##### Table of Contents



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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 September 30, 2003

|      |  |                                                                
|----- |  | ---------------------------------------------------------------
|[   ] |  | 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  [   ]

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 |  | 1,323,880 shares              
|                                       |  |                               
|(class)                                |  | Outstanding at October 7, 2003

Transitional Small Business Format (Check One):  YES  [   ]   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     
|                                          |                                                                                               | Review by Independent Accountants                        
|                                          |                                                                                               | Independent Accountants 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                               
|EX-31.1 Certification of CEO             
|EX-31.2 Certification of CFO             
|EX-32.1 Section 1350 Certification of CEO
|EX-32.2 Section 1350 Certification of CFO



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

INDEX

|                              |                                                                                               |                                                                                                                       |    |       |     | 
|----------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | -- | ----- | --- | 
|                              |                                                                                               |                                                                                                                       |    | Page 
|                              |                                                                                               |                                                                                                                       |    |      
|PART I. FINANCIAL INFORMATION |                                                                                               |                                                                                                                       |    |      
|                              | Item 1. Financial Statements                                                                  |                                                                                                                       |    |       |    
|                              |                                                                                               | Condensed Consolidated Balance Sheets -
At September 30, 2003 (Unaudited) and December 31,
2002                       |    |       | 2   | 
|                              |                                                                                               | Condensed Consolidated Statements of Earnings (Unaudited) -
Three and Nine Months ended September 30, 2003 and
2002   |    |       | 3   | 
|                              |                                                                                               | Condensed Consolidated Statements of Stockholders Equity (Unaudited) -
Nine Months ended September 30, 2003 and 2002 |    |       | 4   | 
|                              |                                                                                               | Condensed Consolidated Statements of Cash Flows (Unaudited) -
Nine Months ended September 30, 2003 and 2002           |    |       | 5   | 
|                              |                                                                                               | Notes
to Condensed Consolidated Financial Statements
(Unaudited)                                                      |    |       | 6-9 | 
|                              |                                                                                               | Review By Independent Accountants                                                                                     |    |       | 10  | 
|                              |                                                                                               | Independent Accountants Report                                                                                       |    |       | 11  | 
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                                                       |    | 12-17 |    
|                              | Item 3. Controls and Procedures                                                               |                                                                                                                       |    | 18    |    
|PART II. OTHER INFORMATION    |                                                                                               |                                                                                                                       |    |      
|                              | Item 1. Legal Proceedings                                                                     |                                                                                                                       |    | 18    |    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                       |    | 19    |    
|SIGNATURES                    |                                                                                               |                                                                                                                       | 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)

|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |              |   |  |         | 
|-------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ---------------- | ------ | -------------------------------------------------------------------------------------------------------------------------- | - | ------------- | ------- | ------------ | - |  | ------- | 
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   | September 30, |         | December 31,
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   | 2003          |         | 2002        
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   | (Unaudited)   |         |              |   | 
|                                                                           |                                                                                                                  | Assets           |        |                                                                                                                            |   |               |         |              |   | 
|Cash and due from banks                                                    |                                                                                                                  | $                | 4,520  |                                                                                                                            |   |               | 4,277   |             
|Federal funds sold                                                         |                                                                                                                  |                  |       |                                                                                                                            |   |               | 1,779   |             
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total cash and cash equivalents                                                                                            |   |               | 4,520   |              |   |  | 6,056   | 
|Securities available for sale                                              |                                                                                                                  |                  | 34,057 |                                                                                                                            |   |               | 24,558  |             
|Loans, net of allowance for loan losses of $1,241 in 2003 and $998 in 2002 |                                                                                                                  |                  | 95,811 |                                                                                                                            |   |               | 78,808  |             
|Federal Home Loan Bank stock                                               |                                                                                                                  |                  | 400    |                                                                                                                            |   |               | 300     |             
|Premises and equipment, net                                                |                                                                                                                  |                  | 1,633  |                                                                                                                            |   |               | 1,100   |             
|Accrued interest receivable                                                |                                                                                                                  |                  | 557    |                                                                                                                            |   |               | 515     |             
|Other assets                                                               |                                                                                                                  |                  | 1,257  |                                                                                                                            |   |               | 1,132   |             
|Deferred tax asset                                                         |                                                                                                                  |                  | 178    |                                                                                                                            |   |               |        |             
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total assets                                                                                                               |   | $             | 138,413 |              |   |  | 112,469 | 
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Liabilities and Stockholders Equity                                                                                       |   |               |         |              |   |  |         | 
|Liabilities:                                                               |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           | Noninterest-bearing demand deposits                                                                              |                  |        | 12,116                                                                                                                     |   |               |         | 12,647       |  
|                                                                           | Savings and NOW deposits                                                                                         |                  |        | 3,430                                                                                                                      |   |               |         | 2,915        |  
|                                                                           | Money-market deposits                                                                                            |                  |        | 20,989                                                                                                                     |   |               |         | 19,060       |  
|                                                                           | Time deposits                                                                                                    |                  |        | 71,149                                                                                                                     |   |               |         | 54,829       |  
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total deposits                                                                                                             |   |               | 107,684 |              |   |  | 89,451  | 
|                                                                           | Federal Home Loan Bank advances                                                                                  |                  |        | 8,000                                                                                                                      |   |               |         | 6,000        |  
|                                                                           | Other borrowing                                                                                                  |                  |        | 7,763                                                                                                                      |   |               |         | 2,940        |  
|                                                                           | Official checks                                                                                                  |                  |        | 918                                                                                                                        |   |               |         | 484          |  
|                                                                           | Deferred tax liability                                                                                           |                  |        |                                                                                                                           |   |               |         | 62           |  
|                                                                           | Other liabilities                                                                                                |                  |        | 456                                                                                                                        |   |               |         | 236          |  
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total liabilities                                                                                                          |   |               | 124,821 |              |   |  | 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;
1,323,880 and 1,320,700 shares issued and outstanding |                  |        | 13                                                                                                                         |   |               |         | 13           |  
|                                                                           | Additional paid-in capital                                                                                       |                  |        | 13,141                                                                                                                     |   |               |         | 13,131       |  
|                                                                           | Retained earnings (accumulated deficit)                                                                          |                  |        | 476                                                                                                                        |   |               |         | (210         | )
|                                                                           | Accumulated other comprehensive income (loss)                                                                    |                  |        | (38                                                                                                                        | ) |               |         | 362          |  
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total stockholders equity                                                                                                 |   |               | 13,592  |              |   |  | 13,296  | 
|                                                                           |                                                                                                                  |                  |        |                                                                                                                            |   |               |         |             
|                                                                           |                                                                                                                  |                  |        | Total liabilities and stockholders equity                                                                                 |   | $             | 138,413 |              |   |  | 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 |       | Nine Months Ended
|                             |                                               |                                                     |                     |       | September 30,      |       | September 30,    
|                             |                                               |                                                     |                     |       |                    |       |                  
|                             |                                               |                                                     |                     |       | 2003               |       | 2002              |       | 2003  |     | 2002 
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |      
|Interest income:             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             | Loans                                         |                                                     | $                   | 1,586 |                    |       |                   | 1,276 |       |     |       | 4,490 |       |       |     | 3,286 |      
|                             | Securities                                    |                                                     |                     | 298   |                    |       |                   | 262   |       |     |       | 807   |       |       |     | 853   |      
|                             | Other                                         |                                                     |                     | 5     |                    |       |                   | 30    |       |     |       | 39    |       |       |     | 84    |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Total interest income                               |                     |       | 1,889              |       |                   |       | 1,568 |     |       |       | 5,336 |       |     |       | 4,223 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Interest expense:            |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             | Deposits                                      |                                                     |                     | 697   |                    |       |                   | 633   |       |     |       | 2,053 |       |       |     | 1,780 |      
|                             | Other borrowings                              |                                                     |                     | 70    |                    |       |                   | 44    |       |     |       | 165   |       |       |     | 134   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Total interest expense                              |                     |       | 767                |       |                   |       | 677   |     |       |       | 2,218 |       |     |       | 1,914 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               |                                                     | Net interest income |       |                    | 1,122 |                   |       |       | 891 |       |       |       | 3,118 |     |       |       | 2,309 | 
|Provision for loan losses    |                                               |                                                     | 89                  |       |                    |       | 146               |       |       |     | 243   |       |       |       | 377 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Net interest income after provision
for loan losses |                     |       | 1,033              |       |                   |       | 745   |     |       |       | 2,875 |       |     |       | 1,932 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Noninterest income:          |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             | Service charges and fees                      |                                                     |                     | 81    |                    |       |                   | 52    |       |     |       | 201   |       |       |     | 118   |      
|                             | Gain on sale of securities available for sale |                                                     |                     |      |                    |       |                   |      |       |     |       |      |       |       |     | 11    |      
|                             | Other income                                  |                                                     |                     | 23    |                    |       |                   | 11    |       |     |       | 47    |       |       |     | 32    |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Total noninterest income                            |                     |       | 104                |       |                   |       | 63    |     |       |       | 248   |       |     |       | 161   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Noninterest expenses:        |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             | Salaries and employee benefits                |                                                     |                     | 344   |                    |       |                   | 212   |       |     |       | 962   |       |       |     | 621   |      
|                             | Occupancy                                     |                                                     |                     | 134   |                    |       |                   | 104   |       |     |       | 350   |       |       |     | 315   |      
|                             | Data processing                               |                                                     |                     | 52    |                    |       |                   | 45    |       |     |       | 158   |       |       |     | 143   |      
|                             | Professional fees                             |                                                     |                     | 21    |                    |       |                   | 20    |       |     |       | 76    |       |       |     | 57    |      
|                             | Courier expense                               |                                                     |                     | 30    |                    |       |                   | 26    |       |     |       | 85    |       |       |     | 78    |      
|                             | Advertising                                   |                                                     |                     | 25    |                    |       |                   | 11    |       |     |       | 72    |       |       |     | 32    |      
|                             | Other expenses                                |                                                     |                     | 125   |                    |       |                   | 63    |       |     |       | 321   |       |       |     | 199   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Total noninterest expenses                          |                     |       | 731                |       |                   |       | 481   |     |       |       | 2,024 |       |     |       | 1,445 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Earnings before income taxes |                                               |                                                     | 406                 |       |                    |       | 327               |       |       |     | 1,099 |       |       |       | 648 |      
|                             |                                               | Income taxes                                        |                     |       | 153                |       |                   |       | 125   |     |       |       | 413   |       |     |       | 246   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Net earnings                 |                                               | $                                                   | 253                 |       |                    |       | 202               |       |       |     | 686   |       |       |       | 402 |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Basic earnings per share                            |                     | $     | .19                |       |                   |       | .15   |     |       |       | .52   |       |     |       | .30   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|                             |                                               | Diluted earnings per share                          |                     | $     | .19                |       |                   |       | .15   |     |       |       | .52   |       |     |       | .30   |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      
|Dividends per share          |                                               | $                                                   |                    |       |                    |       |                  |       |       |     |      |       |       |       |    |      
|                             |                                               |                                                     |                     |       |                    |       |                   |       |       |     |       |       |       |       |     |      

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 Stockholders Equity
($ in thousands)

Nine Months Ended September 30, 2002 and 2003

|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |      |  
|-------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- |  | ------------ | - | ---------- | - | ------------ | - | --------- |  | ------------- | - | ------ |  | -------- | --- | ----- |  | ----------- | ---- | - |  | ------ | ---- | -
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  | Accumulated |      |   |  |       
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  | Retained |     | Other |  |             |      |  
|                                                                           |                                                                                             |  | Common Stock |   | Additional |   | Earnings     |   | Compre-   |  | Total        
|                                                                           |                                                                                             |  |              |   | Paid-In    |   | (Accumulated |   | hensive   |  | Stockholders
|                                                                           |                                                                                             |  | Shares       |   | Amount     |   | Capital      |   | Deficit ) |  | Income (Loss) |   | Equity
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |       
|Balance at December 31, 2001                                               |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |           |  | 13,131        |   |        |  | (864     | )   |       |  | 44          |      |   |  | 12,324 |     
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Comprehensive income:                                                      |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                                                           | Net
earnings for the nine months ended
September 30, 2002 (unaudited)                       |  |              |  |            |   |              |  |           |  |               |  |        |  |          | 402 |       |  |             |     |   |  |        | 402  |  
|                                                                           | Net change in unrealized gain on securities
available for sale, net tax of $137
(unaudited) |  |              |  |            |   |              |  |           |  |               |  |        |  |          |    |       |  |             | 225  |   |  |        | 225  |  
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                                                           | Comprehensive income (unaudited)                                                            |  |              |  |            |   |              |  |           |  |               |  |        |  |          |    |       |  |             |     |   |  |        | 627  |  
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at September 30, 2002 (unaudited)                                  |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |           |  | 13,131        |   |        |  | (462     | )   |       |  | 269         |      |   |  | 12,951 |     
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at December 31, 2002                                               |                                                                                             |  | 1,320,700    |   |            | $ | 13           |   |           |  | 13,131        |   |        |  | (210     | )   |       |  | 362         |      |   |  | 13,296 |     
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Comprehensive income:                                                      |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                                                           | Net
earnings for the nine months ended
September 30, 2003 (unaudited)                       |  |              |  |            |   |              |  |           |  |               |  |        |  |          | 686 |       |  |             |     |   |  |        | 686  |  
|                                                                           | Net change in unrealized gain on securities
available for sale, net tax of $240
(unaudited) |  |              |  |            |   |              |  |           |  |               |  |        |  |          |    |       |  |             | (400 | ) |  |        | (400 | )
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|                                                                           | Comprehensive income (unaudited)                                                            |  |              |  |            |   |              |  |           |  |               |  |        |  |          |    |       |  |             |     |   |  |        | 286  |  
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Proceeds from warrants exercised (net of
offering costs of $22 (unaudited) |                                                                                             |  | 3,180        |   |            |   |             |   |           |  | 10            |   |        |  |         |     |       |  |            |      |   |  | 10     |     
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     
|Balance at September 30, 2003 (unaudited)                                  |                                                                                             |  | 1,323,880    |   |            | $ | 13           |   |           |  | 13,141        |   |        |  | 476      |     |       |  | (38         | )    |   |  | 13,592 |     
|                                                                           |                                                                                             |  |              |   |            |   |              |   |           |  |               |   |        |  |          |     |       |  |             |      |   |  |        |     

See Accompanying Notes to Condensed
Consolidated Financial Statements.

4



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY




Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |         |       |         |  
|------------------------------------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ----------------------------------------- | ------- | ----------------- | ------- | ------ | ------- | ----- | ------- | -
|                                                  |                                                                                     |                                                                        |                                           |         | Nine Months Ended
|                                                  |                                                                                     |                                                                        |                                           |         | September 30,    
|                                                  |                                                                                     |                                                                        |                                           |         |                  
|                                                  |                                                                                     |                                                                        |                                           |         | 2003              |         | 2002  
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |       
|Cash flows from operating activities:             |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  | Net earnings                                                                        |                                                                        | $                                         | 686     |                   |         |        | 402     |      
|                                                  | Adjustments to reconcile net earnings to net cash provided by
operating activities: |                                                                        |                                           |         |                   |         |        |         |      
|                                                  |                                                                                     | Depreciation                                                           |                                           |         | 124               |         |        |         | 114   |        
|                                                  |                                                                                     | Provision for loan losses                                              |                                           |         | 243               |         |        |         | 377   |        
|                                                  |                                                                                     | Deferred income taxes                                                  |                                           |         |                  |         |        |         | 246   |        
|                                                  |                                                                                     | Amortization of loan fees, premiums and discounts                      |                                           |         | 48                |         |        |         | 95    |        
|                                                  |                                                                                     | Increase in accrued interest receivable and other assets               |                                           |         | (167              | )       |        |         | (326  | )      
|                                                  |                                                                                     | Net increase in official checks                                        |                                           |         | 434               |         |        |         | 207   |        
|                                                  |                                                                                     | Increase in other liabilities                                          |                                           |         | 220               |         |        |         | 110   |        
|                                                  |                                                                                     | Gain on sale of securities available for sale                          |                                           |         |                  |         |        |         | (11   | )      
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  |                                                                                     |                                                                        | Net cash provided by operating activities |         |                   | 1,588   |        |         |       | 1,214   |  
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|Cash flows from investing activities:             |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  | Net increase in loans                                                               |                                                                        |                                           | (17,294 | )                 |         |        | (28,216 | )    
|                                                  | Net purchase of available for sale securities                                       |                                                                        |                                           | (24,094 | )                 |         |        | (20,552 | )    
|                                                  | Proceeds from sales, calls of securities available for sale                         |                                                                        |                                           | 7,365   |                   |         |        | 16,925  |      
|                                                  | Principal paydowns on available for sale securities                                 |                                                                        |                                           | 6,590   |                   |         |        | 687     |      
|                                                  | Purchase of Federal Home Loan Bank stock                                            |                                                                        |                                           | (100    | )                 |         |        | (60     | )    
|                                                  | Purchase of premises and equipment                                                  |                                                                        |                                           | (657    | )                 |         |        | (38     | )    
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  |                                                                                     |                                                                        | Net cash used in investing activities     |         |                   | (28,190 | )      |         |       | (31,254 | )
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|Cash flows from financing activities:             |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  | Net increase in deposits                                                            |                                                                        |                                           | 18,233  |                   |         |        | 24,686  |      
|                                                  | Proceeds from Federal Home Loan Bank advance                                        |                                                                        |                                           | 8,000   |                   |         |        | 1,200   |      
|                                                  | Payments of Federal Home Loan Bank advance                                          |                                                                        |                                           | (6,000  | )                 |         |        |        |      
|                                                  | Net increase in other borrowings                                                    |                                                                        |                                           | 4,823   |                   |         |        | 74      |      
|                                                  | Net proceeds from warrants exercised                                                |                                                                        |                                           | 10      |                   |         |        |        |      
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  |                                                                                     |                                                                        | Net cash provided by financing activities |         |                   | 25,066  |        |         |       | 25,960  |  
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|Net decrease in cash and cash equivalents         |                                                                                     |                                                                        | (1,536                                    | )       |                   |         | (4,080 | )      
|Cash and cash equivalents at beginning of period  |                                                                                     |                                                                        | 6,056                                     |         |                   |         | 12,479 |        
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|Cash and cash equivalents at end of period        |                                                                                     | $                                                                      | 4,520                                     |         |                   |         | 8,399  |        
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|Supplemental disclosure of cash flow information: |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  | Cash paid during the period for:                                                    |                                                                        |                                           |         |                   |         |        |         |      
|                                                  |                                                                                     | Interest                                                               |                                           | $       | 2,217             |         |        |         | 1,882 |        
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  |                                                                                     | Income taxes                                                           |                                           | $       | 457               |         |        |         |      |        
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        
|                                                  | Noncash item:                                                                       |                                                                        |                                           |         |                   |         |        |         |      
|                                                  |                                                                                     | Change in unrealized gain on securities available for sale, net of tax |                                           | $       | (400              | )       |        |         | 225   |        
|                                                  |                                                                                     |                                                                        |                                           |         |                   |         |        |        

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, up to the limit allowed by law, by the Federal
Deposit Insurance Corporation. The Bank provides a variety of community
banking services to business and individuals through its two banking
offices in Hillsborough County, Florida.
The Companys fiscal year end is December 31. In the opinion of the
management, the accompanying condensed consolidated financial statements
contain all adjustments (consisting principally of normal recurring
accruals) necessary to present fairly the financial position at September
30, 2003, the results of operations for the three- and nine-month periods
ended September 30, 2003 and 2002 and cash flows for the nine months ended
September 30, 2003 and 2002. The results of operations for the three and
nine months ended September 30, 2003, are not necessarily indicative of
the results to be expected for the year ending December 31, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Loan Impairment and Losses



| | At September 30, 2003 and 2002 there were no impaired loans. The
activity in the allowance for loan losses is as follows (in thousands):
| | ----------------------------------------------------------------------------------------------------------------------------------------

|                               |  |                    |       |                   |  |      |     |      |  |  |       |  |  |  |     | 
|------------------------------ |  | ------------------ | ----- | ----------------- |  | ---- | --- | ---- |  |  | ----- |  |  |  | --- | 
|                               |  | Three Months Ended |       | Nine Months Ended
|                               |  | September 30,      |       | September 30,    
|                               |  |                    |       |                  
|                               |  | 2003               |       | 2002              |  | 2003 |     | 2002
|                               |  |                    |       |                   |  |      |     |     
|Balance at beginning of period |  | $                  | 1,152 |                   |  |      | 755 |      |  |  | 998   |  |  |  | 524 | 
|Provision for loan losses      |  |                    | 89    |                   |  |      | 146 |      |  |  | 243   |  |  |  | 377 | 
|                               |  |                    |       |                   |  |      |     |      |  |  |       |  |  |  |     | 
|Balance at end of period       |  | $                  | 1,241 |                   |  |      | 901 |      |  |  | 1,241 |  |  |  | 901 | 
|                               |  |                    |       |                   |  |      |     |      |  |  |       |  |  |  |     | 

Nonaccrual and past due loans were as follows (in thousands).

|                                                 |  |                  |   |      |  |  |   | 
|------------------------------------------------ |  | ---------------- | - | ---- |  |  | - | 
|                                                 |  | At September 30,
|                                                 |  |                 
|                                                 |  | 2003             |   | 2002
|                                                 |  |                  |   |     
|Nonaccrual loans                                 |  | $                |  |      |  |  |  | 
|Past due ninety days or more, but still accruing |  |                  |  |      |  |  |  | 
|                                                 |  |                  |   |      |  |  |   | 
|                                                 |  | $                |  |      |  |  |  | 
|                                                 |  |                  |   |      |  |  |   | 

(continued)

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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(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
|                                                                                     |  |                  |           |      |  |       
|                                                                                     |  | 2003             |           | 2002
|                                                                                     |  |                  |           |     
|Three Months Ended September 30:                                                     |  |                  |           |      |  |        |           | 
|For Basic EPS                                                                        |  |                  | 1,322,549 |      |  |        | 1,320,700 | 
|Effect
of dilutive securities-
Incremental shares from assumed conversion of options |  |                  | 2,441     |      |  |        |          | 
|                                                                                     |  |                  |           |      |  |        |           | 
|For Diluted EPS                                                                      |  |                  | 1,324,990 |      |  |        | 1,320,700 | 
|                                                                                     |  |                  |           |      |  |        |           | 
|Nine Months Ended September 30:                                                      |  |                  |           |      |  |        |           | 
|For Basic EPS                                                                        |  |                  | 1,321,316 |      |  |        | 1,320,700 | 
|Effect
of dilutive securities-
Incremental shares from assumed conversion of options |  |                  | 2,574     |      |  |        |          | 
|                                                                                     |  |                  |           |      |  |        |           | 
|For Diluted EPS                                                                      |  |                  | 1,323,890 |      |  |        | 1,320,700 | 
|                                                                                     |  |                  |           |      |  |        |           | 



(4) Stock Option Plan



| | Certain key employees, directors and ex-employees of the Company have been
granted 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 September 30, 2003,
17,150 shares 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, 2001  |  |  | 168,000   |  |        | $ | 10        |  |          |  | 10        |  |  |  | 1,680 | 
|Options granted                   |  |  | 9,900     |  |        |   | 10        |  |          |  | 10        |  |  |  | 99    | 
|                                  |  |  |           |  |        |   |           |  |          |  |           |  |  |  |       | 
|Outstanding at September 30, 2002 |  |  | 177,900   |  |        | $ | 10        |  |          |  | 10        |  |  |  | 1,779 | 
|                                  |  |  |           |  |        |   |           |  |          |  |           |  |  |  |       | 
|Outstanding at December 31, 2002  |  |  | 177,600   |  |        |   | 10        |  |          |  | 10        |  |  |  | 1,776 | 
|Options granted                   |  |  | 3,250     |  |        |   | 10        |  |          |  | 10        |  |  |  | 33    | 
|                                  |  |  |           |  |        |   |           |  |          |  |           |  |  |  |       | 
|Outstanding at September 30, 2003 |  |  | 180,850   |  |        | $ | 10        |  |          |  | 10        |  |  |  | 1,809 | 
|                                  |  |  |           |  |        |   |           |  |          |  |           |  |  |  |       | 

(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 (in thousands,
except per share amounts):
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |     | 
|---------------------------------------------------------------------------------------------------------------------------------- | ----------- | - | ------------------ | --- | ----------------- |  | ---- | --- | ---- |  | --- | --- |  |  | --- | --- | 
|                                                                                                                                   |             |   | Three Months Ended |     | Nine Months Ended
|                                                                                                                                   |             |   | September 30,      |     | September 30,    
|                                                                                                                                   |             |   |                    |     |                  
|                                                                                                                                   |             |   | 2003               |     | 2002              |  | 2003 |     | 2002
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |     
|Net earnings, as reported                                                                                                          |             | $ | 253                |     |                   |  | 202  |     |      |  | 686 |     |  |  | 402 |    
|Deduct: Total stock-based employee
compensation determined under fair
value based method for all awards, net
of related tax effect |             |   | (9                 | )   |                   |  | (15  | )   |      |  | (27 | )   |  |  | (45 | )  
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|Proforma net earnings                                                                                                              |             | $ | 244                |     |                   |  | 187  |     |      |  | 659 |     |  |  | 357 |    
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|Basic earnings per share:                                                                                                          |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|                                                                                                                                   | As reported |   | $                  | .19 |                   |  |      | .15 |      |  |     | .52 |  |  |     | .30 | 
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|                                                                                                                                   | Proforma    |   | $                  | .18 |                   |  |      | .14 |      |  |     | .50 |  |  |     | .27 | 
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|Diluted earnings per share:                                                                                                        |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|                                                                                                                                   | As reported |   | $                  | .19 |                   |  |      | .15 |      |  |     | .52 |  |  |     | .30 | 
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    
|                                                                                                                                   | Proforma    |   | $                  | .18 |                   |  |      | .14 |      |  |     | .50 |  |  |     | .27 | 
|                                                                                                                                   |             |   |                    |     |                   |  |      |     |      |  |     |     |  |  |     |    



| | The fair value of each option grant is estimated on the date of grant
using the minimum value method with the following assumptions, no
options were granted during the three-months ended September 30, 2003
and 2002:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                              |  |                   |      |      |  |  |      |  
|--------------------------------------------- |  | ----------------- | ---- | ---- |  |  | ---- | -
|                                              |  | Nine Months Ended
|                                              |  | September 30,    
|                                              |  |                  
|                                              |  | 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
September 30, 2003, that the Bank meets all capital adequacy requirements
to which it is subject.
As of September 30, 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       |  |  
|                       |                                           |  | Actual |  | Adequacy Purposes |  | Action Provisions |        | To Be Well       
|                       |                                           |  |        |  |                   |  |                   |        | Prompt Corrective
|                       |                                           |  |        |  | Amount            |  | %                 |        | Amount            |  | % |       | Amount |  | %
|                       |                                           |  |        |  |                   |  |                   |        |                   |  |   |       |        |  |  
|At September 30, 2003: |                                           |  |        |  |                   |  |                   |        |                   |  |   |       |        |  |   |       |  |  |  |      |   |  |   |        |  |  |  |      
|                       | Total capital (to Risk-
Weighted Assets)  |  |        |  |                   |  | $                 | 12,108 |                   |  |   | 11.20 | %      |  | $ | 8,649 |  |  |  | 8.00 | % |  | $ | 10,812 |  |  |  | 10.00 | %
|                       | Tier I Capital (to Risk-
Weighted Assets) |  |        |  |                   |  |                   | 10,881 |                   |  |   | 10.06 |        |  |   | 4,325 |  |  |  | 4.00 |   |  |   | 6,487  |  |  |  | 6.00  |  
|                       | Tier I Capital
(to Average Assets)        |  |        |  |                   |  |                   | 10,881 |                   |  |   | 8.21  |        |  |   | 5,304 |  |  |  | 4.00 |   |  |   | 6,630  |  |  |  | 5.00  |  

9



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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 September 30, 2003, and for the
three- and nine-month periods ended September 30, 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.

10



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##### Table of Contents






Independent Accountants Report

Florida Business BancGroup, Inc.
Tampa, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of
Florida Business BancGroup, Inc. (the Company) as of September 30, 2003, and
the related condensed consolidated statements of earnings for the three- and
nine- month periods ended September 30, 2003 and 2002 and the related condensed
consolidated statements of cash flows and stockholders equity for the
nine-month periods ended September 30, 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
October 7, 2003

11



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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 September 30, 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, up to the limit
of the law, by the Federal Deposit Insurance Corporation. The Bank provides a
variety of community banking services to business and individuals through its
two banking offices in Hillsborough County, Florida.

Liquidity and Capital Resources

During the nine months ended September 30, 2003, the Companys primary sources
of funds consisted of deposit inflows of $18.2 million, proceeds from principal
pay-downs and calls of securities available for sale of $14.0 million and a net
increase in other borrowings of $4.8 million and Federal Home Loan Bank
advances of $2.0 million. The Company used its capital resources principally
to fund existing and continuing loan commitments net of principal repayments of
$17.3 million and to purchase securities of $24.1 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 September 30, 2003, the Bank
had liquidity of approximately $27 million, or approximately 25% of total
deposits.

Management believes the Bank was in compliance with all minimum capital
requirements which it was subject to at September 30, 2003. See note 5 to the
condensed consolidated financial statements.

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, unused lines
of credit and construction loans 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.

12



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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

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

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 September 30, 2003,
follows (in thousands):

|                                              |  |          |        | 
|--------------------------------------------- |  | -------- | ------ | 
|                                              |  | Contract
|                                              |  | Amount  
|                                              |  |         
|Commitments to extend credit                  |  | $        | 11,108 | 
|                                              |  |          |        | 
|Unused lines of credit and construction loans |  | $        | 17,568 | 
|                                              |  |          |        | 
|Standby letters of credit                     |  | $        | 287    | 
|                                              |  |          |        | 

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 the next twelve months. 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.

Selected Financial Information

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

|                                                                                                |  |               |       |              |  |               |       |             |  |  |       |  
|----------------------------------------------------------------------------------------------- |  | ------------- | ----- | ------------ |  | ------------- | ----- | ----------- |  |  | ----- | -
|                                                                                                |  | Nine Months   |       |              |  |               |       | Nine Months
|                                                                                                |  | Ended         |       | Year Ended   |  | Ended        
|                                                                                                |  | September 30, |       | December 31, |  | September 30,
|                                                                                                |  | 2003          |       | 2002         |  | 2002         
|                                                                                                |  |               |       |              |  |              
|Average equity as a percentage
of average assets                                                |  |               | 10.84 | %            |  |               | 13.24 | %           |  |  | 13.60 | %
|Equity to total assets at end of period                                                         |  |               | 9.82  | %            |  |               | 11.82 | %           |  |  | 12.06 | %
|Return on average assets (1)                                                                    |  |               | .74   | %            |  |               | .66   | %           |  |  | .58   | %
|Return on average equity (1)                                                                    |  |               | 6.79  | %            |  |               | 4.95  | %           |  |  | 4.28  | %
|Noninterest expenses to average assets (1)                                                      |  |               | 2.17  | %            |  |               | 1.98  | %           |  |  | 2.10  | %
|Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period |  |               |      | %            |  |               |      | %           |  |  |      | %



|(1) |  | Annualized for the nine months ended September 30.
|--- |  | --------------------------------------------------

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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 September 30,
|                                                                                 |                                             |                                            |        |                                 
|                                                                                 |                                             |                                            |        | 2003                             |         | 2002     
|                                                                                 |                                             |                                            |        |                                  |         |          
|                                                                                 |                                             |                                            |        |                                  |         |           |       | Interest |       | Average |      |           |      |        |        | Interest |                  | Average
|                                                                                 |                                             |                                            |        | Average                          |         | and       |       | Yield/   |       | Average |      | and       |      | Yield/
|                                                                                 |                                             |                                            |        | Balance                          |         | Dividends |       | Rate     |       | Balance |      | Dividends |      | Rate  
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |       
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          | ($ in thousands)
|Interest-earning assets:                                                         |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 | Loans                                       |                                            | $      | 92,798                           |         |           |       | 1,586    |       |         |      | 6.84      | %    |        | $      | 67,573   |                  |         |     | 1,276 |       |  |      | 7.55 | %   
|                                                                                 | Securities                                  |                                            |        | 34,043                           |         |           |       | 298      |       |         |      | 3.50      |      |        |        | 22,122   |                  |         |     | 262   |       |  |      | 4.74 |     
|                                                                                 | Other interest-earning assets (1)           |                                            |        | 432                              |         |           |       | 5        |       |         |      | 4.63      |      |        |        | 5,936    |                  |         |     | 30    |       |  |      | 2.02 |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             | Total interest-earning
assets              |        |                                  | 127,273 |           |       |          | 1,889 |         |      |           | 5.94 |        |        |          | 95,631           |         |     |       | 1,568 |  |      |      | 6.56 | 
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Noninterest-earning assets                                                       |                                             |                                            | 6,992  |                                  |         |           |       |          |       |         |      |           |      |        | 4,370  |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             | Total assets                               |        | $                                | 134,265 |           |       |          |       |         |      |           |      |        |        | $        | 100,001          |         |     |       |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Interest-bearing liabilities:                                                    |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 | Savings, NOW, money-market
deposit accounts |                                            |        | 24,379                           |         |           |       | 70       |       |         |      | 1.15      |      |        |        | 18,590   |                  |         |     | 86    |       |  |      | 1.85 |     
|                                                                                 | Time deposits                               |                                            |        | 68,805                           |         |           |       | 627      |       |         |      | 3.65      |      |        |        | 52,003   |                  |         |     | 547   |       |  |      | 4.21 |     
|                                                                                 | Other borrowings (2)                        |                                            |        | 16,334                           |         |           |       | 70       |       |         |      | 1.71      |      |        |        | 8,156    |                  |         |     | 44    |       |  |      | 2.16 |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             | Total interest-bearing
liabilities         |        |                                  | 109,518 |           |       |          | 767   |         |      |           | 2.80 |        |        |          | 78,749           |         |     |       | 677   |  |      |      | 3.44 | 
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Noninterest-bearing liabilities                                                  |                                             |                                            | 11,279 |                                  |         |           |       |          |       |         |      |           |      |        | 8,482  |          |                  |         |     |       |       |  |      |     
|Stockholders equity                                                             |                                             |                                            | 13,468 |                                  |         |           |       |          |       |         |      |           |      |        | 12,770 |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             | Total liabilities and
stockholders equity |        | $                                | 134,265 |           |       |          |       |         |      |           |      |        |        | $        | 100,001          |         |     |       |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Net interest income                                                              |                                             |                                            |        |                                  |         | $         | 1,122 |          |       |         |      |           |      |        |        |          |                  | $       | 891 |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Interest-rate spread (3)                                                         |                                             |                                            |        |                                  |         |           |       |          |       |         | 3.14 | %         |      |        |        |          |                  |         |     |       |       |  | 3.12 | %   
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Net interest margin (4)                                                          |                                             |                                            |        |                                  |         |           |       |          |       |         | 3.53 | %         |      |        |        |          |                  |         |     |       |       |  | 3.73 | %   
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     
|Ratio of average interest-earning
assets to average interest-bearing
liabilities |                                             |                                            | 1.16   |                                  |         |           |       |          |       |         |      |           |      |        | 1.21   |          |                  |         |     |       |       |  |      |     
|                                                                                 |                                             |                                            |        |                                  |         |           |       |          |       |         |      |           |      |        |        |          |                  |         |     |       |       |  |      |     



|(1) |  | Includes Federal Home Loan Bank stock and federal funds sold.                                                                                            
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes Federal Home Loan Bank advances and other borrowings.                                                                                           
|   
|(3) |  | Interest-rate spread represents the difference between the average yield
on interest-earning assets and the average rate of interest-bearing
liabilities.
|   
|(4) |  | Net interest margin is net interest income divided by average
interest-earning assets.                                                                   

14



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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

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.

|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |      |      | 
|-------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------ | ------ | ------------------------------- | ------- | --------- | ----- | -------- | ----- | ------- | ---- | --------- | ---- | ------ | ------ | -------- | ------ | ------- | ----- | ---------------- | ----- |  | ---- | ---- | ---- | 
|                                                                                 |                                             |                                            |        | Nine Months Ended September 30,
|                                                                                 |                                             |                                            |        |                                 |         |           |      
|                                                                                 |                                             |                                            |        |                                 |         |           | 2003  |          | 2002 
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |      
|                                                                                 |                                             |                                            |        |                                 |         |           |       | Interest |       | Average |      |           |      |        |        | Interest |        | Average
|                                                                                 |                                             |                                            |        | Average                         |         | and       |       | Yield/   |       | Average |      | and       |      | Yield/
|                                                                                 |                                             |                                            |        | Balance                         |         | Dividends |       | Rate     |       | Balance |      | Dividends |      | Rate  
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |       
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       | ($ in thousands)
|Interest-earning assets:                                                         |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 | Loans                                       |                                            | $      | 84,839                          |         |           |       | 4,490    |       |         |      | 7.06      | %    |        | $      | 58,205   |        |         |       | 3,286            |       |  |      | 7.53 | %   
|                                                                                 | Securities                                  |                                            |        | 28,971                          |         |           |       | 807      |       |         |      | 3.71      |      |        |        | 22,084   |        |         |       | 853              |       |  |      | 5.15 |     
|                                                                                 | Other interest-earning assets (1)           |                                            |        | 3,372                           |         |           |       | 39       |       |         |      | 1.54      |      |        |        | 6,474    |        |         |       | 84               |       |  |      | 1.73 |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             | Total interest-earning
assets              |        |                                 | 117,182 |           |       |          | 5,336 |         |      |           | 6.07 |        |        |          | 86,763 |         |       |                  | 4,223 |  |      |      | 6.49 | 
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Noninterest-earning assets                                                       |                                             |                                            | 7,166  |                                 |         |           |       |          |       |         |      |           |      |        | 5,231  |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             | Total assets                               |        | $                               | 124,348 |           |       |          |       |         |      |           |      |        |        | $        | 91,994 |         |       |                  |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Interest-bearing liabilities:                                                    |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 | Savings, NOW, money-market
deposit accounts |                                            |        | 22,826                          |         |           |       | 234      |       |         |      | 1.37      |      |        |        | 16,628   |        |         |       | 232              |       |  |      | 1.86 |     
|                                                                                 | Time deposits                               |                                            |        | 65,008                          |         |           |       | 1,819    |       |         |      | 3.73      |      |        |        | 47,338   |        |         |       | 1,548            |       |  |      | 4.36 |     
|                                                                                 | Other borrowings (2)                        |                                            |        | 12,170                          |         |           |       | 165      |       |         |      | 1.81      |      |        |        | 7,922    |        |         |       | 134              |       |  |      | 2.26 |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             | Total interest-bearing
liabilities         |        |                                 | 100,004 |           |       |          | 2,218 |         |      |           | 2.96 |        |        |          | 71,888 |         |       |                  | 1,914 |  |      |      | 3.55 | 
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Noninterest-bearing liabilities                                                  |                                             |                                            | 10,869 |                                 |         |           |       |          |       |         |      |           |      |        | 7,591  |          |        |         |       |                  |       |  |      |     
|Stockholders equity                                                             |                                             |                                            | 13,475 |                                 |         |           |       |          |       |         |      |           |      |        | 12,515 |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             | Total liabilities and
stockholders equity |        | $                               | 124,348 |           |       |          |       |         |      |           |      |        |        | $        | 91,994 |         |       |                  |       |  |      |      |      | 
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Net interest income                                                              |                                             |                                            |        |                                 |         | $         | 3,118 |          |       |         |      |           |      |        |        |          |        | $       | 2,309 |                  |       |  |      |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Interest-rate spread (3)                                                         |                                             |                                            |        |                                 |         |           |       |          |       |         | 3.11 | %         |      |        |        |          |        |         |       |                  |       |  | 2.94 | %   
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Net interest margin (4)                                                          |                                             |                                            |        |                                 |         |           |       |          |       |         | 3.55 | %         |      |        |        |          |        |         |       |                  |       |  | 3.55 | %   
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     
|Ratio of average interest-earning
assets to average interest-bearing
liabilities |                                             |                                            | 1.17   |                                 |         |           |       |          |       |         |      |           |      |        | 1.21   |          |        |         |       |                  |       |  |      |     
|                                                                                 |                                             |                                            |        |                                 |         |           |       |          |       |         |      |           |      |        |        |          |        |         |       |                  |       |  |      |     



|(1) |  | Includes Federal Home Loan Bank stock and federal funds sold.                                                                                            
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes Federal Home Loan Bank advances and other borrowings.                                                                                           
|   
|(3) |  | Interest-rate spread represents the difference between the average yield
on interest-earning assets and the average rate of interest-bearing
liabilities.
|   
|(4) |  | Net interest margin is net interest income divided by average
interest-earning assets.                                                                   

15



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##### Table of Contents



FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Comparison of the Three-Month Periods Ended September 30, 2003 and 2002

General.Net earnings for the three months ended September 30, 2003 were
$253,000 or $.19 per basic and diluted share compared to a net earnings
of $202,000 or $.15 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 which was partially offset by an increase in noninterest
expenses.



Interest Income and Expense.Interest income increased to $1.9 million for
the three-month period ended September 30, 2003 from $1.6 million for
the three months ended September 30, 2002. Interest on loans increased
to $1.6 million due to an increase in the average loan portfolio balance
in 2003 to $92.8 million from $67.6 million in 2002 which was only
partially offset by a decrease in the weighted-average yield earned in
2003 to 6.84% from 7.55% in 2002. Interest on securities increased to
$298,000 for the three-months ended September 30, 2003 compared to
$262,000 in 2002 due to an increase in average portfolio balance to
$34.0 million from $22.1 million for 2002 which was partially offset by
decrease in the average yield earned to 3.50% in 2003 from 4.74% in
2002. Interest on other interest-earning assets decreased from $30,000
for the three-months ended September 30, 2002 to $5,000 for the three
months ended September 30, 2003.   Interest expense on deposits increased to $697,000 for the three-months
ended September 30, 2003 from $633,000 in 2002. The increase is due to an
increase in the average deposits in 2003 to $93.2 million from $70.6
million in 2002 which was only partially offset by a decrease in the
weighted-average rate paid on deposits in 2003 to 2.99% from 3.59% 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 $89,000 for the three-month period ended September 30, 2003
compared to $146,000 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. The allowance for loan losses is $1,241,000 at
September 30, 2003. While management believes that its allowance for loan
losses is adequate as of September 30, 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 $104,000 in 2003 from
$63,000 for the three- months ended September 30, 2002. The increase was
due to a increase in service charges and fees primarily due to the growth
in deposit accounts.




Noninterest Expenses.Total noninterest expenses increased to $731,000 for
the three-months ended September 30, 2003 from $481,000 for the
comparable period ended September 30, 2002. The increase was due to an
increase in salaries and employee benefits, occupancy and other expense
due to the opening of a second banking office in the second quarter of
2003.




Income Taxes.Income taxes for the three-months ended September 30, 2003
were $153,000 (an effective rate of 37.7%) compared to income taxes of
$125,000 in 2002 (an effective rate of 38.2%).


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FLORIDA BUSINESS BANCGROUP, INC. AND SUBSIDIARY

Comparison of the Nine-Month Periods Ended September 30, 2003 and 2002



General.Net earnings for the nine months ended September 30, 2003 were
$686,000 or $.52 per basic and diluted share compared to a net earnings
of $402,000 or $.30 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 which was partially offset by an increase in noninterest expense.




Interest Income and Expense.Interest income increased to $5.3 million for
the nine-month period ended September 30, 2003 from $4.2 million for the
nine months ended September 30, 2002. Interest on loans increased to
$4.5 million due to an increase in the average loan portfolio balance in
2003 to $84.8 million from $58.2 million in 2002 which was only
partially offset by a decrease in the weighted-average yield earned in
2003 to 7.06% from 7.53% in 2002. Interest on securities decreased to
$807,000 for the nine-months ended September 30, 2003 compared to
$853,000 in 2002 due to a decrease in the average yield earned in 2003
to 3.71% from 5.15% in 2002 which was partially offset by an increase in
the average portfolio balance to $29.0 million from $22.1 million for
2002. Interest on other interest-earning assets decreased from $84,000
for the nine-months ended September 30, 2002 to $39,000 for the nine
months ended September 30, 2003.   Interest expense on deposits increased to $2.1 million for the nine-months
ended September 30, 2003 from $1.8 million in 2002. The increase is due to
an increase in the average deposits in 2003 to $87.8 million from $64.0
million in 2002 which was only partially offset by a decrease in the
weighted-average rate paid on deposits in 2003 to 3.12% from 3.71% 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 $243,000 for the nine-month period ended September 30, 2003
compared to $377,000 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 $1,241,000 at
September 30, 2003. While management believes that its allowance for loan
losses is adequate as of September 30, 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 $248,000 in 2003 from
$161,000 for the nine- months ended September 30, 2002. The increase was
due to a increase in service charges and fees primarily due to the growth
in deposit accounts.




Noninterest Expenses.Total noninterest expenses increased to $2,024,000 for
the nine-months ended September 30, 2003 from $1,445,000 for the
comparable period ended September 30, 2002. The increase in noninterest
expense was primarily due to an increase in salaries and employee
benefits, occupancy and other expense due to the opening of a second
banking office during the second quarter of 2003.




Income Taxes.The income taxes for the nine-months ended September 30, 2003
were $413,000 (an effective rate of 37.6%) compared to an income taxes of
$246,000 in 2002 (an effective rate of 38.0%).


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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 September 30, 2003.

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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;
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; and exhibits marked with nine
asterisks (*********) were previously filed as part of the companies March
31, 2003 10-QSB, filed with the Securities and Exchange Commission on May 6,
2003.

|            |  |                        |       |  |  |                                                                                                                                              
|----------- |  | ---------------------- | ----- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|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                                                                                                               
|            |  |                        |       |  |  |                                                                                                                                              
|            |  |                        | 31.1  |  |  | Certification of Chief Executive Officer required
by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            |  |                        |       |  |  |                                                                                                                                              
|            |  |                        | 31.2  |  |  | Certification of Chief Financial Officer required
by Rule 13a-14(a)/15d-14(a) under the Exchange Act                                         
|            |  |                        |       |  |  |                                                                                                                                              
|            |  |                        | 32.1  |  |  | Certification of Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of Sarbanes-Oxley Act of 2002
|            |  |                        |       |  |  |                                                                                                                                              
|            |  |                        | 32.2  |  |  | Certification of Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to 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 September 30, 2003.
|--- |  | --------------------------------------------------------------------------------------------------

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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: November 5, 2003 |  | By:                                            |  | /s/ A. Bronson Thayer                       
|                       |  |                                                |  |                                             
|                       |  |                                                |  | A. Bronson Thayer, Chairman and             
|                       |  |                                                |  | Chief Executive Officer                     
|                       |  |                                                |  |                                             
|Date: November 5, 2003 |  | By:                                            |  | /s/ Marti J. Warren                         
|                       |  |                                                |  |                                             
|                       |  |                                                |  | Marti J. Warren, Principal Financial Officer

20