U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

         For the quarterly period ended:  September 30, 2001
                                          ------------------

___      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from _______________ to ________________

                        Commission file number: 33-95562

                      BEACH FIRST NATIONAL BANCSHARES, INC.
                      -------------------------------------
        (Exact name of small business issuer as specified in its charter)

           South Carolina                           57-1030117
      ------------------------                      -----------------
      (State of Incorporation)            (I.R.S. Employer Identification No.)

               1550 Oak Street, Myrtle Beach, South Carolina 29577
                    (Address of principal executive offices)

                                 (843) 626-2265
                           (Issuer's telephone number)

                                 Not Applicable
                         ------------------------------
(Former name, former address and former fiscal year, if changed since last
report)


     Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X    No
         ---      ---
     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

    On November 5, 2001, 1,318,368 shares of the issuer's common stock, par
value $1.00 per share were issued and outstanding.


<PAGE>


PART I
FINANCIAL INFORMATION
Item 1.  Financial Statements.

<TABLE>
<CAPTION>

              Beach First National Bancshares, Inc. and Subsidiary
                          Myrtle Beach, South Carolina
                           Consolidated Balance Sheets

                                                                        September 30,               December 31,
                                                                     2001           2000               2000
                                                                     ----           -----              ----
                                                               (unaudited)         (unaudited)       (audited)

          ASSETS
<S>                                                         <C>                <C>                <C>
Cash and due from banks                                     $     1,920,025    $      1,560,665   $      1,359,158
Federal funds sold and short term investments                     9,842,819           9,291,503          6,919,000
Investment securities available for sale                          6,530,987           8,440,763          8,186,033
Loans, net                                                       60,317,784          40,473,581         45,052,910
Premises and equipment, net                                       2,503,571           1,414,720          1,546,447
Other assets                                                        662,693             694,565            706,468
                                                            ---------------    ----------------   ----------------
      Total assets                                          $    81,777,879    $     61,875,797   $     63,770,016
                                                            ===============    ================   ================

          LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits
   Noninterest bearing deposits                             $    11,356,230    $     7,502,870    $     5,525,253
   Interest bearing deposits                                     56,956,418         47,500,753         51,201,258
                                                            ---------------    ---------------    ---------------
     Total deposits                                              68,312,648         55,003,623         56,726,511
Other liabilities                                                   433,490            351,221            314,835
                                                            ---------------    ---------------    ---------------
     Total liabilities                                           68,746,139         55,354,844         57,041,346
                                                            ---------------    ---------------    ---------------

SHAREHOLDERS' EQUITY:
Common stock, $1 par value; 10,000,000 shares
   authorized; 1,318,368 shares issued and outstanding            1,318,368            735,868            737,368
Paid-in capital                                                  11,814,253          6,476,481          6,489,981
Accumulated retained deficit                                       (187,453)          (515,991)          (457,176)
Accumulated other comprehensive income (loss)                        86,572           (175,405)           (41,503)
                                                            ---------------    ----------------   ----------------
     Total shareholders' equity                                  13,031,740          6,520,953          6,728,670
                                                            ---------------    ---------------    ---------------
      Total liabilities and shareholders' equity            $    81,777,879    $    61,875,797    $    63,770,016
                                                            ===============    ===============    ===============

</TABLE>


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



<PAGE>

              Beach First National Bancshares, Inc. and Subsidiary
                          Myrtle Beach, South Carolina

<TABLE>
<CAPTION>

                      Consolidated Statements of Operations
                                   (Unaudited)
                                                           Nine Months Ended                 Three Months Ended
                                                             September 30,                      September 30,
                                                             -------------                      -------------
                                                         2001             2000             2001              2000
                                                         ----             ----             ----              ----

<S>                                                 <C>             <C>               <C>              <C>
INTEREST INCOME
   Interest and fees on loans                       $  3,709,434    $   2,679,675     $   1,347,536    $     972,861
   Investment securities                                 420,438          448,487           167,339          143,796
   Federal funds sold and short term investments         135,271          175,042            27,727          141,545
                                                    ------------    -------------     -------------    -------------
          Total interest income                        4,265,143        3,303,204         1,542,602        1,258,202

INTEREST EXPENSE
   Deposits                                            2,112,111        1,651,373          695,603           685,615
   Other borrowings                                       13,140           53,406            2,843
                                                    ------------    -------------     ------------     -------------
          Total interest expense                       2,125,251        1,704,779          698,446           685,615

          Net interest income                          2,139,892        1,598,425          844,156           572,587

PROVISION FOR POSSIBLE LOAN
   LOSSES                                                356,000          163,107          171,500            51,375
                                                    ------------    -------------     ------------     -------------
          Net interest income after provision
             for possible loan losses                  1,783,892        1,435,318          672,656           521,212
                                                    ------------    -------------     ------------     -------------

NONINTEREST INCOME
   Service fees on deposit accounts                      215,605          184,775           65,388            66,430
   Loss on sale of investment securities                  (9,746)          (6,825)          (1,996)             (721)
   Other income                                           62,062           30,692           34,927            11,947
                                                    ------------    -------------     ------------     -------------
         Total noninterest income                        267,921          208,642           98,319            77,656
                                                    ------------    -------------     ------------     -------------

NONINTEREST EXPENSES
   Salaries and wages                                    856,760          680,696          316,228           225,458
   Employee benefits                                      82,433           65,559           28,575            24,439
   Supplies and printing                                  56,312           35,886           28,396            13,212
   Advertising and public relations                       48,508           48,507           14,183            15,345
   Professional fees                                      57,038           99,791           31,071            34,860
   Depreciation and amortization                         156,043          127,472           71,519            35,178
   Occupancy                                              70,769           37,243           34,931            13,378
   Data processing fees                                  115,271           70,742           42,573            25,057
   Other operating expenses                              255,672          204,952          109,095            64,455
                                                    ------------    -------------     ------------     -------------
          Total noninterest expenses                   1,698,806        1,370,848          676,571           451,382
                                                    ------------    -------------     ------------     -------------

          Income before income taxes                     353,007          273,112           94,404           147,486

INCOME TAX EXPENSE                                        83,285          101,205           (9,974)           54,567
                                                    ------------    -------------     -------------    -------------
          Net income                                $    269,722    $     171,907     $    104,378     $      92,919
                                                    ============    =============     ============     =============

BASIC NET INCOME PER COMMON SHARE                   $        .20    $         .23     $        .08     $         .13
                                                    ============    =============     ============     =============
DILUTED NET INCOME PER COMMON SHARE                 $        .19    $         .21     $        .07     $         .11
                                                    ============    =============     ============     =============

</TABLE>

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


<PAGE>


              Beach First National Bancshares, Inc. and Subsidiary
<TABLE>
<CAPTION>

           Consolidated Statements of Changes in Shareholders' Equity
                                   (Unaudited)                                                             Accumulated
                                                                                                             Other          Total
                                                          Common stock         Paid-in         Retained  Comprehensive Shareholders'
                                                      Shares        Amount     Capital          Deficit       Loss          Equity
                                                      ------        ------     -------          -------       ----          ------
<S>                                            <C>           <C>            <C>        <C>             <C>           <C>
BALANCE, DECEMBER 31, 1999                           735,868      $735,868  $   6,476,481   $  (687,898)    $(211,138)  $  6,313,313
   Net income                                             --            --             --       171,907            --        171,907

   Other comprehensive loss, net of income taxes:
        Unrealized loss on investment securities          --            --             --            --        31,433         31,433
        Less reclassification adjustments for losses
            included in net loss                                                                                4,300          4,300
                                                                                                                        ------------
   Comprehensive Income                                   --            --             --                                    207,640
                                                   ---------    ----------  -------------   -----------     ---------    -----------
BALANCE, SEPTEMBER 30, 2000                          735,868    $  735,868  $   6,476,481   $  (515,991)    $(175,405)  $  6,520,953
                                                   =========    ==========  =============   ============    =========    ===========



                                                                                                        Accumulated
                                                                                                           Other         Total
                                                          Common stock           Paid-in    Retained   Comprehensive Shareholders'
                                                      Shares        Amount       Capital     Deficit        Loss         Equity
                                                      ------        ------       -------     -------        ----         ------

BALANCE, DECEMBER 31, 2000                            737,368   $  737,368  $   6,489,981   $  (457,175)    $(41,504)  $  6,728,670
   Net income                                             --            --             --       269,722           --        269,722
   Other comprehensive loss, net of income taxes:
        Unrealized loss on investment securities          --            --             --            --      134,508        134,508
        Less reclassification adjustments for losses
            included in net income                        --            --             --            --       (6,432)        (6,432)
                                                                                                                       ------------
    Comprehensive Income                                                                                                    397,798
    Issuance of Common Stock
          less offering expenses of $258,824         581,000    $  581,000  $   5,324,272                                 5,905,272
                                                   ---------     ---------   ------------   -----------     --------   ------------
                                                                                                                          6,303,070
BALANCE, SEPTEMBER 30, 2001                        1,318,368    $1,318,368  $  11,814,253   $  (187,453)    $ 86,572   $ 13,031,740
                                                   =========    ==========  =============   ============    ========   ============

</TABLE>

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


<PAGE>


              Beach First National Bancshares, Inc. and Subsidiary
                          Myrtle Beach, South Carolina

<TABLE>
<CAPTION>

                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                                                                       Nine Months Ended
                                                                                       September 30,
                                                                                  2001               2000
                                                                                  ----               ----


<S>                                                                         <C>                <C>
OPERATING ACTIVITIES
   Net income                                                               $     269,722      $     171,907
   Adjustments to reconcile net income to
        net cash provided by operating activities:
        Deferred income taxes                                                                         97,552
        Provisions for loan losses                                                356,000            124,234
        Depreciation and amortization                                             156,043            127,472
        Writedown on real estate acquired in settlement of loans                                      15,000
        Loss on sale of investment securities                                       9,746              6,825
        Increase (decrease) in other assets                                      (287,109)          (144,044)
        Increase (decrease) in other liabilities                                  398,310            165,159
                                                                            -------------      -------------
           Net cash provided by operating activities                              902,712            564,105
                                                                            -------------      -------------

INVESTING ACTIVITIES
   Purchase of investment securities                                                                (209,313)
   Proceeds from sale or call of investment securities                          1,824,606          1,099,704
   Decrease (increase) in Federal funds sold & short term investments          (2,923,819)        (9,291,503)
   Increase in loans, net                                                     (15,620,874)        (8,468,701)
   Purchase of premises and equipment                                          (1,113,167)           (82,576)
   Proceeds from sale of ORE                                                                          84,820
                                                                            -------------      -------------
        Net cash used in investing activities                                 (17,833,254)       (16,867,569)
                                                                            --------------     -------------

FINANCING ACTIVITIES
   (Decrease) increase in Federal funds purchased & borrowings                                    (2,820,000)
   Sale of Stock                                                                5,905,272
   Net increase in deposits                                                    11,586,137         18,167,603
                                                                            -------------      -------------
          Net cash provided by financing activities                            17,491,409         15,347,603
                                                                            -------------      -------------

          Net increase (decrease) in cash and cash equivalents                    560,867           (955,861)

CASH AND CASH EQUIVALENTS, BEGINNING
   OF PERIOD                                                                $   1,359,158      $   2,516,526
                                                                            -------------      -------------

CASH AND CASH EQUIVALENTS, END OF
   PERIOD                                                                   $   1,920,025      $   1,560,665
                                                                            =============      =============


CASH PAID FOR
   Income taxes                                                             $       8,410      $       4,250
                                                                            -------------      -------------
   Interest                                                                 $   2,152,613      $   1,656,243
                                                                            -------------      -------------
</TABLE>

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

<PAGE>


                      Beach First National Bancshares, Inc.
             Notes to Consolidated Financial Statements (Unaudited)

1.       Basis of Presentation

         The accompanying unaudited consolidated financial statements for Beach
         First National Bancshares,Inc. ("Company") were prepared in
         accordance with instructions for Form 10-QSB and, therefore, do not
         include all disclosures necessary for a complete presentation of
         financial condition, results of operations, and cash flows in
         conformity with generally accepted accounting principles. All
         adjustments, consisting only of normal recurring accruals, which are,
         in the opinion of management, necessary for fair presentation of the
         interim consolidated financial statements have been included. The
         results of operations for the nine month period ended September 30,
         2001 are not necessarily indicative of the results that may be expected
         for the entire year. These consolidated financial statements do not
         include all disclosures required by generally accepted accounting
         principles and should be read in conjunction with the Company's audited
         consolidated financial statements and related notes for the year ended
         December 31, 2000.

2.       Principles of Consolidation

         The accompanying unaudited consolidated financial statements include
         the accounts of the Company and its subsidiary, Beach First National
         Bank. All significant inter-company items and transactions have been
         eliminated in consolidation.

3.       Earnings Per Share

         The Company calculates earnings per share in accordance with SFAS No.
         128, "Earnings Per Share." SFAS No. 128 specifies the computation,
         presentation and disclosure requirements for earnings per share (EPS)
         for entities with publicly held common stock or potential common stock
         such as options, warrants, convertible securities or contingent stock
         agreements if those securities trade in a public market.

         This standard specifies computation and presentation requirements for
         both basic EPS and, for entities with complex capital structures,
         diluted EPS. Basic earnings per share are computed by dividing net
         income by the weighted average common shares outstanding. Diluted
         earnings per share is similar to the computation of basic earnings per
         share except that the denominator is increased to include the number of
         additional common shares that would have been outstanding if the
         dilutive potential common shares had been issued. The dilutive effect
         of options outstanding under the Company's stock option plan is
         reflected in diluted earnings per share by application of the treasury
         stock method.

         RECONCILIATION OF THE NUMERATORS AND DENOMINATORS OF THE BASIC
         AND DILUTED EPS COMPUTATIONS:
<TABLE>
<CAPTION>

                                             For the Nine Months Ended
                                                September 30, 2001
                                                                           Shares              Per Share
                                                      Income
                                                   (Numerator)          (Denominator)           Amount
                                                  ---------------     ------------------    ----------------
<S>                                               <C>                      <C>              <C>
         Basic EPS                                $      269,722           1,318,368        $       0.20
         Effect of Diluted Securities:
             Stock options                                    --              73,406                (.01)
                                                    ------------          ----------        ------------
         Diluted EPS                              $      269,722           1,391,774        $       0.19

</TABLE>

<PAGE>


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

         The following discussion contains forward-looking statements that
involve risks and uncertainties. "Forward-looking statements" relate to items
including, without limitation, future economic performance, plans and objectives
of management for future operations, and projections of revenues and other
financial items that are based on the beliefs of management, as well as
assumptions made by and information currently available to management. The words
"expect," "anticipate," and "believe," as well as similar expressions, are
intended to identify forward-looking statements. The company's actual results
may differ materially from the results discussed in the forward-looking
statements, and our operating performance each quarter is subject to various
risks and uncertainties that are discussed in detail in our filings with the
Securities and Exchange Commission, including the "Risk Factors" section in our
Registration Statement on Form S-2 (Registration Number 333-57120) as filed with
the Securities and Exchange Commission.

         The terrorist attacks that occurred in New York City and Washington,
D.C. on September 11, 2001, and the United States' subsequent response to these
events have resulted in a general economic slowdown that may adversely affect
our banking business. Economic slowdowns or recessions in our primary market
area may be accompanied by reduced demand for credit, decreasing interest
margins and declining real estate values, which may in turn result in a decrease
in net earnings and an increased possibility of potential loan losses in the
event of default. Any sustained period of decreased economic activity, increased
delinquencies, foreclosures or losses could limit our growth and negatively
affect our results of operations. We cannot predict the extent or duration of
these events or their effect upon our business and operations. We will, however,
closely monitor the effect of these events upon our business, and make
adjustments to our business strategy as we deem necessary.

Results of Operations
EARNINGS REVIEW

         Our net income was $269,722, or $.20 per basic common share, for the
nine months ended September 30, 2001 as compared to a net income of $171,907, or
$.23 per basic common share, for the nine months ended September 30, 2000. For
the three months ended September 30, 2001, our net income was $104,378, or $.08
per basic common share, compared to net income of $92,919, or $.13 per basic
common share, for the same period of 2000. The improvement in net income
reflects our bank's continued growth, with average earning assets increasing to
$76.7 million during the first nine months of 2001 from $58.8 million during the
same period of 2000. These figures represent a 56.9% increase in net income and
a 53.8% increase in earnings per share.

         During the first nine months of 2001, net interest income increased to
$2,139,892 from $1,598,425 in the same period of 2000. The growth in net
interest income resulted from an increase of $961,939 in interest income,
partially offset by an increase in interest expense of $420,472. For the three
months ended September 30, 2001, net interest income increased to $844,156 from
$572,587 during the same period of 2000. The net interest spread was 3.12% in
the first nine months of 2001 compared to 3.05% during the same period of 2000.
The net interest margin was 4.26% for the nine month period ended September 30,
2001 compared to 4.23% for the same period of 2000.

         The provision for loan losses was $356,000 for the nine month period
and $171,500 for the three month period ended September 30, 2001, compared to
$163,107 and $51,375 for the nine month and three month periods ended September
30, 2000. Our allowance for loan losses as a percentage of our period end loans
was 1.25% and 1.30% at September 30, 2001 and 2000, respectively. Net
charge-offs totaled $164,091 for the first nine months of 2001. In the same
period of 2000, there were $38,873 in net charge offs. We had three loans
totaling $151,170 in non-performing loans at September 30, 2001 and a loan
totaling $39,056 at September 30, 2000.

         Noninterest income for the nine month period ended September 30, 2001
was $267,921, compared to $208,642 in the same period of 2000. This increase
primarily resulted from the 24.2% increase in deposits from September 30, 2000
to September 30, 2001. For the three month periods ended September 30, 2000 and
1999, noninterest income was $98,319 and $77,656, respectively.

         Noninterest expense was $1,698,806 for the nine month period ended
September 30, 2001, which was an increase of $327,958 over the same period of
2000. For the three months ended September 30, noninterest expense was $676,571
in 2001 and $451,382 in 2000. These increases in noninterest expense primarily
reflect increases in salaries,


<PAGE>

benefits, data processing fees, and other expenses related to the growth of the
bank with the largest impact coming from the opening of our first branch office
in Surfside Beach, SC in June 2001. Additionally, we realized a tax valuation
allowance during this reporting period that reduced our tax liability.

Net Interest Income

         The primary source of revenue is net interest income, which is the
difference between income on interest-bearing assets and interest paid on
deposits and borrowings used to support such assets. Net interest income is
determined by the rates earned on our interest-earning assets and the rates paid
on our interest-bearing liabilities as well as the relative amounts of
interest-bearing assets and interest-bearing liabilities. Presented below are
various components of assets and liabilities, interest income and expense, and
yields/costs for the periods indicated.
<TABLE>
<CAPTION>

                Average Balances, Income and Expenses, and Rates
                                        For the nine months ended                   For the nine months ended
                                            September 30, 2001                          September 30, 2000
                                            ------------------                          ------------------

                                    Average         Income/      Yield/        Average         Income/       Yield/
                                    Balance         Expense       Rate         Balance         Expense        Rate
                                    -------         -------       ----         -------         -------        ----

<S>                         <C>               <C>                <C>    <C>             <C>                  <C>
Federal funds sold & short     $    5,842,552    $    135,271       3.10%  $    3,492,419  $    175,042         6.68%
    term investments
Investment securities               9,302,211         420,438       6.04%       8,894,087       448,487         6.72%
Loans                              54,145,709       3,709,434       9.16%      37,940,301     2,679,675         9.41%
                               --------------    ------------  ----------  --------------  ------------    ----------
     Total earning assets      $   69,290,472    $  4,265,143       8.23%  $   50,326,807  $  3,303,204         8.74%
                               ==============    ============  ==========  ==============  ============    ==========

Interest-bearing deposits      $   52,652,788      $2,112,111       5.36%  $   38,685,561  $  1,651,373         5.69%
Other borrowings                      291,366          13,140       6.03%       1,193,029        53,406         5.96%
                               --------------    ------------  ----------  --------------  ------------    ----------
     Total interest-bearing
            liabilities        $   52,944,154    $  2,125,251       5.37%  $   39,878,590  $  1,704,779         5.69%
                               ==============    ============  ==========  ==============  ============    ==========

Net interest spread                                                 2.86%                                       3.05%
Net interest income/margin                       $  2,139,892       4.13%                  $  1,598,425         4.23%
                                                 ============  ==========                  ============    ==========
</TABLE>

         As reflected above, for the first nine months of 2001 the average yield
on earning assets amounted to 8.23%, while the average cost of interest-bearing
liabilities was 5.37%. For the same period of 2000, the average yield on earning
assets was 8.74% and the average cost of interest-bearing liabilities was 5.69%.
The decrease in the yield on earning assets is attributable to lower rates
earned on federal funds sold and adjustable rate loans due to the declining
interest rate environment.

         The net interest margin is computed by subtracting interest expense
from interest income and dividing the resulting figure by average
interest-earning assets. The net interest margin for the nine month period ended
September 30, 2001 was 4.13% and for the same period of 2000 was 4.23%. This
slight decline in the net interest margin was the result of lowering interest
rates during this reporting period. A contributing factor in the deposits is the
beginning runoff or repricing of higher priced certificates of deposits that
were part of a marketing campaign during this time last year.

         The following table presents the changes in our net interest income as
a result of changes in the volume and rate of our interest-earning assets and
interest-bearing liabilities. The change in net interest income is due to
increases in the volume of both loans and deposits and in changes in average
rates.


<PAGE>
<TABLE>
<CAPTION>
                                     Analysis of Changes in Net Interest Income
                                                          Nine months ended September 30, 2001 versus 2000
                                                 --------------------------------------------------------------------
                                                           Volume                  Rate             Net change

<S>                                                 <C>                        <C>                <C>
Federal funds sold & short term investments         $       54,412             $   (94,183)       $   (39,771)

Investment securities                                      (95,937)                 67,888            (28,049)
Loans                                                    1,110,206                 (80,447)         1,029,759
                                                    --------------             ------------       -----------
     Total earning assets                                1,068,681                (106,742)           961,939
                                                    --------------             ------------       -----------

Interest-bearing deposits                                  560,281                 (99,543)           460,738
Other borrowings                                           (40,663)                    397            (40,266)
                                                    ---------------            -----------        ------------
     Total interest-bearing liabilities                    519,618                 (99,146)           420,472
                                                    --------------             ------------       -----------

Net interest income                                 $      549,063             $    (7,596)       $   541,467
                                                    ==============             ============       ===========
</TABLE>


Provision for Loan Losses

         To keep pace with the loan portfolio, the provision for loan losses was
$356,000 for the first nine months of 2001 and $163,107 for the same period of
2000. For the three month period ending September 30, 2001 and 2000, the
provision was $171,500 and $51,375 respectively. The increases were the result
of our management's assessment of the adequacy of the reserve for possible loan
losses given the size, mix and quality of the current loan portfolio. Our
management anticipates loan growth will continue to be strong in 2001 and that
it will continue to increase the amount of the provision for loan losses as the
portfolio grows. See also "Allowance for Possible Loan Losses" below.

Noninterest Income

         Noninterest income increased to $267,921 in the first nine months of
2001 from $208,642 in the same period of 2000. For the three months ended
September 30, 2001, noninterest income was $98,319 in 2001 and $77,656 in 2000.
Service fees on deposit accounts, the largest component of noninterest income,
increased from $184,775 for the first nine months of 2000 to $215,605 during the
same period of 2001. The category of noninterest income increased due to growth
in the number of deposit accounts as well as increased fee-related activities of
our customers. The net loss on the sale of investment securities increased
slightly to $(9,746) from $(6,825) for the nine month period ended September 30,
2001 and 2000, respectively.

Noninterest Expense

         Total noninterest expense increased from $1,370,848 for the nine months
ended September 30, 2000 to $1,698,806 in the same period of 2001, and from
$451,382 for the three months ended September 30, 2000 to $676,571 in the same
period of 2001. The increase in noninterest expense reflects an increase in most
expense categories as a result of the growth of the assets of our company to
$82.1 million at September 30, 2001 from $61.9 million at September 30, 2000 and
the opening of our first branch office in June 2001. Salaries and wages expense
increased by $176,064 during the nine months ended September 30, 2001 and
$90,770 during the three months ended September 30, 2001 compared to the same
periods in 2000. Employee benefits increased by $16,874 and $4,136 during these
same periods. These increases are primarily the result of hiring more employees
to support the growth of our assets, including the opening of a new branch
office in June 2001 to expand our presence into the southern part of our market.

         Occupancy expense increased by $33,526, printing and supplies increased
by $20,426 and depreciation and amortization expense increased $28,571 as a
result of opening our first branch office. Professional fees decreased $42,753
due to an accrual reversal in legal fees attributed to the final settlement of
pending legal action relating to check kiting scheme.

<PAGE>


         For the nine month period ended September 30, 2001, data processing
expense increased to $115,271 from $70,742 during the same period of 2000.
During the three month period ended September 30, data processing expense
increased to $42,573 in 2001 from $25,057 in 2000. Data processing fees are
directly related to increases in the volume of loan and deposit accounts and
associated transaction activity. The category of other expenses increased to
$255,672 for the first nine months of 2001 compared to $204,952 for the same
period of 2000, a $50,720 increase, and increased to $109,095 during the three
month period ended September 30, 2001 from $64,455 in the same period of 2000.
This increase was due to the start up operating expenses associated with opening
the Surfside branch office, and $15,158 in fraud losses.

BALANCE SHEET REVIEW

Investment Securities

         Total securities averaged $7.2 million in the first nine months of 2001
and totaled $6.5 million at September 30, 2001. In the same period of 2000,
total securities averaged $8.9 million and totaled $8.4 million at September 30,
2000. At September 30, 2001, our total investment securities portfolio had a
book value of $6,398,919 and a market value of $6,530,987 for an unrealized net
gain of $132,068. We primarily invest in U.S. Government Agency Mortgage- backed
securities.

         Contractual maturities and yields on our investment securities (all
available for sale) at September 30, 2001 are as follows. Expected maturities
may differ from contractual maturities because issuers may have the right to
call or prepay obligations with or without call or prepayment penalties.

             Investment Securities Maturity Distribution and Yields
                               September 30, 2001
<TABLE>
<CAPTION>

                                                     After one but          After five but
                            Within one year        Within five years       Within ten years        After ten years
                            ---------------        -----------------       ----------------        ---------------
                           Amount      Yield       Amount       Yield      Amount      Yield      Amount       Yield
                           ------      -----       ------       -----      ------      -----      ------       -----
<S>                       <C>         <C>          <C>        <C>      <C>             <C>      <C>
U.S. Treasury             $     --        --%   $        --         --%  $       --        --%  $        --         --%
U.S. Govt Agencies              --        --             --         --      199,428      8.01%           --         --
Mortgage-backed                 --        --             --         --           --        --     5,890,691       5.84%
Other                           --        --             --         --           --        --       308,800       6.56%
                          --------              -----------   --------    ---------  --------  ------------   ---------
         Total            $     --      0.00%   $        --        0.00%    199,428      8.01%  $ 6,199,491       6.20%
                          ========      =====   ===========   ==========  =========   =======   ===========   =========
</TABLE>

         At September 30, 2001, short-term investments totaled $9,842,819
compared to $9,291,503 as of September 30, 2000. These funds are one source of
our bank's liquidity and are generally invested in an earning capacity on an
overnight or short-term basis.

Loans

         At September 30, 2001, net loans (gross loans less unearned fees and
the allowance for loan losses) totaled $60.3 million, an increase of $19.8
million from September 30, 2000. Average gross loans increased from $37.9
million with a yield of 9.41% in the first nine months of 2000 to $54.1 million
with a yield of 9.16% in 2001. The interest rates charged on loans vary with the
degree of risk and the maturity and amount of the loan. Competitive pressures,
money market rates, availability of funds and government regulations also
influence interest rates.

         Since loans typically provide higher yields than other types of earning
assets, one of our bank's goals is for loans to represent the largest category
of earning assets. As was expected, the success of our third quarter marketing
campaign resulted in deposit growth that outpaced the seasonal demand for loans
in our market. Since our loan demand normally increases during the fall and
winter months, we expect to use these funds, which are currently invested in
short term instruments, to fund loan requests at higher rates.

<PAGE>

        The following table shows the composition of the loan portfolio by
category at September 30, 2001 and 2000.
<TABLE>
<CAPTION>

                                           Composition of Loan Portfolio
                                               September 30, 2001                 September 30, 2000

                                                               Percent                           Percent
                                            Amount            of Total       Amount              of Total
                                            ------            --------       ------              --------

<S>                                  <C>                    <C>      <C>                       <C>
Commercial                           $    12,580,834           20.6%    $     7,538,440           18.3%
Real estate - construction                 2,596,684            4.2%          3,569,270            8.7%
Real estate - mortgage                    39,049,265           63.8%         25,068,324           61.1%
Consumer                                   6,952,868           11.4%          4,909,315           11.9%
                                     ---------------          ------    ---------------          ------
      Loans, gross                        61,179,651          100.0%         41,085,349          100.0%
                                     ===============          ======      =============          ======
Unearned income                             (100,713)                           (78,656)
Allowance for possible loan losses          (761,154)                          (533,112)
                                     ----------------                   ----------------
      Loans, net                     $    60,317,784                    $    40,473,581
                                     ===============                    ===============
</TABLE>


         The principal component of our loan portfolio at September 30, 2001 and
2000 was mortgage loans, which represented 63.8% and 61.1% of the portfolio,
respectively. In the context of this discussion, a "real estate mortgage loan"
is defined as any loan, other than loans for construction purposes, secured by
real estate, regardless of the purpose of the loan. We follow the common
practice of financial institutions in our market area of obtaining a security
interest in real estate whenever possible, in addition to any other available
collateral. The collateral is taken to reinforce the likelihood of the ultimate
repayment of the loan and tends to increase the magnitude of the real estate
loan portfolio component. Generally, we limit the loan-to-value ratio to 80%.
Due to the short time the portfolio has existed, the current mix may not be
indicative of the ongoing portfolio mix. Our management will attempt to maintain
a relatively diversified loan portfolio to help reduce the risk inherent in
concentrations of collateral.

         The following table sets forth the maturity distribution, classified
according to sensitivity to changes in interest rates, for selected components
of our loan portfolio as of September 30, 2001.


       Loan Maturity Schedule and Sensitivity to Changes in Interest Rates
<TABLE>
<CAPTION>


                                                September 30, 2001
                                                          After one but           After
                                        One year           Within five            Five
                                         Or less              Years               Years               Total
                                       -----------        --------------      -----------         --------------
<S>                                <C>                 <C>                 <C>                 <C>
Commercial                         $     5,421,587     $     6,985,337     $       575,674     $       12,982,598
Real estate                              7,679,238          25,782,464           3,860,770             37,322,472
Construction                             2,303,301           1,771,782                   0              4,075,083
Consumer                                 2,358,665           4,128,096             312,737              6,799,498
                                   ---------------     ---------------     ---------------     ------------------
     Total gross loans             $    17,762,791     $    38,667,679     $     4,749,181     $       61,179,651
                                   ===============     ===============     ===============     ==================
Fixed Interest Rate                      9,763,220          36,521,796           4,182,334             50,467,350
Variable Interest Rate                   7,999,571           2,145,883             566,847             10,712,301
                                   ---------------     ---------------     ---------------     ------------------
     Total gross loans             $    17,762,791     $    38,667,679     $     4,749,181     $       61,179,651
                                   ===============     ===============     ===============     ==================

</TABLE>

<PAGE>

         The information presented in the above table is based on the
contractual maturities of the individual loans, including loans which may be
subject to renewal at their contractual maturity. Renewal of such loans is
subject to review and credit approval, as well as modification of terms upon
their maturity. Actual repayments of loans may differ from maturities reflected
above because borrowers may have the right to prepay obligations with or without
prepayment penalties.

Allowance for Possible Loan Losses

         There are risks inherent in making all loans, including risks with
respect to the period of time over which loans may be repaid, risks resulting
from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers, and, in the case of a collateralized loan, risks resulting
from uncertainties about the future value of the collateral. To address these
risks, we have developed policies and procedures to evaluate the overall quality
of our credit portfolio and the timely identification of potential problem
loans. We maintain an allowance for possible loan losses which we establish
through charges in the form of a provision for loan losses. We charge loan
losses and credit recoveries directly to this allowance.

         We attempt to maintain the allowance at a level that will be adequate
to provide for potential losses in our loan portfolio. To maintain the allowance
at an adequate level, we periodically make additions to the allowance by
charging an expense to the provision for loan losses on our statement of
operations. We evaluate the allowance for loan losses on an overall portfolio
basis, as well as allocating the allowance to loan categories. We consider a
number of factors in determining the level of this allowance, including our
total amount of outstanding loans, our amount of past due loans, our historic
loan loss experience, general economic conditions, and our assessment of
potential losses, classified and criticized loans, concentrations of credit and
internal credit risk ratings. Our evaluation is inherently subjective as it
requires estimates that are susceptible to significant change. In addition,
regulatory agencies periodically review our allowance for loan losses as part of
their examination process, and they may require us to record additions to the
allowance based on their judgment about information available to them at the
time of their examinations. Our losses will undoubtedly vary from our estimates,
and there is a possibility that charge-offs in future periods will exceed the
allowance for loan losses as estimated at any point in time.

         At September 30, 2001, the allowance for possible loan losses was
$761,154, or 1.25% of outstanding loans, compared to an allowance for possible
loan losses of $533,112 or 1.30% of outstanding loans, at September 30, 2000. In
the first nine months of 2001, the bank had net charge-offs of $164,091. In the
same period of 2000, there were $38,873 in net charge-offs. We had three
non-performing loans totaling $151,170 at September 30, 2001 and $39,056
non-performing loans as September 30, 2000. While there can be no assurances, we
currently do not expect to incur any losses relating to these non-performing
loans.


<PAGE>
<TABLE>
<CAPTION>

                                         Allowance for Loan Losses
                                                                     Nine months ending September 30,
                                                                         2001                 2000
                                                                         ----                 ----

<S>                                                                <C>                  <C>
Average loans outstanding                                          $    54,146,709      $    37,940,301
Loans outstanding at period end                                         61,179,651           41,085,349
Total nonperforming loans                                                  151,170               39,056

Beginning balance of allowance                                     $       569,245      $       408,878

Loans charged off                                                         (166,634)             (38,873)
Total recoveries                                                             2,543                    0
                                                                   ---------------      ---------------
Net loans charged off                                                     (164,091)             (38,873)

Provision for loan losses                                                  356,000              163,107
                                                                   ---------------      ---------------
Balance at period end                                              $       761,154      $       533,112
                                                                   ===============      ===============

Net charge-offs to average loans                                              .30%                 .10%
Allowance as a percent of total loans                                        1.25%                1.30%
Nonperforming loans as a
     percentage of total loans                                                .25%                 .10%
Non performing loans as a
     percentage of allowance                                                19.86%                7.33%

</TABLE>

Deposits and Other Interest-Bearing Liabilities

         Average total deposits were $61.6 million and average interest-bearing
deposits were $52.6 million in the first nine months of 2001. Average total
deposits were $45.7 million and average interest-bearing deposits were $38.7
million in the same period of 2000. The following table sets forth our deposits
by category as of September 30, 2001 and September 30, 2000.
<TABLE>
<CAPTION>

                                                Deposits
                                               September 30, 2001              September 30, 2000
                                                            Percent of                      Percent of
                                              Amount         Deposits         Amount         Deposits
                                            ---------      -----------       ---------      -----------

<S>                                      <C>                <C>       <C>                     <C>
Demand deposit accounts                  $   11,356,231          16.6%   $    7,502,870          13.6%
Interest bearing checking accounts            3,964,473           5.8%        1,738,915           3.2%
Money market accounts                        14,735,106          21.6%        7,376,434          13.4%
Savings accounts                              3,390,196           5.0%        3,517,560           6.4%
Time deposits less than $100,000             24,146,463          35.3%       22,154,574          40.3%
Time deposits of $100,000 or over            10,720,179          15.7%       12,713,270          23.1%
                                         --------------    -----------   --------------    -----------
     Total deposits                      $   68,312,648         100.0%   $   55,003,623         100.0%
                                         ==============    ===========   ==============    ===========

</TABLE>

Internal growth, resulting primarily from special promotions and increased
advertising, generated the new deposits.


<PAGE>

         Core deposits, which exclude certificates of deposit of $100,000 or
more, provide a relatively stable funding source for our loan portfolio and
other earning assets. Our core deposits were $60.7 million at September 30, 2001
compared to $42.3 million at September 30, 2000. We expect a stable base of
deposits to be our primary source of funding to meet both our short-term and
long-term liquidity needs. Core deposits as a percentage of total deposits were
approximately 84% at September 30, 2001 and 77% at September 30, 2000. Our
loan-to-deposit ratio was 89.4% at September 30, 2001 versus 74.6% at September
30, 2000. The average loan-to-deposit ratio was 86.7% during the first nine
months of 2001 and 83.0% during the same period of 2000.

CAPITAL

         We are subject to various regulatory capital requirements administered
by our federal bank regulators. As long as we have less than $150 million in
total assets, our capital levels are measured for regulatory purposes only at
the bank level, not at the holding company level. Under the capital guidelines
of the Office of the Comptroller of the Currency, the bank is required to
maintain a minimum total risk-based capital ratio of 8%, with at least 4% being
Tier 1 capital. To be considered "well-capitalized," banks must meet regulatory
standards of 10% for total risk-based capital and 6% for Tier 1 capital. Tier 1
capital consists of common shareholders' equity, qualifying perpetual preferred
stock, and minority interest in equity accounts of consolidated subsidiaries,
less goodwill. In addition, the bank must maintain a minimum Tier 1 leverage
ratio (Tier 1 capital to total average assets) of at least 4%. The
"well-capitalized" standard for the Tier 1 leverage ratio is 5%. The following
chart reflects the risk-based regulatory capital ratios of the bank at September
30, 2001.

<TABLE>
<CAPTION>
                                               Analysis of Capital
                                                September 30, 2001
                                              (Amounts in thousands)
                             Required Actual Excess
                                   Amount     %        Amount      %         Amount       %
                                   ------     -        ------      -          ------      -

<S>                        <C>         <C>        <C>         <C>         <C>      <C>
The Bank:
Tier 1 risk-based capital       2,529       4.0%       10,116      15.9%       7,587    11.9%
Total risk-based capital        5,059       8.0%       10,877      17.2%       5,818     9.2%
Tier 1 leverage                 3,201       4.0%       10,116      12.7%       6,915     8.6%
</TABLE>

         On July 24, 2001, we issued 520,000 shares of common stock in
connection with our underwritten public offering registered with the SEC on Form
S-2. We received $5.56 million in gross proceeds in connection with the
issuance. On August 13, 2001, we issued an additional 61,000 shares of common
stock for gross proceeds of $652,000 in connection with the exercise of the
overallotment option for this offering. Taking into account these proceeds, we
believe that we have sufficient capital to fund our current activities on an
on-going basis.

LIQUIDITY AND INTEREST RATE SENSITIVITY

         Primary sources of liquidity for our core are deposits, scheduled
repayments on our loans, and interest on and maturities of our investments. All
of our securities have been classified as available for sale. Occasionally, we
might sell investment securities in connection with the management of our
interest sensitivity gap or to manage cash availability. We may also utilize our
cash and due from banks, security repurchase agreements, and federal funds sold
to meet liquidity requirements as needed. In addition, we have the ability, on a
short-term basis, to purchase federal funds from other financial institutions.
Presently, we have made arrangements with commercial banks for short-term
unsecured advances of up to $3,500,000.

         Additionally, we are eligible to receive advances from the Federal Home
Loan Bank of Atlanta, subject to its approval, and have received and repaid such
advances on two occasions in the past two fiscal years. In July 2001, we were
approved to participate in the Federal Home Loan Bank Blanket Lien Program where
the Bank can borrow up to 75% of its outstanding loan balances on 1 to 4 family
residences. Taking into account the $5.9 million in net proceeds


<PAGE>

we raised in our underwritten public offering, we believe that our liquidity and
ability to manage assets will be sufficient to meet our cash requirements over
the near term.

         We monitor and manage the pricing and maturity of our assets and
liabilities in order to lessen the potential impact that interest rate movements
could have on our net interest margin. To minimize the effect of these margin
swings, the balance sheet should be structured so that repricing opportunities
exist for both assets and liabilities in roughly equivalent amounts at
approximately the same time intervals. Imbalances in these pricing opportunities
at any point in time constitute interest rate risk.

         Interest rate sensitivity refers to the responsiveness of
interest-bearing assets and liabilities to changes in market interest rates. The
rate sensitive position, or gap, is the difference in the volume of rate
sensitive assets and liabilities at any given time interval. Our management
generally attempts to maintain a balance between rate sensitive assets and
liabilities to minimize the company's interest rate risks. Interest rate
sensitivity can be managed by repricing assets or liabilities, selling
securities available-for-sale, replacing an asset or liability at maturity, or
by adjusting the interest rate during the life of an asset or liability.
Balancing the amount of assets and liabilities repricing in the same time
interval helps to hedge the risk and minimize the impact on net interest income
of rising or falling interest rates.

         The interest rate sensitivity position at September 30, 2001 is
presented below. Since all rates and yields do not adjust at the same velocity,
the gap is only a general indicator of rate sensitivity.

                                         Interest Sensitivity Analysis
                                               September 30, 2001
<TABLE>
<CAPTION>


                                                After three but    After one but
                                  Within three   Within twelve     within five     After five
                                     month           months           Years           years           Total
                                  ------------- ---------------   --------------  ------------     ---------

<S>                             <C>        <C>               <C>              <C>             <C>
Assets
Earning assets:
   Federal funds sold
       & short term investments      9,644,819  $       198,000   $           -- $           --  $  9,842,819
   Investment securities               868,358          217,990          819,145      4,625,495     6,530,988
   Loans                            12,689,708        7,752,104       36,461,680      4,175,445    61,078,937
                                 -------------  ---------------   -------------- --------------  ------------
        Total earning assets     $  23,202,885  $     8,168,094   $   37,280,825 $    8,800,940  $ 77,452,744
                                 =============  ===============   ============== ==============  ============

Liabilities
Interest-bearing liabilities
   Money market and NOW          $  20,875,571  $            --   $           -- $           --  $ 20,875,571
   Savings deposits                  3,390,196               --               --             --     3,390,196
   Time deposits                     8,143,997       17,457,151        8,621,746        643,747    34,866,641
                                 -------------  ---------------   -------------- --------------  ------------
        Total interest-bearing
            liabilities          $  32,409,764  $    17,457,151   $    8,621,746 $      643,747  $ 59,132,408
                                 =============   ===============   ============== ==============  ============

Period gap                       $  (9,206,879) $    (9,289,057)  $   28,659,079 $    8,157,193  $ 18,320,336
Cumulative gap                   $  (9,206,879) $   (18,495,936)  $   10,163,143 $   18,320,336  $ 18,320,336
Ratio of cumulative gap
to Total earning assets                 (11.89)%         (23.88)%          13.12%         23.65%

</TABLE>

         We generally would benefit from increasing market rates of interest
when we have an asset sensitive gap and generally would benefit from decreasing
market rates of interest when we are liability sensitive. We currently are
liability sensitive in time frames less than one year and asset sensitive after
that. However, our gap analysis is not a precise indicator of our interest
sensitivity position. The analysis presents only a static view of the timing of
maturities and repricing opportunities, without taking into consideration that
changes in interest rates do not affect all assets and liabilities equally. Net
interest income is also impacted by other significant factors, including changes
in the volume and mix of earning assets and interest-bearing liabilities.

<PAGE>


IMPACT OF INFLATION

         Unlike most industrial companies, the assets and liabilities of
financial institutions such as our company and bank are primarily monetary in
nature. Therefore, interest rates have a more significant impact on our
performance than do the effects of changes in the general rate of inflation and
changes in prices. In addition, interest rates do not necessarily move in the
same magnitude as the prices of goods and services. As discussed previously,
management seeks to manage the relationships between interest sensitive assets
and liabilities in order to protect against wide rate fluctuations, including
those resulting from inflation.

                     MARKET FOR THE COMPANY'S COMMON EQUITY
                         AND RELATED SHAREHOLDER MATTERS

Our Company's articles of incorporation authorize us to issue up to 10,000,000
shares of common stock. We issued 735,868 shares in our initial public offering
in 1996, and an additional 581,000 shares in our second public offering that
became effective on July 18, 2001. As of August 13, 2001, we had 1,318,368
shares of common stock outstanding. Please see Item 5 of Part II of this Form
10-QSB for more information.

All of our outstanding shares of common stock are entitled to share equally in
dividends from funds legally available therefor, when, as and if declared by the
Board of Directors. We do not plan to declare any dividends in the immediate
future.



<PAGE>


PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

         There are no material legal proceedings to which we or any of our
subsidiaries is a party or of which any of our property is the subject.

Item 2.  Changes in Securities.

         Not applicable.

Item 3.  Defaults Upon Senior Securities.

         Not applicable.

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

         Not applicable.

Item 5.  Other Information.

On July 24, 2001, we issued 520,000 shares of common stock in connection with
our underwritten public offering registered with the SEC on Form S-2. We
received $5.56 million in gross proceeds in connection with the issuance. On
August 13, 2001, we issued an additional 61,000 shares of common stock for gross
proceeds of $652,000 in connection with the exercise of the overallotment option
for this offering. Our net proceeds after offering expenses and underwriter's
discount were approximately $5.9 million.

On August 15, 2001 Leigh Meese was appointed as a director.
Richard N. Burch was appointed as Chief Financial Officer.


Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits - See Exhibit Index attached hereto.

(b)      Reports on Form 8-K.

         No reports on Form 8-K were filed during the period ended September 30,
2001.




<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     BEACH FIRST NATIONAL BANCSHARES, INC.


Date:    November 5, 2001
                                     By:      /s/ Walter E. Standish, III
                                              ----------------------------------
                                              Walter E. Standish, III
                                              President


                                     By:      /s/ Richard N. Burch
                                              ----------------------------------
                                              Richard N. Burch
                                              Chief Financial and Principal
                                                 Accounting Officer