<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-K/A

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended                                  Commission File
   December 31, 1997                                         No. 0-27652

                           REPUBLIC BANCSHARES, INC.
             (Exact Name of Registrant As Specified In Its Charter)

         FLORIDA                                              59-3347653
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                           Identification No.)

111 2nd Avenue N.E., St. Petersburg, FL                         33701
   (Address of Principal Office)                             (Zip Code)

                                 (813) 823-7300
              (Registrant's Telephone Number, Including Area Code)

        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:

                              Title of each Class
                              -------------------
                         Common Stock, par value $2.00

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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     
                               ------             ------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not 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-K or any amendment to
this Form 10-K. /x/

As of March 13, 1998, there were 7,047,812 shares of the Registrant's Common
Stock, par value $2.00 per share, issued and outstanding.  Accordingly, the
aggregate market value of the voting stock held by non-affiliates of the
Registrant was $72,093,352.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders are incorporated by reference into Parts I, II, III, and IV of
this report.
<PAGE>   2




                      [This page intentionally left blank]
<PAGE>   3
                                EXPLANATORY NOTE

The undersigned Registrant hereby files this Amendment No. 1 to correct the
aggregate market value of voting stock held by non-affiliates of the
Registrant as set forth on the front cover, and to amend Item 6 - Selected
Consolidated Financial Data and Item 14 - Exhibits, Financial Statement
Schedules, and Reports on Form 8-K, of its Annual Report on Form 10-K for the
fiscal year ended March 31, 1998, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.



                   [Balance of page intentionally left blank]
<PAGE>   4
ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated operating data, per share data, balance 
sheet data and selected financial ratios as of and for each of the years ended
December 31, 1994, 1995, 1996, and 1997, the seven-month period ended December
31, 1993, and the five-month period ended May 31, 1993 were derived from the
audited consolidated financial statements.  The FFO Merger, completed on
September 19, 1997, was accounted for as a corporate reorganization in which
the majority stockholders' interest in FFO was combined at historical cost in a
manner similar to a pooling of interests while the minority interest in FFO was
combined using purchase accounting rules. This accounting treatment required
that all prior period financial information be restated as if the FFO Merger
had been completed in those previous years. The Company's financial information
will differ, in some cases substantially, from financial information presented
prior to completion of the FFO Merger. Financial data at and for the period
ended May 31, 1993, is not restated to reflect the FFO merger as the change in
control did not occur until May 28, 1993. Comparison of financial results
presented herein to financial information in the Company's previously-issued
financial reports may be misleading. In light of the significant mark-to-market
adjustments and other adjusting entries to its financial statements that were
made following the change in control, management believes that the usefulness
of comparisons between (i) the financial statements and the financial data
derived therefrom as of the dates and for the periods prior to June 1, 1993,
and (ii) the financial statements and the financial data derived therefrom as
of the dates and for the periods since June 1, 1993, may be limited. In
addition, subsequent to consummation of the initial public offering and the
Purchase and Assumption in December 1993, the Company has operated in a
significantly different manner from that which it had previously operated.
Accordingly, the financial results for periods prior to the Purchase and
Assumption differ significantly from periods since then. The following
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements, related notes and other financial information presented
elsewhere.

<PAGE>   5
                 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
                                    - TABLE 1
                     ($ IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                       Years Ended December 31,
                                                  --------------------------------------------------------------------
OPERATING DATA:                                       1997               1996               1995               1994
===============                                   -----------        -----------        -----------        -----------

<S>                                               <C>                <C>                <C>                <C>
 Interest income ............................     $   108,457        $    88,944        $    77,593        $    53,997
 Interest expense ...........................          54,923             44,949             40,112             24,423
                                                  -----------        -----------        -----------        -----------
 Net interest income ........................          53,534             43,995             37,481             29,574
 Loan loss provision ........................           2,628              2,582              2,162                172
                                                  -----------        -----------        -----------        -----------
 Net interest income after ..................          50,906             41,413             35,319             29,402
     loan loss provision
 Other noninterest income ...................          25,031              6,745              5,353              5,099
 Gain on sale of ORE held for investment ....               -              1,207                  -                  -
 General and administrative .................          57,484             36,829             30,963             23,678
   ("G&A") expenses
 Merger expenses ............................           1,144                  -                  -                  -
 SAIF special assessment ....................               -              4,005                  -                  -
 Provision for losses on ORE ................             530                111                  -                  -
 Other noninterest expense ..................             273               (490)               902              4,216
 Amort. of goodwill & premium                             464                491                450              1,269
                                                  -----------        -----------        -----------        -----------
    on deposits .............................
 Net income before income taxes, negative
    goodwill accretion & minority interest ..          16,042              8,419              8,357              5,338
 Accretion of negative goodwill .............               -                  -              1,578              2,705
                                                  -----------        -----------        -----------        -----------
 Net income before income taxes                        16,042              8,419              9,935              8,043
     & minority interest ....................
 Income tax (expense) benefit ...............          (6,096)            (3,035)            (2,516)              (702)
 Minority interest in income from                        (701)                 -                  -                  -
    subsidiary trust ........................
 Minority interest in FFO Financial, Inc. ...            (674)              (505)              (503)              (131)
                                                  -----------        -----------        -----------        -----------
 Net income .................................     $     8,571        $     4,879        $     6,916        $     7,210
                                                  ===========        ===========        ===========        ===========
 Earnings per share - diluted ...............     $      1.21        $      0.74        $      1.10        $      1.28
                                                  ===========        ===========        ===========        ===========
 Weighted average shares                            7,301,499          6,626,604          6,261,368          5,632,437
                                                  ===========        ===========        ===========        ===========
    outstanding - diluted ...................  
 Earnings per share - basic .................     $      1.40        $      0.83        $      1.26        $      1.48
                                                  ===========        ===========        ===========        ===========
 Weighted average shares                            6,128,014          5,857,174          5,491,250          4,868,211
                                                  ===========        ===========        ===========        ===========
    outstanding - basic .....................
BALANCE  SHEET DATA:
==================== 
 Total assets ...............................     $ 1,552,405        $ 1,224,357        $ 1,103,480        $   879,873
 Investment & mortgage backed securities ....         108,593            161,357            155,345            101,028
 Loans held for sale ........................         151,404             46,593             27,476              7,930
 Loans held in portfolio,                           1,149,731            920,782            831,033            680,604
    net of unearned income ..................
 Allowance for loan losses ..................          20,776             18,747             20,048             15,272
 Goodwill & premium on deposits .............           4,855                527              1,017                820
 Deposits ...................................       1,361,312          1,114,907            992,041            794,717
 Stockholders' equity .......................          95,531             68,178             63,833             47,618
 Book value per share (dollars) .............           12.27              10.32               9.65               8.16
SELECTED FINANCIAL RATIOS:
==========================
 Return on average assets ...................            0.63%              0.43%              0.68%              0.90%
 Return on average equity ...................           11.44               7.41              12.62              16.73
 Equity to assets ...........................            6.15               5.57               5.78               5.41
 Equity to assets minority interest                      8.01               5.57               5.78               5.41
    in preferred subsidiary .................
 Net interest spread ........................            3.71               3.63               3.65               3.87
 Net interest margin ........................            4.18               4.02               3.95               4.06
 G & A expense to average assets ............            4.26               3.21               3.06               2.95
 G & A efficiency ratio .....................           73.17              72.58              72.29              68.29
 Loan/deposit ratio .........................           84.46              82.59              83.77              85.64
 Nonperforming loans to loans ...............            2.36               2.12               2.18               2.44
 Nonperforming assets to total assets .......            2.20               2.27               2.78               3.96
 Loan loss allowance to loans ...............            1.81               2.04               2.40               2.24
 Loan loss allowance to nonperforming loans:
  Originated portfolio ......................           93.66              73.15             106.51             177.30
  March 1995 purchase .......................          373.91             488.78             647.83                N/A
  Crossland portfolio .......................          421.88             126.12              41.77              23.73
  Other purchased portfolios ................           22.28              89.80              41.84              82.99
  Total portfolio loans .....................           76.51              96.03             110.73              91.98
OTHER DATA (AT PERIOD-END):
===========================
  Number of branches ........................              45                 43                 43                 31
  Number of full time equivalent employees ..           1,045                795                573                451
</TABLE>


                                       3
<PAGE>   6



                 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
                                    - TABLE 2
                     ($ IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             Seven Months Ended     Five Months Ended
                                                              December 31, 1993        May 31, 1993
                                                             ------------------     -----------------
<S>                                                          <C>                    <C>
OPERATING DATA:
===============
Interest income .......................................         $    11,885              $     4,848
Interest expense ......................................               5,120                    1,970
                                                                -----------              -----------
Net interest income ...................................               6,765                    2,878
Loan loss provision ...................................               3,222                      379
                                                                -----------              -----------
Net interest income after loan loss provision .........               3,543                    2,499
Other noninterest income ..............................                   -                      743
General and administrative (G&A) expenses .............               6,481                    2,699
Provision for losses on ORE ...........................                   -                    1,214
Other noninterest expense .............................                 331                      443
                                                                -----------              -----------
Net income before income taxes, negative                             (1,592)                  (1,114)
  goodwill accretion & minority interest ..............
Accretion of negative goodwill ........................               1,578                        -
                                                                -----------              -----------
Net income before income taxes                                          (14)                  (1,114)
  & minority interest .................................
Income tax (expense) benefit ..........................               2,844                        -
Minority interest in FFO ..............................                (197)                       -
                                                                -----------              -----------
   Net income .........................................         $     2,633              $    (1,114)
                                                                ===========              ===========
Earnings(loss) per share-diluted ......................         $      1.01              $     (1.00)
                                                                ===========              ===========
Weighted average shares outstanding-diluted ...........           2,594,923                1,117,192
                                                                ===========              ===========
Earnings(loss) per share-basic ........................         $      1.10              $     (1.11)
                                                                ===========              ===========
Weighted average shares outstanding-basic .............           2,398,066                1,002,794
                                                                ===========              ===========
BALANCE SHEET DATA:
===================
Total assets ..........................................         $   780,711              $   168,741
Investment and mortgage backed securities .............              74,042                   27,433
Loans held for sale ...................................              11,346                        -
Loans held in portfolio, net of unearned income .......             479,600                  111,292
Allowance for loan losses .............................              15,872                    1,866
Deposits ..............................................             705,584                  153,660
Negative goodwill .....................................               4,283                    5,861
Stockholders' equity ..................................              34,003                    8,058
Book value per share (dollars) ........................                6.11                      N/A
SELECTED FINANCIAL RATIOS:
==========================
Return on average assets ..............................                0.97%                   (1.61)%
Return on average equity ..............................               36.97                   (21.75)
Equity to assets ......................................                4.36                     4.78
Net interest spread ...................................                3.88                     4.21
Net interest margin ...................................                4.30                     4.66
G&A expense to average assets .........................                2.38                     6.28
G&A efficiency ratio ..................................               76.77                    74.54
Loan/deposit ratio ....................................               67.97                    72.43
Nonperforming loans to loans ..........................                4.03                     2.27
Nonperforming assets to total assets ..................                5.66                     5.89
Loan loss allowance to loans ..........................                3.31                     1.68
Loan loss allowance to nonperforming loans:
Originated portfolio ..................................              129.06                    73.03
CrossLand portfolio ...................................               39.88                      N/A
Total portfolio loans .................................               82.20                    73.03
OTHER DATA (AT PERIOD-END):
===========================
Number of branches ....................................                  29                        7
Number of full time equivalent employees ..............                 373                       96
</TABLE>


                                       4
<PAGE>   7



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report at pages 49
         through 81.

         1.       Financial Statements
                  Financial Statements of Republic Bancshares, Inc.
                  Report of Independent Certified Public Accountants
                  Consolidated Balance Sheets at December 31, 1997 and 1996
                  Consolidated Statements Of Operations, Stockholders' Equity
                  and Cash Flows for:
                  Years Ended December 31, 1997, 1996, and 1995
                  Notes to Consolidated Financial Statements

         2.       Financial Statement Schedules

                  All required schedules are included in the financial
                  statements or related notes.

(b)      No report on Form 8-K has been filed during fiscal year ending December
         31, 1997. (c) Exhibits:

         3.1      Amended and Restated Articles of Incorporation of the Company
                  (incorporated by reference from Exhibit 3.1 of the Company's
                  Registration Statement on Form S-4, File No. 33-80895, dated
                  December 28, 1995).
         3.2      By-laws of the Company (incorporated by reference from Exhibit
                  3.2 of the Company's Registration Statement on Form S-4, File
                  No. 33-80895, dated December 28, 1995).
         10.1     Purchase and Assumption Agreement relating to the Florida
                  Branches, between NationsBank Corporation and the Company,
                  dated December 15, 1997.
         10.2     Purchase and Assumption Agreement relating to the Georgia
                  Branch, between NationsBank Corporation and the Company, 
                  dated December 15, 1997.
         21.0     List of Subsidiaries
         23.1     Consent of Arthur Andersen LLP.
         27.0     Financial Data Schedule.+ (for SEC use only)

----------------------
+  Previously Filed


                                       5


<PAGE>   8




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and the Board of Directors of Republic Bancshares, Inc.:

         We have audited the accompanying consolidated balance sheets of
Republic Bancshares, Inc. (a Florida corporation) and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1997. 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 did not audit the financial statements of F.F.O. Financial Group,
Inc., a company acquired during 1997 in a transaction accounted for as a
corporate reorganization, as discussed in Note 1. Such statements are included
in the consolidated financial statements of Republic Bancshares, Inc. and
reflect total assets and total revenues of 27% and 25%, respectively, of the
related consolidated totals. These statements were audited by other auditors
whose report has been furnished to us and our opinion, insofar as it relates to
amounts included for F.F.O. Financial Group, Inc., is based solely upon the
report of the other auditors.

         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 and the report of the other auditors provide a
reasonable basis for our opinion.

         In our opinion, based on our audit and the report of the other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Republic Bancshares, Inc. and
subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.




Tampa, Florida
March 13, 1998


                                       6

<PAGE>   9



                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS -DECEMBER 31, 1997 AND 1996
                       ($ in thousands, except par values)

<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                    --------------------------
                                                                                        1997            1996
                                                                                    ----------     -----------
<S>                                                                                 <C>            <C>        
                                      ASSETS
                                      ------
Cash and due from banks ........................................................    $   45,998     $    34,109
Interest bearing deposits in banks .............................................           671          11,783
Federal funds sold .............................................................        33,000           8,000
Investment securities:
Available for sale .............................................................        16,080          74,397
   Trading .....................................................................             -           4,032
Mortgage-backed securities:
   Held  to maturity ...........................................................             -          15,343
   Available for sale ..........................................................        55,467          62,037
   Trading .....................................................................        37,046           5,548
FHLB stock .....................................................................         8,148           7,209
Loans held for sale ............................................................       151,404          46,593
Loans, net of allowance for loan losses ........................................     1,128,955         902,035
Premises and equipment, net ....................................................        33,303          25,039
Other real estate owned acquired through foreclosure, net ......................         6,997           8,162
Accrued interest receivable ....................................................         9,611           7,160
Goodwill and premium on deposits ...............................................         4,855             527
Other assets ...................................................................        20,870          12,383
                                                                                    ----------     -----------
      Total assets .............................................................    $1,552,405     $ 1,224,357
                                                                                    ==========     ===========

                                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                      ------------------------------------
Liabilities:
   Deposits-
      Noninterest-bearing checking .............................................    $   93,843     $    64,363
      Interest checking ........................................................       137,240          87,639
      Money market .............................................................        30,389          32,665
      Savings ..................................................................       291,604         303,932
      Time deposits ............................................................       808,236         626,308
                                                                                    ----------     -----------
          Total deposits .......................................................     1,361,312       1,114,907
Securities sold under agreements to repurchase .................................        19,654          15,372
FHLB advances ..................................................................        35,000           7,000
Subordinated debt ..............................................................             -           6,000
Other liabilities ..............................................................        12,158           6,479
                                                                                    ----------     -----------
          Total liabilities ....................................................     1,428,124       1,149,758
                                                                                    ----------     -----------

Company-obligated mandatorily redeemable capital ...............................        28,750               -
                                                                                    ----------     -----------
   securities of subsidiary trust holding soley junior
   subordinated debentures of the Company
Minority interest in F.F.O. Financial Group, Inc. ..............................             -           6,421
                                                                                    ----------     -----------
Stockholders' equity:
   Perpetual preferred convertible stock ($20.00 par, 100,000 shares authorized,
   75,000 shares issued and outstanding:
   Liquidation preference $6,600 at December 31, 1997 and 1996 .................         1,500           1,500
Common stock ($2.00 par, 20,000,000 shares authorized, 7,035,886 and ...........        14,072          11,708
   5,854,414 shares issued and outstanding at December 31, 1997 and
   1996, respectively)
Capital surplus ................................................................        50,322          34,225
Retained earnings ..............................................................        29,155          20,847
Net unrealized gain (losses) on available-for-sale securities, .................           482            (102)
                                                                                    ----------     -----------
   net of tax effect
   Total stockholders' equity ..................................................        95,531          68,178
                                                                                    ----------     -----------
   Total liabilities and stockholders' equity ..................................    $1,552,405     $ 1,224,357
                                                                                    ==========     ===========
</TABLE>



         The accompanying notes are an integral part of these consolidated
balance sheets.


                                       7
<PAGE>   10

                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     ($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                      FOR THE YEARS ENDED DECEMBER 31
                                                               --------------------------------------------
                                                                    1997              1996           1995
                                                               --------------------------------------------
<S>                                                            <C>               <C>            <C>
INTEREST INCOME:
Interest and fees on loans .................................   $    97,810       $    78,955    $    67,746
     Interest on investment securities .....................         2,155             2,097          3,171
     Interest on mortgage-backed securities ................         5,252             5,375          2,869
     Interest on trading securities ........................            59                 -              -
     Interest on federal funds sold ........................         2,447             1,714          3,117
     Interest on other investments .........................           734               803            690
                                                               -----------       -----------    -----------
   Total interest income ...................................       108,457            88,944         77,593
                                                               -----------       -----------    -----------
INTEREST EXPENSE:
     Interest on deposits ..................................        52,311            44,136         39,822
     Interest on FHLB advances .............................         1,169               365            163
     Interest on subordinated debt .........................           392                 5              -
     Interest on other borrowings ..........................         1,051               443            127
                                                               -----------       -----------    -----------
               Total interest expense ......................        54,923            44,949         40,112
                                                               -----------       -----------    -----------
               Net interest income .........................        53,534            43,995         37,481
PROVISION FOR LOAN LOSSES ..................................         2,628             2,582          2,162
                                                               -----------       -----------    -----------
 Net interest income after provision for possible 
   loan losses .............................................        50,906            41,413         35,319
                                                               -----------       -----------    -----------
NONINTEREST INCOME:
     Income from mortgage banking activities ...............        15,159               852              -
     Gain on sale of loans .................................         1,491               144            210
     Service charges and fees on deposits ..................         3,358             2,847          2,644
     Loan fee income .......................................         1,394             1,327          1,019
     Gain on sale of ORE -- held for investment ............             -             1,207              -
     Gain on sale of securities, net .......................         1,308               261            322
     Other operating income ................................         2,321             1,314          1,138
                                                               -----------       -----------    -----------
               Total noninterest income ....................        25,031             7,952          5,353
NONINTEREST EXPENSES:
Salaries and employee benefits .............................        27,253            18,505         15,294
Net occupancy expense ......................................         8,118             6,381          5,025
Data processing fees .......................................         2,605             2,119          1,716
   FDIC and state assessments ..............................           824             1,606          2,212
Other operating expense ....................................        18,684             8,218          6,716
                                                               -----------       -----------    -----------
Total general and administrative expenses ..................        57,484            36,829         30,963
Merger expenses ............................................         1,144                 -              -
SAIF special assessment ....................................             -             4,005              -
Provisions for losses on ORE ...............................           530               111            240
ORE expense, net of ORE income .............................           273              (490)           662
Amortization of goodwill & premium on deposits .............           464               491            450
                                                               -----------       -----------    -----------
Total noninterest expenses .................................        59,895            40,946         32,315
                                                               -----------       -----------    -----------
Income before negative goodwill accretion, income taxes ....        16,042             8,419          8,357
   and minority interest
Negative goodwill accretion ................................             -                 -          1,578
Income tax provision .......................................        (6,096)           (3,035)        (2,516)
Minority interest in income from subsidiary trust ..........          (701)                -              -
Minority interest in F.F.O .................................          (674)             (505)          (503)
                                                               -----------       -----------    -----------
NET INCOME .................................................   $     8,571       $     4,879    $     6,916
                                                               ===========       ===========    ===========
PER SHARE DATA:
Net income per common and common equivalent share-diluted ..   $      1.21       $        74    $      1.10
                                                               ===========       ===========    ===========
Weighted average common and common equivalent shares
outstanding - diluted ......................................     7,301,499         6,626,604      6,261,368
                                                               ===========       ===========    ===========
Net income per common share-basic ..........................   $      1.40       $       .83    $      1.26
                                                               ===========       ===========    ===========
Weighted average common shares outstanding-basic ...........     6,128,014         5,857,174      5,491,250
                                                               ===========       ===========    ===========
</TABLE>


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



                                       8
<PAGE>   11



                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                ($ IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                                                                 NET
                                                                                                          UNREALIZED
                              PERPETUAL PREFERRED                                                              GAINS
                              Convertible Stock                                                              (LOSSES)
                              -------------------          COMMON STOCK                                 ON AVAILABLE
                                   SHARES                     SHARES                CAPITAL    RETAINED     FOR SALE
                                   ISSUED         AMOUNT      ISSUED     AMOUNT     SURPLUS    EARNINGS    SECURITIES       TOTAL
                                   ------         ------      ------     ------     -------    --------    ----------       -----

<S>                           <C>                <C>       <C>          <C>         <C>        <C>      <C>              <C>        
BALANCE, DECEMBER 31, 1994              75,000   $ 1,500   5,082,782    $ 10,166    $ 26,843    $  9,577     $(549)      $ 47,537

Net income                                  --        --          --          --          --       6,918         --         6,918
Net unrealized gains on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --        651           651
Issuance of common stock                    --        --     800,000       1,600       7,537          --         --         9,137
Exercise of stock options                   --        --       3,170           6          23          --         --            29
Dividends on preferred stock                                                                        (263)                    (263)
Net change in minority interest             --        --     (23,200)        (47)       (129)         --         --          (176)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------

BALANCE, DECEMBER 31, 1995              75,000     1,500   5,862,752      11,725      34,274      16,232        102        63,833

Net income                                  --        --          --          --          --       4,879         --         4,879
Net unrealized loss on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --       (204)         (204)
Dividends on preferred stock                --        --          --          --          --        (264)        --          (264)
Net change in minority interest             --        --      (8,338)        (17)        (49)         --         --           (66)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------

BALANCE, DECEMBER 31, 1996              75,000     1,500   5,854,414      11,708      34,225      20,847       (102)       68,178


Net income                                  --        --          --          --          --       8,571         --         8,571
Net unrealized gains on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --        584           584
Exercise of stock options                   --        --      21,300          43         197          --         --           240
Net change in minority interest             --        --      (2,537)         (5)       (487)         --         --          (492)
Issuance of common stock in
   merger transaction                       --        --     826,709       1,654      11,211          --         --        12,865
Conversion of subordinated
   debentures                               --        --     336,000         672       5,176          --         --         5,848
Dividends on preferred stock                --        --          --          --          --        (263)        --          (263)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------
BALANCE, DECEMBER 31, 1997              75,000   $ 1,500   7,035,886    $ 14,072    $ 50,322    $ 29,155    $   482      $ 95,531
                                    ==========   =======  ==========    ========    ========    ========    =======      ========
</TABLE>





  The accompanying notes are an integral part of these consolidated statements

                                       9
<PAGE>   12

                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     ($ IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                        FOR THE YEARS ENDED DECEMBER 31
                                                                          1997           1996           1995
                                                                   -----------------------------------------
INTEREST INCOME:
<S>                                                                <C>            <C>            <C>        
Interest and fees on loans ................................        $    97,810    $    78,955    $    67,746
     Interest on investment securities ....................              2,155          2,097          3,171
     Interest on mortgage-backed securities ...............              5,252          5,375          2,869
     Interest on trading securities .......................                 59             --             --
     Interest on federal funds sold .......................              2,447          1,714          3,117
     Interest on other investments ........................                734            803            690
                                                                   -----------    -----------    -----------
   Total interest income ..................................            108,457         88,944         77,593
                                                                   -----------    -----------    -----------
INTEREST EXPENSE:
     Interest on deposits .................................             52,311         44,136         39,822
     Interest on FHLB advances ............................              1,169            365            163
     Interest on subordinated debt ........................                392              5             --
     Interest on other borrowings .........................              1,051            443            127
                                                                   -----------    -----------    -----------
               Total interest expense .....................             54,923         44,949         40,112
                                                                   -----------    -----------    -----------
               Net interest income ........................             53,534         43,995         37,481
PROVISION FOR LOAN LOSSES .................................              2,628          2,582          2,162
                                                                   -----------    -----------    -----------
 Net interest income after provision for possible .........             50,906         41,413         35,319
                                                                   -----------    -----------    -----------
   loan losses
NONINTEREST INCOME:
     Income from mortgage banking activities ..............             15,159            852             --
     Gain on sale of loans ................................              1,491            144            210
     Service charges and fees on deposits .................              3,358          2,847          2,644
     Loan fee income ......................................              1,394          1,327          1,019
     Gain on sale of ORE -- held for investment ...........                 --          1,207             --
     Gain on sale of securities, net ......................              1,308            261            322
     Other operating income ...............................              2,321          1,314          1,138
                                                                   -----------    -----------    -----------
               Total noninterest income ...................             25,031          7,952          5,353
NONINTEREST EXPENSES:
Salaries and employee benefits ............................             27,253         18,505         15,294
Net occupancy expense .....................................              8,118          6,381          5,025
Data processing fees ......................................              2,605          2,119          1,716
   FDIC and state assessments .............................                824          1,606          2,212
 Other operating expense ..................................             18,684          8,218          6,716
                                                                   -----------    -----------    -----------
Total general and administrative expenses .................             57,484         36,829         30,963
 Merger expenses ..........................................              1,144             --             --
 SAIF special assessment ..................................                 --          4,005             --
 Provisions for losses on ORE .............................                530            111            240
 ORE expense, net of ORE income ...........................                273           (490)           662
Amortization of goodwill & premium on deposits ............                464            491            450
                                                                   -----------    -----------    -----------
Total noninterest expenses ................................             59,895         40,946         32,315
                                                                   -----------    -----------    -----------
Income before negative goodwill accretion, income taxes ...             16,042          8,419          8,357
   and minority interest
Negative goodwill accretion ...............................                 --             --          1,578
Income tax provision ......................................             (6,096)        (3,035)        (2,516)
Minority interest in income from subsidiary trust .........               (701)            --             --
Minority interest in F.F.O ................................               (674)          (505)          (503)
                                                                   -----------    -----------    -----------
NET INCOME ................................................        $     8,571    $     4,879    $     6,916
                                                                   ===========    ===========    ===========
PER SHARE DATA:
Net income per common and common equivalent share-diluted..        $      1.21    $        74    $      1.10
                                                                   ===========    ===========    ===========
Weighted average common and common equivalent shares ......          7,301,499      6,626,604      6.261,368
outstanding - diluted .....................................        ===========    ===========    ===========
Net income per common share-basic .........................        $      1.40    $       .83    $      1.26
                                                                   ===========    ===========    ===========
Weighted average common  shares outstanding-basic .........          6,128,014      5,857,174      5,491,250
                                                                   ===========    ===========    ===========
</TABLE>


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

                                       8

<PAGE>   13



                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                ($ IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                                                                 NET
                                                                                                          UNREALIZED
                              Perpetual Preferred                                                              GAINS
                              Convertible Stock                                                              (LOSSES)
                              -------------------          Common Stock                                 ON AVAILABLE
                                   SHARES                     SHARES                CAPITAL    RETAINED     FOR SALE
                                   Issued         Amount      Issued     Amount     Surplus    Earnings    Securities       Total
                                   ------         ------      ------     ------     -------    --------    ----------       -----

<S>                           <C>                <C>       <C>          <C>         <C>        <C>      <C>              <C>        
BALANCE, DECEMBER 31, 1994              75,000   $ 1,500   5,082,782    $ 10,166    $ 26,843    $  9,577     $(549)      $ 47,537

Net income                                  --        --          --          --          --       6,918         --         6,918
Net unrealized gains on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --        651           651
Issuance of common stock                    --        --     800,000       1,600       7,537          --         --         9,137
Exercise of stock options                   --        --       3,170           6          23          --         --            29
Dividends on preferred stock              (263)     (263)
Net change in minority interest             --        --     (23,200)        (47)       (129)         --         --          (176)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------

BALANCE, DECEMBER 31, 1995              75,000     1,500   5,862,752      11,725      34,274      16,232        102        63,833

Net income                                  --        --          --          --          --       4,879         --         4,879
Net unrealized loss on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --       (204)         (204)
Dividends on preferred stock                --        --          --          --          --        (264)        --          (264)
Net change in minority interest             --        --      (8,338)        (17)        (49)         --         --           (66)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------

BALANCE, DECEMBER 31, 1996              75,000     1,500   5,854,414      11,708      34,225      20,847       (102)       68,178


Net income                                  --        --          --          --          --       8,571         --         8,571
Net unrealized gains on
available-for-sale securities,
net of tax effect                           --        --          --          --          --          --        584           584
Exercise of stock                           --        --      21,300          43         197          --         --           240
options
Net change in minority                      --        --      (2,537)         (5)       (487)         --         --          (492)
interest
Issuance of common stock in
   merger transaction                       --        --     826,709       1,654      11,211          --         --        12,865
Conversion of subordinated
   debentures                               --        --     336,000         672       5,176          --         --         5,848
Dividends on preferred stock                --        --          --          --          --        (263)        --          (263)
                                    ----------   -------  ----------    --------    --------    --------    -------      --------
BALANCE, DECEMBER 31, 1997              75,000   $ 1,500   7,035,886    $ 14,072    $ 50,322    $ 29,155    $   482      $ 95,531
                                    ==========   =======  ==========    ========    ========    ========    =======      ========
</TABLE>





  The accompanying notes are an integral part of these consolidated statements

                                       9
<PAGE>   14



                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                ($ in thousands)

<TABLE>
<CAPTION>

                                                                           FOR THE YEARS ENDED 
                                                                               DECEMBER  31,
                                                                  -----------------------------------
                                                                     1997         1996         1995
                                                                     ----         ----         ----
<S>                                                               <C>          <C>          <C>      
OPERATING ACTIVITIES:
Net income ....................................................   $   8,571    $   4,879    $   6,916

Reconciliation of net income to net cash (used in)
  provided by operating activities:
Provision for loan and ORE losses .............................       3,235        2,693        2,402
Depreciation and amortization, net ............................       5,297       (1,165)         592
Amortization of premium (accretion) of fair value, net ........         918          712       (1,111)
Gain on sale of loans .........................................     (16,500)        (996)        (210)
Gain on sale of investment securities .........................        (724)        (457)         (93)
Gain on sale of other real estate owned .......................         (27)      (1,810)         (39)
Capitalization of mortgage servicing ..........................      (6,826)      (1,741)          --
Loss (gain) on disposal of premises and equipment .............          14           (2)          --
Net decrease (increase) in deferred tax benefit ...............      (3,768)        (755)         (12)
Net (increase) decrease in other assets .......................      (4,339)       1,803       (4,027)
Net increase (decrease) in other liabilities ..................       4,554       (1,248)       1,800
                                                                  ---------    ---------    ---------
Net cash (used in) provided by operating activities ...........     (11,430)       1,919        6,218
                                                                  ---------    ---------    ---------
INVESTING ACTIVITIES:
Proceeds from excess of deposit liabilities assumed on assets  
   acquired, net of cash acquired .............................       7,223           --           --
Proceeds from sales and maturities of:    
   Investment securities held to maturity .....................          --        7,000       36,526
Investment securities available for sale ......................     126,544      109,218       11,727
Mortgage-backed securities held to maturity ...................          --       15,455           --
Mortgage-backed securities available for sale .................      50,627        6,393        9,732
 Mortgage-backed securities in trading portfolio ..............       2,764       13,496           --
Purchase of investment securities available for sale ..........     (66,771)    (156,036)     (68,187)
Purchase of mortgage backed securities in trading portfolio ...      (4,468)     (20,105)     (16,106)
Principal repayment on mortgage backed securities .............       9,809       25,606        3,073
Purchase of FHLB stock ........................................        (131)      (1,155)      (2,248)
Net increase in loans .........................................    (324,605)    (118,650)    (203,262)
Purchase of premises and equipment ............................      (9,993)      (2,379)      (6,783)
Proceeds from sale of other real estate owned .................       4,739       10,271       10,623
Investments in other real estate owned (net) ..................       2,276          101          315
                                                                  ---------    ---------    ---------
Net cash used in investing activities .........................    (201,986)    (110,785)    (224,590)
                                                                  ---------    ---------    ---------
FINANCING ACTIVITIES:
Net increase in deposits ......................................     177,540      122,866      197,316
Net increase in repurchase agreements .........................       4,282       12,301          991
Proceeds from issuance of subordinated debt ...................          --        6,000           --
Net change of minority interest in FFO ........................         645           --           --
Proceeds from issuance of common stock ........................         240           --        9,166
Proceeds from issuance of minority interest in trust subsidiary      28,750           --           --
Proceeds from FHLB advances ...................................      28,000      (23,000)       8,600
Dividends on perpetual preferred stock ........................        (264)        (264)        (263)
                                                                  ---------    ---------    ---------
Net cash provided by financing activities .....................     239,193      117,903      215,810
                                                                  ---------    ---------    ---------
NET INCREASE (DECREASE) IN CASH AND 
   CASH EQUIVALENTS ...........................................      25,777        9,037       (2,562)
CASH AND CASH EQUIVALENTS, beginning of year ..................      53,892       44,855       47,417
                                                                  ---------    ---------    ---------
CASH AND CASH EQUIVALENTS, end of year ........................   $  79,669    $  53,892    $  44,855
                                                                  =========    =========    =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid during the year for interest ...................   $  47,342    $  45,080    $  39,376
     Cash paid during the year for income taxes ...............       5,674        4,010        2,066
     Noncash transactions:
     Conversion of subordinated debt ..........................       5,888           --           --
     Stock issued for minority interest in FFO ................       5,307           --           --
</TABLE>

  The accompanying notes are an integral part of these consolidated statements

                                       10
<PAGE>   15


                    REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997

1.  BUSINESS:

BASIS OF PRESENTATION AND ORGANIZATION
The consolidated financial statements of Republic Bancshares, Inc. (the Company)
include the accounts of the Company, RBI Capital Trust I, Republic Insurance
Agency, Inc., and Republic Bank (the "Bank") and the Bank's wholly-owned
subsidiaries, RBREO, Inc., Tampa Bay Equities, Inc., and VQH Development, Inc.
restated for the acquisition of FFO Financial Group, Inc. as discussed below.
All significant intercompany accounts and transactions have been eliminated. On
November 21, 1995, the Bank's Board of Directors approved for shareholder
consideration an Amended and Restated Plan of Share Exchange and Reorganization
(the "Reorganization") under which the Bank became a wholly-owned subsidiary of
Company. On the effective date and time of the Reorganization, all holders of
shares of the Bank's Common and Preferred Stock -- at the November 30, 1995,
record date -- received one share of Company Common Stock for each share of the
Bank's Common Stock held and one share of Company Preferred Stock for each share
of the Bank's Preferred Stock held. Holders of outstanding options to purchase
or acquire the Bank's Common Stock received options to purchase an equal number
of shares of Company Common Stock. All necessary governmental and shareholder
approvals for the Reorganization were received. The Company's primary source of
income is from its banking subsidiary which operates 46 branches throughout west
central Florida. The Bank's primary source of revenue is derived from net
interest income on loans and investments and income from mortgage banking
activities.

NEGATIVE GOODWILL
On May 28, 1993 (the "Purchase Date"), 99 percent of the Company's outstanding
common stock was acquired for $4,450,000 (the "Purchase Price"). Also, on May
28, 1993, 583,334 additional shares of common stock were issued for $3,500,000.
The acquisition was accounted for by the purchase method of accounting. Assets
and liabilities were adjusted based upon their fair value as of the Purchase
Date. The excess of the adjusted net book value over the Purchase Price was
recorded as a reduction of the non current assets, to the extent available. The
remaining difference was recorded as excess of fair value over purchase price
("negative goodwill").

The negative goodwill was accreted into income on a straight-line basis over 26
months beginning May 28, 1993, and ending July 31, 1995, which was based on the
estimated life of the loans, investments and deposits acquired. The premiums on
loans and investment securities and the discount on demand and other time
deposits were amortized into income on a straight-line basis over periods based
on the estimated life of the related loans, securities or deposits ranging from
12 to 30 months.

BUSINESS COMBINATIONS

Firstate Financial, F.A.
On April 18, 1997, the Company acquired Firstate Financial, F.A. ("Firstate"), a
thrift institution headquartered in Orlando, Florida, for a cash purchase of
$5.5 million. At April 18, 1997, Firstate had total assets of $71.1 million,
total deposits of $67.9 million and operated a branch in each of Orange and
Seminole counties. The acquisition was accounted for using the purchase
accounting rules which do not require prior period restatement. The amount of
goodwill recorded was $130,000. Accordingly, the consolidated results of
operations only reflect activity subsequent to the acquisition data.

F.F.O. Financial Group, Inc.
On September 19, 1997, F.F.O. Financial Group, Inc. ("FFO"), St. Cloud, Florida,
the parent company for First Federal Savings and Loan Association of Osceola
County ("First Federal"), was merged into the Company in a stock transaction
(the "FFO Merger"). William R. Hough, one of the Company's controlling
stockholders, also owned a majority interest in FFO.

                                       11

<PAGE>   16


The FFO Merger was accounted for as a corporate reorganization in which the
controlling stockholder's interest in FFO was combined at historical cost in a
manner similar to a pooling of interests while the minority interest in FFO was
combined using purchase accounting rules. The excess of the purchase price of
the minority interest over the market value was first assigned to individual
assets and liabilities with the remaining $4.5 million considered unidentifiable
goodwill, which will be amortized over 10 years. The Company issued 1,668,370
shares of common stock to the controlling interest and 826,709 shares of common
stock to the minority interest.

The pooling of interests method of accounting, which is used to account for the
controlling interest in the FFO merger, requires the restatement of financial
results for all prior periods presented. The Company's previously reported
components of consolidated income and the amounts reflected in the accompanying
consolidated statements of operations for the two years ended December 31, 1996
and 1995, are as follows (in thousands):

<TABLE>
<CAPTION>

                                                               Years Ended December 31,
                                                             ----------------------------
Net Interest Income:                                              1996            1995
                                                             ------------   -------------
<S>                                                          <C>            <C>          
As previously reported:

Republic Bancshares, Inc.................................... $      34,021  $      27,862
F.F.O. Financial Group, Inc.................................         9,974          9,619
                                                             -------------  -------------
Combined as restated........................................ $      43,995  $      37,481
                                                             =============  =============
Net Income:
As previously reported:
Republic Bancshares, Inc.................................... $       3,784  $        5,777
F.F.O. Financial Group, Inc.................................         1,600           1,646
Minority interest decrease..................................          (505)           (503)
                                                             -------------  --------------
Combined as restated........................................ $       4,879  $        6,916
                                                             =============  ==============
</TABLE>

RBI Capital Trust I ("RBI Capital")
RBI Capital is a wholly-owned subsidiary of the Company which was formed on May
29, 1997, to issue Cumulative Trust Preferred Securities (the "Preferred
Security or Securities") to the public. The Preferred Securities, issued through
an underwritten public offering on July 28, 1997, were sold at their $10 par
value. RBI Capital issued 2,875,000 shares of the Preferred Securities bearing a
dividend rate of 9.10% for net proceeds of $27.4 million, after deducting
underwriting commissions and other costs. RBI Capital invested the proceeds in
junior subordinated debt of the Company which also has an interest rate of
9.10%. The Company used the proceeds from the junior subordinated debt to
increase the equity capital of the Bank. Interest on the junior subordinated
debentures and distributions on the Preferred Securities are payable quarterly
in arrears, with the first payment having been paid on September 30, 1997.
Distribution on the Preferred Securities are cumulative and based upon the
liquidation value of $10 per Preferred Security. The Company has the right, at
any time, so long as no event of default has occurred and is continuing, to
defer payments of interest on the Junior Subordinated Debentures, which will
require deferral of distribution on the preferred securities, for a period not
exceeding 20 consecutive quarters, provided, that such deferral may not extend
beyond the stated maturity of the Junior Subordinated Debentures. If payments
are deferred, the Company will not be permitted to declare cash dividends. The
Preferred Securities are subject to mandatory redemption, in whole or in part,
upon repayment of the Junior Subordinated Debentures at maturity or their
earlier redemption. The Company has the right to redeem the Junior Subordinated
Debentures in whole (but not in part) within 180 days following certain events
whether occurring before or after June 30, 2002. The exercise of such right is
subject to the Company having received regulatory approval to do so if then
required under applicable capital guidelines or regulatory policies. In addition
to the above right, the Company has the right, at any time, to shorten the
maturity of the Junior Subordinated Debentures to a date not earlier than June
30, 2002. Exercise of this right is also subject to the Company having received
regulatory approval to do so if then required under applicable capital
guidelines or regulatory policies.

The Company has reported its obligation, with respect to the holders of the
Preferred Securities, as a separate line item on its audited consolidated
balance sheet under the caption "Company-obligated mandatorily redeemable
capital securities of subsidiary trust holding solely junior subordinated
debentures of the Company". The related dividend expense, net of the tax
benefit, is reported as a separate line item on the statement of operations
under the caption "minority interest in income from subsidiary trust."

                                       12
<PAGE>   17


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

ESTIMATES, APPRAISALS AND EVALUATIONS
The financial statements include, in conformity with generally accepted
accounting principles, estimates, appraisals and evaluations of loans, other
real estate owned and other assets and liabilities, and disclosure of contingent
assets and liabilities. Changes in such estimates, appraisals and evaluations
might be required because of rapidly changing economic conditions, changing
economic prospects of borrowers and other factors. Actual results may differ
from those estimates.

INVESTMENT SECURITIES
Securities that the Company has both the positive intent and ability to hold to
maturity are classified as Held to Maturity and are carried at historical cost,
adjusted for amortization of premiums and accretion of discounts. Securities
Available for Sale, which are those securities that may be sold prior to
maturity as part of asset/liability management or in response to other factors,
are carried at fair value with any valuation adjustment reported in a separate
component of stockholders' equity, net of tax effect.

Investments identified as trading securities, include mortgage backed securities
resulting from the securitization of residential and High LTV loans, the
resulting residual interest in cash flows from those securitizations, where
applicable, and the excess spread on mortgage servicing rights. Trading
securities are carried at market value with any unrealized gains or losses
included in the statement of operations under "Gain on sale of securities, net."

Interest and dividends on investment securities and amortization of premiums and
accretion of discounts are reported in interest on investment securities. Gains
(losses) realized on sales of investment securities are generally determined on
the specific identification method and are reported as a component of other
noninterest income.

LOANS
Interest on commercial and real estate loans and substantially all installment
loans is recognized monthly on the loan balance outstanding. The Company's
policy is to discontinue accruing interest on loans 90 days or more delinquent
and restructured loans that have not yet demonstrated a sufficient payment
history, which, in the opinion of management, may be doubtful as to the
collection of interest or principal. These loans are designated as "non-accrual"
and any accrued but unpaid interest previously recorded is reversed against
current period interest revenue.

Loan origination and commitment fees net of certain costs are deferred, and the
amount is amortized as an adjustment to the related loan's yield, generally over
the contractual life of the loan. Unearned discounts and premiums on loans
purchased are deferred and amortized as an adjustment to interest income on a
basis that approximates level rates of return over the terms of the loan.

HEDGING CONTRACTS AND LOANS HELD FOR SALE
The Company manages its interest rate market risk on the loans held for sale and
its estimated future commitments to originate and close mortgage loans for
borrowers at fixed prices ("Locked Loans") through hedging techniques which
include listed options and fixed price forward delivery commitments ("Forward
Commitments") to sell mortgage-backed securities or specific whole loans to
investors on a mandatory or best efforts basis. The Company records the
inventory of loans held for sale at the lower of cost or market on an aggregate
basis after considering any market value changes in the loans held for sale,
Locked Loans, and Forward Commitments.

MORTGAGE SERVICING RIGHTS
On July 1, 1995, SFAS No. 122, "Accounting for Mortgage Servicing Rights, an
amendment of FASB Statement No. 65," was adopted. SFAS No. 122 permits an
allocation of a portion of the cost of loan origination to the rights to service
mortgage loans. Approximately $5.5 million, $1.9 million, and $117,000 was
capitalized relating to mortgage servicing rights ("MSRs") during 1997, 1996 and
1995, respectively. Also included in the balance of mortgage servicing rights is
approximately $225,000 of rights acquired through the Firstate acquisition. As
of December 31, 1997, 1996 and 1995, the unamortized portion of these MSRs were


                                       13
<PAGE>   18



$7.1 million, $2.0 million, and $113,000, respectively. For purposes of
measuring impairment, MSRs are stratified based on the loan type, interest rate
and maturity of the underlying loans.

ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT OF
LIABILITIES
The FASB has issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities," which was
effective for the Company's fiscal year beginning January 1, 1997. SFAS 125
provides standards for distinguishing transfers of financial assets that are
sales from transfers that are secured borrowings. In addition to providing
further guidance related to the recording of mortgage servicing rights, SFAS 125
required that the Company classify loans held for sale which are securitized and
retained in the Company's portfolio, residual interest retained and excess
spread interest only strip receivable as trading assets. As a result, the
Company is required to carry these assets at their current market value as of
the balance sheet date with the resulting valuation adjustment recorded in the
statement of operations.

The Company uses an automated portfolio analysis system to value its mortgage
servicing rights at the individual loan level. The model uses current market
assumptions to determine default probabilities and prepayment speed assumptions
based upon current factors to include interest rate, age, loan type, geography
and demographic factors. The automated foreclosure probabilities also take into
consideration the regional, demographic and behavorial characteristics. These
factors are applied to each loan based on its own individual characteristics.
The following table shows the amount of servicing assets which were capitalized
and amortized, and the fair value of those assets as of December 31, for the
periods indicated (dollars in thousands):

<TABLE>
<CAPTION>

                                                 1997       1996     1995
                                               -------    -------    -----
<S>                                            <C>        <C>        <C>  
Balance, beginning of year                     $ 1,968    $   113    $  --
Rights acquired through Firstate acquisition       225         --       --
Capitalized servicing assets                     5,504      1,923      117
Amortization                                      (572)       (68)      (4)
                                               -------    -------    -----
Balance, end of year                           $ 7,125    $ 1,968    $ 113
                                               =======    =======    =====
Fair Value of assets                           $ 7,505    $ 2,289    $ 113
                                               =======    =======    =====
</TABLE>


During December, 1997, the Company completed a securitization of $60 million of
High LTV home equity loans. The assets were sold to Republic Bank Home Loan
Owner Trust 1997-1 and the trust then issued $57.6 million of asset backed notes
and certificates. As part of that transaction the Company recorded $5.7 million
of residual interest on these securities. The calculation used to determine the
value of the residual interest assumed a 14% discount rate, a default rate of
2.25%, and a prepayment rate ranging from 12% through 15%.

ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses provides for risks of losses inherent in the
credit extension process. Losses and recoveries are either charged or credited
to the allowance. The Company's allowance is an amount that management believes
will be adequate to absorb possible losses on existing loans that may become
uncollectible, based on evaluations of the collectibility of loans and prior
loan loss experience. The evaluations take into consideration such factors as
changes in the nature and volume of the loan portfolio, overall portfolio
quality, review of specific problem loans, and current economic conditions that
may affect the borrower's ability to pay. The evaluations are periodically
reviewed and adjustments are recorded in the period in which changes become
known.

ACCOUNTING FOR IMPAIRMENT OF LOANS
The Company's measurement of impaired loans includes those loans which are
nonperforming and have been placed on non-accrual status and those loans which
are performing according to all contractual terms of the loan agreement but may
have substantive indication of potential credit weakness. As of December 31,
1997, $22.8 million of loans were considered impaired by the Company.
Approximately $16.0 million of these loans required valuation allowances,
totaling $2.8 million, which are included within the overall allowance for loan
losses at December 31, 1997. Residential mortgages and consumer loans and leases
outside the scope of 

                                       14

<PAGE>   19

SFAS 114 are collectively evaluated for impairment.

As of December 31, 1996, $19.2 million of loans were considered impaired by the
Company. Approximately $16.9 million of these loans required valuation
allowances, totaling $2.9 million, which were included within the overall
allowance for loan losses at December 31, 1996.

PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization are computed using the straight-line
method over the estimated useful lives of the related assets, except for
leasehold improvements for which the lesser of the estimated useful life of the
asset or the term of the lease is used. The useful lives used in computing
depreciation and amortization are as follows:

<TABLE>
<CAPTION>

                                                         YEARS
                                                         -----
         <S>                                            <C>
         Buildings and improvements                         39
         Furniture and equipment                             7
         Leasehold improvements                         5 - 15
</TABLE>

Gains and losses on routine dispositions are reflected in current operations.
Maintenance, repairs and minor improvements are charged to operating expenses,
and major replacements and improvements are capitalized.

OTHER REAL ESTATE
Other real estate owned ("ORE") represents property acquired through foreclosure
proceedings held for sale and real estate held for investment. ORE is net of a
valuation allowance established to reduce cost to fair value. Losses are charged
to the valuation allowance and recoveries are credited to the allowance.
Declines in market value and gains and losses on disposal are reflected in
current operations in ORE expense. Recoverable costs relating to the development
and improvement of ORE are capitalized whereas routine holding costs are charged
to expense. The sales of these properties are dependent upon various market
conditions. Management is of the opinion that such sales will result in net
proceeds at least equal to present carrying values.

ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS
The FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," which was effective for the
Company's fiscal year beginning January 1, 1996. SFAS No. 121 requires that
long-lived assets and certain identifiable intangibles to be held and used be
reviewed for impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable. If the sum of the expected
future cash flows from the use of the asset and its eventual disposition is less
than the carrying amount of the asset, an impairment loss is recognized. SFAS
No. 121 also requires that certain assets to be disposed of be measured at the
lower of carrying amount or the net realizable value. The impact of adopting
SFAS No. 121 upon the results of operations of the Company was not material.

EARNINGS PER SHARE
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," SFAS No.
128 simplifies the method for computing and presenting earnings per share
("EPS") previously required by APB Opinion No. 15, "Earnings Per Share", and
makes them comparable to international EPS standards. SFAS No. 128 is effective
for periods ending after December 15, 1997, and requires restatement of all
prior period EPS data and has been implemented by the Company. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also requires
dual presentation of basic and diluted EPS on the face of the income statement
for all entities with complex capital structures and requires a reconciliation
of the numerator and denominator of the basic EPS computation to the numerator
and denominator of the diluted EPS computation.

                                       15
<PAGE>   20


REPORTING COMPREHENSIVE INCOME
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
SFAS No. 130 establishes standards for reporting and display of comprehensive
income. A specific reporting format is not required, provided the financial
statements show the amount of total comprehensive income for the period. Those
items which are not included in net income are required to be shown in the
financial statements with appropriate footnote disclosure and the aggregate
balance of such items must be shown separately from retained earnings and
additional paid-in-capital in the equity section of the balance sheet. SFAS No.
130 is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods is required. SFAS
No. 130 will have no material effect on the Company's financial statements.

DISCLOSURES ABOUT BUSINESS SEGMENTS
In June 1997, the FASB adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards for the
way the Company reports information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial reports. SFAS No. 131 is effective for periods
beginning after December 15, 1997. Management has implemented SFAS No. 131 in
the year ended December 31, 1997, and believes its commercial banking and
mortgage banking activities constitute operating segments which require
additional disclosure about their respective assets, revenues, profit or loss
and other operating data.

DISCLOSURES ABOUT PENSIONS AND OTHER POST-RETIREMENT BENEFITS
In February 1998, the FASB issued SFAS No. 132 "Employers' Disclosure about
Pensions and Other Retirement Benefits," (SFAS No. 132). SFAS No. 132 revises
the disclosure requirements for employees' pensions and other post-retirement
benefit plans. SFAS No. 132 is effective for fiscal years beginning after
December 15, 1997, earlier application is encouraged. Management has implemented
SFAS No. 132 in the year ended December 31, 1997.

INCOME TAXES
The Company follows the liability method which establishes deferred tax assets
and liabilities for the temporary differences between the financial reporting
bases and the tax bases of the Company's assets and liabilities at enacted tax
rates expected to be in effect when such amounts are realized or settled. Net
deferred tax assets, whose realization is dependent on taxable earnings of
future years, are recognized when a more-likely-than-not criterion is met, that
is, unless a greater than 50% probability exists that the tax benefits will not
actually be realized sometime in the future.

Effective April 1, 1995, federal regulations restricted the amount of deferred
tax assets that can be used to meet regulatory capital requirements to an amount
that the institution expects to realize within one year, or 10% of Tier 1
capital, whichever is less.

The Company and its subsidiaries file consolidated tax returns with the federal
and state taxing authorities. A tax sharing agreement exists between the Company
and its subsidiaries whereby taxes for the subsidiaries are computed as if the
subsidiaries were separate entities. Amounts to be paid or credited with respect
to current taxes are paid to or received from the Company.

PREMIUM ON DEPOSITS
A premium on deposits is recorded for the difference between cash received and
the carrying value of deposits acquired in purchase transactions. This premium
is being amortized on a straight-line basis over three to four years.
Approximately $202,000 and $527,000 was included in other assets in the
accompanying financial statements, as of December 31, 1997, and 1996.

STOCK-BASED COMPENSATION PLANS
The Company accounts for its stock-based compensation plans under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Effective in 1996, the Company adopted the disclosure option of SFAS No. 123,
"Accounting for Stock-Based Compensation" (SFAS No. 123), which requires that
companies not electing to account for stock-based compensation as prescribed by
the statement, disclose the pro forma effects on earnings and earnings per share
as if SFAS No. 123 had been adopted. Additionally, certain other disclosures are
required with respect to stock compensation and the assumptions used are to
determine the pro forma effects of SFAS No. 123.

                                       16
<PAGE>   21


CASH EQUIVALENTS
For purposes of preparing the Consolidated Statements of Cash Flows, cash
equivalents are defined to include cash and due from banks, interest-bearing
deposits in banks, and federal funds sold.

RECLASSIFICATIONS
Certain reclassifications have been made to prior period financial statements to
conform with the 1997 financial statement presentation.

3.  INVESTMENT SECURITIES:

The Company's investment securities consisted primarily of U.S. Treasury Bills,
Notes, and Agencies. The investment securities of the Company at December 31,
1997 and 1996, are summarized as follows (in thousands):

<TABLE>
<CAPTION>

                                                 Amortized   Unrealized      Unrealized     Market
                                                   Cost        Gains           Losses        Value
                                                   ----        -----           ------        -----
<S>                                              <C>         <C>             <C>            <C>    
AT DECEMBER 31, 1997:
Available-for-sale securities:
 U.S. Government Treasuries ................     $10,512     $      9         $        --    $10,521
 U.S. Agencies .............................       4,000           14                  --      4,014
  Revenue bond .............................       1,545           --                  --      1,545
                                                 -------     --------         -----------    -------
Total U.S. Treasuries & Federal Agency Notes     $16,057     $     23         $        --    $16,080
                                                 =======     ========         ===========    =======

AT DECEMBER 31, 1996:
Available-for-sale securities:
 U.S. Government Treasuries ................     $72,905     $     --         $       (53)   $72,852
 Revenue Bond ..............................       1,545           --                  --      1,545
                                                 -------     --------         -----------    -------
   Total available for sale ................      74,450           --                 (53)    74,397
Trading securities:
 U.S. Agencies .............................       4,000           32                  --      4,032
                                                 -------     --------         -----------    -------
Total U.S. Treasuries & Federal Agency Notes     $78,450     $     32         $       (53)   $78,429
                                                 =======     ========         ===========    =======
</TABLE>

<TABLE>
<CAPTION>
                                                              1997            1996
                                                              ----            ----
<S>                                                        <C>             <C>      
BOOK VALUE AT DECEMBER 31:
 Available-for-sale securities:                            $  16,080       $  74,397
 Trading Securities    ..............................             --           4,032
                                                           ---------       ---------
    Total U.S. Treasuries & Federal Agency Notes.....      $  16,080       $  78,429
                                                           =========       =========
</TABLE>


The amortized cost and estimated market value of investment securities at
December 31, 1997, by contractual maturity are shown below (in thousands):

<TABLE>
<CAPTION>
                                             Available-for-Sale
                                     --------------------------------
                                                 Estimated   Weighted
                                     Amortized     Market     Average
                                        Cost       Value       Yield
                                     ---------   ---------   --------
<S>                                  <C>         <C>         <C>  
Due in 1 year or less .............. $10,512     $10,521        5.68%
Due after 1 year through 5 years ...   1,545       1,545        8.60
Due after 5 years ..................   4,000       4,014        7.45
                                     -------     -------
Total .............................. $16,057     $16,080        6.40%
                                     =======     =======        
</TABLE>


Proceeds from sales of U.S. Treasury and Federal Agency Notes during the years
ended 1997, 1996 and 1995, were $55,092,000, $7,545,000, and $2,972,000,
respectively. Gross losses of $7,109, $0, and $27,891 were realized for the
years ended December 31, 1997, 1996 and 1995. Gross gains of $193,218, $45,404,
and $0,


                                       17
<PAGE>   22



The trading asset category at December 31, 1997, included $2.1 million in excess
spread on mortgage servicing rights, $8.7 million of securities purchased from
the Company's securitization of High LTV Loans in December 1997 and the $8.2
million residual interest in cash flows from that securitization. The Company
has recorded these assets at what it believes to be their fair market value,
however, there is no ready market for residuals in cash flows from
securitization of High Loan-to-Value Loans.

At December 31, 1997, all MBS securities available for sale were scheduled to
reprice in one year or less. The amortized cost and estimated market value of
the MBS portfolio at December 31, 1997, by contractual maturity are shown below
(in thousands). Actual maturities may differ from contractual maturities as a
result of prepayments of the underlying mortgages:

<TABLE>
<CAPTION>

                                                       Amortized            Estimated          Weighted
                                                         Cost                Market            Average
                                                         ----                 Value              Yield
                                                                            ---------          --------
<S>                                                   <C>                   <C>                <C>  
Due 5 - 10 years..................................... $        716          $     724             7.39%
Due after 10 years...................................       90,570             91,789             6.86%
                                                      ------------          ---------
Total................................................ $     91,286          $  92,513             6.87%
                                                      ============          =========
</TABLE>



Proceeds from sales of MBS securities during the years ended December 31, 1997,
1996 and 1995 were $59,111,000, $47,750,000 and $17,487,000, respectively. Gross
gains of $359,511, $495,837 and $130,038 and gross losses of $1,890, $85,845 and
$9,000, respectively, were realized on these sales. Mortgage backed securities
with a par value of $29.3 million and a market value of $30.0 million were
pledged to secure repurchase agreements at December 31, 1997.

5.  LOANS AND LOANS HELD FOR SALE:

Loans and loans held for sale at December 31, 1997 and 1996, are summarized as
follows (in thousands):

<TABLE>
<CAPTION>
                                                                                  1997           1996
                                                                                  ----           ----
<S>                                                                           <C>              <C>      
Real estate mortgage loans:
One-to-four family residential ..........................................     $   644,235      $ 494,955
Multi-family residential ................................................          86,835         90,745
Commercial real estate ..................................................         265,153        224,715
Construction/land development ...........................................          50,203         42,206
Home equity loans .......................................................          44,389         23,622
Commercial loans ........................................................          36,515         37,626
Consumer loans ..........................................................          26,072         21,845
Other loans .............................................................             442          1,294
                                                                              -----------      ---------
Total gross portfolio loans .............................................       1,154,031        937,008
Less-allowance for loan losses ..........................................         (20,776)       (18,747)
Less-undisbursed loans in process .......................................              --        (10,824)
Less-premiums and unearned discounts on loans purchased .................          (3,273)        (4,731)
Less-unamortized loan fees ..............................................          (1,027)          (671)
                                                                              -----------      ---------
Total loans held for portfolio ..........................................       1,128,955        902,035
Residential loans held for sale .........................................         151,404         46,593
                                                                              -----------      ---------
Total loans .............................................................     $ 1,280,359      $ 948,628
                                                                              ===========      =========
</TABLE>


Mortgage loans serviced for others as of December 31, 1997 and 1996, were
$370,106,000 and $224,311,000, respectively. Loans on which interest was not
being accrued totaled approximately $26,959,000, $19,409,000, and $16,229,000 at
December 31, 1997, 1996 and 1995, respectively. Had interest been accrued on
these loans at their originally contracted rates, interest income would have
been increased by approximately $2,138,000, $1,661,000, and $1,729,000 in the
years ended December 31, 1997, 1996 and 1995, respectively. Loans past due 90
days or more and still accruing interest at December 31, 1997 and 1996, totaled
approximately $196,000

                                       19
<PAGE>   23


and $113,000, respectively. The Company restructured loans totaling $0 and
$2,516,000 during 1997 and 1996, respectively.

6.  ALLOWANCE FOR LOAN LOSSES:

Changes in the allowance for loan losses were as follows (in thousands):

<TABLE>
<CAPTION>

                                             For the Years Ended December 31,
                                            ----------------------------------

                                                1997       1996         1995
                                                ----       ----         ----
<S>                                         <C>         <C>           <C>     
  BALANCE, beginning of year .............  $ 18,747    $ 20,048      $ 15,272

Provision for possible loan losses .......     2,628       2,582         2,162
Allowance from Firstate acquisition ......       132          --            --
Discount on purchased loans allocated     
to (from) allowance for loan losses ......        39      (1,732)        7,658
Loans charged off ........................    (1,003)     (2,448)       (5,536)
Recoveries of loans charged off ..........       223         297           492
                                            --------    --------      --------

  BALANCE, end of year ...................  $ 20,776    $ 18,747      $ 20,048
                                            ========    ========      ========
</TABLE>


While management believes that the allowance for loan losses is adequate at
December 31, 1997, based on currently available information, future additions to
the allowance may be necessary due to changes in economic conditions,
deterioration of creditworthiness of the borrower, the value of underlying
collateral or other factors. Additionally, the Florida Department of Banking and
Finance, the FDIC, and the Federal Reserve, as an integral part of their regular
examination process, periodically review the allowance for loan losses. These
agencies may require additions to the allowance based on their judgments about
information available to them at the time of examination.

The portion of the allowance for loan losses which arose due to the allocation
of discounts on purchased loans may only be used to absorb losses on the related
acquired loans. As of December 31, 1997 and 1996, approximately $6,197,000 and
$7,150,000 of the allowance had arisen through an allocation of discounts on
purchased loans.

7.  PREMISES AND EQUIPMENT:

Premises and equipment at December 31, 1997 and 1996, included (in thousands):

<TABLE>
<CAPTION>

                                                     1997          1996
                                                   --------      --------
<S>                                                <C>           <C>     
Land ............................................. $  7,202      $  6,249
Buildings and improvements .......................   19,354        14,370
Furniture and equipment ..........................   16,008        12,634
Leasehold improvements ...........................    2,279         1,051
Construction in progress .........................    1,137           268
                                                   --------      --------
Total premises and equipment .....................   45,980        34,572
Less-accumulated depreciation and amortization ...  (12,677)       (9,533)
                                                   --------      --------
Premises and equipment, net ...................... $ 33,303      $ 25,039
                                                   ========      ========
</TABLE>


                                       20
<PAGE>   24


<TABLE>
<CAPTION>


BOOK VALUE AT DECEMBER 31:                                       1997                1996
                                                               --------            --------
<S>                                                            <C>                 <C>     
Held to maturity securities..........................          $     --            $ 15,343
Available for sale securities........................            55,467              62,037
Trading securities...................................            37,046               5,548
     Total MBS.......................................          $ 92,513            $ 82,928
                                                               ========            ========
</TABLE>

<PAGE>   25

were realized during the years ended December 31, 1997, 1996 and 1995,
respectively. U.S. Treasuries and Federal Agency Notes with a par value of
$10,500,000 and $19,000,000 at December 31, 1997 and 1996, respectively, were
pledged to secure public deposits and for other purposes. Net unrealized holding
gains on trading securities of $764,000, $26,000, and $101,000 were included in
income during 1997, 1996, and 1995, respectively.

4. MORTGAGE-BACKED SECURITIES:

Mortgage-backed securities ("MBS"), sometimes referred to as pass-through
certificates, represent an interest in a pool of loans. The securities are
issued by three government agencies or corporations: (i) the Government National
Mortgage Association ("GNMA"), (ii) the Federal Home Loan Mortgage Corporation
("FHLMC") and (iii) the Federal National Mortgage Association ("FNMA"). During
1997 and 1996 the Company securitized loans with a carrying value of $17,923,000
and $6,282,000, respectively. MBS securities held to maturity are recorded at
amortized cost, while securities available-for-sale and trading are recorded at
estimated market value. Mortgage-backed securities are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                AMORTIZED   UNREALIZED  UNREALIZED    MARKET

                                                  GAINS       GAINS       LOSSES      VALUE
                                                 -------     -------     --------    --------
<S>                                              <C>         <C>         <C>         <C>     
At December 31, 1997:
---------------------
Available for sale securities:
GNMA securities ............................     $41,395     $    648    $     --    $ 42,043
FHLMC securities ...........................       5,963           --          (9)      5,954
FNMA securities ............................       6,644          104          (2)      6,746
Other MBS securities .......................         716            8          --         724
                                                 -------     --------    --------    --------
     Total MBS available for sale ..........     $54,718     $    760    $    (11)   $ 55,467
                                                 =======     ========    ========    ========
Trading securities:
GNMA securities ............................     $16,346     $    478    $     --    $ 16,824
FNMA Title 1 securities ....................       1,200           --          --       1,200
Republic Bank Owner Trust 1997-1 M2 ........       4,350           --          --       4,350
Republic Bank Owner Trust 1997-1 B .........       4,350           --          --       4,350
Republic Bank Owner Trust 1997-1-
Overcollateralization ......................       2,400           --          --       2,400
Residual interest ..........................       5,845           --          --       5,845
Excess spread interest only strip receivable       2,077           --          --       2,077
                                                 -------     --------    --------    --------
Total MBS trading securities ...............     $36,568     $    478    $     --    $ 37,046
                                                 =======     ========    ========    ========

AT DECEMBER 31, 1996:
Available for sale securities:
Mortgage-backed securities .................     $61,560     $    108    $   (219)   $ 61,449
Collateralized mortgage backed
obligations ................................          --           --          --          --
Excess spread interest only strip receivable         588           --          --         588
                                                 -------     --------    --------    --------
Total MBS available for sale ...............     $62,148     $    108    $   (219)   $ 62,037
                                                 =======     ========    ========    ========
Trading Securities:
Mortgage-backed securities .................     $    --     $     --    $     --    $     --
Collateralized mortgage backed
obligations ................................       5,554           --          (6)      5,548
Excess spread interest only strip receivable          --           --          --          --
                                                 -------     --------    --------    --------
Total MBS trading securities ...............     $ 5,554     $     --    $     (6)   $  5,548
                                                 =======     ========    ========    ========
Held to maturity securities:
Mortgage-backed securities .................     $15,343     $    218    $    (47)   $ 15,514
Collateralized mortgage backed
obligations ................................          --           --          --          --
Excess spread interest only strip receivable          --           --          --          --
                                                 -------     --------    --------    --------
Total MBS securities held to maturity ......     $15,343     $    218    $    (47)   $ 15,514
                                                 =======     ========    ========    ========
</TABLE>


<TABLE>
<CAPTION>
                                                                 1997                1996
                                                               --------            --------
<S>                                                            <C>                 <C>     
BOOK VALUE AT DECEMBER 31:
Held to maturity securities..........................          $     --            $ 15,343
Available for sale securities........................            55,467              62,037
Trading securities...................................            37,046               5,548
                                                               --------            --------
     Total MBS.......................................          $ 92,513            $ 82,928
                                                               ========            ========
</TABLE>

                                       18
<PAGE>   26

8.  OTHER REAL ESTATE (ORE):

State banking regulations require the Company to dispose of all ORE acquired
through foreclosure within five years of acquisition, with a possibility for
additional extensions, each of up to five years. Failure to receive additional
extensions could result in losses on ORE. There were three ORE properties
totaling approximately $3,451,000 at December 31, 1997, which were required to
be disposed of by year end. The Company has been granted an extension on these
properties by the State of Florida. The largest piece of these properties is a
tract of land carried at $2.6 million acquired through foreclosure in 1988 that
has partially been developed as a shopping center site. The FDIC has also
granted an extension of the holding period on this property. The Bank currently
has a firm commitment to sell a substantial portion of the second largest
property, with a book value of approximately $597,000, for an amount in excess
of the current book value. While the current appraisal on this property
indicates that the market value of the tract exceeds its book value, a sale to a
party other than an end-user could result in proceeds below the current book
value.

During 1995, the former headquarter building was vacated and that space was
leased to a third party. Since that building was no longer used for banking
purposes, approximately $2,498,000 was transferred from premises and equipment
to ORE held for investment. During 1996, this building was sold and a gain of
$1,207,000 was recorded.

Loans converted to ORE through foreclosure proceedings totaled $6,471,000, and
$7,249,000, for the years ended December 31, 1997 and 1996, respectively. Sales
of ORE that were financed by the Company totaled $113,000 and $6,572,000 for the
years ended December 31, 1997 and 1996, respectively.

Changes in the valuation allowance for ORE were as follows (in thousands):

<TABLE>
<CAPTION>
                                                  For the Years Ended December 31,
                                                  --------------------------------
                                                     1997       1996       1995
                                                     ----       ----       ----
<S>                                                <C>        <C>        <C>    
BALANCE, beginning of year ....................    $ 2,672    $ 2,090    $ 4,043
Provision .....................................        530        111        240
Charge-offs, net ..............................         77        471     (2,193)
                                                   -------    -------    -------
BALANCE, end of year ..........................    $ 3,279    $ 2,672    $ 2,090
                                                   =======    =======    =======
</TABLE>


9.                                                   INCOME TAXES:

Income taxes are comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                                 For the Years Ended December 31,
                                                 --------------------------------
                                                     1997       1996       1995
                                                     ----       ----       ----
<S>                                                <C>        <C>        <C>    
Current provision .............................    $ 7,991    $ 3,728    $ 2,528
Deferred benefit ..............................     (1,895)      (693)       (12)
                                                   -------    -------    -------
                                                   $ 6,096    $ 3,035    $ 2,516
</TABLE>


At December 31, 1997, the Company had approximately $7,061,000 of remaining
federal and $8,784,000 of state net operating loss carryforwards. These
carryforwards expire in the years 2005 through 2012.

Following the change of ownership in 1993, and the two acquisitions in 1997,
recognition of net operating loss carryforwards are limited to approximately
$571,000 each year under the rules of IRC Section 382. If the full amount of the
limitation is not used in any years, the amount not used increases the allowable
limit in the subsequent year.




                                       21
<PAGE>   27


Deferred tax assets and liabilities were comprised of the following at December
31, 1997 and 1996 (in thousands):


<TABLE>
<CAPTION>
                                                                   1997        1996
                                                                   ----        ----
<S>                                                             <C>          <C>     
Gross deferred tax assets:
Tax bases over financial bases for loans ...................    $  6,091     $  3,643
    (loan loss allowance and discounts)
Financial amortization of premium over tax amortization ....         701          646
Interest on non-accrual loans ..............................         522          452
Tax bases over financial bases for ORE .....................       1,516        1,346
Net operating losses and tax credit carryforward ...........       2,717        2,039
Mark-to-market-loans held for sale .........................       1,268          232
Other ......................................................         457          149
                                                                --------     --------
   Gross deferred tax asset ................................      13,272        8,507
   Gross deferred tax liabilities ..........................      (3,315)      (2,318)
                                                                --------     --------
   Net deferred tax asset ..................................    $  9,957     $  6,189
                                                                ========     ========
</TABLE>



There were no valuation allowances against the deferred tax asset as management
has determined that it is more likely than not that all of the deferred tax
asset recorded will be realized. The net deferred tax asset increased during
1997 and 1996 by approximately $352,000 and $63,000, respectively, relating to
the unrealized gain on available for sale securities which is recorded directly
to stockholders' equity.

Through the merger of FFO, the Company acquired an unrecognized deferred tax
liability of approximately $2,700,000 related to base year reserves calculated
under the thrift bad debt percentage method. If during any taxable year, the
Company ceases to be a bank, these reserves shall be taken into account ratably
over the six taxable year period beginning with such taxable year.

The Company's effective tax rate varies from the statutory rate of 34%. The
reasons for this difference are as follows (in thousands):
<TABLE>
<CAPTION>
                                                   For the Years Ended December 31,
                                                   --------------------------------
                                                    1997       1996         1995
                                                    ----       ----         ----

<S>                                                <C>        <C>          <C>  
Computed "expected" tax provision .............    $ 5,454    $ 2,862      $3,37
Increase (reduction) of taxes: ................        (20)       (22)       (27)
   Tax-exempt interest income
Valuation allowance ...........................         --         --       (355)
Goodwill amortization .........................        122         --         --
Amortization of excess of fair ................         --         --       (536)
  value over purchase price
State taxes ...................................        578        304        298
Other .........................................        (38)      (109)      (241)
                                                   -------    -------    -------
Total .........................................    $ 6,096    $ 3,035    $ 2,516
                                                   =======    =======    =======
</TABLE>

10.  OTHER BORROWINGS:

At December 31, 1997, the Company was required by its collateral agreement with
the FHLB to maintain qualifying first mortgage loans in an amount equal to at
least 100% of the FHLB advances outstanding as collateral. The FHLB advances at
December 31, 1997 and 1996, were collateralized by such loans and securities
totaling $35.0 million and $32.2 million, respectively. In addition, all of the
Company's FHLB stock is pledged as collateral for such advances.




                                       22
<PAGE>   28


Maturities and average interest rates of advances from the FHLB as of December
31, 1997 and 1996, were as follows (in thousands):

<TABLE>
<CAPTION>
         Maturities in
         Year Ending          Weighted             Balance at
         December 31,         Average Rate         December 31,
         ------------         ------------    ----------------------
                                              1997             1996
                                              ----------------------
         <S>                   <C>            <C>             <C>   
         1997                     6.95%       $     -         $7,000
         1998                     6.50         35,000              -
                                              -------         ------
         TOTAL                 $35,000                        $7,000
                               -------                        ------
</TABLE>


On December 27, 1996, the Company issued $6,000,000 in convertible subordinated
debentures at a fixed interest rate of 6.00%, interest payable semi-annually,
with a maturity of December 1, 2011. The Company had the right to redeem the
debentures beginning in 2001 at 106% of face value, with the premium declining
1% per year thereafter and without any premium if the price of the Company's
common stock equals or exceeds 130% of the conversion price for not less than 20
consecutive trading days. During 1997, the Company's common stock exceeded 130%
of the conversion price of $17.85714 for more than 20 consecutive days. As a
result, the Company notified the trustee of its intention to redeem the
debentures as of December 1, 1997. All of the holders converted their debentures
prior to this date into a total of 336,000 shares of common stock.

11. OFF-BALANCE-SHEET RISK, COMMITMENTS AND CONTINGENCIES:

CONCENTRATION OF CREDIT RISK
The Company's core customer loan origination base is located along the west
coast and in central Florida. The majority of the Company's purchased loan
portfolio is concentrated in the states of Florida, California, Texas, and in
the northeastern United States. At December 31, 1997 and 1996, approximately 95%
and 94%, respectively, of the Company's loan portfolio was secured by real
estate. Mortgage loans secured by 1-4 family properties comprised approximately
56% and 53%, respectively, of total mortgage loans at December 31, 1997 and
1996.

OFF-BALANCE-SHEET ITEMS
The Company enters into financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing needs of its customers and to
limit exposure to changes in the value of loans held for sale. These financial
instruments include commitments to extend credit, commercial and standby letters
of credit, and forward contracts for the delivery of loans. These instruments
involve, to varying degrees, elements of credit and interest-rate risk that are
not recognized in the accompanying consolidated balance sheets.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instruments discussed above is represented by the
contractual amount of those instruments. The Company uses the same credit
policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments.

A summary of financial instruments with off-balance-sheet risk at December 31,
1997, is as follows (in thousands):
<TABLE>
<CAPTION>
                                                                Contractual
                                                                   Amount
                                                                -----------
         <S>                                                    <C>     
         Commitments to extend credit............................ $ 76,698
         Unfunded lines of credit................................  156,013
         Commercial and standby letters of credit................   12,168
                                                                  --------
              Total.............................................. $244,879
                                                                  ========
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the agreement. 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 



                                       23
<PAGE>   29

Company evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained if deemed necessary upon extension of credit is
based on management's credit evaluation of the counter party. Collateral held
varies but may include premises and equipment, inventory and accounts
receivable. Unfunded lines of credit represent the undisbursed portion of lines
of credit which have been extended to customers.

Commercial and standby letters of credit are conditional commitments issued by
the Company to guarantee the performance of a customer to a third party which
typically do not extend beyond one year. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending loan
facilities to customers. The Company typically holds certificates of deposit as
collateral supporting those commitments, depending on the strength of the
borrower. Outstanding unsecured standby letters of credit at December 31, 1997,
totaled approximately $3,269,000.

At December 31, 1997, in connection with managing the interest rate market risk
on its loans held for sale of $151,404,000 and locked loans (without
consideration for any fallout) of $56,097,000, the Company had outstanding
$32,040,000 (estimated fair value of $31,910,000) of Forward Commitments which
expire over the next two months, the period when the loans are expected to be
sold and locked loans are expected to close.

The Company reduces its risk of nonperformance under the hedging contracts by
entering into those contracts with reputable security dealers and investors and
evaluating their financial condition. However, there is a risk that certain of
the locked loans do not close or are renegotiated in a declining interest rate
market and close at lower prices. The Company reduces this risk by collecting
nonrefundable commitment fees on certain of the locked loans and enters into
forward commitments to deliver loans to investors primarily on a best efforts
basis.

COMMITMENTS
The Company has entered into a number of noncancelable operating leases
primarily for branch banking locations. At December 31, 1997, minimum rental
commitments based on the remaining noncancelable lease terms were as follows (in
thousands):

<TABLE>
         <S>                                                   <C>    
         1998................................................. $ 3,077
         1999.................................................   2,895
         2000.................................................   2,403
         2001.................................................   2,197
         2002.................................................   1,891
         Thereafter...........................................       -
                                                                ------
              Gross operating lease commitments...............  12,463
         Less-sublease rentals................................   (1,60)
              Net operating lease commitments................. $10,843
                                                               =======
</TABLE>


Total rent expense for the years ended December 31, 1997, 1996 and 1995, was
$2,546,000, $2,031,000, and $1,372,000, respectively. Total rental income from
subleases for the years ended December 31, 1997, 1996 and 1995, was $582,000,
$1,031,000, and $1,190,000, respectively.

During 1994 a capital lease obligation of approximately $981,000 was incurred
related to the leasing of data processing equipment with an implicit rate of
7.49%. Minimum lease payments under this capital lease are approximately
$214,000 in 1998 and $107,000 in 1999. In addition, the Company is obligated to
make processing payments in relation to its computer facilities of approximately
$1,545,000 in 1998, $1,653,000 in 1999, $1,759,000 in 2000, and $293,000 in
2001.

CONTINGENCIES
The Company is subject to various other legal proceedings and claims which arise
in the normal course of business. In the opinion of management, the amount of
liability with respect to these other proceedings would not have a material
effect on the financial statements.




                                       24
<PAGE>   30

12.  EMPLOYEE BENEFIT PLANS:

On January 1, 1987, a retirement plan was adopted, covering substantially all
employees, which includes a 401(k) arrangement. The Company's contributions were
$437,200, $186,900, and $107,200 in the years ended December 31, 1997, 1996 and
1995, respectively.

13.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

Generally, the Company's practice and intent is to hold its financial
instruments to maturity, unless otherwise designated. Where available, quoted
market prices are used to determine fair value. However, many of the Company's
financial instruments lack quoted market prices. Although the Company has
incorporated what it considers to be appropriate estimation methodologies for
those financial instruments which lack quoted market prices, a significant
number of assumptions must be used in determining such estimated fair values.
Such assumptions include subjective assessments of current market conditions,
perceived risks associated with these financial instruments and other factors.
Different assumptions might be considered by the user of the financial
statements to be more appropriate, and the use of alternative assumptions or
estimation methodologies could have a significant effect on the resulting
estimated fair values. The estimated fair values presented neither include nor
give effect to the values associated with the Company's business, existing
customer relationships, and branch banking network, among other things.

The following estimates of the fair value of certain financial instruments held
by the Company include only instruments that could reasonably be evaluated. The
investment and mortgage backed securities portfolio was evaluated using market
quotes, where available, or fair market value calculations as of December 31,
1997 and 1996. The fair value of the loan portfolio was evaluated using market
quotes for similar financial instruments, where available. Otherwise, discounted
cash flows at current market, after adjusting for credit deterioration and an
average prepayment assumption, were used based upon current rates the Company
would use in extending credit with similar characteristics. These rates may not
necessarily be the same as those which might be used by other financial
institutions for similar loans. Cash and due from banks and federal funds sold
were valued at cost. The fair values disclosed for checking accounts, savings
accounts, securities sold under agreements to repurchase, and certain money
market accounts are, by definition, equal to the amount payable on demand at the
reporting date, i.e., their carrying amounts. Fair values for time deposits are
estimated using a discounted cash flow calculation that applies current interest
rates to aggregated expected maturities. Standby letters of credit and
commitments to extend credit were valued at book value as the majority of these
instruments are based on variable rates. The value of the Company's mortgage
servicing rights was determined using the net discounted cash flows from
servicing.

These evaluations may incorporate specific value to the Company in accordance
with its asset/liability strategies, interest rate projections and business
plans at a specific point in time and therefore, should not necessarily be
viewed as liquidation value. They should also not be used in determining overall
value of the Company due to undisclosed and intangible aspects such as business
and franchise value, and due to changes to assumptions of interest rates and
expected cash flows which might need to be made to reflect expectations of
returns to be earned on instruments with higher credit risks.

The table below illustrates the estimated fair value of the Company's financial
instruments as of December 31 using the assumptions described above (in
thousands):
<TABLE>
<CAPTION>
                                                                                   1997           1996
                                                                                   ----           ----
<S>                                                                          <C>            <C>       
Cash and due from banks....................................................  $   45,998     $   34,109
                                                                             ==========     ==========
Interest bearing deposits in banks.........................................         671         11,783
                                                                             ==========     ==========
Federal funds sold.........................................................      33,000          8,000
                                                                             ==========     ==========
Investment and mortgage backed securities..................................     108,593        161,304
                                                                             ==========     ==========
Loans and loans held for sale (net of allowance for loan losses)...........   1,306,678        991,635
                                                                             ==========     ==========
Mortgage servicing rights..................................................         269          1,690
                                                                             ==========     ==========
Deposits...................................................................   1,365,824      1,119,888
                                                                             ==========     ==========
Securities sold under agreements to repurchase.............................      19,654         15,372
                                                                              =========     ==========
FHLB stock.................................................................      35,000          7,000
                                                                             ==========     ==========
Subordinated debt..........................................................           -          6,000
                                                                             ==========     ==========
Standby letters of credit..................................................      12,168          7,415
                                                                             ==========     ==========
Commitments to extend credit and unfunded lines of credit..................     232,711        121,420
                                                                             ==========     ==========
</TABLE>




                                       25
<PAGE>   31


14.  STOCKHOLDERS' EQUITY:

PERPETUAL PREFERRED CONVERTIBLE STOCK
The Company has 75,000 outstanding shares of perpetual preferred convertible
stock. The preferred stock has a liquidation preference of $88 per share and
carries a noncumulative dividend of $3.52 per year, payable quarterly. Dividends
on the preferred stock must be paid before any dividends on common stock can be
paid. Beginning December 16, 1994, and thereafter, the preferred stock can be
converted by the holders into 10 shares of common stock for each share of
preferred stock. The holders of the preferred stock vote with the holders of the
common stock and are entitled to 10 votes per share of preferred stock.

DIVIDENDS
Florida Statutes limit the amount of dividends the Bank can pay in any given
year to that year's net income plus retained net income from the two preceding
years. Additionally, the Bank and the Company cannot pay dividends which would
cause either to be undercapitalized as defined by federal regulations.

1993 NON-QUALIFIED STOCK OPTION PLAN
On May 28, 1993, the Company adopted a non-qualified stock option plan (the
Option Plan) which reserved 80,000 shares of common stock for future issuance
under the Option Plan to eligible employees of the Company. As of December 31,
1997, 60,000 options were granted under the Option Plan and 30,000 were
outstanding. The per share exercise price of each stock option is determined by
the Board of Directors at the date of grant. The plan terminates in 2003 or at
the discretion of the Board of Directors.

1995 INCENTIVE STOCK OPTION PLAN
On April 29, 1994, the shareholders approved a qualified incentive stock option
plan to certain key employees. In connection with the Company's holding company
reorganization and share exchange in which all of the Company's stockholders
became stockholders of the Company, the Company adopted the Republic Bancshares,
Inc. 1995 Stock Option Plan (the "Plan") as a replacement for the Company's 1994
Stock Option Plan. The Plan was approved by the stockholders of the Bank at the
Bank's Special Meeting held on February 27, 1996. On April 23, 1996, the
shareholders approved certain amendments to the Plan (the "Amendment"). Under
the Amendment, the total number of shares that may be purchased pursuant to the
plan cannot exceed 525,000 over the life of the plan and provides that the
maximum number of options granted to any one individual in any fiscal year under
the plan cannot exceed 62,000. There is no limitation on the annual aggregate
number of options to be granted in any fiscal year. Each option granted under
the plan will be exercisable by the grantee during a term, not to exceed 10
years, fixed by the compensation committee of the Board of Directors ("the
Committee"). However, no more than 20% of the shares subject to such options
shall vest annually beginning at date of grant. However, in the event of a
change in control, or termination of employment without cause, all options
granted become exercisable immediately. Options under the plan, which have been
granted to the employees of the Flagship/Capital mortgage banking division of
the Company, vest at the rate of 20% at the end of each 12-month period over
five years, contingent upon that division meeting specified net income
performance goals as set by the Board of Directors. If the performance goal for
each year is not met, then the options that would have become exercisable at the
end of the 12-month period shall expire and be null and void. In addition,
options granted to employees of this division shall not vest and become
exercisable if there is a change in control or a termination of employment
without cause, until the performance goal for at least one year has been met.

Upon the grant of an option to a key employee, the Committee will fix the number
of shares of common stock that the grantee may purchase upon exercise of the
option, and the price at which the shares may be purchased. The exercise price
for all options shall not be less than the fair market value. During 1997, 1996
and 1995, options to purchase 80,500, 270,900 and 59,700 shares, respectively,
under the incentive stock option plan were granted. Of the options previously
granted, 59,380 shares have expired, thereby making these options available for
future grants. As of December 31, 1997, 408,750 options remained outstanding
under this plan, with 116,250 available to be granted at a future time.




                                       26
<PAGE>   32


1997 STOCK APPRECIATION RIGHTS PLAN
On October 21, 1997, the Board of Directors of the Company approved a Stock
Appreciation Rights Plan (the "SAR Plan"). Under the SAR Plan, certain key
employees have been granted the right to receive cash equal to the excess of the
fair market value of a share of the Company's common stock at the time of
exercise, over the fair market value of a share of the Company's common stock at
date of grant, times the number of rights exercised. As of December 31, 1997,
40,250 SAR's had been granted at the then current market value of $26.675. No
more than 20% of the shares may vest annually by beginning at date of grant. The
term of an SAR may vary, but shall not be less than one year nor more than 10
years from the date of grant.

The Company records compensation expense equal to the appreciation of the fair
market value of the stock times the number of outstanding stock appreciation
rights. As of December 31, 1997, there had been no appreciation of the Company's
common stock over the fair market value at date of grant. Therefore, no
compensation expense had been recorded.

AGGREGATE STOCK OPTION ACTIVITY
The Company adopted SFAS No. 123 for disclosure purposes in 1996. For SFAS No.
123 purposes, the fair value of each option grant has been estimated as of the
date of grant using the Black-Scholes option pricing model with the following
assumptions (weighted averages) for 1997, 1996 and 1995: risk-free interest rate
of 5.35%, 6.50% and 6.03%, respectively, expected life of seven years, dividend
rate of zero percent, and expected volatility of 30.9% for 1997 and 25% for 1996
and 1995. The approximate fair value of the stock options granted in 1997, 1996,
and 1995 is $959,000, $1,583,000 and $347,000, respectively, which would be
amortized as compensation expense over the vesting period of the options.
Options vest equally over five years. Had compensation cost been determined
consistent with SFAS No. 123, utilizing the assumptions detailed above, the
Company's net income and earnings per share as reported would have been the
following pro forma amounts (in thousands except share data):

<TABLE>
<CAPTION>
                                                     1997      1996      1995
                                                     ----      ----      ----
<S>                                                <C>       <C>       <C>   
Net Income........................................ $8,571    $4,879    $6,916
   As reported
   Pro Forma......................................  8,210     4,683     6,873
Earnings per share-diluted
   As reported....................................   1.21       .74      1.10
   Pro forma......................................   1.16       .71      1.10
Earnings per share-basic
   As reported....................................   1.40       .83      1.26
   Pro forma......................................   1.34       .80      1.25
</TABLE>







                                       27
<PAGE>   33

Because the SFAS No. 123 method of accounting has not been applied to options
granted prior to January 1, 1995, the resulting pro forma compensation cost may
not be representative of that expected in future years. A summary of the status
of the Company's stock option plans at December 31, 1997, 1996 and 1995, and for
the years then ended is presented in the table below:

<TABLE>
<CAPTION>
                                                   1997                1996                  1995
                                                   ----                ----                  ----
                                             Wtd Avg             Wtd Avg             Wtd Avg
                                              Shares Ex Price     Shares   Ex Price   Shares    Ex Price
                                              ------ --------     ------   --------   ------    --------
<S>                                          <C>     <C>         <C>       <C>       <C>        <C>   
Fixed Options
Outstanding - beg. of year...............    196,470   $11.87    131,810     $11.00   81,500      $ 8.75
Granted..................................     82,999    25.94     70,900      13.63   59,700       14.00
Exercised................................    (21,300)   11.80          -          -   (3,170)       9.58
Forfeited/Expired........................     (6,920)   13.04     (6,240)     13.42   (6,220)      11.06
                                             -------             -------             -------
Outstanding - end of year................    251,249    16.38    196,470      11.87  131,810       11.00
                                             =======             =======             =======
Exercisable - end of year................    118,979    12.52     92,530      10.29   45,112        9.07
Wtd. avg. fair value                                    11.91                  5.84                 5.81
   of options granted....................
Performance Options
Outstanding - beg. of year...............    200,000   $13.63    200,000     $13.63        -           -
Granted..................................          -        -          -          -        -           -
Exercised................................          -        -          -          -        -           -
Forfeited/Expired........................    (40,000)   13.63          -          -        -           -
                                             -------             -------             -------
Outstanding - end of year................    160,000    13.63    200,000      13.63        -           -
                                             =======             =======             =======
Exercisable - end of year................          -        -          -          -        -           -
Wtd. avg. fair value of options granted..                   -                  5.84                    -
</TABLE>


<TABLE>
<CAPTION>
                           Options Outstanding                                         Options Exercisable
-----------------------------------------------------------------------------------------------------------------
        Number    Weighted-Average                                   Number
      Range of         Outstanding            Remaining     Weighted-Average        Exercisable  Weighted-Average
Exercise Price         at 12/31/97     Contractual Life       Exercise Price        at 12/31/97    Exercise Price
--------------    ----------------     ----------------    -----------------        -----------    --------------
<S>               <C>                  <C>                 <C>                      <C>          <C>   
$         2.13               2,499           1.00 years               $ 2.13              2,499            $ 2.13
    5.40-10.50              61,610           5.89 years                 8.02             54,040              7.67
   13.63-14.00             266,640           8.19 years                13.69             46,340             13.83
         26.68              80,500           9.79 years                26.68             16,100             26.68
</TABLE>








                                       28
<PAGE>   34


15.  EARNINGS PER SHARE:

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
Diluted earnings per common and common equivalent share has been computed by
dividing net income by the weighted average common and common equivalent shares
outstanding during the periods. The weighted average common and common
equivalent shares outstanding has been adjusted to include the number of shares
that would have been outstanding if the stock options granted had been
exercised, at the average market price for period, with the proceeds being used
to buy shares from the market (i.e., the treasury stock method) and the
perpetual preferred stock and the convertible subordinated debentures had been
converted to common stock at the earlier of the beginning of the year or the
issue date (i.e., the if-converted method). Basic earnings per common share was
computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year. The table below reconciles the
calculation of diluted and basic earnings per share (dollars in thousands,
except share data):


<TABLE>
<CAPTION>
                                                                   1997
                                                 ---------------------------------------
                                                                   Weighted     Earnings
                                                        Net          Shares          Per
                                                     Income     Outstanding        Share
                                                     ------     -----------        -----
<S>                                              <C>            <C>            <C>
Net Income.....................................  $    8,571       6,128,014
Basic earnings per share.......................                                $    1.40
Options exercised during the                              
    period - incremental effect
    prior to exercise..........................           -           5,198
Options outstanding at end of                             
    period.....................................           -         117,835
Convertible perpetual preferred                           
    stock......................................           -         750,000
Convertible subordinated debentures                     
   - incremental effect prior to
   conversion..................................         245         300,452
                                                 ----------     -----------    ---------
Diluted earnings per share.....................  $    8,816       7,301,499    $    1.21
                                                 ==========     ===========    =========
</TABLE>


<TABLE>
<CAPTION>
                                                                  1996
                                                 ---------------------------------------
                                                                   Weighted     Earnings
                                                        Net          Shares          Per
                                                     Income     Outstanding        Share
                                                     ------     -----------        -----
<S>                                              <C>            <C>            <C>
Net Income.....................................  $    4,879       5,857,174
Basic earnings per share.......................                                $    0.83
Options exercised during the                              
    period - incremental effect
    prior to exercise..........................           -               -
Options outstanding at end                                
   of period...................................           -          19,430
Convertible perpetual preferred                           
   stock.......................................           -         750,000
Convertible subordinated                                  
   debentures - incremental effect
   prior to conversion.........................           -               -            -
                                                 ----------     -----------    ---------
Diluted earnings per share.....................  $    4,879       6,626,604    $    0.74
                                                 ==========     ===========    =========
</TABLE>




                                       29
<PAGE>   35




<TABLE>
<CAPTION>
                                                                     1995
                                                   ---------------------------------------
                                                                     Weighted     Earnings
                                                          Net          Shares          Per
                                                       Income     Outstanding        Share
                                                       ------     -----------        -----
<S>                                                <C>            <C>            <C>
Net income.......................................  $    6,916       5,491,250
Basic earnings per share.........................                                $    1.26
Options exercised during the
   period - incremental effect
   prior to exercise.............................           -             388
Options outstanding at end                       
    of period....................................           -          19,730
Convertible prepetual preferred                           
   stock.........................................           -         750,000
Convertible subordinated                                    
    debentures - incremental effect
    prior to conversion..........................           -               -            -
                                                   ----------    ------------    ---------
Diluted earnings per share.......................  $    6,916       6,261,368    $    1.10
                                                   ==========    ============    =========
</TABLE>


In 1997, the Company adopted SFAS No. 128, "Earnings per Share," effective
December 15, 1997. As a result, the Company's reported earnings per share for
1996 and 1995 were restated. The effect of this accounting change on previously
reported earnings per share ("EPS") data was as follows:

<TABLE>
<CAPTION>
                                                            1996         1995
                                                            ----         ----
<S>                                                     <C>           <C>     
Primary EPS as Reported................................ $     .074    $   1.10
Effect of SFAS No. 128.................................       0.09        0.16
                                                        ----------    --------
Basic EPS as restated.................................. $     0.83    $   1.26
                                                        ==========    ========

Fully diluted EPS as Reported.......................... $     0.74    $   1.10
Effect of SFAS No. 128.................................          -           -
                                                        ----------    --------
Diluted EPS as restated................................ $     0.74    $   1.10
                                                        ==========    ========
</TABLE>



                                       30
<PAGE>   36


16.  REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are required to comply with the capital adequacy
standards established by the Federal Reserve (for the Company) and the FDIC (for
the Bank). There are three basic measures of capital adequacy for banks that
have been promulgated by the Federal Reserve; two risk-based measures and a
leverage measure. All applicable capital standards must be satisfied for a bank
holding company to be considered in compliance.

The minimum guidelines for the ratio ("Risk-Based Capital Ratio") of total
capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital (i.e., 4.0% of risk-weighted assets) must comprise common
stock, minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3.0% for banks that meet certain
specified criteria, including having the highest regulatory rating. All other
bank holding companies generally are required to maintain a Leverage Ratio of at
least 3.0%, plus an additional cushion of 100 to 200 basis points. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the Federal Reserve has indicated that it
will consider a "tangible Tier I Capital leverage ratio" (deducting all
intangibles) and other indicators of capital strength in evaluating proposals
for expansion or new activities. The Bank had previously undertaken in writing
to the FDIC to achieve a Leverage Ratio of at least 5.50% by September 30, 1995,
which it did, and will consider raising additional capital or reducing internal
growth should the ratio fall below that level in the future. The Company's
leverage ratio requirement remains at 5.00%. Other than the foregoing
commitment, the Bank has not been advised by the FDIC of any specific minimum
capital ratio requirement applicable to it.

Failure to meet capital guidelines could subject a bank or a bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
the taking of brokered deposits, and certain other restrictions on its business.
Substantial additional restrictions can be imposed upon FDIC-insured depository
institutions that fail to meet applicable capital requirements under the federal
prompt corrective action regulations.

As of December 31, 1997 and 1996, the Company and the Bank were considered "well
capitalized" under the federal banking agencies for prompt corrective action
regulations. Regulatory capital ratios for 1996 have not been restated to
include FFO, as the accounting methodology for a pooling of interest does not
apply under regulatory guidelines. The table which follows sets forth the
amounts of capital and capital ratios of the Company and the Bank as of December
31, 1997 and 1996, and the applicable regulatory minimums (in thousands):






                                       31
<PAGE>   37

<TABLE>
<CAPTION>
                                                                           COMPANY                    BANK
                                                                  -----------------------   ------------------------
                                                                  AMOUNT           RATION   AMOUNT             RATIO
                                                                  ------           ------   ------             -----
<S>                                                               <C>               <C>     <C>               <C>   
As of December 31, 1997:
RISK-BASED CAPITAL:
Tier 1 Capital
Actual............................................................  $ 101,350        10.05% $   103,162        10.25%
Minimum required to be "Adequately Capitalized"...................     40,329         4.00       40,265         4.00
Excess over minimum to be "Adequately Capitalized"................     61,021         6.05       62,897         6.25
To be "Well Capitalized"..........................................     60,494         6.00       60,398         6.00
Excess over "Well Capitalized" requirements.......................     40,856         4.05       42,764         4.25

Total Capital
Actual............................................................    117,603        11.66      115,983        11.52
Minimum required to be "Adequately Capitalized"...................     80,658         8.00       80,530         8.00
Excess over minimum to be "Adequately Capitalized"................     36,945         3.66       35,453         3.52
To be "Well Capitalized"..........................................    100,823        10.00      100,663        10.00
Excess over "Well Capitalized" requirements.......................     16,780         1.66       15,320         1.52

TIER 1 CAPITAL TO TOTAL ASSETS (LEVERAGE):
Actual............................................................    101,350         6.94      103,162         7.07
Minimum required to be "Adequately Capitalized"...................     58,456         4.00       58,392         4.00
Excess over minimum to be "Adequately Capitalized"................     42,894         2.94       44,770         3.07
To be "Well Capitalized"..........................................     73,070         5.00       72,990         5.00
Excess over "Well Capitalized" requirements.......................     28,280         1.94       30,172         2.07

As of December 31, 1996:
RISK-BASED CAPITAL:
Tier 1 Capital
Actual............................................................  $  51,325         8.82% $    57,113         9.82%
Minimum required to be "Adequately Capitalized"...................     23,268         4.00       23,260         4.00
Excess over minimum to be "Adequately Capitalized"................     28,057         4.82       33,853         5.82
To be "Well Capitalized"..........................................     34,902         6.00       34,890         6.00
Excess over "Well Capitalized" requirements.......................     16,423         2.82       22,223         3.82

Total Capital
Actual............................................................     64,630        11.11       64,418        11.08
Minimum required to be "Adequately Capitalized"...................     46,536         8.00       46,519         8.00
Excess over minimum to be "Adequately Capitalized"................     18,094         3.11       17,899         3.08
To be "Well Capitalized"..........................................     58,170        10.00       58,149        10.00
Excess over "Well Capitalized" requirements.......................      6,460         1.11        6,269         1.08

TIER 1 CAPITAL TO TOTAL ASSETS (LEVERAGE):
Actual............................................................     51,325         5.90       57,113         6.57
Minimum required to be "Adequately Capitalized"...................     34,807         4.00       34,798         4.00
Excess over minimum to be "Adequately Capitalized"................     16,518         1.90       22,315         2.57
To be "Well Capitalized"..........................................     43,509         5.00       47,848         5.50
Excess over "Well Capitalized" requirements.......................      7,816         0.90        9,265         1.07
</TABLE>





                                       32
<PAGE>   38


17.  RELATED PARTY TRANSACTIONS
William R. Hough, a director and one of the two controlling shareholders, is
President and the controlling shareholder of William R. Hough & Co. ("WRHC"), an
NASD-member investment banking firm. As part of the normal course of business
the Company solicits competitive bids for the sales of mortgage securities from
approved broker/dealers, including William R. Hough & Company. During 1997, the
Company placed $115,410,000 of forward sales on mortgage backed securities
through William R. Hough & Company. Additionally, the Company periodically
purchased securities under agreement to repurchase at a rate based on the
prevailing federal funds rate plus 1/8 of 1% per an agreement entered into on
August 15, 1995.

In addition, WRH Mortgage, Inc., a related interest of William R. Hough, acted
as the Company's agent in the purchase of two loan pools from the Resolution
Trust Corporation on May 23, 1995, and was paid due diligence fees totaling
$39,997.

In June 1995, in connection with a rights offering of the Company Common Stock
conducted by the Company, William R. Hough & Co. participated as a soliciting
dealer, and as such was entitled to receive solicitation fees in an amount equal
to approximately $11,900. William R. Hough & Co. also participated in the
selling group for the public offering of the Company Common Stock that took
place in conjunction with the rights offering. In connection with the public
offering, William R. Hough & Co. received approximately $18,000 in discounts and
other fees.

In July 1996, William R. Hough & Co. began offering sales of insurance and
mutual fund products and investment advisory services on the premises of the
Company. The Company was paid a monthly fee of $300 for each banking office
participating in the program plus a fee of 15% of the gross commissions earned
from sales of non-insurance products. On January 1, 1997, this agreement was
terminated and replaced with a new agreement where the Company will be paid 50%
of the net profits earned from sales of investment products on the Company's
premises.

In December 1996, the Company offered $6,000,000 of convertible subordinated
debentures through a private placement on a "best efforts" basis exclusively
through William R. Hough & Co. as "Sales Agent" for the Company. The sales agent
agreement provided for the payment to William R. Hough & Co. of a fee of 1.50%
for each $1,000 principal amount of debentures sold to directors of the Company
or their spouses and 3% for each $1,000 of debentures sold to all others. The
total amount of fees paid to William R. Hough & Company for the sale of the
debentures was $162,000. In addition, the Company agreed to indemnify the sales
agent against and contribute toward certain liabilities, including liabilities
under the Securities Act, and to reimburse William R. Hough & Co. for certain
expenses and legal fees related to the sale of the debentures of approximately
$51,000.

During the years ended December 31, 1996 and 1995, FFO purchased approximately
$53.3 million, and $69.5 million of securities through WRHC, respectively.
During the years ended December 31, 1996 and 1995, FFO sold approximately $46.0
million and $19.7 million of securities through WRHC, respectively. In
connection with such transactions, FFO paid WRHC an aggregate of $118,000 and
$92,000, in commissions during the years ended December 31, 1996 and 1995,
respectively.

In July 1997, in connection with an offering of trust preferred securities,
William R. Hough & Company participated as co-manager, and as such was entitled
to receive one-half of an underwriting fee of 3.75% of the dollar amount of
preferred stock issued in an amount equal to approximately $539,063. In
addition, the Company agreed to reimburse William R. Hough & Company for certain
expenses and legal fees not to exceed $65,000.

In December 1997, the Company completed a securitization of $60 million of high
loan-to-value home equity loans. William R. Hough & Company participated as
co-underwriters and was paid one-half of an amount equal to 1.5% of the
principal amount of senior securities; 1.5% of the principal amount of
subordinated securities; and 2.5% of the gross proceeds from the sale of
interest only securities totaling $450,000. The Company also reimbursed William
R. Hough & Company for reasonable out-of-pocket expenses. Certain directors and
executive officers of the Company and Bank, members of their immediate families,
and entities with which such persons are associated are customers of the Bank.
As such, they had transactions in the ordinary course of business with the Bank
during 1997. All loans and commitments to lend included in those transactions
were made in the ordinary course of business, upon substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and, in the



                                       33
<PAGE>   39

opinion of management, have not involved more than the normal risk of
collectibility or presented other unfavorable features.

18.  BANK HOLDING COMPANY FINANCIAL STATEMENTS:

Condensed financial statements of the Company (Republic Bancshares, Inc.) at
December 31 are presented below. Amounts shown as investment in the wholly-owned
subsidiaries and equity in earnings of subsidiaries are eliminated in
consolidation.

                            REPUBLIC BANCSHARES, INC.
                      PARENT-ONLY CONDENSED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                            AS OF DECEMBER 31,
                                                                           --------------------
                                                                           1997            1996
                                                                           ----            ----
<S>                                                                        <C>         <C>     
ASSETS
   Cash .............................................                      $     --    $     --
   Investment in wholly-owned subsidiaries ..........                       124,307      80,391
   Prepaid issuance costs-subordinated debt .........                            --         212
                                                                           --------    --------

       Total ........................................                      $124,307    $ 80,603
                                                                           ========    ========
LIABILITIES
   Subordinated debt ................................                      $     --    $  6,000
   Junior subordinated debt to subsidiary ...........                        28,750          --
   Intercompany payable to subsidiary ...............                            26          --
   Accrued interest on subordinated debt ............                            --           4
                                                                           --------    --------
       Total liabilities ............................                            --           4
   Minority interest ................................                            --       6,421
STOCKHOLDERS' EQUITY
   Perpetual preferred convertible stock ............                         1,500       1,500
   Common stock .....................................                        14,072      11,708
   Capital surplus ..................................                        50,322      34,225
   Retained earnings ................................                        29,155      20,847
   Unrealized gains (losses) on available-                                                      
     for sale securities.............................                           482        (102)

   Total stockholders' equity .......................                        95,531      68,178
                                                                           --------    --------
     Total ..........................................                      $124,307    $ 80,603
                                                                           ========    ========
</TABLE>


                            REPUBLIC BANCSHARES, INC.
                 PARENT-ONLY CONDENSED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              1997       1996
                                                                           --------    --------
<S>                                                                        <C>         <C>     
INCOME
Dividends from bank .................................                      $    828    $    264
Interest expense on subordinated debt ...............                          (392)         (5)
Interest on borrowings from subsidiary ..............                        (1,090)         --
Equity in undistributed net income                                                              
  of subsidiary......................................                         9,225       4,620
                                                                           --------    --------
     Net income .....................................                      $  8,571    $  4,879 
                                                                           ========    ========
</TABLE>





                                       34
<PAGE>   40



                            Republic Bancshares, Inc.
                   Parent-Only CONDENSED CASH FLOW STATEMENTS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                           FOR THE YEARS ENDED DECEMBER 31,
                                                           --------------------------------
                                                                   1997         1996
                                                                   ----         ----
<S>                                                        <C>                <C>     
OPERATING ACTIVITIES:
Net income ...............................................       $  8,571     $  4,879
Adjustments to reconcile net income to net cash
   (Used in) provided by operating activities:
Equity in undistributed net income of subsidiary .........         (9,225)      (4,620)
Net decrease (increase) in other assets ..................            212           --
Net increase (decrease) in other liabilities .............             22            5
                                                                 --------     --------
Net cash (used in) provided by operating activities: .....           (420)         264
                                                                 --------     --------
Investment Activities:
Equity investment in banking subsidiary ..................        (33,322)     (56,648)
Equity investment in trust subsidiary ....................           (889)          --
Equity investment in insurance subsidiary ................            (10)          --
                                                                 --------     --------
Net cash used in investing activities: ...................        (34,221)     (56,648)
                                                                 --------     --------

FINANCING ACTIVITIES:
Issuance of stock in merger ..............................         12,374       50,860
Decrease in minority interest ............................         (6,421)          --
Increase in retained earnings from merger ................              1           --
Conversion/Issuance of subordinated debt .................           (152)       5,788
Proceeds from exercise of stock options ..................            240           --
Proceeds of borrowings from subsidiary ...................         28,750           --
Dividend payments on perpetual preferred stock ...........           (264)        (264)
                                                                 --------     --------
Net cash provided by financing activities ................         34,528       56,384

NET INCREASE (DECREASE) IN CASH AND CASH 
   EQUIVALENTS............................................             --           --
                                                                 --------     --------
Cash balance beginning ...................................             --           --
                                                                 --------     --------
Cash balance ending ......................................             --           --
                                                                 ========     ========
</TABLE>














                                       35
<PAGE>   41


19. BUSINESS SEGMENTS

The Company's operations are divided into two business segments; commercial
banking and mortgage banking. Commercial banking activities include the
Company's lending for portfolio purposes, deposit gathering through the retail
branch network, investment and liquidity management. Mortgage banking
activities, which began in 1996, operate through a separate division of the
Bank, include originating and purchasing mortgage loans for sale as well as
selling those loans. The Company provides support for its mortgage banking
division in areas such as secondary marketing, data processing and financial
management. All funding for the mortgage banking division is provided through
the Bank. The following are business segment results of operation for the years
ended December 31, 1997 and 1996. The Company has elected to report its business
segments without allocation of income taxes and minority interests.

                            REPUBLIC BANCSHARES, INC.
                              BUSINESS SEGMENT DATA
                     YEARS ENDED DECEMBER 31, 1997 AND 1996
                                ($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       1997                                        1996
                                       ------------------------------------         ----------------------------------
                                       Commercial     Mortgage      Company         Commercial    Mortgage    Company
                                         Banking       Banking       Total            Banking      Banking     Total
                                       ----------     --------      -------         ----------    --------    -------
<S>                                    <C>            <C>        <C>                <C>          <C>        <C>       
TOTAL ASSETS (AT YEAR-END)...........   $1,401,001     $151,404  $1,552,405          $1,177,764   $46,593   $1,224,357

OPERATING DATA:
Interest income......................       99,327        9,130     108,457              87,473     1,471       88,944
Interest expense.....................       55,772        4,151      54,923              43,986       963       44,949
                                        ----------     --------  ----------          ----------  --------   ---------
Net interest income..................       48,555        4,979      53,534              43,487       508       43,995
Provision for loan losses............        2,628            -       2,628               2,582         -        2,582
                                        ----------     --------  ----------          ----------   -------   ----------
Net interest income after                   
    provision for loan losses........       45,927        4,979      50,906              40,905       508       41,413
Other noninterest income.............        9,728       15,303      25,031               5,671     1,074        6,745
Gain on sale of ORE held                         
    for investment...................            -            -           -               1,207         -        1,207
General and administrative                  
    (G & A) expenses.................       40,002       17,482      57,484              34,773     2,056       36,829
Merger expenses......................        1,144            -       1,144                   -         -            -
SAIF special assessment..............            -            -           -               4,005         -        4,005
Provision for losses on ORE..........          530            -         530                 111         -          111
ORE expense, net of ORE income.......          273            -         273                (490)        -         (490)
Amort. of goodwill & prem.                     464            -         464                 491         -          491
                                        ----------     --------  ----------          ----------   -------   ----------
    on deposits......................
Income before income taxes &            
    minority interest................   $   13,242     $  2,800      16,042          $    8,893   $  (474)       8,419
                                        ==========     ========                      ==========   ========
Income tax provision.................                                (6,096)                                    (3,035)
Minority interest in income from                                       
    subsidiary trust.................                                  (701)                                         -
Minority interest in F.F.O...........                                  (674)                                      (505)
                                                                 ----------                                 ----------
Net income...........................                            $    8,571                                 $    4,879
                                                                 ==========                                 ==========
</TABLE>






                                       36
<PAGE>   42


20. PROPOSED MERGERS AND ACQUISITIONS (UNAUDITED):

NATIONSBANK AND BARNETT BRANCHES
In December 1997, the Company entered into two purchase and assumption
agreements with NationsBank Corporation ("NationsBank"), to acquire three
branches of NationsBank's subsidiary bank, NationsBank, N.A. ("NationsBank
Subsidiary"), and five branches of Barnett Bank, N.A. ("Barnett Subsidiary"), a
wholly-owned subsidiary of Barnett Banks, Inc. ("BBI"), including the loans and
other assets recorded at those branches, and to assume the deposits and other
liabilities assigned to such branches for a purchase price of approximately
$37.5 million, based on the most recent data available (the "NationsBank
Subsidiary Acquisition"). The first purchase and assumption agreement (the
"Florida Agreement") is for three NationsBank Subsidiary and four Barnett
Subsidiary branches located throughout Florida (the "Florida Branches"),
consisting of three in Monroe County (Key West, Marathon and Plantation Key),
two in Marion County (Ocala and Silver Springs), one in Columbia County (Lake
City) and one in Suwannee County (Live Oak). The second purchase and assumption
agreement (the "Georgia Agreement" and with the Florida Agreement, collectively,
the "NationsBank Subsidiary Agreements") is for a Barnett Subsidiary branch
located in Glynn County, Georgia (the "Georgia Branch" and with the "Florida
Branches," collectively, the "NationsBank Subsidiary Branches"). At August 31,
1997, the Florida Branches had deposit liabilities of $225.5 million and loans
of $163.9 million, and the Georgia Branch had deposit liabilities of $24.2
million and loans of $19.4 million. The NationsBank Subsidiary Acquisition will
be accounted for using purchase accounting rules.

BANKERS SAVINGS BANK
In February 1998, the Company and Bankers Savings Bank, Inc. ("BSB"), Coral
Gables, Florida, entered into a definitive agreement (the "BSB Agreement") for
the merger of BSB into the Bank stock by the Company (the "BSB Acquisition") at
an exchange ratio of 0.54 of a share of the Company's Common Stock for each
share of BSB's Common Stock, subject to certain changes in the price of the
Company's Common Stock and a final valuation of BSB's headquarters building. BSB
has two branches in Dade County and, as of December 31, 1997, had total assets
of $67.1 million, total loans of $47.4 million and total deposits of $56.0
million. It is anticipated that the BSB Acquisition will be accounted for as a
pooling of interests. The BSB Acquisition may be terminated by either BSB or the
Company if it is not consummated by November 1, 1998.

DIME SAVINGS BANK
In March 1998, the Company entered into an agreement with Dime Savings Bank,
F.S.B. (the "DSB Agreement" and "DSB", respectively), to acquire a DSB branch in
Deerfield Beach, Florida (Broward County) and to assume the deposits and other
liabilities of approximately $192.5 million, assume the leasehold on the branch
property and purchase the personal property and equipment of the branch for
$100,000. The transaction will be accounted for using purchase accounting rules
and must be consummated within 30 days of receiving regulatory approval.




                                       37
<PAGE>   43


                                   SIGNATURES


Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                      REPUBLIC BANCSHARES, INC.




                                      By:/s/ John W. Sapanski
                                         --------------------------------------
                                          John W. Sapanski
                                          Chairman and Chief Executive Officer



                                      Date:        April 9, 1998
                                           ---------------------------




                                       38
<PAGE>   44


                                INDEX TO EXHIBITS


         3.1      Amended and Restated Articles of Incorporation of the Company
                  (incorporated by reference from Exhibit 3.1 of the Company's
                  Registration Statement on Form S-4, File No. 33-80895, dated
                  December 28, 1995).
         3.2      By-laws of the Company (incorporated by reference from Exhibit
                  3.2 of the Company's Registration Statement on Form S-4, File
                  No. 33-80895, dated December 28, 1995).
         10.1     Purchase and Assumption Agreement relating to the Florida
                  Branches, between NationsBank Corporation and the Company,
                  dated December 15, 1997.
         10.2     Purchase and Assumption Agreement relating to the Georgia
                  Branch, between NationsBank Corporation and the Company, 
                  dated December 15, 1997.
         21.0     List of Subsidiaries
         23.1     Consent of Arthur Andersen LLP.
         27.0     Financial Data Schedule (for SEC use only).+

--------------------
+  Previously Filed




                                       39