million from maturing investments.  In addition,
the Bank also has the ability to borrow from the FHLB to supplement its
liquidity needs.  At December 31, 1997, the Bank had outstanding borrowings of
approximately $5 million under its line of credit with the FHLB.  The Company's
liquidity needs and funding are provided through the sale of its equity
securities and through borrowings from a nonaffiliated correspondent bank.  As
of December 31, 1997, the Company had drawn approximately $500,000 under the $5
million Credit Line.

         At December 31, 1997, shareholders' equity was approximately
$20,998,000, or 7.24% of total assets, as compared to $18,814,000 at December
31, 1996, or 8.88% of total assets.  At December 31, 1997 and December 31,
1996, respectively, the Company's Tier I leverage ratio was 7.20% and 9.00%,
the Tier I risk-based capital ratio was 10.24% and 12.29% and the total
risk-based capital ratio was 10.91% and 12.95%, all in excess of FDIC
guidelines for a "well capitalized" bank.

         At December 31, 1997 and December 31, 1996, the liquidity ratio of the
Company was 36.16%, 32.44% and 32.14%, respectively, well in excess of
regulatory requirements.

         Management believes that there are adequate funding sources to meet
its future liquidity needs for the foreseeable future.  Primary among these
funding sources are the repayment of principal and interest on loans, the
renewal of time deposits, and the growth in the deposit base.  Management does
not believe that the terms and conditions that will be present at the renewal
of these funding sources will significantly impact the Company's operations,
due to its management of the maturities of its assets and liabilities.
However, in order to finance the continued growth of the Bank at current
levels, additional funds may be necessary in order to provide sufficient
capital to fund loan growth.  In this regard, the Company is considering and
evaluating a variety of additional sources of funds, including other debt
financing vehicles, sales of equity securities, and other financing
alternatives.  In particular, the Company is considering the possible issuance
of junior subordinated debentures to a trust to be formed by it for the sole
purpose of issuing trust preferred securities to investors, the proceeds of
which will be invested in such junior subordinated debentures.  There can be no
assurance that the Company will be able to obtain such additional financing, if
needed, or, if available, that it can be obtained on terms favorable to the
Company.





                                      -36-
<PAGE>   39

RETURN ON EQUITY AND ASSETS

         The following table sets forth certain selected performance ratios of
the Bank for the periods indicated:
<TABLE>
<CAPTION>
                                                                               AT DECEMBER 31,
                                                                  -----------------------------------------
                                                                     1997          1996             1995
                                                                  ---------      --------         ---------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                                               <C>            <C>              <C>
Return on average assets  . . . . . . . . . . . . . . . .            0.64%          0.48%            0.71%
Return on average equity  . . . . . . . . . . . . . . . .           10.02%          5.24%           12.53%
Dividend payout ratios                                                not            not              not
                                                                  applicable     applicable       applicable
Average equity to average assets  . . . . . . . . . . . .            6.46%          9.22%            5.69%
</TABLE>


RECENT DEVELOPMENTS

         MERGER WITH MURDOCK FLORIDA BANK.  On March 23, 1998, the Company
completed its merger with Murdock Florida Bank, headquartered in Charlotte
County, Florida.  Under the terms of the Merger Agreement, each outstanding
share of Murdock Florida Bank's common stock was converted into 2.4 of the
Company's Common Shares.  A total of approximately 924,025 shares of the
Company's Common Shares are issuable in connection with the Merger.  At
December 31, 1997, Murdock Florida Bank had total assets and deposits of $64
million and $58.2 million (unaudited), respectively.  The transaction was
accounted for as a pooling-of-interests.

         ADMINISTRATIVE OFFICES.  On March 25, 1997, the Company purchased
approximately 2 acres of land located adjacent to the Bank's main office for
the purpose of constructing administrative offices.  To the extent not utilized
by the Company, management expects to lease space to the Bank and possible
other subsidiaries and other unrelated businesses.  This new facility will
total approximately 30,000 square feet with a construction cost of
approximately $2.5 million.  On October 30, 1997, the Company obtained the $5
million Credit Line from Barnett Banks, N.A. South Florida.  The proceeds from
this facility will be applied, in part, to fund the construction the Company's
new administrative offices, as well as other general corporate purposes as
shall be determined from time to time by the Board of Directors of the Company
or its management.

         FINANCE COMPANY.  The Company has completed the organization and
formation of the Finance Company, hired employees to work at the Finance
Company upon commencement of operations, and has filed all necessary license
applications with the relevant regulatory authorities.  The Company believes
that it has all necessary licenses to commence the operations of the Finance
Company.  During the second quarter of 1998, it is anticipated that the Bank
will extend a $2.5 million loan to the Finance Company in order to provide the
Finance Company with the funds necessary to commence its operations.   Any such
loan will be made on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the time for comparable
transactions with unrelated parties.  Upon the closing of the loan transaction,
the Finance Company will commence operations.





                                      -37-
<PAGE>   40

IMPACT OF INFLATION AND CHANGING PRICES

         The financial statements and related financial data presented herein
concerning the Company have been prepared in accordance with generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars, without considering changes
in the relative purchasing power of money over time due to inflation.  The
primary impact of inflation on the operations of the Company is reflected in
increased operating costs.  Unlike most industrial companies, virtually all of
the assets and liabilities of a financial institution are monetary in nature.
As a result, changes in interest rates have a more significant impact on the
performance of the Company than do the effects of changes in the general rate
of inflation and changes in prices.  Interest rates do not necessarily move in
the same direction or in the same magnitude as the prices of goods and
services.

FEDERAL AND STATE TAXATION

         Federal Income Taxation.  Although a bank's income tax liability is
determined under provisions of the Code, which is applicable to all taxpayers
or corporations, Sections 581 through 597 of the Code apply specifically to
financial institutions.

         The two primary areas in which the treatment of financial institutions
differ from the treatment of other corporations under the Code are in the areas
of bond gains and losses and bad debt deductions.  Bond gains and losses
generated from the sale or exchange of portfolio instruments are generally
treated for financial institutions as ordinary gains and losses as opposed to
capital gains and losses for other corporations, as the Code considers bond
portfolios held by banks to be inventory in a trade or business rather than
capital assets.  Banks are allowed a statutory method for calculating a reserve
for bad debt deductions.

         State Taxation.  The Company files state income tax returns in
Florida.  Florida taxes banks under primarily the same provisions as other
corporations.  Generally, state taxable income is calculated under applicable
Code sections with some modifications required by state law.

FUTURE ACCOUNTING REQUIREMENTS

         The Financial Accounting Standards Board ("FASB") has issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130").  This statement establishes new standards for reporting and
disclosure of comprehensive income and its components in a full set of general
purpose financial statements.  Comprehensive income is defined as the change in
equity during a period from transactions and other events and circumstances
from non-shareholder sources, such as changes in net unrealized securities
gain.  It includes all changes in equity during a period except those resulting
from investments by shareholders and distributions to shareholders.  This
statement is effective for the Company's fiscal year ending December 31, 1998.
Application of this statement will not impact amounts previously reported for
net income or affect the comparability of previously issued financial
statements.

         The FASB also has issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131").  This statement establishes standards for the reporting of
financial information from operating segments in annual and interim financial
statements.  It requires that financial information be reported on the same
basis that it is reported internally for evaluating segment performance and
deciding how to allocate resources to segments.  Because this statement
addresses how supplemental financial information is disclosed in annual and
interim reports, the adoption will have no





                                      -38-
<PAGE>   41

material impact on the financial statements.  This statement is effective for
the Company's fiscal year ending December 31, 1998.

YEAR 2000 COMPLIANCE

         The Bank utilizes and is dependent upon data processing systems and
software to conduct its business.  The data processing systems and software
include those developed and maintained by the Bank's third-party data
processing vendor and purchased software which is run on in-house computer
networks.  In 1997, the Bank initiated a review and assessment of all hardware
and software to confirm that it will function properly in the year 2000.  To
date, those vendors which have been contacted have indicated that their
hardware or software is or will be Year 2000 compliant in time frames that meet
regulatory requirements.  The costs associated with the compliance efforts are
not expected to have significant impact on the Bank's ongoing results of
operations.


ITEM 7.  FINANCIAL STATEMENTS


The following financial statements are contained on pages F-1 through F-28 of
this Report:

     Report of Independent Accountants;

     Consolidated Balance Sheets - December 31, 1997 and 1996;

     Consolidated Statements of Income - Years ended December 31, 1997 and
     1996;

     Consolidated Statements of Shareholders' Equity - Years ended
     December 31, 1997 and 1996;

     Consolidated Statements of Cash Flows - Years ended December 31, 1997 and
     1996

     Notes to Consolidated Financial Statements


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE


Not Applicable.





                                      -39-
<PAGE>   42

                                    PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Information required by Item 9 of Form 10-KSB is incorporated herein
by reference to the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders which will be filed with the Securities and Exchange
Commission no later than 120 days after the close of the Registrant's fiscal
year.

ITEM 10. EXECUTIVE COMPENSATION

         Information required by Item 10 of Form 10-KSB is incorporated herein
by reference to the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders which will be filed with the Securities and Exchange
Commission no later than 120 days after the close of the Registrant's fiscal
year.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information required by Item 11 of Form 10-KSB is incorporated herein
by reference to the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders which will be filed with the Securities and Exchange
Commission no later than 120 days after the close of the Registrant's fiscal
year.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information required by Item 11 of Form 10-KSB is incorporated herein
by reference to the Registrant's definitive Proxy Statement for the 1998 Annual
Meeting of Shareholders which will be filed with the Securities and Exchange
Commission no later than 120 days after the close of the Registrant's fiscal
year.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)     EXHIBITS

       2.1   --  Agreement and Plan of Merger between American Bank of
                 Bradenton, American Bancshares, Inc. and American Successor
                 Bank, dated July 18, 1995, incorporated herein by reference to
                 Exhibit 2 to the Company's Registration Statement on Form SB-2
                 (Registration No. 33-99972) previously filed with the
                 Commission.

       2.2   --  Agreement and Plan of Merger, dated as of September 23, 1997,
                 by and among American Bancshares, Inc., American Bank of
                 Bradenton, and Murdock Florida Bank, incorporated herein by
                 reference to Exhibit 2.1 to the Company's Registration
                 Statement on Form S-4 (Registration No. 333-45401) previously
                 filed with the Commission.

       2.3   --  Amendment No. 1 to Agreement and Plan of Merger, dated as of
                 October 8, 1997, incorporated herein by reference to Exhibit
                 2.2 to the Company's Registration Statement on Form S-4
                 (Registration No.  333-45401) previously filed with the
                 Commission.





                                      -40-
<PAGE>   43

       *3.1  --  Amended and Restated Articles of Incorporation of the Company.

        3.2  --  Amended and Restated Bylaws, incorporated herein by reference
                 to Exhibit 3.2 to the Company's Registration Statement on Form
                 S-4 (Registration No. 333-45401) previously filed with the
                 Commission.

        4.1  --  See Exhibits 3.1 and 3.2 for provisions of the Amended and
                 Restated Articles of Incorporation and the Amended and
                 Restated Bylaws of the Company defining the rights of holders
                 of the Company's Common Shares.

       10.1  --  Employment Agreement, dated December 1, 1995, by and between
                 the Bank and Gerald L. Anthony, incorporated herein by
                 reference to Exhibit 10.1 to the Company's Registration
                 Statement on Form SB-2 (Registration No. 33-99972) previously
                 filed with the Commission.

       10.2  --  Employment Agreement, dated June 30, 1996, by and between the
                 Bank and Philip W. Coon, incorporated by reference to Exhibit
                 10.2 to the Company's Registration Statement on Form SB-2
                 (Registration No. 33-99972)  previously filed with the
                 Commission.

       10.4  --  Employment Agreement, dated June 30, 1996, by and between the
                 Bank and David R. Mady, incorporated by reference to Exhibit
                 10.3 to the Company's Registration Statement on Form SB-2
                 (Registration No. 33-99972) previously filed with the
                 Commission.

       10.5  --  Employment Agreement, dated January 1, 1996, by and between
                 the Bank and John S. Nash, incorporated by reference to
                 Exhibit 10.5 to the Company's Registration Statement on Form
                 SB-2 (Registration No. 33-99972)  previously filed with the
                 Commission.

       10.6  --  Employment Agreement, dated January 1, 1996, by and between
                 the Bank and Michael Lewis, incorporated by reference to
                 Exhibit 10.6 to the Company's Registration Statement on Form
                 SB-2 (Registration No. 33-99972) previously filed with the
                 Commission.

      *10.7  --  Employment Agreement, dated January 22, 1997, by and between
                 the Bank and Stuart M. Gregory.

       10.8  --  Data Processing Agreement, dated April 1, 1995, by and between
                 the Bank and M & I Data Services, Inc.

       10.9  --  Mortgage Loan Subservice Agreement between Dovenmuehle
                 Mortgage, Inc. and American Bank of Bradenton, dated May 17,
                 1994, incorporated herein by reference to Exhibit 10.8 to the
                 Company's Registration Statement on Form SB-2 (Registration
                 No. 33-99972) previously filed with the Commission.

       10.10 --  American Bancshares, Inc. and American Bank of Bradenton
                 Incentive Stock Option Plan of 1996, dated May 28, 1996, and
                 Form of Incentive Stock Option Agreement, incorporated herein
                 by reference to Exhibit 10.9 to the Company's Form 10-KSB for
                 the fiscal year ended December 31, 1996 previously filed with
                 the Commission.





                                      -41-
<PAGE>   44

      *10.11 --  American Bancshares, Inc. 1997 Nonqualified Share Option Plan
                 for Non-Employee Directors, dated March 18, 1997, and Form of
                 Nonqualified Share Option Agreement.

       10.12 --  Loan Agreement, dated as of October 30, 1997, by and between
                 American Bancshares, Inc. and Barnett Bank, N.A., incorporated
                 herein by reference to Exhibit 10.1 to the Company's
                 Registration Statement on Form S-4 (Registration No.
                 333-45401) previously filed with the Commission.

      *10.13 --  Assignment of Lease and Consent to Assignment, dated February
                 15, 1998, by and between the Finance Company, G.J.M.
                 Properties, Inc., and First Enterprise Acceptance Corporation,
                 and Lease Agreement assumed thereby.

       21.1  --  Subsidiaries of the Company, incorporated herein by reference
                 to Exhibit 21.1 to the Company's Registration Statement on
                 Form S-4 (Registration No. 333-45401) previously filed with
                 the Commission.

      *27.1  --  Financial Data Schedule (for SEC use only)

   -------------------------
   *  Exhibit filed herewith.


         (b) REPORTS ON FORM 8-K

             A Current Report on Form 8-K was filed on October 8, 1997,
pursuant to Item 5 thereof to report the execution of a definitive Agreement
and Plan of Merger, dated September 23, 1997, as amended on October 8, 1997, by
and among American Bancshares, Inc., American Bank of Bradenton, and Murdock
Florida Bank whereby American Bancshares, Inc. agreed to acquire Murdock
Florida Bank in a transaction pursuant to which Murdock would be merged with
and into American Bank of Bradenton.





                                      -42-
<PAGE>   45

                                   SIGNATURES

        In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                      AMERICAN BANCSHARES, INC.

Date:  March 27, 1998                 By: /s/ Gerald L. Anthony
                                          -------------------------------------
                                          Gerald L. Anthony
                                          President and Chief Executive Officer

        In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                    SIGNATURE                              TITLE                                        DATE
                    ---------                              -----                                        ----
<S>                                                <C>                                        <C>
/s/ J. Gary Russ                                   Chairman of the Board                      March 27, 1998
-------------------------------------------
            J. Gary Russ


/s/ Gerald L. Anthony                              President, Chief Executive Officer and     March 27, 1998
-------------------------------------------        Director (Principal Executive Officer)
            Gerald L. Anthony


/s/ Samuel S. Aidlin                               Director                                   March 27, 1998
-------------------------------------------
            Samuel S. Aidlin


/s/ Ronald L. Larson                               Director                                   March 27, 1998
-------------------------------------------
            Ronald L. Larson


/s/ Timothy I. Miller                              Director                                   March 27, 1998
-------------------------------------------
            Timothy I. Miller


/s/ Dan E. Molter                                  Director                                   March 27, 1998
-------------------------------------------
            Dan E. Molter


                                                   Director
-------------------------------------------
            Kirk D. Moudy


/s/ Lindell Orr                                    Director                                   March 27, 1998
-------------------------------------------
            Lindell Orr


/s/ Lynn B. Powell, III                            Director                                   March 27, 1998
-------------------------------------------
            Lynn B. Powell, III
</TABLE>





<PAGE>   46

<TABLE>
<S>                                                <C>                                        <C>
/s/ Walter L. Presha                               Director                                   March 27, 1998
-------------------------------------------
            Walter L. Presha


/s/ R. Jay Taylor                                  Director                                   March 27, 1998
-------------------------------------------
            R. Jay Taylor



/s/ Edward D. Wyke                                 Director                                   March 27, 1998
-------------------------------------------
            Edward D. Wyke


/s/ Brian M. Watterson                             Chief Financial Officer                    March 27, 1998
-------------------------------------------        (Principal Financial Officer)
            Brian M. Watterson
</TABLE>





<PAGE>   47

                                   SIGNATURES

        In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                      AMERICAN BANCSHARES, INC.

Date:                                  By:
                                          -------------------------------------
                                          Gerald L. Anthony
                                          President and Chief Executive Officer

        In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                    SIGNATURE                              TITLE                                        DATE
                    ---------                              -----                                        ----
<S>                                                <C>                                        <C>
                                                   Chairman of the Board
-------------------------------------------
            J. Gary Russ


                                                   President, Chief Executive Officer and
-------------------------------------------        Director (Principal Executive Officer)
            Gerald L. Anthony


                                                   Director
-------------------------------------------
            Samuel S. Aidlin


                                                   Director
-------------------------------------------
            Ronald L. Larson


                                                   Director
-------------------------------------------
            Timothy I. Miller


                                                   Director
-------------------------------------------
            Dan E. Molter


/s/ Kirk D. Moudy                                  Director                                   March 27, 1998
-------------------------------------------
            Kirk D. Moudy


                                                   Director
-------------------------------------------
            Lindell Orr


                                                   Director
-------------------------------------------
            Lynn B. Powell, III
</TABLE>





<PAGE>   48






                   AMERICAN BANCSHARES, INC. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS,
                 TOGETHER WITH REPORT OF INDEPENDENT ACCOUNTANTS

                 FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


<PAGE>   49



TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                       PAGES

<S>                                                                  <C>
Report of Independent Accountants                                       F-1

Consolidated Financial Statements:

  Consolidated Balance Sheets                                           F-2

  Consolidated Statements of Income                                     F-3

  Consolidated Statements of Shareholders' Equity                       F-4

  Consolidated Statements of Cash Flows                                 F-5

  Notes to Consolidated Financial Statements                         F-6 - F-28
</TABLE>





<PAGE>   50

REPORT OF INDEPENDENT ACCOUNTANTS




To the Board of Directors and Shareholders
American Bancshares, Inc. and Subsidiaries
Bradenton, Florida


We have audited the accompanying consolidated balance sheets of American
Bancshares, Inc. and Subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American Bancshares, Inc. and Subsidiaries as of December 31, 1997 and 1996, and
the consolidated results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.


/s/ Coopers & Lybrand, L.L.P.


Tampa, Florida
February 13, 1998




                                      F-1
<PAGE>   51

AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996



<TABLE>
<CAPTION>
                         ASSETS                                                    1997                1996
<S>                                                                            <C>                 <C>
Cash and due from banks                                                        $  10,067,161       $  15,044,908
Federal funds sold                                                                 5,120,000           6,000,000
Loans held for sale                                                               39,587,522          20,351,204
Investment securities available for sale (at aggregate fair value)                49,985,748          26,110,712
Loans receivable (net of allowance for loan losses and deferred loan
    fees/costs of $800,238 in 1997 and $395,463 in 1996)                         172,618,033         135,108,438
Premises and equipment, net                                                        8,953,971           6,878,589
Other assets                                                                       3,607,892           2,471,477
                                                                               -------------       -------------
                                                                               $ 289,940,327       $ 211,965,328
    Total assets                                                               =============       =============



LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
  Deposits                                                                     $ 244,558,776       $ 177,202,633
  Securities sold under agreements to repurchase                                  17,528,493          10,112,986
  Federal Home Loan Bank advances                                                  5,000,000           5,000,000
  Note payable                                                                       500,000                   0
  Other liabilities                                                                1,354,748             835,802
                                                                               -------------       -------------
    Total liabilities                                                            268,942,017         193,151,421

COMMITMENTS AND CONTINGENCIES (Note 14)

SHAREHOLDERS' EQUITY
  Common stock - $1.175 par value; 10,000,000 shares authorized;
      4,070,458 and 4,001,744 shares issued at December 31, 1997
      and 1996, respectively                                                       4,782,788           4,702,049
  Additional paid-in capital                                                      12,080,296          11,736,471
  Unrealized gain (loss) on investment securities available for sale, net of
      tax of $29,914 and $(49,145) at December 31, 1997 and 1996,
      respectively                                                                    48,808             (79,951)
  Retained earnings                                                                4,086,418           2,455,338
                                                                               -------------       -------------

    Total shareholders' equity                                                    20,998,310          18,813,907
                                                                               -------------       -------------

    Total liabilities and shareholders' equity                                 $ 289,940,327       $ 211,965,328
                                                                               =============       =============
</TABLE>


The accompanying notes are an integral part of these financial statements.




                                      F-2
<PAGE>   52

AMERICAN BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
for the years ended December 31, 1997 and 1996



<TABLE>
<CAPTION>
                                                                                   1997                1996
<S>                                                                            <C>                 <C>
Interest income:
  Interest and fees on loans                                                   $  16,606,030       $  12,590,883
  Interest on federal funds sold                                                     398,642             237,408
  Interest on investment securities                                                2,686,145           1,720,060
                                                                               -------------       -------------

    Total interest income                                                         19,690,817          14,548,351

Interest expense:
  Deposits                                                                         9,416,370           6,926,587
  Borrowings                                                                       1,003,036             484,591
                                                                               -------------       -------------
    Total interest expense                                                        10,419,406           7,411,178
                                                                               -------------       -------------
    Net interest income                                                            9,271,411           7,137,173

Provision for loan losses                                                            750,000             286,654
                                                                               -------------       -------------

    Net interest income after provision for loan losses                            8,521,411           6,850,519
                                                                               -------------       -------------

Other income                                                                       3,643,646           1,834,059
                                                                               -------------       -------------

Other expenses                                                                     9,593,765           7,279,136
                                                                               -------------       -------------

    Income before income tax provision                                             2,571,292           1,405,442

Income tax provision                                                                 940,212             521,953
                                                                               -------------       -------------

    Net income                                                                 $   1,631,080       $     883,489
                                                                               =============       =============

Weighted average basic shares outstanding                                          4,071,596           3,713,541
                                                                               =============       =============
Weighted average diluted shares outstanding                                        4,080,893           3,760,204
                                                                               =============       =============

Earnings per share:
  Basic                                                                        $        0.40       $        0.24
                                                                               =============       =============
  Diluted                                                                               0.40                0.23
                                                                               =============       =============
</TABLE>


The accompanying notes are an integral part of these financial statements.




                                      F-3
<PAGE>   53
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
for the years ended December 31, 1997 and 1996


<TABLE>
<CAPTION>

                                                                                                  UNREALIZED
                                                                                                    GAINS/
                                                                                                  LOSSES ON
                                          COMMON STOCK                                            INVESTMENT
                             -------------------------------------    ADDITIONAL                  SECURITIES
                              AUTHORIZED   OUTSTANDING                 PAID-IN      RETAINED       AVAILABLE
                                SHARES       SHARES     PAR VALUE      CAPITAL      EARNINGS     FOR SALE, NET     TOTAL
                             -----------   -----------  ----------   -----------   ----------    -------------  -----------
<S>                          <C>           <C>          <C>          <C>           <C>           <C>            <C>
Balance, January 1, 1996     10,000,000     2,401,070   $2,821,257   $ 5,257,877   $1,571,849    $     47,486   $ 9,698,469

Exercise of warrants                  0       163,695      192,342       789,828                                    982,170

Issuance of stock                     0     1,436,979    1,688,450     5,688,766            0               0     7,377,216

Change in net unrealized
    gain on investment
    securities available
    for sale                          0             0            0             0            0        (127,437)      (17,437)

Net income                            0             0            0             0      883,489               0       883,489
                             ----------    ----------   ----------   -----------   ----------    ------------   -----------

Balance, December 31,
    1996                     10,000,000     4,001,744    4,702,049    11,736,471    2,455,338         (79,951)   18,813,907

Exercise of warrants                  0        61,595       72,374       297,196            0               0       369,570

Issuance of stock                     0         7,119        8,365        46,629            0               0        54,994

Change in net unrealized
    loss on investment
    securities available
    for sale                          0             0            0             0            0         128,759       128,759

Net income                            0             0            0             0    1,631,080               0     1,631,080
                             ----------    ----------   ----------   -----------   ----------    ------------   -----------

Balance, December 31,
    1997                     10,000,000     4,070,458   $4,782,788   $12,080,296   $4,086,418    $     48,808   $20,998,310
                             ==========    ==========   ==========   ===========   ==========    ============   ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.



                                      F-4
<PAGE>   54




AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 1997 and 1996


<TABLE>
<CAPTION>
                                                                                                    1997                    1996
<S>                                                                                            <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net income                                                                            $  1,631,080            $    883,489
                                                                                               ------------            ------------
         Adjustments to reconcile net income to net cash (used in) provided by
                 operating activities:
            Deferred tax credit                                                                    (248,194)               (359,411)
            Depreciation                                                                            581,916                 402,976
            Amortization of investment securities                                                    18,479                 120,064
            Provision for loan losses                                                               750,000                 286,654
            Gain on sale of investment securities available for sale                               (142,820)               (105,826)
            Gain on sale of loans                                                                  (296,991)               (190,624)
            Gain on sale of mortgage servicing rights                                              (381,151)               (323,378)
            Gain on sale of other real estate owned                                                 (10,990)                      0
            Origination of loans held for sale                                                  (58,451,859)            (38,628,254)
            Proceeds from sales of loans held for sale                                           44,112,636              38,158,995
            Increase in deferred loan costs                                                          23,359                 150,103
            Increase in other liabilities                                                           518,946                 371,011
            Increase in other assets                                                             (1,190,732)               (699,012)
                                                                                               ------------            ------------
                 Total adjustments                                                              (14,717,401)               (816,702)
                                                                                               ------------            ------------
                 Net cash (used in) provided by operating activities                            (13,086,321)                 66,787
                                                                                               ------------            ------------

CASH FLOWS FROM INVESTING ACTIVITIES
         Net loans to customers                                                                 (42,258,941)            (36,522,219)
         Purchases of bank premises and equipment                                                (2,657,298)             (3,202,104)
         Proceeds from sales of available for sale investment securities                         17,000,969              27,463,321
         Proceeds from maturities of available for sale investment securities                     8,900,000              11,633,437
         Purchases of available for sale investment securities                                  (49,522,905)            (41,455,883)
         Recoveries on loans charged off                                                             70,535                  46,487
                                                                                               ------------            ------------
                 Net cash used in investing activities                                          (68,467,640)            (42,036,961)
                                                                                               ------------            ------------

CASH FLOWS FROM FINANCING ACTIVITIES
         Net increase (decrease) in demand deposits, NOW, money market
                 and savings accounts                                                            32,958,555              26,871,180
         Net increase in time deposits                                                           34,397,588              20,470,549
         Net increase in securities sold under agreements to repurchase                           7,415,507                 546,318
         Proceeds from advances from borrowings                                                     500,000                       0
         Proceeds from stock sale                                                                   424,564               8,359,386
                                                                                               ------------            ------------
                 Net cash provided by financing activities                                       75,696,214              56,247,433
                                                                                               ------------            ------------

Net increase (decrease) in cash and cash equivalents                                             (5,857,747)             14,277,259
Cash and cash equivalents at beginning of year                                                   21,044,908               6,767,649
                                                                                               ------------            ------------
Cash and cash equivalents at end of year                                                       $ 15,187,161            $ 21,044,908
                                                                                               ============            ============

SUPPLEMENTAL DISCLOSURES
         Interest paid                                                                         $ 10,213,683            $  7,224,428
                                                                                               ============            ============
         Income taxes paid                                                                     $  1,041,233            $    536,500
                                                                                               ============            ============
</TABLE>


The accompanying notes are an integral part of these financial statements.





                                     F-5
<PAGE>   55




         AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         1.      ORGANIZATION:

                 American Bancshares, Inc. (Holding Company) is a one-bank
                 holding company, operated under the laws of the State of
                 Florida.  It has two wholly owned subsidiaries, which include
                 a banking subsidiary, American Bank of Bradenton (Bank), a
                 state-chartered bank; and Freedom Finance Company (Finance), a
                 Florida Corporation.  The Bank is a general commercial bank
                 with all the rights, powers, and privileges granted and
                 conferred by the Florida Banking Code.  Finance was
                 incorporated on March 26, 1997 and had no activity during 1997
                 other than a $100 capital contribution.

         2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

                 The accounting and reporting policies of the Holding Company
                 and Subsidiaries conform to generally accepted accounting
                 principles and general practice within the banking industry.
                 Following is a description of the more significant of those
                 policies:

                 PRINCIPLES OF CONSOLIDATION - The consolidated financial
                 statements include the accounts of the Holding Company and its
                 wholly owned subsidiaries, American Bank of Bradenton and
                 Freedom Finance Company, collectively referred to herein as
                 the Company.  All significant intercompany accounts and
                 transactions have been eliminated.

                 INVESTMENT SECURITIES AVAILABLE FOR SALE - Securities to be
                 held for indefinite periods of time and not intended to be
                 held to maturity are classified as available for sale.  Assets
                 included in this category are those assets that management
                 intends to use as part of its asset/liability management
                 strategy and that may be sold in response to changes in
                 interest rates, resultant prepayment risk and other factors
                 related to interest rate and resultant prepayment risk
                 changes.  Securities available for sale are recorded at fair
                 value.  Both unrealized gains and losses on securities
                 available for sale, net of taxes, are included as a separate
                 component of shareholders' equity in the consolidated balance
                 sheets until these gains or losses are realized.  If a
                 security has a decline in fair value that is other than
                 temporary, then the security will be written down to its fair
                 value by recording a loss in the consolidated statements of
                 operations.

                 Gains or losses on the disposition of investment securities
                 are recognized using the specific identification method.

                 LOANS - Loans are carried at the principal amount outstanding,
                 net of deferred loan fees and/or origination costs.  Interest
                 is accrued on a simple-interest basis.  Loans are charged to
                 the allowance for loan losses at such time as management
                 considers them uncollectible in the normal course of business.
                 Accrual of interest is discontinued on a loan, including
                 impaired loans, when management believes, after considering
                 economic and business conditions and collection efforts, the
                 borrower's financial condition is such that collection of
                 interest is doubtful.  Classification of a loan as nonaccrual
                 is not necessarily indicative of a potential loss of
                 principal.




                                     F-6
<PAGE>   56
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

                 ALLOWANCE FOR LOAN LOSSES - The Company adheres to an internal
                 asset review system and allowance for loan losses methodology
                 designated to provide for the detection of problem assets and
                 to provide an adequate general valuation allowance to cover
                 loan losses.  A provision for loan losses is charged to
                 operations based on management's evaluation of potential
                 losses in the loan portfolio.  The provision is based on an
                 analysis of the loan portfolio, economic conditions,
                 historical loan loss experience, changes in the nature and
                 volume of the loan portfolios and management's assessment of
                 the inherent risk in the portfolio in relation to the level of
                 the allowance for loan losses.  While management uses the best
                 information available to make these evaluations, future
                 adjustments to the allowance may be necessary if economic
                 conditions differ from the assumptions used in preparing the
                 evaluation.  The Company also establishes provisions on a
                 specific loan basis when an identified problem becomes known.
                 Ultimate losses may vary from the current estimates and any
                 adjustments, as they become necessary, are reported in
                 earnings in the periods in which they become known.

                 When a loan or portion of a loan, including an impaired loan,
                 is determined to be uncollectible, the portion deemed
                 uncollectible is charged against the allowance, and subsequent
                 recoveries, if any, are credited to the allowance.

                 INCOME RECOGNITION ON IMPAIRED AND NONACCRUAL LOANS - Loans,
                 including impaired loans, are generally classified as
                 nonaccrual if they are past due as to maturity or payment of
                 principal or interest for a period of more than 90 days,
                 unless such loans are well-collateralized and in the process
                 of collection.  If a loan or a portion of a loan is classified
                 as doubtful or is partially charged off, the loan is
                 classified as nonaccrual.  Loans that are on a current payment
                 status or past due less than 90 days may also be classified as
                 nonaccrual if repayment in full of principal and/or interest
                 is in doubt.

                 Loans may be returned to accrual status when all principal and
                 interest amounts contractually due (including arrearages) are
                 reasonably assured of repayment within an acceptable period of
                 time, and there is a sustained period of repayment performance
                 (generally a minimum of six months) by the borrower, in
                 accordance with the contractual terms of interest and
                 principal.

                 While a loan is classified as nonaccrual and the future
                 collectibility of the recorded loan balance is doubtful,
                 collections of interest and principal are generally applied as
                 a reduction to principal outstanding.  When the future
                 collectibility of the recorded loan balance is expected,
                 interest income may be recognized on a cash basis.  In the
                 case where a nonaccrual loan had been partially charged off,
                 recognition of interest on a cash basis is limited to that
                 which would have been recognized on the recorded loan balance
                 at the contractual interest rate.  Cash interest receipts in
                 excess of that amount are recorded as recoveries to the
                 allowance for loan losses until prior charge-offs have been
                 fully recovered.





                                     F-7
<PAGE>   57
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

                 LOANS HELD FOR SALE - Mortgage loans originated or purchased
                 and intended for sale in the secondary market are carried at
                 the lower of cost or market as determined by outstanding
                 commitments from investors or current investor yield
                 requirements, calculated on the aggregate loan basis.  Net
                 unrealized losses, if any, are recognized in a valuation
                 allowance by charges to earnings.  Gains and losses resulting
                 from the sales of these loans are recognized in the period the
                 sale occurs.  Mortgage loan servicing fees are earned
                 concurrently with the receipt of the related mortgage
                 payments.

                 MORTGAGE SERVICING RIGHTS - The Company recognizes an asset
                 for rights to service mortgage loans for others by management
                 periodically.  The value of mortgage servicing rights related
                 to loans sold was $145,000 and $226,000 at December 31, 1997
                 and 1996, respectively.  The Company had no valuation
                 allowance for capitalized mortgage servicing rights at
                 December 31, 1997 and 1996.

                 LOAN FEES - Loan origination fees and certain direct loan
                 origination costs are deferred and amortized as a yield
                 adjustment, using a method which approximates the interest
                 method, over the contractual lives of the loans.  The net of
                 deferred origination fees and deferred origination costs is
                 presented as an adjustment of loans receivable in the
                 accompanying balance sheets.

                 The Company purchases consumer loans from local auto dealers
                 which are collateralized by automobiles.  In conjunction with
                 this program, the Company pays a premium represented by the
                 present value differential of the yield required by the
                 Company and the underlying loan interest rate.  The premium
                 paid is amortized as a yield adjustment, using the interest
                 method, over the contractual lives of the loans.  If the loan
                 prepays, the Company has recourse against the auto dealer for
                 any unamortized premiums.  At December 31, 1997 and 1996, the
                 unamortized premiums totaled $448,934 and $459,541,
                 respectively.

                 OTHER REAL ESTATE OWNED - Other real estate owned includes
                 properties acquired through foreclosure or acceptance of deeds
                 in lieu of foreclosure.  These properties are recorded on the
                 date acquired at the lower of fair value minus estimated costs
                 to sell or the recorded investment in the related loan.  If
                 the fair value minus estimated costs to sell the property
                 acquired is less than the recorded investment in the related
                 loan, the resulting loss is charged to the allowance for loan
                 losses.  The resulting carrying value established at the date
                 of foreclosure becomes the new cost basis for subsequent
                 accounting.  After foreclosure, if the fair value minus
                 estimated costs to sell the property becomes less than its
                 cost, the deficiency is charged to the valuation allowance on
                 other real estate owned or charged directly to the asset.
                 Costs relating to the development and improvement of the
                 property are capitalized, whereas those relating to holding
                 the property for sale are charged to expense.  Gains and
                 losses on the disposition of other real estate owned are
                 reflected in operations as incurred.  The Company had other
                 real estate owned of $313,501 at December 31, 1997.





                                     F-8
<PAGE>   58
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

                 PREMISES AND EQUIPMENT - Premises and equipment are carried at
                 cost less accumulated depreciation and amortization.
                 Depreciation and amortization are computed on the
                 straight-line method over the estimated useful lives of the
                 related assets.  Maintenance, repairs and minor improvements
                 are charged to operating expenses as incurred.  Major
                 improvements and betterments are capitalized.  Upon retirement
                 or other disposition of the assets, the applicable cost and
                 accumulated depreciation are removed from the accounts and any
                 gains or losses are included in operations.

                 INCOME TAXES - The Company files consolidated income tax
                 returns.  Deferred tax assets or liabilities are computed
                 based on the difference between the financial statement and
                 income tax bases of assets and liabilities using the enacted
                 marginal tax rate.  Deferred income tax expenses or credits
                 are based on the changes in the asset or liability from period
                 to period.  The effect on deferred income taxes of a change in
                 tax rates is recognized in income in the period that includes
                 the enactment date.

                 STATEMENT OF CASH FLOWS - For purposes of reporting cash
                 flows, cash and cash equivalents include cash and due from
                 banks and federal funds sold.

                 EARNINGS PER SHARE - In 1997, the Financial Accounting
                 Standards Board issued Statement No. 128 (FAS No. 128),
                 "Earnings Per Share."  FAS No. 128 replaced the calculation of
                 primary and fully diluted earnings per share with basic and
                 diluted earnings per share.  All earnings per share amounts
                 have been restated to conform to the FAS No. 128 requirements.

                 Basic earnings per common share is calculated by dividing net
                 income by the sum of the weighted average number of shares of
                 common stock outstanding.

                 Diluted earnings per common share is calculated by dividing
                 net income by the weighted average number of shares of common
                 stock outstanding, assuming the exercise of stock options and
                 warrants using the treasury stock method.  Such adjustments to
                 the weighted average number of shares of common stock
                 outstanding are made only when such adjustments dilute
                 earnings per common share.  The diluted earnings per share is
                 summarized as follows:

<TABLE>
<CAPTION>
                                                                      1997                      1996
                                                                    ---------                ---------
         <S>                                                        <C>                      <C>
         Weighted average common shares outstanding                 4,071,596                3,713,541
         Weighted average common shares equivalents                     9,297                   46,663
                                                                    ---------                ---------

         Shares used in diluted earnings per share calculation      4,080,893                3,760,204
                                                                    =========                =========
</TABLE>

                 RECLASSIFICATIONS - Certain amounts in the 1996 financial
                 statements have been reclassified to conform with the current
                 year presentation.  Such reclassification had no impact on
                 total assets, equity, net income or total cash flow balances
                 previously reported.






                                      F-9
<PAGE>   59
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


         3.      INVESTMENT SECURITIES AVAILABLE FOR SALE:

                 The amortized costs and approximate fair value of investment
                 securities available for sale at December 31, 1997 and 1996
                 are summarized as follows:

<TABLE>
<CAPTION>
                                                                            1997
                                                   ------------------------------------------------------
                                                                   GROSS           GROSS
                                                     AMORTIZED   UNREALIZED      UNREALIZED  APPROXIMATE
                                                        COST       GAINS           LOSSES     FAIR VALUE
                                                   -----------   ----------      ----------  ------------
         <S>                                       <C>            <C>            <C>         <C>
         AVAILABLE FOR SALE:
            U.S. Treasury Securities               $ 3,537,278    $    358       $(19,046)   $ 3,518,590
            U.S. Government agencies                44,736,471     104,844         (8,127)    44,833,188
            State and municipals                       499,877         693              0        500,570
                                                   -----------    --------       --------    -----------
                 Total debt securities              48,773,626     105,895        (27,173)    48,852,348
                                                   -----------    --------       --------    -----------
            FHLB stock                               1,133,400           0              0      1,133,400
                                                   -----------    --------       --------    -----------

                 Total available for sale          $49,907,026    $105,895       $(27,173)   $49,985,748
                                                   ===========    ========       ========    ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                           1996
                                                   ------------------------------------------------------
                                                                   GROSS          GROSS
                                                    AMORTIZED    UNREALIZED     UNREALIZED    APPROXIMATE
                                                      COST         GAINS          LOSSES      FAIR VALUE
                                                   -----------   ----------     ----------    -----------
         <S>                                       <C>           <C>            <C>           <C>
         AVAILABLE FOR SALE:
            U.S. Treasury Securities               $ 6,963,521    $  8,193      $ (48,264)   $ 6,923,450
            U.S. Government agencies                13,227,152           0       (122,400)    13,104,752
            State and municipals                       499,639           0         (1,258)       498,381
                                                   -----------    --------      ---------    -----------
                 Total debt securities              20,690,312       8,193       (171,922)    20,526,583
                                                   -----------    --------      ---------    -----------
            FHLB stock                                 499,100           0              0        499,100
            Mortgage-backed securities               5,050,396      47,951        (13,318)     5,085,029
                                                   -----------    --------      ---------    -----------

                 Total available for sale          $26,239,808    $ 56,144      $(185,240)   $26,110,712
                                                   ===========    ========      =========    ===========
</TABLE>

                 The FHLB stock is a restricted investment that is required by
                 the FHLB to be maintained by the Company.





                                     F-10
<PAGE>   60
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         3.      INVESTMENT SECURITIES AVAILABLE FOR SALE, CONTINUED:

                 The amortized cost and approximate fair value of investments
                 at December 31, 1997, by scheduled maturity, are shown below.
                 Scheduled maturities may differ from actual maturities because
                 borrowers may have the right to call or prepay obligations
                 with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                        AMORTIZED            APPROXIMATE
                                                           COST              FAIR VALUE
                                                       -----------          ------------
         <S>                                           <C>                  <C>
         Due in one year or less                       $ 2,505,528          $ 2,499,170
         Due after one year through five years          15,840,650           15,845,685
         Due after five years through ten years         28,427,448           28,509,639
         Due after ten years                             2,000,000            1,997,854
                                                       -----------          -----------
                 Total debt securities                  48,773,626           48,852,348

         FHLB stock                                      1,133,400            1,133,400
                                                       -----------          -----------

                                                       $49,907,026          $49,985,748
                                                       ===========          ===========
</TABLE>

                 Proceeds from the sale of investment securities available for
                 sale during the years ended December 31, 1997 and 1996 were
                 $17,000,969 and $27,563,000, respectively.  Gross gains of
                 $148,259 and $157,500 were realized on these sales for the
                 years ended December 31, 1997 and 1996, respectively.  Gross
                 losses of $5,439 and $51,700 were realized on these sales for
                 the years ended December 31, 1997 and 1996, respectively.

                 At December 31, 1997, the Company had pledged securities with
                 a carrying value of approximately $504,000 and market value of
                 approximately $498,000 to the State of Florida for public fund
                 deposits.  The current value of pledged securities is adequate
                 to meet the pledging requirements.

         4.      LOANS RECEIVABLE, NET:

                 The Company's loan portfolio consisted of the following at
                 December 31:

<TABLE>
<CAPTION>
                                                                                  1997           1996
         <S>                                                                 <C>            <C>
         Residential mortgage loans, substantially all single-family         $ 24,593,596   $ 18,695,342
         Commercial and commercial real estate loans                          103,160,918     74,538,560
         Consumer loans                                                        45,663,756     42,269,999
                                                                             ------------   ------------
                                                                              173,418,270    135,503,901

         Less allowance for loan losses                                        (1,381,415)    (1,000,000)
         Net deferred costs                                                       581,178        604,537
                                                                             ------------   ------------

         Loans, net                                                          $172,618,033   $135,108,438
                                                                             ============   ============
</TABLE>





                                     F-11
<PAGE>   61
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         4.      LOANS RECEIVABLE, NET, CONTINUED:

                 The Company grants and purchases real estate, commercial and
                 consumer loans throughout Florida, with a majority in the
                 Sarasota and Manatee County area.  Although the Company has a
                 diversified loan portfolio, a significant portion of its
                 debtors' ability to honor their contracts is dependent
                 primarily upon the economy of Sarasota and Manatee Counties,
                 Florida and general economic conditions.

                 A summary of activity in the allowance for loan losses
                 follows:

<TABLE>
<CAPTION>
                                                                                   1997                  1996
                         <S>                                                    <C>                  <C>
                         Balance at beginning of year                           $1,000,000           $  946,000
                         Provision charged to income                               750,000              286,654
                         Recoveries on loans previously charged off                 70,535               46,486
                         Loans charged off                                        (439,120)            (279,140)
                                                                                ----------           ----------

                         Balance at end of year                                 $1,381,415           $1,000,000
                                                                                ==========           ==========
</TABLE>

                 In management's opinion, the allowance is adequate to reflect
                 the risk in the loan portfolio.

                 At December 31, 1997 and 1996, the recorded investment in
                 loans for which impairment has been recognized totaled
                 approximately $662,000 and $1,478,000, respectively.  The
                 total allowance for loan losses related to these loans was
                 approximately $246,000 and $331,400 at December 31, 1997 and
                 1996, respectively.  Interest income on impaired loans of
                 approximately $48,500 and $87,000 was recognized for cash
                 payments received in 1997 and 1996, respectively.  For the
                 years ended December 31, 1997 and 1996, the average recorded
                 investment in impaired loans was $312,000 and $1,139,000,
                 respectively.

                 At December 31, 1997 and 1996, the Company had approximately
                 $437,000 and $905,000 in nonaccrual loans, respectively.  For
                 the years ended December 31, 1997 and 1996, the amount of
                 interest income not recorded related to nonaccrual loans was
                 approximately $42,000 and $60,000, respectively.  At December
                 31, 1997, there were two accruing loans totaling $140,000 that
                 were 90 days or more past due.  At December 31, 1996, there
                 were no accruing loans that were 90 days or more past due.

                 LOANS TO OFFICERS AND DIRECTORS - In the course of its
                 business, the Company has granted loans to executive officers,
                 directors and principal shareholders of the Company and to
                 entities to which they are related.  Following is a summary of
                 the amount of loans in which the aggregate of the loans
                 exceeded $60,000 during the year:

<TABLE>
<CAPTION>
                                                                           1997
                         <S>                                           <C>
                         Balance at beginning of year                  $ 6,521,406
                         New loans                                       2,164,334
                         Repayments on loans                            (2,521,223)
                                                                       -----------

                         Balance at end of year                        $ 6,164,517
                                                                       ===========
</TABLE>





                                     F-12
<PAGE>   62
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         5.      PREMISES AND EQUIPMENT:

                 A summary of premises and equipment at December 31, 1997 and
                 1996 is as follows:

<TABLE>
<CAPTION>
                                                                1997                  1996
                      <S>                                   <C>                  <C>
                      Land                                  $ 2,802,264          $ 2,792,263
                      Building and improvements               4,968,441            2,844,277
                      Furniture, fixtures, and equipment      2,898,019            2,446,909
                                                            -----------          -----------
                                                             10,668,724            8,083,449
                      Less accumulated depreciation          (1,714,753)          (1,204,860)
                                                            -----------          -----------

                                                            $ 8,953,971          $ 6,878,589
                                                            ===========          ===========
</TABLE>

                 Depreciation expense totaled $581,916 and $402,976 for the
                 years ended December 31, 1997 and 1996, respectively.

         6.      LOAN SERVICING:

                 Mortgage loans serviced for others are not included in the
                 accompanying consolidated balance sheets.  The unpaid
                 principal balances of mortgage loans serviced for others was
                 $10,998,279 and $19,781,866 at December 31, 1997 and 1996,
                 respectively.

                 Custodial escrow balances maintained in connection with the
                 foregoing loan servicing, and included in demand deposits,
                 were $40,653 and $34,675 at December 31, 1997 and 1996,
                 respectively.

                 Mortgage servicing rights of $187,889 and $254,783 were
                 capitalized in 1997 and 1996, respectively.  Amortization of
                 mortgage servicing rights was $25,927 and $28,901 during 1997
                 and 1996, respectively.  The value of mortgage servicing
                 rights sold was $243,100 and $0 for 1997 and 1996,
                 respectively.  At December 31, 1997 and 1996, the capitalized
                 mortgage servicing rights totaled $144,744 and $225,882,
                 respectively, which approximated fair value.





                                     F-13
<PAGE>   63
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         7.      DEPOSITS:

                 Deposits consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                          1997                  1996
         <S>                                          <C>                  <C>
         Demand                                       $ 39,944,577         $ 26,281,696
         NOW                                            15,041,090           13,081,210
         Money market                                   57,419,868           42,040,356
         Savings                                         8,295,135            6,338,853
                                                      ------------         ------------
                                                       120,700,670           87,742,115
                                                      ------------         ------------
         Certificate accounts:
            Under $100,000                              79,817,006           58,037,837
            Over $100,000                               31,238,121           20,161,471
            IRAs                                        12,802,979           11,261,210
                                                      ------------         ------------
                                                       123,858,106           89,460,518
                                                      ------------         ------------

                                                      $244,558,776         $177,202,633
                                                      ============         ============
</TABLE>

                 The aggregate amount of certificates of deposit of $100,000 or
                 more at December 31, 1997 and 1996 was approximately
                 $32,570,000 and $21,482,000, respectively.

                 A summary of certificate accounts at December 31, 1997 and
                 1996 by year of scheduled maturity follows:

<TABLE>
<CAPTION>
                                                           1997                 1996
         <S>                                          <C>                   <C>
         Due within one year                          $ 63,413,105          $32,807,388
         Due after one year through two years           30,810,004           12,455,878
         Due after two years through three years         8,469,909           18,905,335
         Due after three years through four years       17,702,187            7,680,533
         Due after four years                            3,462,901           17,611,384
                                                      ------------          -----------

                                                      $123,858,106          $89,460,518
                                                      ============          ===========
</TABLE>

                 Interest expense on deposit accounts is summarized as follows:

<TABLE>
<CAPTION>
                                                                                   1997           1996
         <S>                                                                   <C>            <C>
         Interest on NOW accounts and money market deposit accounts            $2,830,315     $1,735,056
         Interest on savings accounts                                             163,718        153,948
         Interest on certificate accounts                                       6,422,337      5,037,583
                                                                               ----------     ----------

                                                                               $9,416,370     $6,926,587
                                                                               ==========     ==========
</TABLE>





                                     F-14
<PAGE>   64
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         8.      SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE:

                 The Company enters into sales of securities under agreements
                 to repurchase.  Repurchase agreements are treated as
                 financings, and the obligations to repurchase securities sold
                 are reflected as a liability in the consolidated balance
                 sheets.  The dollar amount of securities underlying the
                 agreements remains in the asset accounts.  The securities sold
                 under repurchase agreements remain in the custody of a
                 third-party trustee.  The Company may have sold, loaned, or
                 otherwise disposed of such securities in the normal course of
                 its operations and has agreed to maintain substantially
                 identical securities during the agreements.  The agreements
                 mature within 30 days.

                 Information related to the Company's securities sold under
                 repurchase agreements (including accrued interest) at December
                 31, 1997 and 1996 is presented below, segregated by the type
                 of securities sold and by due date of the agreement:

<TABLE>
<CAPTION>
                                                                                 1997           1996
         <S>                                                                <C>             <C>
         Average balance during the year                                    $14,375,332     $ 9,660,214
         Average interest rate during the year                                     4.54%           4.08%
         Maximum month-end balance during the year                          $21,589,255     $10,557,098
         U.S. Treasury securities underlying the agreements at year-end:
            Carrying value                                                  $19,284,514     $11,242,138
            Fair value                                                       19,332,128      11,153,493
</TABLE>

         9.      FEDERAL HOME LOAN BANK ADVANCES:

                 Each Federal Home Loan Bank (FHLB) is authorized to make
                 advances to its member associations, subject to such
                 regulations and limitations as the FHLB may prescribe.  The
                 Bank's borrowings from the FHLB of Atlanta at December 31,
                 1997 and 1996 were $5,000,000 at 6.31%, maturing in October
                 1998.

                 The FHLB requires that the Bank maintain qualifying mortgages
                 as collateral and all of its FHLB stock as collateral for its
                 advances.  As of December 31, 1997, the Bank has a credit
                 availability of $20,000,000.

                 Uncollateralized Federal Fund lines amounting to $3.4 million
                 at December 31, 1997 were maintained with various banks with
                 rates which are at or below prime rate.  The lines and their
                 terms are periodically reviewed and are generally subject to
                 withdrawal at the discretion of the banks.  No borrowings on
                 these agreements were outstanding at December 31, 1997 and
                 1996, respectively.





                                     F-15
<PAGE>   65
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         10.     NOTE PAYABLE:

                 In 1997, the Company entered into a Loan Agreement with a
                 national banking association for a $5 million revolving line
                 of credit facility.  The agreement requires the proceeds of
                 the new credit facility to be used for the acquisition of real
                 estate to be used for the development of the Company's
                 corporate headquarters, an operations center, and bank
                 branches.  The credit facility is collateralized by the shares
                 of the Bank.  The agreement requires the Company to meet
                 certain covenants and restricts the payment of dividends,
                 which have been met.  Interest on the revolving credit
                 facility is calculated quarterly on either one- or three-month
                 LIBOR plus 175 basis points (7.74% at December 31, 1997).
                 After two years, the loan converts into a ten-year term note
                 with a five-year balloon payment.  The total amount of unused
                 revolving credit available to the Company at December 31, 1997
                 was $4.5 million.

         11.     INCOME TAXES:

                 The Company's provision for income taxes consisted of the
                 following for the years ended December 31:


<TABLE>
<CAPTION>
                                                           1997                   1996
                       <S>                              <C>                    <C>
                       Current:
                          Federal                       $1,125,812             $534,953
                          State                             62,600               29,200
                                                        ----------             --------
                                                         1,188,412              564,153
                                                        ----------             --------

                       Deferred:
                          Federal                         (226,000)             (38,500)
                          State                            (22,200)              (3,700)
                                                        ----------             --------
                                                          (248,200)             (42,200)
                                                        ----------             --------

                                                        $  940,212             $521,953
                                                        ==========             ========
</TABLE>

                 Deferred income taxes consisted of the following for the years
                 ended December 31:


<TABLE>
<CAPTION>
                                                             1997                 1996
                       <S>                               <C>                   <C>
                       Provision for loan losses        $ (112,000)            $ (7,700)
                       Deferred loan fees                   19,600              (39,700)
                       Depreciation                        (18,100)             (15,200)
                       Cash to accrual adjustment          (58,000)              57,900
                       Loans held for sale                 (67,800)               3,700
                       Other                               (11,900)             (41,200)
                                                        ----------             --------

                                                        $ (248,200)            $(42,200)
                                                        ==========             ========
</TABLE>





                                     F-16
<PAGE>   66
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         11.     INCOME TAXES, CONTINUED:

                 Deferred income taxes reflect the impact of temporary
                 differences between the amounts of assets and liabilities
                 recorded for financial reporting purposes and such amounts as
                 measured in accordance with tax laws.  In general, these
                 temporary differences are more inclusive than timing
                 differences recognized under previously applicable accounting
                 principles.  The items which comprise a significant portion of
                 deferred tax assets and liabilities at December 31 are as
                 follows:


<TABLE>
<CAPTION>
                                                                      1997                 1996
                    <S>                                             <C>                  <C>
                    Deferred tax assets:
                        Book over tax bad debts                    $ 395,400            $ 283,400
                        Market value of loans held for sale          161,800               94,000
                        Other                                         38,100                    0
                                                                   ---------            ---------
                            Deferred tax assets                      595,300              377,400
                                                                   ---------            ---------
                    Deferred tax liabilities:
                        Loan origination fees                        (74,200)             (54,700)
                        Cash to accrual adjustment                   (57,900)            (116,800)
                        Tax over book depreciation                   (68,700)             (86,800)
                        Other                                              0              (30,900)
                                                                   ---------            ---------
                            Deferred tax liabilities                (200,800)            (289,200)
                                                                   ---------            ---------

                            Net deferred tax asset                 $ 394,500            $  88,200
                                                                   =========            =========
</TABLE>

                 The Company's effective income tax rates of 37% for the years
                 ended December 31, 1997 and 1996 vary from the statutory
                 federal income tax rate of 34% due primarily to state income
                 taxes of 5.5% net of federal tax benefits.

         12.     OTHER INCOME:

                 Other income consisted of the following for the years ended
December 31:


<TABLE>
<CAPTION>
                                                                     1997                  1996
                    <S>                                           <C>                  <C>
                    Service charges on deposit accounts           $1,301,104           $  733,258
                    Broker loan fees                                 327,512               32,807
                    Net gains on sales of investment securities      148,259              105,825
                    Net gains on sales of loans held for sale        296,991              190,624
                    Net gain on sale of other real estate owned       10,990                    0
                    Merchant fees on credit cards                    479,048              262,061
                    Late fees                                        171,301              127,486
                    Net gain on sales of servicing rights            573,289              323,377
                    Other                                            335,152               58,621
                                                                  ----------           ----------

                                                                  $3,643,646           $1,834,059
                                                                  ==========           ==========
</TABLE>





                                     F-17
<PAGE>   67
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         13.     OTHER EXPENSES:

                 Other expenses consisted of the following for the years ended
                 December 31:


<TABLE>
<CAPTION>
                                                                            1997                  1996
                          <S>                                            <C>                  <C>
                          Compensation and related benefits              $4,370,275           $3,470,130
                          Occupancy and equipment                         1,268,498              849,960
                          FDIC insurance                                     29,831               35,181
                          Data processing                                   663,891              740,140
                          Advertising and promotion                         282,154              319,507
                          Printing supplies and postage                     433,705              322,445
                          Directors fees and expenses                       156,680              123,952
                          Professional fees                                 533,606              243,934
                          ATM and credit card fees                          631,077              205,681
                          Intangible taxes                                  156,767              126,235
                          Other                                           1,067,281              841,971
                                                                         ----------           ----------

                                                                         $9,593,765           $7,279,136
                                                                         ==========           ==========
</TABLE>

                 Loan origination costs of approximately $686,000 and $380,000
                 in 1997 and 1996, respectively, have been offset against
                 compensation and related benefits.

         14.     FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:

                 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, standby
                 letters of credit, and credit cards.  They involve, to varying
                 degrees, elements of credit and interest rate risk in excess
                 of the amount recognized on the balance sheet.  The contract
                 or notional amounts of those instruments reflect the extent of
                 involvement the Company has in particular classes of financial
                 instruments.  The Company has no financial instruments with
                 off-balance-sheet risk that are held for trading purposes.

                 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 and standby letters of credit
                 is represented by the contractual or notional amount of the
                 instruments.  The Company uses the same credit policies in
                 making commitments and conditional obligations as it does for
                 on-balance sheet instruments.  As of December 31, 1997 and
                 1996 financial instruments with off-balance-sheet risk were as
                 follows:

<TABLE>
<CAPTION>
                          CONTRACTUAL OR NOTIONAL AMOUNTS                   1997                 1996
                          -------------------------------               -----------          -----------
                          <S>                                           <C>                  <C>
                          Commitments to extend credit                  $53,406,000          $27,601,000
                          Standby letters of credit                     $   458,000          $   373,000
                          Credit cards                                  $ 4,742,000          $ 4,258,000
</TABLE>





                                     F-18
<PAGE>   68
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         14.     FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK, CONTINUED:

                 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 commitment
                 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
                 deemed necessary by the Company upon extension of credit is
                 based on management's credit evaluation of the counter-party.
                 Collateral held varies but may include accounts receivable,
                 inventory, property, plant, and equipment, and
                 income-producing commercial properties.

                 Standby letters of credit are conditional commitments issued
                 by the Company to guarantee the performance of a customer to a
                 third party.  Those guarantees are primarily issued to support
                 public and private borrowing arrangements, including
                 commercial paper, bond financing, and similar transactions.
                 The guarantees are short-term, expiring in 1997.

         15.     EMPLOYEE BENEFIT AND STOCK OPTION PLANS:

                 The Company has a qualified plan under Section 401(k) of the
                 Internal Revenue Code (Plan) for all employees meeting certain
                 eligibility requirements.  The Plan allows participants to
                 make annual contributions equal to 15% or less of the
                 participant's compensation up to a maximum allowed by Internal
                 Revenue Service regulation.  The Company may match a
                 percentage of the participant's contributions.  Plan
                 contributions by the Company for the year ended December 31,
                 1997 and 1996 was approximately $20,500 and $12,000,
                 respectively.

                 The Company has a qualified Incentive Stock Option plan
                 (Incentive Plan) and a Non-qualified Share Option Plan for
                 non-employee directors (Non-qualified Plan) under which the
                 Company may grant options for up to 150,000 and 75,000 shares
                 of common stock, respectively.  Under the Plans, the exercise
                 price of each option equals the market price of the Company's
                 stock on the date of grant.  Options are granted upon approval
                 of the Board of Directors and vest 33% per year for three
                 years and are exercisable over 10 years from the date of the
                 grant.

                 The Company applies APB Opinion No. 25, "Accounting for Stock
                 Issued to Employees" (APB 25) and related Interpretations in
                 accounting for its Plans.  Accordingly, no compensation cost
                 has been recognized for options granted under the Plan.  Had
                 compensation cost for the Company's Plan been determined based
                 on the fair value at the grant dates for awards under the Plan
                 consistent with the method of SFAS 123, the Company's net
                 income and net income per share would have been reduced to the
                 pro forma amounts of $1,612,680 net income and earnings per
                 share of .40 for the year ended December 31, 1997.  The
                 Company did not award any options during the year ended
                 December 31, 1996, therefore, there is no pro forma amount for
                 that period.





                                     F-19
<PAGE>   69
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         15.     EMPLOYEE BENEFIT AND STOCK OPTION PLANS, CONTINUED:

                 The fair value of each option grant is estimated on the date
                 of grant using the Black-Scholes option-pricing model with
                 the following weighted-average assumptions used for grants in
                 1997; dividend yield of 0% in each period, as there has been
                 no regular dividend payment history, expected stock price
                 volatility of 23.6%, risk-free interest rates of 6.39%; and
                 expected lives of 5 years.

                 During 1997, options for 30,000 shares of common stock were
                 granted under the Incentive Plan at an exercise price of
                 $8.375.  None of these options have been exercised.  No
                 options were granted in 1996.  No options have been granted
                 under the Non-Qualified Plan.

         16.     SHAREHOLDERS' EQUITY:

                 The Company's current policy is to retain all earnings to fund
                 operations.  Future dividend payments will be at the
                 discretion of the Board of Directors of the Company and will
                 be dependent upon several factors, including State and Federal
                 banking regulations that impose limitations on such payments.

                 In February 1996, the Company completed a public offering of
                 1,250,000 shares of common stock at $6.00 per share (the
                 Offering).  The net proceeds of the Offering, after deducting
                 applicable issuance costs and expenses, were approximately
                 $7,377,000.

                 In January 1997, the Company acquired the net assets of
                 Deschamps & Gregory Mortgage Company, Inc., a mortgage
                 brokerage company, for approximately $55,000.  The Company
                 issued 7,119 shares of common stock in connection with the
                 acquisition.  The Company accounted for the acquisition using
                 the purchase method of accounting.

                 The following table summarizes the activity of the Company's
                 issued and outstanding warrants and their corresponding
                 exercise prices:

<TABLE>
<CAPTION>
                                                                    1992 WARRANTS                    1994 WARRANTS
                                                          -------------------------------     --------------------------
                                                           WARRANTS              EXERCISE      WARRANTS         EXERCISE
                                                          OUTSTANDING             PRICE       OUTSTANDING        PRICE
                                                          -------------------------------     --------------------------
         <S>                                               <C>                    <C>          <C>               <C>
         Balance, January 1, 1996                           18,594                $4.00         227,224          $6.00

         Warrants exercised                                      -                 0.00        (163,695)          6.00
                                                          --------                            ---------
         Balance, December 31, 1996                         18,594                 4.00          63,529           6.00

         Warrants expired                                  (18,594)                0.00          (1,934)          6.00

         Warrants exercised                                      -                 0.00         (61,595)          6.00
                                                          -----------------------------       ------------------------

         Balance, December 31, 1997                              0                $4.00               0          $6.00
                                                          ========                            =========
</TABLE>





                                     F-20
<PAGE>   70
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         17.     DIVIDEND RESTRICTIONS:

                 State banking regulations limit the amount of dividends that
                 may be paid by the Bank to its Parent without prior approval
                 of regulatory agencies.  The amount of dividends that may be
                 paid is based on the net profits of the current year combined
                 with retained net profits of the preceding two years as
                 defined by state banking regulations.  At December 31, 1997,
                 approximately $3,700,000 are available for payment of
                 dividends without prior regulatory approval.

         18.     FAIR VALUES OF FINANCIAL INSTRUMENTS:

                 Statement of Financial Accounting Standards No. 107,
                 "Disclosures About Fair Value of Financial Instruments,"
                 requires that the Company disclose estimated fair values for
                 its financial instruments.  Fair value is defined as the price
                 at which a financial instrument could be liquidated in an
                 orderly manner over a reasonable time period under present
                 market conditions.  Fair values estimates, methods and
                 assumptions are set forth below for the Company's financial
                 instruments.

                 CASH AND DUE FROM BANK - For cash and due from banks, the
                 carrying amount is a reasonable estimate of fair value.

                 INVESTMENTS AND MORTGAGE-BACKED SECURITIES - The fair value of
                 investments and mortgage-backed securities is estimated based
                 on bid prices published in financial newspapers or bid
                 quotations received from securities dealers.

                 LOANS RECEIVABLE - The estimated fair value of the Company's
                 fixed rate loans was calculated by discounting contractual
                 cash flows adjusted for current prepayment estimates.  The
                 discount rates were based on the interest rate charged to
                 current customers for comparable loans.  The Company's
                 adjustable rate loans reprice frequently at current market
                 rates.  Therefore, the fair value of these loans has been
                 estimated to be approximately equal to their carrying amount.

                 The impact of delinquent loans on the estimation of the fair
                 values described above is not considered to have a material
                 effect and, accordingly, delinquent loans have been
                 disregarded in the valuation methodologies used.

                 DEPOSIT LIABILITIES - The fair value of deposits with no
                 stated maturity, such as demand, NOW, money market and savings
                 is equal to the amount payable on demand as of December 31,
                 1996.  The fair value of time deposits is estimated using the
                 rates currently offered for deposits of similar remaining
                 maturities.

                 SECURITIES SOLD UNDER REPURCHASE AGREEMENTS - The repurchase
                 agreements outstanding at December 31, 1997 mature within 30
                 days.  The estimated fair value of these agreements
                 approximates the carrying value.

                 FHLB ADVANCES AND NOTE PAYABLE - Cash flow from fixed-rate
                 borrowings are discounted at a spread to the zero Treasury
                 curve which equates to the LIBOR yield.  The note payable's
                 interest rate reprices quarterly.  The estimated fair value
                 approximates the carrying value.





                                     F-21
<PAGE>   71
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         18.     FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:

                 COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT -
                 The fair value of commitments to extend credit is estimated
                 using the fees currently charged to enter into similar
                 agreements, taking into account the remaining terms of the
                 agreements and the present creditworthiness of the
                 counterparties.  For fixed rate loan commitments, fair value
                 also considers the difference between current levels of
                 interest rates and the committed rates.  The fair value of
                 standby letters of credit is based on fees currently charged
                 for similar agreements or on the estimated cost to terminate
                 them or otherwise settle the obligations with the
                 counterparties.

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

<TABLE>
<CAPTION>
                                                                                 (IN THOUSANDS)
                                                          ---------------------------------------------------------------
                                                                      1997                               1996
                                                          -------------------------------      --------------------------
                                                          CARRYING                             CARRYING
                                                           AMOUNT              FAIR VALUE       AMOUNT         FAIR VALUE
                                                          --------             ----------      --------        ----------
         <S>                                              <C>                  <C>             <C>             <C>
         Financial assets:
            Cash and due from bank                        $ 10,067             $ 10,067        $ 15,045       $ 15,045
            Federal funds sold                               5,120                5,120           6,000          6,000
            Loans held for sale                             39,588               39,747          20,351         20,414
            Investment securities available for sale        49,986               49,986          26,111         26,111
            Loans receivable, net                          172,618              178,140         135,108        135,285

         Financial liabilities:
            Deposits                                       244,559              245,399         177,203        179,061
            Securities sold under agreements to
               repurchase                                   17,528               17,528          10,113         10,113
            FHLB advances                                    5,000                5,000           5,000          5,000
            Note payable                                       500                  500               0              0
</TABLE>

<TABLE>
<CAPTION>
                                                          CONTRACT                              CONTRACT
                                                           AMOUNT              FAIR VALUE        AMOUNT        FAIR VALUE
                                                          --------             ----------       --------       ----------
         <S>                                              <C>                  <C>              <C>            <C>
         Unrecognized financial instruments:
            Loan commitments                              $ 53,406               $   80         $27,601         $    41
            Standby letters of credit                          458                    0             373               0
            Credit cards                                     4,742                    0           4,258               0
</TABLE>

                 LIMITATIONS - The fair value estimates are made at a discrete
                 point in time based on relevant market information and
                 information about the financial instrument.  Quoted market
                 prices, when available, are used as the measure of fair value.
                 When quoted market prices are not available, fair value
                 estimates have been based on judgments regarding future
                 expected loss experience, current economic conditions, risk
                 characteristics of various financial instruments, and other
                 factors.  These estimates are inherently subjective, involving
                 uncertainties and matters of significant judgment, and,
                 therefore, may not be indicative of the value that could be
                 realized in a current market exchange.  Changes in assumptions
                 could significantly affect the estimates.





                                     F-22
<PAGE>   72
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         18.     FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:

                 The value estimates are based on existing on- and
                 off-balance-sheet financial instruments without attempting to
                 estimate the value of anticipated future business and the
                 value of assets and liabilities that are not considered
                 financial instruments.  Other significant assets and
                 liabilities that are not considered financial assets or
                 liabilities include deferred tax assets and property, plant
                 and equipment.  In addition, the tax ramifications related to
                 the realization of the unrealized gains and losses for
                 investments and mortgage-backed securities can have a
                 significant effect on fair value estimates and have not been
                 considered in many of the estimates.

         19.     RISKS AND UNCERTAINTIES:

                 The earnings of the Company depend on the earnings of the
                 Bank.  The Bank is dependent primarily upon the level of net
                 interest income, which is the difference between interest
                 earned on its interest earning assets, such as loans and
                 investments and the interest paid on its interest-bearing
                 liabilities, such as deposits and borrowings.  Accordingly,
                 the operations of the Bank are subject to risks and
                 uncertainties surrounding its exposure to changes in the
                 interest rate environment.

                 Most of the Bank's lending activity is with customers located
                 within Sarasota and Manatee counties.  Generally, the loans
                 are collateralized by real estate consisting of single family
                 residential properties and commercial properties.  While this
                 represents a concentration of credit risk, the credit losses
                 arising from this type of lending compares favorably with the
                 Bank's credit loss experience on its portfolio as a whole.
                 The ultimate repayment of these loans is dependent to a
                 certain degree on the local economy and real estate market.

                 The financial statements of the Company are prepared in
                 conformity with generally accepted accounting principles that
                 require management to make estimates and assumptions that
                 affect the reported amounts of assets and liabilities and
                 disclosures of contingent assets and liabilities at the date
                 of the financial statements and the reported amounts of
                 revenues and expenses during the reported period.  Actual
                 results could differ from these estimates.

                 Significant estimates are made by management in determining
                 the allowance for possible loan losses.  Consideration is
                 given to a variety of factors in establishing these estimates
                 including current economic conditions, diversification of the
                 loan portfolio, delinquency statistics, results of internal
                 loan reviews, borrowers' perceived financial and managerial
                 strengths, the adequacy of underlying collateral, if
                 collateral dependent, or present value of future cash flows
                 and other relevant factors.  Since the allowance for possible
                 loan losses is dependent, to a great extent, on general and
                 other conditions that may be beyond the Bank's control, it is
                 at least reasonably possible that the estimates of the
                 allowance for possible loan losses and the carrying values of
                 the real estate assets could differ materially in the near
                 term.





                                     F-23
<PAGE>   73
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         20.     REGULATORY CAPITAL:

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

                 Quantitative measures established by regulation to ensure
                 capital adequacy require the Bank to maintain minimum amounts
                 and ratios (set forth in the table below) of total and Tier I
                 capital (as defined in the regulations) to risk-weighted
                 assets (as defined), and of Tier I capital (as defined) to
                 average assets (as defined).  Management believes, as of
                 December 31, 1997, that the Bank meets all capital adequacy
                 requirements to which it is subject.

                 As of December 31, 1997, the most recent notification from the
                 FDIC categorized the Bank as well capitalized under the
                 regulatory framework for prompt corrective action.  To be
                 categorized as well capitalized, the Bank must maintain
                 minimum total risk-based, Tier I risk-based, and Tier I
                 leverage ratios as set forth in the table.  There are no
                 conditions or events since that notification that management
                 believes have changed the Bank's category.

                 The Bank's actual capital amounts and ratios are also
                 presented in the table.  There were no deductions for
                 interest-rate risk in 1997 or 1996.

<TABLE>
<CAPTION>
                                                                                                       TO BE WELL
                                                                                                    CAPITALIZED UNDER
                                                                           FOR CAPITAL              PROMPT CORRECTIVE
                                                    ACTUAL              ADEQUACY PURPOSES           ACTION PROVISIONS
                                            ---------------------    ----------------------      ------------------------
                                              AMOUNT     RATIO         AMOUNT        RATIO        AMOUNT           RATIO
                                            ----------- ---------    -----------    -------      --------        --------
         <S>                                <C>         <C>       <C>                <C>     <C>                 <C>
         As of December 31, 1997:
            Total Capital (to Risk Weighted
                 Assets)                    $20,211,738 10.00%    >$  16,190,178     >8.0%   >$  20,237,723      >10.0%
            Tier I Capital (to Risk Weighted
                 Assets)                    $18,830,322  9.30%    >$   8,095,089     >4.0%   >$  12,142,634      > 6.0%
            Tier I Capital (to Averaged
                 Assets)                    $18,830,322  6.70%    >$   8,475,697     >3.0%   >$  14,126,161      > 5.0%

         As of December 31, 1996:
            Total Capital (to Risk Weighted
                 Assets)                    $15,790,512 10.65%    >$  11,864,054     >8.0%   >$  14,830,067      >10.0%
            Tier I Capital (to Risk Weighted
                 Assets)                    $14,790,512  9.97%    >$   5,932,027     >4.0%   >$  $8,898,040      > 6.0%
            Tier I Capital (to Averaged
                 Assets)                    $14,790,512  7.22%    >$   6,143,606     >3.0%   >$  10,239,343      > 5.0%
</TABLE>





                                     F-24
<PAGE>   74
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



21.      FUTURE ACCOUNTING PRONOUNCEMENTS:

         FAS No. 130, "Reporting Comprehensive Income," establishes new
         standards for reporting and display of comprehensive income and its
         components in a full set of general purpose financial statements.
         Comprehensive income is defined as the change in equity during a
         period from transactions and other events and circumstances from
         non-shareholder sources, such as changes in net unrealized securities
         gains.  It includes all changes in equity during a period except those
         resulting from investments by shareholders and distributions to
         shareholders.  This statement is effective for the Company's fiscal
         year ending December 31, 1998.  Application of this statement will not
         impact amounts previously reported for net income or affect the
         comparability of previously issued financial statements.

         FAS No. 131, "Disclosures about Segments of an Enterprise and Related
         Information," establishes standards for the reporting of financial
         information from operating segments in annual and interim financial
         statements.  It requires that financial information be reported on the
         same basis that it is reported internally for evaluating segment
         performance and deciding how to allocate resources to segments.
         Because this statement addresses how supplemental financial
         information is disclosed in annual and interim reports, the adoption
         will have no material impact on the financial statements.  This
         statement is effective for the Company's fiscal year ending December
         31, 1998.





                                     F-25
<PAGE>   75
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


22.      CONDENSED PARENT COMPANY FINANCIAL STATEMENTS:

         The condensed financial statements of American Bancshares, Inc., as
         the parent organization, are presented as follows:

                           CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                               DECEMBER 31,    DECEMBER 31,
                                                                                   1997            1996
                                                                               ------------    ------------
         <S>                                                                    <C>            <C>
         Assets:
            Cash                                                                $   373,665    $ 3,392,968
            Premises and equipment                                                2,159,542        682,118
            Prepaid expense                                                         156,874          5,781
            Investment in banking subsidiary                                     18,958,907     14,733,040
            Investment in finance subsidiary                                            100              0
            Other assets                                                              3,000              0
                                                                                -----------    -----------

                 Total assets                                                   $21,652,088    $18,813,907
                                                                                ===========    ===========
         Liabilities:
                 Total liabilities                                              $   653,778    $         0
                                                                                -----------    -----------

         Shareholders' equity:
            Common stock                                                          4,782,788      4,702,049
            Additional paid-in capital                                           12,080,296     11,736,471
            Unrealized gain (loss) on investment securities
              available for sale, net                                                48,808        (79,951)
            Retained earnings                                                     4,086,418      2,455,338
                                                                                -----------    -----------

                 Total shareholders' equity                                      20,998,310     18,813,907
                                                                                -----------    -----------

                 Total liabilities and shareholders' equity                     $21,652,088    $18,813,907
                                                                                ===========    ===========
</TABLE>





                                     F-26
<PAGE>   76
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



22.      CONDENSED PARENT COMPANY FINANCIAL STATEMENTS, CONTINUED:

                       CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                YEAR ENDED       YEAR ENDED
                                                                                DECEMBER 31,     DECEMBER 31,
                                                                                    1997             1996
                                                                                ------------     -----------
         <S>                                                                    <C>              <C>
         Equity in undistributed earnings of banking subsidiary                  $1,732,108       $953,567
         Operating expense                                                         (101,028)       (70,078)
                                                                                 ----------       --------

                 Net income                                                      $1,631,080       $883,489
                                                                                 ==========       ========
</TABLE>


                      CONDENSED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  YEAR ENDED    YEAR ENDED
                                                                                DECEMBER 31,    DECEMBER 31,
                                                                                    1997           1996
                                                                                ------------    ------------
         <S>                                                                    <C>            <C>
         Cash flows used in operating activities                                $   398,657    $   (75,859)
                                                                                -----------    -----------
         Cash flows used in investing activities:
           Acquisition of premises and equipment                                 (3,842,524)    (4,890,559)
                                                                                -----------    -----------
         Cash flows provided by financing activities:
           Proceeds from sale of common stock (net of stock
                 offering costs)                                                    424,564      8,359,386
                                                                                -----------    -----------

                 Net increase in cash                                            (3,019,303)     3,392,968

                 Cash at beginning of year                                        3,392,968              0
                                                                                -----------    -----------

                 Cash at end of year                                            $   373,665    $ 3,392,968
                                                                                ===========    ===========
</TABLE>





                                     F-27
<PAGE>   77
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



         23.     SUBSEQUENT EVENTS (UNAUDITED):

                 MERGER - On March 23, 1998, the Company completed its merger
                 with Murdock Florida Bank, headquartered in Charlotte County,
                 Florida.  Under the terms of the merger agreement, each
                 outstanding share of Murdock Florida Bank's common stock was
                 converted into 2.4 shares of the Company's common stock.  A
                 total of approximately $924,000 of the Company's common stock
                 are issuable.  At December 31, 1997, Murdock Florida Bank had
                 total assets and deposits of $64 million and $58.2 million
                 (unaudited), respectively.  The transaction was accounted for
                 as a pooling-of-interests.  Following is an unaudited summary
                 of pro forma information, which represents a combination of
                 the results of operations of the Company and Murdock Florida
                 Bank (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                                    -----------------------
                                                                                      1997           1996
                                                                                    --------        -------
         <S>                                                                        <C>             <C>
         Net interest income                                                        $11,714         $9,466
         Net income                                                                   1,920            782
         Earnings per share (basic)                                                    0.43           0.19
</TABLE>





                                     F-28
<PAGE>   78

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
    Exhibit                                                                                            Sequentially
     Number                                  Description of Exhibits                                  Numbered Pages
    --------                                 -----------------------                                  --------------
    <S>                <C>                                                                            <C>
         2.1   --      Agreement and Plan of Merger between American Bank of Bradenton, American
                       Bancshares, Inc. and American Successor Bank, dated July 18, 1995,
                       incorporated herein by reference to Exhibit 2 to the Company's Registration
                       Statement on Form SB-2 (Registration No. 33-99972) previously filed with
                       the Commission.

         2.2   --      Agreement and Plan of Merger, dated as of September 23, 1997, by and among
                       American Bancshares, Inc., American Bank of Bradenton, and Murdock Florida
                       Bank, incorporated herein by reference to Exhibit 2.1 to the Company's
                       Registration Statement on Form S-4 (Registration No. 333-45401) previously
                       filed with the Commission.

         2.3   --      Amendment No. 1 to Agreement and Plan of Merger, dated as of October 8,
                       1997, incorporated herein by reference to Exhibit 2.2 to the Company's
                       Registration Statement on Form S-4 (Registration No. 333-45401) previously
                       filed with the Commission.

        *3.1   --      Amended and Restated Articles of Incorporation of the Company.

         3.2   --      Amended and Restated Bylaws, incorporated herein by reference to
                       Exhibit 3.2 to the Company's Registration Statement on Form S-4
                       (Registration No. 333-45401) previously filed with the Commission.

         4.1   --      See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
                       Articles of Incorporation and the Amended and Restated Bylaws of the
                       Company defining the rights of holders of the Company's Common Shares.

        10.1   --      Employment Agreement, dated December 1, 1995, by and between the Bank and
                       Gerald L. Anthony, incorporated herein by reference to Exhibit 10.1 to the
                       Company's Registration Statement on Form SB-2 (Registration No. 33-99972)
                       previously filed with the Commission.

        10.2   --      Employment Agreement, dated June 30, 1996, by and between the Bank and
                       Philip W. Coon, incorporated by reference to Exhibit 10.2 to the Company's
                       Registration Statement on Form SB-2 (Registration No. 33-99972) previously
                       filed with the Commission.

        10.4   --      Employment Agreement, dated June 30, 1996, by and between the Bank and
                       David R. Mady, incorporated by reference to Exhibit 10.3 to the Company's
                       Registration Statement on Form SB-2 (Registration No. 33-99972) previously
                       filed with the Commission.

        10.5   --      Employment Agreement, dated January 1, 1996, by and between the Bank and
                       John S. Nash, incorporated by reference to Exhibit 10.5 to the Company's
                       Registration Statement on Form SB-2 (Registration No. 33-99972) previously
                       filed with the Commission.

        10.6   --      Employment Agreement, dated January 1, 1996, by and between the Bank and
                       Michael Lewis, incorporated by reference to Exhibit 10.6 to the Company's
                       Registration Statement on Form SB-2 (Registration No. 33-99972) previously
                       filed with the Commission.

       *10.7   --      Employment Agreement, dated January 22, 1997, by and between the Bank and
                       Stuart M. Gregory.
</TABLE>





<PAGE>   79

<TABLE>
<CAPTION>
    Exhibit                                                                                            Sequentially
     Number                                  Description of Exhibits                                  Numbered Pages
    --------                                 -----------------------                                  --------------
    <S>                <C>                                                                            <C>
        10.8   --      Data Processing Agreement, dated April 1, 1995, by and between the Bank and
                       M & I Data Services, Inc.

        10.9   --      Mortgage Loan Subservice Agreement between Dovenmuehle Mortgage, Inc. and
                       American Bank of Bradenton, dated May 17, 1994, incorporated herein by
                       reference to Exhibit 10.8 to the Company's Registration Statement on
                       Form SB-2 (Registration No. 33-99972) previously filed with the Commission.

       10.10   --      American Bancshares, Inc. and American Bank of Bradenton Incentive Stock
                       Option Plan of 1996, dated May 28, 1996, and Form of Incentive Stock Option
                       Agreement, incorporated herein by reference to Exhibit 10.9 to the
                       Company's Form 10-KSB for the fiscal year ended December 31, 1996
                       previously filed with the Commission.

      *10.11   --      American Bancshares, Inc. 1997 Nonqualified Share Option Plan for
                       Non-Employee Directors, dated March 18, 1997, and Form of Nonqualified
                       Share Option Agreement.

       10.12   --      Loan Agreement, dated as of October 30, 1997, by and between American
                       Bancshares, Inc. and Barnett Bank, N.A., incorporated herein by reference
                       to Exhibit 10.1 to the Company's Registration Statement on Form S-4
                       (Registration No. 333-45401) previously filed with the Commission.

      *10.13   --      Assignment of Lease and Consent to Assignment, dated February 15, 1998, by
                       and between the Finance Company, G.J.M. Properties, Inc., and First
                       Enterprise Acceptance Corporation, and Lease Agreement assumed thereby.

        21.1   --      Subsidiaries of the Company, incorporated herein by reference to
                       Exhibit 21.1 to the Company's Registration Statement of Form S-4
                       (Registration No. 333-45401) previously filed with the Commission.

       *27.1   --      Financial Data Schedule (for SEC use only)
</TABLE>

   -------------------------
   *  Exhibit filed herewith.