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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)

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

For the quarterly period ended March 31, 2003

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

For the transition period from                      to

Commission file number 333-65101

FLORIDA BUSINESS BANCGROUP, INC.




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


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-3517595                          
|                                                               |  |                                     
|(State or Other Jurisdiction
of Incorporation or Organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|2202 North Westshore Boulevard, Suite 150
Tampa, Florida       |  | 33607                               
|                                                               |  |                                     
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          

(813) 281-0009




(Registrants Telephone Number, Including Area Code)


N/A




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


Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

YES   x   
NO   o

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

|                                       |  |                              
|-------------------------------------- |  | -----------------------------
|Common stock, par value $.01 per share |  | 1,320,700 shares             
|                                       |  |                              
|(class)                                |  | Outstanding at March 31, 2003

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

Indicate by check mark, whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2):
   
YES   o   
NO   x



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TABLE OF CONTENTS



|                                                  |                                                                                               |                                                                  |  |  |  |  |  | 
|------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                    
|                                                  | Item 1. Financial Statements                                                                 
|                                                  |                                                                                               | Condensed Consolidated Balance Sheets                           
|                                                  |                                                                                               | Condensed Consolidated Statements of Earnings                   
|                                                  |                                                                                               | Condensed Consolidated Statements of Stockholders Equity       
|                                                  |                                                                                               | Condensed Consolidated Statements of Cash Flows                 
|                                                  |                                                                                               | Notes to Condensed Consolidated Financial Statements (Unaudited)
|                                                  |                                                                                               | Review by Independent Accountants                               
|                                                  |                                                                                               | Independent Accountants Report                                 
|                                                  | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                  | Item 3. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                       
|                                                  | Item 1. Legal Proceedings                                                                    
|                                                  | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                       
|CERTIFICATIONS                                   
|Ex-10.15 Gregory W. Bryant Employment Agreement  
|Ex-10.16 Gregory W. Bryant Confidentiality Agrmnt
|Ex-99.1 CEO Certification                        
|Ex-99.2 CFO Certification                        



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

INDEX

|                              |                                                                                               |                                                                                                                    |       |       |     | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ----- | ----- | --- | 
|                              |                                                                                               |                                                                                                                    |       | Page 
|                              |                                                                                               |                                                                                                                    |       |      
|PART I. FINANCIAL INFORMATION |                                                                                               |                                                                                                                    |       |      
|                              | Item 1. Interim Financial Statements                                                          |                                                                                                                    |       |       |    
|                              |                                                                                               | Condensed Consolidated Balance Sheets -
At March 31, 2003 (Unaudited) and December 31, 2002                        |       |       | 2   | 
|                              |                                                                                               | Condensed Consolidated Statements of Earnings (Unaudited) -
Three Months ended March 31, 2003 and 2002             |       |       | 3   | 
|                              |                                                                                               | Condensed Consolidated Statements of Stockholders Equity (Unaudited) -
Three Months ended March 31, 2003 and 2002 |       |       | 4   | 
|                              |                                                                                               | Condensed Consolidated Statements of Cash Flows (Unaudited) -
Three Months ended March 31, 2003 and 2002           |       |       | 5   | 
|                              |                                                                                               | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                   |       |       | 6-9 | 
|                              |                                                                                               | Review By Independent Accountants                                                                                  |       |       | 10  | 
|                              |                                                                                               | Independent Accountants Report                                                                                    |       |       | 11  | 
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                                                    |       | 12-15 |    
|                              | Item 3. Controls and Procedures                                                               |                                                                                                                    |       | 16    |    
|PART II. OTHER INFORMATION    |                                                                                               |                                                                                                                    |       |      
|                              | Item 1. Legal Proceedings                                                                     |                                                                                                                    |       | 16    |    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                    |       | 17    |    
|SIGNATURES                    |                                                                                               |                                                                                                                    | 18    |      
|CERTIFICATIONS                |                                                                                               |                                                                                                                    | 19-20 |      

1



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




Condensed Consolidated Balance Sheets

($ in thousands, except share information)


|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |              |         |   |         | 
|-------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------- | ----------- | ------- | ------------ | ------- | - | ------- | 
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         | March 31,   |         | December 31,
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         | 2003        |         | 2002        
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         | (Unaudited) |         |              |         |  
|Assets                                                                     |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|Cash and due from banks                                                    |                                                                                                    | $                                          | 4,960                                                                                                                      |                                 |         |             | 4,277   |             
|Federal funds sold and securities sold under agreements to resell          |                                                                                                    |                                            | 975                                                                                                                        |                                 |         |             | 1,779   |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            | Total cash and cash equivalents |         |             | 5,935   |              |         |   | 6,056   | 
|Securities available for sale                                              |                                                                                                    |                                            | 27,850                                                                                                                     |                                 |         |             | 24,558  |             
|Loans, net of allowance for loan losses of $1,008 in 2003 and $998 in 2002 |                                                                                                    |                                            | 79,522                                                                                                                     |                                 |         |             | 78,808  |             
|Federal Home Loan Bank stock                                               |                                                                                                    |                                            | 300                                                                                                                        |                                 |         |             | 300     |             
|Premises and equipment, net                                                |                                                                                                    |                                            | 1,365                                                                                                                      |                                 |         |             | 1,100   |             
|Accrued interest receivable                                                |                                                                                                    |                                            | 600                                                                                                                        |                                 |         |             | 515     |             
|Other assets                                                               |                                                                                                    |                                            | 1,194                                                                                                                      |                                 |         |             | 1,132   |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            | Total assets                    |         | $           | 116,766 |              |         |   | 112,469 | 
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|Liabilities and Stockholders Equity                                       |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|Liabilities:                                                               |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           | Noninterest-bearing demand deposits                                                                |                                            |                                                                                                                            | 7,984                           |         |             |         | 12,647       |        
|                                                                           | Savings and NOW deposits                                                                           |                                            |                                                                                                                            | 3,791                           |         |             |         | 2,915        |        
|                                                                           | Money-market deposits                                                                              |                                            |                                                                                                                            | 17,811                          |         |             |         | 19,060       |        
|                                                                           | Time deposits                                                                                      |                                            |                                                                                                                            | 63,377                          |         |             |         | 54,829       |        
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            | Total deposits                  |         |             | 92,963  |              |         |   | 89,451  | 
|                                                                           | Federal Home Loan Bank advances                                                                    |                                            |                                                                                                                            | 6,000                           |         |             |         | 6,000        |        
|                                                                           | Other borrowing                                                                                    |                                            |                                                                                                                            | 2,963                           |         |             |         | 2,940        |        
|                                                                           | Official checks                                                                                    |                                            |                                                                                                                            | 847                             |         |             |         | 484          |        
|                                                                           | Deferred tax liability                                                                             |                                            |                                                                                                                            | 45                              |         |             |         | 62           |        
|                                                                           | Other liabilities                                                                                  |                                            |                                                                                                                            | 441                             |         |             |         | 236          |        
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    |                                            |                                                                                                                            | Total liabilities               |         |             | 103,259 |              |         |   | 99,173  | 
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|Stockholders equity:                                                      |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           | Preferred stock:                                                                                   |                                            |                                                                                                                            |                                 |         |             |         |              |        
|                                                                           |                                                                                                    |                                            | Designated Series A, $.01 par value, redeemable at $100 per
share, 10,000 shares so designated, none issued or outstanding |                                 |         |            |         |              |         |  |        
|                                                                           |                                                                                                    |                                            | Nondesignated, no par value, 1,999,100 shares authorized,
none issued or outstanding                                       |                                 |         |            |         |              |         |  |        
|                                                                           | Common stock, $.01 par value 10,000,000 shares authorized;
1,320,700 shares issued and outstanding |                                            |                                                                                                                            | 13                              |         |             |         | 13           |        
|                                                                           | Additional paid-in capital                                                                         |                                            |                                                                                                                            | 13,131                          |         |             |         | 13,131       |        
|                                                                           | Retained earnings (accumulated deficit)                                                            |                                            |                                                                                                                            | 64                              |         |             |         | (210         | )      
|                                                                           | Accumulated other comprehensive income                                                             |                                            |                                                                                                                            | 299                             |         |             |         | 362          |        
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    | Total stockholders equity                 |                                                                                                                            |                                 | 13,507  |             |         |              | 13,296  |  
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             
|                                                                           |                                                                                                    | Total liabilities and stockholders equity |                                                                                                                            | $                               | 116,766 |             |         |              | 112,469 |  
|                                                                           |                                                                                                    |                                            |                                                                                                                            |                                 |         |             |         |             

See Accompanying Notes to Condensed Consolidated Financial Statements.

2



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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Condensed Consolidated Statements of Earnings

($ in thousands, except per share information)
(Unaudited)


|                                                                 |                                               |                                                     |           |                    |       |      |           |     |       | 
|---------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------------- | --------- | ------------------ | ----- | ---- | --------- | --- | ----- | 
|                                                                 |                                               |                                                     |           | Three Months Ended
|                                                                 |                                               |                                                     |           | March 31,         
|                                                                 |                                               |                                                     |           |                   
|                                                                 |                                               |                                                     |           | 2003               |       | 2002
|                                                                 |                                               |                                                     |           |                    |       |     
|Interest income:                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 | Loans                                         |                                                     | $         | 1,387              |       |      |           | 930 |      
|                                                                 | Securities                                    |                                                     |           | 259                |       |      |           | 287 |      
|                                                                 | Other                                         |                                                     |           | 19                 |       |      |           | 32  |      
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Total interest income                               |           |                    | 1,665 |      |           |     | 1,249 | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Interest expense:                                                |                                               |                                                     |           |                    |       |      |           |    
|                                                                 | Deposits                                      |                                                     |           | 669                |       |      |           | 568 |      
|                                                                 | Borrowings                                    |                                                     |           | 40                 |       |      |           | 47  |      
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Total interest expense                              |           |                    | 709   |      |           |     | 615   | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Net interest income                                 |           |                    | 956   |      |           |     | 634   | 
|Provision for loan losses                                        |                                               |                                                     | 10        |                    |       |      | 123       |    
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Net interest income after provision for loan losses |           |                    | 946   |      |           |     | 511   | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Noninterest income:                                              |                                               |                                                     |           |                    |       |      |           |    
|                                                                 | Service charges and fees                      |                                                     |           | 65                 |       |      |           | 30  |      
|                                                                 | Gain on sale of securities available for sale |                                                     |           |                   |       |      |           | 11  |      
|                                                                 | Other                                         |                                                     |           | 11                 |       |      |           | 10  |      
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Total noninterest income                            |           |                    | 76    |      |           |     | 51    | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Total noninterest expenses:                                      |                                               |                                                     |           |                    |       |      |           |    
|                                                                 | Compensation and benefits                     |                                                     |           | 284                |       |      |           | 191 |      
|                                                                 | Occupancy and equipment                       |                                                     |           | 94                 |       |      |           | 105 |      
|                                                                 | Data processing                               |                                                     |           | 48                 |       |      |           | 50  |      
|                                                                 | Courier expense                               |                                                     |           | 27                 |       |      |           | 26  |      
|                                                                 | Professional fees                             |                                                     |           | 28                 |       |      |           | 17  |      
|                                                                 | Other expenses                                |                                                     |           | 102                |       |      |           | 74  |      
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Total noninterest expenses                          |           |                    | 583   |      |           |     | 463   | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Earnings before income taxes                                     |                                               |                                                     | 439       |                    |       |      | 99        |    
|                                                                 |                                               | Income taxes                                        |           |                    | 165   |      |           |     | 39    | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Net earnings                                                     |                                               | $                                                   | 274       |                    |       |      | 60        |    
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|                                                                 |                                               | Basic and diluted earnings per share                |           | $                  | 0.21  |      |           |     | .05   | 
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Weighted-average number of common shares outstanding for basic   |                                               |                                                     | 1,320,700 |                    |       |      | 1,320,700 |    
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Weighted-average number of common shares outstanding for diluted |                                               |                                                     | 1,323,047 |                    |       |      | 1,320,700 |    
|                                                                 |                                               |                                                     |           |                    |       |      |           |    
|Dividends per share                                              |                                               |                                                     |          |                    |       |      |          |    
|                                                                 |                                               |                                                     |           |                    |       |      |           |    

See Accompanying Notes to Condensed Consolidated Financial Statements.

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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Condensed Consolidated Statements of Stockholders Equity

($ in thousands)


Three Months Ended March 31, 2002 and 2003

|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |      |  
|------------------------------------- | ------------------------------------------------------------------------------------------- |  | ------------ | - | ---------- | - | ------------ | - | -------- |  | ------------- | - | ------ |  | -------- | --- | ----- |  | ----------- | ---- | - |  | ------ | ---- | -
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  | Accumulated |      |   |  |       
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  | Retained |     | Other |  |             |      |  
|                                      |                                                                                             |  | Common Stock |   | Additional |   | Earnings     |   | Compre-  |  | Total        
|                                      |                                                                                             |  |              |   | Paid-In    |   | (Accumulated |   | hensive  |  | Stockholders'
|                                      |                                                                                             |  | Shares       |   | Amount     |   | Capital      |   | Deficit) |  | Income        |   | Equity
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |       
|Balance at December 31, 2001          |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |          |  | 13,131        |   |        |  | (864     | )   |       |  | 44          |      |   |  | 12,324 |     
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Comprehensive income (loss):          |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                      | Net earnings for the three months ended March
31, 2002 (unaudited)                          |  |              |  |            |   |              |  |          |  |               |  |        |  |          | 60  |       |  |             |     |   |  |        | 60   |  
|                                      | Net change in unrealized gain on securities
available for sale, net tax of $109
(unaudited) |  |              |  |            |   |              |  |          |  |               |  |        |  |          |    |       |  |             | (180 | ) |  |        | (180 | )
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                      | Comprehensive income (loss) (unaudited)                                                     |  |              |  |            |   |              |  |          |  |               |  |        |  |          |    |       |  |             |     |   |  |        | (120 | )
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at March 31, 2002 (unaudited) |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |          |  | 13,131        |   |        |  | (804     | )   |       |  | (136        | )    |   |  | 12,204 |     
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at December 31, 2002          |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |          |  | 13,131        |   |        |  | (210     | )   |       |  | 362         |      |   |  | 13,296 |     
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Comprehensive income:                 |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                      | Net earnings for the three months ended
March 31, 2003 (unaudited)                          |  |              |  |            |   |              |  |          |  |               |  |        |  |          | 274 |       |  |             |     |   |  |        | 274  |  
|                                      | Net change in unrealized gain on securities
available for sale, net tax of $37
(unaudited)  |  |              |  |            |   |              |  |          |  |               |  |        |  |          |    |       |  |             | (63  | ) |  |        | (63  | )
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                      | Comprehensive income (unaudited)                                                            |  |              |  |            |   |              |  |          |  |               |  |        |  |          |    |       |  |             |     |   |  |        | 211  |  
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at March 31, 2003 (unaudited) |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |          |  | 13,131        |   |        |  | 64       |     |       |  | 299         |      |   |  | 13,507 |     
|                                      |                                                                                             |  |              |   |            |   |              |   |          |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     

See Accompanying Notes to Condensed Consolidated Financial Statements.

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Condensed Consolidated Statements of Cash Flows

(In thousands)
(Unaudited)


|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |        |      |        |  
|------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ----------------------------------------- | ------ | --------------- | ------ | ------ | ------ | ---- | ------ | -
|                                                  |                                                                                 |                                                                     |                                           |        | Three Months   
|                                                  |                                                                                 |                                                                     |                                           |        | Ended March 31,
|                                                  |                                                                                 |                                                                     |                                           |        |                
|                                                  |                                                                                 |                                                                     |                                           |        | 2003            |        | 2002  
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |       
|Cash flows from operating activities:             |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  | Net earnings                                                                    |                                                                     | $                                         | 274    |                 |        |        | 60     |     
|                                                  | Adjustments to reconcile net earnings to cash provided by operating activities: |                                                                     |                                           |        |                 |        |        |        |     
|                                                  |                                                                                 | Depreciation                                                        |                                           |        | 25              |        |        |        | 38   |       
|                                                  |                                                                                 | Provision for loan losses                                           |                                           |        | 10              |        |        |        | 123  |       
|                                                  |                                                                                 | Deferred income taxes                                               |                                           |        | 20              |        |        |        | 39   |       
|                                                  |                                                                                 | Amortization of loan fees, premiums and discounts                   |                                           |        | (8              | )      |        |        | 58   |       
|                                                  |                                                                                 | Gain on sale of securities available for sale                       |                                           |        |                |        |        |        | (11  | )     
|                                                  |                                                                                 | Increase in accrued interest receivable and other assets            |                                           |        | (147            | )      |        |        | (216 | )     
|                                                  |                                                                                 | Net increase (decrease) in official checks                          |                                           |        | 363             |        |        |        | (5   | )     
|                                                  |                                                                                 | Net increase in other liabilities                                   |                                           |        | 205             |        |        |        | 36   |       
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  |                                                                                 |                                                                     | Net cash provided by operating activities |        |                 | 742    |        |        |      | 122    |  
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|Cash flows from investing activities:             |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  | Purchase of securities available for sale                                       |                                                                     |                                           | (5,121 | )               |        |        | (5,478 | )   
|                                                  | Proceeds from sales and calls of securities available for sale                  |                                                                     |                                           | 737    |                 |        |        | 5,917  |     
|                                                  | Principal pay-downs on securities available for sale                            |                                                                     |                                           | 992    |                 |        |        | 253    |     
|                                                  | Net increase in loans                                                           |                                                                     |                                           | (716   | )               |        |        | (6,962 | )   
|                                                  | Net purchase of premises and equipment                                          |                                                                     |                                           | (290   | )               |        |        |       |     
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  |                                                                                 |                                                                     | Net cash used in investing activities     |        |                 | (4,398 | )      |        |      | (6,270 | )
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|Cash flows from financing activities:             |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  | Net increase in deposits                                                        |                                                                     |                                           | 3,512  |                 |        |        | 9,992  |     
|                                                  | Net increase (decrease) in other borrowings                                     |                                                                     |                                           | 23     |                 |        |        | (4,750 | )   
|                                                  | Net decrease in Federal Home Loan Bank advance                                  |                                                                     |                                           |       |                 |        |        | (800   | )   
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  |                                                                                 |                                                                     | Net cash provided by financing activities |        |                 | 3,535  |        |        |      | 4,442  |  
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|Net decrease in cash and cash equivalents         |                                                                                 |                                                                     | (121                                      | )      |                 |        | (1,706 | )     
|Cash and cash equivalents at beginning of period  |                                                                                 |                                                                     | 6,056                                     |        |                 |        | 12,479 |       
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|Cash and cash equivalents at end of period        |                                                                                 | $                                                                   | 5,935                                     |        |                 |        | 10,773 |       
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|Supplemental disclosure of cash flow information: |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  | Cash paid during the year for:                                                  |                                                                     |                                           |        |                 |        |        |        |     
|                                                  |                                                                                 | Interest                                                            |                                           | $      | 699             |        |        |        | 606  |       
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  |                                                                                 | Income taxes                                                        |                                           | $      | 65              |        |        |        |     |       
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       
|                                                  | Noncash items:                                                                  |                                                                     |                                           |        |                 |        |        |        |     
|                                                  |                                                                                 | Change in accumulated other comprehensive (loss) income, net of tax |                                           | $      | (63             | )      |        |        | (180 | )     
|                                                  |                                                                                 |                                                                     |                                           |        |                 |        |        |       

See Accompanying Notes to Condensed Consolidated Financial Statements.

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) Description of Business and Summary of Significant Accounting Policies

General.Florida Business BancGroup, Inc., a Florida Corporation, (the
Holding Company) is a one-bank holding company and owns 100% of the
outstanding shares of Bay Cities Bank, a Florida-chartered commercial
bank (the Bank). The Holding Companys only business is the ownership
and operations of the Bank (Collectively, the Company). The Banks
deposits are insured by the Federal Deposit Insurance Corporation. The
Bank provides a variety of community banking services to business and
individuals primarily in Hillsborough County, Florida.

The Companys fiscal year end is December 31. In the opinion of the
management, the accompanying financial statements contain all adjustments
(consisting principally of normal recurring accruals) necessary to present
fairly the financial position at March 31, 2003 and the results of
operations and cash flows for the three-month periods ended March 31, 2003
and 2002. The results of operations for the three months ended March 31,
2003, are not necessarily indicative of the results to be expected for the
year ending December 31, 2003.

(2) Loan Impairment and Losses

At March 31, 2003 and 2002 management had not identified any impaired
loans. The activity in the allowance for loan losses is as follows (in
thousands):

|                               |  |           |       |      |  |  |     | 
|------------------------------ |  | --------- | ----- | ---- |  |  | --- | 
|                               |  | March 31,
|                               |  |          
|                               |  | 2003      |       | 2002
|                               |  |           |       |     
|Balance at beginning of period |  | $         | 998   |      |  |  | 524 | 
|Provision for loan losses      |  |           | 10    |      |  |  | 123 | 
|                               |  |           |       |      |  |  |     | 
|Balance at end of period       |  | $         | 1,008 |      |  |  | 647 | 
|                               |  |           |       |      |  |  |     | 

At March 31, 2003 and 2002, there were no nonaccrual loans.

(continued)

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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

(3) Earnings Per Share

Earnings per share (EPS) of common stock has been computed on the basis of
the weighted-average number of shares of common stock outstanding.
Outstanding stock options are considered dilutive securities for
purposes of calculating diluted EPS which is computed using the treasury
stock method. The following table presents the calculations of the
weighted-average number of shares for diluted EPS.

|                                                                                     |  |                     |           |      |  |  |           | 
|------------------------------------------------------------------------------------ |  | ------------------- | --------- | ---- |  |  | --------- | 
|                                                                                     |  | Weighted-Average   
|                                                                                     |  | Shares at March 31,
|                                                                                     |  |                    
|                                                                                     |  | 2003                |           | 2002
|                                                                                     |  |                     |           |     
|For Basic EPS                                                                        |  |                     | 1,320,700 |      |  |  | 1,320,700 | 
|Effect
of dilutive securities-
Incremental shares from assumed conversion of options |  |                     | 2,347     |      |  |  |          | 
|                                                                                     |  |                     |           |      |  |  |           | 
|For Diluted EPS                                                                      |  |                     | 1,323,047 |      |  |  | 1,320,700 | 
|                                                                                     |  |                     |           |      |  |  |           | 

(4) Stock Option Plan

Certain key employees, directors and ex-employees of the Company have options
to purchase shares of the Companys common stock under its stock option
plans. Under the plans, the total number of shares which may be issued
shall not exceed 204,000. At March 31, 2003, 23,400 remain available for
grant. Some options are fully vested when granted while others
generally vest over five years. A summary of stock option transactions
follows ($ in thousands, except per share amounts):

|                                 |  |           |         |        |  |           |    |          |  |           |    |  |  |  |       | 
|-------------------------------- |  | --------- | ------- | ------ |  | --------- | -- | -------- |  | --------- | -- |  |  |  | ----- | 
|                                 |  |           |         |        |  | Range     |    |          |  |           |    |  |  | 
|                                 |  |           |         |        |  | of Per    |    | Weighted |  |           |    | 
|                                 |  |           |         |        |  | Share     |    | Average  |  | Aggregate
|                                 |  | Number of |         | Option |  | Per Share |    | Option  
|                                 |  | Shares    |         | Price  |  | Price     |    | Price   
|                                 |  |           |         |        |  |           |    |         
|Outstanding at December 31, 2002 |  |           | 177,600 |        |  | $         | 10 |          |  |           | 10 |  |  |  | 1,776 | 
|Options granted                  |  |           | 3,000   |        |  |           | 10 |          |  |           | 10 |  |  |  | 30    | 
|                                 |  |           |         |        |  |           |    |          |  |           |    |  |  |  |       | 
|Outstanding at March 31, 2003    |  |           | 180,600 |        |  | $         | 10 |          |  |           | 10 |  |  |  | 1,806 | 
|                                 |  |           |         |        |  |           |    |          |  |           |    |  |  |  |       | 

(continued)

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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

(4) Stock Option Plan, Continued

The Company accounts their stock option plans under the recognition and
measurement principles of APB No. 25 and related Interpretations. No
stock-based employee compensation cost is reflected in net earnings, as
all options granted under those plans had an exercise price equal to the
market value of the underlying common stock on the date of grant. The
following table illustrates the effect on net earnings and earnings per
share if the company had applied the fair value recognition provisions
of FASB No. 123 to stock-based employee compensation.

|                                                                                                                                   |  |                 |     |      |  |  |     |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | --- | ---- |  |  | --- | -
|                                                                                                                                   |  | Three Months   
|                                                                                                                                   |  | Ended March 31,
|                                                                                                                                   |  |                
|                                                                                                                                   |  | 2003            |     | 2002
|                                                                                                                                   |  |                 |     |     
|Net earnings, as reported                                                                                                          |  | $               | 274 |      |  |  | 60  |  
|Deduct: Total stock-based employee compensation
determined under fair value based method for all
awards, net of related tax effect |  |                 | (9  | )    |  |  | (15 | )
|                                                                                                                                   |  |                 |     |      |  |  |     |  
|Proforma net earnings                                                                                                              |  | $               | 265 |      |  |  | 45  |  
|                                                                                                                                   |  |                 |     |      |  |  |     |  

|                            |             |  |                 |     |      |  |  |     | 
|--------------------------- | ----------- |  | --------------- | --- | ---- |  |  | --- | 
|                            |             |  | Three Months   
|                            |             |  | Ended March 31,
|                            |             |  |                
|                            |             |  | 2003            |     | 2002
|                            |             |  |                 |     |     
|Basic earnings per share:   |             |  |                 |     |      |  |  |    
|                            | As reported |  | $               | .21 |      |  |  | .05 | 
|                            |             |  |                 |     |      |  |  |    
|                            | Proforma    |  | $               | .20 |      |  |  | .03 | 
|                            |             |  |                 |     |      |  |  |    
|Diluted earnings per share: |             |  |                 |     |      |  |  |    
|                            | As reported |  | $               | .21 |      |  |  | .05 | 
|                            |             |  |                 |     |      |  |  |    
|                            | Proforma    |  | $               | .20 |      |  |  | .03 | 
|                            |             |  |                 |     |      |  |  |    

The fair value of each option grant is estimated on the date of grant
using the minimum value method with the following assumptions (in
thousands, except per share amounts):

|                                              |  |                 |      |      |  |  |      |  
|--------------------------------------------- |  | --------------- | ---- | ---- |  |  | ---- | -
|                                              |  | Three Months   
|                                              |  | Ended March 31,
|                                              |  |                
|                                              |  | 2003            |      | 2002
|                                              |  |                 |      |     
|Risk-free interest rate                       |  |                 | 4.69 | %    |  |  | 5.68 | %
|Dividend yield                                |  |                 |     | %    |  |  |     | %
|Expected volatility                           |  |                 |     | %    |  |  |     | %
|Expected life in years                        |  |                 | 10   |      |  |  | 10   |  
|Per share fair value of options at grant date |  | $               | 3.84 |      |  |  | 4.16 |  
|                                              |  |                 |      |      |  |  |      |  

(continued)

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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

(5) Regulatory Matters

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

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and percentages (set forth
in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital
(as defined) to average assets (as defined). Management believes, at
March 31, 2003, that the Bank meets all capital adequacy requirements to
which it is subject.

As of March 31, 2003, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as
well capitalized, the Bank must maintain minimum total risk-based, Tier
I risk-based, and Tier I leverage percentages as set forth in the table.
There are no conditions or events since that notification that
management believes have changed the Banks category. The Banks actual
capital amounts and percentages are also presented in the table (dollars
in thousands).

|                   |                                          |  |             |        |                   |  |                   |       |   |  |        |       |   |  |  |      |   |  |   |       |  |  |  |       |  
|------------------ | ---------------------------------------- |  | ----------- | ------ | ----------------- |  | ----------------- | ----- | - |  | ------ | ----- | - |  |  | ---- | - |  | - | ----- |  |  |  | ----- | -
|                   |                                          |  | Minimum     |        | Capitalized Under |  |                   |       |   |  |        |       |  
|                   |                                          |  | For Capital |        | Prompt Corrective |  | To Be Well       
|                   |                                          |  | Actual      |        | Adequacy Purposes |  | Action Provisions
|                   |                                          |  |             |        |                   |  |                  
|                   |                                          |  | Amount      |        | %                 |  | Amount            |       | % |  | Amount |       | %
|                   |                                          |  |             |        |                   |  |                   |       |   |  |        |       |  
|At March 31, 2003: |                                          |  |             |        |                   |  |                   |       |   |  |        |       |   |  |  |      |   |  |   |       |  |  |  |      
|                   | Total capital (to Risk-Weighted Assets)  |  | $           | 10,637 |                   |  |                   | 11.75 | % |  | $      | 7,258 |   |  |  | 8.00 | % |  | $ | 9,073 |  |  |  | 10.00 | %
|                   | Tier I Capital (to Risk-Weighted Assets) |  |             | 9,662  |                   |  |                   | 10.65 |   |  |        | 3,629 |   |  |  | 4.00 |   |  |   | 5,444 |  |  |  | 6.00  |  
|                   | Tier I Capital
(to Average Assets)       |  |             | 9,662  |                   |  |                   | 8.46  |   |  |        | 4,569 |   |  |  | 4.00 |   |  |   | 5,711 |  |  |  | 5.00  |  

(continued)

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Review by Independent Accountants

Hacker, Johnson & Smith PA, the Companys independent accountants, have made a
limited review of the financial data as of March 31, 2003, and for the
three-month periods ended March 31, 2003 and 2002 presented in this document,
in accordance with standards established by the American Institute of Certified
Public Accountants.

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

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##### Table of Contents






Independent Accountants Report

The Board of Directors
Florida Business BancGroup, Inc.
Tampa, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of
Florida Business BancGroup, Inc. (the Company) as of March 31, 2003, and the
related condensed consolidated statements of earnings, changes in stockholders
equity and cash flows for the three-month periods ended March 31, 2003 and
2002. These financial statements are the responsibility of the Companys
management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.

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

We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet of the Company as of December 31, 2002, and the related consolidated
statements of earnings, changes in stockholders equity and cash flows for the
year then ended (not presented herein); and in our report dated January 10,
2003 we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2002, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.

/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA
Tampa, Florida
April 15, 2003

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




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

Comparison of March 31, 2003 and December 31, 2002

General

Florida Business BancGroup, Inc., a Florida Corporation, (the Holding
Company) is a one-bank holding company and owns 100% of the outstanding shares
of Bay Cities Bank, a Florida-chartered commercial bank (the Bank). The
Holding Companys only business is the ownership and operations of the Bank
(Collectively, the Company). The Banks deposits are insured by the Federal
Deposit Insurance Corporation. The Bank provides a variety of community
banking services to business and individuals in Hillsborough County, Florida.

Liquidity and Capital Resources

During the three months ended March 31, 2003, the Companys primary sources of
funds consisted of deposit inflows of $3.5 million and proceeds from principal
pay-downs and calls of securities available for sale of $1.7 million. The
Company used its capital resources principally to fund existing and continuing
loan commitments and to purchase securities of $5.1 million.

As a Florida-chartered commercial bank, the Bank is required to maintain a
liquidity reserve of at least 15% of its total transaction accounts and 8% of
its total nontransaction accounts less those deposits of certain public funds.
The liquidity reserve may consist of cash on hand, cash on demand with other
correspondent banks and other investments and short-term marketable securities
as defined, such as federal funds sold and United States securities or
securities guaranteed by the United States. As of March 31, 2003, the Bank had
liquidity of approximately $26.0 million, or approximately 27% of total
deposits.

Management believes the Bank was in compliance with all minimum capital
requirements which it was subject to at March 31, 2003. See note 5 to the
condensed consolidated financial statements.

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

|                                                                                                |  |              |       |              |  |           |       |              |  |  |       |  
|----------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------------ |  | --------- | ----- | ------------ |  |  | ----- | -
|                                                                                                |  | Three Months |       |              |  |           |       | Three Months
|                                                                                                |  | Ended        |       | Year Ended   |  | Ended    
|                                                                                                |  | March 31,    |       | December 31, |  | March 31,
|                                                                                                |  | 2003         |       | 2002         |  | 2002     
|                                                                                                |  |              |       |              |  |          
|Average equity as a percentage
of average assets                                                |  |              | 11.60 | %            |  |           | 13.24 | %            |  |  | 14.73 | %
|Equity to total assets at end of period                                                         |  |              | 11.57 | %            |  |           | 11.82 | %            |  |  | 14.38 | %
|Return on average assets (1)                                                                    |  |              | .95   | %            |  |           | .66   | %            |  |  | .29   | %
|Return on average equity (1)                                                                    |  |              | 8.18  | %            |  |           | 4.95  | %            |  |  | 1.94  | %
|Noninterest expenses to average assets (1)                                                      |  |              | 2.02  | %            |  |           | 1.98  | %            |  |  | 2.20  | %
|Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period |  |              |      | %            |  |           |      | %            |  |  |      | %



|(1) |  | Annualized for the three months ended March 31.
|--- |  | -----------------------------------------------

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

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

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

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

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

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

Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.

A summary of the contract amounts of the Companys financial instruments, which
approximates fair value, with off-balance sheet risk at March 31, 2003, follows
(in thousands):

|                                              |  |          |        | 
|--------------------------------------------- |  | -------- | ------ | 
|                                              |  | Contract
|                                              |  | Amount  
|                                              |  |         
|Commitments to extend credit                  |  | $        | 6,643  | 
|                                              |  |          |        | 
|Unused lines of credit and construction loans |  | $        | 14,473 | 
|                                              |  |          |        | 
|Standby letters of credit                     |  | $        | 65     | 
|                                              |  |          |        | 

Management believes that the Company has adequate resources to fund all of its
commitments and that substantially all of its exiting commitments will be
funded in 2003. Management also believes that, if so desired, it can adjust
the rates on time deposits to retain or attract deposits in a changing interest
rate environment.

13



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Results of Operations

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

|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |      |      | 
|-------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------ | ------ | ---------------------------- | ------- | --------- | --- | -------- | ----- | ------- | ---- | --------- | ---- | ------ | ------ | -------- | ------ | ------- | --- | --- | ----- |  | ---- | ---- | ---- | 
|                                                                                 |                                             |                                            |        | Three Months Ended March 31,
|                                                                                 |                                             |                                            |        |                             
|                                                                                 |                                             |                                            |        | 2003                         |         | 2002     
|                                                                                 |                                             |                                            |        |                              |         |          
|                                                                                 |                                             |                                            |        |                              |         |           |     | Interest |       | Average |      |           |      |        |        | Interest |        | Average
|                                                                                 |                                             |                                            |        | Average                      |         | and       |     | Yield/   |       | Average |      | and       |      | Yield/
|                                                                                 |                                             |                                            |        | Balance                      |         | Dividends |     | Rate     |       | Balance |      | Dividends |      | Rate  
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |       
|                                                                                 |                                             |                                            |        | ($in thousands)             
|Interest-earning assets:                                                         |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 | Loans                                       |                                            | $      | 77,848                       |         |           |     | 1,387    |       |         |      | 7.13      | %    |        | $      | 49,900   |        |         |     | 930 |       |  |      | 7.45 | %   
|                                                                                 | Securities                                  |                                            |        | 25,542                       |         |           |     | 259      |       |         |      | 4.06      |      |        |        | 21,045   |        |         |     | 287 |       |  |      | 5.45 |     
|                                                                                 | Other interest-earning assets (1)           |                                            |        | 5,681                        |         |           |     | 19       |       |         |      | 1.34      |      |        |        | 8,214    |        |         |     | 32  |       |  |      | 1.56 |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             | Total interest-earning assets              |        |                              | 109,071 |           |     |          | 1,665 |         |      |           | 6.11 |        |        |          | 79,159 |         |     |     | 1,249 |  |      |      | 6.31 | 
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Noninterest-earning assets                                                       |                                             |                                            | 6,470  |                              |         |           |     |          |       |         |      |           |      |        | 4,991  |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             | Total assets                               |        | $                            | 115,541 |           |     |          |       |         |      |           |      |        |        | $        | 84,150 |         |     |     |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Interest-bearing liabilities:                                                    |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 | Savings, NOW, money-market
deposit accounts |                                            |        | 21,457                       |         |           |     | 85       |       |         |      | 1.58      |      |        |        | 15,039   |        |         |     | 72  |       |  |      | 1.92 |     
|                                                                                 | Time deposits                               |                                            |        | 60,985                       |         |           |     | 584      |       |         |      | 3.83      |      |        |        | 42,693   |        |         |     | 496 |       |  |      | 4.65 |     
|                                                                                 | Borrowings (2)                              |                                            |        | 8,969                        |         |           |     | 40       |       |         |      | 1.78      |      |        |        | 8,144    |        |         |     | 47  |       |  |      | 2.31 |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             | Total interest-bearing liabilities         |        |                              | 91,411  |           |     |          | 709   |         |      |           | 3.10 |        |        |          | 65,876 |         |     |     | 615   |  |      |      | 3.73 | 
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Noninterest-bearing liabilities                                                  |                                             |                                            | 10,728 |                              |         |           |     |          |       |         |      |           |      |        | 5,879  |          |        |         |     |     |       |  |      |     
|Stockholders equity                                                             |                                             |                                            | 13,402 |                              |         |           |     |          |       |         |      |           |      |        | 12,395 |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             | Total liabilities and
stockholders equity |        | $                            | 115,541 |           |     |          |       |         |      |           |      |        |        | $        | 84,150 |         |     |     |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Net interest income                                                              |                                             |                                            |        |                              |         | $         | 956 |          |       |         |      |           |      |        |        |          |        | $       | 634 |     |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Interest-rate spread (3)                                                         |                                             |                                            |        |                              |         |           |     |          |       |         | 3.01 | %         |      |        |        |          |        |         |     |     |       |  | 2.58 | %   
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Net interest margin (4)                                                          |                                             |                                            |        |                              |         |           |     |          |       |         | 3.51 | %         |      |        |        |          |        |         |     |     |       |  | 3.20 | %   
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     
|Ratio of average interest-earning assets to
average interest-bearing liabilities |                                             |                                            | 1.19   |                              |         |           |     |          |       |         |      |           |      |        | 1.20   |          |        |         |     |     |       |  |      |     
|                                                                                 |                                             |                                            |        |                              |         |           |     |          |       |         |      |           |      |        |        |          |        |         |     |     |       |  |      |     



|(1) |  | Includes Federal Home Loan Bank stock, federal funds sold, securities
purchased under agreements to resell and interest-bearing deposits.                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes Federal Home Loan Bank advances and repurchase agreements.                                                                                      
|   
|(3) |  | Interest-rate spread represents the difference between the average yield
on interest-earning assets and the average rate of interest-bearing
liabilities.

14



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##### Table of Contents





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

FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Comparison of the Three-Month Periods Ended March 31, 2003 and 2002

General.Net earnings for the three months ended March 31, 2003 were
$274,000 or $.21 per basic and diluted share compared to a net earnings
of $60,000 or $.05 per basic and diluted share for the same period in
2002. The increase in earnings was primarily due to an increase in net
interest income resulting from growth in the Companys interest earning
assets.

Interest Income and Expense.Interest income increased to $1.7 million for
the three-month period ended March 31, 2003 from $1.2 million for the
three months ended March 31, 2002. Interest on loans increased to $1.4
million due to an increase in the average loan portfolio balance in 2003
to $77.8 million from $49.9 million in 2002 which was only partially
offset by a decrease in the weighted-average yield earned in 2003 to
7.13% from 7.45% in 2002. Interest on securities decreased to $259,000
for the three-months ended March 31, 2003 compared to $287,000 in 2002
due to a increase in the average portfolio balance to $25.8 million from
$21.0 million for 2002 which was offset by a decrease in the average
yield earned in 2003 to 4.06% from 5.45% in 2002. Interest on other
interest-earning assets decreased from $32,000 for the three-months
ended March 31, 2002 to $19,000 for the three months ended March 31,
2003 due to a decrease in the average yield earned to 1.34% in 2003 from
1.56% in 2002 and a decrease in the average balance in 2003 to $5.7
million from $8.2 million in 2002.

Interest expense on deposits increased to $669,000 for the three-months
ended March 31, 2003 from $568,000 in 2002. The increase is due to an
increase in the average deposits in 2003 to $82.4 million from $57.7
million in 2002 which was only partially offset by a decrease in the
weighted-average rate paid on deposits in 2003 to 3.25% from 3.94% in 2002.

Interest expense on borrowings decreased to $40,000 for the three-months
ended March 31, 2003 from $47,000 in 2002. The decrease is due to a
decrease in the weighted-average rate paid on other borrowings in 2003 to
1.78% from 2.31% in 2002 which was partially offset by an increase in the
average other borrowings to $9 million in 2003 from $8.1 million in 2002.

Provision for Loan Losses.The provision for loan losses is charged against
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type
of lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Companys market areas, and other factors related to the
collectibility of the Companys loan portfolio. The provision for loan
losses was $10,000 for the three-month period ended March 31, 2003
compared to $123,000 for the same period in 2002. The decrease is due to
a smaller increase in the portfolio during the 2003 period compared to
the 2002 period increase. The allowance for loan losses is $1,008,000 at
March 31, 2003. While management believes that its allowance for loan
losses is adequate as of March 31, 2003, future adjustments to the
Companys allowance for loan losses may be necessary if economic
conditions differ substantially from the assumptions used in making the
initial determination.

Noninterest Income.Noninterest income increased to $76,000 in 2003 from
$51,000 for the three- months ended March 31, 2002. The increase was due
to a increase in service charges and fees primarily due to the growth in
deposit accounts.

Noninterest Expense.Total noninterest expense increased to $583,000 for the
three-months ended March 31, 2003 from $463,000 for the comparable period
ended March 31, 2002. The increase was due to the continued growth of
the Company.

Income Taxes.The income tax expense for the three-months ended March 31,
2003 was $165,000 (an effective rate of 38%) compared to an income tax
expense of $39,000 in 2002 (an effective rate of 39%).

15



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Item 3. Controls and Procedures



|(a) |  | Evaluation of Disclosure Controls and Procedures.The Company maintains
controls and procedures designed to ensure that information required to be
disclosed in the reports that the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of
this report, the Chief Executive and Chief Financial Officers of the
Company concluded that the Companys disclosure controls and procedures
were adequate.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Changes in Internal Controls.The Company made no significant changes
in its internal controls or in other factors that could significantly
affect these controls subsequent to the date of the evaluation of those
controls by the Chief Executive and Chief Financial officers.                                                                                                                                                                                                                                                                                                                                                                                                  




PART II. OTHER INFORMATION




Item 1. Legal Proceedings

Registrant has no pending legal proceedings as of March 31, 2003.

16



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits.The following exhibits are filed with or incorporated by
reference into this report. The exhibits which are marked by a single
asterisk (*) were previously filed as a part of the Companys Registration
Statement on Form SB-2, filed with the Securities and Exchange Commission on
September 30, 1998, Registration No. 333-65101; exhibits marked with four
asterisks (****) were previously filed in Amendment No. 3 to Registration
Statement on Form SB-2. The exhibits marked with five asterisks (*****)
were previously filed as part of the Companys Definitive Form 14-A, filed
with the Securities and Exchange Commission on March 13, 2000; exhibits
marked with six asterisks (******) were previously filed as part of the
Companys Proxy Statement on Form 14-A, filed with the Securities and
Exchange Commission on March 16, 2001; exhibits marked with seven asterisks
(*******) were previously filed as part of the companies March 31, 2002
10-QSB, filed with the Securities and Exchange Commission on May 9, 2002;
and exhibits marked with eight asterisks (********) were previously filed as
part of the companies June 30, 2002 10-QSB, filed with the Securities and
Exchange Commission on August 8, 2002.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|              |  |                                                                                                         
|------------- |  | --------------------------------------------------------------------------------------------------------
|Exhibit No.   |  | Description of Exhibit                                                                                  
|              |  |                                                                                                         
|* 3.1         |  | Articles of Incorporation of the Company                                                                
|* 3.2         |  | By-laws of the Company                                                                                  
|* 4.1         |  | Specimen Common Stock Certificate                                                                       
|****** 4.5    |  | Amended and Restated Warrant Plan and Specimen Warrant
Certificate                                      
|* 10.3        |  | Servicing Agreement with M&I Data Services                                                              
|**** 10.4     |  | Lease Agreement for Permanent Office                                                                    
|***** 10.5    |  | 2000 Key Employee Stock Compensation Program                                                            
|***** 10.6    |  | 2000 Directors Stock Option Plan                                                                       
|******* 10.7  |  | Supplemental Executive Retirement Plan                                                                  
|********10.8  |  | Supplemental Executive Retirement Plan Participation
Agreement with Gregory W. Bryant                   
|********10.9  |  | Supplemental Executive Retirement Plan Participation
Agreement with Marti J. Warren                     
|******* 10.10 |  | Endorsement Split Dollar Insurance
Agreement with Gregory W. Bryant                                     
|*******10.11  |  | Endorsement Split Dollar Plan
Beneficiary Designation and Limited Assignment of Rights
Gregory W. Bryant
|*******10.12  |  | Endorsement Split Dollar Insurance
Agreement with Marti J. Warren                                       
|*******10.13  |  | Endorsement Split Dollar Plan
Beneficiary Designation and Limited Assignment of Rights
Marti J. Warren  
|*******10.14  |  | Directors Written Consent to Action                                                                    
|10.15         |  | Employment Agreement with Gregory W. Bryant                                                             
|10.16         |  | Confidentiality Non-Compete and Non-Solicitation
Agreement with Gregory W. Bryant                       
|****** 99     |  | Charter of the Audit Committee                                                                          
|99.1          |  | CEO Certifications required under Section 906 of
Sarbanes-Oxley Act of 2002                             
|99.2          |  | CFO Certifications required under Section 906 of
Sarbanes-Oxley Act of 2002                             



|(b) |  | Reports on Form 8-K.Registrant filed no Form 8-K during the three
months ended March 31, 2003.
|--- |  | ----------------------------------------------------------------------------------------------

17



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

PART II. OTHER INFORMATION




SIGNATURES

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

|      |  |             |  |                                               |  |                                                        
|----- |  | ----------- |  | --------------------------------------------- |  | -------------------------------------------------------
|      |  |             |  | FLORIDA BUSINESS BANCGROUP, INC.
(Registrant)
|      |  |             |  |                                               |  |                                                        
|Date: |  | May 6, 2003 |  | By:                                           |  | /s/ A. Bronson Thayer                                  
|      |  |             |  |                                               |  |                                                        
|      |  |             |  |                                               |  | A. Bronson Thayer, Chairman and
Chief Executive Officer
|      |  |             |  |                                               |  |                                                        
|Date: |  | May 6, 2003 |  | By:                                           |  | /s/ Marti J. Warren                                    
|      |  |             |  |                                               |  |                                                        
|      |  |             |  |                                               |  | Marti J. Warren, Principal Financial Officer           

18



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##### Table of Contents






CERTIFICATIONS

I, A. Bronson Thayer, certify, that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Florida
Business BancGroup, Inc.;                                                                                                                                                                                                                                    
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                  
|  
|4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or
operation of the internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                            



|6. |  | The registrants other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |             |  |     |  |                                                        
|----- |  | ----------- |  | --- |  | -------------------------------------------------------
|Date: |  | May 6, 2003 |  | By: |  | /s/ A. Bronson Thayer                                  
|      |  |             |  |     |  |                                                        
|      |  |             |  |     |  | A. Bronson Thayer, Chairman and
Chief Executive Officer

19



---



##### Table of Contents



I, Marti J. Warren, certify, that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Florida
Business BancGroup, Inc.;                                                                                                                                                                                                                                    
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                  
|  
|4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or
operation of the internal controls which could adversely affect
the registrants ability to record, process, summarize and
report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                            



|6. |  | The registrants other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect the internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |             |  |     |  |                                             
|----- |  | ----------- |  | --- |  | --------------------------------------------
|Date: |  | May 6, 2003 |  | By: |  | /s/ Marti J. Warren                         
|      |  |             |  |     |  |                                             
|      |  |             |  |     |  | Marti J. Warren, Principal Financial Officer

20