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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-K

  /X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       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)

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

            POST OFFICE BOX 3239
           201 NORTH MARION STREET
             LAKE CITY, FLORIDA
---------------------------------------------                 32056
                                               -----------------------------------
  (Address of principal executive offices)                 (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (904) 755-3240

        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, 2000 was $35,713,608.

    The number of shares of the Registrant's common stock outstanding as of
March 1, 2000 was 6,122,070 shares, $0.01 par value per share.

                        DOCUMENTS INCORPORATED BY REFERENCE

    The Registrant's 2000 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 15, 2000.

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                                     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 is currently headquartered in Lake City,
Florida, but will relocate its headquarters 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, 1999, the Company had total
assets of $346.1 million, total loans of $266.1 million, total deposits of
$288.2 million, and total shareholders' equity of $43.1 million, reflecting
compound annual growth rates of 15.5%, 25.3%, 13.6% and 27.2%, respectively, for
the five-year period ended December 31, 1999. Net income for the years ended
December 31, 1999, 1998 and 1997 was $2.9 million, $2.7 million and
$3.0 million, respectively. For the five-year period ended December 31, 1999,
the compound annual earnings growth rate was 17.3%.

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"), where it is
expanding. Historically the Company competed successfully in its Core Markets,
which consists of Columbia, Suwannee, Baker, Bradford and Union Counties,
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, NationsBank Corporation (now BankAmerica Corporation)
("BankAmerica") 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

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Bancshares, Inc. ("Compass") in 1996 and 1997. Similarly, Gainesville State
Bank, the largest community bank in Gainesville and the surrounding 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.

GROWTH OPPORTUNITY FOR THE COMPANY

    Management believes that a significant segment of the historical customer
base of Barnett and those 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

                                       3
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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, the Eastern Division and the Central Division. The Company
created a fourth division, 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. In addition, the Company is creating advisory boards in each
division composed of business leaders from that community.

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 based on a tiered
schedule, with significant authority at the Division President level. Exceptions
to the policy must be recommended by the applicable Division President, the
Credit Administrator and approved by either the President or the Chief Executive
Officer of the Bank before the credit commitment can be made. If the loan is for
an amount exceeding $1.5 million, the Executive Committee of the Bank's Board of
Directors must approve any exceptions to the Bank's loan policy.

    COMMERCIAL LOANS

    Commercial loan products include (I) short-term loans and lines of credit
for working capital purposes, which are generally secured by the borrower's
current assets (usually accounts receivables and inventory), (ii) intermediate
term loans for farm and non-farm equipment and crop loans and (iii) SBA
guaranteed loans. They include secured and unsecured loans for working capital,
business expansion and purchases of equipment and machinery.

                                       4
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    Lines of credit are subject to annual review and approval, generally not
later than 120 days after the closing of the customer's fiscal year end.
Advances are typically limited to 75.0% of eligible accounts receivable and up
to 50.0% 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.

    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
40.0% is generally considered unacceptable. For automobile loans, the policy
requires a minimum down payment of 10.0% with maturities based on the age of the
vehicle.

    The Company offers a variety of one-to four-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

                                       5
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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 loan to value ratio of 95% 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.

    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 within the portfolio with a review 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 time
frames 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, historical loan losses and current economic
trends.

ASSET/LIABILITY MANAGEMENT

    The Bank's asset/liability committee is comprised of selected senior
officers of the Bank who are charged with managing the assets and liabilities of
the Bank. The asset/liability committee manages asset growth, liquidity and
capital in order to maximize income and reduce interest rate risk. The
asset/liability committee directs the Bank's overall acquisition and allocation
of funds. At its quarterly meetings, the asset/liability committee reviews and
discusses peer group comparisons, 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 policy is reviewed at least annually by the Bank's Board of Directors. The
Board of Directors is provided monthly information recapping purchases and sales
with the resulting gains or losses, average maturity, federal taxable equivalent
yields and appreciation or depreciation by investment categories.

    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 include Independent Bankers Bank stock, Federal Reserve
Bank stock and Federal Home Loan Bank stock that are required for the Bank to be
a member of, and to conduct business with,

                                       6
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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
(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.

    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 and Live Oak 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. 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 and two of which are 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.

EMPLOYEES

    As of December 31, 1999, the Bank had 183 full-time equivalent employees.
The Company's operations are conducted through the Bank and, consequently, the
Company does not have any separate employees.

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                           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 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 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.

    The activities of the Company and the Bank are limited to banking, managing
or controlling banks, or any other activity which the Federal Reserve Board
determines to be so closely related to banking, managing or controlling banks as
to be a proper incident thereto. In making such determinations, the Federal
Reserve Board is required to consider whether the performance of such activities
by the Company or the Bank can reasonably be expected to produce benefits to the
public such as greater convenience, increased competition or gains in efficiency
that outweigh possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of interest or unsound
banking practices. Generally, the Company would be required to obtain prior
approval of the Federal Reserve Board to engage in any new activity or to
acquire more than 5% of any class of voting stock of any company or any bank
which is not already majority-owned by the Company.

    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. This provision, which
was effective June 1, 1997, allowed each state, prior to the effective date, the
opportunity to "opt out" of this provision, thereby prohibiting interstate
branching within that state. Florida did not "opt out" of the interstate
branching provisions of the Interstate Banking and Branching Act. 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

                                       8
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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, 1999, were 16.2% and 17.3%, 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, 1999 was 12.7%.
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
it became "undercapitalized" or the amount needed to comply with the plan.
Furthermore, in the event of the 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. Under these guidelines, the
Bank is considered well capitalized.

    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

                                       9
<PAGE>
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 thereof.

    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.

                                       10
<PAGE>
                                   PROPERTIES

    The Bank currently operates out of twelve branch offices and a non-customer
operations center. All branches, except one Gainesville branch, have ATMs. The
Company owns the following properties:

<TABLE>
<CAPTION>
                                                      APPROXIMATE SQUARE    YEAR ESTABLISHED/
                  OFFICE LOCATION                           FOOTAGE             ACQUIRED
----------------------------------------------------  -------------------   -----------------
<S>                                                   <C>                   <C>
LAKE CITY (COLUMBIA)
  201 North Marion Street (1).......................        22,000                1986
  145 West Baya Avenue..............................        10,100                1993
  4420 U.S. 90 West.................................         2,870                1997
  1 CNB Place, East U.S. 90 (2).....................         7,000                1996

LIVE OAK (SUWANNEE)
  205 White Avenue, S.E.............................         6,000                1988
  1562 South Ohio Avenue............................         2,000                1993

FORT WHITE (COLUMBIA)
  Highway 27........................................         2,200                1990

MACCLENNEY (BAKER)
  595 South Sixth Street............................         4,800                1992

STARKE (BRADFORD)
  606 West Madison Street...........................         8,000                1994

GAINESVILLE (ALACHUA)
  5027 Northwest 34th Street........................         2,000                1996
  11411 North State Road 121........................         4,500                1996
  7515 West University Avenue (3)...................        14,000                2000

LAKE BUTLER (UNION)
  300 West Main Street..............................         6,750                1996

JACKSONVILLE (DUVAL)
  9715 Gate Parkway North (4).......................        26,000                2000
</TABLE>

------------------------

(1) Main office.

(2) Houses the operations center including bookkeeping, proof and accounting.

(3) Scheduled to open in the second quarter of 2000.

(4) Scheduled to open in the summer of 2000.

    The Company is currently leasing two properties in Jacksonville, Duval
County. The leases on these properties expire in the summer of 2000, and at that
time the Corporate Headquarters and the First Coast Division will relocate to
the new office located at 9715 Gate Parkway North, Jacksonville.

                               LEGAL PROCEEDINGS

    Neither the Company nor the Bank is a party to, nor is any of their property
the subject of, any material pending legal proceedings.

              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.

                                       11
<PAGE>
             EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE REGISTRANT

<TABLE>
<S>                        <C>        <C>
K. C. Trowell                 61      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 NationsBank of 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           53      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 and the
                                      Fisher School of Accounting Steering Committee.

Bennett Brown                 53      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 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.
</TABLE>

                                       12
<PAGE>
<TABLE>
<S>                        <C>        <C>
Joyce A. Bruner               47      Ms. Bruner has served, since the opening of the Bank in
                                      1986, as Vice President, Cashier, Senior Operations Officer,
                                      Senior Vice President and Senior Administrative Officer, and
                                      currently, Executive Vice President. She also serves as
                                      Secretary of the Company. Prior to joining the Bank during
                                      its organizational phase, Ms. Bruner served as Operations
                                      Officer for NationsBank of Lake City (and its predecessors)
                                      for a period of three years where she had responsibility for
                                      branch operations. Ms. Bruner has 23 years of banking
                                      experience.

Martha S. Tucker              49      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 32 years of banking experience.
                                      She is a member of the Altrusa Club and the Suwannee County
                                      Chamber of Commerce. In addition, Ms. Tucker volunteers for
                                      Hospice of North Florida.

Lloyd D. Adams                52      Mr. Adams serves as the Central Division President of the
                                      Bank. 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. A native
                                      of the area, Mr. Adams has deep roots as a community banker
                                      in this Central Division. Mr. Adams has a strong background
                                      in retail and business banking and credit policy, from both
                                      a small community bank and large corporate bank perspective.
                                      He is a graduate of Florida State University, Florida School
                                      of Banking and the ABA Commercial Lending Graduate School in
                                      Norman, OK. He has been in the banking industry for
                                      25 years.

Robert E. Cameron             55      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               43      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, President
                                      of the Girls Softball League of Baker County and on the
                                      Advisory Committee of the Baker County State Housing
                                      Initiative Partnership ("SHIP") Program. Mr. Kennedy has
                                      27 years of banking experience.
</TABLE>

                                       13
<PAGE>
<TABLE>
<S>                        <C>        <C>
Suzanne M. Norris             36      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 13 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 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.
</TABLE>

                                    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 17, 2000, there were 6,115,270
shares of Common Stock issued and outstanding, and 285,548 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
fiscal year.

    Shareholders' equity at December 31, 1999 was $43.1 million, as compared to
$30.9 million at December 31, 1998. 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 consisted of the payment of quarterly cash
dividends in the amount of $0.05 per common share on February 5, May 5,
August 5 and November 5, 1999. The Company also paid $0.20 total dividends in
1998.

    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.

                                       14
<PAGE>
                   CNB FLORIDA BANCSHARES INC. AND SUBSIDIARY
                            SELECTED FINANCIAL DATA

    `

<TABLE>
<CAPTION>
                                        1999         1998         1997         1996         1995
                                     ----------   ----------   ----------   ----------   ----------
                                           DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION.
<S>                                  <C>          <C>          <C>          <C>          <C>
SUMMARY OF OPERATIONS:
Interest Income....................    $ 23,758     $ 21,119     $ 19,420     $ 15,090     $ 12,745
Interest Expense...................      (9,052)      (9,417)      (8,663)      (6,612)      (5,966)
                                     ----------   ----------   ----------   ----------   ----------
Net Interest Income................      14,706       11,702       10,757        8,478        6,779
Provision for Loan Loss............      (1,160)        (710)        (440)        (335)        (230)
                                     ----------   ----------   ----------   ----------   ----------
Net Interest Income After Provision
  for Loan Losses..................      13,546       10,992       10,317        8,143        6,549
Non-Interest Income................       2,952        2,392        2,153        1,777        1,478
Non-Interest Expense...............     (11,994)      (9,298)      (7,914)      (6,360)      (5,172)
                                     ----------   ----------   ----------   ----------   ----------
Income Before Taxes................       4,504        4,086        4,556        3,560        2,855
Income Taxes.......................      (1,563)      (1,407)      (1,581)      (1,247)      (1,014)
                                     ----------   ----------   ----------   ----------   ----------
Net Income.........................    $  2,941     $  2,679     $  2,975     $  2,313     $  1,841
                                     ==========   ==========   ==========   ==========   ==========

PER COMMON SHARE: (1)
Basic Earnings.....................    $   0.49     $   0.55     $   0.69     $   0.67     $   0.56
Diluted Earnings...................        0.48         0.55         0.68         0.65         0.55
Book Value.........................        7.04         6.36         5.98         5.08         4.50
Dividends..........................        0.20         0.20         0.14         0.11         0.09
Actual Shares Outstanding..........   6,116,070    4,856,770    4,856,770    3,875,810    3,279,466
Basic Weighted Average Shares
  Outstanding......................   5,995,474    4,856,770    4,327,534    3,478,248    3,279,466
Diluted Weighted Average Shares
  Outstanding......................   6,069,737    4,897,922    4,406,616    3,547,390    3,338,674

KEY RATIOS:
Return on Average Assets...........        0.91%        0.93%        1.14%        1.14%        1.06%
Return on Average Shareholders'
  Equity...........................        7.03%        8.92%       12.38%       13.88%       13.24%
Dividend Payout....................       40.82%       36.36%       20.29%       16.54%       16.07%
Efficiency Ratio...................       67.92%       65.97%       61.30%       62.02%       62.64%
Total Risk-Based Capital Ratio.....       17.25%       16.62%       18.67%       13.58%       14.90%
Average Shareholders' Equity to
  Average Assets...................       13.01%       10.43%        9.22%        8.24%        7.99%
Tier 1 Capital to Total Assets/
  Leverage Ratio...................       12.70%        9.70%       10.20%        7.25%        7.87%

FINANCIAL CONDITION AT YEAR END:
Assets.............................    $346,076     $311,565     $273,331     $254,945     $176,733
Loans..............................     266,084      187,015      159,649      148,824      102,349
Deposits...........................     288,203      265,109      231,444      226,824      159,003
Shareholders' Equity...............      43,075       30,896       29,025       19,669       14,754

OTHER DATA:
Banking Locations..................          12           11           11           10            7
Full-Time Equivalent Employees.....         183          149          144          134           95
</TABLE>

------------------------

(1) Per share data reflects the two-for-one stock split effective August 17,
    1998.

                                       15
<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 1999 compares with prior years. Throughout this section, CNB Florida
Bancshares, Inc. and its subsidiary, CNB National Bank are referred to as "CNB",
"the Company", or "the Bank."

    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.

    In March 1999, the Company completed the acquisition of a site in
Jacksonville which will be utilized for its corporate offices and as
headquarters for the Bank's commercial banking activities in Jacksonville.
Construction should be completed on the 26,000 square foot building in the
summer of 2000. Construction also began in 1999 on CNB's new Gainesville
headquarters located on Tower Road, with completion scheduled for the second
quarter of 2000.

    As approved by shareholders at the Company's 1999 annual meeting, CNB, Inc.
became CNB Florida Bancshares, Inc. on June 30, 1999. The new name better
reflects the nature of the Company's business and its geographic focus.

RESULTS OF OPERATIONS

    In 1999, the Company's earnings were $2.9 million, or $0.49 per basic share,
compared to $2.7 million, or $0.55 per basic share, and $3.0 million, or $0.69
per basic share, in 1998 and 1997, respectively. Per share earnings for 1999
were adversely impacted by the Company's initial public offering completed in
the first quarter of 1999. The Company sold 1,250,000 shares raising
$11.4 million, net of underwriting discounts and expenses, to support its
expansion plans and for general corporate purposes. Weighted average shares
increased 23% in 1999 compared to 1998. Per share earnings for 1998 were also
adversely affected by the stock sale from the Rights Offering in July 1997,
which resulted in a 12% increase in the weighted shares outstanding from 1997 to
1998.

NET INTEREST INCOME/MARGINS

    Net interest income is the single largest source of revenue of the Company
and is equal to interest and fee income generated by earning assets less
interest expense.

    In 1999, net interest income increased $3.0 million, or 26%. This follows an
increase of $945,000 or 9%, in 1998, and $2.3 million, or 27% in 1997. The
increase in 1999 is mainly attributable to loan portfolio growth and related
increase in interest income from loans of $3.5 million. Also contributing to the
increase was a 4% decrease in interest expense resulting from an improved
interest rate mix, and an 18% increase in non-interest bearing deposits, while
total deposits grew 9%. The increase in net interest income for 1998 is
primarily the result of loan interest and fee income growth of $1.3 million,
investment income growth of $364,000, offset by an increase in interest expense
of $754,000.

    The Company's net interest margin increased to 5.00% in 1999, compared to
4.43% and 4.52% in 1998 and 1997, respectively. The higher yield in 1999
reflects a more favorable earning asset mix as the

                                       16
<PAGE>
loan portfolio, which is the largest and highest yielding component of earning
assets, increased 42% from $187.0 million in 1998 to $266.1 million in 1999.

    Table 1: "Average Balances--Yields and Rates", below, presents comparative
earning asset composition as well as earning asset yields and interest bearing
liabilities for 1999, 1998 and 1997. 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 1: AVERAGE BALANCES--YIELDS AND RATES

<TABLE>
<CAPTION>
                                     DECEMBER 31, 1999                 DECEMBER 31, 1998                 DECEMBER 31, 1997
                              -------------------------------   -------------------------------   -------------------------------
                                         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>         <C>        <C>        <C>         <C>        <C>        <C>         <C>
ASSETS:
  Federal Funds Sold........  $ 13,285    $   643      4.84%    $ 32,583    $ 1,701      5.22%    $ 13,480    $   720      5.34%
  Investment Securities
    Available for Sale......    45,082      2,671      5.92       47,675      2,869      6.01       58,442      3,560      6.09
  Investment Securities Held
    to Maturity.............     9,151        504      5.51        6,519        326      5.00        9,160        490      5.35
  Loans (1).................   215,861     19,412      8.99      171,048     15,877      9.28      155,168     14,542      9.37
  Interest Bearing
    Deposits................    10,533        528      5.01        6,494        346      5.36        1,946        108      5.55
                              --------    -------      ----     --------    -------      ----     --------    -------     -----
TOTAL EARNING ASSETS........   293,912     23,758      8.08      264,319     21,119      7.99      238,196     19,420      8.15
  All Other Assets..........    27,543                            23,774                            22,508
                              --------                          --------                          --------
TOTAL ASSETS................  $321,455                          $288,093                          $260,704
                              ========                          ========                          ========
LIABILITIES AND
  SHAREHOLDERS' EQUITY:
  NOW & Money Markets.......  $ 80,132      1,749      2.18%    $ 68,950      1,682      2.44%    $ 62,465      1,555      2.49%
  Savings...................    17,445        245      1.40       16,379        312      1.90       15,146        296      1.95
  Time Deposits.............   131,548      6,731      5.12      129,157      7,057      5.46      119,545      6,404      5.36
  Short Term Borrowings.....     6,854        322      4.70        7,233        359      4.96        4,738        239      5.04
  Federal Funds Purchased...        93          5      5.40           --         --        --           --         --
  Notes Payable &
    Debentures..............        --         --        --           85          7      8.00        2,100        169      8.05
                              --------    -------      ----     --------    -------      ----     --------    -------     -----
TOTAL INTEREST BEARING
  LIABILITIES...............   236,072      9,052      3.83      221,804      9,417      4.25      203,994      8,663      4.25
  Demand Deposits...........    40,761                            33,161                            30,246
  Other Liabilities.........     2,813                             3,086                             2,434
  Shareholders' Equity......    41,809                            30,042                            24,030
                              --------                          --------                          --------
TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY......  $321,455                          $288,093                          $260,704
                              ========                          ========                          ========
                                                       ----                              ----                             -----
INTEREST SPREAD (2).........                           4.25%                             3.74%                             3.90%
                                                       ====                              ====                             =====
                                          -------                           -------                           -------
NET INTEREST INCOME.........              $14,706                           $11,702                           $10,757
                                          =======                           =======                           =======
NET INTEREST MARGIN (3).....                           5.00%                             4.43%                             4.52%
                                                       ====                              ====                             =====
</TABLE>

------------------------------

(1) Interest income on average loans includes loan fee recognition of $697,000,
    $572,000 and $531,000 in 1999, 1998 and 1997 respectively.

(2) Represents the average rate earned minus average rate paid.

(3) Represents net interest income divided by total earning assets.

                                       17
<PAGE>
          TABLE 1A: ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE

<TABLE>
<CAPTION>
                                                 NET CHANGE DECEMBER 31,            NET CHANGE DECEMBER 31,
                                                1998-1999 ATTRIBUTABLE TO:         1997-1998 ATTRIBUTABLE TO:
                                             --------------------------------   --------------------------------
                                                                       NET                                NET
                                             VOLUME (1)   RATE (2)    CHANGE    VOLUME (1)   RATE (2)    CHANGE
                                             ----------   --------   --------   ----------   --------   --------
                                                                         (THOUSANDS)
<S>                                          <C>          <C>        <C>        <C>          <C>        <C>
INTEREST INCOME:
  Federal Funds Sold.......................    $(1,007)    $ (51)    $(1,058)     $ 1,020     $ (39)    $   981
  Investment Securities Available for
    Sale...................................       (158)      (40)       (198)        (656)      (37)       (693)
  Investment Securities Held to Maturity...        132        46         178         (141)      (23)       (164)
  Loans....................................      4,160      (625)      3,535        1,488      (153)      1,335
  Interest Bearing Deposits................        218       (36)        182          253       (13)        240
                                               -------     -----     -------      -------     -----     -------
    Total..................................      3,345      (706)      2,639        1,964      (265)      1,699

INTEREST EXPENSE:
  NOW & Money Markets......................        273      (206)         67          161       (34)        127
  Savings..................................         20       (87)        (67)          24        (8)         16
  Time Deposits............................        130      (456)       (326)         515       138         653
  Short Term Borrowings....................        (18)      (19)        (37)         124        (4)        120
  Federal Funds Purchased..................          5        --           5           --        --          --
  Notes Payable & Debentures...............         (7)       --          (7)        (162)       --        (162)
                                               -------     -----     -------      -------     -----     -------
    Total..................................        403      (768)       (365)         662        92         754
                                               -------     -----     -------      -------     -----     -------
      Net Interest Income..................    $ 2,942     $  62     $ 3,004      $ 1,302     $(357)    $   945
                                               =======     =====     =======      =======     =====     =======
</TABLE>

------------------------

(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.

NON-INTEREST INCOME

    Non-interest income increased $560,000 or 23% in 1999, compared with
$239,000 or 11% in 1998 compared with 1997. Service charges on deposit accounts
increased $311,000 or 17% in 1999, compared to an increase of 4% in 1998. 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,
net gains and losses from sale of securities and other miscellaneous fees had an
increase of $249,000 or 43% in 1999 and $162,000 or 39% in 1998. The main
contributing factors for the increase in 1999 were fees associated with ATM
surcharges coupled with mortgage servicing fees collected from the mortgage
loans sold to secondary markets. Non-interest income as a percentage of average
assets was 0.92% in 1999 compared to 0.83% and 0.83% in 1998 and 1997,
respectively.

NON-INTEREST EXPENSE

    Non-interest expense increased by $2.7 million, or 29%, for the year ended
1999, as compared to increases of $1.4 million, or 18%, and $1.6 million, or
24%, for 1998 and 1997, respectively. At the end of 1999, non-interest expenses
as a percentage of average assets increased to 3.73%, as compared to 3.23% and
3.04% in 1998 and 1997, respectively. Salaries and employee benefits have
increased $1.6 million from 1998, compared to $859,000 from 1997. The increase
from 1998 to 1999 reflects the continued execution of

                                       18
<PAGE>
management's strategy to expand CNB into the Jacksonville and Gainesville
markets and the building of an infrastructure to support the expansion strategy.
In June 1999, the Bank opened and staffed a temporary branch office in
Jacksonville on Beach Boulevard. The increase in non-interest expense from 1997
to 1998 was due mainly to the implementation of the Company's business plan and
also involved hiring a Bank President, three Division Presidents, a Chief
Financial Officer and several other key positions. As a percentage of average
total assets, salaries and employee benefits have increased to 2.01% in 1999
compared 1.67% and 1.52% in 1998 and 1997, respectively.

    Occupancy expenses (including furniture, fixtures & equipment) increased to
$1.8 million in 1999 compared to $1.6 million in 1998 and $1.4 million in 1997.
Occupancy expenses in 1999 were impacted by costs associated with the opening of
the temporary branch office on Beach Boulevard and the lease expense of
temporary offices for holding company personnel in Jacksonville. Offsetting
these expenses in 1999 was a reduction in maintenance contract expenses. The
increase from 1997 to 1998 was largely due to expenses associated with the West
90 Office opening in Lake City during August 1997.

    Other operating expenses increased $836,000 and $320,000 in 1999 and 1998,
or 29% and 12%, respectively. The increase in 1999 was attributable to: (1) an
increase in postage and delivery expense of approximately $91,000 due to
increased deposit accounts and additional courier runs due to the opening of the
temporary Jacksonville branch office; (2) an increase of $152,000 in telephone
expense, with much of the increase resulting from the installation of a
bank-wide systems network and the added expenses from the offices opened in
Jacksonville; (3) an increase in marketing expense of $115,000 due to the
Company's increased advertising in the new markets and enhanced promotion of the
Bank in its present markets; (4) an increase in legal and professional fees of
$102,000, which is mainly attributable to increased accounting and data
processing fees. The main contributing factors in 1998 was an increase in
telephone expense, which resulted from the installation of a new toll free
telephone banking system in April 1997 allowing customers access to their
accounts 24 hours a day, seven days a week. Other contributing factors were
increases in employee education expense, legal and professional fees, and
postage and delivery service.

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

                       TABLE 2: OTHER OPERATING EXPENSES
                         (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                      ------------------------------
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Data processing.....................................   $  590     $  540     $  519
Postage and delivery................................      468        377        336
Telephone...........................................      423        271        185
Advertising and promotion...........................      354        239        257
Legal and professional..............................      327        225        158
Supplies............................................      299        244        231
Administrative......................................      182        123        103
Amortization of intangible assets...................      179        190        202
Loan expenses.......................................      165        133        135
Regulatory fees.....................................      143        134        119
Other...............................................      593        411        322
                                                       ------     ------     ------
  Total other operating expenses....................   $3,723     $2,887     $2,567
                                                       ======     ======     ======
</TABLE>

                                       19
<PAGE>
INCOME TAXES

    The effective tax rate for the year ended December 31, 1999 was 34.7%,
compared to 34.4% for 1998 and 34.7% for 1997. The consolidated provision for
income taxes increased to $1.6 million in 1999, compared to $1.4 million in 1998
and $1.6 million in 1997. Tax exempt investment income had a positive impact on
the effective rate of 2.7%, 2.9% and 2.3% in 1999, 1998 and 1997, respectively.

LIQUIDITY AND INTEREST RATE SENSITIVITY

    Liquidity management addresses CNB's ability to meet deposit withdrawals
either on demand or at contractual maturity, to repay borrowings and to make new
loans and investments as they arise. 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. 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 and lines of credit
for the purchase of federal funds by the Company's from its principal
correspondent banks. Average liquid assets (cash and amounts due from banks,
interest-bearing deposits in other banks, federal funds sold and securities
available-for-sale) totaled $81.1 million and represented 30.0% of average total
deposits during 1999, compared to $96.9 million and 39.1% for 1998.

    The Company has available lines of credit with other financial institutions
totaling $15.0 million. The Company is also a member of the Federal Home Loan
Bank and as such has access to both long and short term funds. There was an
outstanding balance of $4.8 million in federal funds purchased at December 31,
1999.

    The asset mix of the balance sheet is evaluated continually in terms of
several variables: yield, credit quality, appropriate funding sources and
liquidity. Management of the liability mix of the balance sheet focuses on
expanding the various funding sources.

    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, 1999, the estimated fair values
would necessarily have been achieved at that date, since market values may
differ depending on various circumstances.

    Sources of liquidity include cash and cash equivalents, net of federal
requirements to maintain reserves against deposit liabilities; investment
securities eligible for pledging to secure borrowings from dealers and customers
pursuant to securities sold under repurchase agreements; loan repayments; loan
sales; deposits and certain interest rate-sensitive deposits; and borrowings
under overnight federal fund lines available from correspondent banks. In
addition to interest rate-sensitive deposits, the Company's primary demand for
liquidity is anticipated fundings under credit commitments to customers.

                                       20
<PAGE>
                       TABLE 3: RATE SENSITIVITY ANALYSIS
                               DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                                        FAIR
                                          1 YEAR    2 YEARS    3 YEARS    4 YEARS    5 YEARS     BEYOND     TOTAL      VALUE
                                         --------   --------   --------   --------   --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
INTEREST-EARNING ASSETS:
Loans
  Fixed Rate Loans....................   $ 19,714   $13,394    $20,399    $20,582    $27,358    $ 57,203   $158,650   $157,147
    Average Interest Rate.............       8.22%     9.64%      8.67%      8.79%      8.35%       8.17%      8.48%

  Variable Rate Loans.................     19,362    12,927      4,816      4,707      3,713      61,909    107,434    107,434
    Average Interest Rate.............       9.17%     8.85%      9.16%      8.89%      9.24%       8.10%      8.50%

Investment Securities(1)
  Fixed Rate Investments..............      4,429     7,587         90        179     20,431      10,187     42,903     41,324
    Average Interest Rate.............       5.82%     6.50%      4.10%      7.10%      6.02%       5.71%      6.01%

  Variable Rate Investments...........         --        --         --         --         --       1,792      1,792      1,797
    Average Interest Rate.............                                                              6.04%      6.04%

Other Earning Assets(2)...............      2,140        --         --         --         --          --      2,140      2,192
    Average Interest Rate.............       6.40%                                                             6.40%
                                         --------   -------    -------    -------    -------    --------   --------   --------
TOTAL INTEREST-EARNING ASSETS.........   $ 45,645   $33,908    $25,305    $25,468    $51,502    $131,091   $312,919   $309,894
    AVERAGE INTEREST RATE.............       8.30%     8.64%      8.75%      8.80%      7.49%       7.92%      8.12%
                                         ========   =======    =======    =======    =======    ========   ========   ========
INTEREST-BEARING LIABILITIES:
NOW...................................   $ 14,358   $    --    $    --    $    --    $    --    $ 47,619   $ 61,977   $ 61,977
    Average Interest Rate.............       4.72%                                                  1.16%      1.98%

Money Market..........................     31,411        --         --         --         --       2,178     33,589     33,589
    Average Interest Rate.............       4.66%                                                  2.78%      4.54%

Savings...............................         --        --         --         --         --      16,537     16,537     16,537
    Average Interest Rate.............                                                              1.39%      1.39%

CD's $100,000 and Over................     38,651     4,118      1,871        209         --          --     44,849     44,846
    Average Interest Rate.............       5.49%     5.85%      5.94%      4.83%                             5.54%

CD's Under $100,000...................     72,714    12,071      3,088      1,064        204          --     89,141     89,200
    Average Interest Rate.............       4.83%     5.39%      5.45%      5.23%      5.54%                  4.93%

Securities Sold Under
  Repurchase Agreements...............      7,263        --         --         --         --          --      7,263      7,263
    Average Interest Rate.............       5.20%                                                             5.20%

Federal Funds Purchased...............      4,800        --         --         --         --          --      4,800      4,800
    Average Interest Rate.............       5.36%                                                             5.36%
                                         --------   -------    -------    -------    -------    --------   --------   --------
TOTAL INTEREST-BEARING LIABILITIES....   $169,197   $16,189    $ 4,959    $ 1,273    $   204    $ 66,334   $258,156   $258,212
    AVERAGE INTEREST RATE.............       4.97%     5.51%      5.63%      5.16%      5.54%       1.27%      4.07%
                                         ========   =======    =======    =======    =======    ========   ========   ========
</TABLE>

------------------------------

(1) Securities available for sale are shown at their amortized cost, excluding
    market value adjustment for unrealized gains of $857,000.

(2) Represents interest bearing deposits with Banks, Federal Reserve Bank Stock,
    Federal Home Loan Bank Stock and other marketable equity securities.

                                       21
<PAGE>
    Core deposits, which represent all deposits other than time deposits in
excess of $100,000, averaged 84.9% of total average deposits in 1999 and 85.0%
in 1998. 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, 1999

<TABLE>
<CAPTION>
                                                                AMOUNT
                                                              -----------
                                                              (THOUSANDS)
<S>                                                           <C>
Three Months or Less........................................    $ 9,228
Three Through Six Months....................................     12,159
Six Through Twelve Months...................................     17,264
Over Twelve Months..........................................      6,198
                                                                -------
Total.......................................................    $44,849
                                                                =======
</TABLE>

LENDING ACTIVITIES

    Loan growth of 42% in 1999 reflected continued growth in the Company's core
markets combined with the Company's execution of its expansion strategy in the
Jacksonville and Gainesville markets. An increased focus on commercial and
commercial real estate lending contributed significantly to the overall growth
in loans. The Company's loan to deposit ratio reached 92% at December 31, 1999
compared to 71% at the 1998 year end. The 1999 loan growth contributed to a 26%
increase in net interest income to $14.7 million for the year ended
December 31, 1999 compared to $11.7 million in 1998.

    As of December 31, 1999 the Company had total loans of $266.1 million, as
compared to $187.0 million at December 31, 1998, an increase of $79.1 million or
42%. This growth was mainly due to $51.7 million, or 61% increase in commercial,
financial and agricultural loans. Real estate construction loans totaled
$18.9 million, or 7% of the loan portfolio, as compared to 4% in 1998.
Commercial, financial and agricultural loans, which include loans secured by
owner-occupied commercial real estate, totaled $136.9 million, or 52% of the
loan portfolio as compared to 46% in 1998. Real estate mortgage loans primarily
consisted of single family residential mortgages totaled $86.3 million, or 32%
of the loan portfolio in comparison to 39% in 1998. Installment and consumer
loans, which include credit card balances of approximately $1.5 million, totaled
$23.9 million, or 9% of the loan portfolio as compared to 11% in 1998. The
composition of the Company's loan portfolio for the past five years is presented
in TABLE 5.

    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.

                                       22
<PAGE>
                      TABLE 5: LOAN PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
                                                             AS OF DECEMBER 31,
                                            ----------------------------------------------------
TYPES OF LOANS                                1999       1998       1997       1996       1995
--------------                              --------   --------   --------   --------   --------
                                                                (THOUSANDS)
<S>                                         <C>        <C>        <C>        <C>        <C>
Commercial, Financial and Agricultural....  $136,937   $ 85,208   $ 69,238   $ 68,595   $ 48,948
Real Estate--Construction.................    18,926      8,527      3,336      4,029      2,159
Real Estate--Mortgage.....................    86,275     72,357     68,561     56,787     34,912
Installment and Consumer..................    23,946     20,923     18,514     19,413     16,330
                                            --------   --------   --------   --------   --------

Total Loans, Net of Unearned Discount.....   266,084    187,015    159,649    148,824    102,349
Less: Allowance for Loan Losses...........    (2,671)    (1,875)    (1,495)    (1,396)      (946)
                                            --------   --------   --------   --------   --------
Net Loans.................................  $263,413   $185,140   $158,154   $147,428   $101,403
                                            ========   ========   ========   ========   ========
</TABLE>

    TABLE 6 sets forth the maturity distribution for selected components of the
Company's loan portfolio as of December 31, 1999. Demand loans and overdrafts
are reported as due in one year or less, and loan maturity is based upon
scheduled principal payments.

                  TABLE 6: MATURITY SCHEDULE OF SELECTED LOANS

<TABLE>
<CAPTION>
                                                   DECEMBER 31, 1999
                                       -----------------------------------------
                                         0-12       1-5       OVER 5
                                        MONTHS     YEARS      YEARS      TOTAL
                                       --------   --------   --------   --------
                                                      (THOUSANDS)
<S>                                    <C>        <C>        <C>        <C>
Commercial, Financial &
  Agricultural.......................  $14,447    $ 72,737   $ 49,753   $136,937
Real Estate--Construction............   18,926          --         --     18,926
All Other Loans......................    5,703      35,159     69,359    110,221
                                       -------    --------   --------   --------
Total................................  $39,076    $107,896   $119,112   $266,084
                                       =======    ========   ========   ========

Fixed Interest Rate..................  $19,714    $ 81,733   $ 57,203   $158,650
Variable Interest Rate...............  $19,362    $ 26,163   $ 61,909   $107,434
</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.

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 declined from $2.0 million at December 31, 1998 to
$831,000 at December 31, 1999. Non-performing assets as a percentage of total
assets decreased to 0.24% in 1999 from 0.65% in 1998. The improvement (or
decrease) in non-performing assets is attributed to the liquidation of several
other real estate owned ("OREO") properties, as well as liquidating several
loans guaranteed by the Small Business Administration.

    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.

                                       23
<PAGE>
                         TABLE 7: NON-PERFORMING ASSETS

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                         ----------------------------------------------------
                                           1999       1998       1997       1996       1995
                                         --------   --------   --------   --------   --------
                                                        (DOLLARS IN THOUSANDS)
<S>                                      <C>        <C>        <C>        <C>        <C>
Non-Accrual Loans......................   $ 549      $1,393     $1,045     $  87      $ 372
Past Due Loans 90 Days or More
  and Still Accruing...................     180          22        158       229        159
Other Real Estate Owned
  & Repossessions......................     102         613        320        88        126
                                          -----      ------     ------     -----      -----
    Total Non-Performing Assets........   $ 831      $2,028     $1,523     $ 404      $ 657
                                          =====      ======     ======     =====      =====

Percent of Total Assets................    0.24%       0.65%      0.56%     0.16%      0.37%
                                          =====      ======     ======     =====      =====
</TABLE>

    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 8: ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                            --------------------------------------------------------------------------
                                   1999                  1998                  1997             1996
                            -------------------   -------------------   -------------------   --------
                                       PERCENT               PERCENT               PERCENT
                                       OF LOANS              OF LOANS              OF LOANS
                                       IN EACH               IN EACH               IN EACH
                                       CATEGORY              CATEGORY              CATEGORY
                                       TO TOTAL              TO TOTAL              TO TOTAL
                             AMOUNT     LOANS      AMOUNT     LOANS      AMOUNT     LOANS      AMOUNT
                            --------   --------   --------   --------   --------   --------   --------
                                                      (DOLLARS IN THOUSANDS)
<S>                         <C>        <C>        <C>        <C>        <C>        <C>        <C>
Commercial, Financial and
  Agricultural............   $1,670      51.5%     $1,061      45.6%     $  932      43.4%     $  821
Real
  Estate--Construction....       12       7.1%          6       4.5%          9       2.1%          5
Real Estate--Mortgage.....      220      32.4%        127      38.7%        163      42.9%        154
Consumer..................      769       9.0%        621      11.2%        391      11.6%        416
Unallocated...............       --        --          60        --          --        --          --
                             ------     -----      ------     -----      ------     -----      ------
  Total...................   $2,671       100%     $1,875       100%     $1,495       100%     $1,396
                             ======     =====      ======     =====      ======     =====      ======

<CAPTION>
                                     DECEMBER 31,
                            ------------------------------
                              1996            1995
                            --------   -------------------
                            PERCENT               PERCENT
                            OF LOANS              OF LOANS
                            IN EACH               IN EACH
                            CATEGORY              CATEGORY
                            TO TOTAL              TO TOTAL
                             LOANS      AMOUNT     LOANS
                            --------   --------   --------
                                (DOLLARS IN THOUSANDS)
<S>                         <C>        <C>        <C>
Commercial, Financial and
  Agricultural............    46.1%      $476       47.8%
Real
  Estate--Construction....     2.7%         5        2.1%
Real Estate--Mortgage.....    38.2%        72       34.1%
Consumer..................    13.0%       389       16.0%
Unallocated...............      --          4         --
                             -----       ----      -----
  Total...................     100%      $946        100%
                             =====       ====      =====
</TABLE>

    The allowance for loan losses on December 31, 1999, was $2.7 million, or
1.00% of total loans outstanding, net of unearned income compared to
$1.9 million or 1.00% at December 31, 1998. The increase in the allowance is a
direct result of the loan growth experienced in 1999.

    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 1999, 1998, 1997, 1996 and 1995.

                                       24
<PAGE>
                 TABLE 9: ACTIVITY IN ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                              1999       1998       1997       1996       1995
                                            --------   --------   --------   --------   --------
                                                           (DOLLARS IN THOUSANDS)
<S>                                         <C>        <C>        <C>        <C>        <C>
Balance at Beginning of Year..............  $  1,875   $  1,495   $  1,396   $    946   $    827
Allowance Acquired by Merger..............        --         --         --        370         --
Loans Charged-Off:
  Commercial, Financial and
    Agricultural..........................       312        123        160         79         11
  Real Estate, Mortgage...................        13          3         --          1         --
  Consumer................................       309        296        248        203        159
                                            --------   --------   --------   --------   --------
    Total Loans Charged-Off...............      (634)      (422)      (408)      (283)      (170)
Recoveries on Loans Previously
  Charged-Off:
  Commercial, Financial and
    Agricultural..........................       188         41         24          7         17
  Real Estate Mortgage....................        --          7         --          1         --
  Consumer................................        82         44         43         20         42
                                            --------   --------   --------   --------   --------
    Total Loan Recoveries.................       270         92         67         28         59
                                            --------   --------   --------   --------   --------
      Net Loans Charged-Off...............      (364)      (330)      (341)      (255)      (111)
                                            --------   --------   --------   --------   --------
Provision for Loan Losses
  Charged to Expense......................     1,160        710        440        335        230
                                            --------   --------   --------   --------   --------
Ending Balance............................  $  2,671   $  1,875   $  1,495   $  1,396   $    946
                                            ========   ========   ========   ========   ========
Total Loans Outstanding...................  $266,084   $187,015   $159,649   $148,824   $102,349
Average Loans Outstanding.................  $215,861   $171,048   $155,168   $117,450   $ 93,454
Allowance for Loan Losses to Loans
  Outstanding.............................      1.00%      1.00%      0.94%      0.94%      0.92%
Net Charge-Offs to Average Loans
  Outstanding.............................      0.17%      0.19%      0.22%      0.22%      0.12%
</TABLE>

INVESTMENT PORTFOLIO

    The Company uses its securities portfolio primarily as a source of liquidity
and a base from which to pledge assets for repurchase agreements and public
deposits. The total recorded value of securities was $45.7 million at
December 31, 1999, a decrease of 27% from $62.3 million at the end of 1998.
Securities are classified as either held-to-maturity or available-for-sale which
are recorded at fair market value. Securities available-for-sale, which made up
77% of the total investment portfolio as of December 31, 1999 had a value of
$35.1 million. With most of the portfolio being in the available-for-sale
category, the Company has the flexibility in case an immediate need for
liquidity arises. The unrealized gains or losses, net of tax, do not impact net
income or regulatory capital but are recorded as adjustments to shareholders'
equity. At December 31, 1999, shareholders' equity included a net unrealized
loss of $537,000 compared to net unrealized gain of $418,000 at December 31,
1998.

    As a percent of total earning assets, the investment portfolio has deceased
to a level of 15% at December 31, 1999 compared to 22% for year ended 1998. The
significant decrease in the size of the portfolio relative to total earning
assets is attributable to the increase in loan growth which improved the mix of
earning assets.

    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>
    TABLE10 sets forth the breakdown of investment securities by maturities and
TABLE 10A displays the average yield by range of maturities.

          TABLE 10: MATURITY DISTRIBUTION OF INVESTMENT SECURITIES (1)
                               DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                       HELD TO MATURITY          AVAILABLE FOR SALE
                                                   ------------------------   ------------------------
                                                   AMORTIZED    ESTIMATED     AMORTIZED    ESTIMATED
                                                     COST      MARKET VALUE     COST      MARKET VALUE
                                                   ---------   ------------   ---------   ------------
                                                                  DOLLARS IN THOUSANDS
<S>                                                <C>         <C>            <C>         <C>
U.S. Treasury:
  One Year or Less...............................   $    --       $   --       $ 2,498       $ 2,501
  Over One Through Five Years....................        --           --         7,482         7,513
                                                    -------       ------       -------       -------
Total U.S. Treasury..............................        --           --         9,980        10,014

U.S. Government Agencies and Corporations:
  Over One Through Five Years....................        --           --        20,000        19,062
  Over Five Through Ten Years....................     8,721        8,132            --            --
                                                    -------       ------       -------       -------
Total U.S. Government Agencies and
  Corporations...................................     8,721        8,132        20,000        19,062

Obligations of State and Political Subdivisions:
  Over One Through Five Years....................        --           --            85            85
  Over Five Through Ten Years....................        --           --           790           786
  Over Ten Years.................................        --           --           708           704
                                                    -------       ------       -------       -------
Total Obligations of State and Political
  Subdivisions...................................        --           --         1,583         1,575

Mortgage-Backed Securities (2):
  One Year or Less...............................     1,846        1,770            --            --
  Over One Through Five Years....................        15           15            --            --
  Over Five Through Ten Years....................        --           --           865           865
  Over Ten Years.................................        --           --         1,685         1,688
                                                    -------       ------       -------       -------
Total Mortgage-Backed Securities.................     1,861        1,785         2,550         2,553

Other Securities:
  Over Ten Years (3).............................        --           --         1,855         1,907
                                                    -------       ------       -------       -------
Total Other Securities...........................        --           --         1,855         1,907
                                                    -------       ------       -------       -------
Total Securities.................................   $10,582       $9,917       $35,968       $35,111
                                                    =======       ======       =======       =======
</TABLE>

------------------------

(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.

                                       26
<PAGE>
            TABLE 10A: WEIGHTED AVERAGE YIELD BY RANGE OF MATURITIES

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                              -----------------------
                                                                1999           1998
                                                              --------       --------
<S>                                                           <C>            <C>
One Year or Less............................................    5.81%          5.23%
Over One through Five Years.................................    6.15           6.26
Over Five through Ten Years.................................    5.78           5.82
Over Ten Years(1)...........................................    5.65           5.91
</TABLE>

------------------------

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

CAPITAL RESOURCES

    Shareholders' equity at December 31, 1999 was $43.1 million, as compared to
$30.9 million at December 31, 1998. In 1999, the Board of Directors declared
dividends totaling $0.20 per share, consistent with 1998. At December 31, 1999,
the Company's common stock had a book value of $7.04 per share compared to $6.36
per share in 1998.

    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 Comptroller establishes risk based capital guidelines for national
banks. These guidelines are intended to provide an additional measure of a
bank's capital adequacy by assigning weighted levels of risk to asset
categories. Banks are also required to systematically hold capital against such
"off balance sheet" activities as loans sold with recourse, loan commitments,
guarantees and standby letters of credit. These guidelines are intended to
strengthen the quality of capital by increasing the emphasis on common equity
and restricting the amount of loss reserves and other forms of equity such as
preferred stock that may be included in capital.

    Under the terms of the guidelines, banks must meet minimum capital adequacy
based upon both total assets and risk adjusted assets. All banks are required to
maintain a minimum ratio of total capital to risk-weighted assets of 8% and a
minimum ratio of Tier 1 capital to risk-weighted assets of 4%. Tier 1 Capital
includes common shareholders' equity and qualifying preferred stock, less
goodwill and other adjustments. Tier 2 Capital consists of preferred stock not
qualifying as Tier 1 Capital, mandatory convertible debt, limited amounts of
subordinated debt, other qualifying term debt and the allowance for credit
losses up to 1.25% of risk-weighted assets. Total Capital consists of Tier 1
Capital and Tier 2 Capital. The regulatory agencies have also established an
additional capital adequacy guideline referred to as the Tier 1 leverage ratio
that measures the ratio of Tier 1 capital to average quarterly assets.

    At December 31, 1999, the Company's Tier 1 capital, total risk-based capital
and Tier 1 leverage ratios were 16.2%, 17.3% and 12.7%, respectively. Adherence
to these guidelines has not had an adverse impact on the Company or its banking
subsidiary. Selected capital ratios at year end 1999 as compared to 1998 are
shown in TABLE 11.

                            TABLE 11: CAPITAL RATIOS

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                        -----------------------   WELL CAPITALIZED   REGULATORY
                                                          1999           1998       REQUIREMENTS      MINIMUMS
                                                        --------       --------   ----------------   ----------
<S>                                                     <C>            <C>        <C>                <C>
Risk Based Capital Ratios:
  Tier 1 Capital Ratio................................    16.2%          15.6%           6.0%            4.0%
  Total Capital to Risk-Weighted Assets...............    17.3%          16.6%          10.0%            8.0%
Tier 1 Leverage Ratio.................................    12.7%           9.7%           5.0%            4.0%
</TABLE>

                                       27
<PAGE>
QUARTERLY FINANCIAL INFORMATION

    Table 12 sets forth, for the periods indicated, certain consolidated
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 12: SELECTED QUARTERLY DATA

<TABLE>
<CAPTION>
                                                              1999                                        1998
                                            -----------------------------------------   -----------------------------------------
                                               4Q         3Q         2Q         1Q         4Q         3Q         2Q         1Q
                                            --------   --------   --------   --------   --------   --------   --------   --------
                                                                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Summary of Operations:
  Net interest income.....................  $  3,998   $  3,774   $  3,589   $  3,345   $  3,028   $  2,943   $  2,941   $  2,790
  Provision for loan losses...............      (375)      (275)      (310)      (200)      (310)      (170)      (150)       (80)
                                            --------   --------   --------   --------   --------   --------   --------   --------
  Net interest income after provision for
    loan losses...........................     3,623      3,499      3,279      3,145      2,718      2,773      2,791      2,710
  Other income (excluding securities
    transactions).........................       783        739        743        687        674        579        565        570
  Securities gains, net...................        --         --         --         --          2         --         --          2
  Other expenses..........................    (3,465)    (3,026)    (2,819)    (2,684)    (2,463)    (2,381)    (2,292)    (2,162)
                                            --------   --------   --------   --------   --------   --------   --------   --------
  Income before income tax expense........       941      1,212      1,203      1,148        931        971      1,064      1,120
  Income tax expense......................      (322)      (423)      (418)      (400)      (319)      (333)      (367)      (388)
                                            --------   --------   --------   --------   --------   --------   --------   --------
  Net income..............................  $    619   $    789   $    785   $    748   $    612   $    638   $    697   $    732
                                            ========   ========   ========   ========   ========   ========   ========   ========
Per Common Share:
  Basic earnings per common share.........  $   0.10   $   0.13   $   0.13   $   0.13   $   0.13   $   0.13   $   0.15   $   0.15
  Diluted earnings per common share.......      0.09       0.13       0.13       0.13       0.13       0.13       0.14       0.15
  Dividends Declared......................      0.05       0.05       0.05       0.05       0.05       0.05       0.05       0.05
  Book Value..............................      7.04       7.05       6.99       6.99       6.36       6.29       6.18       6.09
  Market Price (1)
    High..................................     10.56      10.88      10.25      10.25         --         --         --         --
    Low...................................      9.00       8.75       9.66       8.00         --         --         --         --
    Close.................................      9.63      10.69      10.00       9.75         --         --         --         --
Balance Sheet Data:
  Assets..................................  $346,076   $330,106   $314,816   $315,653   $311,565   $290,566   $287,752   $279,546
  Loans...................................   266,084    228,371    216,856    200,326    187,015    176,622    173,854    160,403
  Deposits................................   288,203    274,456    263,408    262,895    265,109    249,173    248,003    241,417
  Shareholders' Equity....................    43,075     43,075     42,715     42,691     30,896     30,555     30,016     29,558
</TABLE>

------------------------------

(1) Prior to January 29, 1999, there was not an established trading market for
    the common stock of CNB Florida Bancshares, Inc.

                                       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, 1999, 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, 1999 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 statements of financial
condition of CNB FLORIDA BANCSHARES, INC. (a Florida corporation) AND SUBSIDIARY
as of December 31, 1999 and 1998 and the related consolidated statements of
income, shareholders' equity, and cash flows for each of the three years in the
period ended December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

          We conducted our audits in accordance with generally accepted auditing
standards 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, 1999 and 1998 and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

Jacksonville, Florida
February 10, 2000

                                       31
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                              -----------------------
                                                                 1999         1998
                                                              ----------   ----------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
                                       ASSETS
Cash and due from banks.....................................   $ 17,235     $ 12,630
Federal funds sold..........................................         --       25,250
Interest-bearing deposits in other banks....................        285       11,007
                                                               --------     --------
      Total cash and cash equivalents.......................     17,520       48,887
Investment securities available for sale....................     35,111       59,337
Investment securities held to maturity......................     10,582        2,940
Loans, net..................................................    263,413      185,140
Premises and equipment, net.................................     14,395       10,754
Other assets................................................      5,055        4,507
                                                               --------     --------
      Total assets..........................................   $346,076     $311,565
                                                               ========     ========
                        LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
  Non-interest bearing demand...............................   $ 42,110     $ 35,701
  Savings, NOW and money market.............................    112,103       92,495
  Time under $100,000.......................................     89,141       95,369
  Time $100,000 and over....................................     44,849       41,544
                                                               --------     --------
      Total deposits........................................    288,203      265,109
Securities sold under repurchase agreements.................      7,263       12,570
Federal funds purchased.....................................      4,800           --
Other liabilities...........................................      2,735        2,990
                                                               --------     --------
      Total liabilities.....................................    303,001      280,669
                                                               --------     --------
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,
  6,116,070 shares issued and outstanding for 1999 and
  4,856,770 shares issued and outstanding for 1998..........         61           49
Additional paid-in capital..................................     30,805       19,465
Retained earnings...........................................     12,746       10,964
Accumulated other comprehensive (loss) income, net of
  taxes.....................................................       (537)         418
                                                               --------     --------
      Total shareholders' equity............................     43,075       30,896
                                                               --------     --------
      Total liabilities and shareholders' equity............   $346,076     $311,565
                                                               ========     ========
</TABLE>

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

                                       32
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                              ---------------------------------
                                                                1999        1998        1997
                                                              ---------   ---------   ---------
                                                              (DOLLARS AND SHARES IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
INTEREST INCOME
  Interest and fees on loans................................   $19,412     $15,877     $14,542
  Interest on investment securities available for sale......     2,671       2,869       3,560
  Interest on investment securities held to maturity........       504         326         490
  Interest on federal funds sold............................       643       1,701         720
  Interest on interest-bearing deposits.....................       528         346         108
                                                               -------     -------     -------
        Total interest income...............................    23,758      21,119      19,420
                                                               -------     -------     -------
INTEREST EXPENSE
  Interest on deposits......................................     8,725       9,051       8,255
  Interest on short-term borrowings.........................       327         359         239
  Interest on notes payable.................................        --           7         169
                                                               -------     -------     -------
        Total interest expense..............................     9,052       9,417       8,663
                                                               -------     -------     -------
NET INTEREST INCOME.........................................    14,706      11,702      10,757
PROVISION FOR LOAN LOSS.....................................     1,160         710         440
                                                               -------     -------     -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSS...........    13,546      10,992      10,317
                                                               -------     -------     -------
NON-INTEREST INCOME
  Service charges...........................................     2,122       1,811       1,734
  Other fees and charges....................................       830         577         418
  Gain on sale of securities................................        --           4           1
                                                               -------     -------     -------
        Total non-interest income...........................     2,952       2,392       2,153
                                                               -------     -------     -------
NON-INTEREST EXPENSE
  Salaries and employee benefits............................     6,461       4,819       3,960
  Occupancy and equipment expenses..........................     1,810       1,592       1,387
  Other operating expenses..................................     3,723       2,887       2,567
                                                               -------     -------     -------
        Total non-interest expense..........................    11,994       9,298       7,914
                                                               -------     -------     -------
INCOME BEFORE INCOME TAXES..................................     4,504       4,086       4,556
INCOME TAXES................................................     1,563       1,407       1,581
                                                               -------     -------     -------
NET INCOME..................................................   $ 2,941     $ 2,679     $ 2,975
                                                               =======     =======     =======
EARNINGS PER SHARE
  Basic earnings per share..................................   $  0.49     $  0.55     $  0.69
                                                               =======     =======     =======
  Basic weighted average shares outstanding.................     5,995       4,857       4,328
                                                               =======     =======     =======
  Diluted earnings per share................................   $  0.48     $  0.55     $  0.68
                                                               =======     =======     =======
  Diluted weighted average shares outstanding...............     6,070       4,898       4,407
                                                               =======     =======     =======
</TABLE>

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

                                       33
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31, 1999, 1998 AND 1997
                                            ----------------------------------------------------------------------------
                                                                                           ACCUMULATED
                                                  COMMON                                      OTHER
                                                   STOCK          ADDITIONAL              COMPREHENSIVE        TOTAL
                                            -------------------    PAID-IN     RETAINED   INCOME (LOSS),   SHAREHOLDERS'
                                             SHARES     VALUE      CAPITAL     EARNINGS    NET OF TAXES       EQUITY
                                            --------   --------   ----------   --------   --------------   -------------
                                                                 (DOLLARS AND SHARES IN THOUSANDS)
<S>                                         <C>        <C>        <C>          <C>        <C>              <C>
BALANCE, DECEMBER 31, 1996................   3,875       $39        $12,663    $ 6,901        $  66           $19,669
Comprehensive income:
  Net income..............................                                       2,975
  Change in unrealized gain on investment
    securities available for sale, net of
    taxes.................................                                                      189
      Total comprehensive income..........                                                                      3,164
Cash dividends............................                                        (620)                          (620)
Issuance of common stock, net of offering
  cost....................................     969        10          6,744                                     6,754
Issuance of common stock for option
  agreements, net of repurchases..........      12                       58                                        58
                                             -----       ---        -------    -------        -----           -------
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
                                             =====       ===        =======    =======        =====           =======
</TABLE>

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

                                       34
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income................................................  $  2,941   $  2,679   $  2,975
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation and amortization...........................       971        894        828
    Provision for loan losses...............................     1,160        710        440
    Investment securities (accretion) amortization, net.....      (278)        54        135
    Non-cash compensation...................................        71         --         --
    Deferred income tax benefit.............................      (242)       (14)       (30)
    Changes in assets and liabilities:
      Other assets..........................................        82       (515)      (246)
      Other liabilities.....................................      (255)       735        219
                                                              --------   --------   --------
        Net cash provided by operating activities...........     4,450      4,543      4,321
                                                              --------   --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES
  Net increase in loans.....................................   (79,433)   (27,696)   (11,165)
  Purchases of investment securities available for sale.....   (20,413)   (28,908)   (17,192)
  Purchases of investment securities held to maturity.......    (8,754)        --         --
  Proceeds from called investment securities available for
    sale....................................................     3,000         --         --
  Proceeds from maturities of investment securities
    available for sale......................................    40,442     22,654     25,417
  Proceeds from maturities of investment securities held to
    maturity................................................     1,064      5,121      1,877
  Purchases of premises and equipment.......................    (4,432)    (1,341)    (1,284)
                                                              --------   --------   --------
        Net cash used in investing activities...............   (68,526)   (30,170)    (2,347)
                                                              --------   --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in deposits..................................    23,094     33,665      4,620
  Net (decrease) increase in securities sold under
    repurchase agreements...................................    (5,307)     3,413      5,390
  Federal funds purchased...................................     4,800         --         --
  Repayment of note payable.................................        --     (1,450)    (1,200)
  Cash dividends............................................    (1,159)      (971)      (620)
  Issuance of common stock..................................    11,368         --      6,754
  Repurchase of common stock................................       (96)        --         --
  Exercise of stock options.................................         9         --         58
                                                              --------   --------   --------
        Net cash provided by financing activities...........    32,709     34,657     15,002
                                                              --------   --------   --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........   (31,367)     9,030     16,976
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR................    48,887     39,857     22,881
                                                              --------   --------   --------
CASH AND CASH EQUIVALENTS, END OF YEAR......................  $ 17,520   $ 48,887   $ 39,857
                                                              ========   ========   ========
</TABLE>

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

                                       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 a total of 12 banking offices in north Florida. The Company offers a full
range of lending and deposit products.

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.

RECLASSIFICATIONS

    Certain amounts and captions presented in the 1998 and 1997 financial
statements have been adjusted to conform to the 1999 presentation. The financial
statements, as well as share and per share data, and other information have been
reclassified to reflect the two-for-one stock split effective August 17, 1998.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

    The preparation of financial statements in conformity with generally
accepted accounting principles 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 are deemed to have indefinite holding periods. 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.

    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.

                                       36
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOANS AND LOAN FEES

    Loans are stated at the amount of unpaid principal, reduced by an allowance
for loan loss. Interest on substantially all loans other than 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 capitalized and amortized as
yield adjustments over the respective loan terms using a method which does not
differ significantly from the interest method. For 1999, 1998 and 1997, loan
fees included in interest and fees on loans amounted to approximately $697,000,
$572,000 and $531,000, 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.

INTANGIBLES

    The Company has intangible assets with carrying amounts of approximately
$1,187,000 and $1,366,000 at December 31, 1999 and 1998, 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

                                       37
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
being amortized over a 15-year period on a straight-line method. Amortization of
intangible assets was approximately $179,000, $190,000 and $202,000 for 1999,
1998 and 1997, 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 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, 1999, 1998 and
1997.

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 $9,206,000, $9,049,000 and $8,308,000 during 1999,
1998 and 1997, respectively, and cash paid for income taxes was approximately
$1,720,000, $1,384,000 and $1,785,000 during 1999, 1998 and 1997, respectively.

                                       38
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  INVESTMENT SECURITIES

    Amortized cost and estimated fair value of investment securities available
for sale at December 31, 1999 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                               U.S.         U.S.        STATE,      MORTGAGE-
                             TREASURY    GOVERNMENT   COUNTY, AND     BACKED
1999                        SECURITIES    AGENCIES     MUNICIPAL    SECURITIES    OTHER      TOTAL
----                        ----------   ----------   -----------   ----------   --------   --------
<S>                         <C>          <C>          <C>           <C>          <C>        <C>
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>

<TABLE>
<CAPTION>
                               U.S.         U.S.        STATE,      MORTGAGE-
                             TREASURY    GOVERNMENT   COUNTY, AND     BACKED
1998                        SECURITIES    AGENCIES     MUNICIPAL    SECURITIES    OTHER      TOTAL
----                        ----------   ----------   -----------   ----------   --------   --------
<S>                         <C>          <C>          <C>           <C>          <C>        <C>
Amortized cost............    $17,966     $33,525        $1,581       $4,157      $1,443    $58,672
Gross unrealized:
  Gains...................        460          23            80           25          82        670
  Losses..................         --          --            --           (5)         --         (5)
                              -------     -------        ------       ------      ------    -------
Estimated fair value......    $18,426     $33,548        $1,661       $4,177      $1,525    $59,337
                              =======     =======        ======       ======      ======    =======
</TABLE>

    Amortized cost and estimated fair value of investment securities held to
maturity at December 31, 1999 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                    U.S.      MORTGAGE-
                                                 GOVERNMENT     BACKED
1999                                              AGENCIES    SECURITIES    TOTAL
----                                             ----------   ----------   --------
<S>                                              <C>          <C>          <C>
Amortized cost.................................    $8,721       $1,861     $10,582
Gross unrealized:
  Gains........................................        --           --          --
  Losses.......................................      (589)         (76)       (665)
                                                   ------       ------     -------
Estimated fair value...........................    $8,132       $1,785     $ 9,917
                                                   ======       ======     =======
</TABLE>

<TABLE>
<CAPTION>
                                                             MORTGAGE-
                                                               BACKED
1998                                                         SECURITIES    TOTAL
----                                                         ----------   --------
<S>                                                          <C>          <C>
Amortized cost.............................................    $2,940      $2,940
Gross unrealized:
  Gains....................................................         4           4
  Losses...................................................        --          --
                                                               ------      ------
Estimated fair value.......................................    $2,944      $2,944
                                                               ======      ======
</TABLE>

    Interest income earned on tax-exempt securities in 1999, 1998 and 1997 was
approximately $87,000, $83,000 and $91,000, respectively. Dividends of
approximately $113,000, $93,000 and $84,000 on stock of

                                       39
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  INVESTMENT SECURITIES (CONTINUED)
the Federal Reserve Bank and the Federal Home Loan Bank are included in interest
on investment securities available for sale in 1999, 1998 and 1997,
respectively.

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

<TABLE>
<CAPTION>
                                       INVESTMENT SECURITIES    INVESTMENT SECURITIES
                                         AVAILABLE FOR SALE        HELD TO MATURITY
                                       ----------------------   ----------------------
                                       AMORTIZED   ESTIMATED    AMORTIZED   ESTIMATED
DUE IN:                                  COST      FAIR VALUE     COST      FAIR VALUE
-------                                ---------   ----------   ---------   ----------
<S>                                    <C>         <C>          <C>         <C>
One year or less.....................   $ 2,498     $ 2,501      $    --      $   --
After one through five years.........    27,567      26,660           --          --
After five through ten...............       790         786        8,721       8,132
Over ten years.......................       708         704           --          --
Mortgage-backed securities and
  others.............................     4,405       4,460        1,861       1,785
                                        -------     -------      -------      ------
                                        $35,968     $35,111      $10,582      $9,917
                                        =======     =======      =======      ======
</TABLE>

    At December 31, 1999, U. S. Treasury and Government agency securities with
an amortized cost of approximately $26,611,000 and an estimated fair value of
approximately $25,792,000 were pledged to secure public funds, treasury tax and
loan deposits, and repurchase agreements.

4.  LOANS, ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS

    Loans at December 31, 1999 and 1998 were comprised of the following (in
thousands):

<TABLE>
<CAPTION>
                                                            1999       1998
                                                          --------   --------
<S>                                                       <C>        <C>
Commercial, financial, and agricultural.................  $136,937   $ 85,208
Real estate--construction...............................    18,926      8,527
Real estate--mortgage...................................    86,275     72,357
Installment and consumer lines..........................    23,946     20,923
                                                          --------   --------
    Total loans, net of unearned discount...............   266,084    187,015
Less allowance for loan losses..........................    (2,671)    (1,875)
                                                          --------   --------
    Net loans...........................................  $263,413   $185,140
                                                          ========   ========
</TABLE>

    Activity in the allowance for loan losses account was as follows for the
years ended December 31, 1999, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Balance beginning of year...........................   $1,875     $1,495     $1,396
  Provision.........................................    1,160        710        440
  Charge-offs.......................................     (634)      (422)      (408)
  Recoveries........................................      270         92         67
                                                       ------     ------     ------
Balance at end of year..............................   $2,671     $1,875     $1,495
                                                       ======     ======     ======
</TABLE>

                                       40
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.  LOANS, ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS (CONTINUED)
    Nonaccrual loans totaled approximately $549,000 and $1,393,000 at
December 31, 1999 and 1998, 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 $23,000, $56,000 and $51,000, in 1999, 1998 and 1997,
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 $88,000 and
$600,000 at December 31, 1999 and 1998, respectively, and is included in other
assets in the accompanying consolidated statement of financial condition.

    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, 1999, 1998 and 1997 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                         1999       1998       1997
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Impaired loans with an allowance.....................    $686      $1,744     $  811
Impaired loans without an allowance (1)..............      --          --        583
                                                         ----      ------     ------
    Total impaired loans.............................    $686      $1,744     $1,395
                                                         ====      ======     ======
Allowance for impaired loans.........................    $159      $  408     $  267
                                                         ====      ======     ======
Interest income recognized on impaired loans during
  the year...........................................    $ 21      $   93     $   73
                                                         ====      ======     ======
</TABLE>

------------------------

(1) Impaired loans determined to be carried at or below fair value of the
    underlying collateral and, as such, do not require an allowance.

    The average balance of impaired loans during 1999, 1998 and 1997
approximated $1.2 million.

5.  PREMISES AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                              1999       1998
                                                            --------   --------
<S>                                                         <C>        <C>
Buildings and improvements................................  $ 8,757    $ 8,629
Equipment and furnishings.................................    5,382      4,213
Land......................................................    3,904      2,552
Construction in progress..................................    1,813         52
                                                            -------    -------
                                                             19,856     15,446
Less accumulated depreciation.............................   (5,461)    (4,692)
                                                            -------    -------
                                                            $14,395    $10,754
                                                            =======    =======
</TABLE>

    Depreciation was approximately $792,000, $704,000 and $626,000 for 1999,
1998 and 1997, respectively.

                                       41
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. TIME DEPOSITS

    At December 31, 1999, the scheduled maturities of time certificates of
deposit are as follows (in thousands):

<TABLE>
<S>                                                           <C>
2000........................................................  $111,365
2001........................................................    16,189
2002........................................................     4,959
2003........................................................     1,273
2004 and thereafter.........................................       204
                                                              --------
                                                              $133,990
                                                              ========
</TABLE>

7. REPURCHASE AGREEMENTS

    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 1999, 1998, and 1997 was approximately $6,854,000, $7,233,000
and $4,738,000, respectively. Interest expense in 1999, 1998 and 1997 was
approximately $322,000, $359,000 and $238,000, respectively, resulting in an
average rate paid of 4.70% in 1999, 4.97% in 1998 and 5.03% in 1997. The highest
amount outstanding during 1999, 1998 and 1997 was approximately $10,700,000,
$12,570,000 and $9,157,000, respectively.

8. OTHER OPERATING EXPENSES

    Components of other operating expenses are as follows for the years ended
December 31, 1999, 1998 and 1997 (in thousands):

<TABLE>
<CAPTION>
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Data processing.....................................   $  590     $  540     $  519
Postage and delivery................................      468        377        336
Advertising and promotion...........................      354        239        257
Supplies............................................      299        244        231
Amortization of intangible assets...................      179        190        202
Telephone...........................................      423        271        185
Legal and professional..............................      327        225        158
Loan expense........................................      165        133        135
Regulatory fees.....................................      143        134        119
Administrative......................................      182        123        103
Other...............................................      593        411        322
                                                       ------     ------     ------
                                                       $3,723     $2,887     $2,567
                                                       ======     ======     ======
</TABLE>

                                       42
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES

    The income tax provision (benefit) for the years ended December 31, 1999,
1998 and 1997 consisted of the following components (in thousands):

<TABLE>
<CAPTION>
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Current:
  Federal...........................................   $1,598     $1,365     $1,438
  State.............................................      207         56        173
                                                       ------     ------     ------
    Total...........................................   $1,805     $1,421     $1,611
                                                       ======     ======     ======

Deferred:
  Federal...........................................   $ (244)    $ (147)    $  (69)
  State.............................................        2        133         39
                                                       ------     ------     ------
    Total...........................................   $ (242)    $  (14)    $  (30)
                                                       ======     ======     ======

Total:
  Federal...........................................   $1,354     $1,218     $1,369
  State.............................................      209        189        212
                                                       ------     ------     ------
    Total...........................................   $1,563     $1,407     $1,581
                                                       ======     ======     ======
</TABLE>

    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, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax liabilities:
  Property and equipment....................................   $(650)     $(685)
  Unearned loan fees........................................     (81)       (37)
  Unrealized gain on investment securities available for
    sale....................................................      --       (248)
                                                               -----      -----
                                                                (731)      (970)
                                                               -----      -----

Deferred tax assets:
  Loan loss provisions......................................     858        607
  Unrealized loss on investment securities available for
    sale....................................................     320         --
  Intangible assets.........................................     105         94
  Other items...............................................      39         50
                                                               -----      -----
                                                               1,322        751
                                                               -----      -----
Net deferred tax asset (liability)..........................   $ 591      $(219)
                                                               =====      =====
</TABLE>

                                       43
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
    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, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                          1999        1998        1997
                                                        --------    --------    --------
<S>                                                     <C>         <C>         <C>
Statutory rates.......................................    34.0%       34.0%       34.0%
Increase (decrease) resulting from:
  Effect of tax-exempt income.........................    (2.7)       (2.9)       (2.3)
  State income taxes, net.............................     2.5         2.6         2.5
  Nondeductible expenses..............................     0.9         0.7         0.5
                                                          ----        ----        ----
                                                          34.7%       34.4%       34.7%
                                                          ====        ====        ====
</TABLE>

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 1999, 1998 and 1997 is calculated as follows (in
thousands):

<TABLE>
<CAPTION>
                                                       1999       1998       1997
                                                     --------   --------   --------
<S>                                                  <C>        <C>        <C>
Unrealized (loss) gains recognized in other
  comprehensive income (net):
  Before tax.......................................  $(1,523)    $  258     $  301
  Income tax.......................................     (568)        95        112
                                                     -------     ------     ------
  Net of tax.......................................  $  (955)    $  163     $  189
                                                     =======     ======     ======

Amounts reported in net income:
  Gain on sale of securities.......................  $    --     $    4     $    1
  Net (accretion) amortization.....................     (278)        54        135
                                                     -------     ------     ------
  Reclassification adjustment......................     (278)        58        136
  Income tax expense...............................       96        (20)       (47)
                                                     -------     ------     ------
  Reclassification adjustment, net of tax..........  $  (182)    $   38     $   89
                                                     =======     ======     ======

Amounts reported in other comprehensive income:
  Unrealized (loss) gains arising during period,
    net of tax.....................................  $(1,137)    $  201     $  278
  Reclassification adjustment, net of tax..........      182        (38)       (89)
                                                     -------     ------     ------
  Unrealized (loss) gains recognized in other
    comprehensive income (net).....................     (955)       163        189
  Net income.......................................    2,941      2,679      2,975
                                                     -------     ------     ------
    Total comprehensive income.....................  $ 1,986     $2,842     $3,164
                                                     =======     ======     ======
</TABLE>

                                       44
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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):

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Balance, January 1..........................................   $3,306     $4,450
  New loans and advances....................................    1,646      3,127
  Repayments (excluding renewals)...........................   (1,267)    (4,271)
                                                               ------     ------
Balance, December 31........................................   $3,685     $3,306
                                                               ======     ======
</TABLE>

    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, 1999, the Bank had
approximately $3,477,000 of retained earnings available for dividends to the
Company without being required to seek special regulatory approvals.

13. EQUITY

DIVIDENDS DECLARED

    During 1999, 1998 and 1997, the Company declared cash dividends of $.20,
$.20 and $.14 per share, respectively.

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.

    On July 15, 1997, the Company issued 968,960 shares of common stock at $7
per share.

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 1,200 were exercised in 1999.
There are 134,900 shares remaining to be issued under the Plan as of
December 31, 1999. Generally, the options granted under the Plan become
exercisable 33% in each year following the year of grant, and expire ten years
after the date of the grant. The grant price of all options has been equal to
the estimated fair market value of a share of stock as of the date of grant.

                                       45
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. STOCK BASED COMPENSATION (CONTINUED)
    Options outstanding and the activity for December 31, 1999, 1998 and 1997
are presented below:

<TABLE>
<CAPTION>
                                                   1999                     1998                     1997
                                          ----------------------   ----------------------   ----------------------
                                                      WEIGHTED-                WEIGHTED-                WEIGHTED-
                                                       AVERAGE                  AVERAGE                  AVERAGE
                                           SHARES    GRANT PRICE    SHARES    GRANT PRICE    SHARES    GRANT PRICE
                                          --------   -----------   --------   -----------   --------   -----------
<S>                                       <C>        <C>           <C>        <C>           <C>        <C>
Employee stock option plans:
  Outstanding at beginning of year......  359,766       $6.26      166,766       $4.32      149,016       $3.75
    Options granted.....................  214,600        9.92      193,000        7.93       34,000        7.00
    Options exercised...................    1,800        5.00           --          --       14,550        4.82
    Options forfeited...................   20,000        8.00           --          --        1,700        4.00
                                          -------       -----      -------       -----      -------       -----
  Outstanding at end of year............  552,566       $7.63      359,766       $6.26      166,766       $4.32
                                          =======       =====      =======       =====      =======       =====
Options exercisable at year-end.........  258,466       $5.90      184,500       $4.98      121,374       $3.99
                                          =======       =====      =======       =====      =======       =====
Weighted-average fair value of options
  granted during the year...............  $  2.59                  $  1.98                  $  2.05
                                          =======                  =======                  =======
</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 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 1999, 1998 and 1997, over the vesting life
of the options, pro forma net income would be as indicated below (dollars in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                       AS REPORTED                       PRO FORMA
                                              ------------------------------   ------------------------------
                                                1999       1998       1997       1999       1998       1997
                                              --------   --------   --------   --------   --------   --------
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>
Net income..................................   $2,941     $2,679     $2,975     $2,658     $2,634     $2,973
Basic earnings per common share.............   $ 0.49     $ 0.55     $ 0.69     $ 0.44     $ 0.54     $ 0.69
Diluted earnings per common share...........   $ 0.48     $ 0.55     $ 0.68     $ 0.44     $ 0.54     $ 0.67
</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

                                       46
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. STOCK BASED COMPENSATION (CONTINUED)
estimates. The weighted-average grant date fair values of the options granted
during 1999, 1998 and 1997 were based on the following assumptions:

<TABLE>
<CAPTION>
                                             RISK-FREE
                                           INTEREST RATES                      DIVIDEND YIELD
                                  --------------------------------    --------------------------------
                                    1999        1998        1997        1999        1998        1997
                                  --------    --------    --------    --------    --------    --------
<S>                               <C>         <C>         <C>         <C>         <C>         <C>
Performance-Based Incentive and
  other stock option plans......    5.89%       4.62%       5.89%      2.03%       2.50%       2.86%
</TABLE>

<TABLE>
<CAPTION>
                                                     EXPECTED LIVES                     VOLATILITY
                                             ------------------------------   ------------------------------
                                               1999       1998       1997       1999       1998       1997
                                             --------   --------   --------   --------   --------   --------
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>
Performance-Based Incentive and
  other stock option plans.................  6 years    6 years    8 years     0.20%      0.25%      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 1999, 1998 and 1997 may not be indicative of
future amounts.

    The following table summarizes information about stock options outstanding
at December 31, 1999.

<TABLE>
<CAPTION>
                                         OUTSTANDING                 EXERCISABLE
                               -------------------------------   -------------------
                                                      AVERAGE               AVERAGE
EXERCISE                                  AVERAGE    EXERCISE               EXERCISE
PRICE RANGE                     SHARES      LIFE       PRICE      SHARES     PRICE
-----------                    --------   --------   ---------   --------   --------
<S>                            <C>        <C>        <C>         <C>        <C>
$3.06-$3.64..................   49,226      1.59       $3.22      49,226     $ 3.22
$4.00-$4.68..................   67,108      6.54        4.14      67,108       4.14
$5.00-$8.00..................  222,232      8.87        7.59     128,132       7.40
$9.00-$10.25.................  214,000      9.42        9.94      14,000      10.00
                               -------      ----       -----     -------     ------
  Total......................  552,566      8.15       $7.69     258,466     $ 5.90
                               =======      ====       =====     =======     ======
</TABLE>

RESTRICTED STOCK

    The Company has awarded 17,500 shares of restricted stock under the
Performance-Based Incentive Plan (6,250 shares have vested in 1999). The
weighted average grant price of restricted stock granted and vested during 1999
was $9.75 and $8.00, respectively.

15. EMPLOYEE BENEFITS

PROFIT-SHARING PLAN

    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 $100,000, $99,000 and $84,000 for the years ended December 31,
1999, 1998 and 1997, respectively.

                                       47
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. EMPLOYEE BENEFITS (CONTINUED)
HEALTH AND WELFARE PLAN

    The Company also provides health care and life insurance benefits to all
employees through Florida Bankers Insurance Trust. Total cost related to these
benefits for 1999, 1998 and 1997 were approximately $453,000, $354,000 and
$319,000, respectively.

16. CAPITAL

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

    Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios of Total and Tier I
capital (as defined in the regulations) to risk-weighted assets (as defined) and
of Tier I capital (as defined) to average assets (as defined). 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."
Management believes that as of December 31, 1999 and 1998, the Bank meets and
exceeds all capital adequacy requirements to which it is subject.

    As of December 31, 1999, the most recent notification from the Bank's
regulatory agency categorized the Bank as "well capitalized" under the
regulatory framework for prompt corrective action. There have

                                       48
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. CAPITAL (CONTINUED)
been no conditions or events since that notification that management believes
have changed the institution's category.

<TABLE>
<CAPTION>
                                                                           ADEQUATELY                  WELL
                                                      ACTUAL               CAPITALIZED              CAPITALIZED
                                                      AMOUNT     RATIO       AMOUNT       RATIO       AMOUNT       RATIO
                                                     --------   --------   -----------   --------   -----------   --------
<S>                                                  <C>        <C>        <C>           <C>        <C>           <C>
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%
As of December 31, 1998:
  Total capital (to risk-weighted assets):
    Consolidated...................................   30,987      16.6%        14,916      8.0%        18,645       10.0%
    Bank...........................................   24,122      12.8%        15,117      8.0%        18,896       10.0%
  Tier I capital (to risk-weighted assets):
    Consolidated...................................   29,112      15.6%         7,458      4.0%        11,187        6.0%
    Bank...........................................   22,247      11.8%         7,558      4.0%        11,337        6.0%
  Tier I capital (to average assets):
    Consolidated...................................   29,112       9.7%        12,009      4.0%        15,011        5.0%
    Bank...........................................   22,247       7.4%        11,978      4.0%        14,972        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

                                       49
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. COMMITMENTS AND CONTINGENCIES (CONTINUED)
requirements. The amount of collateral obtained, if any, is based on
management's credit evaluation in the same manner as though an immediate credit
extension were to be granted. Commitments to extend credit amount to
approximately $52,000,000 and $26,000,000 at December 31, 1999 and 1998,
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 $4,156,000 and
$2,022,000 of standby letters of credit outstanding at December 31, 1999 and
1998, 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, 1999 and
1998 was approximately $6.8 million and $3.7 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, and securities sold under repurchase agreements. 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.

                                       50
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
    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, 1999 and 1998.

    The Company's financial instruments which have estimated fair values
differing from their respective carrying values are presented as follows at
December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                              1999                    1998
                                      ---------------------   ---------------------
                                      CARRYING   ESTIMATED    CARRYING   ESTIMATED
                                       AMOUNT    FAIR VALUE    AMOUNT    FAIR VALUE
                                      --------   ----------   --------   ----------
<S>                                   <C>        <C>          <C>        <C>
Financial assets:
  Investment securities held to
    maturity........................  $ 10,582    $  9,917    $  2,940    $  2,944
  Net loans.........................  $263,413    $261,910    $185,140    $185,780
Financial liabilities:
  Time deposits.....................  $133,990    $134,046    $136,913    $136,283
</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, 1999, 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, 1999 would not necessarily be indicative of fair values at
future dates.

                                       51
<PAGE>
                  CNB FLORIDA BANCSHARES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. CONDENSED FINANCIAL DATA (PARENT COMPANY ONLY)

                        STATEMENT OF FINANCIAL CONDITION
                           DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                1999           1998
                                                              --------       --------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>            <C>
                                       Assets
Cash and cash equivalents...................................  $ 4,187        $ 6,005
Investment in CNB National Bank.............................   34,670         23,913
Other assets................................................    4,218            988
                                                              -------        -------
    Total assets............................................  $43,075        $30,906
                                                              =======        =======
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
  Other liabilities.........................................  $    --        $    10
                                                              -------        -------
    Total liabilities.......................................       --             10
                                                              -------        -------
Shareholders' equity
  Common stock..............................................       61             49
  Additional paid-in capital................................   30,805         19,465
  Retained earnings.........................................   12,746         10,964
  Accumulated other comprehensive (loss) income, net of
    taxes...................................................     (537)           418
                                                              -------        -------
    Total shareholders' equity..............................   43,075         30,896
                                                              -------        -------
    Total liabilities and shareholders' equity..............  $43,075        $30,906
                                                              =======        =======
</TABLE>

                                       52
<PAGE>
                              STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
Dividend income.............................................   $1,679     $1,853     $1,913
Interest income.............................................      298        328        195
Interest expense............................................       --         (7)      (169)
                                                               ------     ------     ------
Net interest and dividend income............................    1,977      2,174      1,939
Noninterest expense, net....................................   (1,016)      (110)       (40)
                                                               ------     ------     ------
Income before income taxes and equity in undistributed net
  income of subsidiary......................................      961      2,064      1,899
Income tax benefit (provision)..............................      268        (79)         5
                                                               ------     ------     ------
Income before equity in undistributed net income of
  subsidiary................................................    1,229      1,985      1,904
Equity in undistributed net income of subsidiary............    1,712        694      1,071
                                                               ------     ------     ------
Net income..................................................   $2,941     $2,679     $2,975
                                                               ======     ======     ======
</TABLE>

                                       53
<PAGE>
                            STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                1999       1998       1997
                                                              --------   --------   --------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
Cash flows from operating activities:
  Net income................................................  $  2,941   $ 2,679    $ 2,975
  Adjustments to reconcile net income to net cash (used in)
    provided by operating activities:
    Undistributed earnings of subsidiary....................    (1,712)     (694)    (1,071)
    Non-cash compensation...................................        71        --         --
    Changes in assets and liabilities:
      Other assets..........................................    (1,891)     (135)        27
      Other liabilities.....................................       (10)       --        (14)
                                                              --------   -------    -------
        Net cash (used in) provided by operating
          activities........................................      (601)    1,850      1,917
                                                              --------   -------    -------
Cash flows from investing activities:
  Cash paid related to investment in subsidiary.............   (10,000)       --         --
  Cash paid related to land purchase........................    (1,339)     (677)        --
                                                              --------   -------    -------
Cash flows from financing activities:
  Payments on notes payable.................................        --    (1,450)    (1,200)
  Cash dividends............................................    (1,159)     (971)      (620)
  Proceeds from issuance of common stock....................    11,377        --      6,812
  Payment to repurchase common stock........................       (96)       --         --
                                                              --------   -------    -------
        Net cash provided by (used in)financing
          activities........................................    10,122    (2,421)     4,992
                                                              --------   -------    -------
Net (decrease) increase in cash and cash equivalents........    (1,818)   (1,248)     6,909
Cash and cash equivalents, beginning of year................     6,005     7,253        344
                                                              --------   -------    -------
Cash and cash equivalents, end of year......................  $  4,187   $ 6,005    $ 7,253
                                                              ========   =======    =======
</TABLE>

                                       54
<PAGE>
                                    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 15, 2000.

                        EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
      EXHIBITS
---------------------
<C>                          <S>
          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                  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(i)               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(ii)              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(iii)             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:

         a)                  On January 13, 1999, the Company filed a Form 8-K to report
                             the unaudited 1998 results.

         b)                  On March 16, 1999, the Company filed a Form 8-K to report
                             the resignation of Corey J. Coughlin as President and Chief
                             Operating Officer of CNB National Bank and Executive Vice
                             President of CNB Florida Bancshares, Inc. and the hiring of
                             Bennett Brown as President and Chief Operating Officer of
                             CNB National Bank and Executive Vice President of CNB
                             Florida Bancshares, Inc.

         c)                  On May 19, 1999, the Company filed a Form 8-K to report the
                             approval of its shareholders to change the name of the
                             Company to CNB Florida Bancshares, Inc.
</TABLE>

                                       55
<PAGE>
                                   SIGNATURES

    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.

<TABLE>
<S>                                                    <C>  <C>
                                                                CNB FLORIDA BANCSHARES, INC.
                                                                        (Registrant)

                                                       By:           /s/ G. THOMAS FRANKLAND
                                                            -----------------------------------------
                                                                       G. Thomas Frankland
                                                                   EXECUTIVE VICE PRESIDENT AND
                                                                     CHIEF FINANCIAL OFFICER

                                                      Date: March 24, 2000
</TABLE>

    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:

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                /s/ THOMAS R. ANDREWS
     -------------------------------------------       Director                       March 24, 2000
                  Thomas R. Andrews

                /s/ AUDREY S. BULLARD
     -------------------------------------------       Director                       March 24, 2000
                  Audrey S. Bullard

                 /s/ RAYMON J. LAND
     -------------------------------------------       Director                       March 24, 2000
                   Raymon J. Land

               /s/ MARVIN H. PRITCHETT
     -------------------------------------------       Director                       March 24, 2000
                 Marvin H. Pritchett

              /s/ WILLIAM J. STREICHER
     -------------------------------------------       Director                       March 24, 2000
                William J. Streicher

                  /s/ K. C. TROWELL
     -------------------------------------------       Director                       March 24, 2000
                    K. C. Trowell

                                                       Executive Vice President
               /s/ G. THOMAS FRANKLAND                   and Chief Financial
     -------------------------------------------         Officer (Principal           March 24, 2000
                 G. Thomas Frankland                     Financial Officer)

                /s/ MARTHA S. TUCKER                   Sr. Vice President and
     -------------------------------------------         Controller (Principal        March 24, 2000
                  Martha S. Tucker                       Accounting Officer)
</TABLE>

                                       56