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

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                    PURSUANT TO SECTIONS 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


 X      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---     ACT OF 1934
        For the fiscal year ended December 31, 2000

                                       OR

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

                           Commission File No: 0-25988

                          CNB Florida Bancshares, Inc.
             (Exact Name of Registrant as Specified in Its Charter)

                FLORIDA                                     59-2958616
   ---------------------------------                    -----------------
   (State or other jurisdiction                          (I.R.S. Employer
   of incorporation or organization)                    Identification No.)

   9715 Gate Parkway North
   Jacksonville,  Florida                                       32246
   -------------------------------------                --------------------
   (Address of principal executive offices)             (Zip Code)

   Registrant's telephone number, including area code: (904) 997-8484

   Securities  registered  pursuant to Section  12(b) of the Act:
   NONE  Securities  registered  pursuant to Section 12(g) of the
   Act: COMMON STOCK, Par value $ 0.01 per share.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-K is not  contained in this form,  and no  disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  based on the  closing  price of the  Registrant's  common  stock as
quoted on the National  Association of Securities  Dealers  Automated  Quotation
("NASDAQ") on March 1, 2001 was $46,777,396.

The number of shares of the Registrant's common stock outstanding as of March 1,
2001 was 6,099,376 shares, $0.01 par value per share.

                       DOCUMENTS INCORPORATED BY REFERENCE

The  Registrant's  2001  Annual  Meeting  Proxy  Statement  is  incorporated  by
reference in this report in Part III,  pursuant to  Instruction  G of Form 10-K,
except for the information relating to executive officers and key employees. The
Company will file its definitive  Proxy  Statement with the Commission  prior to
April 30, 2001.


<PAGE>
                                     PART I

                                    BUSINESS

         This Annual  Report on Form 10-K contains  forward-looking  statements,
which involve risks and uncertainties  which are described in this Annual Report
and in other filings with the  Securities and Exchange  Commission  (the "SEC").
The actual results of CNB Florida Bancshares,  Inc. (the "Company" or "CNB") may
differ   significantly  from  the  results  discussed  in  the   forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking statements,  which speak only as of the date hereof. The Company
does not  undertake any  obligation  to publicly  release any revisions to these
forward-looking  statements to reflect  events or  circumstances  after the date
hereof or to reflect the occurrence of unanticipated events.

         The following  discussion  should be read in conjunction  with Selected
Historical  Financial  Information and the Consolidated  Financial Statements of
the Company, which are included in this Form 10-K.

GENERAL

    The Company is a one-bank holding company  registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"),  which commenced  operations in
1987 by acquiring the capital stock of CNB National Bank (the "Bank"), which had
been formed in 1986.  The Company  relocated  its  headquarters  from Lake City,
Florida to  Jacksonville,  Florida during 2000 in connection  with its expansion
plans described below. The Bank is a national banking association subject to the
supervision of the Office of the Comptroller of the Currency ("Comptroller"). It
provides traditional deposit,  lending and mortgage products and services to its
commercial and retail  customers  through twelve full service  branches  located
within the following contiguous counties in Northeast Florida:  Alachua,  Baker,
Bradford,  Columbia, Duval, Suwannee and Union County. At December 31, 2000, the
Company had total assets of $467.6 million, total loans of $380.8 million, total
deposits of $367.7 million, and total shareholders' equity of $44.6 million. Net
income for the years ended  December 31, 2000,  1999 and 1998 was $2.5  million,
$2.9 million and $2.7 million, respectively.

EVOLUTION OF THE FLORIDA BANKING MARKET

    Significant changes in interstate banking and branching laws, enacted during
the early 1980s, have allowed bank holding companies to aggressively expand into
new markets that have  attractive  growth rates and  demographics.  As a result,
substantial consolidation of the Florida banking market has occurred. Management
believes  Florida has been  particularly  attractive  to regional  bank  holding
companies  because it is the  fourth  largest  state in the  country in terms of
total population and is among the ten fastest growing states in the country.  As
more out-of-state  bank holding companies enter the Florida market,  the Company
believes that the number of depository institutions  headquartered and operating
in Florida will continue to decline.

    The Company has observed a similar consolidation trend in the markets in and
around Gainesville and Jacksonville (the "Expansion Markets").  Historically the
Company competed successfully in Columbia,  Suwannee,  Baker, Bradford and Union
Counties (the "Core Markets"),  against larger bank holding companies for middle
market customers.  In the Company's  Expansion  Markets,  many of such customers
have  preferred  the  banking  services  and  products of banks that are locally
headquartered.  Increasingly, however, large regional bank holding companies are
entering the Company's  Expansion  Markets by acquiring such previously  locally
headquartered  banks.  For example,  in January  1998,  BankAmerica  Corporation
formerly  known  as  NationsBank   Corporation   completed  its  acquisition  of
Jacksonville-based  Barnett  Banks,  Inc.  ("Barnett"),   which,  prior  to  its
acquisition,  was the largest bank headquartered in Florida.  The acquisition of
Barnett  closely  followed  the  acquisition  of  three of  Jacksonville's  five
community  banks by  SouthTrust  Bank  Corporation  ("SouthTrust")  and  Compass
Bancshares,  Inc.  ("Compass") in 1996 and 1997.  Similarly,  Gainesville  State
Bank,  the  largest  community  bank in  Gainesville  and  Alachua  County  (the
"Gainesville Market"), was acquired by Compass in 1997. As a result, the Company
now competes in its Core  Markets,  and will compete in its  Expansion  Markets,
primarily  with SunTrust  Banks,  Inc.,  BankAmerica,  First Union  Corporation,
SouthTrust,  AmSouth  Bancorporation and Compass, all of which are headquartered
outside of Florida.
                                        2
<PAGE>
GROWTH OPPORTUNITY FOR THE COMPANY

    Management  believes that a significant  segment of the historical  customer
base of Barnett and the  customer  bases of other  acquired  community  banks in
Northeast   Florida,   particularly   individuals  and  small  and  medium-sized
businesses,   prefer  the   personalized   service  that   characterized   their
relationships with the locally  headquartered banks that were acquired.  Many of
these  personal  relationships  have  been  disrupted  as the  larger,  regional
financial institutions  increasingly focus on larger corporate customers,  offer
primarily  standardized  loan and  deposit  products  and  services,  and employ
centralized management and more remote decision-making. Thus, Company management
believes there exists a unique  opportunity to address the under-served  banking
needs of  individuals  and small and  medium-sized  businesses  in its Expansion
Markets,  which are  contiguous  and  demographically  similar to the  Company's
existing Core Markets.  Accordingly, the Company's current strategic focus is to
immediately capitalize on this market opportunity. In pursuing this opportunity,
the Company  will  continue to focus on that  specific  segment of the market to
which it has  historically  appealed.  The Company  believes that its historical
strategy  of  providing  personalized  and  consistent  service to its small and
middle-market  corporate  customers and individuals will allow it to continue to
compete  profitably,  not only in the markets  that it  presently  serves but in
other markets as well.

BUSINESS STRATEGY

    The  Company's  primary  goal is to enhance  profitability  and  shareholder
returns through aggressive but sound growth. The Company's long-term strategy is
to (i) continue to grow its full service  banking  operations by expanding  into
new markets,  (ii) leverage current branch capacity,  (iii) expand its mortgage,
consumer and commercial lending  activities,  and (iv) continue to differentiate
itself   from   its   larger    competitors   by    emphasizing    personalized,
relationship-driven  service  provided  by  a  locally-headquartered   financial
institution.

EXPAND IN UNDER-SERVED MARKETS

    The consolidation of the banking industry in Northeast Florida has created a
window of opportunity  for the Company to expand its operations in the Expansion
Markets. The Expansion Markets are contiguous and culturally similar to the Core
Markets.  Like the Core Markets,  the Expansion Markets consist in large part of
individuals and small and medium-sized businesses. The Company believes that its
familiarity with meeting the banking needs and expectations of similar customers
in the Core Markets makes the Company particularly  qualified to attract banking
customers  accustomed to banking with community banks in the Expansion  Markets.
The recent consolidation also has dislocated qualified banking professionals who
have strong ties to, and an understanding  of, their local markets.  The Company
believes that it has attracted  and will continue to attract  qualified  banking
professionals,  thereby  benefiting from their experience and their ability,  in
many  instances,  to  bring  with  them the  banking  business  of  their  loyal
customers.  These  factors,  together with the Bank's asset size and its capital
base, position the Company to work more effectively with middle-market customers
than many smaller community banks in the Expansion Markets.

PROVIDE COMMUNITY BANKING SERVICE

    The Company  believes that it can achieve the goals outlined above through a
continued  commitment  to the  "community  bank  philosophy",  which  emphasizes
offering a broad range of  personalized  products and services  through  banking
professionals  who understand the banking  industry and the banking needs of the
local communities they serve. Each branch manager and individual loan officer is
given a certain degree of authority and discretion to approve loans and to price
loans and services in order to respond  quickly and  efficiently to the needs of
the Company's customers. In implementing this strategy, the Company will combine
the  experience  and customer  networks of its loan  officers  with  centralized
information  technology  to  effectively  price and provide  customized  banking
services to enhance  overall  profitability.  The Company intends to pursue this
strategy  throughout  its Core and Expansion  Markets and operate a multi-office
community bank that emphasizes decision-making at the local level.

    To ensure that the Company's proposed expansion does not erode its standards
for service and quality,  the Company  created three  operating  divisions:  the
Southern Division (Alachua  County),  the Eastern Division (Baker,  Bradford and
Union counties),  the Central  Division.  The Company created a fourth division,

                                        3
<PAGE>
the First Coast Division,  when it moved into the  Jacksonville  Market in 1999.
This new organizational structure will help to ensure that the Company's banking
products  and  services are  tailored to the  individual  markets it serves,  as
opposed to the "one size fits all" approach that generally is followed by larger
financial  institutions.  The  divisions are headed by Division  Presidents  who
effectively  have the authority to operate the division as a community  bank, so
long as it is done within the parameters of the Company's policies.

DEPOSIT PRODUCTS AND SERVICES

    The Company offers various  deposit  products and services to its retail and
commercial  customers.  These products  include  commercial and retail  checking
accounts,  specialized  low-cost checking for customers who write few checks per
month,  money market  accounts  for  consumers  and  commercial  customers,  NOW
accounts   and  savings   accounts.   Additionally,   the   Company   offers  an
interest-bearing  transaction  account  for  seniors  with  no  minimum  balance
requirements,   no  service  charge  and  no  per-check  charge.   For  customer
convenience and ease of storage,  the Company offers image-based monthly account
statements,  as well as an  automated  telephone  banking  service  for  balance
reporting. The Company's deposit services include cash management for commercial
customers for overnight investment, wire transfer services,  collections,  money
orders, safe deposit boxes and traveler's checks. The Bank is currently a member
of the STAR  (formerly  HONOR),  PLUS and CIRRUS  networks of  automated  teller
machines  that may be used by Bank  customers  in major  cities  throughout  the
United  States.  All deposits  are insured by the FDIC up to the maximum  amount
permitted  by law  (generally  $100,000  per  depositor  subject to  aggregation
rules).

LOAN PRODUCTS AND LENDING POLICY

IN GENERAL

    The  Company  provides to  customers  a full range of short- to  medium-term
commercial,  agricultural,  Small Business  Administration  ("SBA")  guaranteed,
Farmers Home  Administration  guaranteed,  long term  residential  mortgages and
personal loans, both secured and unsecured. Credit is extended consistent with a
comprehensive loan policy that governs advance rates,  maturities and acceptable
collateral.  The Company's loan policy grants lending  authority  using a tiered
schedule  that grants  authority to officers  based on certain  risk  parameters
including the collateral type. Loans exceeding  officer authority and exhibiting
certain  risk  parameters  must be approved  by the  Executive  Loan  Committee.
Exceptions  to the policy  must be  recommended  by the  applicable  officer and
approved by either a Division President or the Credit Administrator within their
authority  and  approved by  Executive  Loan  Committee  of the Bank's  Board of
Directors.

COMMERCIAL LOANS

    Commercial loan products  include  short-term  loans and lines of credit for
working capital  purposes.  These loans are generally  secured by the borrower's
current assets,  typically accounts receivables and inventory.  Other commercial
loan products include  intermediate term loans for farm and non-farm  equipment,
crop loans and SBA guaranteed  loans.  SBA guaranteed  loans include secured and
unsecured  loans for  working  capital,  business  expansion  and  purchases  of
equipment and machinery.

    Lines of credit are  subject to annual  review and  approval,  generally  no
later  than 120 days  after  the  closing  of the  customer's  fiscal  year end.
Advances are typically limited to 75% of eligible accounts  receivable and up to
50% on inventory.  These credits are usually  monitored  through the review of a
receivables aging report and borrowing base report.

    Term loans having maturities  greater than one year are generally secured by
equipment or rolling stock with advances  limited to no more than 75.0% of cost.
In virtually all cases, the Bank requires the personal guaranty of the owners or
major shareholders of the borrower.

    Agricultural  loans are granted to  experienced  farmers  with  demonstrated
capabilities, acceptable historical cash flows, reasonable cash flow projections
and adequate secondary sources of repayment.

                                        4
<PAGE>

COMMERCIAL REAL ESTATE LOANS

    The Company's commercial real estate lending products include:  construction
loans,   mini-permanent  and  permanent  financing  for  commercial  properties,
acquisition  and  development  loans for  residential  and  commercial  property
developers and investment property financing.

    Construction loan borrowers are generally required to inject equity equal to
at least 20% of the total cost of the  construction  project  before the Company
will advance funds on the loan.  The Company  advances  funds pursuant to a draw
schedule  and  makes  inspections  prior to each  draw  request.  The  Company's
construction  lending  requirements  also may  include  a plan and cost  review,
depending on the  complexity  of the  project.  The plan and cost review and the
inspections are out-sourced by the Company to qualified professionals.

    Mini-permanent  and permanent  financing  loans are owner occupied  projects
which demonstrate proven cash flows that result in a debt service coverage ratio
of at least 1.25 to 1, based on a twenty year amortization.  Mini-permanent loan
amortization may be as long as twenty-five  years, but normally requires balloon
maturities within five to eight years.

    The Company extends  acquisition and development loans to borrowers who have
historically fulfilled their financial obligations.  The relevant acquisition or
development  project must demonstrate  acceptable  absorption periods and should
have an equity investment of at least 25% of the total project costs. Such loans
typically mature within twenty-four months.

    Loans on investment  property are subject to the same underwriting  criteria
as  mini-permanent  loans and include a threshold debt service coverage ratio of
at least 1.25 to 1.

RESIDENTIAL AND CONSUMER LOANS

    Consumer lending  products  include open- and  closed-ended  home equity and
home improvement  loans,  automobile,  boat, and recreational  vehicle loans and
loans for other asset purchases.  The Company offers Visa and MasterCard  credit
and debit card products to consumers and commercial customers.  Applications for
these  products are evaluated  based on the same credit  requirements  as direct
loans.

    Loans to consumers  are extended  after a credit  evaluation,  including the
creditworthiness  of the borrower,  the purpose of the credit, and the secondary
source of repayment. Specifically, the lender reviews a credit bureau report for
the borrower's credit history and calculates a debt-to-income ratio based on the
borrower's gross monthly income to fixed debt payments.  A ratio higher than 40%
is generally considered unacceptable.  For automobile loans, the policy requires
a minimum down payment of 10% with maturities based on the age of the vehicle.

    The  Company  offers a variety  of 1-4  family  residential  loan  products,
including residential construction loans and residential acquisition financing.

    Residential  construction  financing  typically includes a construction loan
agreement  with a  construction  draw  schedule and third party  inspections.  A
commitment  for  permanent  financing  is  required  prior to  closing.  Typical
residential  construction  loans mature within six to twelve months. The Company
offers a  construction/permanent  package loan  product in  instances  where the
Company acts as the permanent lender.

      Residential loans are originated for the Company's  portfolio,  as well as
for sale in the secondary market.  The maximum loan amount is based on a loan to
value  ratio of 80% or less,  where the value is equal to the lesser of the cost
or the appraised  value.  A higher loan to value ratio is available when private
mortgage  insurance can be obtained.  The majority of these loans are originated
for sale in the secondary market and are sold on a servicing released basis. The
Company services loans originated for its portfolio.

                                        5
<PAGE>

LOAN REVIEW AND NONPERFORMING ASSETS

    The Company's loan review officer, whose position is independent of the loan
production and administration  process, has the responsibility to perform timely
reviews  of  credits  in  the  portfolio  with  scope  and  assessment  criteria
comparable to that of the Bank's regulators.

    All new and renewed secured credits over $500,000 and unsecured credits over
$100,000 are reviewed within one week of approval. Additionally, a comprehensive
annual   review  is  conducted  on  all  credits  over   $250,000,   past  dues,
non-performing  assets and other real estate owned. Smaller credits are reviewed
utilizing pre-determined standards,  which include documentation and compliance,
by a person in loan  operations,  with  exceptions  referred  to the loan review
officer.  Problem credits, which include all non-performing assets, are reviewed
at least quarterly with written  documentation which includes the reason for the
problem,  collateral  support,  a plan for  resolution of the problem and a time
frame for the  resolution.  Delinquent  loans are  reviewed at least  weekly and
monitored by the Board of Directors of the Bank in the monthly meetings.

    A written  report is  developed  on the  findings of the various loan review
functions and reported directly to the Audit Committee of the Company's Board of
Directors,  which meets  quarterly.  The  allowance  for loan losses is reviewed
monthly in order to make the  appropriate  loan loss provision based on the loan
review findings, delinquency trends, historical loan losses and current economic
trends.

ASSET/LIABILITY MANAGEMENT

    The Bank's  asset/liability  policy is carried  out  through the Bank's risk
management  function.  The Bank manages asset  growth,  liquidity and capital in
order to maximize  income and reduce  interest  rate risk.  The risk  management
group reviews and discusses the ratio of rate-sensitive assets to rate-sensitive
liabilities,  the  ratio  of  allowance  for  loan  losses  to  outstanding  and
nonperforming  loans,  and  other  variables,  such  as  expected  loan  demand,
investment  opportunities,  core deposit  growth  within  specified  categories,
regulatory  changes,  monetary  policy  adjustments and the overall state of the
economy.

INVESTMENT POLICY

    The Bank's investment portfolio policy is to maximize income consistent with
liquidity, asset quality, regulatory constraints and asset/liability objectives.
The  Bank  invests  primarily  in  direct  obligations  of  the  United  States,
obligations  guaranteed  as to principal  and interest by the United  States and
obligations of agencies of the United States. In addition,  the Bank enters into
federal  funds  transactions  with  its  principal  correspondent  banks.  Other
investments consist primarily of Federal Reserve Bank and Federal Home Loan Bank
stock that are required for the Bank to be a member of, and to conduct  business
with,  such  institutions.  Dividends on such  investments are determined by the
institutions and are payable semi-annually or quarterly.

COMPETITION

    Within the Jacksonville,  Gainesville and Core Markets in which CNB operates
(collectively,  the  "Markets"),  there  are  competing  financial  institutions
consisting  primarily of other  commercial  banks,  savings and loan offices and
credit unions. Certain non-bank financial  institutions  affiliated with Florida
banks or thrift institutions offer limited financial services, including lending
and deposit gathering activities.  The Bank also competes for deposits and loans
with brokerage firms, mobile home lenders, consumer finance companies, insurance
companies,  mortgage  banking  companies,  money  market  mutual funds and other
financial institutions.

    In addition, the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Interstate  Banking and Branching Act") has removed  substantially
all state  barriers to the  acquisition  of banks by  out-of-state  bank holding
companies. In addition, certain out-of-state bank holding companies have entered
the  Florida  banking  market  by  acquiring  failing  thrift  institutions  and
commercial  banks.  Florida banks and bank holding  companies also may enter the
Markets by acquiring a financial  institution,  by establishing de novo branches
or by forming de novo banks within the market.

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<PAGE>
    Competition for deposit and loan business in the Markets will continue to be
intense  because  of  existing  competitors,  the  accelerating  pace of product
deregulation  and  the  likelihood  of  expansion  into  the  Markets  by  other
institutions.  Many of these institutions have  significantly  greater financial
resources than the Company. To compete, the Bank relies on specialized services,
responsive  handling  of  customer  needs,  customer  contact by Bank  officers,
directors  and  staff,  and the appeal of a  locally-owned,  relationship-driven
institution.

HISTORICAL GROWTH

    The Bank has  operated  in Lake City,  Columbia  County,  Florida  since its
organization  in 1986.  In January 1987 the Company was formed as a bank holding
company to facilitate  expansion  opportunities.  In 1988, the Company organized
Citizens Bank of Live Oak  ("Citizens")  and in November 1992 acquired an Anchor
Savings Bank ("Anchor") office in Macclenny.  In 1990, the Bank opened its first
de novo branch in Fort White.  In 1993,  the Bank  acquired  additional  banking
offices in Lake City,  Florida and Live Oak,  Florida from  Anchor.  The Company
consummated its first merger with another bank holding company on April 1, 1994,
when Bradford Bankshares  ("Bradford")  combined with the Company resulting in a
branch in Starke,  Florida.  On August 31,  1996,  Riherd Bank  Holding  Company
("Riherd")  merged  with  the  Company.  The  Riherd  merger  resulted  in three
additional offices for the Bank, one of which is located in Lake Butler, Florida
and two in  Gainesville.  Both the  Bradford  and the Riherd  transactions  were
accounted  for as purchase  transactions.  In August  1997,  the Bank opened its
eleventh  office,  located  in  Lake  City,  and  in  June  1999  expanded  into
Jacksonville  with its twelfth office.  The Bank opened its second  Jacksonville
branch in February, 2001, and plans to open a St. Augustine branch in May, 2001.

EMPLOYEES

    As of December 31, 2000,  the Bank had 212 full-time  equivalent  employees.
The Company's operations are conducted through the Bank and,  consequently,  the
Company does not have any separate employees.

                           SUPERVISION AND REGULATION

GENERAL

    As a  registered  bank  holding  company,  the  Company  is  subject  to the
supervision  of,  and  regular  inspection  by,  the  Federal  Reserve  Board of
Governors (the "Federal  Reserve") under the BHC Act. The Bank is organized as a
national banking  association,  which is subject to regulation,  supervision and
examination  by the  Comptroller.  The Bank is also subject to regulation by the
Federal Deposit Insurance  Corporation (the "FDIC") and other federal regulatory
agencies.  In  addition,  the Company and the Bank are subject to various  other
laws and  regulations  and  supervision  and  examination  by  other  regulatory
agencies,  all of  which  directly  or  indirectly  affect  the  operations  and
management of the Company and the Bank and their ability to make  distributions.
The  following   discussion   summarizes  certain  aspects  of  those  laws  and
regulations that affect the Company and the Bank.

    The Holding Company is  regulated by the Federal  Reserve  under the Federal
Bank Holding Company Act (BHC Act") which requires every bank holding company to
obtain the prior approval of the Federal  Reserve before  acquiring more than 5%
of the voting shares of any bank or all or substantially  all of the assets of a
bank, and before merging or consolidating with another bank holding company. The
Federal  Reserve  (pursuant to regulation  and published  policy  statement) has
maintained  that a bank  holding  company  must  serve as a source of  financial
strength to its subsidiary banks. In adhering to the Federal Reserve policy, the
Holding  Company may be required to provide  financial  support for a subsidiary
bank at a time where absent such Federal Reserve policy, the Holding Company may
not deem it advisable to provide such assistance.

    Until March of 2000, a bank holding  company was generally  prohibited  from
acquiring  control of any company  which was not a bank and from engaging in any
business other than the business of banking or managing and  controlling  banks.
In April 1997, the Federal  Reserve revised and expanded the list of permissible
non-banking  activities in which a bank holding  company could engage.  However,
limitations  continue to exist under certain laws and regulations.  The recently
passed  Gramm-Leach-Bliley  Act repeals certain  regulations  pertaining to bank
holding   companies   and   eliminates   many  of  the  previous   prohibitions.

                                        7
<PAGE>

Specifically,  Title I of the  Gramm-Leach-Bliley Act repeals Sections 20 and 32
of  Glass-Steagall  Act (12 U.S.C. 377 and 78,  respectively) and is intended to
facilitate  affiliations among bank, securities firms, insurance firms and other
financial  companies.  To further this goal, the  Gramm-Leach-Bliley  Act amends
Section 4 of the BHC Act (12 U.S.C.  1843) to authorize  bank holding  companies
and foreign  banks that qualify as  "financial  holding  companies" to engage in
securities,  insurance  and other  activities  that are  financial  in nature or
incidental to a financial  activity.  The  activities of bank holding  companies
that  are not  financial  holding  companies  will  continue  to be  limited  to
activities  authorized  currently under the BHC Act, such as activities that the
Federal Reserve previously has determined in regulations and orders issued under
section  4(c)(8) of the BHC Act to be closely related to banking and permissible
for bank holding companies.

    Pursuant  to the  Interstate  Banking and  Branching  Act,  bank  holding
companies are able to acquire banks in states other than their  respective  home
states,  without regard to the  permissibility of such acquisitions  under state
laws. The transaction  would still be subject to any state  requirement that the
Bank has been  organized  and  operating  for a minimum  period of time,  not to
exceed five years, and the requirement that the respective bank holding company,
prior to or  following  the  proposed  acquisition,  controls  no more  than ten
percent (10%) of the total amount of deposits of insured depository institutions
in the United States and less than thirty percent (30%) of such deposits in that
state (or such lesser or greater amount set by state law).

    The  Interstate  Banking and  Branching Act also  authorizes  banks to merge
across state  lines,  thereby  creating  interstate  branches.  Florida does not
prohibit  interstate  branching within the state.  Furthermore,  pursuant to the
Interstate Banking and Branching Act, a bank is now able to open new branches in
a state in which it does not  already  have  banking  operations  if such  state
enacts a law permitting de novo branching.

    Proposals  to  change  the  laws and  regulations  governing  the  banking
industry are frequently  introduced in Congress,  in the state  legislatures and
before the various bank  regulatory  agencies.  The likelihood and timing of any
such  proposals  or bills  being  enacted  and the impact they might have on the
Company and the Bank cannot be determined at this time.

CAPITAL AND OPERATIONAL REQUIREMENTS

    The  Federal  Reserve  Board,  the  Comptroller  and the  FDIC  have  issued
substantially  similar risk-based and leverage capital guidelines  applicable to
United States banking organizations.  In addition, those regulatory agencies may
from time to time require that a banking organization maintain capital above the
minimum  levels,  whether  because  of its  financial  condition  or  actual  or
anticipated  growth.  The Federal Reserve Board risk-based  guidelines  define a
two-tier  capital  framework.  Tier 1 capital  consists of common and qualifying
preferred  shareholders' equity, less certain intangibles and other adjustments.
Tier 2 capital  consists of  subordinated  and other  qualifying  debt,  and the
allowance for credit losses up to 1.25% of risk-weighted assets. The sum of Tier
1 and Tier 2 capital less investments in unconsolidated  subsidiaries represents
qualifying total capital,  at least 50% of which must consist of Tier 1 capital.
Risk-based capital ratios are calculated by dividing Tier 1 and total capital by
risk-weighted assets. Assets and off-balance sheet exposures are assigned to one
of four categories of risk weights, based primarily on relative credit risk. The
minimum Tier 1 capital  ratio is 4% and the minimum  total  capital ratio is 8%.
The Company's Tier 1 and total risk-based  capital ratios under these guidelines
at December 31, 2000, were 11.1% and 12.0%, respectively.

    The  leverage  ratio is  determined  by dividing  Tier 1 capital by adjusted
average  total  assets.  Although the stated  minimum  ratio is 3%, most banking
organizations  are  required  to  maintain  ratios  of at least 100 to 200 basis
points above 3%. The Company's leverage ratio at December 31, 2000 was 9.8%. The
Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),  among
other  things,   identifies  five  capital  categories  for  insured  depository
institutions  (well  capitalized,   adequately  capitalized,   undercapitalized,
significantly  undercapitalized and critically  undercapitalized),  and requires
the  respective  federal  regulatory  agencies to implement  systems for "prompt
corrective action" for insured depository  institutions that do not meet minimum
capital requirements within such categories.  FDICIA imposes  progressively more
restrictive  constraints  on operations,  management and capital  distributions,
depending on the category in which an institution is classified. Failure to meet
the  capital  guidelines  could also  subject a banking  institution  to capital
raising  requirements.   An  "undercapitalized"  bank  must  develop  a  capital
restoration  plan and its parent  holding  company  must  guarantee  that bank's
compliance  with the plan. The liability of the parent holding company under any
such  guarantee is limited to the lesser of 5% of the bank's  assets at the time

                                        8
<PAGE>

it became  "undercapitalized"  or the  amount  needed  to comply  with the plan.
Furthermore,  in the event of bankruptcy  of the parent  holding  company,  such
guarantee would take priority over the parent's general unsecured creditors.  In
addition,  FDICIA requires the various regulatory  agencies to prescribe certain
non-capital  standards for safety and soundness  related generally to operations
and management,  asset quality and executive compensation and permits regulatory
action against a financial institution that does not meet such standards.

    The  various  regulatory   agencies  have  adopted   substantially   similar
regulations that define the five capital categories  identified by FDICIA, using
the total  risk-based  capital,  Tier 1 risk-based  capital and leverage capital
ratios as the relevant  capital  measures.  Such regulations  establish  various
degrees of  corrective  action to be taken  when an  institution  is  considered
undercapitalized.  Under the regulations,  a "well capitalized" institution must
have a Tier 1 capital  ratio of at least 6%, a total  capital  ratio of at least
10% and a  leverage  ratio  of at  least  5% and  not be  subject  to a  capital
directive  order.  An "adequately  capitalized"  institution  must have a Tier 1
capital  ratio  of at  least  4%,  a total  capital  ratio  of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases.

    Banking agencies have also adopted regulations which mandate that regulators
take  into   consideration   concentrations   of  credit  risk  and  risks  from
non-traditional  activities, as well as an institution's ability to manage those
risks,  when  determining  the  adequacy  of  an  institution's   capital.  That
evaluation  will  be  made as a part of the  institution's  regular  safety  and
soundness  examination.  Banking  agencies also have adopted  final  regulations
requiring  regulators  to consider  interest  rate risk (when the interest  rate
sensitivity  of an  institution's  assets does not match the  sensitivity of its
liabilities or its off-balance  sheet position) in the determination of a bank's
capital adequacy. Concurrently, banking agencies have proposed a methodology for
evaluating  interest  rate risk.  After  gaining  experience  with the  proposed
measurement   process,   those  banking   agencies  intend  to  propose  further
regulations to establish an explicit risk-based capital charge for interest rate
risk.

DISTRIBUTIONS

    The  Company's  primary  source  of  funds  for  cash  distributions  to its
shareholders is dividends received from the Bank. The Bank is subject to various
general  regulatory  policies  and  requirements  relating  to  the  payment  of
dividends, including requirements to maintain capital above regulatory minimums.
The appropriate  federal  regulatory  authority is authorized to determine under
certain  circumstances  relating to the financial  condition of the bank or bank
holding  company  that the  payment of  dividends  would be an unsafe or unsound
practice and to prohibit payment of dividends.

    In addition to the foregoing, the ability of the Company and the Bank to pay
dividends may be affected by the various  minimum capital  requirements  and the
capital and non-capital  standards established under FDICIA, as described above.
The right of the Company,  its  shareholders and its creditors to participate in
any distribution of the assets or earnings of the Bank is further subject to the
prior claims of creditors of the Bank.

"SOURCE OF STRENGTH" POLICY

    According to Federal Reserve Board policy, the Company is expected to act as
a source of  financial  strength to the Bank and to commit  resources to support
the Bank.












                                        9

<PAGE>

<TABLE>

                                   PROPERTIES

    The Bank currently  operates out of twelve branch offices and a non-customer
operations  center.  All branches have automated teller machines  ("ATMs").  The
Company owns the following properties:


                                                                    APPROXIMATE SQUARE    YEAR ESTABLISHED/
OFFICE LOCATION                                                          FOOTAGE               ACQUIRED
------------------------------------------------------------------  -------------------  -------------------

LAKE CITY (COLUMBIA COUNTY)

<S> <C>                     <C>                                         <C>                    <C>
    201 North Marion Street (1)...............................          22,000                 1986
    145 West Baya Avenue......................................          10,100                 1993
    4420 U.S. 90 West.........................................           2,900                 1997
    1 CNB Place, East U.S. 90 (2).............................          20,800                 1996

LIVE OAK (SUWANNEE COUNTY)

    205 White Avenue, S.E. ...................................           6,000                 1988
    1562 South Ohio Avenue....................................           2,000                 1993

FORT WHITE (COLUMBIA COUNTY)

    Highway 27................................................           2,200                 1990

MACCLENNEY (BAKER COUNTY)

    595 South Sixth Street....................................           4,800                 1992

STARKE (BRADFORD COUNTY)

    606 West Madison Street...................................           8,000                 1994

GAINESVILLE (ALACHUA COUNTY)

    5027 Northwest 34th Street................................           2,000                 1996
    7515 West University Avenue ..............................          12,000                 2000

LAKE BUTLER (UNION COUNTY)

    300 West Main Street......................................           6,750                 1996

JACKSONVILLE (DUVAL COUNTY)

    9715 Gate Parkway North ..................................          26,000                 2000

ST. AUGUSTINE (ST. JOHNS COUNTY)
    U.S. 1 South (3)..........................................           5,000                 2000
-------------------------
<FN>
(1) Main office.
(2) Location of the operations center.
(3) Scheduled to open in May, 2001.
</FN>
</TABLE>

    The  Company  is  currently  leasing  a  branch  in  the  Mandarin  area  of
Jacksonville (Duval County) which opened in February, 2001.

                                       10

<PAGE>

                                LEGAL PROCEEDINGS

    There are no material  pending legal  proceedings  to which the Company is a
party or to which any of their  properties  are subject;  nor are there material
proceedings  known to be contemplated  by any  governmental  authority;  nor are
there material  proceedings  known to the Company,  pending or contemplated,  in
which any director,  officer,  affiliate or any principal security holder of the
Bank or the Company,  or any associate of any of the foregoing is a party or has
an interest adverse to the Company.

               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matter was  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year covered by this report.

             EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE REGISTRANT


K. C. Trowell            62   Mr.  Trowell  is  Chairman  and  Chief   Executive
                              Officer  of  the  Company  and  the  Bank.  He was
                              elected  to the  Board  of  Directors  in 1987 and
                              serves as Chairman of the  Executive  Committee of
                              the  Board of  Directors  of the  Company  and the
                              Bank.  Mr.  Trowell  also serves on the  Executive
                              Committee of the Bank's Board of Directors. He has
                              served as the Chairman and Chief Executive Officer
                              of the Company  since its  inception in 1987.  Mr.
                              Trowell  is a Lake City,  Florida,  native and has
                              been  actively  involved  in  commercial   banking
                              management in North  Florida for over  twenty-five
                              years. He has also held management  positions with
                              Bank  of   America   in   Lake   City   (and   its
                              predecessors),  American Bank of Jacksonville, and
                              Barnett  Banks,  Inc.  in  Jacksonville.  He  is a
                              former  Chairman  of  the  Board  of  Trustees  of
                              Florida  Bankers  Insurance  Trust.  He is a  past
                              director of  Community  Bankers of  Florida,  past
                              director of the Columbia County  Committee of 100,
                              a  founding  director  of  North  Central  Florida
                              Areawide  Development  Company, and a former board
                              member  and  chairman  of both Lake  City  Medical
                              Center and Columbia County Industrial  Development
                              Authority.

G. Thomas Frankland      54   Mr.  Frankland is the Executive Vice President and
                              Chief  Financial  Officer of the  Company  and the
                              Bank. Mr.  Frankland  served as Vice President and
                              Chief Financial  Officer of AirNet  Communications
                              Corporation in Melbourne, Florida, from March 1998
                              until he joined the Company in November 1998. From
                              May 1994 until August 1996, Mr. Frankland was Vice
                              Chairman  and  Chief  Financial  Officer  of Ideon
                              Group, Inc.  ("Ideon").  Following the acquisition
                              of Ideon by CUC  International,  Inc. ("CUC"),  in
                              August  1996,   Mr.   Frankland   continued  in  a
                              consulting  capacity  with  CUC  through  December
                              1997.  Prior  to May  1994,  Mr.  Frankland  was a
                              partner with Price  Waterhouse  LLP. During his 24
                              years with Price  Waterhouse  LLP,  including  the
                              seven years he served as  managing  partner of the
                              Jacksonville  office, he specialized  primarily in
                              the  financial  services  industry.  He  currently
                              serves on the Board of Directors of the University
                              of Florida  Foundation,  the Warrington College of
                              Business  Advisory  Council,  the Fisher School of
                              Accounting   Steering   Committee  and  the  North
                              Florida Land Trust.


Bennett Brown            54   Mr. Brown is the Executive  Vice  President of the
                              Company and is the President  and Chief  Operating
                              Officer of the Bank.  Mr. Brown joined the Company
                              in April 1999.  Mr.  Brown's  background  includes
                              leading the formation of Enterprise  National Bank
                              of  Jacksonville  as President and Chief Executive
                              Officer in 1987 until it was  acquired  by Compass
                              Bancshares  in  early  1997.  He  served  as  City
                              President  of Compass Bank in  Jacksonville  until
                              March 1999. Prior to forming Enterprise

                                       11

<PAGE>

                              Bank, Mr. Brown was with Florida National Bank for
                              10  years  and  was  previously  a  National  Bank
                              Examiner with the Office of the Comptroller of the
                              Currency  for 7 years.  Mr. Brown is a graduate of
                              the  University of South  Carolina with a major in
                              Banking and  Finance.  He currently is a member of
                              the  Downtown  Jacksonville  Rotary  Club,  and  a
                              member  of  the  Board  of  Trustees  for  Wolfson
                              Children's Hospital in Jacksonville.


Martha S. Tucker         50   Ms. Tucker has served as Senior Vice President and
                              Controller of the Company and the Bank since July,
                              1997.  From 1991 through 1997, Ms. Tucker was Vice
                              President  and  Cashier  of the  Bank.  From  1988
                              through 1991,  Ms. Tucker was Cashier for Citizens
                              Bank of Live Oak,  which  merged  into the Bank in
                              November  1992.  From  1986 to  1988,  Ms.  Tucker
                              served as Assistant Cashier for the Bank and prior
                              to 1986 held management positions with NationsBank
                              of Live Oak (and its predecessors).  Ms. Tucker is
                              a life-long  resident of Live Oak, Florida and has
                              over 33  years  of  banking  experience.  She is a
                              member of the Altrusa Club and the Suwannee County
                              Chamber of Commerce.

Lloyd D. Adams           53   Mr. Adams serves as the Central Division President
                              of the Bank and oversees the banking activities in
                              Suwannee and Columbia counties..  Prior to joining
                              the Company in May 1998,  Mr.  Adams served as the
                              Executive Vice  President/Senior  Corporate Banker
                              for  Barnett  Bank,  North  Central  Florida  from
                              November  1996 until  January  1998.  He served as
                              Senior  Credit  Policy  Officer  with Barnett from
                              1992   through   1996.   Mr.  Adams  has  a  solid
                              background   in  retail   and   business   banking
                              beginning his career in Live Oak in 1974. A native
                              of  the  area,  Mr.  Adams  has  deep  roots  as a
                              community leader and banker fort this division. He
                              is a graduate of Florida State University, Florida
                              School of Banking and the ABA  Commercial  Lending
                              Graduate  School  in  Norman,  OK. He is very much
                              involved in community  service  organizations  and
                              his  local  church.  He has  been  in the  banking
                              industry for 26 years.

Robert E. Cameron        56   Mr.  Cameron  serves  as  the  Southern   Division
                              President  of  the  Bank.  Prior  to  joining  the
                              Company in April  1998,  Mr.  Cameron was a Senior
                              Vice  President of Barnett Bank of Alachua  County
                              from 1988 until 1998.  He also was a member of the
                              Board of Directors of United Gainesville Community
                              Development  Board.  He has worked in the  banking
                              industry for 31 years. Currently he is a member of
                              the Board of Directors of the Gainesville Builders
                              Association  and Child Care Resources and a member
                              of the  City  of  Gainesville  Development  Review
                              Board.

John D. Kennedy          44   Mr.  Kennedy  has served as the  Eastern  Division
                              President of the Bank since August 1998. From 1996
                              through 1998, Mr. Kennedy was the President of the
                              Bank's Macclenny  branch.  From October 1973 until
                              August  1996  he was  with  The  Citizens  Bank of
                              Macclenny,  where he served as President beginning
                              in  January  1987.  He is a member of the Board of
                              Directors  of  Baker  County  Hospital  Authority,
                              Baker  County  Council  on Aging and Baker  County
                              Tip-Off  Club.  He is also  Chairman  of the Baker
                              County  Education  Foundation and President of the
                              Girls Softball League of Baker County. Mr. Kennedy
                              has 28 years of banking experience.


Suzanne M. Norris        37   Ms. Norris has served as Senior Vice President and
                              Senior Credit  Administrator since July, 1997. Ms.
                              Norris came to the Bank in September, 1996 and has
                              15 years of banking experience, working in various
                              management and lending  positions with NationsBank
                              in St. Petersburg,  Tampa and Lake City, including
                              acting as commercial market manager/senior banking
                              executive for Lake City and Gainesville from June,
                              1995 to September, 1996. Ms. Norris, a graduate of
                              the University of Florida,  has been active in the
                              community, having served as the President of the

                                       12

<PAGE>

                              Lake City/Columbia County Chamber of Commerce. She
                              currently serves on the Board of Trustees for Lake
                              City Community College, the Board of Directors for
                              the United  Way of  Suwannee  Valley and  Epiphany
                              Catholic School and is a member of Altrusa.


                                     PART II


      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The  Company's  articles  of  incorporation  authorize  it  to  issue  up to
10,000,000  shares of Common Stock.  As of March 15, 2001,  there were 6,099,376
shares of Common Stock issued and  outstanding,  and 391,784  shares  subject to
currently  exercisable  options. On January 29, 1999, the Company's common stock
began trading on the NASDAQ National  Market under the symbol "CNBB",  resulting
from the issuance of 1,250,000  shares of common stock in the Company's  initial
public  offering at $10.25 per common  share.  Proceeds from the offering net of
underwriting   discount  and  expenses   totaled  $11.4  million.   The  Company
contributed $10.0 million of the $11.4 million net proceeds from the offering to
CNB National  Bank in February  1999.  There is no trading  information  for any
prior years,  since there was not an established market for the Company's common
stock.  See Table  12:"Selected  Quarterly Data" in Management's  Discussion and
Analysis of Financial  Condition for the quarterly market price for the last two
fiscal years.

    Shareholders'  equity at December 31, 2000 was $44.6 million, as compared to
$43.1  million at December 31, 1999.  On July 15, 1998,  the Company  declared a
two-for-one stock split for shareholders of record on August 10, 1998, effective
August 17, 1998.


    Company  dividends  for 1999 and 2000  consisted of the payment of quarterly
cash dividends in the amount of $0.05 per common share.

    The  Company's  ability  to  pay  dividends  on  the  Common  Stock  depends
significantly  on the  ability of the Bank to pay  dividends  to the  Company in
amounts  sufficient to service its obligations.  Such obligations may include an
obligation to make any payments with respect to securities  issued in the future
which have an equal or greater dividend preference to the Common Stock. The Bank
may also issue additional capital stock or incur indebtedness.  Furthermore, the
regulations of the Comptroller,  regulatory capital levels and the net income of
the  Bank  determine  its  ability  to  pay  dividends  or  make  other  capital
distributions.




















                                       13

<PAGE>

<TABLE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                   CNB FLORIDA BANCSHARES INC. AND SUBSIDIARY
                             SELECTED FINANCIAL DATA

                                           2000           1999            1998           1997           1996
                                      -------------- --------------- -------------- -------------- --------------
(dollars in thousands except per share information.)
-------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>
SUMMARY OF OPERATIONS:
Interest Income                       $   32,061    $    23,758     $    21,119    $    19,420    $    15,090
Interest Expense                         (14,736)        (9,052)         (9,417)        (8,663)        (6,612)
                                      ----------     ----------      ----------    -----------    -----------
Net Interest Income                       17,325         14,706          11,702         10,757          8,478
Provision for Loan Loss                   (1,350)        (1,160)           (710)          (440)          (335)
                                      ----------     ----------      ----------    -----------    -----------
Net Interest Income After
   Provision for Loan Losses              15,975         13,546          10,992         10,317          8,143
Non-Interest Income                        3,338          2,952           2,392          2,153          1,777
Non-Interest Expense                     (15,481)       (11,994)         (9,298)        (7,914)        (6,360)
                                      ----------     ----------      ----------    -----------    -----------
Income Before Taxes                        3,832          4,504           4,086          4,556          3,560
Income Taxes                              (1,325)        (1,563)         (1,407)        (1,581)        (1,247)
                                      ----------     ----------      ----------    -----------    -----------
Net Income                            $    2,507   $      2,941    $      2,679   $      2,975   $      2,313
                                      ==========     ==========      ==========    ===========    ===========
-------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE: (1)
Basic Earnings                        $     0.41    $      0.49     $      0.55    $      0.69    $      0.67
Diluted Earnings                            0.41           0.48            0.55           0.68           0.65
Book Value                                  7.32           7.04            6.36           5.98           5.08
Dividends                                   0.20           0.20            0.20           0.14           0.11
Actual Shares Outstanding              6,099,376      6,116,070       4,856,770      4,856,770      3,875,810
Basic Weighted Average Shares
  Outstanding                          6,095,471      5,995,474       4,856,770      4,327,534      3,478,248
Diluted Weighted Average Shares
  Outstanding                          6,134,270      6,069,737       4,897,922      4,406,616      3,547,390

-------------------------------------------------------------------------------------------------------------------
KEY RATIOS:
Return on Average Assets                  0.62 %         0.91 %          0.93 %         1.14 %         1.14 %
Return on Average Shareholders' Equity    5.74 %         7.03 %          8.92 %        12.38 %        13.88 %
Dividend Payout                          48.78 %        40.82 %         36.36 %        20.29 %        16.54 %
Efficiency Ratio                         74.92 %        67.92 %         65.97 %        61.30 %        62.02 %
Total Risk-Based Capital Ratio           12.00 %        17.25 %         16.62 %        18.67 %        13.58 %
Average Shareholders' Equity to
   Average Assets                        10.82 %        13.01 %         10.43 %         9.22 %         8.24 %
Tier 1 Capital to Total Assets/
Leverage Ratio                            9.80 %        12.70 %          9.70 %        10.20 %         7.25 %

-------------------------------------------------------------------------------------------------------------------
FINANCIAL CONDITION AT YEAR END:
Assets                                $  467,593    $   346,076     $   311,565    $   273,331    $   254,945
Gross Loans                              380,821        266,084         187,015        159,649        148,824
Deposits                                 367,686        288,203         265,109        231,444        226,824
Short-Term Borrowings                     51,142         12,063          12,570          9,157          3,766
Shareholders' Equity                      44,636         43,075          30,896         29,025         19,669

-------------------------------------------------------------------------------------------------------------------
OTHER DATA:
Banking Locations                             12             12              11             11             10
Full-Time Equivalent Employees               212            183             149            144            134

-------------------------------------------------------------------------------------------------------------------
<FN>
(1) Per share data reflects the  two-for-one  stock split  effective  August 17,
1998.
</FN>
</TABLE>
                                       14
<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

Overview

         The  following   analysis  reviews   important  factors  affecting  the
financial  condition and results of operations of CNB Florida  Bancshares,  Inc.
for the periods  shown.  This  section  should be read in  conjunction  with the
Consolidated  Financial  Statements and related notes.  This  discussion  should
facilitate a better  understanding  of the major factors and trends which affect
the  Company's  financial  condition  and  earnings  performance,  and  how  the
Company's  performance  during 2000 compares with prior years.  Throughout  this
section, CNB Florida Bancshares,  Inc. and its subsidiary, CNB National Bank are
referred to as "CNB", "the Company".

         On January 29, 1999, CNB completed its initial public  offering and its
common stock began trading on the NASDAQ National  Market.  CNB shareholders now
have  greater  access to  purchasing  or selling  shares of common  stock and in
addition CNB obtained additional capital to support its expansion plans, as well
as for general  corporate  purposes.  The Company  contributed as capital to CNB
National  Bank $10.0 million of the $11.4 million net proceeds from the offering
in February 1999.

         The Company is pleased  with the  progress  made  toward its  strategic
growth  initiatives  in 2000.  Expansion  activities  are well  underway  in the
Jacksonville  and Gainesville  markets with the opening of new locations in both
markets  during  2000  and a second  Jacksonville  branch  (Mandarin)  and a St.
Augustine  branch  (US 1 and SR 312)  scheduled  to be  opened  in the first and
second quarters of 2001,  respectively.  With the conversion to an improved data
processing  platform  during  the  fourth  quarter of 2000 and the move into the
expanded Operations Center in the first half of 2001, operational support to our
growth  initiatives  will  become  more  customer  focused  and  cost-efficient.
Finally,  the pending purchases of the Lake City and Live Oak banking offices of
Republic  Bank  will  reduce  our  current  dependency  on  borrowed  funds  for
liquidity,  reduce our loan to deposit ratio and allow our loan growth  momentum
to continue with improved interest margins.

         The Company officially relocated its corporate offices to Jacksonville,
Florida effective January, 2001. Operational  headquarters for CNB National Bank
continue to be located in Lake City.

Results of Operations

         For  2000,  the  Company's  earnings  were $2.5  million,  or $0.41 per
diluted share,  compared to $2.9 million,  or $0.48 per diluted share,  and $2.7
million,  or $0.55 per diluted share, in 1999 and 1998,  respectively.  The 2000
results continue to reflect the costs of the Company's expansion strategy in the
Jacksonville and Gainesville  markets and the building of related production and
operating growth and expansion. The expansion into the new markets will increase
the Company's  asset base and allow more effective  utilization of capital.  CNB
continues to focus its efforts on the people and operational  platform necessary
to deliver the relationship-driven community banking services that customers are
seeking.

Net Interest Income/Margins

         Net interest income (interest income less interest  expense) is a major
component  of the  Company's  net  income,  representing  the  earnings of CNB's
primary  business of gathering  funds from deposit  sources and investing  those
funds in loans and  securities.  The Company's  main  objective is to manage its
assets and  liabilities to provide the largest  possible  amount of income while
balancing interest rate, credit quality,  liquidity and capital risks. Operating
results in 2000  reflected  strong loan demand as the loan to deposit ratio grew
to 104% at  December  31,  2000  compared  to 92% at the  end of  1999.  Table 1
presents a comparative earning asset composition as well as earning asset yields
and interest bearing liability rates for 2000, 1999 and 1998. Table 1a shows the
changes in net  interest  income by category  due to shifts in volumes and rates
for years presented.

                                       15
<PAGE>

         The loan  growth in 2000  contributed  to a 35%  increase  in  interest
income over 1999.  Higher  funding costs,  reflecting the Company's  reliance on
short-term borrowings to meet loan demand,  partially offset the positive impact
of loan growth on net interest  income.  Net interest  income for 2000 was $17.3
million, up $2.6 million, or 18%, with the increase attributable to loan growth.
Increases  in the  level  of short  term  borrowings,  time,  money  market  and
interest-bearing  demand  deposits  were  the  main  contributors  to the  $70.0
million, or 30%, growth in average interest bearing liabilities.

         The 4.75% net  interest  margin  achieved  in 2000 is a 25-basis  point
decrease over the 5.00% reported for 1999. The net interest margin is defined as
net interest  income  divided by average  total  earning  assets and provides an
indication of the efficiency of the earnings from balance sheet  activities.  An
increase in 2000 of short term borrowings is the main contributing factor of the
decrease in 2000. The net interest  margin of 4.75% is a 32-basis point increase
over the 4.43% reported in 1998.

















                                       16

<PAGE>

          Table 1:  "Average  Balances  - Yields  and  Rates",  below,  presents
comparative  earning  asset  composition  as well as  earning  asset  yields and
interest  bearing  liabilities for 2000, 1999 and 1998.  Table 1a:  "Analysis of
Changes in Interest Income and Expense" shows the changes in net interest income
by category due to shifts in volumes and rates for years presented.
<TABLE>
                                              Table 1: Average Balances - Yields and Rates

                                         December 31, 2000                 December 31, 1999                 December 31, 1998
                               --------------------------------    ---------------------------------- ------------------------------
                                            Interest                           Interest                           Interest
                                Average     Income or   Average     Average    Income or   Average     Average    Income or  Average
                                Balance     Expense     Rate        Balance    Expense     Rate        Balance    Expense    Rate
                                --------   ----------  --------    ---------  ----------  ----------  ---------   ---------  -------
                                                                               (dollars in thousands)
<S>                          <C>           <C>
ASSETS:
   Federal Funds Sold        $    3,429    $    208     6.07%     $  13,285    $    643     4.84%     $  32,583   $  1,701    5.22%
   Investment Securities
     Available for Sale          33,314       2,110     6.33         45,082       2,671     5.92         47,675      2,869    6.01
   Investment Securities
    Held to Maturity              9,869         572     5.80          9,151         504     5.51          6,519        326    5.00
   Loans (1)                    317,491      29,112     9.17        215,861      19,412     8.99        171,048     15,877    9.28
   Interest Bearing Deposits        895          59     6.59         10,533         528     5.01          6,494        346    5.36
                                -------     -------    -----        -------     -------     ----        -------     ------    ----

TOTAL EARNING ASSETS            364,998      32,061     8.78        293,912      23,758     8.08        264,319     21,119    7.99
   All Other Assets              38,278                              27,543                              23,774
                                -------                             -------                             -------

TOTAL ASSETS                 $  403,276                           $ 321,455                           $ 288,093
                                =======                             =======                             =======

LIABILITIES AND
   SHAREHOLDERS' EQUITY:
   NOW & Money Markets       $  110,387    $  3,731     3.38 %    $  80,132    $  1,749     2.18 %   $   68,950   $  1,682   2.44%
   Savings                       17,095         238     1.39         17,445         245     1.40         16,379         312   1.90
   Time Deposits                151,674       9,019     5.95        131,548       6,731     5.12        129,157       7,057   5.46
   Federal Funds Purchased and
    Repurchase Agreements         9,565         572     5.98          6,947         327     4.71          7,233         359   4.96
   Short Term Borrowings         17,377       1,176     6.77              -           -        -              -           -      -
   Notes Payable & Debentures         -           -        -              -           -        -             85           7   8.00
                                -------     -------    -----        -------     -------     ----        -------     -------   ----
TOTAL INTEREST BEARING
   LIABILITIES                  306,098      14,736     4.81        236,072       9,052     3.83        221,804       9,417   4.25
   Demand Deposits               49,418                              40,761                              33,161
   Other Liabilities              4,117                               2,813                               3,086
   Shareholders' Equity          43,643                              41,809                              30,042
                                -------                             -------                             -------

TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY     $   403,276                           $ 321,455                           $ 288,093
                                =======                             =======                             =======

                                                        ----                               ----                               ----
INTEREST SPREAD (2)                                     3.97%                              4.25%                              3.74%
                                                        ====                               ====                               ====
                                            -------                             -------                             -------
NET INTEREST INCOME                        $ 17,325                            $ 14,706                           $  11,702
                                            =======                             =======                             =======

NET INTEREST MARGIN (3)                                 4.75%                              5.00%                              4.43%
                                                        ====                               ====                               ====

-------------------
<FN>
(1) Interest  income on average loans includes loan fee recognition of $969,000,
    $697,000 and $572,000 in 2000,  1999 and 1998  respectively.
(2) Represents the average rate earned minus average rate paid.
(3) Represents net interest income divided by total earning assets.
</FN>
</TABLE>
                                       17
<PAGE>

<TABLE>
                           Table 1a: Analysis of Changes in Interest Income and Expense

                                            NET CHANGE DECEMBER 31,                NET CHANGE DECEMBER 31,
                                            1999-2000 ATTRIBUTABLE TO:             1998-1999 ATTRIBUTABLE TO:
                                            ------------------------------         -----------------------------
                                                                     Net                                   Net
                                            Volume (1)    Rate (2)  Change         Volume (1)   Rate (2)  Change
                                            ----------    --------  ------         ----------   --------  ------
                                                                       (thousands)
<S>                                         <C>         <C>
INTEREST INCOME:
   Federal Funds Sold                       $   (477)   $     42   $  (435)      $   (1,007)    $  (51)   $ (1,058)
   Investment Securities Available for Sale     (697)        136      (561)            (158)       (40)       (198)
   Investment Securities Held to Maturity         40          28        68              132         46         178
   Loans                                       9,140         560     9,700            4,160       (625)      3,535
   Interest Bearing Deposits                    (483)         14      (469)             218        (36)        182
                                            ----------  ---------  ---------      ---------     --------   --------
      Total                                    7,523         780     8,303            3,345       (706)      2,639


INTEREST EXPENSE:
   NOW & Money Markets                           661       1,321     1,982              273       (206)         67
   Savings                                        (5)         (2)       (7)              20        (87)        (67)
   Time Deposits                               1,030       1,258     2,288              130       (456)       (326)
   Federal Funds Purchased and
     Repurchase Agreements                       124         121       245              (13)       (19)        (32)
   Short Term Borrowings                       1,176           -     1,176                -          -           -
   Notes Payable & Debentures                      -           -         -               (7)         -          (7)
                                            ---------   ---------  --------       ---------     --------   --------
      Total                                    2,986       2,698     5,684              403       (768)       (365)
                                            ---------   ---------  --------       ---------     --------   --------
         Net Interest Income                $  4,537    $ (1,918)  $ 2,619       $    2,942     $   62      $ 3,004
                                            =========   =========  =======        =========     ========   ========
<FN>
(1)       The  volume  variance  reflects  the  change  in the  average  balance
          outstanding  multiplied  by the actual  average  rate during the prior
          period.
(2)       The rate  variance  reflects  the  change in the actual  average  rate
          multiplied by the average balance outstanding during the prior period.
          Changes  which are not solely  due to volume  changes or solely due to
          rate changes have been attributed to rate changes.
</FN>
</TABLE>

Non-Interest Income

         Non-interest  income  totaled $3.3 million in 2000,  an increase of 13%
from the $3.0 million in 1999, which reflected a 23% increase from 1998. Service
charges on deposit  account  increased  $119,000  or 6% in 2000,  compared  with
$311,000 or 17% in 1999. The main  contributing  factor for the increase in 1999
was an  increase in service  charge  fees that went into  effect  March 1, 1999.
Other fee income, which includes credit card fees, credit life insurance income,
safe deposit box fees and other  miscellaneous fees, had an increase of $267,000
or 32% in 2000 and  $249,000  or 43% in 1999.  The  increase  in 2000 is  mainly
attributable  to  mortgage  fees  collected  from  the  mortgage  loans  sold to
secondary markets.

          Non-interest  income as a  percentage  of average  assets was 0.83% in
2000 compared to 0.92% and 0.83% in 1999 and 1998, respectively.

Non-Interest Expense

         Non-interest  expense  increased by $3.5 million,  or 29%, for the year
ended 2000, as compared to increases of $2.7 million,  or 29%, and $1.4 million,
or 18%,  for  1999 and  1998,  respectively.  At the end of  2000,  non-interest
expenses as a percentage of average  assets  increased to 3.84%,  as compared to
3.73% and 3.23% in 1999 and 1998,  respectively.  Non-interest  expense for 2000
reflected the costs of the Company's  expansion strategy in the Jacksonville and
Gainesville  markets  and the  building  of  related  production  and  operating
infrastructure, including people, facilities and an improved technology platform
to support growth and expansion.

         Salaries and employee  benefits  for 2000  increased  $2.1 million from
1999 compared to $1.6 million from 1998. The increase from 1999 to 2000 reflects
the  continued  execution of  management's  strategy to expand CNB National Bank
into new markets. The Company's banking subsidiary, CNB National Bank moved into
its new  Gainesville  headquarters  located  in the Tower  Hill area  during the
second  quarter of 2000.  During the 2000 third  quarter the Bank opened its new
Deerwood Park branch in Jacksonville.  CNB National Bank also acquired locations
in the Mandarin area of  Jacksonville  and St.  Augustine for branch sites which
will  open  in the  first  and  second  quarters  of  2001,  respectively.  As a
percentage  of  average  total  assets,  salaries  and  employee  benefits  have
increased  to  2.11%  in 2000  compared  to 2.01%  and  1.67% in 1999 and  1998,
respectively.
                                       18
<PAGE>

         Occupancy  expenses   (including   furniture,   fixtures  &  equipment)
increased  to $2.2  million in 2000  compared  to $1.8  million in 1999 and $1.6
million in 1998. The major factors affecting the increase in occupancy  expenses
relate to the  start-up  costs,  increase in real estate  taxes,  utilities  and
depreciation  on  furniture  and  equipment  for  the  new  branches  opened  in
Jacksonville  and  Gainesville  in 2000. CNB continues to monitor and assess its
building  and  equipment  needs as it  positions  itself for  future  growth and
expansion.  In 2000,  construction  began on the renovation and expansion of its
Operations  Center,  which  will be  completed  in the first  half of 2001.  The
Operations  Center has been  expanded  to allow  centralization  of  operational
functions to  accommodate  the  increased  workload  expected to  accompany  the
accelerated growth of CNB National Bank.

         Other operating  expenses at CNB increased 27% in 2000 compared to 1999
and 29% in 1999 compared to 1998. The increase in 2000 was  attributable to: (1)
an  increase  in postage  and  delivery  expense of  $83,000,  primarily  due to
additional courier runs with the opening of the new branches; (2) an increase of
$105,000 in supplies, with the major contributing factors being start-up cost at
new  branches  and  changes  in  proof  documents  due to  the  change  in  data
processors; (3) an increase of $161,000 in communication costs due to expansion;
(4)  an  increase  of  $187,000  in  marketing  expense  due  to  the  Company's
advertising and promotion  expense in new markets and its present  markets;  and
(5)  an  increase  of  $160,000  in  legal  and  professional  costs.  The  main
contributing  factors in 1999 was an  increase in postage  and  delivery  due to
additional  courier  runs,  an increase in telephone  expense,  with much of the
increase  resulting from the  installation  of a bank-wide  data network.  Other
contributing reasons were increases in legal and professional fees and marketing
expense.

           The  following  table  details  the  areas of  significance  in other
operating expenses.

                        Table 2: Other Operating Expenses
                          (Dollar amounts in thousands)

                                                     Year Ended December 31,
                                                   2000         1999        1998
                                                  -----        -----       -----
      Data processing                        $      650    $     590    $    540
      Postage and delivery                          551          468         377
      Telephone                                     584          423         271
      Advertising and promotion                     541          354         239
      Legal and professional                        487          327         225
      Supplies                                      404          299         244
      Administrative                                196          182         123
      Amortization of intangible assets             179          179         190
      Loan expenses                                 194          165         133
      Regulatory fees                               149          143         134
      Other general operating                       174           52          17
      Insurance and bonding                          89           72          49
      Education expense                              62           53          44
      Director fees                                  72           57          36
      Dues and subscriptions                        103           78          43
      Other                                         287          281         222
                                                    ---          ---         ---
            Total other operating expenses   $    4,722    $   3,723    $  2,887
                                                  =====        =====       =====

                                       19
<PAGE>

Income Taxes

         The effective tax rate for the year ended  December 31, 2000 was 34.6%,
compared to 34.7% for 1999 and 34.4% for 1998.  The  consolidated  provision for
income taxes decreased to $1.3 million in 2000, compared to $1.6 million in 1999
and $1.4 million in 1998. Tax exempt  investment income had a positive impact on
the effective rate of 2.7%, 2.7% and 2.9% in 2000, 1999 and 1998, respectively.


Liquidity and Interest Rate Sensitivity

         Liquidity is defined as the ability of the Company to meet  anticipated
demands  for  funds  under  credit  commitments  and  deposit  withdrawals  at a
reasonable cost on a timely basis.  Management  measures the Company's liquidity
position by giving  consideration  to both on-and off- balance  sheet sources of
and demands for funds on a daily and weekly basis. Average funds can be obtained
by converting  assets to cash or by  attracting  new  deposits.  Average  liquid
assets  (cash and  amounts due from  banks,  interest-bearing  deposits in other
banks,  federal  funds sold and  securities  available-for-sale)  totaled  $54.4
million and represented 16.5% of average total deposits during 2000, compared to
$81.1 million and 30.0% for 1999.

         In addition to core deposit growth,  sources of funds available to meet
liquidity  demands include cash received  through ordinary  business  activities
such as the  collection  of interest  and fees,  federal  funds  sold,  loan and
investment  maturities,  lines for the purchase of federal  funds by the Company
from its  principal  correspondent  banks.  The  Company is also a member of the
Federal Home Loan Bank and has access to short-term and long-term  funds.  There
was an  outstanding  balance of $4.6 million in federal  funds  purchased  and a
$30.0 million borrowing at Federal Home Loan Bank as of December 31, 2000.

         Interest   rate   sensitivity   refers   to   the   responsiveness   of
interest-earning  assets and  interest-bearing  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 a given  time  interval,
including both floating rate  instruments and instruments  which are approaching
maturity.   Management   generally   attempts  to  maintain  a  balance  between
rate-sensitive  assets and  liabilities as the exposure  period is lengthened to
minimize the overall interest rate risks to the Company.

         The  Company's  gap and  liquidity  positions are reviewed on a regular
basis by  management  to  determine  whether  or not  changes  in  policies  and
procedures are necessary to achieve  financial goals.  Included in the review is
an internal analysis of the possible impact on net interest income due to market
changes and interest rates.

         Table 3, "Rate Sensitivity Analysis" presents rate sensitive assets and
liabilities  by maturity,  separating  fixed and variable  interest  rates.  The
estimated  fair value of each  instrument  category  is also shown in the table.
While  these  fair  values  are  based  on  management's  judgment  of the  most
appropriate  factors,  there is no  assurance  that,  were the  Company  to have
disposed of such  instruments  on December 31, 2000,  the estimated  fair values
would  necessarily  have been  achieved at that date,  since  market  values may
differ depending on various circumstances.







                                       20

<PAGE>

<TABLE>

Table 3: Rate Sensitivity Analysis
 December 31, 2000

(Dollars in thousands)                                                                                       Fair
                               1 Year     2 Years    3 Years    4 Years    5 Years    Beyond     TOTAL      Value
                               ------     -------    -------    -------    -------    ------     -----      -----
INTEREST-EARNING ASSETS:

<S>                            <C>      <C>
Loans
     Fixed Rate Loans         $ 22,827  $  27,712  $  25,630  $  25,531  $  25,705  $  66,125  $ 193,530  $ 193,362
       Average Interest Rate     9.03%      8.93%      8.94%      8.71%      9.08%      8.28%      8.71%

     Variable Rate Loans        57,223     14,479     10,864      4,029      8,134     92,562    187,291    187,291
       Average Interest Rate     9.70%      9.51%      9.58%      9.59%      9.42%      8.81%      9.22%

Investment Securities(1)
     Fixed Rate Investments      7,587         90          -     20,237          -      8,344     36,258     36,132
       Average Interest Rate     6.49%      4.10%                 6.01%                 6.15%      6.14%

     Variable Rate Investments       -          -          -          -          -      1,568      1,568      1,574
       Average Interest Rate                                                            6.86%      6.86%

Other Earning Assets(2)          3,052          -          -          -          -          -      3,052      3,119
       Average Interest Rate     6.77%                                                             6.77%
                               -------    -------    -------    -------    -------    -------    -------   --------

Total Interest-Earning Assets $ 90,689  $  42,281  $  36,494  $  49,797  $  33,839  $ 168,599  $ 421,699  $ 421,478
       Average Interest Rate     9.16%      9.12%      9.13%      7.68%      9.16%      8.45%      8.69%
                               =======    =======    =======    =======    =======    =======    =======   ========

INTEREST-BEARING LIABILITIES:

NOW                           $ 22,332  $       -  $       -  $       -  $       -  $  52,257  $  74,589  $  74,589
       Average Interest Rate     5.09%                                                  1.23%      2.39%

Money Market                    35,966          -          -          -          -      2,832     38,798     38,798
       Average Interest Rate     5.27%                                                  2.82%      5.09%

Savings                              -          -          -          -          -     16,478     16,478     16,478
       Average Interest Rate                                                            1.39%      1.39%

CD's $100,000 and Over          60,360      9,009        964          -          -          -     70,333     70,325
       Average Interest Rate     6.72%      7.35%      6.82%                                       6.80%

CD's Under $100,000             97,493     15,587      1,871        435         20          -    115,406    115,302
       Average Interest Rate     6.26%      6.61%      5.84%      5.58%      6.16%                 6.30%

Securities Sold Under
   Repurchase Agreements and
   Fed Funds Purchased          21,142          -          -          -          -          -     21,142     21,142
       Average Interest Rate     6.17%                                                             6.17%

Short Term Borrowings           30,000          -          -          -          -          -     30,000     30,000
       Average Interest Rate     6.79%                                                             6.79%
                                ------    -------    -------    -------    -------    --------   -------   --------

Total Interest-Bearing
      Liabilities            $ 267,293  $  24,596  $   2,835  $     435  $      20  $  71,567  $ 366,746  $ 366,634
       Average Interest Rate     6.19%      6.88%      6.17%      5.58%      6.16%      1.33%      5.29%
                               =======    =======    =======    =======    =======    =======    =======   ========
<FN>
(1) Securities  available for sale are shown at their amortized cost,  excluding
market  value  adjustment  for  unrealized  losses of  $53,000.
(2) Represents interest bearing deposits with Banks, Federal Reserve Bank Stock,
Federal Home Loan Bank Stock and other marketable equity securities.
</FN>
</TABLE>
                                       21
<PAGE>
       Core deposits,  which  represent all deposits other than time deposits in
excess of $100,000,  averaged 83.4% of total average  deposits in 2000 and 84.9%
in 1999. The Company closely monitors its reliance on time deposits in excess of
$100,000.  The Bank does not nor has it ever solicited brokered deposits.  Table
4, sets forth the  amounts of time  deposits  with  balances of $100,000 or more
that mature within indicated periods.

             Table 4: Maturity of Time Deposits of $100,000 or More
                                December 31, 2000
                                                                Amount
                                                               ----------
                                                              (thousands)

                 Three Months or Less                         $ 15,498
                 Three Through Six Months                       16,087
                 Six Through Twelve Months                      28,775
                 Over Twelve Months                              9,973
                                                              ---------
                 Total                                        $ 70,333
                                                              =========

Lending Activities

         Lending activities are CNB's single largest source of revenue. Although
management is continually evaluating alternative sources of revenue,  lending is
the major segment of the Company's business and is key to profitability. Average
loans for year ended  December 31, 2000 were $317.5  million,  or 87% of average
earning assets as compared to $215.9  million,  or 73% of average earning assets
for 1999.

         The  commercial  loan  portfolio  includes  commercial,  financial  and
agricultural  loans as well as commercial  real estate loans. As of December 31,
2000, the commercial loan portfolio comprised 51% of total loans compared to 51%
and 46% in 1999 and 1998,  respectively.  During 2000 and 1999, commercial loans
experienced  their strongest  growth in the Company's  history.  This growth was
primarily centered in our expansion markets.

         During 2000, real estate mortgages  experienced  significant  growth of
$34.4  million or 40%. As of December 31, 2000,  the real estate  mortgage  loan
portfolio was 32% of total loans which was consistent with the 1999 ratio.

         The  Company's  loan to deposit  ratio at  December  31,  2000 was 104%
compared to 92% at the end of 1999. Continued loan growth in 2000 contributed to
a 35% increase in interest  income for the year 2000 over the year 1999.  Higher
funding  costs,  reflecting the Company's  reliance on short term  borrowings to
meet loan demand,  partially  offset the  positive  impact of loan growth on net
interest income.

         As of  December  31,  2000 the  Company had total gross loans of $380.8
million,  as compared to $266.1  million at December  31,  1999,  an increase of
$114.7  million or 43%. The  composition of the Company's loan portfolio for the
past five years is presented in Table 5.
<TABLE>
                       Table 5: Loan Portfolio Composition

                                                                               As of December 31,
     Types of Loans                                         2000         1999         1998         1997         1996
     --------------                                     ------------ -----------  ------------ ------------ ------------
                                                                                     (thousands)
     <S>                                                <C>          <C>          <C>          <C>          <C>
     Commercial, Financial and Agricultural             $   192,540  $   136,937  $    85,208  $    69,238  $    68,595
     Real Estate - Construction                              33,648       18,926        8,527        3,336        4,029
     Real Estate - Mortgage                                 120,663       86,275       72,357       68,561       56,787
     Installment and Consumer                                33,970       23,946       20,923       18,514       19,413
                                                         ----------   ----------   ----------   ----------   ----------

     Total Loans, Net of Unearned Discount                  380,821      266,084      187,015      159,649      148,824
     Less: Allowance for Loan Losses                        (3,670)      (2,671)      (1,875)      (1,495)      (1,396)
                                                         ----------   ----------   ----------   ----------   ----------
     Net Loans                                          $   377,151  $   263,413  $   185,140  $   158,154  $   147,428
                                                         ==========   ==========   ==========   ==========   ==========
</TABLE>
                                       22
<PAGE>

         Table 6 sets forth the maturity distribution for selected components of
the  Company's  loan  portfolio  as of  December  31,  2000.  Demand  loans  and
overdrafts  are reported as due in one year or less,  and loan maturity is based
upon scheduled principal payments.
<TABLE>

                  Table 6: Maturity Schedule of Selected Loans

                                                               December 31, 2000

                                               0-12            1-5           Over 5
                                             Months           Years           Years            Total
                                            --------        ---------      ----------        ---------
                                                                   (thousands)
<S>                                         <C>             <C>            <C>               <C>
Commercial, Financial & Agricultural        $ 41,867        $ 82,022       $ 68,651          $ 192,540
Real Estate - Construction                    29,110           4,538              -             33,648
All Other Loans                                9,073          55,524         90,036            154,633
                                             -------         -------        -------            -------
Total                                       $ 80,050        $142,084       $158,687          $ 380,821
                                             =======         =======        =======            =======

Fixed Interest Rate                         $ 22,827        $104,578       $ 66,125          $ 193,530
Variable Interest Rate                      $ 57,223        $ 37,506       $ 92,562          $ 187,291
</TABLE>

         Loan  concentrations  are  considered  to exist where there are amounts
loaned to multiple  borrowers engaged in similar  activities which  collectively
would be similarly  impacted by economic or other  conditions and when the total
of such  amounts  exceed 25% of total  capital.  Due to the lack of  diversified
industry  and  the  relative  proximity  of  markets  served,  the  Company  has
concentrations  in geographic  as well as in types of loans  funded.  The Bank's
three largest  concentration  categories are: Land Development,  Commercial Real
Estate and Professional.

Loan Quality

         Non-performing  assets consist of non-accrual  loans, loans past due 90
days  or  more  and  still  accruing  interest,  other  real  estate  owned  and
repossessions.  Non-performing  assets  increased  from $831,000 at December 31,
1999 to $1.5 million at December 31, 2000. Non-performing assets as a percentage
of total assets  increased to 0.32% in 2000 from 0.24% in 1999.  The increase in
non-performing  assets  is  attributed  to  several  loans  in  the  process  of
collection  and  renewing  that are  past  due  over 90 days or more  and  still
accruing.

         Management is continually  analyzing its loan portfolio in an effort to
recognize and resolve its problem assets as quickly and efficiently as possible.
Table 7 sets forth certain categories of risk elements on non-performing  assets
for the past five years.

<TABLE>
                         Table 7: Non-Performing Assets

                                                                           December 31,
                                                 2000         1999         1998         1997          1996
                                             ------------ ------------ ------------ ------------  ------------
                                                                       (dollars in thousands)
<S>                                          <C>          <C>          <C>          <C>           <C>
Non-Accrual Loans                            $      579   $      549   $    1,393   $    1,045    $      87
Past Due Loans 90 Days or
    More and Still Accruing                         840          180           22          158          229
Other Real Estate Owned &
    Repossessions                                    56          102          613          320           88
                                                -------      -------      -------      -------      -------
         Total Non-Performing Assets         $   1, 475   $      831   $    2,028   $    1,523    $     404
                                                =======      =======      =======      =======      =======

Percent of Total Assets                           0.32%        0.24%        0.65%        0.56%        0.16%
                                                  =====        =====        =====        =====        =====
</TABLE>
                                       23
<PAGE>

         The allowance for loan losses represents a reserve for potential losses
in the  loan  portfolio.  The  adequacy  of the  allowance  for loan  losses  is
evaluated  periodically  based  on a review  of all  significant  loans,  with a
particular emphasis on past due and other loans that management believes require
attention.  The provision for loan losses is a charge to earnings in the current
period to maintain the allowance for loan losses at an adequate level. Loans are
charged  against  the  allowance  when  management  believes  collection  of the
principal  is unlikely.  Management  considers  the  allowance  appropriate  and
adequate to cover  potential  losses  inherent in the loan  portfolio;  however,
management's judgment is based upon a number of assumptions about future events,
which are believed to be reasonable, but which may or may not prove to be valid.
Thus,  there can be no assurance  that  charge-offs  in future  periods will not
exceed  the  allowance  for loan  losses  or that  additional  increases  in the
allowance for loan losses will not be required.

<TABLE>

                                             Table 8: Allocation of Allowance for Loan Losses

                                                                        December 31,
                                         2000                  1999                  1998                1997                 1996
                            --------------------------------------------------------------------------------------------------------
                                        Percent               Percent               Percent             Percent              Percent
                                       of Loans               of Loans              of Loans            of Loans            of Loans
                                         in Each              in Each               in Each             in Each              in Each
                                       Category              Category               Category           Category             Category
                                        to Total             to Total               to Total           to Total             to Total
                              Amount     Loans      Amount     Loans     Amount      Loans     Amount    Loans     Amount    Loans
                             --------  ---------   --------  ---------  --------   ---------  -------- ---------  -------- ---------
                                                                           (dollars in thousands)
<S>                         <C>            <C>    <C>           <C>     <C>            <C>
Commercial, Financial
   and Agricultural         $   2,607      50.5%  $   1,670     51.5%   $  1,061       45.6%  $    932    43.4%   $    821     46.1%
Real Estate - Construction         15       8.8%         12      7.1%          6        4.5%         9     2.1%          5      2.7%
Real Estate - Mortgage            293      31.7%        220     32.4%        127       38.7%       163    42.9%        154     38.2%
Consumer                          734       9.0%        769      9.0%        621       11.2%       391    11.6%        416     13.0%
Unallocated                        21         -           -        -          60          -          -       -           -        -
                                -----      -----     ------     -----    -------       -----   -------    -----     ------     -----
    Total                   $   3,670       100%  $   2,671      100%   $  1,875        100%  $  1,495     100%   $  1,396      100%
                                =====      =====     ======     =====    =======       =====   =======    =====     ======     =====
</TABLE>



         The allowance  for loan losses on December 31, 2000,  was $3.7 million,
or 0.96% of total loans  outstanding,  net of unearned  income  compared to $2.7
million or 1.00% at December 31, 1999. The increase in the allowance is a direct
result of the loan growth experienced in 2000.









                                       24

<PAGE>
         Table 8 provides  an  allocation  of the  allowance  for loan losses to
specific loan categories for each of the past five years.  Table 9: "Activity in
Allowance for Loan Losses"  indicates  activity in the allowance for loan losses
for the years 2000, 1999, 1998, 1997 and 1996.
<TABLE>
                 Table 9: Activity in Allowance for Loan Losses

                                                  2000         1999         1998         1997         1996
                                            ------------- -------------- ----------- ------------ -------------
                                                                    (dollars in thousands)

  <S>                                       <C>           <C>          <C>          <C>          <C>
  Balance at Beginning of Year              $     2,671   $     1,875  $     1,495  $     1,396  $       946
  Allowance Acquired by Merger                        -             -            -            -          370
  Loans Charged-Off:
     Commercial, Financial and Agricultural          75           312          123          160           79
     Real Estate, Mortgage                           40            13            3            -            1
     Consumer                                       409           309          296          248          203
                                                 ------        ------       ------       ------       ------
        Total Loans Charged-Off                    (524)         (634)        (422)        (408)        (283)
  Recoveries on Loans Previously Charged-Off:
     Commercial, Financial and Agricultural          32           188           41           24            7
     Real Estate Mortgage                            -              -            7            -            1
     Consumer                                       141            82           44           43           20
                                                 ------        ------       ------       ------       ------
        Total Loan Recoveries                       173           270           92           67           28
                                                 ------        ------       ------       ------       ------
                 Net Loans Charged-Off             (351)         (364)        (330)        (341)        (255)
                                                 ------        ------       ------       ------       ------

  Provision for Loan Losses
    Charged to Expense                            1,350         1,160          710          440          335
                                                 ------        ------       ------       ------       ------
  Ending Balance                            $     3,670   $     2,671  $     1,875  $     1,495  $     1,396
                                                 ======        ======       ======       ======       ======

  Total Loans Outstanding                   $   380,821   $   266,084  $   187,015  $   159,649  $   148,824
  Average Loans Outstanding                 $   317,491   $   215,861  $   171,048  $   155,168  $   117,450
  Allowance for Loan Losses
     to Loans Outstanding                         0.96%         1.00%        1.00%        0.94%        0.94%
  Net Charge-Offs to
     Average Loans Outstanding                    0.11%         0.17%        0.19%        0.22%        0.22%
</TABLE>

Investment Portfolio

         The Company  uses its  securities  portfolio  to assist in  maintaining
proper interest rate sensitivity in the balance sheet, to provide  securities to
pledge as collateral for public funds and repurchase agreements,  and to provide
an  alternative  investment  for available  funds.  The total  recorded value of
securities  was $40.7  million for 2000, a decrease of 11% from $45.7 million in
1999.

         Securities    are    classified   as   either    held-to-maturity    or
available-for-sale.  Securities  available-for-sale,  which  made  up 82% of the
total  investment  portfolio at December 31, 2000 had a value of $33.2  million.
Securities in the available-for-sale portfolio are recorded at fair value on the
balance sheet and unrealized  gains and losses  associated with these securities
are recorded,  net of tax, as a separate  component of shareholders'  equity. At
December  31,  2000,  shareholders'  equity  included a net  unrealized  loss of
$33,000, compared to a $537,000 unrealized loss at December 31, 1999.

         As a percent of total  earning  assets,  the  investment  portfolio has
decreased  to a level of 10% at December  31, 2000  compared to 15% the for year
ended 1999. The decrease in the size of the portfolio  relative to total earning
assets is directly related to the increase in loan growth.

         The  Company  invests  primarily  in direct  obligations  of the United
States,  obligations  guaranteed  as to the principal and interest by the United
States and  obligations  of  agencies of the United  States.  In  addition,  the
Company enters into federal funds transactions with its principal  correspondent
banks.  The Federal  Reserve Bank and Federal Home Loan Bank also require equity
investments to be maintained by the Company.

                                       25
<PAGE>
          Table  10  sets  forth  the  breakdown  of  investment  securities  by
maturities and Table 10a displays the average yield by range of maturities.
<TABLE>

          Table 10: Maturity Distribution of Investment Securities (1)
                                December 31, 2000

Dollars in Thousands                           Held to Maturity                       Available for Sale
-------------------------------------------------------------------------------------------------------------------
                                           Amortized       Estimated              Amortized       Estimated
                                                Cost      Market Value                 Cost      Market Value

<S>                                      <C>              <C>
U.S. Treasury:
   One Year or Less                      $          -     $          -            $      7,494   $      7,515
   Over One Through Five Years                      -                -                       -              -
                                          -----------     ------------            ------------    -----------

Total U.S. Treasury                                 -                -                   7,494          7,515

 U.S. Government Agencies
 and Corporations:
   Over One Through Five Years                      -                -                  20,000         19,834
   Over Five Through Ten Years                  7,457            7,455                       -              -
                                          -----------     ------------            ------------    -----------
Total U.S. Government Agencies
  and Corporations                              7,457            7,455                  20,000         19,834

Obligations of State and Political
 Subdivisions:
   One Year or less                                 -                -                      90             90
   Over One through Five Years                      -                -                     327            327
   Over Ten Years                                   -                -                     608            630
                                          -----------     ------------            ------------    -----------
Total Obligations of State and
  Political Subdivisions                            -                -                   1,025          1,047

Mortgage-Backed Securities (2):
   One Year or Less                                 3                3                       -              -
   Over One Through Five Years                      -                -                       -              -
   Over Five Through Ten Years                      -                -                     524            524
   Over Ten Years                                   -                -                   1,322          1,326
                                         ------------     ------------             -----------    -----------
Total Mortgage-Backed Securities                    3                3                   1,846          1,850

Other Securities:
   Over Ten Years (3)                               -                -                   2,924          2,990
                                         ------------     ------------             -----------    -----------
Total Other Securities                              -                -                   2,924          2,990
                                         ------------     ------------             -----------    -----------
Total Securities                         $      7,460     $      7,458            $     33,289   $     33,236
                                         ============     ============             ===========    ===========

<FN>
(1) All securities,  excluding Obligations of State and Political  Subdivisions,
are taxable.
(2) Represents investments in mortgage-backed  securities which are subject to
early  repayment.
(3) Represents  investment in Federal Reserve Bank and Federal Home Loan Bank
stock and other marketable equity securities.
</FN>
</TABLE>
            Table 10a: Weighted Average Yield by Range of Maturities

                                                        December 31,
                                                     2000             1999
                                                     ----             ----
One Year or Less                                     6.49%            5.81%
Over One through Five Years                          6.00             6.15
Over Five through Ten Years                          6.18             5.78
Over Ten Years(1)                                    6.45             5.65

(1)  Represents adjustable rate, mortgage-backed securities which are
repriceable within one year.
                                       26
<PAGE>

Capital Resources

         Shareholders'  equity  at  December  31,  2000 was  $44.6  million,  as
compared to $43.1 million at December 31, 1999. In 2000,  the Board of Directors
declared dividends  totaling $0.20 per share,  consistent with 1999. At December
31,  2000,  the  Company's  common  stock  had a book  value of $7.32  per share
compared to $7.04 per share in 1999.

         On January 29, 1999 the Company  began  trading on the NASDAQ  National
Market under the symbol "CNBB" after issuing 1,250,000 shares of common stock in
the  initial  public  offering  at $10.25 per common  share.  Proceeds  from the
offering net of underwriting discount and expenses totaled $11.4 million,  which
are being used to support expansion plans and for general corporate purposes.

         The  Company  is subject to  various  regulatory  capital  requirements
administered by the federal banking agencies.  Under capital adequacy guidelines
the Company must meet  specific  capital  guidelines  that involve  quantitative
measures of its assets,  liabilities,  and  certain  off-balance  sheet items as
calculated  under   regulatory   accounting   practices.   Capital  amounts  and
classification  are also subject to  qualitative  judgements  by the  regulators
about components, risk weightings and other factors.

         Quantitative  measures  as defined by  regulation  and  established  to
ensure capital  adequacy require the Bank to maintain minimum amounts and ratios
of Total and Tier 1 capital  to  risk-weighted  assets  and of Tier 1 capital to
average  assets.  If such  minimum  amounts  and  ratios  are  met,  the Bank is
considered  "adequately  capitalized."  If a bank  exceeds the  requirements  of
"adequately  capitalized" and meets even more stringent minimum standards, it is
considered to be "well capitalized." As of December 31, 2000, the Bank meets all
capital adequacy requirements to which it is subject.

         At December 31, 2000,  the Company's Tier 1 capital,  total  risk-based
capital and Tier 1 leverage  ratios were  11.1%,  12.0% and 9.8%,  respectively.
Selected  capital ratios at year end 2000 as compared to 1999 are shown in Table
11.
<TABLE>

                            Table 11: Capital Ratios

                                                 December 31,           Well Capitalized    Regulatory
                                             2000             1999           Requirements    Minimums
                                         ----------       ----------         ------------    --------

<S>                                         <C>               <C>
Risk Based Capital Ratios:
     Tier 1 Capital Ratio                   11.1%             16.2%               6.0%         4.0%

     Total Capital to
       Risk-Weighted Assets                 12.0%             17.3%              10.0%         8.0%

Tier 1 Leverage Ratio                        9.8%             12.7%               5.0%         4.0%

</TABLE>


                                       27

<PAGE>

Quarterly Financial Information

         Table 12 sets forth, for the periods  indicated,  certain  consolidated
2000 and 1999 quarterly financial  information of the Company.  This information
is derived from the Company's unaudited  financial  statements which include, in
the opinion of management,  all normal  recurring  adjustments  which management
considers necessary for a fair presentation of the results for such periods. The
results for any quarter are not necessarily indicative of results for any future
period.
<TABLE>

                        Table 12: Selected Quarterly Data

                                                        2000                                  1999
                                      ---------------------------------------- ---------------------------------------

(dollars in thousands, except per share data)
                                          4Q        3Q        2Q       1Q        4Q        3Q        2Q        1Q
-----------------------------------   ---------------------------------------- ---------------------------------------

<S>                                   <C>       <C>       <C>      <C>        <C>      <C>
Summary of Operations:
   Net interest income                $   4,562 $  4,358  $  4,311 $   4,094  $  3,998 $   3,774 $   3,589 $   3,345
   Provision for loan losses              (400)    (350)     (300)     (300)     (375)     (275)     (310)     (200)
                                        -------  -------   -------   -------   --------  -------   -------   -------
   Net interest income after
     provision for loan losses            4,162    4,008     4,011     3,794     3,623     3,499     3,279     3,145

    Other income                            939      848       780       771       783       739       743       687

   Other expenses                       (4,135)  (3,891)   (3,758)   (3,697)   (3,465)   (3,026)   (2,819)   (2,684)
                                        -------  -------   -------   -------   -------   -------   -------   -------
   Income before income tax expense         966      965     1,033       868       941     1,212     1,203     1,148
   Income tax expense                     (335)    (333)     (359)     (298)     (322)     (423)     (418)     (400)
                                        -------  -------   -------   -------   -------   -------   -------   -------
   Net income                         $     631 $    632  $    674 $     570  $    619 $     789 $     785 $     748
                                        =======  =======   =======   =======   =======   =======   =======   =======

Per Common Share:
   Basic earnings per common share    $    0.10 $   0.10  $   0.11 $    0.09 $    0.09 $    0.13 $    0.13 $    0.13
   Diluted earnings per common share       0.10     0.10      0.11      0.09      0.09      0.13      0.13      0.13
   Dividends Declared                      0.05     0.05      0.05      0.05      0.05      0.05      0.05      0.05
   Book Value                              7.32     7.23      7.13      7.09      7.04      7.05      6.99      6.99
   Market Price (1)
         High                              9.25     8.75      8.50      9.38     10.56     10.88     10.25     10.25
         Low                               7.25     7.13      7.13      7.25      9.00      8.75      9.66      8.00
         Close                             8.00     8.50      7.75      7.63      9.63     10.69     10.00      9.75

Balance Sheet Data:(end of quarter)
   Assets                             $ 467,593 $433,540  $398,489 $ 373,483 $ 346,076 $ 330,106 $ 314,816 $ 315,653
   Loans, net                           377,151  346,457   313,127   290,077   263,413   228,371   214,686   198,323
   Deposits                             367,686  339,497   329,304   322,472   288,203   274,456   263,408   262,895
   Shareholders' Equity                  44,636   44,042    43,566    43,306    43,075    43,075    42,715    42,691

</TABLE>









                                       28

<PAGE>

            QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

         On January 28, 1997,  the Securities  and Exchange  Commission  adopted
amendments to Regulation S-K,  Regulation S-X, and various forms (Securities Act
Release No. 7386) to clarify and expand  existing  requirements  for disclosures
about  derivatives  and market risks inherent in derivatives and other financial
instruments.  No derivative  financial  instruments are held by the Company, but
other  financial  instruments,  which  include  investments,  loans and  deposit
liabilities are included in the Company's  balance sheet.  The release  requires
quantitative and qualitative  disclosures  about market risk. See section titled
"Liquidity  and  Interest  Rate  Sensitivity"  for  further  discussion  on  the
Company's management of interest rate risk.

         Financial  instruments  that have market risk are  included in Table 3:
"Rate Sensitivity Analysis". These instruments are shown by maturity,  separated
by  fixed  and  variable  interest  rates.  The  estimated  fair  value  of each
instrument  category is also shown in the table.  While these  estimates of fair
value are based on management's judgement of the most appropriate factors, there
is no assurance that,  were the Company to have disposed of such  instruments at
December  31,  2000,  the  estimated  fair values  would  necessarily  have been
achieved  at that date,  since  market  values may differ  depending  on various
circumstances.  The  estimated  fair  values  at  December  31,  2000  would not
necessarily be considered to apply at subsequent dates.


                              FINANCIAL STATEMENTS

         The consolidated financial statements which follow have been audited by
the Company's  independent  certified public  accountants,  Arthur Andersen LLP.
Their  opinion  on the  Company's  consolidated  financial  statements  is  also
included therein.





                                       29
<PAGE>


                          CNB Florida Bancshares, Inc.
                                 and Subsidiary
                        Consolidated Financial Statements





















                                       30

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




To the Board of Directors and Shareholders of CNB
Florida Bancshares, Inc. and Subsidiary:

We have audited the accompanying  consolidated  statement of financial condition
of CNB FLORIDA  BANCSHARES,  INC. (a Florida  corporation)  AND SUBSIDIARY as of
December 31, 2000 and 1999 and the related  consolidated  statements  of income,
shareholders'  equity and cash  flows for each of the three  years in the period
ended December 31, 2000. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial  statements  based on our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of CNB Florida  Bancshares,  Inc.
and  Subsidiary  as of  December  31,  2000 and 1999  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States.


ARTHUR ANDERSEN LLP




Jacksonville, Florida
January 26, 2001





                                       31

<PAGE>
<TABLE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                  CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

                                                                                      December 31,

                                                                                    2000        1999
                                                                                ------------  ----------
                                                                                 (dollars in thousands)



                                            ASSETS
      <S>                                                                      <C>          <C>
      Cash and due from banks                                                  $  20,769    $  17,235
      Interest-bearing deposits in other banks                                       129          285
                                                                                --------     --------
            Total cash and cash equivalents                                       20,898       17,520

      Investment securities available for sale                                    33,236       35,111
      Investment securities held to maturity                                       7,460       10,582
      Loans, net                                                                 377,151      263,413
      Premises and equipment, net                                                 22,433       14,395
      Other assets                                                                 6,415        5,055
                                                                                --------     --------
             Total assets                                                      $ 467,593    $ 346,076
                                                                                ========     ========

                            LIABILITIES AND SHAREHOLDERS' EQUITY

 LIABILITIES
 Deposits:
   Non-interest bearing demand                                                 $  52,082    $  42,110
   Savings, NOW and money market                                                 129,865      112,103
   Time under $100,000                                                           115,406       89,141
   Time $100,000 and over                                                         70,333       44,849
                                                                                --------     --------
             Total deposits                                                      367,686      288,203

 Securities sold under repurchase agreements and federal funds purchased          21,142       12,063
 Short term borrowings                                                            30,000            -
 Other liabilities                                                                 4,129        2,735
                                                                                --------     --------
             Total liabilities                                                   422,957      303,001
                                                                                --------     --------
 COMMITMENTS AND CONTINGENCIES (Notes 17 and 18)

 SHAREHOLDERS' EQUITY
   Preferred stock, $.01 par value; 500,000 shares authorized,
     no shares issued or outstanding                                                 -           -

   Common stock, $.01 par value; 10,000,000 shares authorized,
      6,099,376 shares issued and outstanding for 2000 and
      6,116,070 shares issued and outstanding for 1999                                61           61
   Additional paid-in capital                                                     30,581       30,805
   Retained earnings                                                              14,027       12,746
   Accumulated other comprehensive (loss) income, net of taxes                       (33)        (537)
                                                                                --------      -------
             Total shareholders' equity                                           44,636       43,075
                                                                                --------      -------
             Total liabilities and shareholders' equity                         $467,593     $346,076
                                                                                ========      =======

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

</TABLE>
                                       32

<PAGE>
<TABLE>
                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENT OF INCOME

                                                                                         Year Ended December 31,
                                                                                    2000         1999         1998
                                                                                ----------  ------------  ----------
                                                                                  (dollars and shares in thousands)

<S>                                                                               <C>          <C>          <C>
INTEREST INCOME
   Interest and fees on loans                                                     $29,112      $19,412      $15,877
   Interest on investment securities available for sale                             2,110        2,671        2,869
   Interest on investment securities held to maturity                                 572          504          326
   Interest on federal funds sold                                                     208          643        1,701
   Interest on interest-bearing deposits                                               59          528          346
                                                                                   ------       ------       ------
            Total interest income                                                  32,061       23,758       21,119
                                                                                   ------       ------       ------
INTEREST EXPENSE
   Interest on deposits                                                            12,988        8,725        9,051
   Interest on repurchase agreements and federal funds purchased                      572          327          359
   Interest on short term borrowings                                                1,176            -            -
   Interest on notes payable                                                            -            -            7
                                                                                   ------       ------       ------
            Total interest expense                                                 14,736        9,052        9,417
                                                                                   ------       ------       ------
NET INTEREST INCOME                                                                17,325       14,706       11,702

PROVISION FOR LOAN LOSS                                                             1,350        1,160          710
                                                                                   ------       ------       ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSS                                  15,975       13,546       10,992
                                                                                   ------       ------       ------
NON-INTEREST INCOME
   Service charges                                                                  2,241        2,122        1,811
   Other fees and charges                                                           1,097          830          577
   Gain on sale of securities                                                           -            -            4
                                                                                   ------       ------       ------
            Total non-interest income                                               3,338        2,952        2,392
                                                                                   ------       ------       ------
NON-INTEREST EXPENSE
   Salaries and employee benefits                                                   8,539        6,461        4,819
   Occupancy and equipment expenses                                                 2,220        1,810        1,592
   Other operating expenses                                                         4,722        3,723        2,887
                                                                                   ------       ------       ------
            Total non-interest expense                                             15,481       11,994        9,298
                                                                                   ------       ------       ------
INCOME BEFORE INCOME TAXES                                                          3,832        4,504        4,086

INCOME TAXES                                                                        1,325        1,563        1,407
                                                                                   ------       ------       ------
NET INCOME                                                                        $ 2,507     $  2,941     $  2,679
                                                                                   ======       ======       ======
EARNINGS PER SHARE
   Basic earnings per share                                                       $  0.41     $   0.49     $   0.55
                                                                                   ======       ======       ======

   Basic weighted  average shares outstanding                                       6,095        5,995        4,857
                                                                                   ======       ======       ======

   Diluted earnings per share                                                     $  0.41     $   0.48     $   0.55
                                                                                   ======       ======       ======

   Diluted weighted average shares outstanding                                      6,134        6,070        4,898
                                                                                   ======       ======       ======

   The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       33
<PAGE>

<TABLE>

                                            CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                                           CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                            YEAR ENDED DECEMBER 31, 2000, 1999 AND 1998



                                                                                                         Accumulated
                                                                                                           Other
(dollars and shares in thousands)                        Common Stock      Additional                  Comprehensive      Total
                                                       -----------------    Paid-In      Retained      Income (Loss),  Shareholders'
                                                       Shares      Value    Capital       Earnings      Net of Taxes      Equity
                                                       ======      =====   ==========    =========     ==============   =========

<S>                                                     <C>     <C>       <C>           <C>             <C>             <C>
BALANCE, December 31, 1997                              4,856   $    49   $   19,465    $    9,256      $      255      $ 29,025

Comprehensive income:
  Net income                                                                                 2,679
  Change in unrealized gain on investment
       securities available for sale, net of taxes                                                                163
  Total comprehensive income                                                                                               2,842
Cash dividends                                                                                (971)                         (971)
                                                       -------     -----     --------     --------           ------      -------
BALANCE, December 31, 1998                               4,856        49      19,465        10,964             418        30,896


Comprehensive income:
  Net income                                                                                 2,941
  Change in unrealized gain on investment
      securities available for sale, net of taxes                                                             (955)
  Total comprehensive income                                                                                               1,986
Cash dividends                                                                              (1,159)                       (1,159)
Issuance of common stock, net of offering cost           1,250        12      11,356                                      11,368
Exercise of stock options                                    2                     9                                           9
Repurchase of common stock                                 (10)                  (96)                                        (96)
Issuance of restricted stock                                18                    71                                          71
                                                       -------     -----     --------     ---------          ------     --------
BALANCE, December 31, 1999                               6,116        61       30,805       12,746            (537)       43,075


Comprehensive income:
  Net income                                                                                 2,507
  Change in unrealized gain on investment
      securities available for sale, net of taxes                                                              504
  Total comprehensive income                                                                                               3,011
Cash dividends                                                                              (1,226)                       (1,226)
Exercise of stock options                                   33                    113                                        113
Repurchase of common stock                                 (50)                  (395)                                      (395)
Issuance of restricted stock                                                       58                                         58
                                                       -------    ------     --------     ---------         ------     ---------
BALANCE, DECEMBER 31,2000                                6,099   $    61    $  30,581    $  14,027       $    (33)    $   44,636
                                                       =======    ======     ========     =========         ======     =========



   The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       34

<PAGE>
<TABLE>

                                            CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                                                CONSOLIDATED STATEMENT OF CASH FLOWS





                                                                                           Year Ended December 31,
                                                                                        2000         1999         1998
                                                                                       ------       ------       ------
                                                                                            (dollars in thousands)


  <S>                                                                               <C>          <C>
  CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                     $   2,507    $   2,941   $    2,679
     Adjustments to reconcile net income to net cash provided by operating
       activities:
           Depreciation and amortization                                                1,176          971          894
           Provision for loan losses                                                    1,350        1,160          710
           Investment securities amortization (accretion), net                             13         (278)          54
           Non-cash compensation                                                           58           71            -
           Deferred income tax benefit                                                   (370)        (242)         (14)
           Changes in assets and liabilities:
              Other assets                                                             (1,469)          82         (515)
              Other liabilities                                                         1,394         (255)         735
                                                                                       ------       ------        -----
                Net cash provided by operating activities                               4,659        4,450        4,543
                                                                                       ------       ------        -----
  CASH FLOWS FROM INVESTING ACTIVITIES
     Net increase in loans                                                           (115,088)     (79,433)     (27,696)
     Purchases of investment securities available for sale                             (1,068)     (20,413)     (28,908)
     Purchases of investment securities held to maturity                                    -       (8,754)           -
     Proceeds from called investment securities available for sale                        472        3,000            -
     Proceeds from called investment securities held to maturity                        1,245            -            -
     Proceeds from maturities of investment securities available for sale               3,287       40,442       22,654
     Proceeds from maturities of investment securities held to maturity                 1,852        1,064        5,121
     Purchases of premises and equipment                                               (9,035)      (4,432)      (1,341)
                                                                                      -------       ------       ------
                Net cash used in investing activities                                (118,335)     (68,526)     (30,170)
                                                                                      -------       ------       ------
  CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in deposits                                                          79,483       23,094       33,665
     Net increase (decrease) in securities sold under repurchase agreements
          and federal funds purchased                                                   9,079         (507)       3,413
     Short-term borrowings                                                             30,000            -            -
     Repayment of note payable                                                              -            -       (1,450)
     Cash dividends                                                                    (1,226)      (1,159)        (971)
     Issuance of common stock                                                               -       11,368            -
     Repurchase of common stock                                                          (395)         (96)           -
     Exercise of stock options                                                            113            9            -
                                                                                      -------       ------       ------
                Net cash provided by financing activities                             117,054       32,709       34,657
                                                                                      -------       ------       ------
  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  3,378      (31,367)       9,030

  CASH AND CASH EQUIVALENTS, beginning of year                                         17,520       48,887       39,857
                                                                                      -------       ------       ------
  CASH AND CASH EQUIVALENTS, end of year                                             $ 20,898    $  17,520     $ 48,887
                                                                                      =======       ======       ======
   The accompanying notes are an integral part of these financial statements.

</TABLE>


                                       35

<PAGE>


                   CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

1.    ORGANIZATION AND BASIS OF PRESENTATION

      Organization and Nature of Operations

      CNB Florida Bancshares,  Inc. (the "Company") is a registered bank holding
      company  incorporated  in  Florida.  The Company  operates a wholly  owned
      banking subsidiary,  CNB National Bank (the "Bank"), which is chartered as
      a national  bank.  The Bank is a member of the Federal  Reserve System and
      conducts business from 12 banking offices in north Florida.

      Principles of Consolidation

      The consolidated  financial statements include the accounts of the Company
      and the Bank. All significant  intercompany accounts and transactions have
      been eliminated in consolidation.  The Company follows generally  accepted
      accounting  principles and reporting  practices  applicable to the banking
      industry in the United States.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Use of Estimates in Preparation of Consolidated Financial Statements

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally accepted in the United States requires management to
      make estimates and assumptions  that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial  statements and the reported amounts of revenues and
      expenses  during the reporting  period.  Actual  results could differ from
      those estimates.

      Investment Securities

               Available for Sale

               Securities  available for sale  represent  investment  securities
               which are used for  asset/liability,  liquidity,  and other funds
               management  purposes  which may be sold in response to changes in
               interest rate risk,  prepayment  risk or other  similar  economic
               factors.  These  securities  are  recorded  at fair  value,  with
               unrealized  gain  and  losses,  net  of  deferred  income  taxes,
               recorded in the  accumulated  other  comprehensive  (loss) income
               component of shareholders' equity.

               Held to Maturity

               Securities held to maturity represent investment  securities
               where  the  Company's  intent  and  ability  is to hold  the
               securities to maturity. These securities are stated at cost,
               adjusted  for  amortization  of premiums  and  accretion  of
               discounts.


                                       36

<PAGE>


            Amortization  and accretion of premiums and discounts are recognized
            as  adjustments  to interest  income.  Realized gains and losses are
            recognized using the specific identification method.

      Loans, Loan Fees and Interest Income

      Loans  are  stated  at the  amount  of  unpaid  principal,  reduced  by an
      allowance for loan loss.  Interest on  substantially  all loans other than
      certain  installment  loans is  calculated  by using the  simple  interest
      method on daily balances of the principal amounts outstanding. Interest on
      some  installment  loans is recognized using the rule-of-78s  method,  the
      results of which are not materially different than the interest method.

      Loan fees, net of loan  origination  costs,  are deferred and amortized as
      yield adjustments over the respective loan terms using a method which does
      not differ  significantly  from the interest  method.  For 2000,  1999 and
      1998,  loan  fees  included  in  interest  and fees on loans  amounted  to
      approximately $969,000, $697,000 and $572,000, respectively.

      Allowance for Loan Losses

      The allowance for loan losses is established  through a provision for loan
      losses charged to income. Loans are charged against the allowance for loan
      losses when management  believes that the  collectibility of the principal
      is unlikely.  The allowance is an amount that management  believes will be
      adequate  to absorb  inherent  losses on  existing  loans  that may become
      uncollectible based on evaluations of the collectibility of the loans. The
      evaluations take into  consideration such factors as changes in the nature
      and volume of the loan portfolio,  overall  portfolio  quality,  review of
      specific problem loans,  and current  economic  conditions that may affect
      the  borrowers'  ability to pay.  Accrual of interest is  discontinued  on
      loans   that  are  90  days  or  more  past  due,   unless   substantially
      collateralized  and in the  process  of  collection,  or sooner if, in the
      opinion of  management,  the borrower's  financial  condition is such that
      collection of principal or interest is doubtful.

      Premises and Equipment

      Premises and equipment are stated at cost, less accumulated  depreciation.
      Depreciation is computed using the straight-line method over the estimated
      useful  lives of the  assets.  Maintenance  and  repairs  are  charged  to
      expenses as incurred.  Gains and losses on  dispositions  are reflected in
      income.

      Long-lived assets are evaluated regularly for other-than-temporary
      impairment.  If circumstances suggest that their value may be impaired, an
      assessment of  recoverability  is performed prior to any write-down of the
      asset.

      Other Real Estate Owned

      Real estate properties  acquired through,  or in lieu of, loan foreclosure
      are  initially  recorded  at  fair  value  at  the  date  of  foreclosure,
      establishing  a  new  cost  basis.  After   foreclosure,   valuations  are
      periodically performed by management and the real estate is carried at the
      lower of carrying amount or at fair value, less cost to sell.


                                       37

<PAGE>

      Intangibles

      The Company has intangible  assets with carrying  amounts of approximately
      $1,033,000  and  $1,187,000  at December 31, 2000 and 1999,  respectively.
      Intangible  assets  consist of core  deposits and  goodwill.  Core deposit
      intangibles   are  being   amortized  over  a  10-year  period  using  the
      straight-line method. Goodwill is being amortized over a 15-year period on
      a   straight-line   method.   Amortization   of   intangible   assets  was
      approximately  $179,000,  $179,000 and  $190,000 for 2000,  1999 and 1998,
      respectively.

      Periodically, the Company reviews its intangible assets for
      events or changes in  circumstances  that may  indicate  that the carrying
      amounts of the assets are not recoverable.

      Income Taxes

      The Company uses the asset and liability  method of accounting  for income
      taxes.  This method  requires the  recognition  of deferred tax assets and
      liabilities  for the future tax  consequences  attributable to differences
      between the financial  statement  carrying  amounts of existing assets and
      liabilities and their respective tax bases.

      The Company and the Bank file  consolidated  federal and state  income tax
      returns.  Under a tax-sharing  arrangement,  income tax charges or credits
      are generally  allocated to the Company and the Bank on the basis of their
      respective  taxable  income or loss that is included  in the  consolidated
      income tax return, as determined by the separate return method.

      Earnings Per Share

      Basic earnings per share is calculated based on weighted average number of
      shares  of  common  stock  outstanding.  Diluted  earnings  per  share  is
      calculated  based on the weighted average number of shares of common stock
      and common stock  equivalents  outstanding.  Common stock  equivalents are
      determined using the treasury method for diluted shares  outstanding.  The
      difference  between  diluted and basic shares  outstanding is common stock
      equivalents  from stock options and  restricted  stock  outstanding in the
      years ended December 31, 2000, 1999 and 1998.

      Supplemental Cash Flow Information

      For purposes of reporting cash flows,  cash and cash  equivalents  include
      cash and due from  banks,  interest-bearing  deposits  in other  banks and
      federal  funds sold.  Generally,  federal funds are purchased and sold for
      one-day periods and all cash equivalents  have an original  maturity of 90
      days or  less.  Cash  paid for  interest  was  approximately  $13,330,000,
      $9,206,000 and $9,049,000  during 2000, 1999 and 1998,  respectively,  and
      cash paid for income taxes was  approximately  $1,759,000,  $1,720,000 and
      $1,384,000 during 2000, 1999 and 1998, respectively.


                                       38

<PAGE>

         Accounting Pronouncements

         In September  2000, the Financial  Accounting  Standards Board ("FASB")
         issued  Statement of Financial  Accounting  Standards  ("SFAS") No. 140
         "Accounting  for  Transfers  and  Servicing  of  Financial  Assets  and
         Extinguishments  of  Liabilities",  a replacement  of SFAS No. 125. The
         statement revises the standards for accounting for  securitizations and
         other transfers of financial assets and collateral and requires certain
         disclosures.  The  statement is effective for fiscal years ending after
         December  15,  2000.  The  adoption  of this  standard  did not  have a
         material impact on reported results of operations of the Company.

         In June 1998, the FASB issued SFAS No. 133  "Accounting  for Derivative
         Instruments   and  Hedging   Activities"  as  amended.   The  statement
         establishes   accounting   and  reporting   standards  for   derivative
         instruments (including certain derivative instruments imbedded in other
         contracts). The statement is effective for fiscal years beginning after
         June 15, 2000.  The  adoption of this  standard did not have a material
         impact on reported results of operations of the Company.

  3.  INVESTMENT SECURITIES

      Amortized cost and estimated fair value of investment securities available
      for sale at December 31, 2000 and 1999 are as follows (in thousands):
<TABLE>

2000                                    U.S.          U.S.          State,       Mortgage-
                                      Treasury     Government     County, and     Backed
                                     Securities     Agencies       Municipal    Securities     Other        Total
                                     ----------    ----------     -----------   ----------     -----        -----
<S>                                  <C>          <C>             <C>           <C>           <C>         <C>
Amortized cost                       $    7,494   $    20,000     $    1,025    $  1,846      $  2,924    $  33,289
Gross unrealized:
   Gains                                     21          -                22           4            66          113
   Losses                                   -            (166)           -           -             -           (166)
                                        -------       --------        ------      ------        ------      -------
Estimated fair value                 $    7,515   $    19,834     $    1,047    $  1,850      $  2,990    $  33,236
                                        =======       ========        ======      ======        ======      =======

1999                                    U.S.          U.S.          State,       Mortgage-
                                      Treasury     Government     County, and     Backed
                                     Securities     Agencies       Municipal    Securities     Other        Total
                                     ----------    ----------     -----------   ----------     -----        -----
Amortized cost                       $    9,980   $    20,000     $    1,583    $  2,550     $   1,855    $  35,968
Gross unrealized:
   Gains                                     34          -              -              3            52           89
   Losses                                  -             (938)            (8)       -             -            (946)
                                        -------        ------          -----       ------        ------      ------
Estimated fair value                 $   10,014   $    19,062     $    1,575    $  2,553     $   1,907    $  35,111
                                        =======        ======          =====       ======        ======      ======
</TABLE>

                                       39
<PAGE>

      Amortized cost and estimated fair value of investment  securities  held to
      maturity at December 31, 2000 and 1999 are as follows (in thousands):

2000                                         U.S.        Mortgage-
                                         Government      Backed
                                          Agencies      Securities        Total
                                         ----------     ----------       ------

Amortized cost                          $     7,457   $           3 $    7,460
Gross unrealized:
    Gains                                         -             -            -
    Losses                                       (2)            -           (2)
                                           --------       ---------   --------
Estimated fair value                    $     7,455   $           3 $    7,458
                                           ========       =========   ========

1999                                         U.S.        Mortgage-
                                          Government     Backed
                                           Agencies     Securities        Total
                                          ----------    ----------    ---------

Amortized cost                          $     8,721   $       1,861 $   10,582
Gross unrealized:
    Gains                                         -            -             -
    Losses                                     (589)            (76)      (665)
                                            -------       ---------   --------
Estimated fair value                    $     8,132   $       1,785 $    9,917
                                            =======       =========   ========

Interest  income  earned on  tax-exempt  securities  in 2000,  1999 and 1998 was
approximately  $52,000,   $87,000  and  $83,000,   respectively.   Dividends  of
approximately  $146,000,  $113,000  and $93,000 on stock of the Federal  Reserve
Bank and the Federal  Home Loan Bank are  included  in  interest  on  investment
securities  available  for  sale in  2000,  1999  and  1998,  respectively.

The amortized  cost and estimated fair value of securities at December 31, 2000,
by contractual maturity, are shown below (in thousands):

<TABLE>

                                                         Investment Securities         Investment Securities
                                                          Available for Sale             Held to Maturity
                                                      -----------------------------------------------------------
                                                        Amortized      Estimated       Amortized     Estimated
                                                          Cost         Fair Value        Cost        Fair Value
                                                      -------------  -------------   ------------  --------------
<S>                                                   <C>             <C>
Due in:
   One year or less                                   $     7,584     $     7,605    $        -      $        -
   After one through five years                            20,327          20,161             -               -
   After five through ten                                       -               -         7,457           7,455
   Over ten years                                             608             630             -               -
   Mortgage-backed securities and others                    4,770           4,840             3               3
                                                        ---------       ---------      --------       ---------
                                                      $    33,289     $    33,236    $    7,460      $    7,458
                                                        =========       =========      ========       =========
</TABLE>

At December 31, 2000, U. S. Treasury and Government  agency  securities  with an
amortized  cost of  approximately  $25,896,000  and an  estimated  fair value of
approximately  $25,834,000 were pledged to secure public funds, treasury tax and
loan deposits, and repurchase agreements.


                                       40

<PAGE>

4.    LOANS, ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS

      Loans at December 31, 2000 and 1999 were  comprised of the  following  (in
thousands):

                                                            2000        1999
                                                        -----------  -----------

      Commercial, financial, and agricultural           $  192,540   $  136,937
      Real estate - construction                            33,648       18,926
      Real estate - mortgage                               120,663       86,275
      Installment and consumer lines                        33,970       23,946
                                                         ---------     ---------
         Total loans, net of unearned discount             380,821      266,084
      Less allowance for loan losses                        (3,670)      (2,671)
                                                         ---------     --------
         Net loans                                       $ 377,151   $  263,413
                                                         =========     ========

      Activity in the allowance  for loan losses  account was as follows for the
      years ended December 31, 2000, 1999 and 1998 (in thousands):

                                              2000          1999          1998
                                             ------        ------       -------
              Balance beginning of year      $  2,671     $ 1,875       $ 1,495
                Provision                       1,350       1,160           710
                Charge-offs                      (524)       (634)         (422)
                Recoveries                        173         270            92
                                              -------      -------       -------
              Balance at end of year          $ 3,670      $ 2,671       $ 1,875
                                              =======      =======       =======

      Nonaccrual loans totaled  approximately  $579,000 and $549,000 at December
      31,  2000 and 1999,  respectively.  Foregone  interest,  which  would have
      otherwise been recorded on nonaccrual  loans,  including  those loans that
      were nonaccrual at sometime during the year and later paid,  reinstated or
      charged off, was approximately $25,000, $23,000 and $56,000, in 2000, 1999
      and 1998,  respectively.  In addition to nonaccrual  loans,  nonperforming
      assets  include  other real estate owned  related to property  acquired by
      foreclosure   in  settlement   of  debt.   Other  real  estate  owned  was
      approximately   $19,000  and  $88,000  at  December  31,  2000  and  1999,
      respectively,  and  is  included  in  other  assets  in  the  accompanying
      consolidated statement of financial condition.


                                       41

<PAGE>


      The Company  recognizes  income on impaired  loans  primarily  on the cash
      basis.  Any  change  in the  present  value  of  expected  cash  flows  is
      recognized   through  the  allowance   for  loan  losses.   Impaired  loan
      information  for the year ended  December  31,  2000,  1999 and 1998 is as
      follows (in thousands):

                                         2000              1999          1998
                                         ----              ----          ----

Impaired loans with an allowance    $    1,041        $       686   $    1,744
                                      --------           --------     --------
         Total impaired loans       $    1,041        $       686   $    1,744
                                      ========           ========     ========

Allowance for impaired loans        $      213        $       159   $      408
                                      ========           ========     ========

Interest income recognized on
impaired loans during the year      $       40        $        21   $       93
                                      ========           ========     ========


      The  average  balance  of  impaired  loans  during  2000,  1999  and  1998
approximated $1.2 million.

5.  PREMISES AND EQUIPMENT

      Premises and  equipment  were  comprised of the  following  components  at
December 31 (in thousands):

                                                2000            1999
                                            ----------      ----------

  Buildings and improvements               $   15,731      $    8,757
  Equipment and furnishings                     6,974           5,382
  Land                                          4,738           3,904
  Construction in progress                      1,421           1,813
                                              -------        --------
                                               28,864          19,856
  Less accumulated depreciation                (6,431)         (5,461)
                                              -------        --------
                                           $   22,433      $   14,395
                                              =======        ========

      Depreciation was approximately  $997,000,  $792,000 and $704,000 for 2000,
      1999 and 1998, respectively.

6.  TIME DEPOSITS

         At December 31, 2000, the scheduled  maturities of time certificates of
deposit are as follows (in thousands):

                     2001                              $157,853
                     2002                                24,596
                     2003                                 2,835
                     2004                                   435
                     2005 and thereafter                     20
                                                       --------
                                                       $185,739
                                                       ========
                                       42
<PAGE>

7.   REPURCHASE AGREEMENTS AND SHORT TERM BORROWINGS

     The Bank has entered into  repurchase  agreements  with  several  customers
     under  which the Bank  pledges  investment  securities  owned and under its
     control as  collateral  against the one-day  agreements.  The daily average
     balance of these agreements  during 2000, 1999, and 1998 was  approximately
     $7,666,000,  $6,854,000 and $7,233,000,  respectively.  Interest expense in
     2000,  1999 and 1998 was  approximately  $447,000,  $322,000 and  $359,000,
     respectively,  resulting in an average rate paid of 5.83% in 2000, 4.70% in
     1999 and 4.97% in 1998. The highest amount  outstanding  during 2000,  1999
     and  1998  was  approximately  $16,542,000,  $10,700,000  and  $12,570,000,
     respectively.

     During 2000 the Bank received  funding from Federal Home Loan Bank advances
     and at December  31, 2000 had a balance in the amount of  $30,000,000.  The
     advances are  collateralized by its residential  mortgage portfolio and the
     average rate paid in 2000 on the Federal Home Loan Bank advances was 6.77%.
     Interest  expense  paid in 2000 on  Federal  Home  Loan Bank  advances  was
     approximately  $1,176,000.  The highest amount  outstanding during 2000 was
     the advance of $30,000,000 at December 31, 2000.

8.   OTHER OPERATING  EXPENSES

     Components of other  operating  expenses are as follows for the years ended
     December 31, 2000, 1999 and 1998 (in thousands):


                                                     2000        1999       1998
                                                    -----       -----      -----

           Data processing                       $    650    $    590    $   540
           Postage and delivery                       551         468        377
           Advertising and promotion                  541         354        239
           Supplies                                   404         299        244
           Amortization of intangible assets          179         179        190
           Telephone                                  584         423        271
           Legal and professional                     487         327        225
           Loan expense                               194         165        133
           Regulatory fees                            149         143        134
           Administrative                             196         182        123
           Other general operating                    174          52         17
           Insurance and bonding                       89          72         49
           Education expense                           62          53         44
           Directors fees                              72          57         36
           Dues and subscriptions                     103          78         43
           Other                                      287         281        222
                                                    -----       -----      -----
                                                 $  4,722   $   3,723   $  2,887
                                                    =====       =====      =====
                                       43
<PAGE>

9.    INCOME TAXES

      The income tax provision  (benefit) for the years ended December 31, 2000,
      1999 and 1998 consisted of the following components (in thousands):


                                               2000           1999        1998
                                               ----           ----        ----
           Current:
              Federal                       $   1,432     $   1,598    $  1,365
              State                               263           207          56
                                                -----         -----       -----
                        Total               $   1,695     $   1,805    $  1,421
                                                =====         =====       =====
           Deferred:
              Federal                       $    (315)    $    (244)   $   (147)
              State                               (55)            2         133
                                                -----         -----       -----
                        Total               $    (370)    $    (242)   $    (14)
                                                =====         =====       =====

           Total:
              Federal                       $   1,117     $   1,354    $  1,218
              State                               208           209         189
                                                -----         -----       -----
                        Total               $   1,325     $   1,563    $  1,407
                                                =====         =====       =====


     Deferred income tax assets and  liabilities  reflect the net tax effects of
     temporary   differences   between  the  carrying   amounts  of  assets  and
     liabilities and their respective tax bases.  Significant  components of and
     the resultant  deferred tax assets and liabilities at December 31, 2000 and
     1999 are as follows:

                                                            2000         1999
                                                            ----         ----
           Deferred tax liabilities:
              Property and equipment                       $ (697)     $ (650)
              Unearned loan fees                              (78)        (81)
              Other items                                     (32)          -
                                                            -----       -----
                                                             (807)       (731)
                                                            -----       -----
           Deferred tax assets:
              Loan loss provisions                          1,191         858
              Unrealized loss on investment
                securities available for sale                  20         320
              Intangible assets                               125         105
              Other items                                       -          39
                                                            -----       -----
                                                            1,336       1,322
                                                            -----       -----
           Net deferred tax asset (liability)             $   529     $   591
                                                            =====       =====
                                       44
<PAGE>


     The reasons for the  differences  between the statutory  federal income tax
     rate and the  effective  tax rate are  summarized  as follows for the years
     ended December 31, 2000, 1999 and 1998:

                                                   2000        1999       1998
                                                  ------      ------     ------

          Statutory rates                          34.0%       34.0%      34.0%
          Increase (decrease) resulting from:
             Effect of tax-exempt income           (2.7)       (2.7)      (2.9)
             State income taxes, net                2.5         2.5        2.6
             Nondeductible expenses                 0.8         0.9        0.7
                                                   -----       -----      -----
                                                   34.6%       34.7%      34.4%
                                                   =====       =====      =====

10.  COMPREHENSIVE INCOME

     The Company's  comprehensive  income  consists of net income and changes in
     unrealized gains (losses) on securities available-for-sale,  net of income
     taxes.

     Comprehensive  income for 2000,  1999 and 1998 is calculated as follows (in
     thousands):
<TABLE>

                                                                            2000          1999          1998
                                                                           ------        ------        ------

    <S>                                                               <C>            <C>
    Unrealized gains (loss) recognized in other comprehensive
       income (net):
           Before tax                                                 $      804     $   (1,523)      $   258
           Income tax expense                                                300           (568)           95
                                                                           -----        -------         -----
           Net of tax                                                 $      504     $     (955)      $   163
                                                                           =====        =======         =====
    Amounts reported in net income:
       Gain on sale of securities                                     $        -     $       -        $     4
       Net amortization (accretion)                                           13           (278)           54
                                                                           -----        -------         -----
       Reclassification adjustment                                            13           (278)           58
       Income tax expense                                                     (5)            96           (20)
                                                                           -----        -------         -----
       Reclassification adjustment, net of tax                        $        8     $     (182)      $    38
                                                                           =====        =======         =====
    Amounts reported in other comprehensive income:
       Unrealized gains (loss) arising during period, net of tax      $      512     $   (1,137)      $   201
       Reclassification adjustment, net of tax                                (8)           182           (38)
                                                                           -----        -------         -----
       Unrealized gains (loss) recognized in other comprehensive
          income (net)                                                       504           (955)          163
       Net income                                                          2,507          2,941         2,679
                                                                           -----        -------         -----
                 Total comprehensive income                          $     3,011     $    1,986       $ 2,842
                                                                           =====        =======         =====
</TABLE>

                                       45
<PAGE>


11.   LOANS TO RELATED PARTIES

      Certain officers and directors,  and companies in which they held a 10% or
      more beneficial ownership,  were indebted to (or in some cases, guaranteed
      loans by) the Bank. An analysis of such activities follows (in thousands):

                                                         2000           1999
                                                       --------      ---------

               Balance, January 1                     $   3,685     $   3,306
                  New loans and advances                  3,179         1,646
                  Repayments (excluding renewals)        (2,021)       (1,267)
                                                       --------      --------
               Balance, December 31                   $   4,843     $   3,685
                                                       ========      ========



      The loans analyzed  above were made in the normal  course of  business  at
      prevailing interest rates and terms.

12.   DIVIDEND RESTRICTIONS

      The Company's  primary  source of funds is dividends it receives  from the
      Bank. The payment of  dividends  by the Bank,  in turn,  is subject to the
      regulations of the Comptroller of the Currency, which require, among other
      things,  that  dividends  be paid only from net profits of the current and
      immediately  preceding  two  years.  At  December 31,  2000,  the Bank had
      approximately  $2,426,000 of retained  earnings available for dividends to
      the Company without being required to seek special regulatory approvals.

13.   EQUITY

      Dividends Declared

      The Company  declared cash  dividends of $.20 per share in 2000,  1999 and
      1998.

      Common Stock

      During  February 1999, the Company sold  1,250,000  shares of common stock
      resulting in proceeds of approximately $11.4 million,  net of underwriting
      discount and expenses.

14.   STOCK BASED COMPENSATION

      Stock Options

      The Company has long-term incentive plans that provide stock-based awards,
      including  stock  options  to  certain  key  employees.  The  terms of the
      Performance-Based  Incentive  Plan ("the  Plan"),  which were  approved by
      shareholders  at the  annual  meeting in April  1998,  allow for a maximum
      grant of 540,000  shares.  Prior to the  approval of the Plan,  there were
      issued and  outstanding  options  totaling  166,766 of which  33,306  were
      exercised in 2000.  There are 32,400  shares  remaining to be issued under
      the Plan as of December 31, 2000. Generally, the options granted under the
      Plan become  exercisable  over a three to four year period  following  the
      year of grant, and expire ten years after the date of the grant. The grant

                                       46

<PAGE>




      price of all options has been equal to the estimated  fair market value of
      a share  of stock as of the date of  grant.

      Options outstanding  and the activity for December 31, 2000, 1999 and 1998
      are presented below:
<TABLE>

                                                 2000                        1999                       1998
                                       ------------------------   -------------------------   ------------------------

                                                   Weighted-                   Weighted-                   Weighted-
                                                    Average                     Average                     Average
                                       Shares     Grant Price     Shares      Grant Price     Shares      Grant Price
                                       --------   -------------   ---------   -------------   -------    -------------
<S>                                       <C>            <C>
Employee stock option plans:
       Outstanding at beginning of  year  552,566        $7.63       359,766         $6.26       166,766         $4.32
             Options granted              102,500         8.64       214,600          9.92       193,000          7.93
             Options exercised             33,306         3.41         1,800          5.00             -             -
             Options forfeited                  -            -        20,000          8.00             -             -
                                        ---------       ------       -------        ------       -------         -----
       Outstanding at end of year         621,760        $7.58       552,566         $7.63       359,766         $6.26
                                        =========       ======       =======        ======       =======         =====

       Options exercisable at year-end    391,784        $7.40       258,466         $5.90       184,500         $4.98
                                        =========       ======       =======        ======       =======         =====
    Weighted-average fair value of
       options granted during the year      $2.86                      $2.59                       $1.98
                                        =========                    =======                     =======
</TABLE>

      The Company applies the provisions of Accounting  Principles Board Opinion
      No. 25,  "Accounting for Stock Issued to Employees," in accounting for its
      stock  option and award plans and has adopted the  disclosure-only  option
      under  Statement  of  Financial  Accounting  Standards,  ("SFAS") No. 123,
      "Accounting for Stock-Based  Compensation." If the Company had adopted the
      accounting  provisions  of SFAS 123 and  recognized  expense  for the fair
      value of employee stock options  granted in 2000,  1999 and 1998, over the
      vesting  life of the  options,  pro forma net income would be as indicated
      below (dollars in thousands, except per share data):
<TABLE>

                                                   As Reported                           Pro Forma
                                       -----------------------------------   -----------------------------------
                                        2000         1999         1998         2000         1999         1998
                                       --------   ---------    ---------     --------     --------     ---------
<S>                                      <C>          <C>          <C>         <C>          <C>          <C>
      Net income                         $2,507       $2,941       $2,679      $2,407       $2,658       $ 2,634
      Basic earnings per common share    $ 0.41       $ 0.49       $ 0.55      $ 0.39       $ 0.44       $ 0.54
      Diluted earnings per common share  $ 0.41       $ 0.48       $ 0.55      $ 0.39       $ 0.44       $ 0.54

</TABLE>


      In determining the pro forma disclosures  above, the fair value of options
      granted  was  estimated  on the  date of  grant  using  the  Black-Scholes
      option-pricing  model. The  Black-Scholes  model was developed to estimate
      the fair value of traded  options,  which have  different  characteristics
      than employee  stock options,  and changes to the  subjective  assumptions
      used in the model can result in materially different fair value estimates.
      The weighted-average  grant date fair values of the options granted during
      2000, 1999 and 1998 were based on the following assumptions:

                                       47

<PAGE>

<TABLE>

                                                          Risk-Free                           Dividend
                                                        Interest Rates                          Yield
                                                  ------------------------------      -----------------------------
                                                   2000        1999        1998        2000       1999        1998
                                                  ------      ------       ------     -------     ------      -----
<S>                                                <C>         <C>
Performance-Based Incentive and other
   stock option plans                              6.52%       5.89%        4.62%      2.50%      2.03%       2.50%


                                                        Expected Lives                         Volatility
                                                  ------------------------------     ------------------------------
                                                   2000        1999        1998       2000        1999        1998
                                                  ------      ------      ------     ------      ------      ------
Performance-Based Incentive and other
   stock option plans                              6 years     6 years   6 years       0.30%       0.20%      0.25%

</TABLE>

      Compensation  expense under the fair value-based method is recognized over
      the vesting  period of the related  stock  options.  Accordingly,  the pro
      forma results of applying  SFAS No. 123 in 2000,  1999 and 1998 may not be
      indicative of future amounts.

     The following table summarizes  information about stock options outstanding
     at December 31, 2000.

<TABLE>

                                      Outstanding                         Exercisable
                      -------------------------------------------    ---------------------------
                                                        Average                        Average
      Exercise                           Average        Exercise                      Exercise
    Price Range           Shares          Life           Price          Shares          Price
------------------    ------------     ----------     -----------    -----------   -------------
<S>   <C>                 <C>              <C>         <C>               <C>         <C>
$3.06-$3.64               21,920           1.95        $  3.43           21,920      $  3.43
$4.00-$4.68               67,108           4.82           4.14           67,108         4.14
$5.00-$8.00              254,732           7.86           7.69          194,682         7.63
$9.00-$10.25             278,000           8.30           9.74          108,074         9.80
                         -------           ----           ----          -------         ----
       Total             621,760           7.52        $  8.07          391,784      $  7.40
                         =======           ====           ====          =======         ====

</TABLE>



       Restricted Stock

       The  Company  awarded  17,500  shares  of  restricted   stock  under  the
       Performance-Based  Incentive  Plan (6,875 shares vested in 2000 and 6,250
       shares vested in 1999).  The weighted  average price of restricted  stock
       vested during 2000 and 1999 was $8.64 and $8.00, respectively.


                                       48
<PAGE>


15.   EMPLOYEE BENEFITS

      The Company sponsors a 401(k)  profit-sharing  plan in which substantially
      all  full-time  employees  are eligible to  participate.  This plan allows
      eligible employees to defer a portion of their salaries on a pretax basis.
      The Company  matches these deferrals on a pro rata basis as defined in the
      plan.  Contributions  and  administrative  expenses  related  to the  plan
      totaled approximately  $214,000,  $100,000 and $99,000 for the years ended
      December 31, 2000, 1999 and 1998, respectively.

      Health and Welfare Plan

      The Company also provides  health care,  dental care,  disability and life
      insurance benefits to all employees.  Total cost related to these benefits
      for  2000,  1999  and  1998  were  approximately  $561,000,  $453,000  and
      $354,000, respectively.

16.   CAPITAL

      The  Company  is  subject  to  various  regulatory  capital   requirements
      administered  by the federal  banking  agencies.  Under  capital  adequacy
      guidelines, the Company must meet specific capital guidelines that involve
      quantitative measures of its assets, liabilities,  and certain off-balance
      sheet items as calculated under regulatory accounting  practices.  Capital
      amounts and  classification  are also subject to qualitative  judgments by
      the  regulators  about  components,  risk  weightings,  and other factors.

      Quantitative  measures as defined by regulation and  established to ensure
      capital  adequacy  require the Bank to maintain minimum amounts and ratios
      of Total and Tier I capital to risk-weighted  assets and of Tier I capital
      to average assets. If such minimum amounts and ratios are met, the Bank is
      considered "adequately capitalized." If a bank exceeds the requirements of
      "adequately  capitalized" and meets even more stringent minimum standards,
      it is considered to be "well  capitalized."  As of December 31, 2000,  the
      Bank meets all capital adequacy requirements to which it is subject.









                                       49

<PAGE>




      The following table  summarizes the actual and required capital levels and
      ratios for the Company and the Bank at December 31, 2000 and 1999.


<TABLE>
                                                                        Adequately               Well
                                                    Actual              Capitalized           Capitalized
                                                    Amount     Ratio      Amount      Ratio     Amount      Ratio
                                                   -------    ------   ------------  -------  ------------  -----
<S>                                                <C>         <C>
As of December 31, 2000:
     Total capital (to risk-weighted assets):
         Consolidated                              $47,306     12.0%   $31,559        8.0%   $39,448       10.0%
         Bank                                       37,959      9.9%    30,838        8.0%    38,548       10.0%
     Tier I capital (to risk-weighted assets):
         Consolidated                               43,636     11.1%    15,779        4.0%    23,669        6.0%
         Bank                                       34,289      8.9%    15,419        4.0%    23,129        6.0%
     Tier I capital (to average assets):
         Consolidated                               43,636      9.8%    17,862        4.0%    22,328        5.0%
         Bank                                       34,289      7.8%    17,500        4.0%    21,875        5.0%
As of December 31, 1999:
     Total capital (to risk-weighted assets):
         Consolidated                               45,096     17.3%     20,942       8.0%    26,178       10.0%
         Bank                                       36,797     14.0%     21,018       8.0%    26,273       10.0%
     Tier I capital (to risk-weighted assets):
         Consolidated                               42,425     16.2%     10,471       4.0%    15,707        6.0%
         Bank                                       34,126     13.0%     10,509       4.0%    15,764        6.0%
     Tier I capital (to average assets):
         Consolidated                               42,425     12.7%     13,363       4.0%    16,704        5.0%
         Bank                                       34,126     10.3%     13,219       4.0%    16,523        5.0%
</TABLE>

17.   COMMITMENTS AND CONTINGENCIES

      Financial Instruments With Off-Balance Sheet Risk

      The financial statements do not reflect various commitments and contingent
      liabilities,  or off-balance  sheet risks, that arise in the normal course
      of  business  to meet the  financing  needs of  customers.  These  include
      commitments to extend credit and to honor standby letters of credit. These
      instruments  involve,  to varying  degrees,  elements of credit,  interest
      rate,  and liquidity  risks in excess of amounts  reflected in the balance
      sheets.  The  extent of the Bank's  involvement  in these  commitments  or
      contingent  liabilities  is  expressed  by the  contractual,  or notional,
      amounts of the instruments.

      The Company's  maximum  exposure to credit loss under  standby  letters of
      credit and commitments to extend credit is represented by the  contractual
      amount of those instruments.  The Company uses the same credit policies in
      establishing commitments  and  issuing  letters  of  credit as it does for
      on-balance sheet instruments.

      Commitments  to extend credit are agreements to lend to a customer so 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  commitments  are
      expected to expire without being drawn upon, the total commitment  amounts
      do not  necessarily  represent  future  cash  requirements.  The amount of
      collateral obtained, if any, is based on management's credit evaluation in


                                       50

<PAGE>

      the same  manner  as  though  an  immediate  credit  extension  were to be
      granted.  Commitments to extend credit amount to approximately $77,000,000
      and $52,000,000 at December 31, 2000 and 1999, respectively.

      Standby letters of credit are conditional  commitments  issued by the Bank
      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  loan  facilities.  The  Company had  approximately
      $6,760,000  and  $4,156,000 of standby  letters of credit  outstanding  at
      December 31, 2000 and 1999, respectively.  The Company does not anticipate
      any material  losses as a result of  participating  in standby  letters of
      credit or commitments to extend credit.

      Concentrations of Credit Risk

      The Bank originates residential and commercial real estate loans and other
      consumer and  commercial  loans  primarily in the north  Florida  area. In
      addition,  the Bank  occasionally  purchases loans,  primarily in Florida.
      Although the Bank has a diversified loan portfolio,  a substantial portion
      of its borrowers'  ability to repay their loans is dependent upon economic
      conditions  in the Bank's market area.

      Federal  Reserve  Requirement

      The Federal Reserve Board requires that certain banks  maintain  reserves,
      based on their average  deposits,  in the form of vault  cash and  average
      deposit balances at a Federal Reserve Bank. The requirement as of December
      31,  2000 and 1999  was  approximately  $8.8  million  and  $6.8  million,
      respectively.

      Legal Contingencies

      In the ordinary  course of business,  the Company has various  outstanding
      commitments and  contingent  liabilities  that  are not  reflected  in the
      accompanying consolidated financial statements. In addition, the Company
      is a defendant in certain claims and legal actions arising in the ordinary
      course of business.  In the opinion of management, after consultation with
      legal counsel, the ultimate disposition of these matters is not expected
      to have a material adverse effect on the consolidated financial condition,
      operations, or liquidity of the Company.


18.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      Many of the Company's  assets and  liabilities  are  short-term  financial
      instruments  whose carrying  values  approximate  fair value.  These items
      include  cash and due from  banks,  interest-bearing  deposits  with other
      banks, federal funds sold, federal funds purchased,  securities sold under
      repurchase  agreements  and other  short term  borrowings.  In cases where
      quoted market prices are not available, fair values are based on estimates
      using  present value or other  valuation  techniques.  The resulting  fair
      values may be significantly  affected by the assumptions  used,  including
      the discount rates and estimates of future cash flows.


                                       51

<PAGE>




      The  methods  and  assumptions  used to  estimate  the  fair  value of the
      Company's other financial instruments are as follows:

               Investment Securities

               Fair values for investment  securities are based on quoted market
               prices. If a quoted market price is not available,  fair value is
               estimated using market prices for similar  securities.

               Loans

               The loan  portfolio is segregated  into  categories  and the fair
               value of each loan  category is  calculated  using  present value
               techniques  based on projected cash flows and estimated  discount
               rates.  The  calculated  present  values  are then  reduced by an
               allocation  of  the  allowance  for  loan  losses   against  each
               respective loan category.

               Deposits

               The fair values of  noninterest-bearing  deposits,  NOW accounts,
               money  market  accounts,  and  savings  accounts  are the amounts
               payable  on  demand  at the  reporting  date.  The fair  value of
               fixed-maturity  certificates  of deposit is  estimated  using the
               rates  currently   offered  for  deposits  of  similar  remaining
               maturities.

               Commitments to Extend Credit and Standby Letters of Credit

               The estimated  fair values for other  financial  instruments  and
               off-balance  sheet loan commitments are considered to approximate
               carrying amounts at December 31, 2000 and 1999.

      The  Company's  financial  instruments  which have  estimated  fair values
      differing from their  respective  carrying values are presented as follows
      at December 31, 2000 and 1999 (in thousands):
<TABLE>


                                                                 2000                          1999
                                                    -----------------------------  ----------------------------
                                                       Carrying        Estimated       Carrying       Estimated
                                                        Amount        Fair Value        Amount       Fair Value
                                                    ------------   --------------  --------------   -----------
   <S>                                             <C>             <C>
   Financial assets:
      Investment securities held to maturity       $    7,460      $    7,458      $  10,582        $    9,917
      Net loans                                    $  377,151      $  376,983      $ 263,413        $  261,910
   Financial liabilities:
      Time deposits                                $  185,739      $  185,627      $ 133,990        $  134,046

</TABLE>

         While these estimates of fair value are based on management's  judgment
of the most appropriate factors, there is no assurance that, were the Company to
have disposed of such financial  instruments at December 31, 2000, the estimated
fair values  would  necessarily  have been  achieved at that date,  since market
values may differ depending on various circumstances.  The estimated fair values
at  December  31, 2000 would not  necessarily  be  indicative  of fair values at
future dates.


                                       52

<PAGE>

19.     BRANCH ACQUISITIONS

        In December  2000,  the Bank  entered  into a  definitive  agreement to
acquire two branch offices in existing  markets from Republic Bank.  Under terms
of the  agreement,  the Bank  will  purchase  the  banking  facilities,  acquire
approximately   $12  million  in  consumer  and  residential  loans  and  assume
approximately  $65 million in deposits.  Existing Republic Bank employees of the
branches  will  be  offered   employment  with  the  Bank.  The  transaction  is
anticipated to close in May 2001, pending receipt of regulatory approval.



































                                       53

<PAGE>

20.   CONDENSED FINANCIAL DATA (PARENT COMPANY ONLY)

                        Statement of Financial Condition
                           December 31, 2000 and 1999

                                     Assets


                                                          2000          1999
                                                    --------------  ------------
                                                         (dollars in thousands)


 Cash and cash equivalents                             $    372        $  4,187
 Investment in CNB National Bank                         35,153          34,670
 Building and improvements                                8,800           3,790
 Other assets                                               339             428
                                                        -------         -------
              Total assets                             $ 44,664        $ 43,075
                                                        =======         =======

                      Liabilities and Shareholders' Equity


 Liabilities
    Other liabilities                                  $      28       $      -
                                                         -------        -------
              Total liabilities                               28              -
                                                         -------        -------
 Shareholders' equity
    Common stock                                              61             61
    Additional paid-in capital                            30,581         30,805
    Retained earnings                                     14,027         12,746
    Accumulated other comprehensive (loss) income,
                  net of taxes                               (33)          (537)
                                                         -------        -------
              Total shareholders' equity                  44,636         43,075
                                                         -------        -------
              Total liabilities and shareholders'
                  equity                               $  44,664       $ 43,075
                                                         =======        =======













                                       54

<PAGE>


<TABLE>


                               Statement of Income

                                                                          December 31,
                                                               2000          1999          1998
                                                           -----------   -----------  -----------
                                                                   (dollars in thousands)


<S>                                                       <C>               <C>           <C>
Dividend income                                           $2,755            $1,679        $1,853
Interest income                                               71               298           328
Interest expense                                               -                 -            (7)
                                                          ------            ------        ------
Net interest and dividend income                           2,826             1,977         2,174
Noninterest income, net                                        2                 -             -
Noninterest expense, net                                    (451)           (1,016)         (110)
Realized losses on available for sale securities             (50)                -             -
                                                          ------            ------        ------
Income before income taxes and equity in undistributed net
    income of subsidiary                                   2,327               961         2,064
Income tax benefit (provision)                               160               268           (79)
                                                          ------            ------        ------

Income before equity in undistributed
    net income of subsidiary                               2,487             1,229         1,985
Equity in undistributed net income of subsidiary              20             1,712           694
                                                          ------            ------        ------
Net income                                                $2,507            $2,941        $2,679
                                                          ======            ======        ======

</TABLE>











                                       55

<PAGE>
<TABLE>




                             Statement of Cash Flows
                                                                                       December 31,
                                                                             2000          1999          1998
                                                                           ---------    ---------     ---------
                                                                                 (dollars in thousands)



<S>                                                                          <C>            <C>
Cash flows from operating activities:
  Net income                                                                 $2,507         $2,941       $2,679
  Ajustments to reconcile net income to net cash (used in)
       provided by operating activities:
               Undistributed earnings of subsidiary                             (20)        (1,712)        (694)
               Depreciation                                                      41              -            -
               Non-cash compensation                                             58             71            -
               Unrealized gain on available for sale securities                 (17)             -            -
               Changes in assets and liabilities:
                   Other assets                                                 204         (1,891)        (135)
                   Other liabilities                                             28            (10)           -
                                                                             ------         ------        -----
                       Net cash (used in) provided by operating
                         activities                                           2,801           (601)       1,850
                                                                             ------         ------        -----
Cash flows from investing activities:
  Cash paid related to investment in subsidiary                                   -        (10,000)           -
  Cash paid related to land purchase                                              -         (1,339)        (677)
  Purchases - buildings and improvements                                     (5,010)             -            -
  Purchase of available for sale securities                                     (98)             -            -
                                                                              -----         ------       ------
Cash flows from financing activities:
  Payments on notes payable                                                       -              -       (1,450)
  Cash dividends                                                             (1,226)        (1,159)        (971)
  Proceeds from issuance of common stock                                        113         11,377            -
  Payment to repurchase common stock                                           (395)           (96)           -
                                                                              -----         ------        -----
                       Net cash provided by (used in)financing activities    (1,508)        10,122       (2,421)
                                                                              -----         ------        -----
Net (decrease) increase in cash and cash equivalents                         (3,815)        (1,818)      (1,248)
Cash and cash equivalents, beginning of year                                  4,187          6,005        7,253
                                                                              -----         ------       ------
Cash and cash equivalents, end of year                                      $   372        $ 4,187      $ 6,005
                                                                              =====         ======       ======


</TABLE>



                                       56
<PAGE>


           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                            AND FINANCIAL DISCLOSURE.

None


                                    PART III

    Except for the information  relating to the Company's executive officers and
its key  employees,  the  material  required  by items 10  through  13 is hereby
incorporated by reference from the Company's definitive proxy statement pursuant
to  Instruction  G of Form 10-K.  The  Company  will file its  definitive  Proxy
Statement with the Commission prior to April 30, 2001.

EXHIBITS AND REPORTS ON FORM 8-K

         Exhibits.3(i)        Articles   of   Incorporation   (Incorporated   by
                              reference   to  Exhibit   3.3  to  the   Company's
                              Registration  Statement No. 33-71082,  as amended,
                              on Form S-4 filed February 8,1994).

                  3(ii)       By-laws  (Incorporated by reference to Exhibit 3.4
                              to  the  Company's   Registration   Statement  No.
                              33-71082,  as amended,  on Form S-4 filed February
                              8, 1994).

                  10(i)       Bennett Brown Employment  Agreement  (Incorporated
                              by reference to Exhibit 10 of the  Company's  June
                              30, 1999 10-Q filed on August 16, 1999).

                  10(ii)      K. C. Trowell Employment  Agreement  (Incorporated
                              by  reference  to Exhibit 10 (i) to the  Company's
                              Pre-Effective  Amendment No. 1 to its Registration
                              Statement  on Form  S-2  filed as of  January  26,
                              1999).

                  10(iii)     G.   Thomas   Frankland    Employment    Agreement
                              (Incorporated  by  reference to Exhibit 10 (ii) to
                              the Company's Pre-Effective Amendment No. 1 to its
                              Registration  Statement  on Form  S-2  filed as of
                              January 26, 1999).

                  10(iv)      1998     Performance-Based      Incentive     Plan
                              (Incorporated  by  reference  to Exhibit 99 to the
                              Company's Registration Statement on Form S-8 filed
                              December 7, 1998).

                  21          Subsidiaries of the Registrant.

                  23          Consent of Arthur Andersen, LLP, independent
                              certified public accountants .

                  27          Financial Data Schedule.

Report of Form 8-K:
------------------

         The Company did not file a form 8-K during the last quarter of 2000.






                                       57

<PAGE>




                               S I G N A T U R E S

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                              CNB Florida Bancshares, Inc.
                                           -------------------------------------
                                                            (Registrant)

                                  By:      /s/ G. Thomas Frankland
                                           -------------------------------------
                                           G. Thomas Frankland
                                           Executive Vice President
                                            and Chief Financial Officer

                                  Date:    March 28, 2001

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

               Signature              Title                           Date
            ---------------         ----------                    ------------

       /s/ Thomas R. Andrews        Director                      March 28, 2001
 -------------------------------
 Thomas R. Andrews

       /s/ Audrey S. Bullard        Director                      March 28, 2001
 -------------------------------
 Audrey S. Bullard

       /s/ Raymon J. Land           Director                      March 28, 2001
 -------------------------------
 Raymon J. Land

       /s/ Marvin H. Pritchett      Director                      March 28, 2001
 -------------------------------
 Marvin H. Pritchett

       /s/ William J. Streicher     Director                      March 28, 2001
 -------------------------------
 William J. Streicher

       /s/ Halcyon E. Skinner       Director                      March 28, 2001
 -------------------------------
 Halcyon E. Skinner

       /s/ K. C. Trowell            Chairman, CEO & Director      March 28, 2001
 -------------------------------
 K. C. Trowell

       /s/ G. Thomas Frankland      Executive Vice President      March 28, 2001
 -------------------------------    and Chief Financial Officer
 G. Thomas Frankland                (Principal Financial Officer


       /s/ Martha S. Tucker         Controller                    March 28, 2001
 -------------------------------    (Principal Accounting Officer)
 Martha S. Tucker


                                       58