---




SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





---




FORM 10-QSB/A


(Amendment No.1)


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE
ACT OF 1934





For Quarterly Period Ended June 30, 2002





Commission File Number: 333-74997





---




BANCSHARES OF FLORIDA, INC.


(Exact name of small business issuer as specified
in its charter)





Florida (State or other
jurisdiction of incorporation or organization)

59-3535315 (I.R.S.
Employer Identification No.)





1185 Immokalee Road, Naples, Florida (Address of principal executive offices)

34110 (Zip Code)





Issuers telephone number: 941-254-2100





3411 Tamiami Trail North, Suite 200 Naples, Florida 34103


(Former name, former address and former fiscal year, if changed since last report)





---




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  ̈





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





Common Stock, $0.01 per value

2,079,199Class

Outstanding as of September 9, 2002





Transitional Small Business Disclosure
Format:  Yes  ̈ No  x





---



---

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


For the periods ended June 30, 2002 and December 31,
2001


June 30, 2002


December 31, 2001(Unaudited)ASSETSCash and due from banks

$
4,260,854


$
3,244,930Federal funds sold


2,490,000



2,757,000TOTAL CASH AND CASH EQUIVALENTS


6,750,854



6,001,930Interest-bearing deposits in banks


4,229,030



0Securities available for sale


575,760



75,7600



0Loans


79,501,455



68,405,562Less:Allowance for loan losses


(678,245
)


(494,205
)Unearned income and deferred loan fees


(44,313
)


(63,802
)NET LOANS


78,778,897



67,847,555Restricted securities, Federal Home Loan Bank Federal Reserve Bank stock, at cost


531,100



491,000Premises and equipment


4,358,868



2,178,422Accrued interest receivable


364,707



342,320Other assets


146,380



154,826TOTAL ASSETS

$
95,735,596


$
77,091,813LIABILITIES AND STOCKHOLDERS' EQUITYDeposits

$
78,873,476


$
64,287,574Other borrowings


0



4,000,000Accrued interest payable


4,846



4,690Accrued expenses and other liabilities


75,495



278,752TOTAL LIABILITIES


78,953,817



68,571,016CommitmentsStockholders' EquityPreferred stock, par value $.01 per share, 1,000,000 shares authorized, no shares issued and outstanding


0



0Common stock, par value $.01 per share, 20,000,000 shares authorized, 2,079,199 and 1,165,370 shares issued and
outstanding, respectively


28,456



11,654Additional paid-in capital


20,671,188



11,549,700Accumulated deficit


(3,917,865
)


(3,040,557
)TOTAL STOCKHOLDERS' EQUITY


16,781,779



8,520,797TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
95,735,596


$
77,091,813




2




---




BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS





Three months ended June 30,2002


2001(Unaudited)INTEREST INCOMEInterest and fees on loans

$
1,368,199


$
1,043,374Interest on securities and other


26,941



7,018Interest on federal funds sold


22,185



67,214TOTAL INTEREST INCOME


1,417,325



1,117,606INTEREST EXPENSEInterest on deposits


544,029



553,512Interest on other borrowings


0



0TOTAL INTEREST EXPENSE


544,029



553,512NET INTEREST INCOME


873,296



564,094PROVISION FOR LOAN LOSSES


34,222



65,200NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


839,074



498,894NON-INTEREST INCOMEService charges, commissions and fees


124,121



75,861963,195



574,755NON-INTEREST EXPENSESSalaries and employee benefits


756,311



406,384Occupancy expenses


129,634



45,947Equipment rental, depreciation and maintenance


81,644



68,959General operating


357,985



180,126TOTAL NON-INTEREST EXPENSES


1,325,574



701,416LOSS BEFORE INCOME TAXES


(362,379
)


(126,661
)INCOME TAXES


0



0NET LOSS

$
(362,379
)

$
(126,661
)LOSS PER SHARE

$
(0.21
)

$
(0.11
)WEIGHTED AVERAGE SHARES OUTSTANDING


1,752,839



1,165,370












































BANCSHARES OF FLORIDA,
INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS





Six months ended June 30,2002


2001(Unaudited)INTEREST INCOMEInterest and fees on loans

$
2,629,379


$
1,893,791Interest on securities and other


35,338



68,273Interest on federal funds sold


40,629



187,040TOTAL INTEREST INCOME


2,705,346



2,149,104INTEREST EXPENSEInterest on deposits


1,070,057



1,105,096Interest on other borrowings


12,402



0TOTAL INTEREST EXPENSE


1,082,459



1,105,096NET INTEREST INCOME


1,622,887



1,044,008PROVISION FOR LOAN LOSSES


240,620



115,951NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


1,382,267



928,057NON-INTEREST INCOMEService charges, commissions and fees


235,646



108,2731,617,913



1,036,330NON-INTEREST EXPENSESSalaries and employee benefits


1,417,843



795,496Occupancy expenses


258,814



96,567Equipment rental, depreciation and maintenance


147,435



134,614General operating


671,129



326,246TOTAL NON-INTEREST EXPENSES


2,495,221



1,352,923LOSS BEFORE INCOME TAXES


(877,308
)


(316,593
)INCOME TAXES


0



0NET LOSS

$
(877,308
)

$
(316,593
)LOSS PER SHARE

$
(0.59
)

$
(0.27
)WEIGHTED AVERAGE SHARES OUTSTANDING


1,487,492



1,165,370




3




---




BANCSHARES OF FLORIDA, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS





Six months ended June 30,2002


2001(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(877,308
)

$
(316,593
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization


106,252



96,066Provision for loan losses


240,620



115,951Accretion of deferred loan fees and discounts


(12,278
)


(606
)Increase in accrued interest receivable


(22,387
)


(58,892
)(Increase) decrease in other assets


8,447



(47,234
)Increase (decrease) in accrued interest payable


156



(15,615
)Increase (decrease) in accrued expenses and other liabilities


(203,257
)


(39,632
)Total adjustments


117,553



50,038NET CASH USED IN OPERATING ACTIVITIES


(759,755
)


(266,555
)CASH FLOWS FROM INVESTING ACTIVITIESNet (increase) decrease in interest-bearing deposits in banks


(4,229,030
)


4,000,000Net increase in loans


(11,159,684
)


(17,315,367
)Purchase of securities available for sale


(500,000
)


0Proceeds from (purchases of) securities held to maturity


0



1,000,000Purchase of restricted securities


(40,100
)


(105,300
)Purchase of premises and equipment


(2,286,698
)


(28,497
)NET CASH USED IN INVESTING ACTIVITIES


(18,215,512
)


(12,449,164
)CASH FLOWS FROM FINANCING ACTIVITIESNet increase in deposits


14,585,901



14,115,545Borrowings on (repayment of) short-term notes


(4,000,000
)


0Net proceeds from issuance of common stock


9,138,290



0NET CASH PROVIDED BY FINANCING ACTIVITIES


19,724,191



14,115,545NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


748,924



1,399,826CASH AND CASH EQUIVALENTSBeginning of period


6,001,930



8,736,225End of period

$
6,750,854


$
10,136,051SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the year for:Interest

$
1,082,303


$
1,120,711




4




---

BANCSHARES OF FLORIDA, INC. AND SUBSIDIARY





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Six Months Ended June 30, 2002





NOTE AORGANIZATION AND BASIS OF PRESENTATION





Organization:





Bancshares of Florida was incorporated as
Citizens Bancshares of Southwest Florida, Inc. ( Bancshares) in Florida in September 1998 to serve as a holding company for Citizens National Bank of Southwest Florida (the Bank or Citizens National Bank), a
national banking association then in organization. For approximately the first eleven months following its incorporation, the main activities of Bancshares centered on applying for a national bank charter, applying to become a bank holding company,
hiring and training bank employees, preparing the banking facilities and premises for opening, and conducting an initial public offering of common stock to raise a minimum of $10 million to fund the startup of Citizens National Bank. By August 1999,
Citizens Bancshares had received subscriptions to purchase common stock in an amount in excess of the required minimum, and on August 24, 1999, Citizens National Bank commenced operations at its office located at 3401 Tamiami Trail North in Naples,
Florida.





On April 18, 2000, Citizens Capital Management was incorporated under the laws of the State of Florida
as a wholly-owned subsidiary of Citizens National Bank of Southwest Florida. Citizens Capital Management applied to the Office of the Comptroller of Currency and was approved to engage in fiduciary services and estate planning consultation on August
23, 2000. Citizens Capital Management offers investment management, trust administration, estate planning, and financial planning services. On May 28, 2002, Citizens Capital Management changed its corporate name to Florida Trust Company, Inc.





On December 3, 2001, the Company filed an Application for Authority to Organize a Bank with the Florida
Department of Banking and Finance for a new state bank to be named Bank of Florida and to be located in Fort Lauderdale, Florida. Bank of Florida opened for business on July 16, 2002.





Throughout this report, Bancshares of Florida, the Bank, Florida Trust Company and Bank of Florida are collectively referred to as the Company.





Basis of Presentation:





The accompanying unaudited consolidated financial statements include the accounts of the Company. All inter-Company accounts and transactions have been eliminated in consolidation.





The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information and with instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary have been made for the fair presentation of the Companys consolidated financial position and results of operations.
Operating results for the six-month period ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002.




5




---




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





MANAGEMENTS DISCUSSION AND ANALYSIS OF


FINANCIAL CONDITION AND RESULTS OF OPERATIONS


(For the Six Months Ended, June 30,
2002 and 2001)





General


Bancshares of Florida, f/k/a Citizens Bancshares of South Florida, Inc. was incorporated in Florida in September 1998 to serve as a holding company for Citizens National Bank of Southwest Florida, a national banking association then
in organization. The holding company structure provides flexibility for expansion of Bancshares of Floridas banking business through acquisition of other financial institutions and provision of additional banking-related services which the
traditional commercial bank may not provide under present laws. For example, banking regulations require that banks maintain a minimum ratio of capital to assets. In the event that Citizens Nationals or Bank of Floridas growth is such
that this minimum ratio is not maintained, Bancshares of Florida may borrow funds, subject to the capital adequacy guidelines of the Federal Reserve Board, and contribute them to the capital of Citizens National or Bank of Florida, and otherwise
raise capital in a manner that is unavailable to its bank subsidiaries under existing banking regulations.


|
|




For approximately the first eleven months following its
incorporation, the main activities of Bancshares of Florida centered on applying for a national bank charter, applying to become a bank holding company, hiring and training bank employees, preparing the banking facilities and premises for opening,
and conducting an initial public offering of common stock to raise a minimum of $10 million to fund the startup of Citizens National. By August 1999, Bancshares of Florida had received subscriptions to purchase common stock in an amount in excess of
the required minimum, and on August 24, 1999, Citizens National commenced operations at its office located at 3401 Tamiami Trail North in Naples, Florida.





|
|

Citizens National is a full service commercial bank with full trust powers. Citizens National offers a full
range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, money market accounts, individual retirement accounts, regular interest bearing statement savings accounts, certificates of deposit,
commercial loans, real estate loans, home equity loans and consumer/installment loans. In addition, Citizens National provides such consumer services as U.S. Savings Bonds, travelers checks, cashiers checks, safe deposit boxes, bank by mail
services, direct deposit and automatic teller services.


|
|




On April 18, 2000, Citizens Capital Management, Inc. was
incorporated under the laws of the State of Florida as a wholly-owned subsidiary of Citizens National. Citizens Capital Management applied to the Comptroller of the Currency and was approved to engage in fiduciary services and estate planning
consultation on August 23, 2000. Citizens Capital Management offers investment management, trust administration, estate planning, and financial planning services. On May 28, 2002, Citizens Capital Management changed its corporate name to Florida
Trust Company, Inc.





On July 16, 2002, Bancshares of Florida opened the Bank of Florida, a newly formed
state-chartered commercial bank, in Ft. Lauderdale, Florida. Bank of Florida opened with over $7 million in capital and offers a full range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts,
money market accounts, individual retirement accounts, regular interest




6




---

bearing statement savings accounts, certificates of deposit, commercial loans, real estate loans, home equity loans and consumer/installment
loans. In addition, Bank of Florida provides such consumer services as U.S. Savings Bonds, travelers checks, cashiers checks, safe deposit boxes, bank by mail services, direct deposit and automatic teller services.





Results of Operations





Overview





For the three-month period ended June 30, 2002, we reported a net loss of $
362,379 compared to a loss of $126,661 for the comparable period in 2001. Interest income generated during the quarter ended June 30, 2002 totaled $1,417,325 compared to $1,117,606 for the same period in 2000. Approximately 96.5% of interest income
for the second quarter of 2002, resulted from interest and fees on loans compared to 93.4% for the second quarter of 2001, a result of continued strong loan growth at Citizens National. Interest expense totaled $544,029 for the second quarter of
2002 compared to $553,512 for that period in 2001. Interest expense resulted entirely from interest paid on customer deposits. Net interest income represents the difference between interest received on interest-earning assets and interest paid on
interest-bearing liabilities. For the three-month period ended June 30, 2002, our net interest income yield was 3.34%, reflecting a yield on average earning assets of 6.57% and the cost of average interest-bearing liabilities of 3.24%.





As a result of our continued growth in loans, a total of $34,222 was added to the provision for loan loss for the three months
ended June 30, 2002, compared to $65,200 for the three month period ended June 30, 2001.





Non-interest income
totaled $124,121 for the three month period ended June 30, 2002, compared to $75,861 for the three month period ended June 30, 2001. Non-interest income included $67,563 in fees generated by Florida Trust Company during the second quarter of 2002
compared to $51,564 for the comparable period in 2001.





Our non-interest expense totaled $1,325,574 for the second
quarter of 2002, compared to $701,416 for the comparable period in 2001. Expenses related to personnel totaled $756,311 for the second quarter of 2002, compared to $406,384 for the comparable period in 2001. Non-interest expenses attributed to the
operation of Florida Trust Company totaled $143,604 for the three-month period ended June 30, 2002 compared to $104,729 for the comparable period in 2001. Non-interest expenses attributed to Bank of Florida totaled $334,747 for the three-month
period ended June 30, 2002.





For the six-month period ended June 30, 2002, we reported a net loss of $877,308,
compared to a loss of $316,593 for the comparable period in 2001. Interest income generated during the six months ended June 30, 2002 totaled $2,705,346, compared to $2,149,104 for the same period in 2001. Approximately 97.2% of interest income for
the first six months of 2002 resulted from interest and fees on loans, compared to 88.2% for the first six months of 2001, a result of continued strong loan growth at Citizens National. Interest expense totaled $1,082,459 for the first six months of
2002, compared to 1,105,096 for that period in 2001. Interest expense resulted mainly from interest paid on customer deposits. For the six-month period ended June 30, 2002, our net interest income yield was 3.33%, reflecting a yield on average
earning assets of 6.66% and the cost of average interest-bearing liabilities of 3.33%.





A total of $240,620 was
added to the provision for loan loss for the six months ended June 30, 2002, compared to $115,951, for the six month period ended June 30, 2001.




7




---




Non-interest income totaled $235,646 for the six month period ended June 30,
2002, compared to $108,273 for the comparable period in 2001. Non-interest income included $138,277 in fees generated by Florida Trust Company during the first two quarters of 2002 compared to $51,564 for the comparable period in 2001.





Our non-interest expense totaled $2,495,221 for the first six months of 2002, compared to $1,352,923 for the comparable period
in 2001. Expenses related to personnel totaled $1,417,843 for the first two quarters of 2002, compared to $795,496 for the comparable period in 2001. Non-interest expenses attributed to the operation of Florida Trust Company, Citizens
Nationals subsidiary, totaled $263,965 for the six-month period ended June 30, 2002 compared to $204,589 for the comparable period in 2001. Non-interest expenses attributed to Bank of Florida totaled $628,638 for the six-month period ended
June 30, 2002.





Average Balances, Income and Expenses, and Rates





The following table depicts, for the periods indicated, certain information related to our average balance sheet and its average yields on assets and average costs of
liabilities. Such yields are derived by dividing income or expense by the average balance of the corresponding assets or liabilities. Average balances have been derived from daily averages.





[Table follows this page.]




8




---




Average Balances, Income and Expenses, and Rates


(dollars in thousands)





For the Six Months Ended June 30,2002


2001Average Balance


Interest and
Dividends

Average Yield/ Rate


Average Balance


Interest and
Dividends

Average Yield/ RateEarning assets:Interest earning deposits

$
1,933


$
19

2.01
%

$
1,527


$
53

6.91
%Securities


583



16

5.51
%


559



16

5.62
%Federal funds sold


4,926



41

1.65
%


7,292



187

5.14
%Loans


74,020



2,629

7.12
%


42,244



1,894

8.99
%Total earning assets


81,461



2,705

6.66
%


51,622



2,149

8.35
%Non-earning assets


6,227









4,540Total Assets

$
87,688








$
56,162Interest-bearing liabilities:NOW and money market

$
14,102


$
73

1.03
%

$
14,127


$
223

3.16
%Savings


806



2

0.46
%


599



7

2.50
%Time deposits


48,978



996

4.08
%


27,641



875

6.35
%Other borrowings


1,229



12

2.02
%


0





n/aTotal interest-bearing liabilities


65,115



1,082

3.33
%


42,367



1,105

5.23
%Non interest-bearing liabilities


15,404









6,615Stockholders equity


7,170









7,180Total liabilities and equity

$
87,688








$
56,162Net interest income before provision





$
1,623








$
1,044Interest-rate spread








3.33
%








3.12
%Net interest margin








3.71
%








3.73
%Ratio of average earning assets to average interest-bearing liabilities


125.1
%








121.8
%




9




---




Comparison of Results of Operations for the Six Months Ended June 30, 2002





Net Interest IncomeThe largest component of our net income is net interest income, which is the
difference between the income earned on assets and the interest paid on deposits and borrowings used to support such assets. Net interest income is determined by the rates earned on interest-earning assets and the rates paid on our interest-bearing
liabilities, the relative amounts of interest-earning assets and interest-bearing liabilities, and the degree of mismatch and the maturity and re-pricing characteristics of its interest-earning assets and interest-bearing liabilities.





Net interest income was $1,622,887 for the six months ended June 30, 2002, as compared to $1,044,008 for the six months ended
June 30, 2001. The $29.2 million increase in loans (58.0%) between the periods had the most significant impact on the improvement in total interest income. Net interest income increased 55.5% for the six months ended June 30, 2002, versus the
comparable period in 2001. Net interest spread, the difference between the yield on earning assets and the rate paid on interest-bearing liabilities, was 3.33% for the six months ended June 30, 2002, as compared to 3.12% for the six months ended
June 30, 2001. Net interest margin, net interest income divided by average assets declined slightly to 3.71% for the six months ended June 30, 2002, as compared to 3.73% for the six months ended June 30, 2001. The increase in spread was a result of
increases in loan volumes having a greater impact on these ratios than the numerous declines in interest rates during the first six months of 2002.





Provision and Allowance For Credit Losses.    We have developed policies and procedures for evaluating the overall quality of our credit portfolio and the
timely identification of potential problem loans. Managements judgement as to the adequacy of the allowance is based upon a number of assumptions about future events that it believes to be reasonable, but which may or may not be valid. Thus,
there can be no assurance that charge-offs in future periods will not exceed the allowance for credit losses or that additional increases in the credit loss allowance will not be required.





The allowance for credit losses is established through a provision for loan losses charged against income. Loans are charged against the provision when management believes
that the collectibility of the principal is unlikely. The provision is an estimated amount that management believes will be adequate to absorb losses inherent in the loan portfolio based on evaluations of its collectibility. The evaluations take
into consideration such factors as changes in the nature and volume of the portfolio, overall portfolio quality, specific problem loans and commitments, and current anticipated economic conditions that may affect the borrowers ability to pay.
While management uses the best information available to recognize losses on loans, future additions to the provision may be necessary based on changes in economic conditions.





Activity in the allowance for credit losses follows:





Six Months Ended June 30, 2002


Twelve Months Ended December 31, 2001Balance, beginning of period

$
494,205


$
281,067Recoveries


0



268Charge-offs


(56,580
)


(1,702
)Charged to operations


240,620



214,572Balance, end of period


678,245



494,205




10




---




At June 30, 2002, the allowance for credit losses amounted to $678,245, or 0.85%
of outstanding loans. At December 31, 2001, the allowance for credit losses totaled $494,205, or 0.72% of outstanding loans. The provision for credit losses was $240,620 for the six months ended June 30, 2002. For the same six month period in 2001,
the provision for credit losses was $115,951. The provision for possible loan losses increased to $678,245 as of June 30, 2002 compared to $494,205 as of December 31, 2001. Because of a lack of historical loss experience, the provision has been
established based principally on loss histories of comparably sized and positioned banking institutions, adjusted for current economic and demographic conditions. The provision is also influenced by the fact that some 30% of the loan portfolio is
residential real estate which historically has resulted in a lower percentage of losses.





Non-interest Income and Expense





Non-interest Income.    Our primary sources of non-interest income include
service charges on deposit accounts and fees related to loans which are closed in the name of a third party. Other sources of non-interest income include debit card, atm card, check printing, safe deposit, wire transfer and official check fees.





Total non-interest income increased by $127,373 during the six months ended June 30, 2002, as compared to the
same period in 2001, reflecting increased activity fees related to increases in deposit and loan balances. Non-interest income totaled $235,646 for the six months ended June 30, 2002, as compared to $108,273 for the comparable period in 2001.





Non-interest Expense.    As Citizens National Bank and Florida Trust Company
continued to grow and we incurred expenses related to the organization of Bank of Florida in Fort Lauderdale, total non-interest expense increased by $1,142,298 during the six months ended June 30, 2002, as compared to the same period in 2001. Some
55.0% of this increase, or $628,637 was related to start-up costs for Bank of Florida. For the first six months of 2002, this increase involved increases in salary and benefits of $622,347 that resulted from the addition of staff due to continued
growth and provided normal salary and benefit increases. Occupancy and equipment related expenses increased $175,068 in the first six months of 2002, as compared to the same period in 2001. The organization of Bank of Florida occupancy and equipment
expenses totaled $144,285 in the first six months of 2002 or 82.4% of the total increase.





Comparison of Results of Operations for the
Three Months Ended June 30, 2002





Net Interest
Income.    Net interest income was $873,296 for the three months ended June 30, 2002, as compared to $564,094 for the three months ended June 30, 2001. The increase was directly related to significant
increase in loan volume of 58.0% (approximately $29.2 million) between the periods. Net interest spread, the difference between the yield on earning assets and the rate paid on interest-bearing liabilities was 3.34% for the three months ended June
30, 2002, as compared to 3.21% for the three months ended June 30, 2001.





Noninterest Income and Expense





Noninterest Income.    Total noninterest income increased by $48,260 during the three months ended June
30, 2002, as compared to the same period in 2001, reflecting increased activity fees related to increases in deposit and loan balances. Fees and service charges were $124,121 for the three months ended June 30, 2002, as compared to $75,861 for the
comparable period in 2001.





Noninterest Expense.    Total noninterest
expense increased by $624,158 during the three months ended June 30, 2002, as compared to the same period in 2001, as a result of Citizens Bancshares continued strong growth.




11




---

This 89.0% increase reflected increased personnel expenses related to additions in loan production, Florida Trust Company staffing components,
as well as organizational costs for Bank of Florida. Noninterest expenses related to Bank of Florida totaled $334,747 during the second quarter of 2002, or 53.6% of the total noninterest expense increase when compared to the second quarter of 2001.





Financial Condition





Our total assets at June 30, 2002, were $94.9 million, increasing from $77.1 million at December 31, 2001. The increase of approximately $17.8 million was due principally to the increase in loan
balances of $11.1million and a $4.2 million increase in interest-bearing deposits in banks. Deposits increased approximately $14.6 million, with $1.2 million of the increase attributable to non-interest bearing deposits, a 12.2% increase compared to
a 24.6% increase ($13.4 million) in interest bearing deposits.





Total stockholders equity as of June 30,
2002, was $15,930,279 million, an increase of $7.4 million or approximately 87.0%, compared with stockholders equity of approximately $8.5 million as of December 31, 2001. This increase is primarliy attributable to the sale of $8.3 million of
Bancshares common stock in the first half of 2002.





The following table shows selected ratios for the periods
ended or at the dates indicated:





Six Months Ended June 30, 2002


Year Ended Dec. 31, 2002Return on average assets

(2.00
)%

(0.87
)%Return on average equity

(24.49
)%

(7.74
)%Interest-rate spread during the period

3.33
%

2.76
%Net interest margin

3.71
%

3.62
%Allowance for credit losses to period end loans

0.85
%

0.72
%Net charge-offs to average loans

0.08
%

0.00
%Nonperforming assets to period end total assets

0.21
%

0.31
%Average Equity to Average Assets ratio

8.17
%

11.24
%





Liquidity and Capital Resources





Liquidity Management.    Liquidity management involves monitoring our sources and uses of funds in order
to meet its day-to-day cash flow requirements while maximizing profits. Liquidity represents the ability of a company to convert assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities.
Liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management control. For example, the timing of maturities of the investment portfolio is very predictable and subject to a
high degree of control at the time investment decisions are made. However, net deposit inflows and outflows are far less predictable and are not subject to the same degree of control. Asset liquidity is provided by cash and assets which are readily
marketable, which can be pledged, or which will mature in the near future. Liability liquidity is provided by access to core funding sources, principally the ability to generate customer deposits in our primary markets. In addition, liability
liquidity is provided through the ability to borrow against approved lines of credit including federal funds purchased from correspondent banks and the Federal Home Loan Bank.




12




---

Short-Term Investments.    Short-term investments, which consist of federal funds sold
and interest-bearing deposits, averaged $6.9 million in the first six months of 2002, as compared to $8.8 million in the same period of 2001. At June 30, 2002, and December 31, 2001, short-term investments totaled $6.7 million and $2.8 million,
respectively. These funds are a source of our liquidity and are generally invested in an earning capacity on an overnight basis.





Management regularly reviews our liquidity position and has implemented internal policies which establish guidelines for sources of asset-based liquidity and limit the total amount of purchased funds used to support the balance sheet
and funding from non-core sources.





Deposits and Other Sources of Funds.    In
addition to deposits, the sources of funds available for lending and other business purposes include loan repayments, loan sales, and borrowings from the Federal Home Loan Bank. Loan repayments are a relatively stable source of funds, while deposit
inflows and outflows are influenced significantly by general interest rates and money market conditions. Borrowings may be used on a short-term basis to compensate for reductions in other sources, such as deposits at less than projected levels, and
are also used to fund the origination of mortgage loans designated to be sold in the secondary markets.





Deposits.    Deposits from our primary market provide a relatively stable funding source for our loan portfolio and other earning assets. Our total deposits were $78.9 million at June 30, 2002, and
$64.3 million at December 31, 2001. Most of the $14.6 million increase in deposits since December 31, 2001, was attributable to continued growth in certificates of deposit. The funding requirements for loans have continued to grow in the first six
months of 2002, from 2001 levels. Loans have increased $11.1 million during the period from December 31, 2001, to June 30, 2002. As noted, we have also experienced strong growth in non-interest deposits as management continued a conscious effort to
attract deposits from commercial relationships. Management anticipates that a stable base of deposits will be our primary source of funding to meet both its short-term and long-term liquidity needs in the future.





Capital.    The Federal Reserve Board and bank regulatory agencies require bank holding companies and
financial institutions to maintain capital at adequate levels based on a percentage of assets and off-balance sheet exposures, adjusted for risk weights ranging from 0% to 100%. The Federal Reserve grants an exemption from these requirements for
bank holding companies with less than $150 million in consolidated assets, therefore our capital is currently measured only at our subsidiary banks level. Under the risk-based standard, capital is classified into two tiers. Tier 1 capital
consists of common stockholders equity, excluding the unrealized gain (loss) on available-for-sale securities, minus certain intangible assets. Tier 2 capital consists of the general allowance for credit losses subject to certain limitations.
An institutions qualifying capital base for purposes of its risk-based capital ratio consists of the sum of its Tier 1 and Tier 2 capital. The regulatory minimum requirements are 4% for Tier 1 and 8% for total risk-based capital.





Bank holding companies and banks are also required to maintain capital at a minimum level based on total assets, which is known
as the leverage ratio. The minimum requirement for the leverage ratio is 3%, but all but the highest rated institutions are required to maintain ratios 100 to 200 basis points above the minimum. Bancshares of Florida and Citizens National exceeded
their minimum regulatory capital ratios as of June 30, 2002, as reflected in the following table which sets forth its regulatory capital position: (dollars in thousands)




13




---




Actual Amount

%


Minimum(1)


Well-Capitalized(2)Amount

%


Amount

%Total Capital (to Risk-Weighted Assets)

$
7,547

10.14
%

$
5,956

8.00
%

$
7,445

10.00
%Tier 1 Capital (to Risk-Weighted Assets)

$
6,869

9.23
%

$
2,978

4.00
%

$
4,467

6.00
%Tier 1 Capital (to Average Assets)

$
6,869

7.43
%

$
3,698

4.00
%

$
4,623

5.00
%


---

|(1) |  | The minimum required for adequately capitalized purposes.
|--- |  | ---------------------------------------------------------

|(2) |  | To be well-capitalized under the FDICs Prompt Corrective Action regulations.
|--- |  | -------------------------------------------------------------------------------




Bancshares of Florida, Inc. is not aware of any current recommendation by any regulatory authority which, if implemented, would have a
material effect on Citizens Bancshares liquidity, capital resources or results of operations.








Cautionary Note Regarding Forward-Looking Statements





Bancshares of Florida, Inc.
may, from time to time, make written or oral forward-looking statements, including statements contained in Bancshares of Florida, Inc. filings with the Securities and Exchange Commission and its reports to stockholders. Such forward-looking
statements are made based on managements belief as well as assumptions made by, and information currently available to, management pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Bancshares of Florida, Inc. actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including governmental monetary and fiscal policies, deposit levels, loan demand, loan
collateral values, securities portfolio values and interest rate risk management; the effects of competition in the banking business from other commercial banks, savings and loan associations, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies, money market mutual funds and other financial institutions operating in Bancshares of Florida, Inc. market area and elsewhere, including institutions operating through the Internet;
changes in government regulations relating to the banking industry, including regulations relating to branching and acquisitions; failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral
underlying delinquent loans, and other factors. Bancshares of Florida, Inc. cautions that such factors are not exclusive. Bancshares of Florida, Inc. does not undertake to update any forward-looking statements that may be made from time to time by,
or on behalf of, Bancshares of Florida, Inc.




14




---

PART II.OTHER INFORMATION





Item 4.Submission of Matters to a Vote of Security Holders





On April 25, 2002, Citizens Bancshares of Southwest Florida, Inc. held its annual meeting of shareholders. At the meeting, Donald Barber, Stanley W. Hole, LaVonne Johnson, and Dr. Luc C. Mazzini were elected as Class I
Directors to three year terms. Of the 725,430 shares voted, LaVonne Johnson and Donald Barber received 725,430 or 100% FOR votes, Stanley Hole received 708,430 or 97.7% FOR votes and 16,000 votes withheld.a Dr. Luc Mazzini
received 705,930 or 97.3% FOR votes and 18,500 votes withheld. The following individuals will continue to serve as Directors until their respective terms expire: Joe B. Cox, Earl L. Frye, Michael L. McMullan, Polly M. Rogers, Lorenzo
Walker, John B. James and Bernard L. Turner.





Shareholders approved an amendment to the Articles of Incorporation
to change our the corporate name to Bancshares of Florida, Inc. A total of 701,430 or 96.7% voted FOR the proposal, 22,500 voted against and 500 voted to abstain.





Shareholders ratified the appointment of the firm Hill, Barth and King as independent auditors for the year ending December 31, 2002. A total of 721,930 or 99.5% voted
FOR the proposal, 50 voted against and 2,000 voted to abstain.





Item 5.Other
Information.





On April 30, 2002, an amendment to the Companys Articles of Incorporation was
deemed effective by the Florida Department of State, Division of Corporations. This amendment changed the Companys name from Citizens Bancshares of South Florida, Inc. to Bancshares of Florida, Inc.




15




---




Item 6.Exhibits and Reports on Form 8-K





The following exhibits are filed with the Securities and Exchange Commission and are
incorporated by reference into this Registration Statement. The exhibits which are denominated by an (a.) were previously filed as a part of a Registration Statement on Form SB-2 for Bancshares of Florida with the SEC on March 24, 1999, File No.
333-74997. The exhibits which are denominated by a (b.) were previously filed as a part of Amendment No. 1 to Form SB-2, filed with the SEC on May 7, 1999. The exhibits which are denominated by a (c.) were previously filed as a part of Form 10-KSB
filed with the SEC on March 30, 2000. The exhibits which are denominated by a (d.) were previously filed as a part of an exhibit to Form 10-QSB/A-1 filed on December 3, 2001. The exhibits which are denominated by an (e.) were previously filed as a
part of a Registration Statement on Form SB-2 for Bancshares of Florida with the SEC on December 28, 2001, File No. 333-76094.





Exhibit Number

Description of Exhibita.   3.1

Amended and Restated Articles of Association.a.   3.2

Bylaws.3.3

Amendment to Articles of Incorporation changing the corporate name filed as an exhibit to Form 8-K filed on
October 29, 2001.3.4

Amendment to Articles of Incorporation changing the corporate name filed as an exhibit to Form 8-K filed on May 10,
2002.b.   4.1

Specimen Common Stock Certificate.b.   4.3

Form of Stock Purchase Warrant1999 Offering.e.   4.4

Form of Stock Purchase Warrant2002 Offering.b. 10.1

Employment Agreement of Michael L. McMullan, dated as of April 28, 1999.c. 10.1.1

Amendment to Employment Agreement of Michael L. McMullan dated August 24, 1999.10.1.2

Amendment to Employment Agreement of Michael L. McMullan dated July 30, 2001.10.1.3

Amendment to Employment Agreement of Michael L. McMullan dated August 30, 2002.a. 10.2

Agreement for the Purchase and Sale of Real Property.c. 10.4

1999 Stock Option Plan.c. 10.5

Form of Incentive Stock Option Agreement.d. 10.6

Employment Agreement of Craig Sherman, dated as of May 3, 1999.10.6.1

Amendment to Employment Agreement of Craig Sherman, dated as of July 30, 2001.d. 10.7

Employment Agreement of Thomas M. Whelan, dated as of April 28, 1999.10.7.1

Amendment to Employment Agreement of Thomas M. Whelan, dated as of July 30, 2001.10.8

Employment Agreement of John B. James, dated as of October 1, 2001.10.9

Lease between Citizens Reserve, LLC and Citizens National Bank of Southwest Florida.10.10

Lease between Citizens Reserve, LLC and Citizens National Bank of Southwest Florida.





(b)  Reports on Form 8-K. On May 13, 2002, Bancshares
filed a Form 8-K reporting the change of its corporate name to Banschares of Florida, Inc.




16




---

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350





In connection with Bancshares of Florida, Unc.s (Company) Quarterly Report on Form 10-QSB for the period ended June 30, 2002 (Report), each of
the undersigned certify that:





1.  The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and





2.  The information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the period ended, June 30, 2002.





By:

/s/    MICHAEL L.
MCMULLANMichael L. McMullan Chief
Executive Officer





Date:  September 9, 2002





By:

/s/    THOMAS M.
WHELANThomas M. Whelan Executive
Vice President (principal financial and accounting officer)





Date:  September 9, 2002




17




---

SIGNATURES





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








By:

/s/    MICHAEL L.
MCMULLANMichael L. McMullan Chief
Executive Officer





Date:  September 9, 2002





By:

/s/    THOMAS M.
WHELANThomas M. Whelan Executive
Vice President (principal financial and accounting officer)





Date:  September 9, 2002




18