##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

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, 1999         |  | 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
(Address of Principal Office) |  | 33701
(Zip Code)

(727) 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.

The aggregate market value of the registrants Common Stock held by
non-affiliates of the Registrant, based upon the average bid and asked prices,
was approximately $128,650,000, on February 29, 2000. As of that date, there
were 10,555,889 shares of the Registrants Common Stock, par value $2.00 per
share, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Companys Proxy Statement for the 2000 Annual Meeting of
Stockholders are incorporated by reference into Parts I, II, III, and IV of this
report.





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TABLE OF CONTENTS



|                                                                                             |                                          |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------- | ---------------------------------------- |  |  |  |  |  |  | 
|PART I                                                                                      
|Item 1.  BUSINESS                                                                           
|                                                                                             | Background and Prior Operating History  
|                                                                                             | Business of Republic Bancshares, Inc.   
|                                                                                             | Sources of Funds                        
|                                                                                             | Lending Activities                      
|                                                                                             | Credit Administration                   
|                                                                                             | Asset Quality                           
|                                                                                             | Troubled Debt Restructurings            
|                                                                                             | Investment Activities                   
|                                                                                             | Employees                               
|                                                                                             | Market Area                             
|                                                                                             | Market Risk                             
|                                                                                             | Supervision and Regulation              
|                                                                                             | Effects of Inflation                    
|                                                                                             | Year 2000 Transition                    
|                                                                                             | Changes in Accounting Standards         
|Item 2.  PROPERTIES                                                                         
|Item 3.  LEGAL PROCEEDINGS                                                                  
|Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                
|PART II                                                                                     
|Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               
|Item 6.  SELECTED CONSOLIDATED FINANCIAL DATA                                               
|                                                                                             | Years Ended December 31, 1999 and 1998  
|                                                                                             | Years Ended December 31, 1998 and 1997  
|                                                                                             | Asset/Liability Management and Liquidity
|Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                        
|Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|PART III                                                                                    
|Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                
|Item 11.  EXECUTIVE COMPENSATION                                                            
|Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                    
|Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                    
|PART IV                                                                                     
|Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                   



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##### Table of Contents



TABLE OF CONTENTS

|                                                                        |                                               |  |    |    | 
|----------------------------------------------------------------------- | --------------------------------------------- |  | -- | -- | 
|PART I                                                                 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 1. BUSINESS                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Background and Prior Operating History        |  |    | 1  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Business of Republic Bancshares, Inc.         |  |    | 3  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Sources of Funds                              |  |    | 4  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Lending Activities                            |  |    | 5  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Credit Administration                         |  |    | 6  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Asset Quality                                 |  |    | 7  | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Troubled Debt Restructurings                  |  |    | 11 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Investment Activities                         |  |    | 11 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Employees                                     |  |    | 11 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Market Area                                   |  |    | 11 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Market Risk                                   |  |    | 12 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Supervision and Regulation                    |  |    | 14 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Effects of Inflation                          |  |    | 20 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Year 2000 Transition                          |  |    | 20 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Changes in Accounting Standards               |  |    | 20 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 2. PROPERTIES                                                      |                                               |  | 21 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 3. LEGAL PROCEEDINGS                                               |                                               |  | 29 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             |                                               |  | 29 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|PART II                                                                
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED              
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | STOCKHOLDER MATTERS                           |  |    | 29 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 6. SELECTED CONSOLIDATED FINANCIAL DATA                            |                                               |  | 30 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF                        
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Years Ended December 31, 1999 and 1998        |  |    | 32 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Years Ended December 31, 1998 and 1997        |  |    | 38 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Asset/Liability Management and Liquidity      |  |    | 45 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                     |                                               |  | 49 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON               
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | ACCOUNTING AND FINANCIAL DISCLOSURE           |  |    | 49 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|PART III                                                               
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT             |                                               |  | 50 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 11. EXECUTIVE COMPENSATION                                         |                                               |  | 51 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |                                               |  | 51 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                 |                                               |  | 51 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|PART IV                                                                
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND                  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | REPORTS ON FORM 8-K                           |  |    | 51 | 





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##### Table of Contents









PART I







Item 1. BUSINESS

Republic Bancshares, Inc. (the Company or Republic or We) is a bank
holding company registered with the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956 as amended. We conduct
business mainly through our banking subsidiary, Republic Bank (the Bank), a
Florida-chartered commercial bank headquartered in St. Petersburg, Florida. We
provide a broad range of traditional commercial banking services, emphasizing
commercial real estate and business lending. Previously, mortgage banking
activities comprised a significant portion of our business, but at the end of
1998 we significantly reduced the size and scope of our mortgage banking
operations. Based on the most recent available data, we are the third largest
independent commercial bank holding company headquartered in Florida. At
December 31, 1999, our branch network consisted of 81 branches throughout
Florida and the Companys consolidated assets totaled $2.6 billion, portfolio
loans totaled $1.9 billion, deposits totaled $2.3 billion and stockholders
equity was $170.2 million. The Banks activities are regulated by the Florida
Department of Banking and Finance (the Department) and the Federal Deposit
Insurance Corporation (the FDIC). Deposits are insured by the FDIC up to
applicable limits, and the Bank is a member of the Federal Home Loan Bank of
Atlanta (the FHLB).







Background and Prior Operating History

In May 1993, the Company underwent a change of control. More than 99.0% of the
outstanding common stock was acquired by William R. Hough and John W. Sapanski,
both directors of the Company. Afterward a program was implemented to expand our
branches and lines of business. In December 1993 the first of these expansions
was completed through our acquisition of 12 branches from Crossland Savings,
F.S.B., a federal stock savings bank. We assumed deposit liabilities of $327.7
million, purchased loans secured by real estate and purchased foreclosed
properties amounting to $201.6 million. During the latter part of 1994 and
throughout 1995, we continued this strategy by increasing our retail banking
presence on the west coast of Florida. We opened 13 new branches, increasing our
market presence in existing counties and expanding into Pasco County. At the
same time, we undertook a program of purchasing residential mortgage loans,
primarily from the FDIC at substantial discounts from face value, as a means of
deploying the excess liquidity from new deposits until internal loan growth was
sufficient to absorb the liquidity. We converted to a holding company structure
in February 1996.

Also in 1996 residential lending capabilities were expanded by adding loan
production offices in Florida, Boston, Massachusetts, and Irvine, California.
The residential loan product line was also expanded to include
government-insured first mortgage loans and high loan-to-value debt
consolidation and home improvement loans secured by junior liens on real estate
(High LTV Loans). In the fourth quarter of 1996, a wholesale lending operation
was added that purchased residential loans from third-party originators for
resale. We sold or securitized a substantial portion of the loans that the
newly-formed mortgage banking division originated, and the first securitization
of High LTV Loans was completed in December 1997.

While building the mortgage banking operation, we also expanded our commercial
banking operations. In January 1997, we opened a new branch in Hernando County.
In April 1997, we acquired Firstate Financial, F.A., a thrift institution
headquartered in Orlando, Florida, for a cash purchase price of $5.5 million.
That acquisition increased our presence in central Florida, where we previously
operated a commercial loan production facility but had no branches.

In September 1997, we acquired and merged with F.F.O. Financial Group, Inc.
(FFO), St. Cloud, Florida, the holding company parent of First Federal Savings
and Loan Association of Osceola County, in a stock-for-stock transaction. Mr.
Hough was the controlling shareholder of FFO. That merger further increased our
presence in central Florida by adding 11 branches in Brevard, Orange and Osceola
Counties. At the time of the merger, FFO had total assets of $328.4 million,
total loans of $222.4 million and total deposits of $281.3 million.

1



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In June 1998, we acquired three branch offices from BankAmerica (formerly
NationsBank, N.A.) and four branch offices of NationsBanks then-affiliate,
Barnett Bank, N.A., all of which were located in Florida, including the branchs
loans and other assets. At acquisition, the seven branches had deposit
liabilities of $199.9 million and loans of $114.4 million. On August 20, 1998,
we acquired an additional Barnett branch located in Brunswick, Georgia, with the
office becoming an interstate branch of the Companys newly chartered savings
bank, Republic Bank, F.S.B. (the Savings Bank). At acquisition, the Georgia
Branch had deposit liabilities of $16.9 million and loans of $7.5 million. We
paid a combined deposit and loan premium of $24.0 million for all of the
branches that were acquired.

On August 13, 1998, we purchased a branch office in Deerfield Beach (Broward
County), Florida from the Dime Savings Bank, F.S.B. In the transaction, the
Company acquired $61,000 of loans, $100,000 of personal property and equipment
located at the branch and assumed $206.7 million of deposits. The purchase price
for this branch was $9.8 million.

On November 5, 1998, we acquired and merged with Bankers Savings Bank, F.S.B.,
Coral Gables, Florida, in a stock-for-stock transaction. At the date of
acquisition, Bankers Savings Bank, which operated two branches in Dade County,
had total assets of $70.0 million, total loans of $46.2 million and total
deposits of $61.1 million.

On the same date, we also acquired Lochaven Federal Savings and Loan
Association, a one branch, federally chartered thrift in Orlando, Florida in a
stock-for-stock acquisition. At the date of acquisition, Lochaven had total
assets of $56.5 million, total loans of $44.8 million and total deposits of
$54.0 million.

In the fourth quarter of 1998 we significantly reduced the size and scope of our
mortgage banking activities due to turmoil in the financial markets,
particularly the High LTV and nonconforming mortgage loan segments, and reduced
liquidity levels in the High LTV Loan sector of the asset-backed securities
markets. During the latter part of November 1998, the Companys normal conduits
for sale and/or securitization of High LTV Loans and nonconforming first
mortgage loans suddenly became unavailable due to those liquidity problems.
Rather than dispose of High LTV Loans and nonconforming mortgages we had
originated at distressed prices resulting from the illiquid market, we elected
to hold those loans in our portfolio. We also ceased originating High LTV Loans
and virtually eliminated origination of nonconforming first mortgage loans. We
closed out-of-state loan production offices and ceased all telemarketing efforts
that were the source of the majority of the loan originations by our mortgage
banking unit. At year-end 1998, we recorded a restructuring charge of $6.7
million, primarily for severance benefits payable to mortgage banking employees
whose positions were eliminated, and an $818,000 charge for legal and other
costs not includable as part of the restructuring charge.

During 1998, we entered into a series of purchase, lease assumption and sublease
agreements with BankAmerica under which we purchased three former NationsBank
branch offices and leased 22 former branches of NationsBank and Barnett Bank
that had been closed in connection with the merger of NationsBank and Barnett.
These branch office sites are located throughout the State of Florida. Two of
the purchased branch offices are in Hillsborough County and the third is in Lee
County. The leased offices are in Broward, Clay, Collier, Dade, Marion, Palm
Beach, Pinellas and Volusia Counties. We paid BankAmerica $3.8 million for the
three purchased offices and, in addition to assuming the lease obligations, paid
approximately $3.0 million (for furniture, fixtures and equipment and certain
real estate and as a premium) in connection with the lease assumption
transactions. We had opened three of these branch offices by the end of 1998.
During 1999 we opened the remaining branch offices, continuing the expansion of
our commercial banking activities while continuing to shrink residential
mortgage lending efforts.

On September 10, 1999, we sold the Brunswick, Georgia office of the Savings Bank
to Sapelo National Bank (Sapelo) for a gain of $1.1 million. In the
transaction, Sapelo acquired all of the deposits and fixed assets associated
with the Brunswick office. Simultaneously with the branch sale, the Savings Bank
sold its loan portfolio to the Bank and was dissolved.

2



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##### Table of Contents



Subsequent Events

Appointment of Chief Executive Officer

On March 8, 2000, the board of directors of the Company and the Bank announced
the appointment of Mr. William R. Klich as President and Chief Executive Officer
of the Company and the Bank, effective March 15, 2000. Mr. Klich, 55, has 30
years of banking experience and was the chief executive for Coast
Bank, F.S.B., located in Sarasota, Florida, from 1990-1993. After Coast Bank was acquired by
SunTrust Banks in mid-1993, Mr. Klich remained with SunTrust Bank, Gulf Coast,
as its Corporate Banking Executive. In early 1996 he was promoted to his current
position as Chairman and Chief Executive Officer of the $2.4 billion SunTrust
Bank, Gulf Coast, serving Manatee, Sarasota and Charlotte Counties.

Mr. Klich will be appointed to the Banks board of directors effective March
15, 2000, and is expected to become a member of the Companys board of
directors at its annual stockholders meeting in April 2000. Messrs. William
R. Hough and Alfred T. May will continue to serve as Chairman of the
Companys board of directors and as Chairman of the Banks board of
directors, respectively.

Mortgage Warehouse Lending

In another matter, on March 8, 2000, the Company announced that in recent weeks
operational deficiencies in its warehouse lending department, which makes loans
to mortgage originators secured by an inventory of loans held for sale, had come
to its attention. Management is instituting workout plans for several borrowers
that may include an amended repayment schedule, substitute collateral,
additional collateral or a combination thereof. Based on information the Company
has at this time, it is uncertain as to whether it will incur any losses on its
warehouse loans or, if so, the extent of any losses that may be incurred. At
this time, management believes that its allowance for loan losses at December
31, 1999 was adequate.







Business of Republic Bancshares, Inc.

Our principal business strategies now include:



| |  |  | continuing to expand our commercial real estate lending                                      
| | - |  | ---------------------------------------------------------------------------------------------
|
| |  |  | expanding business lending, including introducing a small business
lending program           
|
| |  |  | increasing consumer lending through our branch system with an emphasis
on home equity lending
|
| |  |  | increasing market share of deposits through internal growth                                  
|
| |  |  | emphasizing commercial and retail checking relationships                                     
|
| |  |  | increasing our range of commercial banking and retail-oriented products
and services         

While pursuing these strategies, management remains committed to improving asset
quality, managing interest rate risk and enhancing profitability.

3



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##### Table of Contents









Sources of Funds

Our primary source of funds for lending, investment, and other general business
purposes are deposit accounts. In addition to deposits, another principal source
of funds are loan repayments. The Banks mortgage portfolio contains a
significant amount of seasoned loans that are anticipated to repay rapidly
during the next few years. If necessary, additional funding is available by
borrowing from the FHLB, which has been granted a blanket lien on our
residential loan portfolio as collateral. We do not foresee needing to rely on
brokered deposits. To the extent that short-term financing is required, we
intend to rely on repurchase agreements, FHLB advances, and other traditional
money market sources of funding. For additional discussion of asset/liability
management policies and strategies, see Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Asset/Liability
Management.

We offer a full range of deposit services, including checking and other
transaction accounts, savings accounts, and time deposits. At December 31, 1999,
we had no brokered deposits and time deposits in amounts of $100,000 or more
constituted 11.08% of total deposits.

The following table shows the principal types of deposit accounts we offer and
the aggregate amounts of those accounts at December 31, 1999 ($ in thousands):

|                                           |                             |                         |      |               |      |        |         |                |           |            |      |      |       |  
|------------------------------------------ | --------------------------- | ----------------------- | ---- | ------------- | ---- | ------ | ------- | -------------- | --------- | ---------- | ---- | ---- | ----- | -
|                                           |                             |                         |      | Weighted     
|                                           |                             |                         |      | Average       |      |        |         |                |           | Percent of
|                                           |                             |                         |      | Interest Rate |      | Amount |         | Total Deposits
|                                           |                             |                         |      |               |      |        |         |               
|Noninterest bearing                        |                             |                         | 0.00 | %             |      | $      | 127,619 |                |           |            | 5.6  | %   
|                                          
|                                          
|                                          
|                                          
|Interest checking                          |                             |                         | .75  |               |      |        | 187,463 |                |           |            | 8.2  |     
|                                          
|                                          
|                                          
|                                          
|Passbook gold                              |                             |                         | 4.14 |               |      |        | 248,974 |                |           |            | 10.9 |     
|                                          
|                                          
|                                          
|                                          
|Regular savings                            |                             |                         | 1.60 |               |      |        | 61,022  |                |           |            | 2.7  |     
|                                          
|                                          
|                                          
|                                          
|Money market                               |                             |                         | 3.17 |               |      |        | 45,697  |                |           |            | 2.0  |     
|                                          
|                                          
|                                          
|                                          
|Money market gold                          |                             |                         | 4.12 |               |      |        | 165,861 |                |           |            | 7.3  |     
|                                           |                             |                         |      |               |      |        |         |                |           |            |      |     
|                                           | Total liquid accounts       |                         |      | 2.51          |      |        |         | 836,636        |           |            |      | 36.7 |      
|                                          
|                                          
|                                          
|                                          
|Time deposits with original maturities of:
|                                          
|                                          
|                                          
|                                          
|                                           | One year or less            |                         |      | 5.12          |      |        |         | 385,070        |           |            |      | 16.9 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Over 1 year through 5 years |                         |      | 5.46          |      |        |         | 1,061,103      |           |            |      | 46.4 |      
|                                           |                             |                         |      |               |      |        |         |                |           |            |      |     
|                                           |                             | Total time deposits (1) |      |               | 5.37 |        |         |                | 1,446,173 |            |      |      | 63.3  |  
|                                           |                             |                         |      |               |      |        |         |                |           |            |      |     
|                                           |                             | Total deposits          |      |               | 4.32 | %      |         | $              | 2,282,809 |            |      |      | 100.0 | %
|                                           |                             |                         |      |               |      |        |         |                |           |            |      |     



---

|(1) |  | Includes time deposits in amounts of $100,000 or more of $253.0
million.
|--- |  | ------------------------------------------------------------------------

At December 31, 1999, scheduled maturities of total time deposits were as
follows ($ in thousands):

|                    |  |        |           |                     |  |            |       |  
|------------------- |  | ------ | --------- | ------------------- |  | ---------- | ----- | -
|Year ended          |  |        |           |                     |  | Percent of
|December 31,        |  | Amount |           | Total Time Deposits
|                    |  |        |           |                    
|2000                |  | $      | 1,042,187 |                     |  |            | 72.06 | %
|                   
|                   
|                   
|                   
|2001                |  |        | 255,069   |                     |  |            | 17.64 |  
|                   
|                   
|                   
|                   
|2002                |  |        | 42,874    |                     |  |            | 2.96  |  
|                   
|                   
|                   
|                   
|2003                |  |        | 46,646    |                     |  |            | 3.23  |  
|                   
|                   
|                   
|                   
|2004                |  |        | 57,395    |                     |  |            | 3.97  |  
|                   
|                   
|                   
|                   
|Thereafter          |  |        | 2,002     |                     |  |            | .14   |  
|                    |  |        |           |                     |  |            |       |  
|Total time deposits |  | $      | 1,446,173 |                     |  |            | 100.0 | %
|                    |  |        |           |                     |  |            |       |  

4



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##### Table of Contents









Lending Activities

We originate a full range of traditional lending products for our portfolio. In
recent years origination of High LTV Loans comprised a major part of our lending
efforts, but we discontinued originating that product in the first quarter of
1999. Additionally, we closed the out-of-state lending offices that were part of
the now-discontinued mortgage banking operations.

During 1999 and in the future, we will continue to take advantage of our
expertise in commercial real estate and multifamily residential lending. Our new
business initiatives will be directed toward increasing consumer and business
loans, with residential lending comprising a lesser part of our lending
activities. In 1999, we introduced a small business loan production program
targeted at businesses with gross sales under $5 million.

For 1999, loan originations from all product types totaled $626.2 million. Of
this amount, originations of commercial real estate and commercial (business)
loans totaled $365.1 million, consumer loan originations (primarily home equity
loans) totaled $96.8 million and residential loan originations were $164.3
million.

The following tables show information concerning our loan portfolio, based on
total dollars and percent of portfolio, by collateral type as of the dates
indicated ($ in thousands):

|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |         |         |         | 
|-------------------------------- | ------------------------------ | --------------------------------- | ------------------- | ------- | --------- | --------- | --------- | ------- | --------- | --------- | --------- | ------- | --------- | --------- | ------- | ------- | ------- | --------- | ------- | ------- | ------- | ------- | 
|Based on total dollars:          |                                | At December 31,                  
|                                 |                                |                                  
|                                 |                                |                                   |                     |         | 1999      |           | 1998      |         | 1997      |           | 1996      |         | 1995     
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |          
|Real estate mortgage loans:     
|                                
|                                
|                                
|                                
|                                 | One-to-four family residential |                                   | $                   | 721,159 |           |           | $         | 738,489 |           |           | $         | 686,661 |           |           | $       | 532,692 |         |           | $       | 512,751 |        
|                                
|                                
|                                
|                                
|                                 | Multifamily residential        |                                   |                     | 80,212  |           |           |           | 92,209  |           |           |           | 84,863  |           |           |         | 89,129  |         |           |         | 94,242  |        
|                                
|                                
|                                
|                                
|                                 | Nonconforming mortgages        |                                   |                     | 79,562  |           |           |           | 72,980  |           |           |           |        |           |           |         |        |         |           |         |        |        
|                                
|                                
|                                
|                                
|                                 | Warehouse lines of credit      |                                   |                     | 96,873  |           |           |           | 132,973 |           |           |           |        |           |           |         |        |         |           |         |        |        
|                                
|                                
|                                
|                                
|                                 | High LTV Loans                 |                                   |                     | 96,758  |           |           |           | 116,764 |           |           |           |        |           |           |         |        |         |           |         |        |        
|                                
|                                
|                                
|                                
|                                 | Commercial real estate         |                                   |                     | 416,827 |           |           |           | 379,797 |           |           |           | 278,951 |           |           |         | 234,043 |         |           |         | 184,050 |        
|                                
|                                
|                                
|                                
|                                 | Construction/land development  |                                   |                     | 165,649 |           |           |           | 130,415 |           |           |           | 51,511  |           |           |         | 32,245  |         |           |         | 26,268  |        
|                                
|                                
|                                
|                                
|                                 | Home equity loans              |                                   |                     | 118,737 |           |           |           | 104,803 |           |           |           | 47,365  |           |           |         | 15,014  |         |           |         | 7,939   |        
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        
|Total real estate mortgage loans |                                |                                   | 1,775,777           |         |           |           | 1,768,430 |         |           |           | 1,149,351 |         |           |           | 903,123 |         |         |           | 825,250 |        
|                                
|                                
|                                
|                                
|Commercial (business) loans      |                                |                                   | 90,378              |         |           |           | 84,002    |         |           |           | 39,119    |         |           |           | 40,747  |         |         |           | 36,272  |        
|                                
|                                
|                                
|                                
|Consumer loans and other loans   |                                |                                   | 23,737              |         |           |           | 43,857    |         |           |           | 27,430    |         |           |           | 32,352  |         |         |           | 24,320  |        
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        
|Total portfolio loans            |                                |                                   | 1,889,892           |         |           |           | 1,896,289 |         |           |           | 1,215,900 |         |           |           | 976,222 |         |         |           | 885,842 |        
|                                
|                                
|                                
|                                
|Allowance for loan losses        |                                |                                   | (28,177             | )       |           |           | (28,077   | )       |           |           | (22,023   | )       |           |           | (19,774 | )       |         |           | (21,097 | )      
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        
|                                 |                                | Portfolio loans, net of allowance |                     |         | 1,861,715 |           |           |         | 1,868,212 |           |           |         | 1,193,877 |           |         |         | 956,448 |           |         |         | 864,745 |        
|                                
|                                
|                                
|                                
|Loans held for sale:            
|                                
|                                
|                                
|                                
|Residential first mortgage loans |                                |                                   |                     |         |           |           | 184,176   |         |           |           | 141,556   |         |           |           | 92,838  |         |         |           | 84,311  |        
|                                
|                                
|                                
|                                
|High LTV Loans                   |                                |                                   |                    |         |           |           |          |         |           |           | 45,670    |         |           |           | 5,511   |         |         |           |        |        
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        
|                                 |                                |                                   | Loans held for sale |         |           |          |           |         |           | 184,176   |           |         |           | 187,226   |         |         |         | 98,349    |         |         |         | 84,311  | 
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        
|                                 |                                |                                   | Total loans         |         | $         | 1,861,715 |           |         | $         | 2,052,388 |           |         | $         | 1,381,103 |         |         | $       | 1,054,797 |         |         | $       | 949,056 | 
|                                 |                                |                                   |                     |         |           |           |           |         |           |           |           |         |           |           |         |         |         |           |         |        

|                                 |                       |              |       |        |      |  |       |        |      |  |       |        |   |  |       |        |   |  |       |        |  
|-------------------------------- | --------------------- | ------------ | ----- | ------ | ---- |  | ----- | ------ | ---- |  | ----- | ------ | - |  | ----- | ------ | - |  | ----- | ------ | -
|Based on percent of portfolio:   |                       | December 31,
|                                 |                       |             
|                                 |                       |              | 1999  |        | 1998 |  | 1997  |        | 1996 |  | 1995 
|                                 |                       |              |       |        |      |  |       |        |      |  |      
|Real estate mortgage loans:     
|                                
|                                
|                                
|                                
|One-to-four family residential   |                       |              | 38.16 | %      |      |  | 38.94 | %      |      |  | 56.47 | %      |   |  | 54.57 | %      |   |  | 57.88 | %     
|                                
|                                
|                                
|                                
|Multifamily residential          |                       |              | 4.24  |        |      |  | 4.86  |        |      |  | 6.98  |        |   |  | 9.13  |        |   |  | 10.64 |       
|                                
|                                
|                                
|                                
|Nonconforming mortgages          |                       |              | 4.21  |        |      |  | 3.85  |        |      |  |      |        |   |  |      |        |   |  |      |       
|                                
|                                
|                                
|                                
|Warehouse lines of credit        |                       |              | 5.13  |        |      |  | 7.01  |        |      |  |      |        |   |  |      |        |   |  |      |       
|                                
|                                
|                                
|                                
|High LTV Loans                   |                       |              | 5.12  |        |      |  | 6.16  |        |      |  |      |        |   |  |      |        |   |  |      |       
|                                
|                                
|                                
|                                
|Commercial real estate           |                       |              | 22.06 |        |      |  | 20.03 |        |      |  | 22.94 |        |   |  | 23.97 |        |   |  | 20.78 |       
|                                
|                                
|                                
|                                
|Construction/land development    |                       |              | 8.76  |        |      |  | 6.88  |        |      |  | 4.24  |        |   |  | 3.30  |        |   |  | 2.97  |       
|                                
|                                
|                                
|                                
|Home equity loans                |                       |              | 6.28  |        |      |  | 5.53  |        |      |  | 3.90  |        |   |  | 1.54  |        |   |  | 0.89  |       
|                                 |                       |              |       |        |      |  |       |        |      |  |       |        |   |  |       |        |   |  |       |       
|Total real estate mortgage loans |                       |              | 93.96 |        |      |  | 93.26 |        |      |  | 94.53 |        |   |  | 92.51 |        |   |  | 93.16 |       
|                                
|                                
|                                
|                                
|Commercial (business) loans      |                       |              | 4.78  |        |      |  | 4.43  |        |      |  | 3.22  |        |   |  | 4.17  |        |   |  | 4.10  |       
|                                
|                                
|                                
|                                
|Consumer loans and other loans   |                       |              | 1.26  |        |      |  | 2.31  |        |      |  | 2.25  |        |   |  | 3.32  |        |   |  | 2.74  |       
|                                 |                       |              |       |        |      |  |       |        |      |  |       |        |   |  |       |        |   |  |       |       
|                                 | Total portfolio loans |              |       | 100.00 | %    |  |       | 100.00 | %    |  |       | 100.00 | % |  |       | 100.00 | % |  |       | 100.00 | %
|                                 |                       |              |       |        |      |  |       |        |      |  |       |        |   |  |       |        |   |  |       |       

5



---



##### Table of Contents



The following table shows the maturities of our real estate and commercial loans
at December 31, 1999 and 1998. Loans having no stated schedule of repayments and
no stated maturity are reported as due in one year or less. This table also
shows the dollar amount of loans scheduled to mature after one year, according
to their interest rate characteristics ($ in thousands):

|                                                   |                              |             |           |                   |  |                   |        |            |  |   |           |           |  |   |        |        |  | 
|-------------------------------------------------- | ---------------------------- | ----------- | --------- | ----------------- |  | ----------------- | ------ | ---------- |  | - | --------- | --------- |  | - | ------ | ------ |  | 
|                                                   |                              |             |           | December 31, 1999 |  | December 31, 1998
|                                                   |                              |             |           |                   |  |                  
|Type of loan:                                      |                              | Real Estate |           | Commercial        |  | Real Estate       |        | Commercial
|                                                   |                              |             |           |                   |  |                   |        |           
|Amounts due:                                      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | One year or less             |             | $         | 393,953           |  |                   | $      | 40,651     |  |   | $         | 361,236   |  |   | $      | 13,369 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | After one through five years |             |           | 339,331           |  |                   |        | 33,167     |  |   |           | 296,670   |  |   |        | 55,375 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | More than five years         |             |           | 1,042,493         |  |                   |        | 16,560     |  |   |           | 1,110,524 |  |   |        | 15,258 | 
|                                                   |                              |             |           |                   |  |                   |        |            |  |   |           |           |  |   |        |        |  | 
|Total                                              |                              | $           | 1,775,777 |                   |  | $                 | 90,378 |            |  | $ | 1,768,430 |           |  | $ | 84,002 |       
|                                                   |                              |             |           |                   |  |                   |        |            |  |   |           |           |  |   |        |        |  | 
|Interest rate terms on
amounts due after one year:
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Adjustable                   |             | $         | 668,549           |  |                   | $      | 27,804     |  |   | $         | 688,040   |  |   | $      | 51,229 | 
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Fixed                        |             |           | 713,275           |  |                   |        | 21,923     |  |   |           | 719,154   |  |   |        | 19,404 | 
|                                                   |                              |             |           |                   |  |                   |        |            |  |   |           |           |  |   |        |        |  | 
|Total                                              |                              | $           | 1,381,824 |                   |  | $                 | 49,727 |            |  | $ | 1,407,194 |           |  | $ | 70,633 |       
|                                                   |                              |             |           |                   |  |                   |        |            |  |   |           |           |  |   |        |        |  | 







Credit Administration

Our loan approval process provides for various levels of lending authority to
loan officers, the Officers Loan Committee, the Chairman, and the Chief
Executive Officer. In addition, loans in excess of $3.0 million require the
approval of the Board of Directors Loan Committee or a majority of the full
Board prior to funding. Loan purchases are made subject to the same underwriting
standards as loan originations. To achieve consistency in underwriting policies
and procedures, we have centralized the supervision of our loan approval process
and all credit decision functions.

Our real estate lending consists of extensions of credit secured by real estate
mortgages and loans made for the purpose of financing the construction of a
building or other improvements to real estate, regardless of whether a lien has
been taken on the property. Using applicable regulatory guidelines as our basis,
we have adopted comprehensive written real estate lending policies that we
believe are consistent with safe and sound banking practices. These lending
policies reflect consideration of the Interagency Guidelines for Real Estate
Lending Policies (the Guidelines) adopted by the federal banking agencies in
December 1992, which set forth applicable standards for real estate lending.

Our lending policy addresses certain lending considerations set forth in the
Guidelines, including loan-to-value (LTV) limits, loan administration
procedures, underwriting standards, portfolio diversification standards and
documentation, approval and reporting requirements. The LTV ratio framework,
with a LTV ratio being the total amount of credit to be extended divided by the
appraised value or purchase price of the property at the time the credit is
originated, has been established for each category of real estate loans. Our
policy, subject to certain approval exceptions, establishes, among other things,
the following LTV limits: raw land (65%); land development (75%); construction
(commercial, multifamily and non-residential) (80%) and improved property (85%).
For portfolio purposes, loans on one-to-four family residential (owner occupied)
mortgages where the LTV exceeds 95% are not made, and any LTV ratio in excess of
80% generally requires appropriate insurance or additional security from readily
marketable collateral. The Board of Directors reviews and approves the Companys
lending policies at least annually.

Our commercial (business) lending is based on a strategy of extending credit to
the Florida business community, with commercial loans being made to corporate
and commercial businesses and to borrowers with satisfactory cash flows.

6



---



##### Table of Contents



We manage our loan portfolio on an ongoing basis following written portfolio
management strategies, guidelines for underwriting standards and risk
assessment, and procedures for ongoing identification and management of credit
deterioration. We undertake regular portfolio reviews to estimate loss exposure
and determine compliance with policies (see  Asset Quality).







Asset Quality

Allowance/Provision for Loan Losses

The allowance for loan losses represents our estimate of an amount adequate to
provide for probable losses inherent in the loan portfolio based on historical
data for the Company and the current status of the loan portfolio. However,
there may be additional risks of losses in the future, which cannot be
quantified precisely or attributed to particular loans or classes of loans.
Because those risks include general economic trends, as well as available
information about conditions affecting individual borrowers, our estimate of the
allowance needed is necessarily approximate and imprecise. The allowance is also
subject to regulatory examinations and determinations as to adequacy, which may
take into account such factors as the methodology used to calculate the
allowance and the size of the allowance in comparison to peers identified by the
regulatory agencies.

We conduct an ongoing evaluation and grading of the loan portfolio according to
an eight-point rating system. The loan ratings serve as a guideline in assessing
the risk level of a particular loan and provide a basis for the estimation of
the overall allowance necessary based on historical experience. The Loan Review
Department independently rates loans and, on a quarterly basis, meets with
senior management and the loan officers to discuss all loans, that have been
identified for potential credit quality problems. The Loan Review Department
reports its findings to the Directors Audit Committee to ensure independence of
the loan grading function.

We believe that our loan loss allowance policy is consistent with policies
established by federal and state regulatory agencies and that the level of our
allowance is appropriate in light of our historical loss experience. Provisions
for loan losses charged to expense during each period are made based on our
estimation of the adequacy of the allowance when compared to the inherent risk
of the existing portfolio. As part of the risk assessment for certain loans
purchased from 1993 through 1997, we allocated a portion of the discount on such
loan purchases to the allowance in amounts which are consistent with our loan
loss allowance policy guidelines. Amounts resulting from discount allocation to
the allowance related to specific pools of purchased loans are available to
absorb potential losses only on those purchased loans and are not available to
cover losses on other loans. At December 31, 1999, $1.6 million of the loan loss
allowance resulted from allocations of loan discount with the $26.6 million
remainder resulting from provisions to the allowance. At December 31, 1999, the
amount of unearned discount on purchased loans, which had not been allocated to
the allowance, totaled $3.4 million.

Loan loss allowance activity during 1999 included $9.6 million of loan
charge-offs (net of recoveries), $470,000 reallocated from the allowance to loan
discounts and a $9.9 million provision for loan losses. Activity during 1998
included a $14.3 million provision for loan losses, loan charge-offs (net of
recoveries) of $3.9 million and $4.3 million reallocated from the allowance to
loan discounts as a result of lower-than-expected charge-offs in these
portfolios.

7



---



##### Table of Contents



The following table shows information concerning the activity in the allowance
for loan losses during the periods indicated ($ in thousands):

|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |       |       | 
|---------------------------------------------------------- | ------------------------------ | ----------------------------------------------------- | ------- | ------------------------ | ---- | ---- | ------ | ------ | ------ | ---- | ------ | ---- | -- | - | ------ | ------ | ------ | - | ------ | ----- | ----- | 
|                                                           |                                |                                                       |         | Years Ended December 31,
|                                                           |                                |                                                       |         |                         
|                                                           |                                |                                                       |         | 1999                     |      | 1998 |        | 1997   |        | 1996 |        | 1995
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |     
|Allowance at beginning
of period:                          |                                | $                                                     | 28,077  |                          |      | $    | 22,023 |        |        | $    | 19,774 |      |    | $ | 21,097 |        |        | $ | 16,322 |      
|                                                          
|                                                          
|                                                          
|                                                          
|Allowance from Firstate
Acquisition                        |                                |                                                       |        |                          |      |      |       |        |        |      | 132    |      |    |   |       |        |        |   |       |      
|                                                          
|                                                          
|                                                          
|                                                          
|Loan discount (net) allocated
to/(from) the allowance for:
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Loans purchased from Crossland |                                                       |         | (55                      | )    |      |        | (805   | )      |      |        |     |    |   |        |       |        |   |        |      |      
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Loans purchased in 1994        |                                                       |         |                         |      |      |        | (689   | )      |      |        |     |    |   |        | (202   | )      |   |        |      |      
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Loans purchased in 1995        |                                                       |         | (215                     | )    |      |        | (2,605 | )      |      |        | (773 | )  |   |        | (1,541 | )      |   |        | 7,658 |      
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Loans purchased in 1996        |                                                       |         |                         |      |      |        |       |        |      |        |     |    |   |        | 11     |        |   |        |      |      
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Loans purchased in 1997        |                                                       |         | 75                       |      |      |        | (204   | )      |      |        | 812  |    |   |        |       |        |   |        |      |      
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|                                                           |                                | Total loan discount allocated
to/(from) the allowance |         |                          | (195 | )    |        |        | (4,303 | )    |        |      | 39 |   |        |        | (1,732 | ) |        |       | 7,658 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Charge-offs:                                              
|                                                          
|                                                          
|                                                          
|                                                          
|Residential loans (1-4 family)                             |                                |                                                       | (2,980  | )                        |      |      | (1,481 | )      |        |      | (974   | )    |    |   | (1,934 | )      |        |   | (553   | )    
|                                                          
|                                                          
|                                                          
|                                                          
|Commercial real estate/
multi-family                       |                                |                                                       | (838    | )                        |      |      | (266   | )      |        |      | (15    | )    |    |   | (170   | )      |        |   | (4,054 | )    
|                                                          
|                                                          
|                                                          
|                                                          
|Commercial (business)                                      |                                |                                                       | (353    | )                        |      |      | (1,450 | )      |        |      | (125   | )    |    |   | (249   | )      |        |   | (1,000 | )    
|                                                          
|                                                          
|                                                          
|                                                          
|High LTV                                                   |                                |                                                       | (5,357  | )                        |      |      |       |        |        |      |       |      |    |   |       |        |        |   |       |      
|                                                          
|                                                          
|                                                          
|                                                          
|Home Equity                                                |                                |                                                       | (730    | )                        |      |      |       |        |        |      |       |      |    |   |       |        |        |   |       |      
|                                                          
|                                                          
|                                                          
|                                                          
|Consumer and other loans                                   |                                |                                                       | (865    | )                        |      |      | (1,197 | )      |        |      | (288   | )    |    |   | (292   | )      |        |   | (207   | )    
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|Total charge-offs                                          |                                |                                                       | (11,123 | )                        |      |      | (4,394 | )      |        |      | (1,402 | )    |    |   | (2,645 | )      |        |   | (5,814 | )    
|                                                          
|                                                          
|                                                          
|                                                          
|Recoveries:                                               
|                                                          
|                                                          
|                                                          
|                                                          
|Residential loans (1-4 family)                             |                                |                                                       | 695     |                          |      |      | 112    |        |        |      | 3      |      |    |   | 31     |        |        |   | 65     |      
|                                                          
|                                                          
|                                                          
|                                                          
|Commercial real estate/
multi-family                       |                                |                                                       | 18      |                          |      |      | 183    |        |        |      | 54     |      |    |   | 35     |        |        |   | 379    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Commercial loans (business)                                |                                |                                                       | 184     |                          |      |      | 48     |        |        |      | 152    |      |    |   | 168    |        |        |   | 53     |      
|                                                          
|                                                          
|                                                          
|                                                          
|High LTV                                                   |                                |                                                       | 301     |                          |      |      |       |        |        |      |       |      |    |   |       |        |        |   |       |      
|                                                          
|                                                          
|                                                          
|                                                          
|Home equity                                                |                                |                                                       | 52      |                          |      |      |       |        |        |      |       |      |    |   |       |        |        |   |       |      
|                                                          
|                                                          
|                                                          
|                                                          
|Consumer and other loans                                   |                                |                                                       | 245     |                          |      |      | 147    |        |        |      | 24     |      |    |   | 62     |        |        |   | 10     |      
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|Total recoveries                                           |                                |                                                       | 1,495   |                          |      |      | 490    |        |        |      | 233    |      |    |   | 296    |        |        |   | 507    |      
|                                                          
|                                                          
|                                                          
|                                                          
|Net charge-offs                                            |                                |                                                       | (9,628  | )                        |      |      | (3,904 | )      |        |      | (1,169 | )    |    |   | (2,349 | )      |        |   | (5,307 | )    
|                                                          
|                                                          
|                                                          
|                                                          
|Provisions for loan losses                                 |                                |                                                       | 9,923   |                          |      |      | 14,261 |        |        |      | 3,247  |      |    |   | 2,758  |        |        |   | 2,424  |      
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|Allowance at end of period                                 |                                | $                                                     | 28,177  |                          |      | $    | 28,077 |        |        | $    | 22,023 |      |    | $ | 19,774 |        |        | $ | 21,097 |      
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|Charges to allocated loan discount                         |                                |                                                       | .05     | %                        |      |      | 0.03   | %      |        |      | 0.04   | %    |    |   | 0.15   | %      |        |   | 0.09   | %    
|                                                          
|                                                          
|                                                          
|                                                          
|Other net charge-offs                                      |                                |                                                       | .45     |                          |      |      | 0.19   |        |        |      | 0.06   |      |    |   | 0.10   |        |        |   | 0.54   |      
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      
|Total net charge-offs to
average loans                     |                                |                                                       | .50     | %                        |      |      | 0.22   | %      |        |      | 0.10   | %    |    |   | 0.25   | %      |        |   | 0.63   | %    
|                                                           |                                |                                                       |         |                          |      |      |        |        |        |      |        |      |    |   |        |        |        |   |        |      

The following table shows the allocation of the allowance based on certain
subjective estimates and the percent of the loan portfolio for each category
presented. The amount allocated to a particular segment should not be construed
as the only amount available for future charge-offs that might occur within that
segment. In addition, the amounts allocated by segment may not be indicative of
future charge-off trends. The allocation of the allowance may change from year
to year should we determine that the risk characteristics of the loan portfolio
and off-balance sheet commitments have changed.

8



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##### Table of Contents



|                                    |                       |          |       |           |        |        |      |                  |       |   |       |       |        |            |      |      |       |  
|----------------------------------- | --------------------- | -------- | ----- | --------- | ------ | ------ | ---- | ---------------- | ----- | - | ----- | ----- | ------ | ---------- | ---- | ---- | ----- | -
|                                    |                       |          |       | 1999      |        | 1998  
|                                    |                       |          |       |           |        |       
|                                    |                       |          |       |           |        |        |      | Percent of       |       |   |       |       |        | Percent of
|Allowance Allocation                |                       | Amount   |       | Portfolio |        | Amount |      | Portfolio       
|                                    |                       |          |       |           |        |        |      |                 
|                                    |                       |          |       |           |        |        |      | ($ in thousands)
|Performing/not classified:         
|                                   
|                                   
|                                   
|                                   
|Residential loans:                 
|                                   
|                                   
|                                   
|                                   
|                                    | March 1995 Purchase   |          | $     | 44        |        |        |      | 1.2              | %     |   | $     | 49    |        |            |      | 1.2  | %    
|                                   
|                                   
|                                   
|                                   
|                                    | All other residential |          |       | 1,884     |        |        |      | 56.6             |       |   |       | 1,976 |        |            |      | 55.5 |      
|                                   
|                                   
|                                   
|                                   
|Debt consolidation & subprime loans |                       |          | 5,681 |           |        |        | 7.3  |                  |       |   | 4,621 |       |        |            | 8.4  |     
|                                   
|                                   
|                                   
|                                   
|Commercial (business)               |                       |          | 877   |           |        |        | 4.0  |                  |       |   | 830   |       |        |            | 4.0  |     
|                                   
|                                   
|                                   
|                                   
|Commercial real estate              |                       |          | 5,504 |           |        |        | 19.2 |                  |       |   | 3,602 |       |        |            | 19.2 |     
|                                   
|                                   
|                                   
|                                   
|Consumer & other                    |                       |          | 1,737 |           |        |        | 7.9  |                  |       |   | 1,995 |       |        |            | 7.9  |     
|                                    |                       |          |       |           |        |        |      |                  |       |   |       |       |        |            |      |     
|                                    |                       | Subtotal |       |           | 15,727 |        |      |                  | 96.2  |   |       |       | 13,073 |            |      |      | 96.2  |  
|                                   
|                                   
|                                   
|                                   
|Nonperforming/classified:          
|                                   
|                                   
|                                   
|                                   
|Special mention                     |                       |          | 1,001 |           |        |        | 1.4  |                  |       |   | 587   |       |        |            | 1.4  |     
|                                   
|                                   
|                                   
|                                   
|Substandard & nonperforming         |                       |          | 5,096 |           |        |        | 2.3  |                  |       |   | 7,272 |       |        |            | 2.3  |     
|                                   
|                                   
|                                   
|                                   
|Doubtful                            |                       |          | 1,427 |           |        |        | .1   |                  |       |   | 871   |       |        |            | .1   |     
|                                   
|                                   
|                                   
|                                   
|Loss                                |                       |          |      |           |        |        |     |                  |       |   |      |       |        |            |     |     
|                                    |                       |          |       |           |        |        |      |                  |       |   |       |       |        |            |      |     
|                                    |                       | Subtotal |       |           | 7,524  |        |      |                  | 3.8   |   |       |       | 8,730  |            |      |      | 3.8   |  
|                                   
|                                   
|                                   
|                                   
|Unfunded portion of closed loans    |                       |          | 1,356 |           |        |        |     |                  |       |   | 1,553 |       |        |            |     |     
|                                   
|                                   
|                                   
|                                   
|Unallocated                         |                       |          | 3,570 |           |        |        |     |                  |       |   | 4,721 |       |        |            |     |     
|                                    |                       |          |       |           |        |        |      |                  |       |   |       |       |        |            |      |     
|                                    |                       | Total    |       | $         | 28,177 |        |      |                  | 100.0 | % |       | $     | 28,077 |            |      |      | 100.0 | %
|                                    |                       |          |       |           |        |        |      |                  |       |   |       |       |        |            |      |     

Nonperforming Assets

Nonperforming assets include:



| |  | loans which are 90 days or more past due and have been placed into
non-accrual status;                                                                         
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | accruing loans that are 90 days or more delinquent that are deemed by
management to be adequately secured and in the process of collection;                    
| 
| |  | restructured loans that have not yet demonstrated a sufficient payment
history to warrant return to performing status and therefore, are not
accruing interest;
| 
| |  | Other Real Estate (ORE) (i.e., real estate acquired through foreclosure
or deed in lieu of foreclosure) and other assets acquired in satisfaction
of a loan. 

All delinquent loans are reviewed on a regular basis and are placed on
non-accrual status when, in our opinion, the possibility of collecting
additional interest is deemed insufficient to warrant further accrual. As a
matter of policy, interest is not accrued on loans past due 90 days or more
unless the loan is both well secured and in process of collection. When a loan
is placed in non-accrual status, interest accruals cease and uncollected accrued
interest is reversed and charged against current income. Additional interest
income on such loans is recognized only when received.

Loans classified as non-accrual totaled $25.0 million at December 31, 1999,
compared with $35.6 million at December 31, 1998, a decrease of $10.6 million.
Nonperforming one-to-four family residential loans at year-end 1999 decreased
$5.1 million and commercial real estate and multifamily loans decreased $8.1
million, while nonperforming commercial (business) loans declined $515,000. At
December 31, 1999 and 1998, we had non-performing assets (including loans
classified as non-accrual) of $31.2 million or 1.22% of total assets and $42.8
million or 1.71% of total assets, respectively. Accruing loans, which were 90
days past due amounted to $171,000 at December 31, 1999 and $1.2 million at
December 31, 1998, and primarily consisted of loans in process of renewal. (See
Managements Discussion and Analysis of Financial Condition and Results of
OperationsComparison of Balance Sheets at December 31, 1999 and 1998.)

9



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The following table shows information regarding the components of nonperforming
assets at the dates indicated ($ in thousands):

|                                     |  |                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |        |  
|------------------------------------ |  | --------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                     |  | At December 31,
|                                     |  |                
|                                     |  | 1999            |        | 1998 |  | 1997 |        | 1996 |  | 1995
|                                     |  |                 |        |      |  |      |        |      |  |     
|Non-accrual loans:                  
|                                    
|                                    
|                                    
|                                    
|Residential loans (1-4 family)       |  | $               | 14,510 |      |  | $    | 19,579 |      |  | $    | 17,101 |   |  | $ | 12,495 |   |  | $ | 13,394 |  
|                                    
|                                    
|                                    
|                                    
|High LTV Loans                       |  |                 | 474    |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                    
|                                    
|                                    
|                                    
|Nonconforming mortgages              |  |                 | 4,973  |      |  |      | 3,369  |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                    
|                                    
|                                    
|                                    
|Multi-family residential             |  |                 |       |      |  |      | 183    |      |  |      | 194    |   |  |   | 55     |   |  |   | 129    |  
|                                    
|                                    
|                                    
|                                    
|Commercial real estate               |  |                 | 3,252  |      |  |      | 9,888  |      |  |      | 9,121  |   |  |   | 8,140  |   |  |   | 4,119  |  
|                                    
|                                    
|                                    
|                                    
|Commercial (business)                |  |                 | 797    |      |  |      | 1,312  |      |  |      | 2,031  |   |  |   | 1,604  |   |  |   | 1,059  |  
|                                    
|                                    
|                                    
|                                    
|Home equity and consumer             |  |                 | 973    |      |  |      | 1,261  |      |  |      | 638    |   |  |   | 164    |   |  |   | 495    |  
|                                     |  |                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |        |  
|Total non-accrual loans              |  |                 | 24,979 |      |  |      | 35,592 |      |  |      | 29,085 |   |  |   | 22,458 |   |  |   | 19,196 |  
|                                    
|                                    
|                                    
|                                    
|Other nonperforming receivables      |  |                 | 736    |      |  |      | 1,010  |      |  |      | 1,319  |   |  |   |       |   |  |   |       |  
|                                    
|                                    
|                                    
|                                    
|ORE acquired through foreclosure     |  |                 | 5,332  |      |  |      | 4,951  |      |  |      | 8,191  |   |  |   | 9,477  |   |  |   | 13,465 |  
|                                    
|                                    
|                                    
|                                    
|Accruing loans 90 days
past due      |  |                 | 171    |      |  |      | 1,232  |      |  |      | 196    |   |  |   | 113    |   |  |   | 1,876  |  
|                                     |  |                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |        |  
|Nonperforming assets                 |  | $               | 31,218 |      |  | $    | 42,785 |      |  | $    | 38,791 |   |  | $ | 32,048 |   |  | $ | 34,537 |  
|                                     |  |                 |        |      |  |      |        |      |  |      |        |   |  |   |        |   |  |   |        |  
|Nonperforming loans to loans         |  |                 | 1.33   | %    |  |      | 1.94   | %    |  |      | 2.41   | % |  |   | 2.31   | % |  |   | 2.38   | %
|                                    
|                                    
|                                    
|                                    
|Nonperforming assets to total assets |  |                 | 1.22   | %    |  |      | 1.71   | %    |  |      | 2.31   | % |  |   | 2.35   | % |  |   | 2.78   | %

Other Real Estate Acquired Through Foreclosure

All ORE assets are recorded at the lower of cost or estimated fair market value
less selling costs based on appraisal information that is updated when a
property is taken into ORE and, thereafter, when determined appropriate by
management but no less than annually.

The following table shows information regarding ORE balances, net of allowances,
as of the dates indicated ($ in thousands):

|                                      |  |                 |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |        |  
|------------------------------------- |  | --------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ------ | -
|                                      |  | At December 31,
|                                      |  |                
|                                      |  | 1999            |       | 1998 |  | 1997 |       | 1996 |  | 1995
|                                      |  |                 |       |      |  |      |       |      |  |     
|Residential houses                    |  | $               | 3,245 |      |  | $    | 2,258 |      |  | $    | 2,613 |   |  | $ | 3,442 |   |  | $ | 1,779  |  
|                                     
|                                     
|                                     
|                                     
|Vacant undeveloped residential land   |  |                 |      |      |  |      | 6     |      |  |      | 1,145 |   |  |   | 1,334 |   |  |   | 1,755  |  
|                                     
|                                     
|                                     
|                                     
|Vacant developed residential lots     |  |                 | 192   |      |  |      | 785   |      |  |      | 254   |   |  |   | 260   |   |  |   | 265    |  
|                                     
|                                     
|                                     
|                                     
|Vacant commercial undeveloped land    |  |                 | 256   |      |  |      | 640   |      |  |      | 855   |   |  |   | 821   |   |  |   | 1,357  |  
|                                     
|                                     
|                                     
|                                     
|Commercial land developed for sale    |  |                 |      |      |  |      | 890   |      |  |      | 2,835 |   |  |   | 3,450 |   |  |   | 4,823  |  
|                                     
|                                     
|                                     
|                                     
|Income-producing commercial buildings |  |                 | 1,190 |      |  |      | 310   |      |  |      | 427   |   |  |   | 12    |   |  |   | 2,801  |  
|                                     
|                                     
|                                     
|                                     
|Vacant commercial buildings           |  |                 | 449   |      |  |      | 62    |      |  |      | 62    |   |  |   |      |   |  |   | 685    |  
|                                      |  |                 |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |        |  
|Total ORE                             |  | $               | 5,332 |      |  | $    | 4,951 |      |  | $    | 8,191 |   |  | $ | 9,319 |   |  | $ | 13,465 |  
|                                      |  |                 |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |        |  
|ORE to total assets                   |  |                 | 0.21  | %    |  |      | 0.20  | %    |  |      | 0.49  | % |  |   | 0.69  | % |  |   | 1.08   | %
|                                      |  |                 |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |        |  

10



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##### Table of Contents









Troubled Debt Restructurings

In a troubled debt restructuring (TDR), the creditor allows the debtor certain
concessions that would not normally be allowed, such as modifying the terms of
the debt to a basis more favorable than those offered to other creditors or
accepting third-party receivables in lieu of the debt. At December 31, 1999 and
1998, the loan portfolio included TDRs amounting to $1.2 million and $411,000,
respectively. All restructured loans, as of December 31, 1999 and 1998, were
performing loans.







Investment Activities

Florida statutes require that a specified minimum amount of liquid assets be
maintained based primarily on the level of deposits. At December 31, 1999, the
amount of liquid assets maintained exceeded the regulatory minimum.







Employees

At December 31, 1999, we had 1,000 full-time equivalent employees, none of whom
were represented by a union or other collective bargaining agreement.







Market Area

As of December 31, 1999, we operated 81 full-service branches throughout
Florida. As a multi-branch institution, our market area encompasses all of the
counties in which we operate.

Most of our branches are in Metropolitan Statistical Areas (MSA). A MSA is
defined by the U.S. Census Bureau as a geographic area with a significant
population nucleus, along with any adjacent communities that have a high degree
of economic and social integration with the nucleus. More than half of our
branches are in the two MSAs which anchor the west coast of Florida: (1)
Tampa-St. Petersburg-Clearwater, which includes Hillsborough, Hernando, Pasco
and Pinellas Counties; and (2) Sarasota-Bradenton, comprised of Manatee and
Sarasota Counties. As of January 1999, the latest date estimates were available,
the Tampa-St. Petersburg MSA had a population of 2.3 million and the
Sarasota-Bradenton MSA had a population of 571,000. Together, the two MSAs had
a combined population of 2.9 million residents, which would rank approximately
12th in the United States. Light industry and service businesses, a large and
growing segment of retirees support the economic base of the MSAs in which we
have branches, and by tourism, which is highly seasonal.

Florida is a highly competitive state for financial services of all kinds.
Competition for deposits also exists from money market funds and credit unions.
Consumers can choose from a wide range of suppliers of personal credit,
including credit card companies, consumer finance companies, credit unions and
mortgage bankers, as well as from competing financial institutions.

We ranked 12th among holding companies and 15th among all depository
institutions in the state of Florida in terms of deposits held as of June 30,
1999, the latest date for which data is available. As the following table
indicates, market share ranges from 11.62% in Osceola County to .03% in
Hillsborough County.

11



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##### Table of Contents



Branch Deposits in Florida by County
($ in thousands)

|             |       |  |                       |    |                     |   |           |           |         |   |         |           |  |   |            |             |  |  |       |      |  
|------------ | ----- |  | --------------------- | -- | ------------------- | - | --------- | --------- | ------- | - | ------- | --------- |  | - | ---------- | ----------- |  |  | ----- | ---- | -
|             |       |  | At December 31, 1999, |    | As of June 30, 1999
|             |       |  |                       |    |                    
|             |       |  | Number of             |    | Amount              |   | Amount    |           | Florida |   | Market 
|             |       |  | Branch Offices        |    | By Branch           |   | By Branch |           | Total   |   | Share  
|             |       |  |                       |    |                     |   |           |           |         |   |        
|Brevard      |       |  | 5                     |    |                     | $ | 177,412   |           |         | $ | 177,030 |           |  | $ | 4,046,678  |             |  |  | 4.37  | %   
|            
|            
|            
|            
|Broward      |       |  | 9                     |    |                     |   | 271,873   |           |         |   | 263,630 |           |  |   | 21,310,737 |             |  |  | 1.24  |     
|            
|            
|            
|            
|Collier      |       |  | 1                     |    |                     |   | 6,778     |           |         |   | 5,732   |           |  |   | 4,057,389  |             |  |  | .14   |     
|            
|            
|            
|            
|Columbia     |       |  | 1                     |    |                     |   | 31,433    |           |         |   | 27,426  |           |  |   | 375,994    |             |  |  | 7.29  |     
|            
|            
|            
|            
|Dade         |       |  | 5                     |    |                     |   | 48,910    |           |         |   | 46,510  |           |  |   | 37,477,153 |             |  |  | .12   |     
|            
|            
|            
|            
|Hernando     |       |  | 1                     |    |                     |   | 26,426    |           |         |   | 25,861  |           |  |   | 1,698,448  |             |  |  | 1.52  |     
|            
|            
|            
|            
|Hillsborough |       |  | 2                     |    |                     |   | 6,632     |           |         |   | 2,748   |           |  |   | 8,907,762  |             |  |  | .03   |     
|            
|            
|            
|            
|Lee          |       |  | 1                     |    |                     |   | 2,751     |           |         |   | 2,019   |           |  |   | 5,240,035  |             |  |  | .04   |     
|            
|            
|            
|            
|Manatee      |       |  | 7                     |    |                     |   | 201,543   |           |         |   | 201,383 |           |  |   | 2,680,536  |             |  |  | 7.51  |     
|            
|            
|            
|            
|Marion       |       |  | 4                     |    |                     |   | 64,667    |           |         |   | 52,554  |           |  |   | 2,471,536  |             |  |  | 2.13  |     
|            
|            
|            
|            
|Monroe       |       |  | 3                     |    |                     |   | 85,519    |           |         |   | 90,367  |           |  |   | 1,262,096  |             |  |  | 7.16  |     
|            
|            
|            
|            
|Palm Beach   |       |  | 3                     |    |                     |   | 32,693    |           |         |   | 17,724  |           |  |   | 19,394,230 |             |  |  | .09   |     
|            
|            
|            
|            
|Pasco        |       |  | 3                     |    |                     |   | 93,125    |           |         |   | 93,335  |           |  |   | 3,732,275  |             |  |  | 2.50  |     
|            
|            
|            
|            
|Pinellas     |       |  | 23                    |    |                     |   | 862,459   |           |         |   | 875,052 |           |  |   | 13,137,180 |             |  |  | 6.66  |     
|            
|            
|            
|            
|Osceola      |       |  | 5                     |    |                     |   | 125,815   |           |         |   | 128,242 |           |  |   | 1,103,384  |             |  |  | 11.62 |     
|            
|            
|            
|            
|Orange       |       |  | 3                     |    |                     |   | 75,370    |           |         |   | 83,861  |           |  |   | 8,395,324  |             |  |  | 1.00  |     
|            
|            
|            
|            
|Sarasota     |       |  | 2                     |    |                     |   | 86,521    |           |         |   | 86,372  |           |  |   | 6,363,661  |             |  |  | 1.36  |     
|            
|            
|            
|            
|Seminole     |       |  | 1                     |    |                     |   | 38,046    |           |         |   | 39,891  |           |  |   | 2,824,670  |             |  |  | 1.41  |     
|            
|            
|            
|            
|Suwannee     |       |  | 1                     |    |                     |   | 29,866    |           |         |   | 28,635  |           |  |   | 281,705    |             |  |  | 10.16 |     
|            
|            
|            
|            
|Volusia      |       |  | 1                     |    |                     |   | 14,970    |           |         |   | 10,604  |           |  |   | 5,688,990  |             |  |  | .19   |     
|             |       |  |                       |    |                     |   |           |           |         |   |         |           |  |   |            |             |  |  |       |     
|             | Total |  |                       | 81 |                     |   | $         | 2,282,809 |         |   | $       | 2,258,976 |  |   | $          | 150,449,783 |  |  |       | 1.50 | %
|             |       |  |                       |    |                     |   |           |           |         |   |         |           |  |   |            |             |  |  |       |     







Market Risk

The market risk inherent in market sensitive instruments is the potential loss
arising from changes in interest rates and the changes in prices of marketable
equity securities. One of our primary objectives is to reduce fluctuations in
net interest income caused by changes in interest rates. To manage interest rate
risk, the Board of Directors has established interest-rate risk policies and
procedures, which delegate to the Asset/Liability Committee the responsibility
to monitor and report on interest-rate risk, devise strategies to manage
interest-rate risk, monitor loan originations and deposit activity, and approve
pricing strategies.

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. Trading
securities include a subordinate tranche from a 1998 securitization of High LTV
Loans, the resulting residual interest in cash flows from that securitization,
from a securitization completed in 1997, and the excess spread on interest
only-strips receivable. Trading securities are carried at market value with any
unrealized gains or losses included in the statement of operations under Gain
on securities, net. Securities held to maturity are carried at amortized cost.

12



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##### Table of Contents



For a description of the key assumptions used by us to measure market risk, see
the discussion on interest sensitivity analysis under the caption
Asset/Liability Management.

The table below shows principal amounts and related average interest rates, by
year of maturity or repricing, for market sensitive instruments as of December
31, 1999 ($ in thousands).

|                                             |  |      |           |      |  |      |         |      |  |      |         |            |  |       |         |   |  |   |         |   |  |   |         |   |  |   |           |  
|-------------------------------------------- |  | ---- | --------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | ---------- |  | ----- | ------- | - |  | - | ------- | - |  | - | ------- | - |  | - | --------- | -
|Assets                                       |  | 2000 |           | 2001 |  | 2002 |         | 2003 |  | 2004 |         | Thereafter |  | Total
|                                             |  |      |           |      |  |      |         |      |  |      |         |            |  |      
|Interest bearing
deposits in banks           |  | $    | 3,758     |      |  | $    |        |      |  | $    |        |            |  | $     |        |   |  | $ |        |   |  | $ |        |   |  | $ | 3,758     |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 4.37      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 4.37      | %
|                                            
|                                            
|                                            
|                                            
|Federal funds sold                           |  |      | 27,060    |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 27,060    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 4.71      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 4.71      | %
|                                            
|                                            
|                                            
|                                            
|Commercial paper                             |  |      | 39,888    |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 39,888    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 5.95      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 5.95      | %
|                                            
|                                            
|                                            
|                                            
|U.S. treasuries and
government agencies      |  |      | 16,978    |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 4,840   |   |  |   | 21,818    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 4.76      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 6.80    | % |  |   | 5.21      | %
|                                            
|                                            
|                                            
|                                            
|Revenue bond                                 |  |      |          |      |  |      | 900     |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 2,837   |   |  |   | 3,737     |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      |          |      |  |      | 8.60    | %    |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 6.13    | % |  |   | 6.73      | %
|                                            
|                                            
|                                            
|                                            
|Mortgage-backed
Securities  fixed           |  |      | 26,618    |      |  |      | 20,649  |      |  |      | 20,725  |            |  |       | 18,994  |   |  |   | 17,402  |   |  |   | 143,835 |   |  |   | 248,223   |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 6.33      | %    |  |      | 6.33    | %    |  |      | 6.33    | %          |  |       | 6.33    | % |  |   | 6.33    | % |  |   | 6.33    | % |  |   | 6.33      | %
|                                            
|                                            
|                                            
|                                            
|Mortgage-backed
Securities  variable        |  |      | 100,113   |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 100,113   |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 6.05      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 6.05      | %
|                                            
|                                            
|                                            
|                                            
|Residual trading securities                  |  |      | 4,894     |      |  |      | 5,438   |      |  |      | 8,247   |            |  |       | 8,988   |   |  |   | 3,071   |   |  |   | 8,591   |   |  |   | 39,229    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      |          |      |  |      |        |      |  |      | 1.91    | %          |  |       | 2.37    | % |  |   | 5.75    | % |  |   | 7.24    | % |  |   | 2.98      | %
|                                            
|                                            
|                                            
|                                            
|FHLB stock                                   |  |      | 13,816    |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 13,816    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 7.75      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 7.75      | %
|                                            
|                                            
|                                            
|                                            
|Loans portfolio  fixed                      |  |      | 327,676   |      |  |      | 117,118 |      |  |      | 94,549  |            |  |       | 87,898  |   |  |   | 73,211  |   |  |   | 298,990 |   |  |   | 999,442   |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 8.88      | %    |  |      | 8.88    | %    |  |      | 8.93    | %          |  |       | 8.79    | % |  |   | 8.85    | % |  |   | 8.68    | % |  |   | 8.81      | %
|                                            
|                                            
|                                            
|                                            
|Loans portfolio  variable                   |  |      | 648,757   |      |  |      | 41,028  |      |  |      | 39,182  |            |  |       | 37,692  |   |  |   | 82,826  |   |  |   | 40,965  |   |  |   | 890,450   |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 8.33      | %    |  |      | 8.43    | %    |  |      | 8.59    | %          |  |       | 8.35    | % |  |   | 8.22    | % |  |   | 10.73   | % |  |   | 8.45      | %
|                                            
|                                            
|                                            
|                                            
|Mortgage servicing
Rights                    |  |      | 2,750     |      |  |      | 2,420   |      |  |      | 2,130   |            |  |       | 1,875   |   |  |   | 1,650   |   |  |   | 9,856   |   |  |   | 20,681    |  
|                                            
|                                            
|                                            
|                                            
|Liabilities                                 
|                                            
|                                            
|                                            
|                                            
|Deposits                                     |  |      | 1,330,976 |      |  |      | 323,840 |      |  |      | 133,859 |            |  |       | 138,349 |   |  |   | 223,510 |   |  |   | 132,275 |   |  |   | 2,282,809 |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 4.90      | %    |  |      | 5.00    | %    |  |      | 3.90    | %          |  |       | 3.94    | % |  |   | 2.79    | % |  |   | .11     | % |  |   | 4.31      | %
|                                            
|                                            
|                                            
|                                            
|Securities sold under
agreements to repurch. |  |      | 37,241    |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 37,241    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 4.96      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 4.96      | %
|                                            
|                                            
|                                            
|                                            
|FHLB advances                                |  |      | 769       |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 769       |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 7.50      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 7.50      | %
|                                            
|                                            
|                                            
|                                            
|Holding company senior
debt                  |  |      | 9,167     |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 9,167     |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      | 7.27      | %    |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   |        |   |  |   | 7.27      | %
|                                            
|                                            
|                                            
|                                            
|Convertible debentures                       |  |      |          |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 14,684  |   |  |   | 14,684    |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      |          |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 7.23    | % |  |   | 7.23      | %
|                                            
|                                            
|                                            
|                                            
|Subordinated debt                            |  |      |          |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 2,750   |   |  |   | 2,750     |  
|                                            
|                                            
|                                            
|                                            
|                                             |  |      |          |      |  |      |        |      |  |      |        |            |  |       |        |   |  |   |        |   |  |   | 9.50    | % |  |   | 9.50      | %

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##### Table of Contents









Supervision and Regulation

We are extensively regulated under both federal and state law. The following is
a brief summary of certain statutes, rules, and regulations affecting us. This
summary is qualified in its entirety by reference to the particular statutory
and regulatory provisions referenced below and is not intended to be an
exhaustive description of the statutes or regulations applicable to our
business. Supervision, regulation, and examination of the Company by the bank
regulatory agencies are intended primarily for the protection of depositors
rather than stockholders.

Regulation of the Company

We are a bank holding company registered with the Federal Reserve under the Bank
Holding Company Act of 1956, as amended (the BHC Act). We are subject to the
applicable provisions of the BHC Act and the supervision, examination, and
regulations of the Federal Reserve.

The BHC Act requires every bank holding company to obtain the prior approval of
the Federal Reserve before: (1) it may acquire direct or indirect ownership or
control of any voting shares of any bank if, after such acquisition, the bank
holding company will directly or indirectly own or control more than five
percent of the voting shares of the bank; (2) it or any of its subsidiaries,
other than a bank, may acquire all or substantially all of the assets of the
bank; or (3) it may merge or consolidate with any other bank holding company.
Similar federal statues require bank holding companies and other companies to
obtain the prior approval of the OTS before acquiring ownership or control of a
savings association.

The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anti-competitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community served. The Federal Reserve is also required to consider the
financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the communities
to be served. Considerations of financial resources generally focuses on capital
adequacy, and consideration of convenience and needs issues includes the
parties performance under the Community Reinvestment Act of 1977 (the CRA).

The BHC Act, as amended by the interstate banking provisions of the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the Interstate Banking
Act), authorizes any bank holding company located in Florida to acquire a bank
located in any other state, and any bank holding company located outside Florida
may lawfully acquire any Florida-based bank, regardless of state law to the
contrary, in either case subject to certain deposit-percentage, aging
requirements, and other restrictions. The Interstate Banking Act also generally
provides that national and state-chartered banks may branch interstate through
acquisitions of banks in other states, unless a state has opted out of the
interstate branching provisions of the Interstate Banking Act prior to June 1,
1997. Neither Florida nor any other state in the southeastern United States has
opted out. Accordingly, we would have the ability to acquire a bank in a state
in the Southeast and consolidate the newly acquired bank and the Bank into a
single bank with interstate branches.

The BHC Act, as currently in effect, generally prohibits us from engaging in
activities other than banking or managing or controlling banks or other
permissible subsidiaries and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those activities
determined by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.

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In determining whether a particular activity is permissible, the Federal Reserve
must consider whether the performance of such an activity reasonably can be
expected to produce benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices. The Federal
reserve has determined that, as a general matter, bank holding companies and
their non-bank subsidiaries may engage in the following list of activities:



| |  | operating a thrift subsidiary                                                                                                         
|- |  | --------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | factoring accounts receivable                                                                                                         
| 
| |  | acquiring or servicing loans                                                                                                          
| 
| |  | leasing personal property                                                                                                             
| 
| |  | conducting discount securities brokerage activities                                                                                   
| 
| |  | performing certain data processing services                                                                                           
| 
| |  | acting as agent or broker in selling credit life insurance and certain
other types of insurance in connection with credit transactions

The BHC Act does not place territorial limitations on permissible non-banking
activities of bank holding companies. Despite prior approval, the Federal
Reserve has the power to order a bank holding company or its non-bank
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of the holding
company.

Under Federal Reserve policy, bank holding companies are expected to act as a
source of financial strength and support to their subsidiary banks. This support
may be required at times when, absent such Federal Reserve policy, the holding
company may not be inclined to provide it. In addition, any capital loans by a
bank holding company to any bank subsidiary are subordinate in right of payment
to deposits and to certain other indebtedness of such subsidiary bank. In the
event of a bank holding companys bankruptcy, any commitment by the bank holding
company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority payment.

On November 12, 1999, the President signed into law the Gramm-Leach-Bliley Act
(the Act), a piece sweeping of financial services reform legislation that for
the first time will permit commercial banks to affiliate with investment banks
and insurance companies through a holding company structure and will greatly
expand the range of activities in which bank affiliates and subsidiaries may
engage. The Act repeals key provisions of the Glass-Steagall Act of 1933 that
have heretofore prohibited banks from affiliating with entities engaged
principally in securities underwriting activities and overrides those state laws
that prohibit affiliations of banks and insurance companies or either
discriminate against or have a substantially adverse effect on banks selling
insurance.

The Act amends the BHC Act to authorize new financial holding companies (the
FHCs). Under the FHC provisions of the Act, a BHC can qualify to become an FHC
if all of its bank and thrift subsidiaries are well capitalized and well managed
and have a Community Reinvestment Act (CRA) rating of satisfactory or
better. Once a BHC becomes and FHC, it is permitted to conduct any securities,
insurance and merchant banking activities, as well as any other activities that
are financial in nature or incidental or complementary to a financial
activity, such as developing financial software, hosting internet web sites
relating to financial matters and operating a travel agency. Under the
regulatory structure prescribed by the Act, the Federal Reserve will act as the
umbrella regulator for the FHC, with each FHC subsidiary subject to
supervision and regulation by its own functional regulator or agency.

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##### Table of Contents



The Act also gives banks the option of conducting certain newly-permitted
financial activities in a subsidiary rather than using a FHC. Banks that satisfy
the well capitalized, well managed and CRA requirements applicable to FHCs will
be able to establish financial subsidiaries that are permitted to conduct all
financial activities as agency and some financial activities as principal such
as securities underwriting. The main activities in which financial subsidiaries
are prohibited from engaging are insurance underwriting, real estate development
and, at least for the next five years, merchant banking.

Regulation of the Bank

The Bank is organized as a Florida-chartered commercial bank and is regulated
and supervised by the Department. The FDIC serves as its primary federal
regulator and the administrator of the fund that insures the Banks deposits.
The Department and the FDIC conduct regular examinations, reviewing the adequacy
of the loan loss reserves, quality of loans and investments, propriety of
management practices, compliance with laws and regulations, and other aspects of
operations. In addition to these regular examinations, the Bank must furnish to
the FDIC quarterly reports containing detailed financial statements and
schedules.

Federal and Florida banking laws and regulations govern all areas of the
operations of the Bank, including reserves, loans, mortgages, capital, issuances
of securities, payment of dividends, and establishment of branches. As its
primary regulators, the Department and the FDIC have authority to impose
penalties, initiate civil and administrative actions, and take other steps
intended to prevent the Bank from engaging in unsafe or unsound practices. The
Bank is a member of the Bank Insurance Fund and, as such, deposits in the Bank
are insured by the FDIC to the maximum extent permissible by law.

The Bank is subject to the provisions of the CRA. Under the CRA, the Bank has a
continuing and affirmative obligation consistent with their safe and sound
operation to help meet the credit needs of their entire communities, including
low and moderate-income individuals and neighborhoods. The CRA does not
establish specific lending requirements or programs for financial institutions
nor does it limit the Banks discretion to develop the types of products and
services that it believes are best suited to their particular communities,
consistent with the CRA. The CRA requires the appropriate federal bank
regulatory agency (in the case of the Bank, the FDIC) in connection with their
regular examinations, to assess a financial institutions record in meeting the
credit needs of the community serviced by it, including low- and moderate-income
neighborhoods. A federal banking agencys assessment of a financial
institutions CRA record is made available to the public. Further, such
assessment is required whenever the institution applies to, among other things,
establish a new branch that will accept deposits, relocate an existing office or
merge or consolidate with, or acquire the assets of or assume the liabilities
of, a federally-regulated financial institution. In the case where the Company
applies for approval to acquire a bank or other bank holding company, the
federal regulator approving the transaction will also assess the CRA records of
the Bank. The Bank received a Satisfactory CRA rating in its most recent
examination.

In April 1995, the federal banking agencies substantially revised their CRA
regulations. Among other things, the amended CRA regulations, which became fully
effective in 1997, substitute for the prior process-based assessment factors a
new evaluation system that will rate an institution based on its actual
performance in meeting community needs. In particular, the system focuses on
three tests: (1) a lending test, to evaluate the institutions record of making
loans in its service areas; (2) an investment test, to evaluate the
institutions record of investing in community development projects; and (3) a
service test, to evaluate the institutions delivery of services through its
branches and other offices. The amended CRA regulations also clarify how an
institutions CRA performance will be considered in the application process.

Deposit Insurance

The Bank is subject to FDIC deposit insurance assessments. The Bank is subject
to a risk-based assessment system for insured depository institutions that takes
into account the risks attributable to different categories

16



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##### Table of Contents



and concentrations of assets and liabilities. The new system assigns an
institution to one of three capital categories: (1) well capitalized; (2)
adequately capitalized; and (3) undercapitalized. An institution is also
assigned, by the FDIC, to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institutions primary
federal regulator and information which the FDIC determines to be relevant to
the institutions financial condition and the risk posed to the deposit
insurance funds (which may include, if applicable, information provided by the
institutions state supervisor). An institutions insurance assessment rate is
then determined based on the capital category and posed to the deposit insurance
funds (which may include, if applicable, information provided by the
institutions state supervisor). An institutions insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned. Under the risk-based assessment system, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied.
Assessment rates on deposits for an institution in the highest category (i.e.,
well capitalized and healthy) are less than assessment rates on deposits for
an institution in the lowest category (i.e., undercapitalized and substantial
supervisory concern).

The Bank, as a state-chartered commercial bank, is a member of the Bank
Insurance Fund (BIF). However as part of the Crossland Purchase and
Assumption, the Bank acquired $327.7 million in deposits insured by the Savings
Association Insurance Fund (the SAIF) and thereby became a so-called Oakar
Bank. Based on the Crossland Purchase and Assumption and the Firstate
acquisition, the Bank is required to pay insurance premiums to the FDIC on a
substantial portion of its deposits at the SAIF assessment rate notwithstanding
its status as a BIF member. As of December 31, 1999, the most recent measurement
date for assessment purposes, approximately 70.7% of the Banks deposits was
treated as SAIF-insured deposits, with the remaining 29.3% of deposits being
assessed at the BIF rate.

Prior to enactment of the Deposit Insurance Funds Act of 1996 (the Funds Act),
only assessments were available to pay interest on the so-called FICO Bonds,
which were issued by the Financing Corporation (the FICO) in the late 1980s
to fund the resolution of troubled thrifts. The Funds Act shifted a portion of
the FICO funding obligations to the BIF member institutions beginning in 1997.
Through the end of 1999, the FICO assessment rate on BIF-assessable deposits is
required by the statute to be one-fifth of the SAIF rate. During 1999 the FICO
assessment rate for BIF-assessable deposits was 0.013 percent (or 1.3 basis
points) and the FICO assessment rate for SAIF-assessable deposits was 0.0648
percent or (6.48 basis points). Beginning January 1, 2000, the FDIC has
equalized the FICO assessment rates for members of both insurance funds at
0.0212 percent. In 1999, the Banks total FICO payment obligation was $1.3
million, $1.2 million of which was attributable to the Banks SAIF-assessable
deposits and the balance of which was attributable to its BIF-assessable
deposits.

Capital Requirements

We are required to comply with the capital adequacy standards established by the
Federal Reserve (for the Company), and the FDIC (for the Bank). The minimum
capital requirements applicable to the Company and the Bank are essentially the
same. As of December 31, 1999, the Company and the Bank were considered well
capitalized for purposes of the agencys prompt corrective action guidelines.

For additional information regarding capital requirements applicable to the Bank
and its compliance with such requirements, see Note 16 of the Companys
Consolidated Financial Statement.

17



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##### Table of Contents



Payment of Dividends

As a Florida-chartered commercial bank, the Bank is subject to the laws of
Florida as to the payment of dividends. Under the Florida Financial Institutions
Code, the prior approval of the Department is required if the total of all
dividends declared by a bank in any calendar year will exceed the sum of a
banks net profits for that year and its retained net profits for the preceding
two years. For the years ended December 31, 1997, 1998 and 1999, the aggregate
net income of the Bank was $13.9 million while dividends paid to the Company by
the Bank for the same period totaled $11.5 million. The aggregate retained net
income for 1998 and 1999 was a $6.8 million deficit. Therefore, the Bank will be
required to obtain approval for dividend payments in the year 2000 until
retained net income exceeds the $6.8 million deficit.

Under Federal law, if, in the opinion of the federal banking regulator, a bank
or thrift under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such regulation
may require, after notice and hearing, that such institution cease and desist
from such practice. The federal banking agencies have indicated that paying
dividends that deplete a depository institutions capital base to an inadequate
level would be an unsafe and unsound banking practice. Under the Prompt
Corrective Action regulations adopted by the federal banking agencies in
December 1992, a depository institution may not pay any dividend to its holding
company if payment would cause it to become undercapitalized or if it already
is undercapitalized.

Federal Reserve System

The Federal Reserve regulations require banks to maintain noninterest earning
reserves against their transaction accounts (primarily NOW and regular checking
accounts). The Federal Reserve Board regulations, effective November 30, 1999,
generally require that reserves be maintained against aggregate transaction
accounts as follows: (1) for accounts aggregating $44.3 million or less (as of
January 1, 2000, subject to adjustment by the Federal Reserve) the reserve
requirement is 3.0%; and (2) for accounts greater than $44.3 million, the
reserve requirement is $1.3 million plus 10.0% (subject to adjustment by the
Federal Reserve between 8.0% and 14.0%) against that portion of total
transaction accounts in excess of $46.5 million. The first $5.0 million of
otherwise reservable balances (subject to adjustments by the Federal Reserve)
are exempted from the reserve requirements. The balances maintained to meet the
reserve requirements imposed by the Federal Reserve may be used to satisfy
liquidity requirements imposed by the Department. Because required reserves must
be maintained in the form of either vault cash, a noninterest bearing account at
a Federal Reserve Bank or a pass-through account as defined by the Federal
Reserve, the effect of this reserve requirement is to reduce the Banks interest
earning assets. FHLB system members also are authorized to borrow from the
Federal Reserve discount window, but Federal Reserve regulations require
institutions to exhaust all Federal Home Loan Bank sources before borrowing from
a Federal Reserve Bank.

Federal Home Loan Bank System

The FHLB system, which consists of 12 regional Federal Home Loan Banks is
governed and regulated by the Federal Housing Finance Board (the FHFB). The
Federal Home Loan Banks provide a central credit facility for member
institutions. As a member of the FHLB, we are required to acquire and hold
shares of capital stock in the FHLB in an amount at least equal to the greater
of one percent of the aggregate principal amount of our unpaid residential
mortgage loans, home purchase contracts and similar obligations as of the close
of each calendar year, or five percent of our borrowings from the FHLB
(including advances and letters of credit issued by the FHLB on our behalf).

18



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##### Table of Contents



The FHLB makes advances to members in accordance with policies and procedures
periodically established by the FHFB and the Board of Directors of the FHLB.
Currently outstanding advances from the FHLB are required to be secured by a
members shares of stock in the FHLB and by certain types of mortgages and other
assets. Interest rates charged for advances vary depending on maturity, the cost
of funds to the FHLB and the purpose of the borrowing. As of December 31, 1999,
we had $769,000 of outstanding advances from the FHLB.

Liquidity

Under Florida banking regulations, we are required to maintain a daily liquidity
position equal to at least 15% of our total transaction accounts and eight
percent of our total non-transaction accounts, less those deposits of public
funds for which security has been pledged as provided by law. We may satisfy our
liquidity requirements with cash on hand (including cash items in process of
collection), deposits held with the Federal Reserve, demand deposits due from
correspondent banks, federal funds sold, interest bearing deposits maturing in
31 days or less and the market value of certain unencumbered, rated,
investment-grade securities and securities issued by Florida or any county,
municipality of other political subdivision within the State. The FDIC reviews
our liquidity position as part of its examination. Any Florida-chartered
commercial bank that fails to comply with its liquidity requirements generally
may not further diminish liquidity either by making any new loans (other than by
discounting or purchasing bills of exchange payable at sight) or by paying
dividends. At December 31, 1999, the net liquid assets exceeded the minimum
amount required under the applicable Florida regulations.

Monetary Policy and Economic Controls

The banking business is affected not only by general economic conditions, but
also by the monetary policies of the Federal Reserve. Changes in the discount
rate on member bank borrowing, availability of borrowing at the discount
window, open market operations, the imposition of changes in reserve
requirements against bank deposits and the imposition of and changes in reserve
requirements against certain borrowings by banks and their affiliates are some
of the instruments of monetary policy available to the Federal Reserve. The
monetary policies have had a significant effect on the operating results of
commercial banks and are expected to continue to do so in the future. The
monetary policies of the Federal Reserve are influenced by various factors,
including inflation, unemployment and short and long-term changes in the
international trade balance and in the fiscal policies of the United States
Government. Future monetary policies and the effect of such policies on the
future business and earnings of the Bank cannot be predicted.

19



---



##### Table of Contents









Effects of Inflation

As a financial institution, the majorities of our assets are monetary in nature
and, therefore, differ greatly from those of more industrial or commercial
companies that have significant investments in fixed assets. The effects of
inflation on the financial condition and results of operations, therefore, are
less significant than the effects of changes in interest rates. The most
significant effect of inflation is on noninterest expense, which tends to rise
during periods of general inflation.







Year 2000 Transition

Many companies, including financial institutions such as us, faced potentially
serious risks associated with the inability of existing data processing hardware
and software to appropriately recognize calendar dates beginning in the year
2000. Many computer programs that could only distinguish the final two digits of
the year entered may have read entries for the year 2000 as the year 1900 and
computed payment, interest or delinquency based on the wrong date. Our Year 2000
compliance effort was completed during the fall of 1999. We experienced no year
2000 related problems during the transition from 1999 to 2000.

We originally estimated that the operating costs associated with replacing
non-compliant hardware and software would be approximately $800,000, and that
$600,000 in capital expenditures would be required, the majority of which would
be incurred in the normal course of upgrading our computer systems. For the
fiscal year ending December 31, 1998, our Year 2000 compliance expenditures had
totaled $345,000. As of December 31, 1999, we had additional expenditures of
$551,000, for a total of $896,000 on a cumulative basis. Our capital
expenditures in 1999 related to Year 2000 compliance were not material because
of reduced equipment needs following the reduction in size of mortgage
activities.







Changes in Accounting Standards

The Financial Accounting Standards Board (FASB) recently adopted or issued
proposals and guidelines that may have a significant impact on the accounting
practices of commercial enterprises in general and financial institutions in
particular.

Accounting for Derivative Instruments and Hedging
Activities

In June 1998, the FASB issued Statements of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that entities recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. In June 1999, the FASB issued SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities  Deferral of the
Effective Date of FASB Statement No. 133, which delayed the date of
implementation to all fiscal quarters of all fiscal years beginning after June
15, 2000. Management does not believe that the adoption of SFAS No. 133 will
have a material effect upon the results of operations of the Company.

20



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##### Table of Contents









Item 2. PROPERTIES

At December 31, 1999, we had 81 branch offices, of which 39 were leased and 42
were owned. In addition, we have eight non-branch facilities including three
loan production offices, four operation centers and one facility used for
warehouse purposes. Six of these are leased and two are owned. Substantially all
of our furniture, fixtures and equipment items are owned. The following table
shows the name, location and lease expiration date (if applicable) for each
facility as of December 31, 1999:

|                                    |  |                                 |                   | 
|----------------------------------- |  | ------------------------------- | ----------------- | 
|Location                            |  | Ownership/Lease Expiration Date
|                                    |  |                                
|Brevard County:                    
|                                   
|                                   
|                                   
|                                   
|Causeway Office                     |  |                                 | Facility owned    | 
|                                   
|                                   
|                                   
|                                   
|450 East Eau Gallie Boulevard      
|                                   
|                                   
|                                   
|                                   
|Indian Harbour Beach, Florida 32937
|                                   
|                                   
|                                   
|                                   
|Melbourne Office                    |  |                                 | Facility owned    | 
|                                   
|                                   
|                                   
|                                   
|1300 Babcock Street                
|                                   
|                                   
|                                   
|                                   
|Melbourne, Florida 32901           
|                                   
|                                   
|                                   
|                                   
|Melbourne Beach Office              |  |                                 | May 1, 2009       | 
|                                   
|                                   
|                                   
|                                   
|401 Ocean Avenue                   
|                                   
|                                   
|                                   
|                                   
|Melbourne Beach, Florida 32951     
|                                   
|                                   
|                                   
|                                   
|Palm Bay Office                     |  |                                 | May 31, 2004      | 
|                                   
|                                   
|                                   
|                                   
|6000 Babcock Street, SE            
|                                   
|                                   
|                                   
|                                   
|Palm Bay, Florida 32909            
|                                   
|                                   
|                                   
|                                   
|Sun Tree Office                     |  |                                 | Facility owned    | 
|                                   
|                                   
|                                   
|                                   
|6430 North Wickham Road            
|                                   
|                                   
|                                   
|                                   
|Melbourne, Florida 32940           
|                                   
|                                   
|                                   
|                                   
|Broward County:                    
|                                   
|                                   
|                                   
|                                   
|Century Village Office              |  |                                 | June 30, 2000     | 
|                                   
|                                   
|                                   
|                                   
|1886 West Hillsboro Boulevard      
|                                   
|                                   
|                                   
|                                   
|Deerfield Beach, Florida 33442     
|                                   
|                                   
|                                   
|                                   
|Deerfield Office                    |  |                                 | April 30, 2003    | 
|                                   
|                                   
|                                   
|                                   
|1327 South Military Trail          
|                                   
|                                   
|                                   
|                                   
|Deerfield Beach, Florida 33442     
|                                   
|                                   
|                                   
|                                   
|East Oakland Office                 |  |                                 | January 14, 2004  | 
|                                   
|                                   
|                                   
|                                   
|3101 North Federal Highway         
|                                   
|                                   
|                                   
|                                   
|Suite 100                          
|                                   
|                                   
|                                   
|                                   
|Oakland Park, Florida 33306        
|                                   
|                                   
|                                   
|                                   
|Hollywood Mall Office               |  |                                 | May 31, 2005      | 
|                                   
|                                   
|                                   
|                                   
|470 Hollywood Mall                 
|                                   
|                                   
|                                   
|                                   
|Hollywood, Florida 33021           
|                                   
|                                   
|                                   
|                                   
|Pembroke Commons Office             |  |                                 | February 26, 2001 | 
|                                   
|                                   
|                                   
|                                   
|502 University Drive               
|                                   
|                                   
|                                   
|                                   
|Pembroke Pines, Florida 33024      

21



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PROPERTIES (contd)

|                              |  |                                 |                             | 
|----------------------------- |  | ------------------------------- | --------------------------- | 
|Location                      |  | Ownership/Lease Expiration Date
|                              |  |                                
|Pine Island Office            |  |                                 | April 30, 2004              | 
|                             
|                             
|                             
|                             
|300 South Pine Island Road   
|                             
|                             
|                             
|                             
|Plantation, Florida 33324    
|                             
|                             
|                             
|                             
|Port Royale Office            |  |                                 | January 31, 2003            | 
|                             
|                             
|                             
|                             
|6550 North Federal Highway   
|                             
|                             
|                             
|                             
|Ft. Lauderdale, Florida 33308
|                             
|                             
|                             
|                             
|Shenandoah Office             |  |                                 | Facility owned              | 
|                             
|                             
|                             
|                             
|13636 State Road 84           |  |                                 | Ground
Lease (May 31, 2009)
|                             
|                             
|                             
|                             
|Davie, Florida 33325-5303    
|                             
|                             
|                             
|                             
|Weston Office                 |  |                                 | September 30, 2008          | 
|                             
|                             
|                             
|                             
|1290 Weston Road             
|                             
|                             
|                             
|                             
|Weston, Florida 33326        
|                             
|                             
|                             
|                             
|Collier County               
|                             
|                             
|                             
|                             
|Naples Fifth Avenue Office    |  |                                 | August 11, 2001             | 
|                             
|                             
|                             
|                             
|691 Fifth Avenue South       
|                             
|                             
|                             
|                             
|Naples, Florida 34102        
|                             
|                             
|                             
|                             
|Columbia County:             
|                             
|                             
|                             
|                             
|Lake City Office              |  |                                 | Facility owned              | 
|                             
|                             
|                             
|                             
|100 North First Street       
|                             
|                             
|                             
|                             
|Lake City, Florida 32055     
|                             
|                             
|                             
|                             
|Dade County:                 
|                             
|                             
|                             
|                             
|Airpark Office                |  |                                 | October 31, 2009            | 
|                             
|                             
|                             
|                             
|20 NW 57th Avenue            
|                             
|                             
|                             
|                             
|Miami, Florida 33126         
|                             
|                             
|                             
|                             
|Coral Gables Office           |  |                                 | November 5, 2008            | 
|                             
|                             
|                             
|                             
|2222 Ponce DeLeon Boulevard  
|                             
|                             
|                             
|                             
|Coral Gables, Florida 33134  
|                             
|                             
|                             
|                             
|Doral Office                  |  |                                 | Facility owned              | 
|                             
|                             
|                             
|                             
|9785 NW 41st Street          
|                             
|                             
|                             
|                             
|Miami, Florida 33178         
|                             
|                             
|                             
|                             
|South Miami Office            |  |                                 | February 28, 2003           | 
|                             
|                             
|                             
|                             
|8211 South Dixie Highway     
|                             
|                             
|                             
|                             
|Miami, Florida 33143         
|                             
|                             
|                             
|                             
|Town & Country Office         |  |                                 | September 30, 2000          | 
|                             
|                             
|                             
|                             
|11631 North Kendall Drive    
|                             
|                             
|                             
|                             
|Miami, Florida 33176         

22



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##### Table of Contents



PROPERTIES (contd)

|                             |  |                                 |                   | 
|---------------------------- |  | ------------------------------- | ----------------- | 
|Location                     |  | Ownership/Lease Expiration Date
|                             |  |                                
|Hernando County:            
|                            
|                            
|                            
|                            
|Spring Hill Office           |  |                                 | May 21, 2006      | 
|                            
|                            
|                            
|                            
|5331 Spring Hill Drive      
|                            
|                            
|                            
|                            
|Spring Hill, Florida 34606  
|                            
|                            
|                            
|                            
|Manatee County:             
|                            
|                            
|                            
|                            
|53rd Avenue Office           |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|415 53rd Avenue West        
|                            
|                            
|                            
|                            
|Bradenton, Florida 34207    
|                            
|                            
|                            
|                            
|Bayshore Office              |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|6204 14th Street West       
|                            
|                            
|                            
|                            
|Bradenton, Florida 34207    
|                            
|                            
|                            
|                            
|Downtown Bradenton Office    |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|1301 6th Avenue West        
|                            
|                            
|                            
|                            
|Bradenton, Florida 34205    
|                            
|                            
|                            
|                            
|Ellenton Office              |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|3510 U.S. Highway 301       
|                            
|                            
|                            
|                            
|Ellenton, Florida 34222     
|                            
|                            
|                            
|                            
|Ironwood Office              |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|4302 Cortez Road West       
|                            
|                            
|                            
|                            
|Bradenton, Florida 34210    
|                            
|                            
|                            
|                            
|Mt. Vernon Office            |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|9819 Cortez Road West       
|                            
|                            
|                            
|                            
|Bradenton, Florida 34210    
|                            
|                            
|                            
|                            
|Westside Office              |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|5905 Manatee Avenue West    
|                            
|                            
|                            
|                            
|Bradenton, Florida 34209    
|                            
|                            
|                            
|                            
|Orange County:              
|                            
|                            
|                            
|                            
|Downtown Orlando Office      |  |                                 | February 28, 2002 | 
|                            
|                            
|                            
|                            
|255 South Orange Avenue     
|                            
|                            
|                            
|                            
|Orlando, Florida 32801      
|                            
|                            
|                            
|                            
|North Orange Office          |  |                                 | November 30, 2003 | 
|                            
|                            
|                            
|                            
|2415 North Orange Avenue    
|                            
|                            
|                            
|                            
|Orlando, Florida 32804      
|                            
|                            
|                            
|                            
|Winter Garden Office         |  |                                 | Facility owned    | 
|                            
|                            
|                            
|                            
|232 South Dillard Street    
|                            
|                            
|                            
|                            
|Winter Garden, Florida 34787

23



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##### Table of Contents



PROPERTIES (contd)

|                               |  |                                 |                   | 
|------------------------------ |  | ------------------------------- | ----------------- | 
|Location                       |  | Ownership/Lease Expiration Date
|                               |  |                                
|Osceola County:               
|                              
|                              
|                              
|                              
|Bermuda Office                 |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|1115 North Bermuda Avenue     
|                              
|                              
|                              
|                              
|Kissimmee, Florida 34741      
|                              
|                              
|                              
|                              
|Broadway Office                |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|200 East Broadway             
|                              
|                              
|                              
|                              
|Kissimmee, Florida 34741      
|                              
|                              
|                              
|                              
|Mill Creek Office              |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|1300 East Vine Street         
|                              
|                              
|                              
|                              
|Kissimmee, Florida 34744      
|                              
|                              
|                              
|                              
|Ninth Street Office            |  |                                 | December 31, 2002 | 
|                              
|                              
|                              
|                              
|1220 Ninth Street             
|                              
|                              
|                              
|                              
|St. Cloud, Florida 34769      
|                              
|                              
|                              
|                              
|Oak Park Office                |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|4291 13th Street              
|                              
|                              
|                              
|                              
|St. Cloud, Florida 34769      
|                              
|                              
|                              
|                              
|Pasco County:                 
|                              
|                              
|                              
|                              
|Gulfview Square Mall Office    |  |                                 | April 30, 2005    | 
|                              
|                              
|                              
|                              
|9501 U.S. 19 North            
|                              
|                              
|                              
|                              
|Port Richey, Florida 34668    
|                              
|                              
|                              
|                              
|Holiday Office                 |  |                                 | December 7, 2004  | 
|                              
|                              
|                              
|                              
|4649 Sunray Drive             
|                              
|                              
|                              
|                              
|Holiday, Florida 34691        
|                              
|                              
|                              
|                              
|Holiday Drive-up               |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|4649-A Sunray Drive           
|                              
|                              
|                              
|                              
|Holiday, Florida 34691        
|                              
|                              
|                              
|                              
|New Port Richey Office         |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|6500 Massachusetts Avenue     
|                              
|                              
|                              
|                              
|New Port Richey, Florida 34653
|                              
|                              
|                              
|                              
|Pinellas County:              
|                              
|                              
|                              
|                              
|Belleair Bluffs Office         |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|401 North Indian Rocks Road   
|                              
|                              
|                              
|                              
|Belleair Bluffs, Florida 33770
|                              
|                              
|                              
|                              
|Caladesi Office                |  |                                 | Facility owned    | 
|                              
|                              
|                              
|                              
|2678 Bayshore Boulevard       
|                              
|                              
|                              
|                              
|Dunedin, Florida 34698        

24



---



##### Table of Contents



PROPERTIES (contd)

|                                  |  |                                 |                   | 
|--------------------------------- |  | ------------------------------- | ----------------- | 
|Location                          |  | Ownership/Lease Expiration Date
|                                  |  |                                
|Corporate Headquarters and Branch |  |                                 | December 13, 2004 | 
|                                 
|                                 
|                                 
|                                 
|111 Second Avenue N.E            
|                                 
|                                 
|                                 
|                                 
|St. Petersburg, Florida 33701    
|                                 
|                                 
|                                 
|                                 
|Countryside Office                |  |                                 | April 30, 2005    | 
|                                 
|                                 
|                                 
|                                 
|28050 U.S. 19 North              
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33761        
|                                 
|                                 
|                                 
|                                 
|Disston Plaza Office              |  |                                 | May 31, 2001      | 
|                                 
|                                 
|                                 
|                                 
|3739 49th Street North           
|                                 
|                                 
|                                 
|                                 
|St. Petersburg, Florida 33710    
|                                 
|                                 
|                                 
|                                 
|Dunedin Office                    |  |                                 | Facility owned    | 
|                                 
|                                 
|                                 
|                                 
|1478 Main Street                 
|                                 
|                                 
|                                 
|                                 
|Dunedin, Florida 34698           
|                                 
|                                 
|                                 
|                                 
|East Lake Woodlands               |  |                                 | March 31, 2007    | 
|                                 
|                                 
|                                 
|                                 
|3412 East Lake Road              
|                                 
|                                 
|                                 
|                                 
|Palm Harbor, Florida 34685       
|                                 
|                                 
|                                 
|                                 
|Highland Avenue Office            |  |                                 | Facility owned    | 
|                                 
|                                 
|                                 
|                                 
|1831 Highland Avenue North       
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33755        
|                                 
|                                 
|                                 
|                                 
|ICOT Office                       |  |                                 | December 31, 2003 | 
|                                 
|                                 
|                                 
|                                 
|5801 Ulmerton Road               
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33760        
|                                 
|                                 
|                                 
|                                 
|Largo Mall Office                 |  |                                 | February 28, 2004 | 
|                                 
|                                 
|                                 
|                                 
|10500 Ulmerton Road E, #816      
|                                 
|                                 
|                                 
|                                 
|Largo, Florida 33771             
|                                 
|                                 
|                                 
|                                 
|Mainlands Office                  |  |                                 | February 6, 2001  | 
|                                 
|                                 
|                                 
|                                 
|1235 South Missouri Avenue       
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33782        
|                                 
|                                 
|                                 
|                                 
|Missouri Office                   |  |                                 | December 31, 2000 | 
|                                 
|                                 
|                                 
|                                 
|1235 South Missouri Avenue       
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33756        
|                                 
|                                 
|                                 
|                                 
|Northeast Office                  |  |                                 | Facility owned    | 
|                                 
|                                 
|                                 
|                                 
|250 37th Avenue North            
|                                 
|                                 
|                                 
|                                 
|St. Petersburg, Florida 33704    
|                                 
|                                 
|                                 
|                                 
|Northwood Office                  |  |                                 | February 28, 2006 | 
|                                 
|                                 
|                                 
|                                 
|3024 Enterprise Road             
|                                 
|                                 
|                                 
|                                 
|Clearwater, Florida 33759        
|                                 
|                                 
|                                 
|                                 
|Oldsmar Office                    |  |                                 | March 31, 2001    | 
|                                 
|                                 
|                                 
|                                 
|3711 Tampa Road, Suite 101       
|                                 
|                                 
|                                 
|                                 
|Oldsmar, Florida 34677           

25



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##### Table of Contents



PROPERTIES (contd)

|                                         |  |                                 |                                   | 
|---------------------------------------- |  | ------------------------------- | --------------------------------- | 
|Location                                 |  | Ownership/Lease Expiration Date
|                                         |  |                                
|Palm Harbor Office                       |  |                                 | October 31, 2002                  | 
|                                        
|                                        
|                                        
|                                        
|33920 U.S. 19 North                     
|                                        
|                                        
|                                        
|                                        
|Palm Harbor, Florida 34684              
|                                        
|                                        
|                                        
|                                        
|Pinellas Park Office                     |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|7600 66th Street North                  
|                                        
|                                        
|                                        
|                                        
|Pinellas Park, Florida 33781            
|                                        
|                                        
|                                        
|                                        
|Pinellas Point Office                    |  |                                 | October 14, 2006 (Ground lease)   | 
|                                        
|                                        
|                                        
|                                        
|3000 54th Avenue South                   |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|St. Petersburg, Florida 33712           
|                                        
|                                        
|                                        
|                                        
|St. Petersburg Office                    |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|100 34th Street North                   
|                                        
|                                        
|                                        
|                                        
|St. Petersburg, Florida 33713           
|                                        
|                                        
|                                        
|                                        
|Seminole Office                          |  |                                 | September 30,
2007 (Ground lease) | 
|                                        
|                                        
|                                        
|                                        
|8000 113th Street North                  |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|Seminole, Florida 33772-4801            
|                                        
|                                        
|                                        
|                                        
|Sunset Point Office                      |  |                                 | November 30, 2004                 | 
|                                        
|                                        
|                                        
|                                        
|23684 U.S. 19 North                     
|                                        
|                                        
|                                        
|                                        
|Clearwater, Florida 33765               
|                                        
|                                        
|                                        
|                                        
|Tyrone Gardens Operations                |  |                                 | Month-to-month lease              | 
|                                        
|                                        
|                                        
|                                        
|1028 58th Street North                  
|                                        
|                                        
|                                        
|                                        
|St. Petersburg, Florida 33710           
|                                        
|                                        
|                                        
|                                        
|Tyrone Office                            |  |                                 | October 31, 2004                  | 
|                                        
|                                        
|                                        
|                                        
|6900 22nd Avenue North                  
|                                        
|                                        
|                                        
|                                        
|St. Petersburg, Florida 33710           
|                                        
|                                        
|                                        
|                                        
|Walsingham Office                        |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|14141 Walsingham Road                   
|                                        
|                                        
|                                        
|                                        
|Largo, Florida 33774                    
|                                        
|                                        
|                                        
|                                        
|Clearwater Loan Operations Center        |  |                                 | June 30, 2006                     | 
|                                        
|                                        
|                                        
|                                        
|28051 U.S. 19 North, Suite G            
|                                        
|                                        
|                                        
|                                        
|Clearwater, Florida 34621               
|                                        
|                                        
|                                        
|                                        
|Sarasota County:                        
|                                        
|                                        
|                                        
|                                        
|Sarasota Office & Loan Production Office |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|1100 South Tamiami Trail                
|                                        
|                                        
|                                        
|                                        
|Sarasota, Florida 34236                 
|                                        
|                                        
|                                        
|                                        
|Venice Office                            |  |                                 | Facility owned                    | 
|                                        
|                                        
|                                        
|                                        
|400 Venice By-pass North                
|                                        
|                                        
|                                        
|                                        
|Venice, Florida 34292                   

26



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##### Table of Contents



PROPERTIES (contd)

|                                     |  |                                 |                 | 
|------------------------------------ |  | ------------------------------- | --------------- | 
|Location                             |  | Ownership/Lease Expiration Date
|                                     |  |                                
|Seminole County:                    
|                                    
|                                    
|                                    
|                                    
|Lake Howell Office                   |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|1980 Howell Branch Road             
|                                    
|                                    
|                                    
|                                    
|Winter Park, Florida 32792          
|                                    
|                                    
|                                    
|                                    
|Suwannee County:                    
|                                    
|                                    
|                                    
|                                    
|Live Oak Office                      |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|535 Ohio Avenue South               
|                                    
|                                    
|                                    
|                                    
|Live Oak, Florida 32060             
|                                    
|                                    
|                                    
|                                    
|Lee County:                         
|                                    
|                                    
|                                    
|                                    
|Cape Coral Office                    |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|1321 Southeast 47th Terrace         
|                                    
|                                    
|                                    
|                                    
|Cape Coral, Florida 33904           
|                                    
|                                    
|                                    
|                                    
|Marion County:                      
|                                    
|                                    
|                                    
|                                    
|Forest Office                        |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|15825 East Highway 40               
|                                    
|                                    
|                                    
|                                    
|Silver Springs, Florida 34488       
|                                    
|                                    
|                                    
|                                    
|Midtown Office                       |  |                                 | August 31, 2000 | 
|                                    
|                                    
|                                    
|                                    
|One NE First Avenue, Suite 100      
|                                    
|                                    
|                                    
|                                    
|Ocala, Florida 34470                
|                                    
|                                    
|                                    
|                                    
|Paddock Office                       |  |                                 | April 17, 2001  | 
|                                    
|                                    
|                                    
|                                    
|3033 SW College Road                
|                                    
|                                    
|                                    
|                                    
|Ocala, Florida 34474                
|                                    
|                                    
|                                    
|                                    
|Silver Springs Office                |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|5431-A East Silver Springs Boulevard
|                                    
|                                    
|                                    
|                                    
|Silver Springs, Florida 34488       
|                                    
|                                    
|                                    
|                                    
|Monroe County:                      
|                                    
|                                    
|                                    
|                                    
|Key West Office                      |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|1010 Kennedy Drive                  
|                                    
|                                    
|                                    
|                                    
|Key West, Florida 33040             
|                                    
|                                    
|                                    
|                                    
|Marathon Office                      |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|6090 Overseas Highway               
|                                    
|                                    
|                                    
|                                    
|Marathon, Florida 33050             
|                                    
|                                    
|                                    
|                                    
|Plantation Key Office                |  |                                 | Facility owned  | 
|                                    
|                                    
|                                    
|                                    
|90184 Overseas Highway              
|                                    
|                                    
|                                    
|                                    
|Tavernier, Florida 33070            

27



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##### Table of Contents



PROPERTIES (contd)

|                                      |  |                                 |                    | 
|------------------------------------- |  | ------------------------------- | ------------------ | 
|Location                              |  | Ownership/Lease Expiration Date
|                                      |  |                                
|Hillsborough County:                 
|                                     
|                                     
|                                     
|                                     
|South Brandon Office                  |  |                                 | Facility owned     | 
|                                     
|                                     
|                                     
|                                     
|404 Oakfield Drive                   
|                                     
|                                     
|                                     
|                                     
|Brandon, Florida 33511               
|                                     
|                                     
|                                     
|                                     
|Sun City Office                       |  |                                 | Facility owned     | 
|                                     
|                                     
|                                     
|                                     
|3880 Sun City Center Boulevard       
|                                     
|                                     
|                                     
|                                     
|Ruskin, Florida 33573                
|                                     
|                                     
|                                     
|                                     
|Palm Beach County:                   
|                                     
|                                     
|                                     
|                                     
|Boca Hamptons Office                  |  |                                 | January 31, 2002   | 
|                                     
|                                     
|                                     
|                                     
|9060 Kimberly Boulevard              
|                                     
|                                     
|                                     
|                                     
|Boca Raton, Florida 33434            
|                                     
|                                     
|                                     
|                                     
|Kings Point Office                   |  |                                 | September 30, 2000 | 
|                                     
|                                     
|                                     
|                                     
|6630 West Atlantic Avenue            
|                                     
|                                     
|                                     
|                                     
|Delray Beach, Florida 33446          
|                                     
|                                     
|                                     
|                                     
|Lake Worth Office                     |  |                                 | November 30, 2000  | 
|                                     
|                                     
|                                     
|                                     
|7753 Lake Worth Road                 
|                                     
|                                     
|                                     
|                                     
|Lake Worth, Florida 33467            
|                                     
|                                     
|                                     
|                                     
|Volusia County:                      
|                                     
|                                     
|                                     
|                                     
|Ormond Beach Office                   |  |                                 | November 1, 2004   | 
|                                     
|                                     
|                                     
|                                     
|193 East Granada Boulevard           
|                                     
|                                     
|                                     
|                                     
|Ormond Beach, Florida 32176          
|                                     
|                                     
|                                     
|                                     
|Other Florida Facilities:            
|                                     
|                                     
|                                     
|                                     
|Warehouse                             |  |                                 | February 15, 2000  | 
|                                     
|                                     
|                                     
|                                     
|2718 24th Street North               
|                                     
|                                     
|                                     
|                                     
|St. Petersburg, Florida 33713        
|                                     
|                                     
|                                     
|                                     
|Republic Bank Center Operations       |  |                                 | Facility owned     | 
|                                     
|                                     
|                                     
|                                     
|1432 66th Street North               
|                                     
|                                     
|                                     
|                                     
|St. Petersburg, Florida 33710        
|                                     
|                                     
|                                     
|                                     
|Republic Bank Center Operations Annex |  |                                 | October 31, 2012   | 
|                                     
|                                     
|                                     
|                                     
|1500 66th Street North               
|                                     
|                                     
|                                     
|                                     
|St. Petersburg, Florida 33710        
|                                     
|                                     
|                                     
|                                     
|Tampa Loan Production Office          |  |                                 | December 1, 2000   | 
|                                     
|                                     
|                                     
|                                     
|1411 North Westshore Blvd            
|                                     
|                                     
|                                     
|                                     
|Suite 300                            
|                                     
|                                     
|                                     
|                                     
|Tampa, Florida 33607                 

28



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##### Table of Contents









Item 3.   LEGAL PROCEEDINGS

In January 1999, we filed a lawsuit against a former vendor that provided
printing and direct mailing services for the Companys mortgage banking
operations to invalidate a term contract executed by the former manager of the
High LTV Loan origination unit. The vendor had initiated arbitration proceedings
against us relating to the same issues. On February 1, 2000, we reached a
settlement of this matter wherein we agreed to pay $716,000 to the vendor and
the vendor agreed to waive all further claims for contract payments allegedly
owed by us. Separately, the former manager of the High LTV Loan origination unit
is asserting an unpaid compensation claim against us that we believe is without
merit. We intend to defend such action vigorously.

In November 1999, 18 former shareholders of Bankers Savings Bank, F.S.B. (BSB)
filed a claim against us that alleges that we had knowledge, prior to acquiring
BSB, that we would incur a substantial loss during the fourth quarter of 1998.
The claim also alleges breach of contract, fraud and violations of the Florida
statutes governing securities transactions. We believe the claim is without
merit and intend to defend such action vigorously.

We are subject to various legal proceedings in the ordinary course of business.
Based on information presently available, we do not believe that the ultimate
outcome in such proceedings, in the aggregate, would have a material adverse
effect on our financial position or results of operations.







Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Information required by this item is incorporated by reference from our Proxy
Statement for the 2000 Annual Meeting.







PART II







Item 5.   MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Trading Market

Our common stock is currently traded on the NASDAQ National Market under the
symbol REPB. The table below shows, the high, low and closing bid information
for the common stock as regularly quoted on the NASDAQ National Market for the
periods indicated.

|                                 |  |          |  |     |          |         |  |       
|-------------------------------- |  | -------- |  | --- | -------- | ------- |  | ------
|                                 |  | High     |  | Low |          | Closing
|                                 |  |          |  |     |          |        
|Quarter ended March 31, 1998     |  | 31 3/4   |  |     | 25       |         |  | 29 1/4
|                                
|                                
|                                
|                                
|Quarter ended June 30, 1998      |  | 34 3/4   |  |     | 25 13/16 |         |  | 27 1/8
|                                
|                                
|                                
|                                
|Quarter ended September 30, 1998 |  | 27 1/16  |  |     | 17 3/4   |         |  | 22 1/8
|                                
|                                
|                                
|                                
|Quarter ended December 31, 1998  |  | 21 29/32 |  |     | 13 1/8   |         |  | 13 1/8
|                                
|                                
|                                
|                                
|Quarter ended March 31, 1999     |  | 23 3/16  |  |     | 13 1/4   |         |  | 21 3/8
|                                
|                                
|                                
|                                
|Quarter ended June 30, 1999      |  | 22 1/4   |  |     | 18 3/16  |         |  | 20 1/2
|                                
|                                
|                                
|                                
|Quarter ended September 30, 1999 |  | 19 1/2   |  |     | 14 7/16  |         |  | 14 1/2
|                                
|                                
|                                
|                                
|Quarter ended December 31, 1999  |  | 15 5/8   |  |     | 12 1/4   |         |  | 12 1/2

These over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, markdown or commission and may not necessarily reflect actual
transactions.

Stockholders and Dividends

As of December 31, 1999, there were approximately 4,022 beneficial owners of our
common stock. As a parent holding company of a Florida-chartered commercial
bank, our ability to receive dividends from the

29



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##### Table of Contents



Bank and to pay dividends to our stockholders are subject to the laws of Florida
as to the payment of dividends. Under the Florida Financial Institutions Code,
the prior approval of the Department is required if the total of all dividends
declared by a bank in any calendar year will exceed the sum of the banks net
profits for that year and its retained net profits for the preceding two years.
At January 1, 2000, the Banks dividends paid in 1998 and 1999 exceeded its net
profits for those years by $6.8 million. Accordingly, the Bank would not be
permitted to pay dividends to us until earnings in 2000 are sufficient to offset
this deficit.

Under Federal law, if, in the opinion of the federal banking regulator, a bank
or thrift under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such regulator
may require, after notice and hearing, that such institution cease and desist
from such practice. The federal banking agencies have indicated that paying
dividends that deplete a depository institutions capital base to an inadequate
level would be an unsafe and unsound banking practice. Under the Prompt
Corrective Action regulations adopted by the federal banking agencies in
December 1992, a depository institution may not pay any dividend to its holding
company if payment would cause it to become undercapitalized or if it already is
undercapitalized. (See Item 1. Business  Supervision and Regulation 
Payment of Dividends.)

To date, we have paid no dividends on our common stock and have no present plans
to do so. The only dividends that we declared in 1999 were quarterly dividends
totaling $.88 per share on the 75,000 shares of our noncumulative convertible
perpetual preferred stock that are outstanding. (See Note 14, Stockholders
Equity).







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, 1995 through 1999, were derived from the audited consolidated
financial statements.

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.

[Balance of page intentionally left blank]

30



---



##### Table of Contents



Selected Consolidated Financial and Other Data
($ in thousands, except per share data, financial ratios and other data)

|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |        | 
|--------------------------- | -------------------------------------------------------------------------------------- | ---------------------------------------- | - | ------------------------ | ------ | ---- | - | --------- | ------ | ---- | - | --------- | ------ |  | - | --------- | ------ |  | - | --------- | ------ | 
|                            |                                                                                        |                                          |   | Years Ended December 31,
|                            |                                                                                        |                                          |   |                         
|OPERATING DATA:             |                                                                                        | 1999                                     |   | 1998                     |        | 1997 |   | 1996      |        | 1995
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |     
|                            | Interest income                                                                        |                                          | $ | 190,763                  |        |      | $ | 172,793   |        |      | $ | 117,834   |        |  | $ | 99,058    |        |  | $ | 88,848    |       
|                           
|                           
|                           
|                           
|                            | Interest expense                                                                       |                                          |   | 98,380                   |        |      |   | 89,609    |        |      |   | 60,742    |        |  |   | 51,245    |        |  |   | 47,232    |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | Net interest income                                                                    |                                          |   | 92,383                   |        |      |   | 83,184    |        |      |   | 57,092    |        |  |   | 47,813    |        |  |   | 41,616    |       
|                           
|                           
|                           
|                           
|                            | Loan loss provision                                                                    |                                          |   | 9,923                    |        |      |   | 14,261    |        |      |   | 3,247     |        |  |   | 2,758     |        |  |   | 2,424     |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | Net interest income after loan loss provision                                          |                                          |   | 82,460                   |        |      |   | 68,923    |        |      |   | 53,845    |        |  |   | 45,055    |        |  |   | 39,192    |       
|                           
|                           
|                           
|                           
|                            | Noninterest income                                                                     |                                          |   | 25,832                   |        |      |   | 56,157    |        |      |   | 29,451    |        |  |   | 10,531    |        |  |   | 8,964     |       
|                           
|                           
|                           
|                           
|                            | Gain on sale of ORE held for investment                                                |                                          |   |                         |        |      |   |          |        |      |   |          |        |  |   | 1,207     |        |  |   |          |       
|                           
|                           
|                           
|                           
|                            | General and administrative (G&A) expenses                                            |                                          |   | 84,430                   |        |      |   | 129,017   |        |      |   | 65,420    |        |  |   | 44,788    |        |  |   | 39,287    |       
|                           
|                           
|                           
|                           
|                            | Merger/acquisition expenses                                                            |                                          |   |                         |        |      |   | 3,233     |        |      |   | 1,144     |        |  |   |          |        |  |   |          |       
|                           
|                           
|                           
|                           
|                            | Restructuring costs                                                                    |                                          |   |                         |        |      |   | 6,673     |        |      |   |          |        |  |   |          |        |  |   |          |       
|                           
|                           
|                           
|                           
|                            | SAIF special assessment                                                                |                                          |   |                         |        |      |   |          |        |      |   |          |        |  |   | 4,818     |        |  |   |          |       
|                           
|                           
|                           
|                           
|                            | Provision for losses on ORE                                                            |                                          |   | 80                       |        |      |   | 1,603     |        |      |   | 530       |        |  |   | 111       |        |  |   | 240       |       
|                           
|                           
|                           
|                           
|                            | Other noninterest (income) expense                                                     |                                          |   | (307                     | )      |      |   | (40       | )      |      |   | 396       |        |  |   | (490      | )      |  |   | 661       |       
|                           
|                           
|                           
|                           
|                            | Amort. of goodwill & premium on deposits                                               |                                          |   | 3,910                    |        |      |   | 1,930     |        |      |   | 479       |        |  |   | 491       |        |  |   | 450       |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | Net income (loss) before income taxes, negative
goodwill accretion & minority interest |                                          |   | 20,179                   |        |      |   | (17,336   | )      |      |   | 15,327    |        |  |   | 7,075     |        |  |   | 7,518     |       
|                            | Accretion of negative goodwill                                                         |                                          |   |                         |        |      |   |          |        |      |   |          |        |  |   |          |        |  |   | 1,578     |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                           
|                           
|                           
|                           
|                            | Net income (loss) before income taxes & minority
interest                              |                                          |   | 20,179                   |        |      |   | (17,336   | )      |      |   | 15,327    |        |  |   | 7,075     |        |  |   | 9,096     |       
|                           
|                           
|                           
|                           
|                            | Income tax benefit (expense)                                                           |                                          |   | (7,800                   | )      |      |   | 6,602     |        |      |   | (6,165    | )      |  |   | (2,772    | )      |  |   | (2,231    | )     
|                           
|                           
|                           
|                           
|                            | Minority interest in income from subsidiary trust                                      |                                          |   | (1,687                   | )      |      |   | (1,687    | )      |      |   | (701      | )      |  |   |          |        |  |   |          |       
|                           
|                           
|                           
|                           
|                            | Minority interest in FFO                                                               |                                          |   |                         |        |      |   |          |        |      |   | (674      | )      |  |   | (505      | )      |  |   | (503      | )     
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | Net income (loss)                                                                      |                                          | $ | 10,692                   |        |      | $ | (12,421   | )      |      | $ | 7,787     |        |  | $ | 3,798     |        |  | $ | 6,362     |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | Earnings (loss) per share  basic                                                      |                                          | $ | .99                      |        |      | $ | (1.34     | )      |      | $ | 1.12      |        |  | $ | .55       |        |  | $ | 1.01      |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                           
|                           
|                           
|                           
|                            | Weighted average shares outstanding  basic                                            |                                          |   | 10,484,650               |        |      |   | 9,286,813 |        |      |   | 6,693,970 |        |  |   | 6,423,130 |        |  |   | 6,057,206 |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                           
|                           
|                           
|                           
|                            | Earnings (loss) per share  diluted                                                    |                                          | $ | .95                      |        |      | $ | (1.34     | )      |      | $ | 1.01      |        |  | $ | .53       |        |  | $ | .93       |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                           
|                           
|                           
|                           
|                            | Weighted average shares outstanding  diluted                                          |                                          |   | 11,299,902               |        |      |   | 9,286,813 |        |      |   | 7,920,926 |        |  |   | 7,204,217 |        |  |   | 6,820,377 |       
|                            |                                                                                        |                                          |   |                          |        |      |   |           |        |      |   |           |        |  |   |           |        |  |   |           |       
|                            | BALANCE SHEET DATA:                                                                   
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                            | Total assets                                                                           |                                          | $ | 2,566,026                |        |      | $ | 2,505,117 |        |      | $ | 1,678,831 |        |  | $ | 1,365,845 |        |  | $ | 1,241,967 |       
|                           
|                           
|                           
|                           
|                            | Investment & mortgage backed securities                                                |                                          |   | 453,008                  |        |      |   | 129,783   |        |      |   | 115,769   |        |  |   | 170,392   |        |  |   | 164,387   |       
|                           
|                           
|                           
|                           
|                            | Loans held for sale                                                                    |                                          |   |                         |        |      |   | 184,176   |        |      |   | 187,226   |        |  |   | 98,349    |        |  |   | 84,311    |       
|                           
|                           
|                           
|                           
|                            | Loans held in portfolio                                                                |                                          |   | 1,889,892                |        |      |   | 1,896,289 |        |      |   | 1,215,900 |        |  |   | 976,222   |        |  |   | 885,841   |       
|                           
|                           
|                           
|                           
|                            | Allowance for loan losses                                                              |                                          |   | 28,177                   |        |      |   | 28,077    |        |      |   | 22,023    |        |  |   | 19,774    |        |  |   | (21,097   | )     
|                           
|                           
|                           
|                           
|                            | Goodwill & premium on deposits                                                         |                                          |   | 32,827                   |        |      |   | 36,916    |        |      |   | 4,855     |        |  |   | 527       |        |  |   | 1,017     |       
|                           
|                           
|                           
|                           
|                            | Deposits                                                                               |                                          |   | 2,282,809                |        |      |   | 2,187,412 |        |      |   | 1,471,679 |        |  |   | 1,237,211 |        |  |   | 1,110,293 |       
|                           
|                           
|                           
|                           
|                            | Stockholders equity                                                                   |                                          |   | 170,245                  |        |      |   | 163,597   |        |      |   | 102,530   |        |  |   | 75,961    |        |  |   | 72,697    |       
|                           
|                           
|                           
|                           
|                            | Book value per share (dollars)                                                         |                                          |   | 15.06                    |        |      |   | 14.77     |        |      |   | 12.28     |        |  |   | 10.59     |        |  |   | 10.13     |       
|                           
|                           
|                           
|                           
|SELECTED FINANCIAL RATIOS: 
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                            | Return on average assets                                                               |                                          |   | .42                      | %      |      |   | (.58      | )%     |      |   | .53       | %      |  |   | .29       | %      |  |   | .54       | %     
|                           
|                           
|                           
|                           
|                            | Return on average equity                                                               |                                          |   | 6.39                     |        |      |   | (7.91     | )      |      |   | 9.46      |        |  |   | 5.11      |        |  |   | 9.95      |       
|                           
|                           
|                           
|                           
|                            | Equity to assets                                                                       |                                          |   | 6.63                     |        |      |   | 6.53      |        |      |   | 6.11      |        |  |   | 5.56      |        |  |   | 6.85      |       
|                           
|                           
|                           
|                           
|                            | Equity & minority interest in preferred subsidiary
to assets                           |                                          |   | 7.75                     |        |      |   | 7.68      |        |      |   | 7.82      |        |  |   | 5.56      |        |  |   | 5.85      |       
|                           
|                           
|                           
|                           
|                            | Net interest spread                                                                    |                                          |   | 3.57                     |        |      |   | 3.71      |        |      |   | 3.64      |        |  |   | 3.57      |        |  |   | 3.64      |       
|                           
|                           
|                           
|                           
|                            | Net interest margin                                                                    |                                          |   | 3.92                     |        |      |   | 4.12      |        |      |   | 4.08      |        |  |   | 3.93      |        |  |   | 3.96      |       
|                           
|                           
|                           
|                           
|                            | G&A expense to average
assets (1)                                                      |                                          |   | 3.35                     |        |      |   | 2.76      |        |      |   | 3.23      |        |  |   | 3.33      |        |  |   | 3.35      |       
|                           
|                           
|                           
|                           
|                            | G&A efficiency ratio
(1)                                                               |                                          |   | 71.42                    |        |      |   | 70.12     |        |      |   | 72.35     |        |  |   | 75.28     |        |  |   | 77.67     |       
|                           
|                           
|                           
|                           
|                            | Loan/deposit ratio  Excludes loans held for sale                                      |                                          |   | 82.79                    |        |      |   | 86.69     |        |      |   | 82.62     |        |  |   | 78.71     |        |  |   | 79.78     |       
|                           
|                           
|                           
|                           
|                            | Nonperforming loans to loans                                                           |                                          |   | 1.33                     |        |      |   | 1.94      |        |      |   | 2.41      |        |  |   | 2.31      |        |  |   | 2.38      |       
|                           
|                           
|                           
|                           
|                            | Nonperforming assets to total assets                                                   |                                          |   | 1.22                     |        |      |   | 1.71      |        |      |   | 2.31      |        |  |   | 2.35      |        |  |   | 2.78      |       
|                           
|                           
|                           
|                           
|                            | Loan loss allowance to loans                                                           |                                          |   | 1.49                     |        |      |   | 1.48      |        |      |   | 1.81      |        |  |   | 2.03      |        |  |   | 2.26      |       
|                           
|                           
|                           
|                           
|                            | Loan loss allowance to nonperforming loans:                                           
|                           
|                           
|                           
|                           
|                            |                                                                                        | Originated portfolio                     |   |                          | 137.61 |      |   |           | 77.06  |      |   |           | 89.26  |  |   |           | 66.79  |  |   |           | 89.17  | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | March 1995 purchase                      |   |                          | 246.89 |      |   |           | 108.06 |      |   |           | 373.91 |  |   |           | 488.78 |  |   |           | 647.83 | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | Crossland portfolio                      |   |                          | 24.63  |      |   |           | 43.50  |      |   |           | 421.88 |  |   |           | 126.12 |  |   |           | 41.77  | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | July 1997 purchase                       |   |                          |       |      |   |           | 35.70  |      |   |           | 31.74  |  |   |           | N/A    |  |   |           | N/A    | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | Other purchased portfolios               |   |                          | 14.03  |      |   |           | 113.69 |      |   |           | 18.41  |  |   |           | 89.80  |  |   |           | 41.84  | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | Total portfolio loans                    |   |                          | 112.04 |      |   |           | 76.25  |      |   |           | 75.21  |  |   |           | 87.61  |  |   |           | 100.12 | 
|                           
|                           
|                           
|                           
|OTHER DATA (AT PERIOD-END):
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                           
|                            |                                                                                        | Number of branches                       |   |                          | 81     |      |   |           | 62     |      |   |           | 48     |  |   |           | 46     |  |   |           | 46     | 
|                           
|                           
|                           
|                           
|                            |                                                                                        | Number of full time equivalent employees |   |                          | 1,000  |      |   |           | 1,733  |      |   |           | 1,165  |  |   |           | 930    |  |   |           | 706    | 



---

|(1) |  | Ratios prior to 1999 include the commercial banking segment only.
|--- |  | -----------------------------------------------------------------

31



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##### Table of Contents



Item 7.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our balance sheets and statements of
operations should be read in conjunction with Item 6. Selected Consolidated
Financial Data, the Consolidated Financial Statements and the related notes
included elsewhere therein.







Years Ended December 31, 1999 and 1998

Comparison of Balance Sheets at December 31, 1999 and 1998

Overview

Our total assets were $2.6 billion at December 31, 1999, and $2.5 billion at
December 31, 1998, an increase of $61.2 million or 2.4%. The mix of our asset
base changed substantially during the year as we sold a major part of our
December 1998 inventory of loans held for sale and reinvested those funds into
U.S. Treasury and mortgage-backed securities. At December 31, 1999, we no longer
maintained an inventory of loans held for sale.

In September 1999, we completed a private placement to accredited investors of
$15.0 million of 7.0% convertible subordinated debentures (the Debentures). In
addition, we refinanced our $7.0 million of debt to our directors. Approximately
$4.3 million of the Debentures were issued to our directors in exchange for an
equal amount of the pre-existing debt, with the balance of the Debentures being
sold to third-party accredited investors. The $2.7 million balance of the $7.0
million debt to directors not converted into the Debentures was exchanged for an
equal principal amount of non-convertible term subordinated debt (the Term
Debt). Both the Debentures and the Term Debt that we issued qualify as Tier 2
capital under applicable regulatory capital guidelines.

We paid down the principal amount of our $25.0 million non-revolving line of
credit (Senior Debt) from SunTrust Bank, Central Florida, N.A. (SunTrust) by
$15 million to a balance of $10 million. The $10.5 million of net proceeds from
sale of the Debentures, after deducting offering costs, and the cash received
from dissolution of the Savings Bank, were used to repay principal on the
SunTrust loan. In connection with the paydown, SunTrust agreed to extend the
remaining portion of its loan to the Company through March 31, 2001.

Investment and Mortgage-Backed Securities

Investments consisting of U.S. Treasury and federal agency securities,
commercial paper, and mortgage-backed securities were $453.0 million at December
31, 1999, compared to $129.8 million at December 31, 1998, an increase of $323.2
million or 249.1%, partially as a result of the sale or securitization of loans
held for sale. At December 31, 1999, $380.7 million of securities were
classified as available for sale, $33.1 million of securities were classified as
held to maturity and $39.2 million were trading assets. Included in the trading
asset category were: (1) a $10.9 million subordinate tranche of securities
purchased from our securitization of High LTV Loans in June 1998; (2) $24.1
million in overcollateralization and residual interests in cash flows from
securitizations in December 1997 and June 1998; and (3) the excess spread on
mortgage servicing rights, which amounted to $4.2 million at year-end 1999.

Trading assets are evaluated at least quarterly with any valuation adjustment
reflected as a trading gain or loss in the statement of operations. Under
applicable accounting rules, use of quoted market values is the preferred method
for valuing trading assets. However, where the market for those assets is
illiquid and price quotations are available on a distress basis only, other
methods are permitted, including techniques utilizing the present value of
expected cash flows. The Company has employed those present value methods in
lieu of established market price quotes for its trading assets. In December 1999
we conducted an extensive analysis of the credit quality of the loans underlying
the trading assets related to High LTV Loan securitizations by

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##### Table of Contents



obtaining current credit scores on the borrowers. Based on that analysis and on
the historical loss history of those loans an adjustment was made to the
expected cumulative losses on each securitization (expressed as total lifetime
losses as a percent of the original balance of loans in the securitization). The
cumulative loss factor for the securitization completed in December 1997 was
increased from an original estimate of 10% to a current estimate of 15%. The
cumulative loss factor for the securitization completed in June 1998 was
increased from an original estimate of 11% to a current estimate of 12%. A
trading loss of $470,000 was recorded based on the revised valuation. We believe
these valuations are a reasonable approximation of fair market value; however,
there is no assurance that we could realize these values if such assets were
sold in the current market.

Loans and Loans Held for Sale

Total loans (including held for portfolio and held for sale) were $1.9 billion
at December 31, 1999, compared to $2.1 billion at December 31, 1998, a decrease
of $190.6 million, or 9.2%. Loan sales in early 1999 and a rapid increase in
refinancing of loans beginning in mid-1999 were the primary reasons for a $231.0
million decline in first lien residential loans. Other changes in real
estate-secured loans included; (1) a decline of $20.0 million in High LTV Loans;
(2) an increase of $60.3 million of commercial real estate, multifamily and
construction loans; and (3) a $13.9 million increase in home equity loans with
loan-to-value ratios of less than 100%.

Allowance for Loan Losses

The allowance for loan losses amounted to $28.2 million at December 31, 1999,
compared with $28.1 million at December 31, 1998. At December 31, 1999, the
allowance for loan losses included $26.6 million allocated to loans originated
by us and $1.6 million from discount allocations for purchased loans. During
1999 we took a charge of $9.9 million of provisions for loan losses. Other
activity included $9.6 million of loan charge-offs (net of recoveries), $275,000
in acquired reserves and $470,000 reallocated from the allowance to loan
discount. At December 31, 1999, the ratio of the allowance for loan losses to
nonperforming loans was 112.04% compared to 76.25% at the end of 1998.

Nonperforming Assets

Nonperforming assets amounted to $31.2 million or 1.22% of total assets at
December 31, 1999, compared with $42.8 million or 1.71% of total assets at
December 31, 1998. Nonperforming loans totaled $25.2 million (or 1.33% of total
loans) at December 31, 1999, a decrease of $11.7 million from December 31, 1998.
Nonperforming one-to-four family residential mortgage loans decreased by $5.1
million, while nonperforming commercial real estate and multi-family loans
declined $8.1 million. ORE increased $381,000 from $5.0 million at December 31,
1998, to $5.3 million at December 31, 1999.

Deposits

Total deposits were $2.3 billion at December 31, 1999, compared to $2.2 billion
at December 31, 1998, an increase of $95.4 million or 4.4%. The new branch
openings have contributed $206.2 million in deposit growth since the beginning
of the year. Overall, since year-end 1998, certificates of deposit and money
market gold accounts increased $113.8 million and $59.7 million, respectively,
while checking, regular money market and savings accounts declined by $13.2
million, $8.0 million and $56.8 million, respectively.

Senior Debt

On September 24, 1998, SunTrust extended us a non-revolving line of credit (the
Senior Debt) for up to $25.0 million. Interest on the loan is payable monthly,
and the maturity date for the loan was September 25, 1999. On September 25,
1998, we received the full $25.0 million balance under the line of credit. The
proceeds of the Senior Debt were used to maintain the regulatory capital of the
Bank at well capitalized levels and to support the planned branch expansion
activities.

The terms of the Senior Debt were amended on December 29, 1998 to require, among
other things, that: (1) an interest rate of LIBOR plus 1.50%, effective January
1, 1999 be paid; (2) we maintain an acceptable

33



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##### Table of Contents



supervisory rating and not become subject to a cease and desist order; and (3)
upon written request from SunTrust at any time after March 31, 1999, for any
reason whatsoever, Mr. William R. Hough, our Chairman of the Board and principal
shareholder, purchase the loan from SunTrust.

On March 19, 1999, the Senior Debt was further amended to extend the date for
SunTrusts option to request purchase of the loan from March 31, 1999 to
September 24, 1999, the maturity date of the loan. We agreed to establish an
interest reserve account with SunTrust and to deposit in the account sufficient
funds to pay interest on the loan through the maturity date. SunTrust retained
its right to request purchase of the loan in the event we fail to comply with
financial convenants of the Senior Debt which require us to: (1) maintain our
ratio of nonperforming assets to assets at no more than three percent; (2)
maintain our debt service coverage ratio at no less than two to one; and (3)
eliminate the excess of dividends paid by the Bank to the Holding Company over
the Banks net income for the current and two preceding years by June 30, 1999.

In September 1999 we paid down the principal amount of the Senior Debt by $15.0
million to a balance of $10.0 million, using the net proceeds from the issuance
of subordinated debt and dividends from the Bank. SunTrust agreed to extend the
remaining portion of its loan to us through March 31, 2001.

Convertible Subordinated Debentures

In September 1999, the Company completed a private placement to accredited
investors of $15.0 million of its 7.0% convertible subordinated debentures (the
Debentures). The net proceeds from issuance were used to paydown the Companys
Senior Debt. Each $1,000 principal amount of the Debentures are convertible at
any time by the holder into 55.55556 shares of the Companys common stock. The
resulting conversion price of $18.00 per share represented a premium of
approximately 22% over the $14.75 September 22, 1999 closing price of our common
stock on the NASDAQ National Market. The Debentures are redeemable by the
Company at any time after October 1, 2004 at a premium of 106% with the premium
declining one percent per year thereafter. The Debentures may also be redeemed
at our option if the closing price of our common stock equals or exceeds $23.40
for 20 consecutive trading days. The Debentures carry a net cost of 7.23%.

Term Subordinated Debt & Unsecured Debt

On December 30, 1998, our directors executed unsecured notes with an aggregate
balance of $7.0 million to further augment our regulatory capital. The loan
proceeds were used to cover our debt servicing obligations.

In September 1999, we refinanced the $7.0 million of debt to our directors.
Approximately $4.3 million of the Debentures were issued to our directors in
exchange for an equal amount of the pre-existing debt. The $2.7 million balance
of the $7.0 million debt to the directors not converted into the Debentures was
exchanged for an equal principal amount of non-convertible term subordinated
debt (the Term Debt). Both the Debentures and the Term Debt issued by us
qualify as Tier 2 capital under applicable regulatory capital guidelines.

Stockholders Equity

Stockholders equity was $170.2 million at December 31, 1999, or 6.6% of total
assets, compared to $163.6 million or 6.5% of total assets at December 31, 1998.
At December 31, 1999, the Banks Tier 1 (Leverage) Capital ratio was 6.78%,
its Tier 1 Risk-Based Capital ratio was 10.33%, and its Total Risk-Based Capital
ratio was 11.63%, all in excess of minimum FDIC guidelines for an institution to
be considered a well-capitalized bank, while the same ratios for the Company
were 6.02%, 9.17% and 11.53%.

Comparison of Results of Operations for the Year Ended
December 31, 1999 and 1998

Overview

A net profit of $10.7 million, or $.95 per share (on a diluted basis), was
recorded for the year ended December 31, 1999 compared to a net loss of $12.4
million, or $1.34 per share, for the same period in 1998. Return on average
assets for the year ended December 31, 1999, was .42%, compared
to a negative .58% for the same period in 1998. The return on average equity was 6.39%,
compared with a negative 7.91% for the same period in 1998.

34



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##### Table of Contents



An analysis of the Companys net income is as follows, using these after-tax
components: (1) base net income (which excludes items 2-4); (2) the contribution
from the 24 branches opened in late 1998 and 1999; (3) direct costs of mortgage
production activities, net of applicable gains on loans held for sale; and (4)
other unusual or infrequently occurring items; ($ in thousands, net of tax
effect).

|                                                 |                                  |   |                          |        |      |   |         |         |  
|------------------------------------------------ | -------------------------------- | - | ------------------------ | ------ | ---- | - | ------- | ------- | -
|                                                 |                                  |   | Years Ended December 31,
|                                                 |                                  |   |                         
|                                                 |                                  |   | 1999                     |        | 1998
|                                                 |                                  |   |                          |        |     
|Base after-tax net
income detail:               
|                                                
|                                                
|                                                
|                                                
|Net interest income                              |                                  | $ | 54,291                   |        |      | $ | 51,569  |        
|                                                
|                                                
|                                                
|                                                
|Loan loss provision                              |                                  |   | (6,073                   | )      |      |   | (2,653  | )      
|                                                
|                                                
|                                                
|                                                
|Noninterest income                               |                                  |   | 11,536                   |        |      |   | 6,999   |        
|                                                
|                                                
|                                                
|                                                
|G & A expense                                    |                                  |   | (40,527                  | )      |      |   | (43,198 | )      
|                                                
|                                                
|                                                
|                                                
|Amortization of goodwill and premium on deposits |                                  |   | (2,390                   | )      |      |   | (1,208  | )      
|                                                
|                                                
|                                                
|                                                
|New branches                                     |                                  |   | (2,920                   | )      |      |   |        |        
|                                                
|                                                
|                                                
|                                                
|Minority interest                                |                                  |   | (1,686                   | )      |      |   | (1,689  | )      
|                                                 |                                  |   |                          |        |      |   |         |        
|                                                 | After-tax base net income (loss) |   |                          | 12,231 |      |   |         | 9,820   |  
|                                                
|                                                
|                                                
|                                                
|Other after-tax net
income (loss) components:   
|                                                
|                                                
|                                                
|                                                
|Mortgage production activities                   |                                  |   | (3,979                   | )      |      |   | (21,865 | )      
|                                                
|                                                
|                                                
|                                                
|Sale of portfolio loans                          |                                  |   | 1,119                    |        |      |   | 2,612   |        
|                                                
|                                                
|                                                
|                                                
|Gain on sale of branch deposits                  |                                  |   | 685                      |        |      |   |        |        
|                                                
|                                                
|                                                
|                                                
|Gain from branch relocation(s)                   |                                  |   | 804                      |        |      |   |        |        
|                                                
|                                                
|                                                
|                                                
|ORE and other non-operating items                |                                  |   | (168                     | )      |      |   | (2,988  | )      
|                                                 |                                  |   |                          |        |      |   |         |        
|                                                 | Net income (loss)                |   | $                        | 10,692 |      |   | $       | (12,421 | )
|                                                 |                                  |   |                          |        |      |   |         |        

Analysis of Net Interest Income

Net interest income for the year ended December 31, 1999 was $92.4 million,
compared to $83.2 million for the same period in 1998. This $9.2 million, or
11.1% increase was primarily due to growth in total interest earning assets.
Average asset yield decreased 52 basis points from 8.57% for the year ended
December 31, 1998, to 8.05% for the same period in 1999, primarily from
increased investment in mortgage securities and a reduced investment in loans
held for sale. Average earning assets increased $341.5 million from $2.0 billion
for the year ended December 31, 1998, to $2.4 billion for the same period in
1999. During this same period, the average cost of interest bearing liabilities
decreased 33 basis points from 4.86% to 4.53%. Net interest spread, the
difference between asset yield and cost of funds, decreased 19 basis points to
3.52%. Net interest margin, which includes the benefit of noninterest bearing
funds, decreased from 4.12% for the year ended December 31, 1998, to 3.87% for
the same period in 1999.

35



---



##### Table of Contents



The following table summarizes the average yields earned on interest earning
assets and the average rates paid on interest bearing liabilities for the years
ended December 31, 1999 and 1998 ($ in thousands):

|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|--------------------------------------- | ---------------------------------- |  | ------------------------ | --------- | -------- | - | ------- | ------- | ------- |  | -------- | ---- | ------- |  | --------- | --------- |  | - | ------- | ------- |  |  | ---- | ---- | -
|                                        |                                    |  | Years Ended December 31,
|                                        |                                    |  |                         
|                                        |                                    |  | 1999                     |           | 1998    
|                                        |                                    |  |                          |           |         
|                                        |                                    |  | Average                  |           | Average  |   |         |         |         |  | Average  |      | Average
|                                        |                                    |  | Balance                  |           | Interest |   | Rate    |         | Balance |  | Interest |      | Rate   
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |        
|Summary of Average Rates               
|                                       
|                                       
|                                       
|                                       
|Interest earning assets:               
|                                       
|                                       
|                                       
|                                       
|                                        | Loans, net                         |  | $                        | 1,916,399 |          |   | $       | 166,656 |         |  |          | 8.70 | %       |  | $         | 1,773,697 |  |   | $       | 159,495 |  |  |      | 8.97 | %
|                                       
|                                       
|                                       
|                                       
|                                        | Investment securities              |  |                          | 39,501    |          |   |         | 2,075   |         |  |          | 5.25 |         |  |           | 38,430    |  |   |         | 2,364   |  |  |      | 6.15 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Mortgage backed securities         |  |                          | 207,587   |          |   |         | 12,840  |         |  |          | 6.19 |         |  |           | 23,171    |  |   |         | 1,669   |  |  |      | 7.20 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Trading securities                 |  |                          | 57,058    |          |   |         | 2,224   |         |  |          | 3.90 |         |  |           | 56,160    |  |   |         | 2,859   |  |  |      | 5.09 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Interest bearing deposits in banks |  |                          | 8,595     |          |   |         | 424     |         |  |          | 4.93 |         |  |           | 2,655     |  |   |         | 128     |  |  |      | 4.81 |  
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB stock                         |  |                          | 13,287    |          |   |         | 991     |         |  |          | 7.46 |         |  |           | 11,337    |  |   |         | 843     |  |  |      | 7.44 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Federal funds sold                 |  |                          | 104,527   |          |   |         | 5,206   |         |  |          | 4.91 |         |  |           | 105,783   |  |   |         | 5,435   |  |  |      | 5.07 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Commercial paper                   |  |                          | 5,808     |          |   |         | 347     |         |  |          | 5.89 |         |  |           |          |  |   |         |        |  |  |      |     |  
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|Total interest earning assets           |                                    |  | 2,352,762                |           |          |   | 190,763 |         |         |  | 8.10     |      |         |  | 2,011,233 |           |  |   | 172,793 |         |  |  | 8.57 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Noninterest earning assets         |  |                          | 165,995   |          |   |         |         |         |  |          |      |         |  |           | 138,353   | 
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|                                        | Total assets                       |  | $                        | 2,518,757 |          |   |         |         |         |  |          |      |         |  | $         | 2,149,586 | 
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|Interest bearing liabilities:          
|                                       
|                                       
|                                       
|                                       
|                                        | Interest checking                  |  | $                        | 177,592   |          |   | $       | 1,419   |         |  |          | .80  | %       |  | $         | 151,460   |  |   | $       | 2,201   |  |  |      | 1.45 | %
|                                       
|                                       
|                                       
|                                       
|                                        | Money market                       |  |                          | 200,550   |          |   |         | 7,481   |         |  |          | 3.73 |         |  |           | 101,683   |  |   |         | 2,743   |  |  |      | 2.70 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Savings                            |  |                          | 68,693    |          |   |         | 1,143   |         |  |          | 1.66 |         |  |           | 64,757    |  |   |         | 1,394   |  |  |      | 2.15 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Passbook gold                      |  |                          | 278,562   |          |   |         | 11,604  |         |  |          | 4.17 |         |  |           | 270,045   |  |   |         | 12,904  |  |  |      | 4.78 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Time deposits                      |  |                          | 1,371,047 |          |   |         | 72,486  |         |  |          | 5.29 |         |  |           | 1,106,167 |  |   |         | 61,916  |  |  |      | 5.60 |  
|                                       
|                                       
|                                       
|                                       
|                                        | FHLB advances                      |  |                          | 3,230     |          |   |         | 164     |         |  |          | 5.06 |         |  |           | 104,894   |  |   |         | 6,103   |  |  |      | 5.82 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other borrowings                   |  |                          | 70,642    |          |   |         | 4,083   |         |  |          | 5.78 |         |  |           | 43,976    |  |   |         | 2,348   |  |  |      | 5.34 |  
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|                                        | Total interest bearing liabilities |  |                          | 2,170,316 |          |   |         | 98,380  |         |  |          | 4.53 |         |  |           | 1,842,982 |  |   |         | 89,609  |  |  |      | 4.86 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Noninterest bearing liabilities    |  |                          | 180,316   |          |   |         |         |         |  |          |      |         |  |           | 153,164   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Stockholders equity               |  |                          | 167,581   |          |   |         |         |         |  |          |      |         |  |           | 153,440   | 
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|                                        | Total liabilities and equity       |  | $                        | 2,518,757 |          |   |         |        |         |  |          |      |         |  | $         | 2,149,586 |  |   |         |        | 
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|Net interest income/net interest spread |                                    |  |                          |           |          | $ | 92,383  |         |         |  | 3.57     | %    |         |  |           |           |  | $ | 83,184  |         |  |  | 3.71 | %   
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  
|Net interest margin                     |                                    |  |                          |           |          |   |         |         |         |  | 3.42     | %    |         |  |           |           |  |   |         |         |  |  | 4.12 | %   
|                                        |                                    |  |                          |           |          |   |         |         |         |  |          |      |         |  |           |           |  |   |         |         |  |  |      |      |  

|                                           |                                    |                                  |       |                            |        |       |       |        |        |   |       |        |        |  
|------------------------------------------ | ---------------------------------- | -------------------------------- | ----- | -------------------------- | ------ | ----- | ----- | ------ | ------ | - | ----- | ------ | ------ | -
|                                           |                                    |                                  |       | Increase (Decrease) Due to
|                                           |                                    |                                  |       |                           
|                                           |                                    | Volume                           |       | Rate                       |        | Total
|                                           |                                    |                                  |       |                            |        |       |       |       
|Changes in Net Interest
Income            
|                                          
|                                          
|                                          
|                                          
|Interest earning assets:                  
|                                          
|                                          
|                                          
|                                          
|                                           | Loans, net                         |                                  | $     | 10,297                     |        |       | $     | (3,136 | )      |   | $     | 7,161  |       
|                                          
|                                          
|                                          
|                                          
|                                           | Investment securities              |                                  |       | 285                        |        |       |       | (574   | )      |   |       | (289   | )     
|                                          
|                                          
|                                          
|                                          
|                                           | Mortgage backed securities         |                                  |       | 11,409                     |        |       |       | (238   | )      |   |       | 11,171 |       
|                                          
|                                          
|                                          
|                                          
|                                           | Trading securities                 |                                  |       | 378                        |        |       |       | (1,013 | )      |   |       | (635   | )     
|                                          
|                                          
|                                          
|                                          
|                                           | Interest bearing deposits in banks |                                  |       | 254                        |        |       |       | 42     |        |   |       | 296    |       
|                                          
|                                          
|                                          
|                                          
|                                           | FHLB stock                         |                                  |       | 145                        |        |       |       | 3      |        |   |       | 148    |       
|                                          
|                                          
|                                          
|                                          
|                                           | Federal funds sold                 |                                  |       | (64                        | )      |       |       | (165   | )      |   |       | (229   | )     
|                                          
|                                          
|                                          
|                                          
|                                           | Commercial paper                   |                                  |       | 347                        |        |       |       |       |        |   |       | 347    |       
|                                           |                                    |                                  |       |                            |        |       |       |        |        |   |       |       
|                                           | Total change in interest income    |                                  |       | 23,051                     |        |       |       | (5,081 | )      |   |       | 17,970 |       
|                                          
|                                          
|                                          
|                                          
|Interest bearing liabilities:             
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Interest checking                |       |                            | 332    |       |       |        | (1,114 | ) |       |        | (782   | )
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Money market                     |       |                            | 3,399  |       |       |        | 1,339  |   |       |        | 4,738  |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Savings                          |       |                            | 80     |       |       |        | (331   | ) |       |        | (251   | )
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Passbook gold                    |       |                            | 397    |       |       |        | (1,697 | ) |       |        | (1,300 | )
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Time deposits                    |       |                            | 15,261 |       |       |        | (4,691 | ) |       |        | 10,570 |  
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | FHLB advances                    |       |                            | (3,807 | )     |       |        | (2,132 | ) |       |        | (5,939 | )
|                                          
|                                          
|                                          
|                                          
|                                           |                                    | Other borrowings                 |       |                            | 1,947  |       |       |        | (212   | ) |       |        | 1,735  |  
|                                           |                                    |                                  |       |                            |        |       |       |        |        |   |       |       
|                                           |                                    | Total change in interest expense |       |                            | 17,609 |       |       |        | (8,838 | ) |       |        | 8,771  |  
|                                           |                                    |                                  |       |                            |        |       |       |        |        |   |       |       
|Increase (decrease) in net interest income |                                    | $                                | 5,442 |                            |        | $     | 3,757 |        |        | $ | 9,199 |       
|                                           |                                    |                                  |       |                            |        |       |       |        |        |   |       |       

36



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##### Table of Contents



Noninterest Income

Noninterest income for the year ended December 31, 1999, was $25.8 million
compared with $56.2 million for the same period in 1998, a decrease of $30.3
million. This decrease is primarily the result of lower gains on sale of loans
from the now-discontinued mortgage banking division.

The following table reflects the components of noninterest income for the years
ended December 31, 1999 and 1998 ($ in thousands):

|                                        |  |                                  |        |      |  |            |        |  |  |          |         |  
|--------------------------------------- |  | -------------------------------- | ------ | ---- |  | ---------- | ------ |  |  | -------- | ------- | -
|                                        |  | For the Years Ended December 31,
|                                        |  |                                 
|                                        |  |                                  |        |      |  |            |        |  |  | Increase
|                                        |  | 1999                             |        | 1998 |  | (Decrease)
|                                        |  |                                  |        |      |  |           
|Service charges on deposit accounts     |  | $                                | 5,409  |      |  | $          | 4,472  |  |  | $        | 937     |  
|                                       
|                                       
|                                       
|                                       
|Loan service fees                       |  |                                  | 6,584  |      |  |            | 692    |  |  |          | 5,892   |  
|                                       
|                                       
|                                       
|                                       
|Loan fee income                         |  |                                  | 4,281  |      |  |            | 2,486  |  |  |          | 1,795   |  
|                                       
|                                       
|                                       
|                                       
|Income from mortgage banking activities |  |                                  |       |      |  |            | 40,600 |  |  |          | (40,600 | )
|                                       
|                                       
|                                       
|                                       
|Gain on sale of loans, net              |  |                                  | 3,602  |      |  |            | 2,890  |  |  |          | 712     |  
|                                       
|                                       
|                                       
|                                       
|Gain on sale of securities, net         |  |                                  |       |      |  |            | 867    |  |  |          | (867    | )
|                                       
|                                       
|                                       
|                                       
|Net trading account (loss) profit       |  |                                  | (714   | )    |  |            | 173    |  |  |          | (887    | )
|                                       
|                                       
|                                       
|                                       
|Generations Gold fee income             |  |                                  | 1,424  |      |  |            | 970    |  |  |          | 454     |  
|                                       
|                                       
|                                       
|                                       
|Merchant charge card processing fees    |  |                                  | 569    |      |  |            | 466    |  |  |          | 103     |  
|                                       
|                                       
|                                       
|                                       
|Foreign exchange income                 |  |                                  | 96     |      |  |            | 111    |  |  |          | (15     | )
|                                       
|                                       
|                                       
|                                       
|Gain on sale of branch deposits         |  |                                  | 1,098  |      |  |            |       |  |  |          | 1,098   |  
|                                       
|                                       
|                                       
|                                       
|Gain on branch relocation(s)            |  |                                  | 1,289  |      |  |            |       |  |  |          | 1,289   |  
|                                       
|                                       
|                                       
|                                       
|Other income                            |  |                                  | 2,194  |      |  |            | 2,430  |  |  |          | (236    | )
|                                        |  |                                  |        |      |  |            |        |  |  |          |         |  
|Total noninterest income                |  | $                                | 25,832 |      |  | $          | 56,157 |  |  | $        | (30,325 | )
|                                        |  |                                  |        |      |  |            |        |  |  |          |         |  

Noninterest Expense

Total noninterest expenses for the year ended December 31, 1999, were $88.1
million, compared with $142.4 million for the same period in 1998, a decrease of
$54.3 million. G&A expenses for the year ended December 31, 1999, included in
the noninterest expense total, were $84.4 million, compared with $129.0 million
for the same period in 1998, a decrease of $44.6 million. These decreases were
primarily the result of discontinuing mortgage-banking operations, which
accounted for a $50.9 million expense reduction. Also during 1999, the Companys
branch expansion program contributed $8.6 million to the G&A expense total.
Merger and acquisition expenses, primarily employee severance benefits, were $0
for 1999 compared to $3.2 million in 1998.

37



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##### Table of Contents



The following table reflects the components of noninterest expense for the years
ended December 31, 1999 and 1998 ($ in thousands):

|                                               |  |                                  |        |      |  |            |         |   |  |          |         |  
|---------------------------------------------- |  | -------------------------------- | ------ | ---- |  | ---------- | ------- | - |  | -------- | ------- | -
|                                               |  | For the Years Ended December 31,
|                                               |  |                                 
|                                               |  |                                  |        |      |  |            |         |   |  | Increase
|                                               |  | 1999                             |        | 1998 |  | (Decrease)
|                                               |  |                                  |        |      |  |           
|Salaries and benefits                          |  | $                                | 41,716 |      |  | $          | 53,257  |   |  | $        | (11,541 | )
|                                              
|                                              
|                                              
|                                              
|Net occupancy expense                          |  |                                  | 15,957 |      |  |            | 13,623  |   |  |          | 2,334   |  
|                                              
|                                              
|                                              
|                                              
|Advertising and marketing                      |  |                                  | 1,103  |      |  |            | 18,776  |   |  |          | (17,673 | )
|                                              
|                                              
|                                              
|                                              
|FDIC and state assessments                     |  |                                  | 1,613  |      |  |            | 1,190   |   |  |          | 423     |  
|                                              
|                                              
|                                              
|                                              
|Data processing fees and services              |  |                                  | 4,823  |      |  |            | 3,743   |   |  |          | 1,080   |  
|                                              
|                                              
|                                              
|                                              
|Telephone expense                              |  |                                  | 1,760  |      |  |            | 2,693   |   |  |          | (933    | )
|                                              
|                                              
|                                              
|                                              
|Legal and professional                         |  |                                  | 2,292  |      |  |            | 4,348   |   |  |          | (2,056  | )
|                                              
|                                              
|                                              
|                                              
|Postage and supplies                           |  |                                  | 4,102  |      |  |            | 20,813  |   |  |          | (16,711 | )
|                                              
|                                              
|                                              
|                                              
|Other operating expense                        |  |                                  | 11,064 |      |  |            | 10,574  |   |  |          | 490     |  
|                                               |  |                                  |        |      |  |            |         |   |  |          |         |  
|G & A expenses                                 |  |                                  | 84,430 |      |  |            | 129,017 |   |  |          | (44,587 | )
|                                              
|                                              
|                                              
|                                              
|Merger & acquisition expenses                  |  |                                  |       |      |  |            | 3,233   |   |  |          | (3,233  | )
|                                              
|                                              
|                                              
|                                              
|Restructuring cost                             |  |                                  |       |      |  |            | 6,673   |   |  |          | (6,673  | )
|                                              
|                                              
|                                              
|                                              
|Provision for losses on ORE                    |  |                                  | 80     |      |  |            | 1,603   |   |  |          | (1,523  | )
|                                              
|                                              
|                                              
|                                              
|ORE (income) expense, net                      |  |                                  | (307   | )    |  |            | (40     | ) |  |          | (267    | )
|                                              
|                                              
|                                              
|                                              
|Amortization of goodwill & premium on deposits |  |                                  | 3,910  |      |  |            | 1,930   |   |  |          | 1,980   |  
|                                               |  |                                  |        |      |  |            |         |   |  |          |         |  
|Total noninterest expense                      |  | $                                | 88,113 |      |  | $          | 142,416 |   |  | $        | (54,303 | )
|                                               |  |                                  |        |      |  |            |         |   |  |          |         |  

Minority Interests

The minority interest from subsidiary trust, which represents the after-tax cost
of borrowings through RBI Capital Trust 1 (RBI Capital), formed in July 1997
in connection with our trust preferred securities offering, was $1.7 million for
both 1999 and 1998.







Years Ended December 31, 1998 and 1997

Comparison of Balance Sheets at December 31, 1998 and 1997

Overview

Total assets were $2.5 billion at December 31, 1998 and $1.7 billion at December
31, 1997, an increase of $826.3 million. This growth was primarily the result
of: (1) $330.0 million of internal growth; (2) $423.5 million in deposits
acquired via purchase; and (3) the completion of a stock offering of 2.6 million
shares of our common stock in May 1998 with net proceeds of $72.9 million.

Investment and Mortgage-Backed Securities

Investment and mortgage-backed securities, consisting of U.S. Treasury and
federal agency securities, were $129.8 million in 1998 compared to $115.8
million in 1997, an increase of $14.0 million or 12.1%.

Loans and Loans Held for Sale

Total loans at December 31, 1998, included $1.9 billion of loans held in
portfolio and $184.2 million of loans held for sale, a total of $2.1 billion. At
December 31, 1997, these amounts were $1.2 billion and $187.2 million,
respectively. The $671.3 million increase in total portfolio loans was primarily
comprised of a $286.9 million increase in one-to-four family residential loans
and a $116.8 million increase in High LTV loans.

Allowance for Loan Losses

The allowance for loan losses amounted to $28.1 million at December 31, 1998,
compared to $22.0 million at December 31, 1997. At December 31, 1998, the
allowance for loan losses included $24.8 million allocated to loans originated
by us, $1.2 million allocated to the March 1995 Purchase, $539,000 allocated to
loans

38



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##### Table of Contents



purchased from Crossland, $543,000 allocated to the July 1997 Purchase and $1.0
million allocated to other loan purchases.

Activity to the allowance during 1998 included a $14.3 million provision for
loan losses, loan charge-offs (net of recoveries) of $3.9 million, and $4.3
million reallocated from the allowance to loan discounts. At December 31, 1998,
the amount of unearned discount on purchased loans not allocated to allowance
totaled $3.9 million.

Nonperforming Assets

Nonperforming assets amounted to $42.8 million, or 1.71% of total assets, at
December 31, 1998, compared with $38.8 million, or 2.31% of total assets, at
December 31, 1997. Nonperforming loans totaled $37.8 million at the end of 1998,
an increase of $7.2 million from the prior year-end.

Deposits

Total deposits were $2.2 billion at December 31, 1998, compared with $1.5
billion at the prior year-end, an increase of $715.7 million. Internal growth
accounted for $292.2 million of the increase while deposits acquired through
branch purchase contributed $423.5 million.

Senior Debt

On September 24, 1998, we entered into a loan agreement (Loan Agreement) with
SunTrust Bank, Central Florida, N.A. (SunTrust), which SunTrust extended us a
non-revolving line of credit for up to $25.0 million. Interest on the loan made
for the Senior Debt (the Senior Debt) is payable monthly and the maturity date
for the loan is September 25, 1999. On September 25, 1998, we received the full
$25.0 million balance under the line of credit. The proceeds of the Senior Debt
were used to augment our regulatory capital. See discussion of Senior Debt under
comparison of Balance Sheets at December 31, 1999 and 1998 beginning on page 32.

Unsecured Debt

On December 30, 1998, certain of our directors executed unsecured notes with an
aggregate balance of $7.0 million with us to further augment the regulatory
capital. The total amount was retained by us to cover our debt servicing
obligations. The unsecured notes matured on September 25, 1999.

Stockholders Equity

Stockholders equity was $163.6 million at December 31, 1998, or 6.5% of total
assets, compared with $102.5 million, or 6.11% of total assets, at December 31,
1997. At December 31, 1998, our capital ratios were all in excess of minimum
regulatory guidelines for an institution to be considered well-capitalized.

Comparison of Results of Operations for Years
Ended December 31, 1998 and 1997

Overview

We incurred a net loss of $12.4 million, or $1.34 per share, for the year ended
December 31, 1998 compared to net income of $7.8 million, or $1.16 per share,
for the same period in 1997. Return on average assets for the year ended
December 31, 1998, was a negative .58%, compared with a positive .53% for the
same period in 1997, while the return on average equity was a negative 7.91%,
compared with a positive 9.46% for the same period in 1997. Results for 1998
were negatively impacted by a restructuring charge of $6.7 million, $818,000 in
other costs associated with legal and other issues and $10.0 million in loss
provisions for loans transferred to portfolio at year-end 1998.

Our commercial banking business segment, pretax net income before minority
interest reductions and reductions for non-operating items, was $19.2 million
for 1998 compared to $14.2 million for 1997, an increase of 35.1%. On the same
basis our mortgage-banking segment incurred a loss of $15.0 million for 1998
compared to net income of $2.8 million for 1997.

39



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##### Table of Contents



Business Segment Information

In 1998 and 1997, our operations were divided into two business segments,
commercial banking and mortgage banking. Commercial banking activities included
our lending for portfolio purposes, deposit gathering through the retail branch
network, investment and liquidity management. Mortgage banking activities
included originating, purchasing, and servicing mortgage loans. We provided
support for our mortgage banking division in areas such as secondary marketing
and data processing. The following were the business segment results of
operation for the years ended December 31, 1998 and 1997. We elected to report
our business segments before non-operating items and without allocation of
income taxes and minority interests.

Commercial Banking Activities

Income from commercial banking activities (before non-operating items, income
taxes and minority interests) was $19.2 million for 1998 compared to $14.2
million for 1997, an increase of $5.0 million. Net interest income in the
commercial banking segment increased by $17.8 million due to increased lending
volumes from expansion of the Banks commercial lending activities. General and
Administrative (G&A) expenses increased by $11.5 million, primarily due to
lending and branch expansion. Noninterest income, comprised primarily of service
fees and other charges on deposit accounts and servicing fees on the loan
portfolio, increased by $757,000 from $14.1 million to $14.9 million.

Mortgage Banking Activities

We incurred a net loss before non-operating items, income taxes and minority
interests from mortgage banking activities of $15.0 million for 1998 compared to
net income of $2.8 million for 1997, on the same basis. The expansion of the
High LTV Loan origination function was the primary reason for the $52.1 million
increase in G&A expenses from $17.5 million for 1997 to $69.6 million for 1998.
Noninterest income, primarily gains on sale of loans, increased $25.9 million
from $15.3 million for 1997 to $41.3 million for 1998. In 1998, sales of High
LTV Loans accounted for $36.2 million or 89.2% of total noninterest income in
the mortgage banking segment.

In the fourth quarter of 1998, we undertook a restructuring of our mortgage
banking operations, which significantly reduced the size and scope of our
mortgage origination activities. Due to their limited marketability, High LTV
Loans amounting to $116.8 million and nonconforming first lien mortgage loans
amounting to $127.3 million were transferred from the held for sale category to
the portfolio category. A loan loss provision of $10.0 million was recorded upon
transfer. Sales of High LTV Loans and nonconforming first lien mortgage loans
had been the predominant source of noninterest income for the mortgage banking
segment. Without revenues from sales of these loans, noninterest income was
significantly less than the cost of production, primarily advertising, direct
mail and postage for telemarketing activities. The Bank ceased originating High
LTV Loans and subsequently reduced its originations of nonconforming first lien
mortgage loans in December 1998. All telemarketing and direct mail origination
efforts were also eliminated. A restructuring charge of $6.7 million was
recorded, primarily for severance benefits payable to mortgage banking employees
whose positions were eliminated and an $818,000 charge was recorded for legal
and other costs not includable as part of the restructuring charge.

40



---



##### Table of Contents



Business Segment Data
Years Ended December 31, 1998 and 1997
($ in thousands)

|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|--------------------------------------------------------------------------------- |  | ---------- | --------- | -------- |  | ------- | ------- | ---------- |  | -------- | --------- | ------- |  | - | --------- |  |  | - | ------ |  |  | - | --------- | -
|                                                                                  |  | 1998       |           | 1997    
|                                                                                  |  |            |           |         
|                                                                                  |  | Commercial |           | Mortgage |  | Company |         | Commercial |  | Mortgage |           | Company
|                                                                                  |  | Banking    |           | Banking  |  | Total   |         | Banking    |  | Banking  |           | Total  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |        
|Balance Sheet Data (at period end):                                              
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Total assets                                                                      |  | $          | 2,320,941 |          |  | $       | 184,176 |            |  | $        | 2,505,117 |         |  | $ | 1,580,952 |  |  | $ | 97,879 |  |  | $ | 1,678,831 |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Nonperforming assets                                                              |  |            | 36,301    |          |  |         | 6,484   |            |  |          | 42,785    |         |  |   | 36,453    |  |  |   | 2,338  |  |  |   | 38,791    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Operating Data:                                                                  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest income                                                                   |  |            | 141,554   |          |  |         | 31,239  |            |  |          | 172,793   |         |  |   | 108,704   |  |  |   | 9,130  |  |  |   | 117,834   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest expense                                                                  |  |            | 71,677    |          |  |         | 17,932  |            |  |          | 89,609    |         |  |   | 56,591    |  |  |   | 4,151  |  |  |   | 60,742    |  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net interest income                                                               |  |            | 69,877    |          |  |         | 13,307  |            |  |          | 83,184    |         |  |   | 52,113    |  |  |   | 4,979  |  |  |   | 57,092    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loan loss provision (recurring)                                                   |  |            | 4,266     |          |  |         |        |            |  |          | 4,266     |         |  |   | 3,247     |  |  |   |       |  |  |   | 3,247     |  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net interest income after
loan loss provision                                     |  |            | 65,611    |          |  |         | 13,307  |            |  |          | 78,918    |         |  |   | 48,866    |  |  |   | 4,979  |  |  |   | 53,845    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Noninterest income                                                                |  |            | 14,905    |          |  |         | 41,252  |            |  |          | 56,157    |         |  |   | 14,148    |  |  |   | 15,303 |  |  |   | 29,451    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|General and administrative
(G & A) expenses                                       |  |            | 59,447    |          |  |         | 69,570  |            |  |          | 129,017   |         |  |   | 47,938    |  |  |   | 17,482 |  |  |   | 65,420    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Other noninterest (income) expense                                                |  |            | (40       | )        |  |         |        |            |  |          | (40       | )       |  |   | 396       |  |  |   |       |  |  |   | 396       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Amort. of goodwill & premium
on deposits                                          |  |            | 1,930     |          |  |         |        |            |  |          | 1,930     |         |  |   | 479       |  |  |   |       |  |  |   | 479       |  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net income (loss) before non-
operating items, income
taxes and minority interest |  | $          | 19,179    |          |  | $       | (15,011 | )          |  | $        | 4,168     |         |  | $ | 14,201    |  |  | $ | 2,800  |  |  | $ | 17,001    |  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Non-operating items:                                                             
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loan loss provision on loans
transferred to portfolio                             |  |            |           |          |  |         |         |            |  |          | (9,995    | )       |  |   |           |  |  |   |        |  |  |   |          |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Merger/acquisition expenses                                                       |  |            |           |          |  |         |         |            |  |          | (3,233    | )       |  |   |           |  |  |   |        |  |  |   | (1,144    | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Restructuring cost                                                                |  |            |           |          |  |         |         |            |  |          | (6,673    | )       |  |   |           |  |  |   |        |  |  |   |          |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Provision for losses on ORE                                                       |  |            |           |          |  |         |         |            |  |          | (1,603    | )       |  |   |           |  |  |   |        |  |  |   | (530      | )
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net income (loss) before income
taxes and minority interest                       |  |            |           |          |  |         |         |            |  |          | (17,336   | )       |  |   |           |  |  |   |        |  |  |   | 15,327    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income tax benefit (expense)                                                      |  |            |           |          |  |         |         |            |  |          | 6,602     |         |  |   |           |  |  |   |        |  |  |   | (6,165    | )
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net income (loss) before minority interests                                       |  |            |           |          |  |         |         |            |  |          | (10,734   | )       |  |   |           |  |  |   |        |  |  |   | 9,162     |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Minority interest in income from
subsidiary trust                                 |  |            |           |          |  |         |         |            |  |          | (1,687    | )       |  |   |           |  |  |   |        |  |  |   | (701      | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Minority interest in FFO                                                          |  |            |           |          |  |         |         |            |  |          |          |         |  |   |           |  |  |   |        |  |  |   | (674      | )
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  
|Net (loss) income                                                                 |  |            |           |          |  |         |         |            |  | $        | (12,421   | )       |  |   |           |  |  |   |        |  |  | $ | 7,787     |  
|                                                                                  |  |            |           |          |  |         |         |            |  |          |           |         |  |   |           |  |  |   |        |  |  |   |           |  

41



---



##### Table of Contents



Analysis of Net Interest Income

Net interest income for 1998 was $83.2 million compared to $57.1 million for
1997. This $26.1 million or 45.7% increase was primarily due to growth in total
interest earning assets. During the same period, interest expense increased by
$28.9 million from $60.7 million for 1997 to $89.6 million for 1998. Average
asset yield increased 11 basis points from 8.46% for 1997 to 8.57% for 1998 and
average-earning assets increased by $628.0 million. The average cost of interest
bearing liabilities increased three basis points from 4.83% to 4.86%. Net
interest spread increased seven basis points from 3.64% for 1997 to 3.71% for
1998, and the net interest margin, which includes the benefit of noninterest
bearing funds, increased from 4.08% for 1997 to 4.12% for 1998.

Noninterest Income

Noninterest income for 1998 was $56.2 million compared with $29.5 million for
1997, an increase of $26.7 million. This increase is primarily the result of
higher income derived from the mortgage banking operations, which increased
$25.6 million, and a $1.6 million increase in loan fee income.

The following table reflects the components of noninterest income for the years
ended December 31, 1998 and 1997 ($ in thousands):

|                                                   |  |                    |        |      |  |            |        |  |  |          |        |  
|-------------------------------------------------- |  | ------------------ | ------ | ---- |  | ---------- | ------ |  |  | -------- | ------ | -
|                                                   |  | For the Years     
|                                                   |  | Ended December 31,
|                                                   |  |                   
|                                                   |  |                    |        |      |  |            |        |  |  | Increase
|                                                   |  | 1998               |        | 1997 |  | (Decrease)
|                                                   |  |                    |        |      |  |           
|Income from mortgage banking operations            |  | $                  | 40,600 |      |  | $          | 15,009 |  |  | $        | 25,591 |  
|                                                  
|                                                  
|                                                  
|                                                  
|Service charges on deposit accounts                |  |                    | 4,472  |      |  |            | 3,701  |  |  |          | 771    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Loan service fees                                  |  |                    | 692    |      |  |            | 401    |  |  |          | 291    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Other loan fee income                              |  |                    | 2,486  |      |  |            | 1,210  |  |  |          | 1,276  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Gain on sale of loans, net                         |  |                    | 2,890  |      |  |            | 5,184  |  |  |          | (2,294 | )
|                                                  
|                                                  
|                                                  
|                                                  
|Recovery of unrealized loss on loans
held for sale |  |                    |       |      |  |            | 150    |  |  |          | (150   | )
|                                                  
|                                                  
|                                                  
|                                                  
|Gain on sale of securities, net                    |  |                    | 867    |      |  |            | 544    |  |  |          | 323    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Net trading account profit (loss)                  |  |                    | 173    |      |  |            | 764    |  |  |          | (591   | )
|                                                  
|                                                  
|                                                  
|                                                  
|Generations Gold fee income                        |  |                    | 970    |      |  |            | 517    |  |  |          | 453    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Merchant charge card processing fees               |  |                    | 466    |      |  |            | 265    |  |  |          | 201    |  
|                                                  
|                                                  
|                                                  
|                                                  
|Foreign exchange income                            |  |                    | 111    |      |  |            | 72     |  |  |          | 39     |  
|                                                  
|                                                  
|                                                  
|                                                  
|Other income                                       |  |                    | 2,430  |      |  |            | 1,634  |  |  |          | 796    |  
|                                                   |  |                    |        |      |  |            |        |  |  |          |        |  
|Total noninterest income                           |  | $                  | 56,157 |      |  | $          | 29,451 |  |  | $        | 26,706 |  
|                                                   |  |                    |        |      |  |            |        |  |  |          |        |  

42



---



##### Table of Contents



The following table summarizes the average yields earned on interest earning
assets and the average rates paid on interest bearing liabilities for the years
ended December 31, 1998 and 1997 ($ in thousands):

|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |      |      | 
|--------------------------------------- | ----------------------------- | ---------------------------------- | ----------------- | ---------------------------------- | --------- | --------- | --------- | -------- | ------- | ------ | ------ | ------- | ---- | -------- | ---- | ---- | --------- | ------- | --------- | ------- | ------- | ------ | ------ | - | ---- | ---- | ---- | 
|                                        |                               |                                    |                   |                                    |           | 1998      |           | 1997    
|                                        |                               |                                    |                   |                                    |           |           |           |         
|                                        |                               |                                    |                   |                                    |           | Average   |           |          |         |        |        | Average |      | Average  |      |      |           |         |           | Average
|                                        |                               |                                    |                   |                                    |           | Balance   |           | Interest |         | Rate   |        | Balance |      | Interest |      | Rate
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |     
|Summary of Average Rates               
|                                       
|                                       
|                                       
|                                       
|Interest earning assets:               
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Loans net                          |                   | $                                  | 1,773,697 |           |           | $        | 159,495 |        |        |         | 8.97 | %        |      | $    | 1,188,796 |         |           | $       | 105,803 |        |        |   | 8.84 | %   
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Investment securities              |                   |                                    | 38,430    |           |           |          | 2,364   |        |        |         | 6.15 |          |      |      | 43,599    |         |           |         | 2,598   |        |        |   | 5.96 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Mortgage backed securities         |                   |                                    | 23,171    |           |           |          | 1,669   |        |        |         | 7.20 |          |      |      | 80,381    |         |           |         | 5,252   |        |        |   | 6.54 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Trading securities                 |                   |                                    | 56,160    |           |           |          | 2,859   |        |        |         | 5.09 |          |      |      | 1,505     |         |           |         | 59      |        |        |   | 3.92 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Interest bearing deposits in banks |                   |                                    | 2,655     |           |           |          | 128     |        |        |         | 4.81 |          |      |      | 15,456    |         |           |         | 902     |        |        |   | 5.83 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | FHLB stock                         |                   |                                    | 11,337    |           |           |          | 843     |        |        |         | 7.44 |          |      |      | 8,786     |         |           |         | 642     |        |        |   | 7.26 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Federal funds sold                 |                   |                                    | 105,783   |           |           |          | 5,435   |        |        |         | 5.07 |          |      |      | 44,746    |         |           |         | 2,579   |        |        |   | 5.69 |     
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|                                        |                               | Total interest earning assets      |                   |                                    | 2,011,233 |           |           |          | 172,793 |        |        |         | 8.57 |          |      |      | 1,383,269 |         |           |         | 117,835 |        |        |   | 8.46 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               | Noninterest earning assets         |                   |                                    | 138,353   |           |           |          |         |        |        |         |      |          |      |      | 85,635    |        
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|                                        |                               | Total assets                       |                   | $                                  | 2,149,586 |           |           |          |         |        |        |         |      |          |      | $    | 1,468,904 |        
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|                                        | Interest bearing liabilities:
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    | Interest checking |                                    | $         | 151,460   |           |          | $       | 2,201  |        |         |      | 1.45     | %    |      | $         | 109,090 |           |         | $       | 1,168  |        |   |      | 1.07 | %   
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    | Money market      |                                    |           | 101,683   |           |          |         | 2,743  |        |         |      | 2.70     |      |      |           | 64,800  |           |         |         | 1,976  |        |   |      | 3.05 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    | Savings           |                                    |           | 64,757    |           |          |         | 1,394  |        |         |      | 2.15     |      |      |           | 45,455  |           |         |         | 1,204  |        |   |      | 2.65 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    | Passbook gold     |                                    |           | 270,045   |           |          |         | 12,904 |        |         |      | 4.78     |      |      |           | 222,957 |           |         |         | 10,901 |        |   |      | 4.89 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    | Time deposits     |                                    |           | 1,106,167 |           |          |         | 61,916 |        |         |      | 5.60     |      |      |           | 761,188 |           |         |         | 42,600 |        |   |      | 5.60 |     
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    |                   | FHLB advances                      |           |           | 104,894   |          |         |        | 6,103  |         |      |          | 5.82 |      |           |         | 25,776    |         |         |        | 1,364  |   |      |      | 5.29 | 
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    |                   | Other borrowings                   |           |           | 43,976    |          |         |        | 2,348  |         |      |          | 5.34 |      |           |         | 27,105    |         |         |        | 1,529  |   |      |      | 5.29 | 
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|                                        |                               |                                    |                   | Total interest bearing liabilities |           |           | 1,842,982 |          |         |        | 89,609 |         |      |          | 4.86 |      |           |         | 1,256,371 |         |         |        | 60,742 |   |      |      | 4.83 | 
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    |                   | Noninterest bearing liabilities    |           |           | 153,164   |          |         |        |        |         |      |          |      |      |           |         | 131,873   |        
|                                       
|                                       
|                                       
|                                       
|                                        |                               |                                    |                   | Stockholders equity               |           |           | 153,440   |          |         |        |        |         |      |          |      |      |           |         | 80,660    |        
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|                                        |                               |                                    |                   | Total liabilities and equity       |           | $         | 2,149,586 |          |         |        |        |         |      |          |      |      |           | $       | 1,468,904 |        
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|Net interest income/net interest spread |                               |                                    |                   |                                    |           | $         | 83,184    |          |         |        | 3.71   | %       |      |          |      |      |           | $       | 57,093    |         |         |        | 3.64   | %
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     
|Net interest margin                     |                               |                                    |                   |                                    |           |           |           |          |         |        | 4.12   | %       |      |          |      |      |           |         |           |         |         |        | 4.08   | %
|                                        |                               |                                    |                   |                                    |           |           |           |          |         |        |        |         |      |          |      |      |           |         |           |         |         |        |        |   |      |     

|                                           |                                    |                                  |        |        |                                |       |       |       |       |   |        |        |        |  | 
|------------------------------------------ | ---------------------------------- | -------------------------------- | ------ | ------ | ------------------------------ | ----- | ----- | ----- | ----- | - | ------ | ------ | ------ |  | 
|                                           |                                    |                                  |        |        | Increase (Decrease) Due to (1)
|                                           |                                    |                                  |        |        |                               
|Changes
in Net Interest Income             |                                    | Volume                           |        | Rate   |                                | Total
|                                           |                                    |                                  |        |        |                                |      
|Interest earning assets:                  
|                                          
|                                          
|                                          
|                                          
|                                           | Loans, net                         |                                  | $      | 52,082 |                                |       | $     | 1,611 |       |   | $      | 53,693 |       
|                                          
|                                          
|                                          
|                                          
|                                           | Investment securities              |                                  |        | (316   | )                              |       |       | 82    |       |   |        | (234   | )     
|                                          
|                                          
|                                          
|                                          
|                                           | Mortgage backed securities         |                                  |        | (4,069 | )                              |       |       | 486   |       |   |        | (3,583 | )     
|                                          
|                                          
|                                          
|                                          
|                                           | Trading securities                 |                                  |        | 2,778  |                                |       |       | 22    |       |   |        | 2,800  |       
|                                          
|                                          
|                                          
|                                          
|                                           | Interest bearing deposits in banks |                                  |        | (639   | )                              |       |       | (135  | )     |   |        | (774   | )     
|                                          
|                                          
|                                          
|                                          
|                                           | FHLB stock                         |                                  |        | 185    |                                |       |       | 16    |       |   |        | 201    |       
|                                          
|                                          
|                                          
|                                          
|                                           | Federal funds sold                 |                                  |        | 3,165  |                                |       |       | (309  | )     |   |        | 2,856  |       
|                                           |                                    |                                  |        |        |                                |       |       |       |       |   |        |        |       
|                                           |                                    | Total change in interest income  |        |        | 53,186                         |       |       |       | 1,773 |   |        |        | 54,959 | 
|                                          
|                                          
|                                          
|                                          
|Interest bearing liabilities:             
|                                          
|                                          
|                                          
|                                          
|                                           | Interest checking                  |                                  |        | 538    |                                |       |       | 495   |       |   |        | 1,033  |       
|                                          
|                                          
|                                          
|                                          
|                                           | Money market                       |                                  |        | 1,018  |                                |       |       | (251  | )     |   |        | 767    |       
|                                          
|                                          
|                                          
|                                          
|                                           | Savings                            |                                  |        | 445    |                                |       |       | (255  | )     |   |        | 190    |       
|                                          
|                                          
|                                          
|                                          
|                                           | Passbook gold                      |                                  |        | 2,255  |                                |       |       | (252  | )     |   |        | 2,003  |       
|                                          
|                                          
|                                          
|                                          
|                                           | Time deposits                      |                                  |        | 19,336 |                                |       |       | (20   | )     |   |        | 19,316 |       
|                                          
|                                          
|                                          
|                                          
|                                           | FHLB advances                      |                                  |        | 4,589  |                                |       |       | 150   |       |   |        | 4,739  |       
|                                          
|                                          
|                                          
|                                          
|                                           | Other borrowings                   |                                  |        | 875    |                                |       |       | (56   | )     |   |        | 819    |       
|                                           |                                    |                                  |        |        |                                |       |       |       |       |   |        |        |       
|                                           |                                    | Total change in interest expense |        |        | 29,056                         |       |       |       | (189  | ) |        |        | 28,867 | 
|                                           |                                    |                                  |        |        |                                |       |       |       |       |   |        |        |       
|Increase (decrease) in net interest income |                                    | $                                | 24,130 |        |                                | $     | 1,962 |       |       | $ | 26,092 |       
|                                           |                                    |                                  |        |        |                                |       |       |       |       |   |        |        |       

43



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##### Table of Contents



Noninterest Expense

Total noninterest expenses for 1998 were $142.4 million compared with $68.0
million for the same period in 1997, an increase of $74.4 million. G & A
expenses for 1998, included in the noninterest expense total, were $129.0
million compared with $65.4 million, an increase of $63.6 million. The increase
was primarily the result of increased costs from an overall expansion of our
loan production and mortgage banking capabilities. Merger and acquisition
expenses, primarily employee severance benefits, were $3.2 million for 1998
compared to $1.1 million in 1997. Also included in 1998 results was the $6.7
million restructuring charge, $1.6 million in provisions for losses on ORE and
$1.9 million for amortization of premiums paid for branch acquisition and
amortization of goodwill.

The following table reflects the components of noninterest expense for the years
ended December 31, 1998 and 1997 ($ in thousands):

|                                                 |  |                    |         |      |  |            |        |  |  |          |        |  
|------------------------------------------------ |  | ------------------ | ------- | ---- |  | ---------- | ------ |  |  | -------- | ------ | -
|                                                 |  | For the Years     
|                                                 |  | Ended December 31,
|                                                 |  |                   
|                                                 |  |                    |         |      |  |            |        |  |  | Increase
|                                                 |  | 1998               |         | 1997 |  | (Decrease)
|                                                 |  |                    |         |      |  |           
|Salaries and benefits                            |  | $                  | 53,257  |      |  | $          | 31,926 |  |  | $        | 21,331 |  
|                                                
|                                                
|                                                
|                                                
|Net occupancy expense                            |  |                    | 13,623  |      |  |            | 9,376  |  |  |          | 4,247  |  
|                                                
|                                                
|                                                
|                                                
|Advertising and marketing                        |  |                    | 18,776  |      |  |            | 4,712  |  |  |          | 14,064 |  
|                                                
|                                                
|                                                
|                                                
|FDIC and state assessments                       |  |                    | 1,190   |      |  |            | 1,034  |  |  |          | 156    |  
|                                                
|                                                
|                                                
|                                                
|Data processing fees and services                |  |                    | 3,743   |      |  |            | 2,970  |  |  |          | 773    |  
|                                                
|                                                
|                                                
|                                                
|Telephone expense                                |  |                    | 2,693   |      |  |            | 1,686  |  |  |          | 1,007  |  
|                                                
|                                                
|                                                
|                                                
|Legal and professional                           |  |                    | 4,348   |      |  |            | 2,418  |  |  |          | 1,930  |  
|                                                
|                                                
|                                                
|                                                
|Postage and supplies                             |  |                    | 20,813  |      |  |            | 5,639  |  |  |          | 15,174 |  
|                                                
|                                                
|                                                
|                                                
|Other operating expense                          |  |                    | 10,574  |      |  |            | 5,659  |  |  |          | 4,915  |  
|                                                 |  |                    |         |      |  |            |        |  |  |          |        |  
|Total G & A expenses                             |  |                    | 129,017 |      |  |            | 65,420 |  |  |          | 63,597 |  
|                                                
|                                                
|                                                
|                                                
|Merger and acquisition expenses                  |  |                    | 3,233   |      |  |            | 1,144  |  |  |          | 2,089  |  
|                                                
|                                                
|                                                
|                                                
|Restructuring cost                               |  |                    | 6,673   |      |  |            |       |  |  |          | 6,673  |  
|                                                
|                                                
|                                                
|                                                
|Provision for losses on ORE                      |  |                    | 1,603   |      |  |            | 530    |  |  |          | 1,073  |  
|                                                
|                                                
|                                                
|                                                
|ORE expense, net of ORE income                   |  |                    | (40     | )    |  |            | 396    |  |  |          | (436   | )
|                                                
|                                                
|                                                
|                                                
|Amortization of goodwill and premium on deposits |  |                    | 1,930   |      |  |            | 479    |  |  |          | 1,451  |  
|                                                 |  |                    |         |      |  |            |        |  |  |          |        |  
|Total noninterest expense                        |  | $                  | 142,416 |      |  | $          | 67,969 |  |  | $        | 74,447 |  
|                                                 |  |                    |         |      |  |            |        |  |  |          |        |  

Minority Interests

The minority interest reduction from subsidiary trust, which represents the
after-tax cost of borrowings through RBI Capital Trust 1 (RBI Capital), formed
in July 1997 in connection with our trust preferred securities offering, was
$1.7 million and $701,000 for 1998 and 1997, respectively.

44



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##### Table of Contents



Selected Quarterly Financial Data

Summarized selected unaudited quarterly financial information for the years
ended December 31, 1999 and 1998 follows ($ in thousands except share data):

|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        |  | 
|-------------------------- |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ |  |  | - | ------ |  | 
|                           |  | 1999   
|                           |  |         |       
|                           |  | First   |        | Second  |  | Third   |        | Fourth 
|                           |  | Quarter |        | Quarter |  | Quarter |        | Quarter
|                           |  |         |        |         |  |         |        |        
|Interest income            |  | $       | 46,679 |         |  | $       | 46,965 |         |  | $ | 48,158 |  |  | $ | 48,961 | 
|                          
|                          
|                          
|                          
|Interest expense           |  |         | 24,256 |         |  |         | 24,202 |         |  |   | 24,795 |  |  |   | 25,128 | 
|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Net interest income        |  | $       | 22,423 |         |  | $       | 22,763 |         |  | $ | 23,363 |  |  | $ | 23,833 | 
|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Net income                 |  | $       | 2,855  |         |  | $       | 2,988  |         |  | $ | 3,063  |  |  | $ | 1,786  | 
|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Earnings per share-diluted |  | $       | .25    |         |  | $       | .26    |         |  | $ | .27    |  |  | $ | .16    | 
|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Earnings per share-basic   |  | $       | .27    |         |  | $       | .28    |         |  | $ | .28    |  |  | $ | .16    | 
|                           |  |         |        |         |  |         |        |         |  |   |        |  |  |   |        | 

|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |   | 
|--------------------------------- |  | - | ------- |  | ------- | - | ------- | - | ------- | - | ------ |  |  | - | ------- | - | 
|                                  |  |   | 1998   
|                                  |  |   |         | 
|                                  |  |   | First   |  | Second  |   | Third   |   | Fourth 
|                                  |  |   | Quarter |  | Quarter |   | Quarter |   | Quarter
|                                  |  |   |         |  |         |   |         |   |         |  
|Interest income                   |  | $ | 35,960  |  |         | $ | 40,322  |   |         | $ | 50,777 |  |  | $ | 45,734  |  
|                                 
|                                 
|                                 
|                                 
|Interest expense                  |  |   | 18,558  |  |         |   | 21,302  |   |         |   | 24,446 |  |  |   | 25,303  |  
|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |  
|Net interest income               |  | $ | 17,402  |  |         | $ | 19,020  |   |         | $ | 26,331 |  |  | $ | 20,431  |  
|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |  
|Net income (loss)                 |  | $ | 3,065   |  |         | $ | (1,514  | ) |         | $ | 7,125  |  |  | $ | (21,097 | )
|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |  
|Earnings (loss) per share-diluted |  | $ | .36     |  |         | $ | (.17    | ) |         | $ | .63    |  |  | $ | (2.04   | )
|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |  
|Earnings (loss) per share-basic   |  | $ | .40     |  |         | $ | (.17    | ) |         | $ | .69    |  |  | $ | (2.04   | )
|                                  |  |   |         |  |         |   |         |   |         |   |        |  |  |   |         |  







Asset/Liability Management and Liquidity

Liquidity

The Asset/Liability Management Committee (ALCO) reviews our liquidity, which
is our ability to generate sufficient cash flow to meet the funding needs of
current loan demand, deposit withdrawals, and other cash demands. The primary
sources of funds consist of deposits, amortization and prepayments of loans,
sales of investments, other funds from operations and our capital. We are a
member of the FHLB and have the ability to borrow to supplement our liquidity
needs.

Those FHLB borrowings, known as advances, are secured by the Banks mortgage
loan portfolio, and the terms and rates charged for FHLB advances vary based on
an institutions loan portfolio and in response to general economic conditions.
As a shareholder of the FHLB, the Bank is authorized to apply for advances from
this bank. A variety of borrowing plans is offered by the FHLB, each with its
own maturity and interest rate. The FHLB will consider various factors,
including an institutions regulatory capital position, net income, quality and
composition of assets, lending policies and practices, and level of current
borrowings from all sources, in determining the amount of credit to extend to an
institution. As of December 31, 1999, the Bank had $769,000 of outstanding
advances from the FHLB. See Business  Supervision and Regulation  Federal
Home Loan Bank System and Liquidity.

At December 31, 1999, the Banks liquidity ratio, defined as net cash and
investments of $520.1 million divided by net deposits and short-term liabilities
of $2.28 billion, was 22.81% as compared to 10.24% at December 31, 1998. Net
liquid assets were $330.5 million in excess of the amount required by Florida
banking regulations.

45



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##### Table of Contents



Asset/Liability Management

One of our primary objectives is to reduce fluctuations in net interest income
caused by changes in interest rates. To manage interest rate risk, the Board of
Directors has established interest-rate risk policies and procedures, that
delegate to ALCO the responsibility to monitor and report on interest-rate risk,
devise strategies to manage interest-rate risk, monitor loan originations and
deposit activity, and approve all pricing strategies.

The management of interest-rate risk is one of the most significant factors
affecting the ability to achieve future earnings. The measure of the mismatch of
assets maturing or re-pricing within certain periods, and liabilities maturing
or re-pricing within the same period, is commonly referred to as the gap for
such period. Controlling the maturity or re-pricing of an institutions assets
and liabilities in order to minimize interest rate risk is commonly referred to
as gap management. Negative gap occurs when, during a specific time period, an
institutions liabilities are scheduled to re-price more rapidly than its
assets, so that, barring other factors affecting interest income and expense, in
periods of rising interest rates the institutions interest expense would
increase more rapidly than its interest income, and in periods of falling
interest rates the institutions interest expense would decrease more rapidly
than its interest income. Positive gap occurs when an institutions assets are
scheduled to re-price more rapidly than its liabilities, so that, barring other
factors affecting interest income and expense, in periods of falling interest
rates the institutions interest income would decrease more rapidly than its
interest expense, and in periods of rising interest rates the institutions
interest income would increase more rapidly than its interest expense. It is
common to focus on the one-year gap, which is the difference between the dollar
amount of assets and the dollar amount of liabilities maturing or re-pricing
within the next 12 months.

ALCO uses an industry standard computer modeling system to analyze the impact of
financial strategies prior to their implementation. The system attempts to
simulate the asset and liability base and project future operating results under
a variety of interest rates and spread assumptions. Through this management
tool, we can also, among other things, project the effects of changing our asset
and liability mix and modifying our balance sheet, and identify appropriate
investment opportunities. The results of these simulations are evaluated within
the context of the interest-rate risk policy, which sets out target levels for
the appropriate level of interest-rate risk.

The policy is to maintain a cumulative one-year gap of no more than plus or
minus 15% of total assets. We conform to this policy primarily by managing the
maturity distribution of our investment portfolio and emphasizing loan
originations and loan purchases carrying variable interest rates tied to
interest-sensitive indices. Additionally, the Bank has joined the FHLB to
enhance its liquidity position and to provide it with the ability to utilize
long-term fixed-rate advances to improve the match between interest earning
assets and interest bearing liabilities in certain periods. Currently,
off-balance-sheet hedging instruments are not used to manage overall interest
rate risk. In 1999, the Company discontinued the use of these instruments. We
may expand our use of off-balance sheet hedging instruments to manage exposure
to overall interest rate risk in the future, subject to board approval.

The cumulative one-year gap at December 31, 1999, was a negative $159.0 million,
or a negative 6.19% (expressed as a percentage of total assets). We will attempt
to moderate any lengthening of the re-pricing structure of earning assets by
emphasizing variable-rate assets and, where appropriate, match-funding
longer-term fixed-rate loans with FHLB advances. See Business  Sources of
Funds.

The following table presents the maturities or re-pricing of interest earning
assets and interest bearing liabilities at December 31, 1999. The balances shown
have been derived based on the financial characteristics of the various assets
and liabilities. Adjustable and floating-rate assets are included in the period
in which interest rates are next scheduled to adjust rather than their scheduled
maturity dates. Fixed-rate loans are shown in the periods in which they are
scheduled to be repaid according to contractual amortization and, where
appropriate, prepayment assumptions, based on the coupon rates in the portfolio
have been used to adjust the repayment amounts. Re-pricing of time deposits is
based on their scheduled maturities. Based on an analysis of our deposit
accounts and our experience in the markets in which we operate, statement
savings deposits are

46



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##### Table of Contents



assumed to re-price at 18.0% of the total balance in the first 12 months, 11.0%
in the second 12 months, 13.0% in the third and fourth year, and the remaining
45.0% in the fifth year. Passbook savings deposits are assumed to re-price at
41.6% of the total balance in the first 12 months, 18.3% in the second 12
months, 19.9% in the third year, and the remaining 20.2% in the fourth year.
Re-pricing of interest checking is assumed to occur at 15.8% in the first 12
months, 9.2% in the second 12 months, 13.0% in the third and fourth year, and
the remaining 49.0% in the fifth year. The re-pricing of regular money market
accounts is assumed at 23.7% of the total balance in the first year, 7.3% in the
second year, 8.0% in the third and fourth years with the remaining 53.0% in the
fifth year, while money market gold accounts re-price at 66.8% in the first
year, 9.2% in the second year, 4.0% in the third and fourth years and the
remaining 16.0% in the fifth year.

[Balance of page intentionally left blank]

47



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##### Table of Contents



INTEREST SENSITIVITY ANALYSIS

December 31, 1999
($ in thousands)

|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |      | 
|------------------------------------------------------------------------------------------------------------------------ | ----------------- | - | ---------- | ------- | ----------- |  | --------- | ---- | ------------ | - | --------- | ------- | ------ |  | ------ | ---- | ---- | - | -------- | ------- |  |  | ------ | ---- | ------ | - | ------- | ----- |  |  | ---- | ---- | 
|                                                                                                                         |                   |   | 0-3 months |         | 4-12 months |  | 1-5 Years |      | Over 5 Years
|                                                                                                                         |                   |   |            |         |             |  |           |      |             
|                                                                                                                         |                   |   |            |         |             |  | Yield/    |      |              |   |           |         | Yield/ |  |        |      |      |   | Yield/   |         |  |  |        |      | Yield/
|                                                                                                                         |                   |   | Amount     |         | Rate        |  | Amount    |      | Rate         |   | Amount    |         | Rate   |  | Amount |      | Rate
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |     
|Interest earning assets:                                                                                                
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|U.S. Treasury securities
and government agencies                                                                         |                   | $ | 3,000      |         |             |  | 4.50      | %    |              | $ | 13,978    |         |        |  | 4.81   | %    |      | $ | (147     | )       |  |  | 0.00   | %    |        | $ | 4,987   |       |  |  | 6.60 | %   
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Revenue bonds                                                                                                            |                   |   |           |         |             |  | 0.00      |      |              |   |          |         |        |  | 0.00   |      |      |   | 900      |         |  |  | 8.60   |      |        |   | 2,837   |       |  |  | 6.13 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Mortgage backed securities                                                                                               |                   |   | 30,885     |         |             |  | 5.59      |      |              |   | 95,846    |         |        |  | 6.28   |      |      |   | 77,771   |         |  |  | 6.33   |      |        |   | 143,834 |       |  |  | 6.33 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Commercial paper                                                                                                         |                   |   | 39,888     |         |             |  | 5.95      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Trading securities                                                                                                       |                   |   | 928        |         |             |  | 0.00      |      |              |   | 3,966     |         |        |  | 0.00   |      |      |   | 25,743   |         |  |  | 2.13   |      |        |   | 8,592   |       |  |  | 7.24 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Federal funds sold                                                                                                       |                   |   | 27,060     |         |             |  | 4.71      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Interest bearing deposits
in banks                                                                                       |                   |   | 3,758      |         |             |  | 4.37      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|FHLB stock                                                                                                               |                   |   | 13,816     |         |             |  | 7.50      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Portfolio loans                                                                                                          |                   |   | 321,740    |         |             |  | 8.65      |      |              |   | 655,319   |         |        |  | 8.45   |      |      |   | 573,663  |         |  |  | 8.69   |      |        |   | 339,379 |       |  |  | 8.34 |     
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     
|Total interest earning
Assets                                                                                            |                   | $ | 441,075    |         |             |  | 7.30      |      |              | $ | 769,109   |         |        |  | 8.07   |      |      | $ | 677,930  |         |  |  | 8.17   |      |        | $ | 499,629 |       |  |  | 7.72 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Interest bearing liabilities:                                                                                           
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Deposits                                                                                                                
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                         | Interest checking |   | $          | 7,030   |             |  |           | .74  |              |   | $         | 22,651  |        |  |        | .74  |      |   | $        | 157,782 |  |  |        | .74  |        |   | $       |      |  |  |      | 0.00 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                         | Money market      |   |            | 29,869  |             |  |           | 4.04 |              |   |           | 91,280  |        |  |        | 4.04 |      |   |          | 88,240  |  |  |        | 3.75 |        |   |         | 2,169 |  |  |      | 0.00 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                         | Savings           |   |            | 8,982   |             |  |           | 2.02 |              |   |           | 7,470   |        |  |        | 1.53 |      |   |          | 44,571  |  |  |        | 1.53 |        |   |         |      |  |  |      | 0.00 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                         | Passbook gold     |   |            | 24,872  |             |  |           | 4.14 |              |   |           | 78,750  |        |  |        | 4.14 |      |   |          | 145,351 |  |  |        | 4.14 |        |   |         |      |  |  |      | 0.00 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                         | Time deposits     |   |            | 219,073 |             |  |           | 5.12 |              |   |           | 841,017 |        |  |        | 5.27 |      |   |          | 383,613 |  |  |        | 5.72 |        |   |         | 2,470 |  |  |      | 5.85 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|FHLB advances                                                                                                            |                   |   | 769        |         |             |  | 7.50      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Outside borrowings                                                                                                       |                   |   | 37,241     |         |             |  | 4.96      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Fed funds purchased                                                                                                      |                   |   |           |         |             |  | 0.00      |      |              |   |          |         |        |  | 0.00   |      |      |   |         |         |  |  | 0.00   |      |        |   |        |       |  |  | 0.00 |     
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Holding company debt                                                                                                     |                   |   |           |         |             |  | 0.00      |      |              |   |          |         |        |  | 0.00   |      |      |   | 9,167    |         |  |  | 7.27   |      |        |   | 17,434  |       |  |  | 7.55 |     
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     
|Total interest bearing
Liabilities                                                                                       |                   | $ | 327,836    |         |             |  | 4.75      |      |              | $ | 1,041,168 |         |        |  | 4.95   |      |      | $ | 828,724  |         |  |  | 4.08   |      |        | $ | 22,073  |       |  |  | 6.62 |     
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     
|Excess (deficiency) of interest-
earning assets over interest-
bearing liabilities                                       |                   | $ | 113,239    |         |             |  | 2.55      | %    |              | $ | (272,059  | )       |        |  | 3.12   | %    |      | $ | (150,794 | )       |  |  | 4.09   | %    |        | $ | 477,556 |       |  |  | 1.10 | %   
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     
|Cumulative excess (deficiency)
of interest earning assets
over interest bearing
liabilities                              |                   | $ | 113,239    |         |             |  | 2.55      | %    |              | $ | (158,820  | )       |        |  | 2.89   | %    |      | $ | (309,614 | )       |  |  | 3.34   | %    |        | $ | 167,942 |       |  |  | 3.27 | %   
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     
|Cumulative excess (deficiency)
of interest earning assets
over interest bearing
liabilities as a percent
of total assets |                   |   |            |         |             |  | 4.41      | %    |              |   |           |         |        |  | (6.19  | )%   |      |   |          |         |  |  | (12.06 | )%   |        |   |         |       |  |  | 6.54 | %   
|                                                                                                                         |                   |   |            |         |             |  |           |      |              |   |           |         |        |  |        |      |      |   |          |         |  |  |        |      |        |   |         |       |  |  |      |     

48



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##### Table of Contents



Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this Annual Report on Form 10-K or incorporated
therein by reference (other than the financial statements and statements of
historical fact), including, without limitation, statements as to management
expectations and beliefs presented under the captions Letters to Our
Stockholders and Managements Discussion and Analysis, may constitute
forward-looking statements. Forward-looking statements are made based upon our
expectations and beliefs concerning future development and their potential
effect upon us. There can be no assurance that future developments will be in
accordance with our expectations or that the effect of future developments will
be those anticipated by us.

We wish to caution readers that the assumptions which form the basis for
forward-looking statements with respect to or that may impact earnings for the
year ended December 31, 2000 and thereafter include many factors that are beyond
our ability to control or estimate precisely. These risks and uncertainties
include, but are not limited to, the market demand and acceptance of our
existing and new loan and deposit products, the impact of competitive products,
our ability to achieve the desired consolidation efficiencies from our planned
acquisitions, and changes in economic conditions, such as inflation or
fluctuations in interest rates.

While we periodically reassess material trends and uncertainties affecting our
results of operations and financial condition in connection with our preparation
of the stockholders letter and managements discussion and analysis contained
in our annual report, we do not intend to review or revise any particular
forward-looking statement referenced herein in light of future events.









|        |                                            
|------- | -------------------------------------------
|Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item is provided on pages 53 through 90 within the
Consolidated Financial Statements and notes thereto.









|        |                                                                                     
|------- | ------------------------------------------------------------------------------------
|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

There are no such items to report.

[Balance of page intentionally left blank]

49



---



##### Table of Contents






PART III







Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors of the Company

The information relating to the Directors appears in our Proxy Statement for the
2000 Annual Meeting of Stockholders under the caption Proposal One  Election
of Directors and is incorporated by reference.

Senior Executive Officers of the Company and Bank

The following list sets forth the name and age of each executive officer of the
Company or the Bank as of December 31, 1999, and all positions held by each such
officer (and the period each such position has been held), a brief account of
each such officers business experience during the past five years and certain
other information:

Alfred T. May(62)Mr. May has served as Chief Executive Officer since
April 1999 and President since December 1998. Mr. May formerly served as
Director and Chairman of the Board with FFO and its subsidiary Firstate Federal
Savings and Loan of Osceola County, and President of Mid-State Federal Savings
Bank. Mr. May has more than 39 years experience in the banking industry.

Fred Hemmer(45)Mr. Hemmer has served as Senior Executive Vice
President of the Bank in charge of Corporate Banking and Special Assets since
joining the Bank in 1991. He previously served as Executive Vice President of
Rutenberg Corporation, a real estate development company based in Clearwater,
Florida, from 1980 to 1991. Mr. Hemmer is a certified public accountant and was
employed by Arthur Andersen & Co. from 1976 to 1980. Mr. Hemmer is also a
licensed real estate broker and certified general contractor.

William R. Falzone(52)Mr. Falzone has served as Treasurer of the Company
since March 1996 and First Executive Vice President and Chief Financial Officer
of the Bank since February 1994. He was employed at Florida Federal Savings Bank
from 1983 through 1991 where he served as Senior Vice President and Controller
and as Director of Financial Services. More recently, he was a Senior Consultant
for Stogniew and Associates, a nationwide consulting firm. He has more than 25
years of banking experience and is a certified public accountant.

John W. Fischer, Jr. (52)Mr. Fischer has served as Executive Vice
President of the Bank in charge of Consumer Banking since December 1993. He has
more than 20 years of banking experience in retail branch management and
consumer and residential lending. Mr. Fischer formerly served as Regional
Marketing Director for Western Reserve Life in Clearwater, Regional Vice
President of Great Western Bank in Miami and Executive Vice President/Consumer
Financial Services for Florida Federal Savings Bank. Mr. Fischer holds a life,
health, annuity and Series 7 securities license.

Kathleen A. Reinagel(48)Executive Vice President of the Bank in
charge of Credit and Loan Administration, Ms. Reinagel who has served in her
present position with the Company since August 1993, has over 20 years of
experience in the lending field with concentration in credit and underwriting,
loan documentation, due diligence and loan review. Ms. Reinagel formerly served
as Vice President of WRH Mortgage, St. Petersburg, Florida and Vice President,
Department Manager of Commercial Real Estate of Florida Federal Savings Bank.

Christopher M. Hunter(49)Mr. Hunter has served as Secretary of the
Company since its inception in November 1995 and has served as First Senior Vice
President and General Counsel of the Bank since March 1995. Mr. Hunter has been
a member of the Florida Bar for 17 years working primarily with financial
institutions. Mr. Hunter formerly served as Corporate Counsel for Florida
Federal Savings Bank, staff counsel with the Resolution Trust Corporation, and
general partner of Stock, Gouze & Hunter, P.A.

50



---



##### Table of Contents









Item 11. EXECUTIVE COMPENSATION

Information required by this item appears in our Proxy Statement for the 2000
Annual Meeting of Shareholders under the captions, Executive Compensation and
Benefits and Certain Transactions, is incorporated by reference.







Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT







Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by items 12 and 13 are incorporated by reference from our
Proxy Statement for the 2000 Annual Meeting.




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 52
through 86.

|   |  |                                                              |                                              
|-- |  | ------------------------------------------------------------ | ---------------------------------------------
|1. |  | Financial Statements                                        
|  
|  
|  
|  
|   |  | Financial Statements of Republic Bancshares, Inc.           
|  
|  
|  
|  
|   |  | Report of Independent Certified Public Accountants          
|  
|  
|  
|  
|   |  | Consolidated Balance Sheets at December 31, 1999 and 1998   
|  
|  
|  
|  
|   |  | Consolidated Statements of Operations, Stockholders Equity,
|  
|  
|  
|  
|   |  | Comprehensive Income (Loss), and Cash Flows for:            
|  
|  
|  
|  
|   |  |                                                              | Years Ended December 31, 1999, 1998, and 1997
|  
|  
|  
|  
|   |  |                                                              | Notes to Consolidated Financial Statements   

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



| |     |                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------
| | (b) | The following reports on Form 8-K filed during fiscal year ending
December 31, 1999, are hereby incorporated by reference.



|1. |  | Report on Form 8-K dated 01/07/99  Announced reorganization
of mortgage banking division and amendment of projected loss
for 1998.                                                                                                                                                                                                                                                            
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Report on Form 8-K dated 02/01/99  Announced the retainment
of an investment banker to evaluate strategic alternatives for
us for 1999, including the possible sale of the Company.                                                                                                                                                                                                           
|  
|3. |  | Report on Form 8-K dated 07/08/99  Announced Companys
decision to remain independent for the foreseeable future.                                                                                                                                                                                                                                                                             
|  
|4. |  | Report on Form 8-K dated 10/04/99  Announced (1) the
completion of a $15.0 million private placement of
subordinated debt; (2) refinancing of $7.0 million of debt to
directors; (3) completion of sale of the Georgia office of the
Savings Bank and subsequent voluntary dissolution of the
thrift; and (4) paydown of the principal amount of $25.0
million SunTrust loan by $15.0 million.
|  
|5. |  | Report on Form 8-K dated 11/10/99  Announced the filing of a
complaint against the Company by 18 former shareholders of
Bankers Savings Bank, FSB.                                                                                                                                                                                                                                            
|  
|6. |  | Report on Form 8-K dated 11/19/99  Announced retention of an
executive search firm to assist the Board of Directors in a
search for a new President and Chief Executive Officer of both
the Company and the Bank.                                                                                                                                                                             



| |     |          
| | --- | ---------
| | (c) | Exhibits:



|23.0 |  | Consent of Independent Certified Public Accountants
|---- |  | ---------------------------------------------------
|    
|27.0 |  | Financial Data Schedule                            

51



---



##### Table of Contents



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Republic Bancshares, Inc.:

We have audited the accompanying consolidated balance sheets of Republic
Bancshares, Inc. (a Florida corporation) and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of operations,
stockholders equity, comprehensive income (loss), and cash flows for each of
the three years in the period ended December 31, 1999. 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 Bankers Savings Bank, FSB and
Lochaven Federal Savings and Loan Association; companies acquired during 1998 in
transactions accounted for as a pooling of interests, as discussed in Note 1,
which statements reflect total net interest income of 9 percent of the related
consolidated total, for the year ended December 31, 1997. These statements were
audited by other auditors whose reports have been furnished to us and our
opinion, insofar as it relates to amounts included for Bankers Savings Bank, FSB
and Lochaven Federal Savings and Loan Association is based solely upon the
reports 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 reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports 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, 1999 and 1998, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles.



| | /s/ ARTHUR ANDERSEN LLP
| | -----------------------

Tampa, Florida
February 11, 2000

52



---



##### Table of Contents



REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands, except share data)

|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |         |           |           | 
|--------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ------------------------------------------ | ------- | ------------ | --------- | --------- | ------- | --------- | --------- | 
|                                                          |                                                                                                                                                                                         |                              |                                            |         | December 31,
|                                                          |                                                                                                                                                                                         |                              |                                            |         |             
|                                                          |                                                                                                                                                                                         |                              |                                            |         | 1999         |           | 1998     
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |          
|                                                          |                                                                                                                                                                                         |                              | ASSETS                                    
|                                                         
|                                                         
|                                                         
|                                                         
|Cash and due from banks                                   |                                                                                                                                                                                         | $                            | 62,643                                     |         |              | $         | 46,143    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Interest bearing deposits in banks                        |                                                                                                                                                                                         |                              | 3,758                                      |         |              |           | 3,467     |        
|                                                         
|                                                         
|                                                         
|                                                         
|Federal funds sold                                        |                                                                                                                                                                                         |                              | 27,060                                     |         |              |           | 93,000    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Commercial Paperavailable for sale                       |                                                                                                                                                                                         |                              | 39,888                                     |         |              |           |          |        
|                                                         
|                                                         
|                                                         
|                                                         
|Investment securities:                                   
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Available for sale                                                                                                                                                                      |                              |                                            | 25,555  |              |           |           | 31,003  |          
|                                                         
|                                                         
|                                                         
|                                                         
|Mortgage-backed securities:                              
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Held to maturity                                                                                                                                                                        |                              |                                            | 33,068  |              |           |           |        |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Available for sale                                                                                                                                                                      |                              |                                            | 315,268 |              |           |           | 32,713  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Trading                                                                                                                                                                                 |                              |                                            | 39,229  |              |           |           | 66,067  |          
|                                                         
|                                                         
|                                                         
|                                                         
|FHLB stock                                                |                                                                                                                                                                                         |                              | 13,816                                     |         |              |           | 11,152    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Loans held for sale                                       |                                                                                                                                                                                         |                              |                                           |         |              |           | 184,176   |        
|                                                         
|                                                         
|                                                         
|                                                         
|Loans, net of allowance for loan losses                   |                                                                                                                                                                                         |                              | 1,861,715                                  |         |              |           | 1,868,212 |        
|                                                         
|                                                         
|                                                         
|                                                         
|Premises and equipment, net                               |                                                                                                                                                                                         |                              | 52,574                                     |         |              |           | 60,274    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Other real estate owned acquired through foreclosure, net |                                                                                                                                                                                         |                              | 5,332                                      |         |              |           | 4,951     |        
|                                                         
|                                                         
|                                                         
|                                                         
|Accrued interest receivable                               |                                                                                                                                                                                         |                              | 14,747                                     |         |              |           | 13,452    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Goodwill and premium on deposits                          |                                                                                                                                                                                         |                              | 32,827                                     |         |              |           | 36,916    |        
|                                                         
|                                                         
|                                                         
|                                                         
|Other assets                                              |                                                                                                                                                                                         |                              | 38,546                                     |         |              |           | 53,591    |        
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | Total assets                               |         | $            | 2,566,026 |           |         | $         | 2,505,117 | 
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | LIABILITIES AND STOCKHOLDERS
EQUITY      
|                                                         
|                                                         
|                                                         
|                                                         
|Liabilities:                                             
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Deposits-                                                                                                                                                                              
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                                                                                                                         | Noninterest bearing checking |                                            | $       | 127,619      |           |           | $       | 138,934   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                                                                                                                         | Interest checking            |                                            |         | 187,463      |           |           |         | 189,392   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                                                                                                                         | Money market                 |                                            |         | 211,558      |           |           |         | 159,868   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                                                                                                                         | Savings                      |                                            |         | 309,996      |           |           |         | 366,817   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                                                                                                                                                                         | Time deposits                |                                            |         | 1,446,173    |           |           |         | 1,332,401 |          
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | Total deposits                             |         |              | 2,282,809 |           |         |           | 2,187,412 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Securities sold under agreements to repurchase                                                                                                                                          |                              |                                            | 37,241  |              |           |           | 36,640  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | FHLB advances                                                                                                                                                                           |                              |                                            | 769     |              |           |           | 25,000  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Holding company senior debt                                                                                                                                                             |                              |                                            | 9,167   |              |           |           | 25,000  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Convertible subordinated debt                                                                                                                                                           |                              |                                            | 14,684  |              |           |           |        |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Term subordinated debt                                                                                                                                                                  |                              |                                            | 2,750   |              |           |           |        |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Holding company unsecured notes                                                                                                                                                         |                              |                                            |        |              |           |           | 7,000   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Other liabilities                                                                                                                                                                       |                              |                                            | 19,611  |              |           |           | 31,718  |          
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | Total liabilities                          |         |              | 2,367,031 |           |         |           | 2,312,770 | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Company-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely junior
subordinated debentures of the Company                                            |                              |                                            | 28,750  |              |           |           | 28,750  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Stockholders equity:                                                                                                                                                                  
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Perpetual preferred convertible stock ($20.00 par, 100,000 shares authorized,
75,000 shares issued and outstanding. Liquidation preference $6.6 million
at December 31, 1999 and 1998.) |                              |                                            | 1,500   |              |           |           | 1,500   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Common stock ($2.00 par, 20,000,000 shares authorized, 10,555,889 and 10,323,194
shares issued and outstanding at December 31, 1999 and 1998, respectively)                             |                              |                                            | 21,112  |              |           |           | 20,646  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Capital surplus                                                                                                                                                                         |                              |                                            | 128,780 |              |           |           | 125,364 |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Retained earnings                                                                                                                                                                       |                              |                                            | 26,530  |              |           |           | 16,103  |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Net unrealized losses on available for sale securities, net of tax effect                                                                                                               |                              |                                            | (7,677  | )            |           |           | (16     | )        
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | Total stockholders equity                 |         |              | 170,245   |           |         |           | 163,597   | 
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        
|                                                          |                                                                                                                                                                                         |                              | Total liabilities and stockholders equity |         | $            | 2,566,026 |           |         | $         | 2,505,117 | 
|                                                          |                                                                                                                                                                                         |                              |                                            |         |              |           |           |        

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

53



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##### Table of Contents



REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share and per share data)

|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |       |        |         |         | 
|------------------------------------------------------------------------ | ------------------------- | ------------------------------ | ---------------------------------------------- | --------------------------------------------------- | ------ | -------------------------------- | --------- | ------ | ------ | ------- | --------- | ----- | ------ | ------- | ------- | 
|                                                                         |                           |                                |                                                |                                                     |        | FOR THE YEARS ENDED DECEMBER 31,
|                                                                         |                           |                                |                                                |                                                     |        |                                 
|                                                                         |                           |                                |                                                |                                                     |        | 1999                             |           | 1998   |        | 1997   
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |        
|                                                                         | INTEREST INCOME:         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Interest and fees on loans                     |                                                     | $      | 166,656                          |           |        | $      | 159,495 |           |       | $      | 105,803 |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on investment securities                   |        |                                  | 2,075     |        |        |         | 2,364     |       |        |         | 2,598   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on mortgage-backed securities              |        |                                  | 12,840    |        |        |         | 1,669     |       |        |         | 5,252   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on trading securities                      |        |                                  | 2,224     |        |        |         | 2,859     |       |        |         | 59      | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on federal funds sold                      |        |                                  | 5,206     |        |        |         | 5,435     |       |        |         | 2,578   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Interest on commercial paper                   |                                                     |        | 347                              |           |        |        |        |           |       |        |        |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on other investments                       |        |                                  | 1,415     |        |        |         | 971       |       |        |         | 1,544   | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Total interest income                               |        |                                  | 190,763   |        |        |         | 172,793   |       |        |         | 117,834 | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         | INTEREST EXPENSE:        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on deposits                                |        |                                  | 94,133    |        |        |         | 81,157    |       |        |         | 57,849  | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on FHLB advances                           |        |                                  | 164       |        |        |         | 6,103     |       |        |         | 1,364   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on holding company debt                    |        |                                  | 2,277     |        |        |         | 507       |       |        |         | 392     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Interest on other borrowings                        |        |                                  | 1,806     |        |        |         | 1,842     |       |        |         | 1,137   | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Total interest expense                              |        |                                  | 98,380    |        |        |         | 89,609    |       |        |         | 60,742  | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Net interest income                                 |        |                                  | 92,383    |        |        |         | 83,184    |       |        |         | 57,092  | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | PROVISION FOR LOAN LOSSES |                                |                                                | 9,923                                               |        |                                  |           | 14,261 |        |         |           | 3,247 |       
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Net interest income after provision for
loan losses |        |                                  | 82,460    |        |        |         | 68,923    |       |        |         | 53,845  | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         | NONINTEREST INCOME:      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Service charges and fees on deposits                |        |                                  | 5,409     |        |        |         | 4,472     |       |        |         | 3,701   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Loan service fees                                   |        |                                  | 6,584     |        |        |         | 692       |       |        |         | 401     | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Other loan fee income                               |        |                                  | 4,281     |        |        |         | 2,486     |       |        |         | 1,210   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Income from mortgage banking activities             |        |                                  |          |        |        |         | 40,600    |       |        |         | 15,009  | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Gain on sale of loans                               |        |                                  | 3,602     |        |        |         | 2,890     |       |        |         | 5,334   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Gain (loss) on securities, net                      |        |                                  | (714      | )      |        |         | 1,040     |       |        |         | 1,308   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                |                                                | Other operating income                              |        |                                  | 6,670     |        |        |         | 3,977     |       |        |         | 2,488   | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Total noninterest income                            |        |                                  | 25,832    |        |        |         | 56,157    |       |        |         | 29,451  | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | NONINTEREST EXPENSES:    
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           | Salaries and employee benefits |                                                |                                                     | 41,716 |                                  |           |        | 53,257 |         |           |       | 31,926 |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           | Net occupancy expense          |                                                |                                                     | 15,958 |                                  |           |        | 13,623 |         |           |       | 9,376  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           | Data processing fees           |                                                |                                                     | 4,823  |                                  |           |        | 3,743  |         |           |       | 2,970  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           | Advertising                    |                                                |                                                     | 1,103  |                                  |           |        | 18,776 |         |           |       | 4,712  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           | Other operating expense        |                                                |                                                     | 20,830 |                                  |           |        | 39,618 |         |           |       | 16,436 |        
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Total general and administrative expenses           |        |                                  | 84,430    |        |        |         | 129,017   |       |        |         | 65,420  | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Merger expenses                                |                                                     |        |                                 |           |        |        | 3,233   |           |       |        | 1,144   |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Restructuring cost                             |                                                     |        |                                 |           |        |        | 6,673   |           |       |        |        |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Provisions for losses on ORE                   |                                                     |        | 80                               |           |        |        | 1,603   |           |       |        | 530     |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | ORE expense (income), net                      |                                                     |        | (307                             | )         |        |        | (40     | )         |       |        | 396     |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         |                           |                                | Amortization of goodwill & premium on deposits |                                                     |        | 3,910                            |           |        |        | 1,930   |           |       |        | 479     |        
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | Total noninterest expenses                          |        |                                  | 88,113    |        |        |         | 142,416   |       |        |         | 67,969  | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|Income (loss) before income taxes and minority interest                  |                           |                                | 20,179                                         |                                                     |        |                                  | (17,336   | )      |        |         | 15,327    |      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Income tax (provision) benefit                                           |                           |                                | (7,800                                         | )                                                   |        |                                  | 6,602     |        |        |         | (6,165    | )    
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Minority interests in income from subsidiary trust                       |                           |                                | (1,687                                         | )                                                   |        |                                  | (1,687    | )      |        |         | (701      | )    
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Minority interest                                                        |                           |                                |                                               |                                                     |        |                                  |          |        |        |         | (674      | )    
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|                                                                         |                           |                                |                                                | NET INCOME (LOSS)                                   |        | $                                | 10,692    |        |        | $       | (12,421   | )     |        | $       | 7,787   | 
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|PER SHARE DATA:                                                         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net income (loss) per common share-basic                                 |                           | $                              | .99                                            |                                                     |        | $                                | (1.34     | )      |        | $       | 1.12      |      
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|Weighted average common shares outstanding-basic                         |                           |                                | 10,484,650                                     |                                                     |        |                                  | 9,286,813 |        |        |         | 6,693,970 |      
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|Net income (loss) per common and common equivalent shares-diluted        |                           | $                              | .95                                            |                                                     |        | $                                | (1.34     | )      |        | $       | 1.01      |      
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      
|Weighted average common and common equivalent
shares outstanding-diluted |                           |                                | 11,299,902                                     |                                                     |        |                                  | 9,286,813 |        |        |         | 7,920,926 |      
|                                                                         |                           |                                |                                                |                                                     |        |                                  |           |        |        |         |           |      

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

54



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##### Table of Contents



REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31,
1997, 1998 AND 1999

($ in thousands)

|                                                                          |  |                     |        |              |  |        |       |        |  |         |            |   |  |         |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------- | ------ | ------------ |  | ------ | ----- | ------ |  | ------- | ---------- | - |  | ------- | ------ | - |  | - | ------- | -
|                                                                          |  | Perpetual Preferred
|                                                                          |  | Convertible Stock   |        | Common Stock
|                                                                          |  |                     |        |             
|                                                                          |  | Shares              |        |              |  |        |       | Shares |  |         |            |   |  | Capital
|                                                                          |  | Issued              |        | Amount       |  | Issued |       | Amount |  | Surplus
|                                                                          |  |                     |        |              |  |        |       |        |  |        
|Balance, December 31, 1996                                                |  |                     | 75,000 |              |  | $      | 1,500 |        |  |         | 6,421,520  |   |  | $       | 12,842 |   |  | $ | 40,456  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net income                                                                |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized gains on
available for sale securities,
net of tax effect  |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |                     |       |              |  |        |      |        |  |         | 21,300     |   |  |         | 43     |   |  |   | 197     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net change in minority interest                                           |  |                     |       |              |  |        |      |        |  |         | (2,537     | ) |  |         | (5     | ) |  |   | (487    | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Issuance of common stock in
merger transaction                            |  |                     |       |              |  |        |      |        |  |         | 826,709    |   |  |         | 1,654  |   |  |   | 11,211  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Conversion of subordinated
debentures                                     |  |                     |       |              |  |        |      |        |  |         | 336,000    |   |  |         | 672    |   |  |   | 5,176   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                          |  |                     |        |              |  |        |       |        |  |         |            |   |  |         |        |   |  |   |         |  
|Balance, December 31, 1997                                                |  |                     | 75,000 |              |  |        | 1,500 |        |  |         | 7,602,992  |   |  |         | 15,206 |   |  |   | 56,553  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net loss                                                                  |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized losses on
available for sale securities,
net of tax effect |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |                     |       |              |  |        |      |        |  |         | 78,052     |   |  |         | 156    |   |  |   | 662     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Issuance of common stock                                                  |  |                     |       |              |  |        |      |        |  |         | 2,642,150  |   |  |         | 5,284  |   |  |   | 67,598  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Additional capital surplus from
non-qualified/performance
stock options   |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   | 551     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                          |  |                     |        |              |  |        |       |        |  |         |            |   |  |         |        |   |  |   |         |  
|Balance, December 31, 1998                                                |  |                     | 75,000 |              |  |        | 1,500 |        |  |         | 10,323,194 |   |  |         | 20,646 |   |  |   | 125,364 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net income                                                                |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized losses on
available for sale securities,
net of tax effect |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |                     |       |              |  |        |      |        |  |         | 232,695    |   |  |         | 466    |   |  |   | 2,313   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Additional capital surplus from
non-qualified/performance
stock options   |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   | 1,103   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |                     |       |              |  |        |      |        |  |         |           |   |  |         |       |   |  |   |        |  
|                                                                          |  |                     |        |              |  |        |       |        |  |         |            |   |  |         |        |   |  |   |         |  
|Balance, December 31, 1999                                                |  |                     | 75,000 |              |  | $      | 1,500 |        |  |         | 10,555,889 |   |  | $       | 21,112 |   |  | $ | 128,780 |  
|                                                                          |  |                     |        |              |  |        |       |        |  |         |            |   |  |         |        |   |  |   |         |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                          |  |          |         |            |  |                |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | -------- | ------- | ---------- |  | -------------- | ------ | - |  | - | ------- | -
|                                                                          |  |          |         |            |  | Net Unrealized
|                                                                          |  |          |         |            |  | Gains/(Losses)
|                                                                          |  |          |         |            |  | on Available  
|                                                                          |  | Retained |         | for Sale  
|                                                                          |  | Earnings |         | Securities |  | Total         
|                                                                          |  |          |         |            |  |               
|Balance, December 31, 1996                                                |  | $        | 21,265  |            |  | $              | (102   | ) |  | $ | 75,961  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net income                                                                |  |          | 7,787   |            |  |                |       |   |  |   | 7,787   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized gains on
available for sale securities,
net of tax effect  |  |          |        |            |  |                | 584    |   |  |   | 584     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |          |        |            |  |                |       |   |  |   | 240     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net change in minority interest                                           |  |          |        |            |  |                |       |   |  |   | (492    | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Issuance of common stock in
merger transaction                            |  |          |        |            |  |                |       |   |  |   | 12,865  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Conversion of subordinated
debentures                                     |  |          |        |            |  |                |       |   |  |   | 5,848   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |          | (263    | )          |  |                |       |   |  |   | (263    | )
|                                                                          |  |          |         |            |  |                |        |   |  |   |         |  
|Balance, December 31, 1997                                                |  |          | 28,789  |            |  |                | 482    |   |  |   | 102,530 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net loss                                                                  |  |          | (12,421 | )          |  |                |       |   |  |   | (12,421 | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized losses on
available for sale securities,
net of tax effect |  |          |        |            |  |                | (498   | ) |  |   | (498    | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |          |        |            |  |                |       |   |  |   | 818     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Issuance of common stock                                                  |  |          |        |            |  |                |       |   |  |   | 72,882  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Additional capital surplus from
non-qualified/performance
stock options   |  |          |        |            |  |                |       |   |  |   | 551     |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |          | (265    | )          |  |                |       |   |  |   | (265    | )
|                                                                          |  |          |         |            |  |                |        |   |  |   |         |  
|Balance, December 31, 1998                                                |  |          | 16,103  |            |  |                | (16    | ) |  |   | 163,597 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net income                                                                |  |          | 10,692  |            |  |                |       |   |  |   | 10,692  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Net unrealized losses on
available for sale securities,
net of tax effect |  |          |        |            |  |                | (7,661 | ) |  |   | (7,661  | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Exercise of stock options                                                 |  |          |        |            |  |                |       |   |  |   | 2,779   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Additional capital surplus from
non-qualified/performance
stock options   |  |          |        |            |  |                |       |   |  |   | 1,103   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Dividends on preferred stock                                              |  |          | (265    | )          |  |                |       |   |  |   | (265    | )
|                                                                          |  |          |         |            |  |                |        |   |  |   |         |  
|Balance, December 31, 1999                                                |  | $        | 26,530  |            |  | $              | (7,677 | ) |  | $ | 170,245 |  
|                                                                          |  |          |         |            |  |                |        |   |  |   |         |  

REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

($ in thousands)

|                                                                         |                                                                    |                               |        |                                  |        |      |         |      |      |   |       |       |     | 
|------------------------------------------------------------------------ | ------------------------------------------------------------------ | ----------------------------- | ------ | -------------------------------- | ------ | ---- | ------- | ---- | ---- | - | ----- | ----- | --- | 
|                                                                         |                                                                    |                               |        | For the years ended December 31,
|                                                                         |                                                                    |                               |        |                                 
|                                                                         |                                                                    |                               |        | 1999                             |        | 1998 |         | 1997
|                                                                         |                                                                    |                               |        |                                  |        |      |         |     
|Net income (loss)                                                        |                                                                    | $                             | 10,692 |                                  |        | $    | (12,421 | )    |      | $ | 7,787 |      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Unrealized gains on securities:                                         
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Unrealized holding gains (losses), net
of tax effect during period |                               |        | (7,661                           | )      |      |         | 369  |      |   |       | 1,128 |    
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Less reclassification adjustment for
gains realized in net income (loss) |                                                                    |                               |       |                                  |        |      | (867    | )    |      |   | (544  | )    
|                                                                         |                                                                    |                               |        |                                  |        |      |         |      |      |   |       |      
|                                                                         |                                                                    | Net unrealized gains (losses) |        |                                  | (7,661 | )    |         |      | (498 | ) |       |       | 584 | 
|                                                                         |                                                                    |                               |        |                                  |        |      |         |      |      |   |       |      
|Comprehensive income (loss)                                              |                                                                    | $                             | 3,031  |                                  |        | $    | (12,919 | )    |      | $ | 8,371 |      
|                                                                         |                                                                    |                               |        |                                  |        |      |         |      |      |   |       |      

The accompanying notes are an integral part of these consolidated statements

55



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##### Table of Contents



REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |         |        |       | 
|---------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------------------------------------- | ----------------------------------------- | ------- | -------------------------------- | ---- | -------- | ------ | ------ | - | -------- | ------- | ------ | ----- | 
|                                                                                               |                                                 |                                                       |                                           |         | For The Years Ended December 31,
|                                                                                               |                                                 |                                                       |                                           |         |                                 
|OPERATING ACTIVITIES:                                                                          |                                                 | 1999                                                  |                                           | 1998    |                                  | 1997
|                                                                                               |                                                 |                                                       |                                           |         |                                  |     
|Net income (loss)                                                                              |                                                 | $                                                     | 10,692                                    |         |                                  | $    | (12,421  | )      |        | $ | 7,787    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Reconciliation of net income (loss) to net cash (used in)
provided by operating
activities:   
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Provision for loan and ORE losses                                                              |                                                 |                                                       | 10,003                                    |         |                                  |      | 15,864   |        |        |   | 3,853    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Depreciation and amortization, net                                                             |                                                 |                                                       | 15,366                                    |         |                                  |      | 17,092   |        |        |   | 5,903    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Amortization of premium (accretion) of fair value, net                                         |                                                 |                                                       | 9,012                                     |         |                                  |      | 1,943    |        |        |   | (918     | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Gain on sale of loans                                                                          |                                                 |                                                       | (3,602                                    |         |                                  |      | (43,490  | )      |        |   | (1,358   | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Loss/(gain) on securities                                                                      |                                                 |                                                       | 714                                       |         |                                  |      | (1,463   | )      |        |   | (724     | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|(Gain)/loss on sale of other real estate owned                                                 |                                                 |                                                       | (726                                      | )       |                                  |      | 404      |        |        |   | (118     | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Capitalization of mortgage servicing/residual interest                                         |                                                 |                                                       | (566                                      | )       |                                  |      | (43,021  | )      |        |   | (6,826   | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|(Gain)/loss on disposal of premises and equipment                                              |                                                 |                                                       | (621                                      | )       |                                  |      | (275     |        |        |   | 14       |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net decrease/(increase) in deferred tax benefit                                                |                                                 |                                                       | 1,156                                     |         |                                  |      | (24      | )      |        |   | (3,623   | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net decrease/(increase) in other assets                                                        |                                                 |                                                       | 11,837                                    |         |                                  |      | (15,943  | )      |        |   | (4,194   | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net increase in value of performance/unqualified options                                       |                                                 |                                                       | 1,103                                     |         |                                  |      | 551      |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net (decrease)/increase in other liabilities                                                   |                                                 |                                                       | (12,108                                   | )       |                                  |      | 15,530   |        |        |   | 1,611    |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|Net cash provided by (used in) operating activities                                            |                                                 |                                                       | 42,260                                    |         |                                  |      | (65,253  | )      |        |   | 1,407    |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|INVESTING ACTIVITIES:                                                                         
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from excess of deposit liabilities assumed over assets
acquired, net of cash acquired |                                                 |                                                       |                                          |         |                                  |      | 253,235  |        |        |   | 7,223    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from sales and maturities of:                                                        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               | Investment securities held to maturity          |                                                       |                                           |        |                                  |      |          | 2,000  |        |   |          | 1,003   |       
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               | Investment securities available for sale        |                                                       |                                           | 146,500 |                                  |      |          | 18,000 |        |   |          | 126,544 |       
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               | Mortgage-backed securities available for sale   |                                                       |                                           | 1,552   |                                  |      |          | 37,055 |        |   |          | 50,627  |       
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               | Mortgage-backed securities in trading portfolio |                                                       |                                           |        |                                  |      |          | 33,778 |        |   |          | 2,764   |       
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of commercial paper available for sale                                                |                                                 |                                                       | (39,541                                   | )       |                                  |      |         |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of investment securities available for sale                                           |                                                 |                                                       | (136,768                                  | )       |                                  |      | (28,150  | )      |        |   | (66,771  | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of mortgage backed securities available for sale                                      |                                                 |                                                       | (226,343                                  | )       |                                  |      | (23,543  | )      |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of mortgage backed securities held to maturity                                        |                                                 |                                                       | (33,075                                   | )       |                                  |      |         |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of mortgage backed securities in trading portfolio                                    |                                                 |                                                       |                                          |         |                                  |      | (12,000  | )      |        |   | (4,468   | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Principal repayment on mortgage backed securities                                              |                                                 |                                                       | 33,772                                    |         |                                  |      | 34,529   |        |        |   | 9,809    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Principal repayment on revenue bonds                                                           |                                                 |                                                       | 405                                       |         |                                  |      | 245      |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of FHLB stock                                                                         |                                                 |                                                       | (2,664                                    | )       |                                  |      | (2,136   | )      |        |   | (131     | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net decrease (increase) in loans                                                               |                                                 |                                                       | 85,230                                    |         |                                  |      | (573,912 | )      |        |   | (335,648 | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Purchase of premises and equipment, net                                                        |                                                 |                                                       | 1,197                                     |         |                                  |      | (14,685  | )      |        |   | (10,437  | )      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from sale of other real estate owned                                                  |                                                 |                                                       | 8,566                                     |         |                                  |      | (4,485   | )      |        |   | 5,501    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Investments in other real estate owned (net)                                                   |                                                 |                                                       | 496                                       |         |                                  |      | 733      |        |        |   | 2,276    |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|Net cash used in investing activities                                                          |                                                 |                                                       | (160,673                                  | )       |                                  |      | (279,336 | )      |        |   | (211,708 | )      
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|FINANCING ACTIVITIES:                                                                         
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net increase in deposits                                                                       |                                                 |                                                       | 95,778                                    |         |                                  |      | 292,807  |        |        |   | 165,571  |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net increase in repurchase agreements                                                          |                                                 |                                                       | 601                                       |         |                                  |      | 15,186   |        |        |   | 5,048    |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Net change of minority interest in FFO                                                         |                                                 |                                                       |                                          |         |                                  |      |         |        |        |   | 645      |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from issuance of common stock                                                         |                                                 |                                                       | 2,779                                     |         |                                  |      | 73,700   |        |        |   | 240      |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from minority interest in trust subsidiary                                            |                                                 |                                                       |                                          |         |                                  |      |         |        |        |   | 28,750   |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Proceeds from issuance of debt                                                                 |                                                 |                                                       | 10,535                                    |         |                                  |      | 32,000   |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Repayment of holding company debt                                                              |                                                 |                                                       | (15,934                                   | )       |                                  |      |         |        |        |   |         |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|(Repayment)/proceeds from FHLB advances, net                                                   |                                                 |                                                       | (24,231                                   | )       |                                  |      | (14,300  | )      |        |   | 27,868   |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Dividends on perpetual preferred stock                                                         |                                                 |                                                       | (264                                      | )       |                                  |      | (264     | )      |        |   | (264     | )      
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|Net cash provided by financing activities                                                      |                                                 |                                                       | 69,264                                    |         |                                  |      | 399,129  |        |        |   | 227,858  |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                           |                                                 |                                                       | (49,149                                   | )       |                                  |      | 54,540   |        |        |   | 17,557   |        
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|CASH AND CASH EQUIVALENTS, beginning of year                                                   |                                                 |                                                       | 142,610                                   |         |                                  |      | 88,070   |        |        |   | 70,513   |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|CASH AND CASH EQUIVALENTS, end of year                                                         |                                                 | $                                                     | 93,461                                    |         |                                  | $    | 142,610  |        |        | $ | 88,070   |        
|                                                                                               |                                                 |                                                       |                                           |         |                                  |      |          |        |        |   |          |        
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                             
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 | Cash paid during the year for interest                |                                           | $       | 98,159                           |      |          | $      | 72,610 |   |          | $       | 52,730 |      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 | Cash (received) paid during the year for income taxes |                                           |         | (10,883                          | )    |          |        | (7,618 | ) |          |         | 5,880  |      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 | Non-cash transactions:                               
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 | Refinancing of unsecured notes                        |                                           |         | 7,000                            |      |          |        |       |   |          |         |       |      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 | Conversion of subordinated debt                       |                                           |         |                                 |      |          |        |       |   |          |         | 5,888  |      
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                               |                                                 |                                                       | Stock issued for minority interest in FFO |         |                                  |     |          |        |        |  |          |         |        | 5,307 | 

The accompanying notes are an integral part of these consolidated statements

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REPUBLIC BANCSHARES, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999

1. BUSINESS:

Basis of Presentation and Organization

The consolidated financial statements of Republic Bancshares, Inc. (the
Company or Republic) include the accounts of the Company and its wholly
owned subsidiaries, RBI Capital Trust I (RBI), Republic Bank, F.S.B. (the
Savings Bank) and Republic Bank (the Bank) and the Banks wholly-owned
subsidiaries, Republic Insurance Agency, Inc., RBREO, Inc., and Tampa Bay
Equities, Inc. All financial information has been restated for the acquisitions
of F.F.O. Financial Group, Inc. (FFO) in 1997, Bankers Savings Bank, F.S.B.
(BSB) and Lochaven Federal Savings and Loan Association (Lochaven) both in
1998. All significant inter-company accounts and transactions have been
eliminated. Our primary source of income is from our banking subsidiary, which
operates 81 branches throughout Florida. The Banks primary source of revenue
has been derived from net interest income on loans and investments.

BUSINESS COMBINATIONS

Bankers Savings Bank, F.S.B.

On November 5, 1998, BSB, Coral Gables, Florida, was merged into the Company
(the BSB Acquisition) in a stock transaction, with BSB stockholders receiving
396,872 shares of our common stock (an exchange ratio of 0.5749 of a share for
each share of BSB common stock). There were also 212,000 options outstanding for
BSB common stock, which were exchanged for 121,853 options for our common stock.
At the date of acquisition, BSB had total assets of $70.0 million, total loans
of $46.2 million, total deposits of $61.1 million and operated two branches in
Dade County. The BSB Acquisition was accounted for as a pooling of interests
with the books and records of BSB combined with ours at historical cost.

Lochaven Federal Savings and Loan Association

On November 5, 1998, Lochaven, Orlando, Florida, was merged into the Company
(the Lochaven Acquisition) in a stock transaction with Lochaven stockholders
receiving 169,084 shares of our common stock (an exchange ratio of 0.2776 of a
share for each share of Lochaven common stock). There were also 35,000 options
outstanding for Lochaven common stock, which were exchanged for 9,716 options of
our common stock. At the date of acquisition, Lochaven had total assets of $56.5
million, total loans of $44.8 million, total deposits of $54.0 million and
operated one branch in Orange County. The Lochaven Acquisition was accounted for
as a pooling of interests with the books and records of Lochaven combined with
ours at historical cost.

F.F.O. Financial Group, Inc.

On September 19, 1997, 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). At the time
of the FFO Merger, Mr. William R. Hough owned a majority interest in FFO and us.

The FFO Merger was accounted for as a corporate reorganization in which Mr.
Hough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 is being amortized over 10 years. We issued 1,668,370 shares of common
stock to the controlling interest and 826,709 shares of common stock to the
minority interest.

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##### Table of Contents



Firstate Financial, F.A.

On April 18, 1997, we acquired Firstate Financial, F.A. (Firstate), a thrift
institution headquartered in Orlando, Florida, for a cash purchase of $5.5
million. At acquisition, 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 Statements of Operations only
reflect activity subsequent to the acquisition date.

ACQUISITIONS

NationsBank and Barnett Branches

In December 1997, we entered into two agreements with BankAmerica Corporation
(BankAmerica, formerly NationsBank Corporation) to acquire eight branch
offices of BankAmericas subsidiary banks, NationsBank, N.A. (NationsBank) and
Barnett Bank N.A. (Barnett), including the loans and other assets recorded at
those branches, and to assume the deposits and other liabilities assigned to the
branches. The first agreement (the Florida Agreement), was consummated on June
19, 1998, representing the acquisition of three NationsBank branches and four
Barnett branches, collectively, located throughout Florida (the Florida
Branches). The second agreement (the Georgia Agreement), was consummated
August 20, 1998, for a Barnett branch located in Brunswick, Georgia (the
Georgia Branch). When acquired on June 19, 1998, the Florida Branches had
deposit liabilities of $199.9 million and loans of $114.4 million, and the
Georgia Branch, at acquisition, had deposit liabilities of $16.9 million and
loans of $7.5 million. We paid a deposit premium of $24.0 million, loan premium
of $3.2 million, and a $5.5 million premium for real and personal property for
the NationsBank and Barnett branches. These purchases were both accounted for
using purchase accounting rules, with deposit premiums being amortized using the
straight-line method over a 10 year period and the loan and property premiums
being amortized over the life of the underlying assets.

On September 10, 1999, the Company sold its Brunswick, Georgia office of the
Savings Bank to Sapelo National Bank (Sapelo) for a gain of $1.1 million.
Sapelo acquired all of the associated deposits at the Brunswick office. This
sale also included lease rights on the building where the Brunswick office was
located and all fixed assets associated with the property. The Savings Bank also
sold its loan portfolio to the Bank on September 3, 1999.
The Savings Bank has been dissolved.

Dime Savings Bank

In March 1998, we entered into an agreement with Dime Savings Bank, F.S.B.
(DSB), to acquire DSBs branch in Deerfield Beach, Florida (Broward County)
and to assume the deposit liabilities, at acquisition date, of approximately
$206.7 million and purchase the personal property and equipment of the branch
for $100,000. The transaction, which was consummated on August 13, 1998, was
accounted for using purchase accounting rules, with a deposit premium of $9.8
million to be amortized over 10 years.

BankAmerica (formerly NationsBank) and Barnett
Branch Lease Assumptions and Facility Purchases

We and BankAmerica entered into a series of purchase, lease assumption and
sublease agreements under which we purchased three former NationsBank branch
offices and leased 22 former branches of NationsBank and Barnett Bank that were
closed in connection with the merger of NationsBank and Barnett. These branch
office sites are located throughout the State of Florida. Two of the purchased
branch offices are in Hillsborough County and the third is in Lee County. The
leased offices are in Broward, Clay, Collier, Dade, Marion, Palm Beach, Pinellas
and Volusia Counties. We paid BankAmerica $3.8 million for the three purchased
offices and, in addition to assuming the lease obligations, paid approximately
$3.0 million (for furniture, fixtures and equipment and certain real estate and
as a premium) in connection with the lease assumption transactions. Three of
these branch offices were opened at the end of 1998, with the remaining offices
opened during 1999.

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RBI Capital Trust I (RBI)

RBI 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 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 invested the proceeds in our junior
subordinated debt, which also has an interest rate of 9.10%. We used the
proceeds from the junior subordinated debt to increase the equity capital.
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. Distributions on the Preferred
Securities are cumulative and based upon the liquidation value of $10 per
Preferred Security. We have 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, we 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. We have 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 us receiving regulatory
approval to do so if then required under applicable capital guidelines or
regulatory policies. In addition, we have 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 receiving regulatory
approval to do so if then required under applicable capital guidelines or
regulatory policies.

We have reported our obligation, with respect to the holders of the Preferred
Securities, as a separate line item in the accompanying Consolidated Balance
Sheets under the caption Company-obligated mandatorily redeemable capital
securities of the 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 in the accompanying Consolidated Statements of
Operations under the caption Minority interest in income from subsidiary
trust.

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 we have 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
classified as Available for Sale, 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, include the resulting residual interest in cash flows
from the securitization of residential and High LTV Loans, where applicable, and
the excess spread, interest only-strip. Trading securities are carried at

59



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##### Table of Contents



market value with any unrealized gains or losses included in the Consolidated
Statements of Operations under Gain (loss) on 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. Our 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 our opinion, 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 term of the loan.

Hedging Contracts and Loans Held for Sale

At December 31, 1999, the Company did not have an inventory of loans held for
sale and did not maintain any hedging instruments. In 1998, we managed our
interest rate market risk on the loans held for sale and our estimated future
commitments to originate and close mortgage loans for borrowers at fixed prices
(Locked Loans) through hedging techniques which included 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. We recorded 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.
Transfers of loans held for sale, to the portfolio category, were recorded at
the lower of cost or market value.

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 our
fiscal year beginning January 1, 1997. SFAS No. 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 (MSRs), SFAS No. 125 requires that we
classify residual interest retained and excess spread interest only-strip on
loans which are securitized, as trading assets. Consequently, we are required to
carry these assets at their current market value as of the balance sheet date
with the resulting valuation adjustments recorded in the Consolidated Statements
of Operations.

We use an automated portfolio analysis system to value our MSRs at the
individual loan level. The model uses current market assumptions for default
probabilities and prepayment speeds based upon individual loan factors,
including interest rate, age, loan type, geography and demographics. The
analysis also takes into consideration the historical aggregate characteristics
of borrowers based on their geographic location. These factors are applied to
each loan based on its own individual characteristics. We have no valuation
allowances recorded for the years ended December 31, 1999 and 1998. 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 ($ in thousands):

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|                                             |  |      |        |      |  |      |        |   |  |   |       |  
|-------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | -
|                                             |  | 1999 |        | 1998 |  | 1997
|                                             |  |      |        |      |  |     
|Balance, beginning of year                   |  | $    | 22,930 |      |  | $    | 7,172  |   |  | $ | 2,011 |  
|                                            
|                                            
|                                            
|                                            
|Rights acquired through Firstate Acquisition |  |      |       |      |  |      |       |   |  |   | 225   |  
|                                            
|                                            
|                                            
|                                            
|Capitalized servicing assets                 |  |      | 566    |      |  |      | 20,418 |   |  |   | 5,517 |  
|                                            
|                                            
|                                            
|                                            
|Amortization                                 |  |      | (2,815 | )    |  |      | (4,660 | ) |  |   | (581  | )
|                                             |  |      |        |      |  |      |        |   |  |   |       |  
|Balance, end of year                         |  | $    | 20,681 |      |  | $    | 22,930 |   |  | $ | 7,172 |  
|                                             |  |      |        |      |  |      |        |   |  |   |       |  
|Fair value of assets                         |  | $    | 29,728 |      |  | $    | 29,608 |   |  | $ | 7,552 |  
|                                             |  |      |        |      |  |      |        |   |  |   |       |  

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. Our allowance is an amount that we believe will be adequate to
absorb probable 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

Our identification of impaired loans considers 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,
1999, $23.0 million of loans were considered impaired by us. Approximately $22.1
million of these loans required valuation allowances, totaling $3.6 million,
which are included within the overall allowance for loan losses at December 31,
1999. Residential mortgages and consumer loans and leases outside the scope of
SFAS No. 114 are collectively evaluated for impairment.

As of December 31, 1998, $22.0 million of loans were considered impaired by us.
Approximately $11.9 million of these loans required valuation allowances,
totaling $1.4 million, which were included within the overall allowance for loan
losses at December 31, 1998.

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:

|                           |  |       |        | 
|-------------------------- |  | ----- | ------ | 
|                           |  | YEARS
|                           |  |      
|Buildings and improvements |  |       | 39     | 
|                          
|                          
|                          
|                          
|Furniture and equipment    |  |       | 7      | 
|                          
|                          
|                          
|                          
|Leasehold improvements     |  |       | 5 - 15 | 

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

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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. We
believe that such sales will result in net proceeds at least equal to present
carrying values.

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 Accounting Principal Board (APB) Opinion No.
15, Earnings Per Share, and makes them comparable to international EPS
standards. SFAS No. 128 was effective for periods ending after December 15,
1997, and required restatement of all prior period EPS data. It replaced 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.

Income Taxes

We follow the liability method, which establishes deferred tax assets and
liabilities for the temporary differences between the financial reporting bases
and the tax bases of our 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.

Our subsidiaries and we file consolidated tax returns with the federal and state
taxing authorities. A tax sharing agreement exists between us and our
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 us.

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 ten years.
Approximately $29.1 million and $32.7 million was included in Goodwill and
premium on deposits in the accompanying consolidated Balance Sheets, as of
December 31, 1999, and 1998.

Stock-Based Compensation Plans

We account for our stock-based compensation plans under APB Opinion No. 25,
Accounting for Stock Issued to Employees. We adopted the disclosure option of
SFAS No. 123, Accounting for Stock-Based Compensation, 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.

Reporting Comprehensive Income

In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income,
which was effective for our fiscal year beginning January 1, 1998. SFAS No. 130
establishes standards for reporting and display of comprehensive income, its
components and accumulated balances in the financial statements. We implemented
SFAS No. 130 in the year ended December 31, 1997.

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Disclosures About Business Segments

In June 1997, the FASB adopted SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information which was effective for our fiscal year
beginning January 1, 1998. SFAS No. 131 establishes standards for the way we
report information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in interim
financial statements. Through December 31, 1998 our commercial banking and
mortgage banking activities constituted operating segments for which we have
provided additional disclosure regarding their respective assets, revenues,
profit or loss and other operating data. We implemented SFAS No. 131 in the year
ended December 31, 1997.

As a result of the restructuring of our mortgage banking operation in the fourth
quarter of 1998, that operation now represents an insubstantial portion of our
overall business activities during 1999 and has ceased to be a reportable
business segment.

Accounting for Costs of Computer Software for Internal Use

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. SOP 98-1 provides guidance for
capitalizing and expensing the costs of computer software developed or obtained
for internal use. SOP 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. The adoption of SOP 98-1 did not have a
material impact on the accompanying consolidated financial statements.

Accounting for Derivative Instruments and Hedging Activities

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that entities recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. In June 1999, the FASB
issued SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities  Deferral of the Effective Date of FASB Statement No. 133, which
delayed the date for implementation to all fiscal quarters beginning after June
15, 2000. We do not believe that the adoption of SFAS No. 133 will have a
material effect upon our results of operations.

Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for
Sale by a Mortgage Banking Enterprise

In October 1998, the FASB issued SFAS No. 134, Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise. SFAS No. 134 amends SFAS Nos. 65, Accounting
for Certain Mortgage Banking Activities and SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities. SFAS No. 134 establishes
standards for the classification of securities and other beneficial interests in
accordance with SFAS No. 115. SFAS No. 134 allows an enterprise engaged in
mortgage banking activities to classify mortgage-backed securities and other
beneficial interests retained after the securitization of mortgage loans as
trading, available for sale or held to maturity, depending upon an entitys
intent and ability to hold those securities, except for those with sales
commitments in place which must be classified as trading. Previously, such
securities and beneficial interests retained after securitization of mortgage
loans held for sale by an entity engaged in mortgage banking activities were
required to be classified as trading. SFAS No. 134 was effective for periods
beginning after December 15, 1998 with early application permitted. The adoption
of SFAS No. 134 did not have a material financial effect on the accompanying
consolidated financial statements.

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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 and federal funds sold.

Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform to the 1999 financial statement presentation.

3. INVESTMENT SECURITIES AND COMMERCIAL PAPER:

Our investment securities consisted primarily of U.S. Treasury Bills, Notes, and
Agencies. The investment securities at December 31, 1999 and 1998, are
summarized as follows ($ in thousands):

|                               |                            |              |       |        |           |        |            |     |            |     |        |      |   |      |   |        |       |        | 
|------------------------------ | -------------------------- | ------------ | ----- | ------ | --------- | ------ | ---------- | --- | ---------- | --- | ------ | ---- | - | ---- | - | ------ | ----- | ------ | 
|                               |                            |              |       |        | Amortized |        | Unrealized |     | Unrealized |     | Market
|                               |                            |              |       |        | Cost      |        | Gains      |     | Losses     |     | Value 
|                               |                            |              |       |        |           |        |            |     |            |     |       
|At December 31, 1999:         
|                              
|                              
|                              
|                              
|Available for sale securities:
|                              
|                              
|                              
|                              
|                               | U.S. Government Treasuries |              | $     | 11,978 |           |        | $          |    |            |     | $      | (147 | ) |      | $ | 11,831 |      
|                              
|                              
|                              
|                              
|                               | U.S. Agencies              |              |       | 10,000 |           |        |            | 10  |            |     |        | (23  | ) |      |   | 9,987  |      
|                              
|                              
|                              
|                              
|                               | Revenue bond               |              |       | 3,794  |           |        |            | 18  |            |     |        | (75  | ) |      |   | 3,737  |      
|                              
|                              
|                              
|                              
|                               | Commercial Paper           |              |       | 39,888 |           |        |            |    |            |     |        |     |   |      |   | 39,888 |      
|                               |                            |              |       |        |           |        |            |     |            |     |        |      |   |      |   |       
|                               |                            |              | Total |        | $         | 65,660 |            |     | $          | 28  |        |      | $ | (245 | ) |        | $     | 65,443 | 
|                               |                            |              |       |        |           |        |            |     |            |     |        |      |   |      |   |       
|At December 31, 1998:         
|                              
|                              
|                              
|                              
|Available for sale securities:
|                              
|                              
|                              
|                              
|                               | U.S. Government Treasuries |              | $     | 23,564 |           |        | $          | 137 |            |     | $      |     |   |      | $ | 23,701 |      
|                              
|                              
|                              
|                              
|                               | U.S. Agencies              |              |       | 5,000  |           |        |            |    |            |     |        | (94  | ) |      |   | 4,906  |      
|                              
|                              
|                              
|                              
|                               |                            | Revenue bond |       |        | 2,298     |        |            |     | 98         |     |        |      |  |      |   |        | 2,396 |       
|                               |                            |              |       |        |           |        |            |     |            |     |        |      |   |      |   |       
|                               |                            |              | Total |        | $         | 30,862 |            |     | $          | 235 |        |      | $ | (94  | ) |        | $     | 31,003 | 
|                               |                            |              |       |        |           |        |            |     |            |     |        |      |   |      |   |       

|                              |  |      |        |      |  |   |        | 
|----------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|Book Value at December 31:    |  | 1999 |        | 1998
|                              |  |      |        |     
|Available for sale securities |  | $    | 65,443 |      |  | $ | 31,003 | 
|                              |  |      |        |      |  |   |        | 

The amortized cost and estimated market value of investment securities at
December 31, 1999, by contractual maturity are shown below ($ in thousands):

|                                 |  |                    |        |        |  |         |        |  |  |          |      |  
|-------------------------------- |  | ------------------ | ------ | ------ |  | ------- | ------ |  |  | -------- | ---- | -
|                                 |  | Available-for-Sale
|                                 |  |                   
|                                 |  |                    |        |        |  |         |        |  |  | Weighted
|                                 |  | Amortized          |        | Market |  | Average
|                                 |  | Cost               |        | Value  |  | Yield  
|                                 |  |                    |        |        |  |        
|Due in 1 year or less            |  | $                  | 46,889 |        |  | $       | 46,864 |  |  |          | 5.78 | %
|                                
|                                
|                                
|                                
|Due after 1 year through 5 years |  |                    | 10,877 |        |  |         | 10,749 |  |  |          | 5.04 |  
|                                
|                                
|                                
|                                
|Due after 5 years                |  |                    | 7,894  |        |  |         | 7,830  |  |  |          | 6.43 |  
|                                 |  |                    |        |        |  |         |        |  |  |          |      |  
|Total                            |  | $                  | 65,660 |        |  | $       | 65,443 |  |  |          | 5.73 | %
|                                 |  |                    |        |        |  |         |        |  |  |          |      |  

There were no sales of U.S. Treasury and Agency Notes during the year ended 1999
and 1998. Proceeds from sales of U.S. Treasury and Agency Notes during the year
ended 1997, were $55.1 million. Gross losses of $7,100 were realized for the
year ended December 31, 1997. Gross gains of $193,200, were realized during the
year ended December 31, 1997. U.S. Treasuries and Federal Agency Notes with a
book value of $12.0 million and $27.5 million at December 31, 1999 and 1998,
respectively, were pledged to secure public deposits and for other purposes.

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4. MORTGAGE-BACKED AND HIGH LTV LOAN 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: (1) the Government National
Mortgage Association (GNMA); (2) the Federal Home Loan Mortgage Corporation
(FHLMC); and (3) the Federal National Mortgage Association (FNMA). During
1999 and 1998 we securitized conventional and government insured first lien
mortgage loans with carrying values at securitization of $85.6 million and $67.3
million, respectively. The Company also securitized High LTV Loans in 1998 with
carrying values at securitization of $240.0 million. Securities held to maturity
are recorded at amortized cost, while securities available for sale and trading
are recorded at estimated market value. Mortgage-backed and High LTV Loan
securities that were retained on the balance sheet at December 31, 1999 and 1998
are summarized as follows ($ in thousands):

|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|-------------------------------------------- | ---------------------------- | ---------------------------- | ------- | ------ | --------- | - | ---------- | --- | ---------- | - | ------- | ---- | ------- | - | ------- | ------ | ------- |  | 
|                                             |                              |                              |         |        | Amortized |   | Unrealized |     | Unrealized |   | Market 
|                                             |                              |                              |         |        | Costs     |   | Gains      |     | Losses     |   | Value  
|                                             |                              |                              |         |        |           |   |            |     |            |   |        
|At December 31, 1999:                       
|                                            
|                                            
|                                            
|                                            
|Available for sale securities:              
|                                            
|                                            
|                                            
|                                            
|GNMA securities                              |                              | $                            | 299,836 |        |           | $ | 277        |     |            | $ | (11,292 | )    |         | $ | 288,820 |       
|                                            
|                                            
|                                            
|                                            
|FHLMC securities                             |                              |                              | 6,020   |        |           |   | 6          |     |            |   | (308    | )    |         |   | 5,718   |       
|                                            
|                                            
|                                            
|                                            
|FNMA securities                              |                              |                              | 17,159  |        |           |   | 139        |     |            |   | (642    | )    |         |   | 16,656  |       
|                                            
|                                            
|                                            
|                                            
|Other MBS securities                         |                              |                              | 4,338   |        |           |   |           |     |            |   | (265    | )    |         |   | 4,074   |       
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|                                             |                              | Total MBS available for sale |         | $      | 327,353   |   |            | $   | 422        |   |         | $    | (12,507 | ) |         | $      | 315,268 | 
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|Trading securities:                         
|                                            
|                                            
|                                            
|                                            
|Republic Bank Owner Trust 1998-1 B2          |                              | $                            | 10,863  |        |           | $ |           |     |            | $ |        |      |         | $ | 10,863  |       
|                                            
|                                            
|                                            
|                                            
|Republic Bank Owner Trust 1997-1 and 1998-1:
|                                            
|                                            
|                                            
|                                            
|                                             | Overcollateralization        |                              |         | 14,555 |           |   |            |    |            |   |         |     |         |   |         | 14,555 |        
|                                            
|                                            
|                                            
|                                            
|                                             | Residual interest            |                              |         | 10,062 |           |   |            |    |            |   |         | (470 | )       |   |         | 9,592  |        
|                                            
|                                            
|                                            
|                                            
|Excess servicing, interest only-strip        |                              |                              | 4,219   |        |           |   |           |     |            |   |        |      |         |   | 4,219   |       
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|                                             | Total MBS trading securities |                              | $       | 39,699 |           |   | $          |    |            |   | $       | (470 | )       |   | $       | 39,229 |        
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|Held to maturity:                           
|                                            
|                                            
|                                            
|                                            
|GNMA securities                              |                              | $                            | 9,899   |        |           | $ | 6          |     |            | $ | (33     | )    |         | $ | 9,872   |       
|                                            
|                                            
|                                            
|                                            
|FHLMC securities                             |                              |                              | 7,140   |        |           |   | 23         |     |            |   | (96     | )    |         |   | 7,067   |       
|                                            
|                                            
|                                            
|                                            
|FNMA securities                              |                              |                              | 16,029  |        |           |   | 68         |     |            |   | (74     | )    |         |   | 16,023  |       
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|                                             | Total MBS held to maturity   |                              | $       | 33,068 |           |   | $          | 97  |            |   | $       | (203 | )       |   | $       | 32,962 |        
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|At December 1, 1998:                        
|                                            
|                                            
|                                            
|                                            
|Available for sale securities:              
|                                            
|                                            
|                                            
|                                            
|GNMA securities                              |                              | $                            | 1,939   |        |           | $ | 11         |     |            | $ |        |      |         | $ | 1,950   |       
|                                            
|                                            
|                                            
|                                            
|FHLMC securities                             |                              |                              | 10,025  |        |           |   | 26         |     |            |   | (61     | )    |         |   | 9,990   |       
|                                            
|                                            
|                                            
|                                            
|FNMA securities                              |                              |                              | 15,615  |        |           |   | 44         |     |            |   | (136    | )    |         |   | 15,523  |       
|                                            
|                                            
|                                            
|                                            
|Other MBS securities                         |                              |                              | 5,282   |        |           |   | 5          |     |            |   | (37     | )    |         |   | 5,250   |       
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|                                             |                              | Total MBS available for sale |         | $      | 32,861    |   |            | $   | 86         |   |         | $    | (234    | ) |         | $      | 32,713  | 
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|Trading securities:                         
|                                            
|                                            
|                                            
|                                            
|GNMA securities                              |                              | $                            | 24,695  |        |           | $ | 651        |     |            | $ |        |      |         | $ | 25,346  |       
|                                            
|                                            
|                                            
|                                            
|Republic Bank Owner Trust 1998-1 B2          |                              |                              | 10,863  |        |           |   |           |     |            |   |        |      |         |   | 10,863  |       
|                                            
|                                            
|                                            
|                                            
|Republic Bank Owner Trust 1997-1 and 1998-1:
|                                            
|                                            
|                                            
|                                            
|                                             | Overcollateralization        |                              |         | 10,928 |           |   |            |    |            |   |         |     |         |   |         | 10,928 |        
|                                            
|                                            
|                                            
|                                            
|                                             | Residual interest            |                              |         | 14,484 |           |   |            |    |            |   |         |     |         |   |         | 14,484 |        
|                                            
|                                            
|                                            
|                                            
|Excess servicing, interest only-strip        |                              |                              | 4,446   |        |           |   |           |     |            |   |        |      |         |   | 4,446   |       
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 
|                                             | Total MBS trading securities |                              | $       | 65,416 |           |   | $          | 651 |            |   | $       |     |         |   | $       | 66,067 |        
|                                             |                              |                              |         |        |           |   |            |     |            |   |         |      |         |   |         |        |         |  | 

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|                              |           |      |         |         |  |   |        |        | 
|----------------------------- | --------- | ---- | ------- | ------- |  | - | ------ | ------ | 
|Book Value at December 31:    |           | 1999 |         | 1998   
|                              |           |      |         |        
|Available for sale securities |           | $    | 315,268 |         |  | $ | 32,713 |       
|                             
|                             
|                             
|                             
|Trading securities            |           |      | 39,229  |         |  |   | 66,067 |       
|                             
|                             
|                             
|                             
|Held to maturity securities   |           |      | 33,068  |         |  |   |       |       
|                              |           |      |         |         |  |   |        |       
|                              | Total MBS |      | $       | 387,565 |  |   | $      | 98,780 | 
|                              |           |      |         |         |  |   |        |       

At December 31, 1999, the trading asset category included the following
securities that resulted from our securitization of High LTV Loans: (1) a $10.9
million subordinate tranche purchased from our securitization of High LTV Loans
in June 1998 and (2) $24.1 million in overcollateralization and residual
interests in cash flows from securitizations in December 1997 and June 1998.
Also, the trading category included $4.2 million of excess servicing interest
only strips that resulted from securitization of first lien mortgage loans. The
$10.9 million subordinated tranche is a non-investment grade security which is
not considered to be an acceptable investment under Florida banking laws. We
have recorded these assets at what we believe to be their fair market value;
however, there is currently no ready market for subordinate tranches and
residual interests in cash flows from securitization of High LTV Loans.

The amortized cost and estimated market value of the MBS portfolio at December
31, 1999, based on stated maturities and/or re-pricing characteristics are shown
below ($ in thousands):

|                                              |                      |   |        |           |  |            |       |           |  |       |         |         |  |   |         |         |  | 
|--------------------------------------------- | -------------------- | - | ------ | --------- |  | ---------- | ----- | --------- |  | ----- | ------- | ------- |  | - | ------- | ------- |  | 
|                                              |                      |   |        | Less Than |  | One - Five |       | Over Five
|                                              |                      |   |        | One Year  |  | Years      |       | Years     |  | Total
|                                              |                      |   |        |           |  |            |       |           |  |      
|Amortized Cost:                              
|                                             
|                                             
|                                             
|                                             
|Available for sale securities:               
|                                             
|                                             
|                                             
|                                             
|GNMA securities  fixed rate                  |                      | $ |       |           |  | $          | 108   |           |  | $     | 205,354 |         |  | $ | 205,462 |        
|                                             
|                                             
|                                             
|                                             
|GNMA securities  variable rate               |                      |   | 94,374 |           |  |            |      |           |  |       |        |         |  |   | 94,374  |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  fixed rate                 |                      |   |       |           |  |            | 1,070 |           |  |       | 3,950   |         |  |   | 5,020   |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  variable rate              |                      |   | 1,000  |           |  |            |      |           |  |       |        |         |  |   | 1,000   |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  fixed rate                  |                      |   |       |           |  |            | 432   |           |  |       | 11,988  |         |  |   | 12,420  |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  variable rate               |                      |   | 1,155  |           |  |            | 3,584 |           |  |       |        |         |  |   | 4,739   |        
|                                             
|                                             
|                                             
|                                             
|Other MBS securities  fixed rate             |                      |   |       |           |  |            |      |           |  |       | 4,338   |         |  |   | 4,338   |        
|                                             
|                                             
|                                             
|                                             
|Trading securities:                          
|                                             
|                                             
|                                             
|                                             
|Mortgage related residual assets  fixed rate |                      |   |       |           |  |            |      |           |  |       | 39,699  |         |  |   | 39,699  |        
|                                             
|                                             
|                                             
|                                             
|Held to maturity:                            
|                                             
|                                             
|                                             
|                                             
|GNMA securities  fixed rate                  |                      |   |       |           |  |            |      |           |  |       | 9,899   |         |  |   | 9,899   |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  fixed rate                 |                      |   |       |           |  |            | 4,746 |           |  |       | 2,394   |         |  |   | 7,140   |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  fixed rate                  |                      |   |       |           |  |            | 6,312 |           |  |       | 9,717   |         |  |   | 16,029  |        
|                                              |                      |   |        |           |  |            |       |           |  |       |         |         |  |   |         |         |  | 
|                                              | Total MBS securities |   | $      | 96,529    |  |            | $     | 16,252    |  |       | $       | 287,339 |  |   | $       | 400,120 | 
|                                              |                      |   |        |           |  |            |       |           |  |       |         |         |  |   |         |         |  | 
|Fair Value:                                  
|                                             
|                                             
|                                             
|                                             
|Available for sale securities:               
|                                             
|                                             
|                                             
|                                             
|GNMA securities  fixed rate                  |                      | $ |       |           |  | $          | 106   |           |  | $     | 194,938 |         |  | $ | 195,044 |        
|                                             
|                                             
|                                             
|                                             
|GNMA securities  variable rate               |                      |   | 93,776 |           |  |            |      |           |  |       |        |         |  |   | 93,776  |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  fixed rate                 |                      |   |       |           |  |            | 1,053 |           |  |       | 3,659   |         |  |   | 4,712   |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  variable rate              |                      |   | 1,006  |           |  |            |      |           |  |       |        |         |  |   | 1,006   |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  fixed rate                  |                      |   |       |           |  |            | 429   |           |  |       | 11,358  |         |  |   | 11,787  |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  variable rate               |                      |   | 1,159  |           |  |            | 3,710 |           |  |       |        |         |  |   | 4,869   |        
|                                             
|                                             
|                                             
|                                             
|Other MBS securities  fixed rate             |                      |   |       |           |  |            |      |           |  |       | 4,074   |         |  |   | 4,074   |        
|                                             
|                                             
|                                             
|                                             
|Trading securities:                          
|                                             
|                                             
|                                             
|                                             
|Mortgage related residual assets  fixed rate |                      |   |       |           |  |            |      |           |  |       | 39,229  |         |  |   | 39,229  |        
|                                             
|                                             
|                                             
|                                             
|Held to maturity:                            
|                                             
|                                             
|                                             
|                                             
|GNMA securities  fixed rate                  |                      |   |       |           |  |            |      |           |  |       | 9,872   |         |  |   | 9,872   |        
|                                             
|                                             
|                                             
|                                             
|FHLMC securities  fixed rate                 |                      |   |       |           |  |            | 4,699 |           |  |       | 2,368   |         |  |   | 7,067   |        
|                                             
|                                             
|                                             
|                                             
|FNMA securities  fixed rate                  |                      |   |       |           |  |            | 6,277 |           |  |       | 9,746   |         |  |   | 16,023  |        
|                                              |                      |   |        |           |  |            |       |           |  |       |         |         |  |   |         |         |  | 
|                                              | Total MBS securities |   | $      | 95,941    |  |            | $     | 16,274    |  |       | $       | 275,244 |  |   | $       | 387,459 | 
|                                              |                      |   |        |           |  |            |       |           |  |       |         |         |  |   |         |         |  | 

66



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The amortized cost and estimated market value of the MBS portfolio at December
31, 1999 by contractual maturity are shown below ($ in thousands). Actual
maturities may differ from contractual maturities because of prepayments of the
underlying mortgages:

|                     |       |   |           |         |        |   |           |         |          |  |      |      |  
|-------------------- | ----- | - | --------- | ------- | ------ | - | --------- | ------- | -------- |  | ---- | ---- | -
|                     |       |   |           |         |        |   | Estimated |         | Weighted
|                     |       |   | Amortized |         | Market |   | Average  
|                     |       |   | Cost      |         | Value  |   | Yield    
|                     |       |   |           |         |        |   |          
|Due one year or less |       | $ |          |         |        | $ |          |         |          |  |     | %   
|                    
|                    
|                    
|                    
|Due 1 - 5 years      |       |   | 12,833    |         |        |   | 12,732    |         |          |  | 6.82 |     
|                    
|                    
|                    
|                    
|Due after 5 years    |       |   | 386,817   |         |        |   | 374,727   |         |          |  | 5.94 |     
|                     |       |   |           |         |        |   |           |         |          |  |      |     
|                     | Total |   | $         | 399,650 |        |   | $         | 387,459 |          |  |      | 5.97 | %
|                     |       |   |           |         |        |   |           |         |          |  |      |     

Proceeds from sales of MBS securities during the years ended December 31, 1999,
1998 and 1997 were $0, $79.1 million and $59.1 million, respectively. Gross
gains of $0, $1.2 million and $359,500 and gross losses of $0, $363,000 and
$1,900, respectively, were realized on these sales. MBS with book and market
values of $60.1 million were pledged to secure repurchase agreements at December
31, 1999. Net unrealized holding (losses)/gains on trading securities of
$(470,000), $173,000, and $764,000 were included in income during 1999, 1998,
and 1997, respectively.

5. LOANS AND LOANS HELD FOR SALE:

Loans and loans held for sale at December 31, 1999 and 1998, are summarized as
follows ($ in thousands):

|                                 |                                                         |                                |   |         |           |      |         |         |           | 
|-------------------------------- | ------------------------------------------------------- | ------------------------------ | - | ------- | --------- | ---- | ------- | ------- | --------- | 
|                                 |                                                         |                                |   | 1999    |           | 1998
|                                 |                                                         |                                |   |         |           |     
|                                 | Real estate mortgage loans:                            
|                                
|                                
|                                
|                                
|                                 |                                                         | One-to-four family residential |   | $       | 953,764   |      |         | $       | 977,227   | 
|                                
|                                
|                                
|                                
|                                 |                                                         | Multi-family residential       |   |         | 84,921    |      |         |         | 97,264    | 
|                                
|                                
|                                
|                                
|                                 |                                                         | Commercial real estate         |   |         | 416,827   |      |         |         | 379,797   | 
|                                
|                                
|                                
|                                
|                                 |                                                         | High LTV Loans                 |   |         | 96,758    |      |         |         | 116,744   | 
|                                
|                                
|                                
|                                
|                                 |                                                         | Construction/land development  |   |         | 165,649   |      |         |         | 130,415   | 
|                                
|                                
|                                
|                                
|                                 |                                                         | Home equity loans              |   |         | 66,419    |      |         |         | 76,261    | 
|                                
|                                
|                                
|                                
|                                 | Commercial loans                                        |                                |   | 90,639  |           |      |         | 84,267  |          
|                                
|                                
|                                
|                                
|                                 | Consumer loans                                          |                                |   | 22,511  |           |      |         | 43,227  |          
|                                 |                                                         |                                |   |         |           |      |         |        
|                                 |                                                         | Total gross portfolio loans    |   |         | 1,897,488 |      |         |         | 1,905,202 | 
|                                
|                                
|                                
|                                
|                                 | Less-allowance for loan losses                          |                                |   | (28,177 | )         |      |         | (28,077 | )        
|                                
|                                
|                                
|                                
|                                 | Less-premiums and unearned discounts on loans purchased |                                |   | 316     |           |      |         | 275     |          
|                                
|                                
|                                
|                                
|                                 | Less-unamortized loan fees, net                         |                                |   | (7,912  | )         |      |         | (9,188  | )        
|                                 |                                                         |                                |   |         |           |      |         |        
|                                 |                                                         | Total loans held for portfolio |   |         | 1,861,715 |      |         |         | 1,868,212 | 
|                                
|                                
|                                
|                                
|                                 | Residential loans held for sale:                       
|                                
|                                
|                                
|                                
|Residential first mortgage loans |                                                         |                                |  |         |           |      | 184,176 |        
|                                 |                                                         |                                |   |         |           |      |         |        
|                                 |                                                         | Total loans                    |   | $       | 1,861,715 |      |         | $       | 2,052,388 | 
|                                 |                                                         |                                |   |         |           |      |         |        

Mortgage loans serviced for others as of December 31, 1999 and 1998, were both
$1.5 billion. Loans on which interest was not being accrued totaled
approximately $25.0 million, $36.6 million, and $30.4 million at December 31,
1999, 1998 and 1997, respectively. Had interest been accrued on these loans at
their originally contracted rates, interest income would have been increased by
approximately $3.0 million, $3.2 million, and $2.3 million in the years ended
December 31, 1999, 1998 and 1997, respectively. Loans past due 90 days or more
and still accruing interest at December 31, 1999 and 1998, totaled approximately
$171,000 and $1.2 million, respectively. Our restructured loans totaled $1.2
million and $411,000 during 1999 and 1998, respectively.

67



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6. ALLOWANCE FOR LOAN LOSSES:

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

|                           |                                                                           |   |                                  |         |      |   |        |        |   |   |        |        |  
|-------------------------- | ------------------------------------------------------------------------- | - | -------------------------------- | ------- | ---- | - | ------ | ------ | - | - | ------ | ------ | -
|                           |                                                                           |   | For the Years Ended December 31,
|                           |                                                                           |   |                                 
|                           |                                                                           |   | 1999                             |         | 1998 |   | 1997  
|                           |                                                                           |   |                                  |         |      |   |       
|BALANCE, beginning of year |                                                                           | $ | 28,077                           |         |      | $ | 22,023 |        |   | $ | 19,774 |       
|                          
|                          
|                          
|                          
|                           | Provision for possible loan losses                                        |   |                                  | 9,923   |      |   |        | 14,261 |   |   |        | 3,247  |  
|                          
|                          
|                          
|                          
|                           | Allowance from Firstate acquisition                                       |   |                                  |        |      |   |        |       |   |   |        | 132    |  
|                          
|                          
|                          
|                          
|                           | Allowance from purchased loans                                            |   |                                  | 275     |      |   |        |       |   |   |        |       |  
|                          
|                          
|                          
|                          
|                           | Discount on purchased loans allocated
to (from) allowance for loan losses |   |                                  | (470    | )    |   |        | (4,303 | ) |   |        | 39     |  
|                          
|                          
|                          
|                          
|                           | Loans charged-off                                                         |   |                                  | (11,123 | )    |   |        | (4,394 | ) |   |        | (1,402 | )
|                          
|                          
|                          
|                          
|                           | Recoveries of loans charged-off                                           |   |                                  | 1,495   |      |   |        | 490    |   |   |        | 233    |  
|                           |                                                                           |   |                                  |         |      |   |        |        |   |   |        |       
|BALANCE, end of year       |                                                                           | $ | 28,177                           |         |      | $ | 28,077 |        |   | $ | 22,023 |       
|                           |                                                                           |   |                                  |         |      |   |        |        |   |   |        |       

While we believe that the allowance for loan losses is adequate at December 31,
1999, based on currently available information, future provisions 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 that was created through the
allocation of discounts on purchased loans may only be used to absorb losses on
the related acquired loans. As of December 31, 1999 and 1998, approximately $1.3
million and $2.3 million of the allowance remained from the allocation of
discounts on purchased loans.

7. PREMISES AND EQUIPMENT:

Premises and equipment at December 31, 1999 and 1998, included ($ in thousands):

|                                               |                              |   |         |        |      |   |         |        | 
|---------------------------------------------- | ---------------------------- | - | ------- | ------ | ---- | - | ------- | ------ | 
|                                               |                              |   | 1999    |        | 1998
|                                               |                              |   |         |        |     
|Land                                           |                              | $ | 9,560   |        |      | $ | 10,524  |       
|                                              
|                                              
|                                              
|                                              
|Buildings and improvements                     |                              |   | 30,126  |        |      |   | 31,414  |       
|                                              
|                                              
|                                              
|                                              
|Furniture and equipment                        |                              |   | 31,729  |        |      |   | 31,035  |       
|                                              
|                                              
|                                              
|                                              
|Leasehold improvements                         |                              |   | 5,134   |        |      |   | 4,504   |       
|                                              
|                                              
|                                              
|                                              
|Construction in progress                       |                              |   | 20      |        |      |   | 2,302   |       
|                                               |                              |   |         |        |      |   |         |       
|                                               | Total premises and equipment |   |         | 76,569 |      |   |         | 79,779 | 
|                                              
|                                              
|                                              
|                                              
|Less-accumulated depreciation and amortization |                              |   | (23,995 | )      |      |   | (19,505 | )     
|                                               |                              |   |         |        |      |   |         |       
|                                               | Premises and equipment, net  |   | $       | 52,574 |      |   | $       | 60,274 | 
|                                               |                              |   |         |        |      |   |         |       

8. OTHER REAL ESTATE (ORE):

State banking regulations require us 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. We have been granted an extension on a
piece of property, with a book value of $172,000, until December 6, 2000. This
property, consisting of residential lots, is currently under contract with
closings to begin in the first quarter of 2000. There are no other properties,
which have exceeded the five-year holding period limitation.

Loans converted to ORE through foreclosure proceedings totaled $8.9 million, and
$4.9 million, for the years ended December 31, 1999 and 1998, respectively.
Sales of ORE that were financed by us totaled $1.5 million and $86,000 for the
years ended December 31, 1999 and 1998, respectively.

68



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

|                           |                  |   |                                  |        |      |   |       |       |   |   |       |     | 
|-------------------------- | ---------------- | - | -------------------------------- | ------ | ---- | - | ----- | ----- | - | - | ----- | --- | 
|                           |                  |   | For the Years Ended December 31,
|                           |                  |   |                                 
|                           |                  |   | 1999                             |        | 1998 |   | 1997 
|                           |                  |   |                                  |        |      |   |      
|BALANCE, beginning of year |                  | $ | 4,405                            |        |      | $ | 3,279 |       |   | $ | 2,672 |    
|                          
|                          
|                          
|                          
|                           | Provision        |   |                                  | 80     |      |   |       | 1,603 |   |   |       | 530 | 
|                          
|                          
|                          
|                          
|                           | Charge-offs, net |   |                                  | (4,347 | )    |   |       | (477  | ) |   |       | 77  | 
|                           |                  |   |                                  |        |      |   |       |       |   |   |       |    
|BALANCE, end of year       |                  | $ | 138                              |        |      | $ | 4,405 |       |   | $ | 3,279 |    
|                           |                  |   |                                  |        |      |   |       |       |   |   |       |    

9. INCOME TAXES:

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

|                             |  |              |       |      |  |      |        |   |  |   |        |  
|---------------------------- |  | ------------ | ----- | ---- |  | ---- | ------ | - |  | - | ------ | -
|                             |  | For the     
|                             |  | Years Ended 
|                             |  | December 31,
|                             |  |             
|                             |  | 1999         |       | 1998 |  | 1997
|                             |  |              |       |      |  |     
|Current (benefit)/provision  |  | $            | 6,411 |      |  | $    | (4,272 | ) |  | $ | 7,916  |  
|                            
|                            
|                            
|                            
|Deferred provision/(benefit) |  |              | 1,389 |      |  |      | (2,330 | ) |  |   | (1,751 | )
|                             |  |              |       |      |  |      |        |   |  |   |        |  
|                             |  | $            | 7,800 |      |  | $    | (6,602 | ) |  | $ | 6,165  |  
|                             |  |              |       |      |  |      |        |   |  |   |        |  

At December 31, 1999, we had approximately $21.3 million of remaining federal
and $33.8 million of state net operating loss carry-forwards. These
carry-forwards expire in the years 2005 through 2019. Following the change of
ownership in 1993, and the four acquisitions in 1997 and 1998, recognition of
net operating loss carry-forwards incurred prior to 1998, are limited to
approximately $732,000 each year under the rules of Internal Revenue Code
(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.

A portion of the net operating loss incurred during 1998 was carried back to the
previous two years for federal income tax purposes. The remaining 1998 net
operating loss and 1999 federal and state carry-forwards of $13.5 million and
$28.2 million, respectively, which are included above are not subject to any
annual limitations.

Deferred tax assets and liabilities were comprised of the following at December
31, 1999 and 1998 ($ in thousands):

|                                |  |                                                                              |  |                                |        |      |         |      |        |   |         |  
|------------------------------- |  | ---------------------------------------------------------------------------- |  | ------------------------------ | ------ | ---- | ------- | ---- | ------ | - | ------- | -
|                                |  |                                                                              |  |                                |        | 1999 |         | 1998
|                                |  |                                                                              |  |                                |        |      |         |     
|Gross deferred tax assets:     
|                               
|                               
|                               
|                               
|                                |  | Tax bases over financial bases for loans
(loan loss allowance and discounts) |  | $                              | 10,098 |      |         | $    | 10,217 |  
|                               
|                               
|                               
|                               
|                                |  | Financial amortization of premium over tax amortization                      |  |                                | 1,094  |      |         |      | 722    |  
|                               
|                               
|                               
|                               
|                                |  | Interest on non-accrual loans                                                |  |                                | 650    |      |         |      | 584    |  
|                               
|                               
|                               
|                               
|                                |  | Tax bases over financial bases for ORE                                       |  |                                | 100    |      |         |      | 2,202  |  
|                               
|                               
|                               
|                               
|                                |  | Net operating losses and tax credit carry-forward                            |  |                                | 9,451  |      |         |      | 7,866  |  
|                               
|                               
|                               
|                               
|                                |  | Mark-to-market-loans held for sale                                           |  |                                |       |      |         |      | 1,192  |  
|                               
|                               
|                               
|                               
|                                |  | Accrued restructuring and other costs                                        |  |                                |       |      |         |      | 2,192  |  
|                               
|                               
|                               
|                               
|                                |  | Other                                                                        |  |                                | 136    |      |         |      | 163    |  
|                                |  |                                                                              |  |                                |        |      |         |     
|                                |  |                                                                              |  | Gross deferred tax asset       |        |      | 21,529  |      |        |   | 25,138  |  
|                                |  |                                                                              |  |                                |        |      |         |     
|Gross deferred tax liabilities:
|                               
|                               
|                               
|
|                                |  | Gains on sale of loans-financial bases greater than tax bases                |  |                                | (6,669 | )    |         |      | (8,926 | )
|                               
|                               
|                               
|                               
|                                |  | Fixed assets  financial bases greater than tax bases                        |  |                                | (1,905 | )    |         |      | (1,272 | )
|                               
|                               
|                               
|                               
|                                |  | Purchased assets  FMV adjustments                                           |  |                                | (493   | )    |         |      | (368   | )
|                               
|                               
|                               
|                               
|                                |  | Mortgage servicing rights                                                    |  |                                | (3,413 | )    |         |      | (3,888 | )
|                               
|                               
|                               
|                               
|                                |  | Other                                                                        |  |                                | (826   | )    |         |      | (979   | )
|                                |  |                                                                              |  |                                |        |      |         |     
|                                |  |                                                                              |  | Gross deferred tax liabilities |        |      | (13,306 | )    |        |   | (15,433 | )
|                               
|                               
|                               
|                               
|                                |  |                                                                              |  | Less valuation allowance       |        |      |        |      |        |   | (523    | )
|                                |  |                                                                              |  |                                |        |      |         |     
|                                |  |                                                                              |  | Net deferred tax asset         |        | $    | 8,223   |      |        | $ | 9,182   |  
|                                |  |                                                                              |  |                                |        |      |         |     

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An amount relating to the unrealized gain on available for sale securities,
which is recorded directly to stockholders equity, increased during 1999 by
$4.6 million and decreased during 1998 by $283,000.

Through the merger of FFO in 1997, BSB and Lochaven in 1998, we acquired
unrecognized deferred tax liabilities of approximately $3.2 million, $17,000 and
$69,000, respectively, related to base year reserves calculated under the thrift
bad debt percentage method. If during any taxable year, we cease to be a bank,
these reserves shall be taken into account ratably over the six taxable year
period beginning with such taxable year.

Our effective tax rate varies from the statutory rate of 34%. The reasons for
this difference are as follows ($ in thousands):

|                                            |                                           |       |       |                                  |       |      |        |      |        |   |       |     |       | 
|------------------------------------------- | ----------------------------------------- | ----- | ----- | -------------------------------- | ----- | ---- | ------ | ---- | ------ | - | ----- | --- | ----- | 
|                                            |                                           |       |       | For the Years Ended December 31,
|                                            |                                           |       |       |                                 
|                                            |                                           |       |       | 1999                             |       | 1998 |        | 1997
|                                            |                                           |       |       |                                  |       |      |        |     
|Computed expected tax provision (benefit) |                                           | $     | 6,861 |                                  |       | $    | (5,894 | )    |        | $ | 5,226 |    
|                                           
|                                           
|                                           
|                                           
|Increase (reduction) of taxes:             
|                                           
|                                           
|                                           
|                                           
|                                            | Tax-exempt interest income                |       |       | (18                              | )     |      |        | (18  | )      |   |       | (20 | )    
|                                           
|                                           
|                                           
|                                           
|                                            | Valuation allowance on deferred tax asset |       |       | (523                             | )     |      |        |     |        |   |       | 286 |      
|                                           
|                                           
|                                           
|                                           
|                                            | Goodwill amortization                     |       |       | 179                              |       |      |        | 162  |        |   |       | 47  |      
|                                           
|                                           
|                                           
|                                           
|                                            | State taxes                               |       |       | 841                              |       |      |        | (624 | )      |   |       | 550 |      
|                                           
|                                           
|                                           
|                                           
|                                            | Other                                     |       |       | 460                              |       |      |        | (228 | )      |   |       | 76  |      
|                                            |                                           |       |       |                                  |       |      |        |      |        |   |       |    
|                                            |                                           | Total |       | $                                | 7,800 |      |        | $    | (6,602 | ) |       | $   | 6,165 | 
|                                            |                                           |       |       |                                  |       |      |        |      |        |   |       |    

10. OTHER BORROWINGS:

FHLB Advances

At December 31, 1999, we were required by our 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, 1999 and 1998 were collateralized by such loans and securities totaling
$769,000 and $25.0 million, respectively. In addition, all of our FHLB stock is
pledged as collateral for such advances.

Maturities and average interest rates of advances from the FHLB as of December
31, 1999 and 1998, were as follows ($ in thousands):

|              |       |              |      |      |  |              |            |     |  |   |        |        | 
|------------- | ----- | ------------ | ---- | ---- |  | ------------ | ---------- | --- |  | - | ------ | ------ | 
|              |       |              |      |      |  |              | Balance at
|Maturities in |       |              |      |      |  | December 31,
|Year Ending   |       | Weighted     |      |     
|December 31,  |       | Average Rate |      | 1999 |  | 1998        
|              |       |              |      |      |  |             
|1999          |       |              | 5.15 | %    |  | $            |           |     |  | $ | 25,000 |       
|             
|             
|             
|             
|2014          |       |              | 6.85 | %    |  |              | 769        |     |  |   |       |       
|              |       |              |      |      |  |              |            |     |  |   |        |       
|              | TOTAL |              |      |      |  |              | $          | 769 |  |   | $      | 25,000 | 
|              |       |              |      |      |  |              |            |     |  |   |        |       

Senior Debt

On September 24, 1998, we entered into a loan agreement (Loan Agreement) with
SunTrust Bank, Central Florida, N.A. (SunTrust), which SunTrust extended us a
non-revolving line of credit (Senior Debt) for up to $25.0 million. Interest
on the loan is payable monthly and the maturity date for the loan was September
25, 1999. On September 25, 1998, we received the full $25.0 million balance
under the line of credit. The proceeds of the Senior Debt were used to maintain
the regulatory capital at well capitalized levels and to support the planned
branch expansion activities.

The terms of the loan agreement were amended on December 30, 1998 to require,
among other things, that: (1) an interest rate of LIBOR plus 1.50%, effective
January 1, 1999 be paid; (2) we maintain a supervisory rating of no less than
3 on the regulatory composite scale of 1 to 5 (1 being the highest, 5
being the lowest) and that we do not become subject to a cease and desist
order; and (3) upon the written request from SunTrust

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at any time after March 31, 1999, for any reason whatsoever, Mr. William R.
Hough will purchase the loan from SunTrust.

On March 19, 1999, the loan agreement was further amended to extend the date for
SunTrusts option to request purchase of the loan from March 31, 1999 to
September 24, 1999, the maturity date of the loan. We agreed to establish an
interest reserve account with SunTrust and to deposit in the account sufficient
funds to pay interest on the note through the maturity date. SunTrust retained
its right to request purchase of the loan in the event we failed to comply with
financial covenants of the loan agreement which require us to: (1) maintain our
ratio of nonperforming assets to assets at no more than three percent; (2)
maintain our debt service coverage ratio at no less than two to one; and (3)
eliminate the excess of dividends paid by the Bank to the Company over the
Banks net income for the current and preceding two years by June 30, 1999.

During 1999, we paid down the principal amount of the $25.0 million loan from
SunTrust by $15.0 million to a balance of $10.0 million. The $10.5 million of
net proceeds from the sale of Debentures (see below), after deducting offering
costs, and the cash received from dissolution of the Savings Bank, were used to
repay principal on the SunTrust loan. In connection with the paydown, SunTrust
agreed to extend the remaining portion of its loan to us through March 31, 2001
with monthly payments of $278,000 principal plus interest at Libor plus 1.50%
and a balloon payment on March 24, 2001 of approximately $5.0 million. At
December 31, 1999, the loan carried a balance of $9.2 million with a variable
rate of 7.93%.

Convertible Subordinated Debt

In September 1999, we completed a private placement to accredited investors of
$15.0 million of our 7.0% convertible subordinated debentures (the Debentures)
maturing on October 1, 2014.  Each $1,000 principal amount of the Debentures are
convertible at any time by the holder into 55.55556 shares of our $2.00 par
value common stock. The resulting conversion price of $18.00 per share
represented a premium of approximately 22% over the $14.75 September 21, 1999
closing price of our common stock on the NASDAQ National Market. The Debentures
are redeemable by us at any time after October 1, 2004 at a premium of 106% with
the premium declining one percent per year thereafter. The Debentures may also
be redeemed at our option, without a premium, if the closing price of our common
stock equals or exceeds $23.40 for 20 consecutive trading days.

Holding Company Unsecured Notes and Term Subordinated Debt

On December 30, 1998, we entered into loan agreements with certain members of
our Board of Directors to borrow $7.0 million in unsecured notes. Interest on
these notes is payable monthly at a variable rate, changing every 90 days, equal
to the three month LIBOR rate plus 2.50%. The initial rate was 7.747%. The notes
matured on September 25, 1999. We contributed $5.0 million of the proceeds from
these unsecured notes to maintain the regulatory capital at well-capitalized
levels. The remaining $2.0 million of the proceeds was retained to service our
debt. The repayment of principal and interest on these notes is subordinate to
the payment of all principal and interest on the Senior Debt, and the payment of
interest on the Company-obligated mandatorily redeemable capital securities of
the subsidiary trust holding solely the junior subordinated debentures of the
Company.

In September 1999, we refinanced the $7.0 million of debt to our directors.
Approximately $4.3 million of the Debentures were issued to our directors in
exchange for an equal amount of the pre-existing debt, with the balance of the
Debentures being sold to third party accredited investors. The $2.7 million
balance of the $7.0 million debt to the directors not converted into the
Debentures was exchanged for an equal principal amount of non-convertible term
subordinated debt (the Term Debt), maturing on
September 22, 2006 with a
variable interest rate of prime plus one percent (or 9.50% at December 31,
1999). Both the Debentures and the Term Debt issued by us qualify as Tier 2
capital under applicable regulatory capital guidelines.

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

Concentration of Credit Risk

Our core customer loan origination base is located along the west coast and in
central Florida. The majority of our purchased loan portfolio is concentrated in
the states of Florida, California, Texas, and in the northeastern United States.
At December 31, 1999 and 1998, approximately 94% and 93%, respectively, of our
loan portfolio was secured by real estate. Mortgage loans secured by one-to-four
family properties comprised approximately 48% and 50%, respectively, of total
mortgage loans at December 31, 1999 and 1998.

Off-Balance-Sheet Items

We enter into financial instruments with off-balance-sheet risk in the normal
course of business to meet the financing needs of our customers. These financial
instruments include commitments to extend credit and commercial and standby
letters of credit. These instruments involve, to varying degrees, elements of
credit and interest-rate risks that are not recognized in the accompanying
Consolidated Balance Sheets.

Our 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. We use the same credit policies in making
commitments and conditional obligations as we do for on-balance-sheet
instruments.

A summary of financial instruments with off-balance-sheet risk at December 31,
1999, is as follows ($ in thousands):

|                                         |       |   |             |         | 
|---------------------------------------- | ----- | - | ----------- | ------- | 
|                                         |       |   | Contractual
|                                         |       |   | Amount     
|                                         |       |   |            
|Commitments to extend credit             |       | $ | 160,998     |        
|                                        
|                                        
|                                        
|                                        
|Unfunded lines of credit                 |       |   | 205,128     |        
|                                        
|                                        
|                                        
|                                        
|Commercial and standby letters of credit |       |   | 8,860       |        
|                                         |       |   |             |        
|                                         | Total |   | $           | 374,986 | 
|                                         |       |   |             |        

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 may expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements. We evaluate 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 our 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
us 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 those involved in extending loan facilities to
customers. We typically hold certificates of deposit as collateral supporting
those commitments, depending on the strength of the borrower. Outstanding,
unsecured standby letters of credit at December 31, 1999 totaled approximately
$2.6 million.

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Commitments

We have entered into a number of non-cancelable operating leases primarily for
branch banking locations. At December 31, 1999, minimum rental commitments based
on the remaining noncancelable lease terms were as follows ($ in thousands):

|                      |                                   |   |        |        | 
|--------------------- | --------------------------------- | - | ------ | ------ | 
|2000                  |                                   | $ | 6,032  |       
|                     
|                     
|                     
|                     
|2001                  |                                   |   | 5,473  |       
|                     
|                     
|                     
|                     
|2002                  |                                   |   | 4,716  |       
|                     
|                     
|                     
|                     
|2003                  |                                   |   | 4,068  |       
|                     
|                     
|                     
|                     
|2004                  |                                   |   | 3,100  |       
|                     
|                     
|                     
|                     
|Thereafter            |                                   |   | 10,785 |       
|                      |                                   |   |        |       
|                      | Gross operating lease commitments |   |        | 34,174 | 
|                     
|                     
|                     
|                     
|Less-sublease rentals |                                   |   | (2,947 | )     
|                      |                                   |   |        |       
|                      | Net operating lease commitments   |   | $      | 31,227 | 
|                      |                                   |   |        |       

Total rent expense for the years ended December 31, 1999, 1998 and 1997, was
$6.0 million, $4.0 million, and $3.0 million, respectively. Total rental income
from subleases for the years ended December 31, 1999, 1998 and 1997, was
$909,000, $1.2 million, and $1.2 million, 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%. This capital lease expired in 1999. In addition, we are obligated to make
processing payments in relation to our computer facilities of approximately $2.1
million in 2000 and $347,000 in 2001.

Contingencies

In January 1999, we filed a lawsuit against a former vendor that provided
printing and direct mailing services for the Companys mortgage banking
operations to invalidate a term contract executed by the former manager of the
High LTV Loan origination unit. The vendor had filed arbitration proceedings
against us relating to the same issues. On February 1, 2000, we reached a
settlement of this matter wherein we agreed to pay $716,000 to the vendor, which
was recorded as of December 31, 1999, and the vendor agreed to waive all further
claims for contract payments allegedly owed by us. Separately, the former
manager of the High LTV Loan origination unit is asserting an unpaid
compensation claim against us that we believe is without merit. We intend to
defend such action vigorously.

In November 1999, we received a claim from 18 former shareholders of Bankers
Savings Bank, F.S.B. (BSB) which alleges that we had knowledge, prior to
acquiring BSB, that we would incur a substantial loss during the fourth quarter
of 1998. The claim also alleges breach of contract, fraud and violations of the
Florida statutes governing securities transactions. We believe the claim is
without merit and intend to defend such action vigorously.

We are subject to various legal proceedings in the ordinary course of business.
Based on information presently available, we do not believe that the ultimate
outcome in such proceedings, in the aggregate, would have a material adverse
effect on our financial position or results of operations.

12. EMPLOYEE BENEFIT PLANS:

The Company has a retirement plan, covering substantially all employees, which
includes a 401(k) arrangement. Our contributions were $268,800, $683,800, and
$437,200 in the years ended December 31, 1999, 1998 and 1997, respectively.

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13. FAIR VALUE OF FINANCIAL INSTRUMENTS:

Generally, our practice and intent is to hold our financial instruments to
maturity, unless otherwise designated. Where available, quoted market prices are
used to determine fair value. However, many of our financial instruments lack
quoted market prices. Although we have incorporated what we consider 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 our
business, existing customer relationships, and branch banking network, among
other things.

The following estimates of the fair value of certain financial instruments held
by us 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 values calculations as of December 31,
1999 and 1998. 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 we 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 our mortgage servicing
rights was determined using the discounted cash flows from servicing.

These evaluations may incorporate specific value to us in accordance with our
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 our overall value
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.

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The table below illustrates the estimated fair value of our financial
instruments as of December 31 using the assumptions described above ($ in
thousands):

|                       |                                                           |  |      |           |      |  |   |           | 
|---------------------- | --------------------------------------------------------- |  | ---- | --------- | ---- |  | - | --------- | 
|                       |                                                           |  | 1999 |           | 1998
|                       |                                                           |  |      |           |     
|Financial Assets:     
|                      
|                      
|                      
|                      
|                       | Cash and due from banks                                   |  | $    | 62,643    |      |  | $ | 46,143    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Interest bearing deposits in banks                        |  |      | 3,758     |      |  |   | 3,467     | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Federal funds sold                                        |  |      | 27,060    |      |  |   | 93,000    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Investment and mortgage backed/related securities         |  |      | 452,902   |      |  |   | 129,783   | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Loans                                                     |  |      | 1,888,946 |      |  |   | 2,100,862 | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Mortgage servicing rights                                 |  |      | 30,247    |      |  |   | 29,608    | 
|                       |                                                           |  |      |           |      |  |   |          
|Financial Liabilities:
|                      
|                      
|                      
|                      
|                       | Deposits                                                  |  |      | 2,286,110 |      |  |   | 2,200,203 | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Securities sold under agreements to repurchase            |  |      | 37,241    |      |  |   | 36,640    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | FHLB advances                                             |  |      | 769       |      |  |   | 25,000    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Holding company senior debt                               |  |      | 9,167     |      |  |   | 25,000    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Convertible subordinated debt                             |  |      | 14,684    |      |  |   |          | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Term subordinated debt                                    |  |      | 2,750     |      |  |   |          | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Holding company unsecured notes                           |  |      |          |      |  |   | 7,000     | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Standby letters of credit                                 |  |      | 8,860     |      |  |   | 11,396    | 
|                       |                                                           |  |      |           |      |  |   |          
|                       | Commitments to extend credit and unfunded lines of credit |  |      | 366,126   |      |  |   | 457,288   | 
|                       |                                                           |  |      |           |      |  |   |          

14. STOCKHOLDERS EQUITY:

Perpetual Preferred Convertible Stock

We have 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 we can pay in any given year to
that years net income plus retained net income from the two preceding years.
Additionally, we cannot pay dividends, which would cause us to be
undercapitalized as defined by federal regulations. Under the Florida Financial
Institutions Code, the prior approval of the Department is required if the total
of all dividends declared by a bank in any calendar year will exceed the sum of
the banks net profits for that year and its retained net profits for the
preceding two years. At January 1, 2000, the Banks dividends paid in 1998 and
1999 exceeded its net profits for those years by $6.8 million. Accordingly, the
Bank would not be permitted to pay dividends to the parent holding company until
earnings in 2000 are sufficient to offset this deficit.

Non-qualified Stock Options

The Board of Directors may grant up to 25,000 shares of unqualified options each
year. As of December 31, 1999, 45,000 of such options were outstanding. The per
share exercise price of each stock option is determined by the Board of
Directors at the date of grant, vesting over a five year period.

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 our reorganization and share
exchange in which all of the stockholders adopted the Republic Bancshares, Inc.
1995 Stock Option Plan (the Plan) as a replacement for our 1994 Stock Option
Plan. The Plan was approved by the stockholders at a Special Meeting held on
February 27, 1996. On April 23, 1996 and April 28, 1998, the shareholders
approved certain amendments to the Plan (the Amendments). Under the

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Amendments, the total number of shares that may be purchased pursuant to the
Plan cannot exceed 1,125,000 shares 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. As of December 31, 1999, performance
options under the plan, which were granted to the employees of the mortgage
banking division, have all either been exercised or have expired.

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 1999, 1998
and 1997, options to purchase 242,500, 167,896 and 172,785 shares, respectively,
under the Plan were granted. Of the options previously granted, 243,991 shares
have expired, thereby making these options available for future grants. As of
December 31, 1999, 494,557 options remained outstanding under this plan, with
336,747 shares available to be granted at a future time.

1997 Stock Appreciation Rights Plan

On October 21, 1997, the Board of Directors 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 our common stock at the time of exercise, over the fair market
value of a share of our common stock at date of grant, times the number of
rights exercised. As of December 31, 1999, 40,250 SARs had been granted at the
then current market value of $26.675 with 32,540 remained outstanding. No more
than 20% of the shares may vest annually by beginning at date of grant. The term
of a SAR may vary, but shall not be less than one year or more than 10 years
from the date of grant.

We record compensation expense equal to the appreciation of the fair market
value of the stock times the number of outstanding SARs. As of December 31,
1999, there had been no appreciation of our common stock over the fair market
value at date of grant. Therefore, compensation expense has been recorded only
for those rights, which have been exercised.

Aggregate Stock Option Activity

We have adopted SFAS No. 123 for disclosure purposes. 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 1999, 1998 and 1997: risk-free interest rate of 6.34%,
4.66% and 5.35%, respectively, expected life of seven years, dividend rate of
zero percent, and expected volatility of 24.0% for 1999, 70.1% for 1998 and
30.9% for 1997. The approximate fair value of the stock options granted in 1999,
1998, and 1997 is $2.9 million, $3.4 million and $1.6 million, respectively,
which would be amortized as compensation expense over the vesting period of the
options. Options vest over five years. Had compensation cost been determined
consistent with SFAS No. 123, utilizing the assumptions detailed above, our net
income (loss) and earnings (loss) per share, as reported, would have been the
following pro forma amounts ($ in thousands except per share data):

76



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|                                    |             |  |      |        |      |  |      |         |   |  |   |       | 
|----------------------------------- | ----------- |  | ---- | ------ | ---- |  | ---- | ------- | - |  | - | ----- | 
|                                    |             |  | 1999 |        | 1998 |  | 1997
|                                    |             |  |      |        |      |  |     
|Net income (loss)                  
|                                    | As reported |  | $    | 10,692 |      |  | $    | (12,421 | ) |  | $ | 7,787 | 
|                                    | Pro forma   |  |      | 9,452  |      |  |      | (13,176 | ) |  |   | 7,444 | 
|                                   
|                                   
|                                   
|                                   
|Net income (loss) per
share-diluted
|                                    | As reported |  |      | .95    |      |  |      | (1.34   | ) |  |   | 1.01  | 
|                                    | Pro forma   |  |      | .84    |      |  |      | (1.42   | ) |  |   | .97   | 
|                                   
|                                   
|                                   
|                                   
|Net income (loss) per share-basic  
|                                    | As reported |  |      | .99    |      |  |      | (1.34   | ) |  |   | 1.12  | 
|                                    | Pro forma   |  |      | .88    |      |  |      | (1.42   | ) |  |   | 1.07  | 

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
might not be representative of that expected in future years. A summary of the
status of our stock option plans at December 31, 1999, 1998 and 1997, and for
the years then ended is presented in the table below:

|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |          |  |       |       |  |  |          |         |   |  |       |        | 
|--------------------------------------- | --------------------------------------- |  | ------ | -------- | -------- |  | -------- | ----- | -------- |  | ------ | ------- | -------- |  | ----- | ----- |  |  | -------- | ------- | - |  | ----- | ------ | 
|                                        |                                         |  | 1999   |          | 1998     |  | 1997    
|                                        |                                         |  |        |          |          |  |         
|                                        |                                         |  |        |          |          |  | Wtd Avg. |       |          |  |        |         | Wtd Avg. |  |       |       |  |  | Wtd Avg.
|                                        |                                         |  | Shares |          | Ex Price |  | Shares   |       | Ex Price |  | Shares |         | Ex Price
|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |         
|Fixed Options                          
|                                       
|                                       
|                                       
|                                       
|                                        | Outstanding  beg. of year              |  |        | 503,939  |          |  | $        | 20.15 |          |  |        | 407,995 |          |  | $     | 15.10 |  |  |          | 281,217 |   |  | $     | 11.68  | 
|                                       
|                                       
|                                       
|                                       
|                                        | Granted                                 |  |        | 267,500  |          |  |          | 14.73 |          |  |        | 167,896 |          |  |       | 28.58 |  |  |          | 160,385 |   |  |       | 20.67  | 
|                                       
|                                       
|                                       
|                                       
|                                        | Exercised                               |  |        | (119,595 | )        |  |          | 10.33 |          |  |        | (61,552 | )        |  |       | 9.65  |  |  |          | (21,300 | ) |  |       | 11.79  | 
|                                       
|                                       
|                                       
|                                       
|                                        | Forfeited/Expired                       |  |        | (112,287 | )        |  |          | 22.79 |          |  |        | (10,400 | )        |  |       | 20.55 |  |  |          | (12,307 | ) |  |       | 15.32  | 
|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |          |  |       |       |  |  |          |        
|                                        | Outstanding  end of year               |  |        | 539,557  |          |  |          | 19.09 |          |  |        | 503,939 |          |  |       | 20.15 |  |  |          | 407,995 |   |  |       | 15.10  | 
|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |          |  |       |       |  |  |          |        
|                                        | Exercisable  end of year               |  |        | 234,357  |          |  |          | 19.04 |          |  |        | 284,579 |          |  |       | 13.36 |  |  |          | 253,425 |   |  |       | 11.61  | 
|                                       
|                                       
|                                       
|                                       
|                                        | Wtd. avg. fair value
of options granted |  |        |          |          |  |          | 10.93 |          |  |        |         |          |  |       | 20.04 |  |  |          |         |   |  |       | 9.45   | 
|                                       
|                                       
|                                       
|                                       
|Performance Options                    
|                                       
|                                       
|                                       
|                                       
|                                        | Outstanding  beg. of year              |  |        | 139,100  |          |  |          | 14.79 |          |  |        | 172,400 |          |  |       | 14.56 |  |  |          | 200,000 |   |  |       | 13.63  | 
|                                       
|                                       
|                                       
|                                       
|                                        | Granted                                 |  |        |         |          |  |          |      |          |  |        |        |          |  |       |      |  |  |          | 12,400  |   |  |       | 26.683 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Exercised                               |  |        | (113,100 | )        |  |          | 13.63 |          |  |        | (16,500 | )        |  |       | 13.63 |  |  |          |        |   |  |       |       | 
|                                       
|                                       
|                                       
|                                       
|                                        | Forfeited/Expired                       |  |        | (26,000  | )        |  |          | 19.85 |          |  |        | (16,800 | )        |  |       | 13.63 |  |  |          | (40,000 | ) |  |       | 13.63  | 
|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |          |  |       |       |  |  |          |        
|                                        | Outstanding  end of year               |  |        |         |          |  |          |      |          |  |        | 139,100 |          |  |       | 14.79 |  |  |          | 172,400 |   |  |       | 14.56  | 
|                                        |                                         |  |        |          |          |  |          |       |          |  |        |         |          |  |       |       |  |  |          |        
|Exercisable  end of year               |                                         |  |       |          |          |  |         |       |          |  | 68,900 |         |          |  | 14.79 |       |  |  |         |         |   |  |      |       
|                                       
|                                       
|                                       
|                                       
|Wtd. avg. fair value
of options granted |                                         |  |        |          |          |  |         |       |          |  |        |         |          |  |      |       |  |  |          |         |   |  | 11.91 |       

|                    |             |                     |        |                  |                  |                  |  |             |  |                  |        |       |  |  |  |         |  |  |  |       | 
|------------------- | ----------- | ------------------- | ------ | ---------------- | ---------------- | ---------------- |  | ----------- |  | ---------------- | ------ | ----- |  |  |  | ------- |  |  |  | ----- | 
|Options Outstanding |             | Options Exercisable
|                    |             |                    
|                    |             |                     | Number |                  | Weighted-Average |                  |  |             |  |                  | Number
|Range of            |             | Outstanding         |        | Remaining        |                  | Weighted-Average |  | Exercisable |  | Weighted-Average
|Exercise Prices     |             | at 12/31/99         |        | Contractual Life |                  | Exercise Price   |  | at 12/31/99 |  | Exercise Price  
|                    |             |                     |        |                  |                  |                  |  |             |  |                 
|$                   | 10.00-12.63 |                     |        | 68,150           |                  |                  |  | 7.79        |  |                  |        | 11.81 |  |  |  | 34,550  |  |  |  | 11.02 | 
|                   
|                   
|                   
|                   
|                    | 13.63-17.63 |                     |        | 280,667          |                  |                  |  | 8.22        |  |                  |        | 14.79 |  |  |  | 110,107 |  |  |  | 14.32 | 
|                   
|                   
|                   
|                   
|                    | 26.68-28.94 |                     |        | 190,740          |                  |                  |  | 8.17        |  |                  |        | 28.14 |  |  |  | 89,700  |  |  |  | 27.92 | 

77



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15. EARNINGS (LOSS) PER SHARE:

Net Income (Loss) Per Common and Common Equivalent Share

In 1997 we adopted SFAS No. 128, Earnings Per Share, effective December 15,
1997. Diluted earnings (loss) per common and common equivalent shares have been
computed by dividing net income (loss) 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 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 (loss) per common
share was computed by dividing net income (loss) by the weighted average number
of shares of common stock outstanding during the year. During 1999, there were
298,140 stock options and 270,000 shares of convertible subordinated debt which
were antidilutive. During 1998, there were 643,039 stock options and 750,000
shares of convertible preferred stock, which were antidilutive. During 1997,
there were 102,800 stock options which were antidilutive.

The table below reconciles the calculation of diluted and basic earnings per
share for 1999 and 1997 ($ in thousands, except per share data):

|                           |                                                                            |   |        |        |             |  |            |            |          |   |      |     | 
|-------------------------- | -------------------------------------------------------------------------- | - | ------ | ------ | ----------- |  | ---------- | ---------- | -------- | - | ---- | --- | 
|                           |                                                                            |   | 1999  
|                           |                                                                            |   |       
|                           |                                                                            |   |        |        |             |  | Weighted   |            | Earnings
|                           |                                                                            |   | Net    |        | Shares      |  | Per       
|                           |                                                                            |   | Income |        | Outstanding |  | Share     
|                           |                                                                            |   |        |        |             |  |           
|Net Income                
|                          
|                          
|                          
|                          
|                           | Basic earnings per share                                                   |   | $      | 10,427 |             |  |            | 10,484,650 |          |   | $    | .99 | 
|                          
|                          
|                          
|                          
|                           | Options exercised during the
period  incremental effect
prior to exercise |   |        |       |             |  |            | 23,676     |         
|                          
|                          
|                          
|                          
|                           | Options outstanding at end
of period                                       |   |        |       |             |  |            | 41,576     |         
|                          
|                          
|                          
|                          
|                           | Convertible perpetual preferred
Stock                                      |   |        | 265    |             |  |            | 750,000    |          |   |      |    | 
|                           |                                                                            |   |        |        |             |  |            |            |          |   |      |    
|Diluted earnings per share |                                                                            | $ | 10,692 |        |             |  | 11,299,902 |            |          | $ | 0.95 |    
|                           |                                                                            |   |        |        |             |  |            |            |          |   |      |    

|           |                                                                              |   |        |       |             |  |           |           |          |  |   |      | 
|---------- | ---------------------------------------------------------------------------- | - | ------ | ----- | ----------- |  | --------- | --------- | -------- |  | - | ---- | 
|           |                                                                              |   | 1997  
|           |                                                                              |   |       
|           |                                                                              |   |        |       |             |  | Weighted  |           | Earnings
|           |                                                                              |   | Net    |       | Shares      |  | Per      
|           |                                                                              |   | Income |       | Outstanding |  | Share    
|           |                                                                              |   |        |       |             |  |          
|Net Income |                                                                              | $ | 7,524  |       |             |  | 6,693,970 |          
|          
|          
|          
|          
|           | Basic earnings per share                                                     |   |        |       |             |  |           |           |          |  | $ | 1.12 | 
|          
|          
|          
|          
|           | Options exercised during the
period  incremental effect
prior to exercise   |   |        |      |             |  |           | 5,198     |         
|          
|          
|          
|          
|           | Options outstanding at end of
period                                         |   |        |      |             |  |           | 171,306   |         
|          
|          
|          
|          
|           | Convertible perpetual preferred
stock                                        |   |        | 263   |             |  |           | 750,000   |         
|          
|          
|          
|          
|           | Convertible subordinated debentures
- incremental effect prior to
conversion |   |        | 245   |             |  |           | 300,452   |          |  |   |     | 
|           |                                                                              |   |        |       |             |  |           |           |          |  |   |      | 
|           | Diluted earnings per share                                                   |   | $      | 8,032 |             |  |           | 7,920,926 |          |  | $ | 1.01 | 
|           |                                                                              |   |        |       |             |  |           |           |          |  |   |      | 

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16. REGULATORY CAPITAL REQUIREMENTS:

We are required to comply with the capital adequacy standards established by the
Federal Reserve and the FDIC. There are three basic measures of capital adequacy
that have been promulgated by the Federal Reserve and FDIC, 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.

Failure to meet capital guidelines could subject us 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 our 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, 1999 and 1998, we were considered well capitalized under
the federal banking agencies for prompt corrective action regulations. The table
which follows sets forth the amounts of capital and capital ratios as of
December 31, 1999 and 1998, and the applicable regulatory minimums ($ in
thousands):

79



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|                                           |                                                    |  |         |         |       |  |        |       |       |  |   |         |  |  |  |       |  
|------------------------------------------ | -------------------------------------------------- |  | ------- | ------- | ----- |  | ------ | ----- | ----- |  | - | ------- |  |  |  | ----- | -
|                                           |                                                    |  | Company |         | Bank 
|                                           |                                                    |  |         |         |      
|                                           |                                                    |  | Amount  |         | Ratio |  | Amount |       | Ratio
|                                           |                                                    |  |         |         |       |  |        |       |      
|As of December 31, 1999:                  
|                                          
|                                          
|                                          
|                                          
|Risk-Based Capital:                       
|                                          
|                                          
|                                          
|                                          
|                                           | Tier 1 Capital                                     | 
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  | $       | 149,560 |       |  |        | 9.17  | %     |  | $ | 168,108 |  |  |  | 10.33 | %
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 65,234  |       |  |        | 4.00  |       |  |   | 65,064  |  |  |  | 4.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 84,326  |       |  |        | 5.17  |       |  |   | 103,044 |  |  |  | 6.33  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 97,596  |  |  |  | 6.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over Well Capitalized requirements        |  |         | N/A     |       |  |        | N/A   |       |  |   | 70,512  |  |  |  | 4.33  |  
|                                          
|                                          
|                                          
|                                          
|                                          
|                                           | Total Capital                                      | 
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  |         | 188,093 |       |  |        | 11.53 |       |  |   | 189,154 |  |  |  | 11.63 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 130,469 |       |  |        | 8.00  |       |  |   | 130,128 |  |  |  | 8.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 57,624  |       |  |        | 3.53  |       |  |   | 59,026  |  |  |  | 3.63  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 162,660 |  |  |  | 10.00 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over Well Capitalized requirements        |  |         | N/A     |       |  |        | N/A   |       |  |   | 26,494  |  |  |  | 1.63  |  
|                                          
|                                          
|                                          
|                                          
|                                          
|Tier 1 Capital to Total Assets (Leverage):
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  |         | 149,560 |       |  |        | 6.02  |       |  |   | 168,108 |  |  |  | 6.78  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 99,298  |       |  |        | 4.00  |       |  |   | 99,136  |  |  |  | 4.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 50,262  |       |  |        | 2.02  |       |  |   | 68,972  |  |  |  | 2.78  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 123,920 |  |  |  | 5.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over Well Capitalized requirements        |  |         | N/A     |       |  |        | N/A   |       |  |   | 44,188  |  |  |  | 1.78  |  
|                                          
|                                          
|                                          
|                                          
|                                          
|As of December 31, 1998:                  
|                                          
|                                          
|                                          
|                                          
|Risk-Based Capital:                       
|                                          
|                                          
|                                          
|                                          
|                                           | Tier 1 Capital                                     | 
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  | $       | 133,137 |       |  |        | 7.72  | %     |  | $ | 158,876 |  |  |  | 9.27  | %
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 68,983  |       |  |        | 4.00  |       |  |   | 68,584  |  |  |  | 4.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 64,154  |       |  |        | 3.72  |       |  |   | 90,292  |  |  |  | 5.27  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 102,876 |  |  |  | 6.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over Well Capitalized requirements        |  |         | N/A     |       |  |        | N/A   |       |  |   | 56,000  |  |  |  | 3.27  |  
|                                          
|                                          
|                                          
|                                          
|                                          
|                                           | Total Capital                                      | 
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  |         | 155,435 |       |  |        | 9.01  |       |  |   | 181,046 |  |  |  | 10.56 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 137,966 |       |  |        | 8.00  |       |  |   | 137,168 |  |  |  | 8.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 17,469  |       |  |        | 1.01  |       |  |   | 43,205  |  |  |  | 2.56  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 171,460 |  |  |  | 10.00 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over/under Well Capitalized requirements  |  |         | N/A     |       |  |        | N/A   |       |  |   | 9,586   |  |  |  | 0.56  |  
|                                          
|                                          
|                                          
|                                          
|                                          
|Tier 1 Capital to Total Assets (Leverage):
|                                          
|                                          
|                                          
|                                          
|                                           | Actual                                             |  |         | 133,137 |       |  |        | 5.49  |       |  |   | 158,876 |  |  |  | 6.66  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Minimum required to be Adequately Capitalized    |  |         | 96,944  |       |  |        | 4.00  |       |  |   | 95,425  |  |  |  | 4.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over minimum to be Adequately Capitalized |  |         | 36,193  |       |  |        | 1.49  |       |  |   | 63,451  |  |  |  | 2.66  |  
|                                          
|                                          
|                                          
|                                          
|                                           | To be Well Capitalized                           |  |         | N/A     |       |  |        | N/A   |       |  |   | 119,282 |  |  |  | 5.00  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Excess over Well Capitalized requirements        |  |         | N/A     |       |  |        | N/A   |       |  |   | 39,594  |  |  |  | 1.66  |  

80



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##### Table of Contents



|                         |                                             |  |                    |       |               |  |        |       |       |  |   |       |  |  |  |       |  
|------------------------ | ------------------------------------------- |  | ------------------ | ----- | ------------- |  | ------ | ----- | ----- |  | - | ----- |  |  |  | ----- | -
|                         |                                             |  | Risk Based Capital
|                         |                                             |  |                   
|                         |                                             |  | Tier 1 Capital     |       | Total Capital
|                         |                                             |  |                    |       |              
|                         |                                             |  | Amount             |       | Ratio         |  | Amount |       | Ratio
|                         |                                             |  |                    |       |               |  |        |       |      
|The Savings Bank        
|                        
|                        
|                        
|                        
|As of December 31, 1998:
|                        
|                        
|                        
|                        
|                         | Actual                                      |  | $                  | 2,342 |               |  |        | 30.19 | %     |  | $ | 2,402 |  |  |  | 30.97 | %
|                        
|                        
|                        
|                        
|                         | Minimum required                            |  |                    | N/A   |               |  |        | N/A   |       |  |   | 620   |  |  |  | 8.00  |  
|                        
|                        
|                        
|                        
|                         | Excess over minimum                         |  |                    | N/A   |               |  |        | N/A   |       |  |   | 1,782 |  |  |  | 22.97 |  
|                        
|                        
|                        
|                        
|                         | To be Well Capitalized                    |  |                    | 465   |               |  |        | 6.00  |       |  |   | 776   |  |  |  | 10.00 |  
|                        
|                        
|                        
|                        
|                         | Excess over Well Capitalized requirements |  |                    | 1,877 |               |  |        | 24.19 |       |  |   | 1,626 |  |  |  | 20.97 |  

|                                            |  |                         |       |                       |  |        |       |       |  |   |       |  |  |  |       |  
|------------------------------------------- |  | ----------------------- | ----- | --------------------- |  | ------ | ----- | ----- |  | - | ----- |  |  |  | ----- | -
|                                            |  | Tier 1 Capital to       |       | Total Tangible Equity
|                                            |  | Total Assets (Leverage) |       | to Assets            
|                                            |  |                         |       |                      
|                                            |  | Amount                  |       | Ratio                 |  | Amount |       | Ratio
|                                            |  |                         |       |                       |  |        |       |      
|Actual                                      |  | $                       | 2,342 |                       |  |        | 12.15 | %     |  | $ | 2,402 |  |  |  | 12.43 | %
|                                           
|                                           
|                                           
|                                           
|Minimum required                            |  |                         | 778   |                       |  |        | 4.00  |       |  |   | 1,507 |  |  |  | 8.00  |  
|                                           
|                                           
|                                           
|                                           
|Excess over minimum                         |  |                         | 1,564 |                       |  |        | 8.15  |       |  |   | 835   |  |  |  | 4.43  |  
|                                           
|                                           
|                                           
|                                           
|To be Well Capitalized                    |  |                         | 973   |                       |  |        | 5.00  |       |  |   | N/A   |  |  |  | N/A   |  
|                                           
|                                           
|                                           
|                                           
|Excess over Well Capitalized requirements |  |                         | 1,369 |                       |  |        | 7.15  |       |  |   | N/A   |  |  |  | N/A   |  

17. RELATED PARTY TRANSACTIONS:

Mr. William R. Hough, is chairman of the board, a director and the largest
shareholder of the Company. Mr. Hough is also President and the controlling
shareholder of William R. Hough & Co. (WRHC), a NASD-member investment-banking
firm. During 1999, we entered into an agreement with WRHC whereby they would act
as our agent in open-market purchases of securities. WRHC is compensated under
that agreement on a commission basis. During 1999 and 1998, we placed $241.3
million and $547.2 million, respectively, of forward sales on mortgage-backed
securities through WRHC. We also periodically purchase securities under
agreement to repurchase at a rate based on the prevailing federal funds rate and
one-eighth of one percent, per an agreement entered into on August 15, 1995.

In September 1999, WRHC acted as sales agent for a private
placement to accredited investors of $15.0 million of our 7.0%
convertible subordinated debentures maturing on October 1, 2014. WRHC
was paid fees in an amount equal to $215,000 and were reimbursed for
their out-of-pocket expenses.

In May 1998, WRHC acted as co-underwriters for an offering of 2.6 million shares
of our common stock and as such was entitled to receive fees in an amount equal
to $1.5 million. In addition, during 1998, WRHC was engaged to act as one of the
underwriters in connection with a private placement offering of approximately
$240.0 million in securities backed by High LTV Loans and received $550,761 in
placement agent fees in the transaction. We also reimbursed WRHC for
out-of-pocket expenses.

In December 1997, we completed a securitization of $60 million of High LTV home
equity loans. WRHC 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. We also reimbursed WRHC
for reasonable out-of-pocket expenses.

In July 1997, in connection with an offering of trust preferred securities, WRHC
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 $539,000. In addition, we agreed to reimburse WRHC
for certain expenses and legal fees not to exceed $65,000.

WRHC offers sales of insurance and mutual fund products and investment advisory
services on our premises. We are paid 50% of the net profits earned from sales
of investment products on our premises. The Company fee income earned from this
relationship of $58,200 and $24,000 during 1999 and 1998, respectively.

Certain directors and executive officers, members of their immediate families,
and entities with which such persons are associated are customers of ours. As
such, they had transactions in the ordinary course of business with us. All
loans and commitments to lend included in those transactions were made in the
ordinary course of business, upon substantially the same terms. Features
including interest rates and collateral, as those prevailing

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at the time for comparable transactions with other persons and, in our opinion,
have not involved more than the normal risk of collectibility or presented other
unfavorable features.

18. BANK HOLDING COMPANY FINANCIAL STATEMENTS:

Condensed financial statements 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)

|                     |                                                                       |                   |       |         |                    |         |      |         |        |         | 
|-------------------- | --------------------------------------------------------------------- | ----------------- | ----- | ------- | ------------------ | ------- | ---- | ------- | ------ | ------- | 
|                     |                                                                       |                   |       |         | As of December 31,
|                     |                                                                       |                   |       |         |                   
|                     |                                                                       |                   |       |         | 1999               |         | 1998
|                     |                                                                       |                   |       |         |                    |         |     
|Assets              
|                    
|                    
|                    
|                    
|                     | Cash                                                                  |                   | $     | 4,123   |                    |         | $    | 1,210   |       
|                    
|                    
|                    
|                    
|                     | Investment in wholly-owned subsidiaries                               |                   |       | 218,994 |                    |         |      | 221,968 |       
|                    
|                    
|                    
|                    
|                     | Other assets                                                          |                   |       | 2,805   |                    |         |      | 1,207   |       
|                     |                                                                       |                   |       |         |                    |         |      |        
|                     |                                                                       |                   | Total |         | $                  | 225,922 |      |         | $      | 224,385 | 
|                     |                                                                       |                   |       |         |                    |         |      |        
|Liabilities         
|                    
|                    
|                    
|                    
|                     | Holding company senior debt                                           |                   | $     | 9,167   |                    |         | $    | 25,000  |       
|                    
|                    
|                    
|                    
|                     | Convertible subordinated debt                                         |                   |       | 14,684  |                    |         |      |        |       
|                    
|                    
|                    
|                    
|                     | Term subordinated debt                                                |                   |       | 2,750   |                    |         |      |        |       
|                    
|                    
|                    
|                    
|                     | Holding company unsecured notes                                       |                   |       |        |                    |         |      | 7,000   |       
|                    
|                    
|                    
|                    
|                     | Junior subordinated debt to subsidiary                                |                   |       | 28,750  |                    |         |      | 28,750  |       
|                    
|                    
|                    
|                    
|                     | Accrued interest on debt                                              |                   |       | 326     |                    |         |      | 38      |       
|                     |                                                                       |                   |       |         |                    |         |      |        
|                     |                                                                       | Total liabilities |       |         | 55,677             |         |      |         | 60,788 |        
|                    
|                    
|                    
|                    
|Stockholders Equity
|                    
|                    
|                    
|                    
|                     | Perpetual preferred convertible stock                                 |                   |       | 1,500   |                    |         |      | 1,500   |       
|                    
|                    
|                    
|                    
|                     | Common stock                                                          |                   |       | 21,112  |                    |         |      | 20,646  |       
|                    
|                    
|                    
|                    
|                     | Capital surplus                                                       |                   |       | 128,780 |                    |         |      | 125,364 |       
|                    
|                    
|                    
|                    
|                     | Retained earnings                                                     |                   |       | 26,530  |                    |         |      | 16,103  |       
|                    
|                    
|                    
|                    
|                     | Unrealized losses on available
for sale securities, net of tax effect |                   |       | (7,677  | )                  |         |      | (16     | )     
|                     |                                                                       |                   |       |         |                    |         |      |        
|                     | Total stockholders equity                                            |                   |       | 170,245 |                    |         |      | 163,597 |       
|                     |                                                                       |                   |       |         |                    |         |      |        
|                     |                                                                       |                   | Total |         | $                  | 225,922 |      |         | $      | 224,385 | 
|                     |                                                                       |                   |       |         |                    |         |      |        

Republic Bancshares, Inc.
Parent-Only Condensed Statements of Operations
($ in thousands)

|                                                        |                   |   |        |        |      |   |         |         |   |   |        |       | 
|------------------------------------------------------- | ----------------- | - | ------ | ------ | ---- | - | ------- | ------- | - | - | ------ | ----- | 
|                                                        |                   |   | 1999   |        | 1998 |   | 1997   
|                                                        |                   |   |        |        |      |   |        
|Dividends from bank                                     |                   | $ | 7,200  |        |      | $ | 2,499   |         |   | $ | 828    |      
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on deposits                                    |                   |   | 13     |        |      |   |        |         |   |   |       |      
|                                                       
|                                                       
|                                                       
|                                                       
|Interest expense on holding company debt                |                   |   | (2,276 | )      |      |   | (507    | )       |   |   | (392   | )    
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on borrowings from subsidiary                  |                   |   | (2,616 | )      |      |   | (2,616  | )       |   |   | (1,090 | )    
|                                                       
|                                                       
|                                                       
|                                                       
|Equity in undistributed net income (loss)
of subsidiary |                   |   | 6,562  |        |      |   | (13,004 | )       |   |   | 8,441  |      
|                                                       
|                                                       
|                                                       
|                                                       
|Other expense                                           |                   |   | (3     | )      |      |   |        |         |   |   |       |      
|                                                       
|                                                       
|                                                       
|                                                       
|Income tax benefit                                      |                   |   | 1,812  |        |      |   | 1,207   |         |   |   |       |      
|                                                        |                   |   |        |        |      |   |         |         |   |   |        |      
|                                                        | Net income (loss) |   | $      | 10,692 |      |   | $       | (12,421 | ) |   | $      | 7,787 | 
|                                                        |                   |   |        |        |      |   |         |         |   |   |        |      

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Republic Bancshares, Inc.
Parent-Only Condensed Cash Flow Statements
($ in thousands)

|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |         |        |         |  
|----------------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------- | ---------------------------------------------------- | ------- | -------------------------------- | ----- | ----- | -------- | ------- | -------- | - | ------- | ------ | ------- | -
|                                          |                                                                                      |                                                     |                                                      |         | For the Years Ended December 31,
|                                          |                                                                                      |                                                     |                                                      |         |                                 
|                                          |                                                                                      |                                                     |                                                      |         | 1999                             |       | 1998  |          | 1997   
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |        
|Operating Activities:                    
|                                         
|                                         
|                                         
|                                         
|                                          | Net income (loss)                                                                    |                                                     | $                                                    | 10,692  |                                  |       | $     | (12,421  | )       |          | $ | 7,787   |       
|                                         
|                                         
|                                         
|                                         
|                                          | Adjustments to reconcile net income (loss)
to net cash used in operating activities:
|                                         
|                                         
|                                         
|                                         
|                                          | Equity in undistributed net income (loss) of subsidiary                              |                                                     |                                                      | (6,562  | )                                |       |       | 13,004   |         |          |   | (8,441  | )     
|                                         
|                                         
|                                         
|                                         
|                                          | Expense on performance options                                                       |                                                     |                                                      | 1,103   |                                  |       |       | 551      |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Amortization of issuance costs                                                       |                                                     |                                                      | 3       |                                  |       |       |         |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Net increase in other assets                                                         |                                                     |                                                      | (1,598  | )                                |       |       | (1,207   | )       |          |   | 325     |       
|                                         
|                                         
|                                         
|                                         
|                                          | Net increase in other liabilities                                                    |                                                     |                                                      | 288     |                                  |       |       | 12       |         |          |   | 22      |       
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|                                          | Net cash provided by (used in) operating activities:                                 |                                                     |                                                      | 3,926   |                                  |       |       | (61      | )       |          |   | (307    | )     
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|Investment Activities:                   
|                                         
|                                         
|                                         
|                                         
|                                          | Equity investment in banking subsidiary                                              |                                                     |                                                      | (1,251  | )                                |       |       | (104,164 | )       |          |   | (33,322 | )     
|                                         
|                                         
|                                         
|                                         
|                                          | Return of investment from savings bank                                               |                                                     |                                                      | 3,127   |                                  |       |       |         |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Equity investment in trust subsidiary                                                |                                                     |                                                      |        |                                  |       |       |         |         |          |   | (889    | )     
|                                         
|                                         
|                                         
|                                         
|                                          | Equity investment in insurance subsidiary                                            |                                                     |                                                      |        |                                  |       |       |         |         |          |   | (10     | )     
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|                                          |                                                                                      |                                                     | Net cash provided by (used in) investing activities: |         |                                  | 1,876 |       |          |         | (104,164 | ) |         |        | (34,221 | )
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|Financing Activities:                    
|                                         
|                                         
|                                         
|                                         
|                                          | Proceeds from issuance of common stock                                               |                                                     |                                                      |        |                                  |       |       | 72,882   |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Proceeds from (repayment of) holding company debt                                    |                                                     |                                                      | (22,833 | )                                |       |       | 32,000   |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Proceeds from subordinated debt                                                      |                                                     |                                                      | 17,430  |                                  |       |       |         |         |          |   |        |       
|                                         
|                                         
|                                         
|                                         
|                                          | Proceeds of borrowings from subsidiary                                               |                                                     |                                                      |        |                                  |       |       |         |         |          |   | 28,750  |       
|                                         
|                                         
|                                         
|                                         
|                                          | Issuance of stock in merger                                                          |                                                     |                                                      |        |                                  |       |       |         |         |          |   | 12,374  |       
|                                         
|                                         
|                                         
|                                         
|                                          | Decrease in minority interest                                                        |                                                     |                                                      |        |                                  |       |       |         |         |          |   | (6,421  | )     
|                                         
|                                         
|                                         
|                                         
|                                          | Increase in retained earnings from merger                                            |                                                     |                                                      |        |                                  |       |       |         |         |          |   | 1       |       
|                                         
|                                         
|                                         
|                                         
|                                          | Conversion of subordinated debt                                                      |                                                     |                                                      |        |                                  |       |       |         |         |          |   | (152    | )     
|                                         
|                                         
|                                         
|                                         
|                                          | Proceeds from exercise of stock options                                              |                                                     |                                                      | 2,779   |                                  |       |       | 818      |         |          |   | 240     |       
|                                         
|                                         
|                                         
|                                         
|                                          | Dividend payments on perpetual preferred stock                                       |                                                     |                                                      | (265    | )                                |       |       | (265     | )       |          |   | (264    | )     
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|                                          |                                                                                      | Net cash provided by (used in) financing activities |                                                      |         | (2,889                           | )     |       |          | 105,435 |          |   |         | 34,528 |        
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|NET INCREASE IN CASH AND CASH EQUIVALENTS |                                                                                      |                                                     | 2,913                                                |         |                                  |       | 1,210 |          |         |          |  |        
|                                         
|                                         
|                                         
|                                         
|                                          | Cash balance beginning                                                               |                                                     |                                                      | 1,210   |                                  |       |       |         |         |          |   |        |       
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        
|                                          | Cash balance ending                                                                  |                                                     | $                                                    | 4,123   |                                  |       | $     | 1,210    |         |          | $ |        |       
|                                          |                                                                                      |                                                     |                                                      |         |                                  |       |       |          |         |          |   |        

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19. PRIOR YEAR BUSINESS SEGMENT INFORMATION:

As a result of the restructuring of our mortgage banking operation in the fourth
quarter of 1998, that operation now represents an insubstantial portion of our
overall business activities during 1999 and has ceased to be a reportable
business segment.

Our operations, through December 31, 1998, were divided into two business
segments; commercial banking and mortgage banking. Commercial banking activities
include our lending for portfolio purposes, deposit gathering through the retail
branch network, investment and liquidity management. Mortgage banking
activities, which began in 1996, operated through a separate division, include
originating and purchasing mortgage loans for sale as well as selling those
loans. We provided support for our mortgage banking division in areas such as
secondary marketing and data processing. The following are business segment
results of operation for the years ended December 31, 1998 and 1997. We have
elected to report our business segments before non-operating items and without
allocation of income taxes and minority interests.

[Balance of page intentionally left blank]

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Business Segement Data
Years Ended December 31, 1998 and 1997
($ in thousands)

|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |        | 
|-------------------------------------------------------------------------------- | ---------------------------- | -------------------- | ------- | ---------- | ------ | -------- | ------- | ------- | ----- | ---------- | ------- | --------- | ------ | ------- | ------- | --------- | ------ | - | ------ | ------ | ----- | - | ------- | --------- | ------ | 
|                                                                                 |                              |                      |         | 1998       |        | 1997    
|                                                                                 |                              |                      |         |            |        |         
|                                                                                 |                              |                      |         | Commercial |        | Mortgage |         | Company |       | Commercial |         | Mortgage  |        | Company
|                                                                                 |                              |                      |         | Banking    |        | Banking  |         | Total   |       | Banking    |         | Banking   |        | Total  
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |        
|Assets:                                                                         
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Total assets (at period-end) |                      | $       | 2,320,941  |        |          | $       | 184,176 |       |            | $       | 2,505,117 |        |         | $       | 1,580,952 |        |   | $      | 97,879 |       |   | $       | 1,678,831 |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                              | Nonperforming assets |         |            | 36,301 |          |         |         | 6,484 |            |         |           | 42,785 |         |         |           | 36,453 |   |        |        | 2,338 |   |         |           | 38,791 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Operating Data:                                                                 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest income                                                                  |                              |                      | 141,554 |            |        |          | 31,239  |         |       |            | 172,793 |           |        |         | 108,704 |           |        |   | 9,130  |        |       |   | 117,834 |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Interest expense                                                                 |                              |                      | 71,677  |            |        |          | 17,932  |         |       |            | 89,609  |           |        |         | 56,591  |           |        |   | 4,151  |        |       |   | 60,742  |          
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Net interest income                                                              |                              |                      | 69,877  |            |        |          | 13,307  |         |       |            | 83,184  |           |        |         | 52,113  |           |        |   | 4,979  |        |       |   | 57,092  |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Loan loss provision (recurring)                                                  |                              |                      | 4,266   |            |        |          |        |         |       |            | 4,266   |           |        |         | 3,247   |           |        |   |       |        |       |   | 3,247   |          
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Net interest income after
loan loss provision                                    |                              |                      | 65,611  |            |        |          | 13,307  |         |       |            | 78,918  |           |        |         | 48,866  |           |        |   | 4,979  |        |       |   | 53,845  |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Noninterest income                                                               |                              |                      | 14,905  |            |        |          | 41,252  |         |       |            | 56,157  |           |        |         | 14,148  |           |        |   | 15,303 |        |       |   | 29,451  |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|General and administrative
(G & A) expenses                                      |                              |                      | 59,447  |            |        |          | 69,570  |         |       |            | 129,017 |           |        |         | 47,938  |           |        |   | 17,482 |        |       |   | 65,420  |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Other noninterest (income) expense                                               |                              |                      | (40     | )          |        |          |        |         |       |            | (40     | )         |        |         | 396     |           |        |   |       |        |       |   | 396     |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Amort. of goodwill & premium
on deposits                                         |                              |                      | 1,930   |            |        |          |        |         |       |            | 1,930   |           |        |         | 479     |           |        |   |       |        |       |   | 479     |          
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Net income (loss) before non-operating
items, income taxes and minority
interest |                              | $                    | 19,179  |            |        | $        | (15,011 | )       |       | $          | 4,168   |           |        | $       | 14,201  |           |        | $ | 2,800  |        |       | $ | 17,001  |          
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Non-operating items:                                                            
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Loan loss provision on loans
transferred to portfolio                            |                              |                      |         |            |        |          |         |         |       |            | (9,995  | )         |        |         |         |           |        |   |        |        |       |   |        |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Merger/acquisition expenses                                                      |                              |                      |         |            |        |          |         |         |       |            | (3,233  | )         |        |         |         |           |        |   |        |        |       |   | (1,144  | )        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Restructuring cost                                                               |                              |                      |         |            |        |          |         |         |       |            | (6,673  | )         |        |         |         |           |        |   |        |        |       |   |        |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Provision for losses on ORE                                                      |                              |                      |         |            |        |          |         |         |       |            | (1,603  | )         |        |         |         |           |        |   |        |        |       |   | (530    | )        
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Net (loss) income before income
taxes and minority interest                      |                              |                      |         |            |        |          |         |         |       |            | (17,336 | )         |        |         |         |           |        |   |        |        |       |   | 15,327  |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Income tax benefit (expense)                                                     |                              |                      |         |            |        |          |         |         |       |            | 6,602   |           |        |         |         |           |        |   |        |        |       |   | (6,165  | )        
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|Net (loss) income before minority interests                                      |                              |                      |         |            |        |          |         |         |       |            | (10,734 | )         |        |         |         |           |        |   |        |        |       |   | 9,162   |          
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Minority interest in income from
subsidiary trust                                |                              |                      |         |            |        |          |         |         |       |            | (1,687  | )         |        |         |         |           |        |   |        |        |       |   | (701    | )        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Minority interest in FFO                                                         |                              |                      |         |            |        |          |         |         |       |            |        |           |        |         |         |           |        |   |        |        |       |   | (674    | )        
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Net (loss) income                                                                |                              |                      |         |            |        |          |         |         |       | $          | (12,421 | )         |        |         |         |           |        |   |        |        |       | $ | 7,787   |          
|                                                                                 |                              |                      |         |            |        |          |         |         |       |            |         |           |        |         |         |           |        |   |        |        |       |   |         |           |       

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20. RESTRUCTURING COSTS AND OTHER RELATED CHARGES:

In the fourth quarter of 1998 we significantly reduced the size and scope of our
mortgage banking activities. We ceased originating High LTV Loans and
substantially reduced originations of nonconforming first mortgage loans. We
also closed our out-of-state lending offices and ceased all telemarketing
efforts that were the source of the majority of the loan originations from our
mortgage-banking unit.

In connection with this reorganization of mortgage banking activities, a
restructuring charge of approximately $6.7 million was recorded at December 31,
1998, which included severance benefits payable to mortgage banking employees
whose positions were eliminated, outplacement services for those employees,
write-downs for abandoned assets, costs related to the consolidation of
facilities and legal costs directly related to the restructuring. In addition,
an $818,000 charge was recorded for legal and other costs related to the
reorganization but not includable in the restructuring charge. We have completed
the restructuring process of the mortgage-banking unit.

Expenses charged against the restructuring accrual for the year ended December
31, 1999 are as follows:

|                             |                             |   |       |        |  
|---------------------------- | --------------------------- | - | ----- | ------ | -
|Balance at December 31, 1998 |                             | $ | 6,673 |       
|                            
|                            
|                            
|                            
|Deductions:                 
|                            
|                            
|                            
|                            
|                             | Severance and benefits      |   |       | (4,274 | )
|                            
|                            
|                            
|                            
|                             | Outplacement costs          |   |       | (200   | )
|                            
|                            
|                            
|                            
|                             | Abandonment of assets       |   |       | (614   | )
|                            
|                            
|                            
|                            
|                             | Consolidation of facilities |   |       | (1,335 | )
|                            
|                            
|                            
|                            
|                             | Legal costs                 |   |       | (250   | )
|                             |                             |   |       |       
|Balance at December 31, 1999 |                             | $ |      |       
|                             |                             |   |       |       

[Balance of page intentionally left blank]

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SIGNATURES

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



| | REPUBLIC BANCSHARES,
INC.
| | -------------------------



| | By: /s/ Alfred T.
May
Alfred T. May
President and Chief Executive
Officer
| | -------------------------------------------------------------------------



| | Date: March 9,
2000
| | -------------------

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

|                                           |  |               |  |                                                                              
|------------------------------------------ |  | ------------- |  | -----------------------------------------------------------------------------
|SIGNATURE                                  |  | DATE          |  | TITLE                                                                        
|                                           |  |               |  |                                                                              
|/s/ Alfred T. May
Alfred T. May            |  | March 9, 2000 |  | President, Chief Executive Officer
and Director (principal executive
officer)
|                                          
|/s/William R. Falzone
William R. Falzone   |  | March 9, 2000 |  | Treasurer (principal financial and
accounting officer)                       
|                                          
|/s/Fred A. Hemmer
Fred A. Hemmer           |  | March 9, 2000 |  | Director                                                                     
|                                          
|/s/Marla M. Hough
Marla M. Hough           |  | March 9, 2000 |  | Director                                                                     
|                                          
|/s/William R. Hough
William R. Hough       |  | March 9, 2000 |  | Director                                                                     
|                                          
|/s/William C. Ballard
William C. Ballard   |  | March 9, 2000 |  | Director                                                                     
|                                          
|/s/William J. Morrison
William J. Morrison |  | March 9, 2000 |  | Director                                                                     
|                                          
|/s/John W. Sapanski
John W. Sapanski       |  | March 9, 2000 |  | Director                                                                     

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INDEX TO EXHIBITS

|     |  |                                                    
|---- |  | ---------------------------------------------------
|23.0 |  | Consent of Independent Certified Public Accountants
|    
|    
|    
|    
|27.0 |  | Financial Data Schedule                            

89