##### 



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

For Quarter Ended June 30, 2002

COMMISSION FILE NUMBER 33 ACT FILE NO. -33-90524

VALRICO BANCORP, INC.

---

(Exact name of registrant as specified in its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|(FLORIDA)                                                      |  | 65-0553757                          
|                                                               |  |                                     
|(State of other jurisdiction of
incorporation of organization) |  | (I.R.S. Employee Identification No.)

1815 EAST STATE ROAD 60, VALRICO, FLORIDA 33594

---

(Address of principal executive offices and Zip Code)


(813) 689-1231

---

(Registrants telephone number, including area code)


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.
(1) Yes [X]   (2) No [   ]

AS OF June 30, 2002, THERE WERE 307,077 SHARES OF COMMON STOCK OUTSTANDING





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##### 



VALRICO BANCORP, INC.

INDEX

|                                                                                                    |  |            
|--------------------------------------------------------------------------------------------------- |  | -----------
|                                                                                                    |  | Page Number
|                                                                                                    |  |            
|PART I. FINANCIAL INFORMATION                                                                       |  |            
|                                                                                                   
|Item 1. Financial Statements                                                                        |  |            
|                                                                                                   
|Consolidated balance sheets
 June 30,
     2002 and December 31, 2001                              |  | 3          
|                                                                                                   
|Consolidated statements of
income -
     Three and six months ended
June 30,
     2002 and 2001     |  | 4          
|                                                                                                   
|Consolidated
statements of shareholders
     equity  Six months ended
June 30, 2002
     and 2001 |  | 5          
|                                                                                                   
|Consolidated
statements of cash flows -
     Six months ended June 30, 2002 and 2001                |  | 6          
|                                                                                                   
|Notes to consolidated financial statements                                                          |  | 7          
|                                                                                                   
|Item 2. Managements Discussion and Analysis of
Financial Condition and Results of
Operations       |  | 8          
|                                                                                                   
|PART II. OTHER INFORMATION                                                                          |  | 10         
|                                                                                                   
|SIGNATURES                                                                                          |  | 11         

2



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##### 



VALRICO BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |              |        |         |  | 
|-------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------- | ------------------------------------------ | -------------------------- | ------ | -------------- | ------ | ------------ | ------ | ------- |  | 
|                                                                                                         |                                                 |                         |                                            |                            |        | June 30,       |        | December 31,
|                                                                                                         |                                                 |                         |                                            |                            |        | 2002           |        | 2001        
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         |                                            |                            |        | (In thousands)
|                                                                                                         |                                                 |                         |                                            | Assets                     |        |                |        |              |        |         |  | 
|Cash and Non Interest Bearing Deposits                                                                   |                                                 | $                       | 8,560                                      |                            |        | $              | 6,417  |             
|Federal Funds Sold                                                                                       |                                                 |                         | 8,630                                      |                            |        |                | 3,645  |             
|Securities Available for Sale                                                                            |                                                 |                         | 21,564                                     |                            |        |                | 20,364 |             
|Securities Held to Maturity                                                                              |                                                 |                         | 1,423                                      |                            |        |                | 1,582  |             
|Loans                                                                                                    |                                                 |                         | 66,511                                     |                            |        |                | 66,798 |             
|Facilities                                                                                               |                                                 |                         | 2,991                                      |                            |        |                | 3,231  |             
|Accrued Interest Receivable                                                                              |                                                 |                         | 520                                        |                            |        |                | 632    |             
|Other Assets                                                                                             |                                                 |                         | 2,864                                      |                            |        |                | 2,931  |             
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         | Total Assets                               |                            | $      | 113,063        |        |              | $      | 105,600 | 
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         |                                            | Liabilities                |        |                |        |              |        |         |  | 
|Deposits:                                                                                                |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 | Demand Deposits         |                                            | $                          | 18,440 |                |        | $            | 13,990 |        
|                                                                                                         |                                                 | NOW Accounts            |                                            |                            | 21,130 |                |        |              | 21,145 |        
|                                                                                                         |                                                 | Money Market Accounts   |                                            |                            | 8,537  |                |        |              | 6,698  |        
|                                                                                                         |                                                 | Savings Accounts        |                                            |                            | 12,759 |                |        |              | 11,396 |        
|                                                                                                         |                                                 | Time, $100,000 and over |                                            |                            | 11,742 |                |        |              | 12,372 |        
|                                                                                                         |                                                 | Other Time Deposits     |                                            |                            | 27,470 |                |        |              | 27,568 |        
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         | Total Deposits                             |                            |        | 100,078        |        |              |        | 93,169  | 
|Securities Sold Under the Agreement to Repurchase                                                        |                                                 |                         | 391                                        |                            |        |                | 308    |             
|Accounts Payable and Accrued Liabilities                                                                 |                                                 |                         | 976                                        |                            |        |                | 979    |             
|Advancements under line of credit                                                                        |                                                 |                         | 970                                        |                            |        |                | 970    |             
|Notes Payable                                                                                            |                                                 |                         | 3,003                                      |                            |        |                | 3,040  |             
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         | Total Liabilities                          |                            |        | 105,418        |        |              |        | 98,466  | 
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|Commitments and Contingencies                                                                            |                                                 |                         |                                            |                            |        |                |        |             
|StockHolders Equity                                                                                     |                                                 |                         |                                            |                            |        |                |        |             
|Common Stock, No Par Value, Authorized 1,000,000
shares, issued and outstanding 307,077 on June 30, 2002 |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         | Issued and outstanding 304,728 on Dec. 31, 2001 |                         |                                            | 307                        |        |                |        | 305          |       
|Capital Surplus                                                                                          |                                                 |                         | 2,586                                      |                            |        |                | 2,526  |             
|Retained Earnings                                                                                        |                                                 |                         | 4,556                                      |                            |        |                | 4,236  |             
|Accumulated Other Comprehensive Income                                                                   |                                                 |                         | 196                                        |                            |        |                | 67     |             
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         |                                            | Total Stockholders Equity |        | 7,654          |        |              |        | 7,134   |  | 
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             
|                                                                                                         |                                                 |                         | Total Liabilities and Stockholders Equity |                            | $      | 113,063        |        |              | $      | 105,600 | 
|                                                                                                         |                                                 |                         |                                            |                            |        |                |        |             

See Notes to Consolidated Financial Statements

3



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##### 



VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |         |       | 
|-------------------------- | --------------------------------------------------- | ---------------------- | ---- | ---------------------------------------- | ----- | ------------------------- | ---- | ------- | ----- | ---- | ---- | ------- | ----- | - | ---- | ------- | ----- | 
|                           |                                                     |                        |      | Three Months Ended June 30,              |       | Six Months Ended June 30,
|                           |                                                     |                        |      |                                          |       |                          
|                           |                                                     |                        |      | 2002                                     |       | 2001                      |      | 2002    |       | 2001
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |     
|                           |                                                     |                        |      | (In thousands except for per share data)
|Interest Income            |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Interest and Fees on Loans                          |                        | $    | 1,370                                    |       |                           | $    | 1,529   |       |      | $    | 2,730   |       |   | $    | 3,121   |      
|                           | Interest on Investment Securities                   |                        |      | 258                                      |       |                           |      | 178     |       |      |      | 530     |       |   |      | 304     |      
|                           | Income on Federal Funds Sold                        |                        |      | 33                                       |       |                           |      | 152     |       |      |      | 56      |       |   |      | 306     |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           |                                                     | Total Interest Income  |      |                                          | 1,661 |                           |      |         | 1,859 |      |      |         | 3,316 |   |      |         | 3,731 | 
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Interest Expense           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Interest on Deposits                                |                        |      | 478                                      |       |                           |      | 770     |       |      |      | 1,031   |       |   |      | 1,528   |      
|                           | Other Interest                                      |                        |      | 58                                       |       |                           |      | 68      |       |      |      | 116     |       |   |      | 143     |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           |                                                     | Total Interest Expense |      |                                          | 536   |                           |      |         | 838   |      |      |         | 1,147 |   |      |         | 1,671 | 
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           |                                                     | Net Interest Income    |      |                                          | 1,125 |                           |      |         | 1,021 |      |      |         | 2,169 |   |      |         | 2,060 | 
|Provision for Loan Losses  |                                                     |                        | 30   |                                          |       |                           | 30   |         |       |      | 60   |         |       |   | 60   |        
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Net Interest Income after
Provision for loan losses |                        |      | 1,095                                    |       |                           |      | 991     |       |      |      | 2,109   |       |   |      | 2,000   |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Other Income:              |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Service Charge on Deposit Accounts                  |                        |      | 248                                      |       |                           |      | 223     |       |      |      | 458     |       |   |      | 436     |      
|                           | Miscellaneous Income                                |                        |      | 58                                       |       |                           |      | 19      |       |      |      | 104     |       |   |      | 46      |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           |                                                     | Total Other Income     |      |                                          | 306   |                           |      |         | 242   |      |      |         | 562   |   |      |         | 482   | 
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Other Expenses:            |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Salaries and Employee Benefits                      |                        |      | 551                                      |       |                           |      | 526     |       |      |      | 1,090   |       |   |      | 1,051   |      
|                           | Occupancy Expense                                   |                        |      | 272                                      |       |                           |      | 93      |       |      |      | 365     |       |   |      | 173     |      
|                           | Equipment Expense                                   |                        |      | 73                                       |       |                           |      | 82      |       |      |      | 148     |       |   |      | 159     |      
|                           | Stationery, Printing, and Supplies                  |                        |      | 83                                       |       |                           |      | 37      |       |      |      | 88      |       |   |      | 68      |      
|                           | Miscellaneous Expenses                              |                        |      | 191                                      |       |                           |      | 183     |       |      |      | 485     |       |   |      | 412     |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           |                                                     | Total Other Expenses   |      |                                          | 1170  |                           |      |         | 921   |      |      |         | 2,176 |   |      |         | 1,863 | 
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Income Before Income Taxes |                                                     |                        | 231  |                                          |       |                           | 312  |         |       |      | 495  |         |       |   | 619  |        
|Income Taxes               |                                                     |                        | 86   |                                          |       |                           | 101  |         |       |      | 175  |         |       |   | 228  |        
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Net Income                 |                                                     | $                      | 145  |                                          |       | $                         | 211  |         |       | $    | 320  |         |       | $ | 391  |        
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Per share Information:     |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|                           | Average Shares Outstanding                          |                        |      | 306,018                                  |       |                           |      | 304,257 |       |      |      | 306,018 |       |   |      | 304,257 |      
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        
|Net Income Per Share       |                                                     | $                      | 0.47 |                                          |       | $                         | 0.69 |         |       | $    | 1.04 |         |       | $ | 1.29 |        
|                           |                                                     |                        |      |                                          |       |                           |      |         |       |      |      |         |       |   |      |        

See Notes to Consolidated Financial Statements

4



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##### 



VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(UNAUDITED)
(In Thousands)

|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   |            |     |       |   |       |     |  
|-------------------------- | --------------------------------------------------------- | - | ------ | - | ------- | - | -------- | -- | ---------- | - | -------- | --- |  | - | ---------- | --- | ----- | - | ----- | --- | -
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   | Net        |     |       |   |      
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   | Unrealized |     | Total
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   | Holding    |     | Stock
|                           |                                                           |   | Common |   | Capital |   | Retained |    | Losses On  |   | Holders'
|                           |                                                           |   | Stock  |   | Surplus |   | Earnings |    | Securities |   | Equity  
|                           |                                                           |   |        |   |         |   |          |    |            |   |         
|Balance, December 31, 2001 |                                                           | $ | 305    |   |         | $ | 2,526    |    |            | $ | 4,236    |     |  | $ | 67         |     |       | $ | 7,134 |    
|                           | Net Income                                                |   |        |   |         |   |          |    |            |   |          | 320 |  |   |            |     |       |   |       | 320 |  
|                           | Stock Sale                                                |   |        | 2 |         |   |          | 60 |            |   |          |     |  |   |            |     |       |   |       | 62  |  
|                           | Net Change in Net Unrealized
holding losses on securities |   |        |   |         |   |          |    |            |   |          |     |  |   |            | 129 |       |   |       | 129 |  
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   |            |     |       |   |       |    
|Balance, June 30, 2002     |                                                           | $ | 307    |   |         | $ | 2,586    |    |            | $ | 4,556    |     |  | $ | 196        |     |       | $ | 7,645 |    
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   |            |     |       |   |       |    
|Balance, December 31, 2000 |                                                           | $ | 304    |   |         | $ | 2,515    |    |            | $ | 3,535    |     |  | $ | (42        | )   |       | $ | 6,312 |    
|                           | Net Income                                                |   |        |   |         |   |          |    |            |   |          | 391 |  |   |            |     |       |   |       | 391 |  
|                           | Stock Redemption                                          |   |        |   |         |   |          | (2 | )          |   |          |     |  |   |            |     |       |   |       | (2  | )
|                           | Net Change in Net Unrealized
holding losses on securities |   |        |   |         |   |          |    |            |   |          |     |  |   |            | 64  |       |   |       | 64  |  
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   |            |     |       |   |       |    
|Balance, June 30, 2001     |                                                           | $ | 304    |   |         | $ | 2,513    |    |            | $ | 3,926    |     |  | $ | 22         |     |       | $ | 6,765 |    
|                           |                                                           |   |        |   |         |   |          |    |            |   |          |     |  |   |            |     |       |   |       |    

See Notes to Consolidated Financial Statements

5



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##### 



VALRICO BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |      |        |   |        |  
|------------------------------------------------------------------- | -------------------------------- | ------------------------------------------------------------------------ | ------------------------------------------------ | --------------------------------------------------------------------------- | ------ | ------------------------- | ------ | ---- | ------ | - | ------ | -
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        | Six Months Ended June 30,
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                          
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        | 2002                      |        | 2001
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        | (In thousands)           
|Cash Flows from Operating Activities                                |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  | Net Income                                                               |                                                  | $                                                                           | 320    |                           |        | $    | 391    |  
|                                                                    |                                  | Adjustments to Reconcile net income to net                               |                                                  |                                                                             |        |                           |        |      |        |  
|                                                                    |                                  |                                                                          | Cash provided by (used in) operating activities: |                                                                             |        |                           |        |      |        |   |       
|                                                                    |                                  |                                                                          |                                                  | Provision for Loan Losses                                                   |        |                           | 60     |      |        |   | 60     |  
|                                                                    |                                  |                                                                          |                                                  | Depreciation and amortization                                               |        |                           | 253    |      |        |   | 130    |  
|                                                                    |                                  |                                                                          |                                                  | Net amortization (accretion) of investments
Security premiums and discounts |        |                           | 29     |      |        |   | 13     |  
|                                                                    |                                  |                                                                          |                                                  | (Increase) Decrease in assets:                                              |        |                           |        |      |        |   |        |  
|                                                                    |                                  |                                                                          |                                                  | Accrued Interest Receivable                                                 |        |                           | 112    |      |        |   | (51    | )
|                                                                    |                                  |                                                                          |                                                  | Other Assets                                                                |        |                           | 67     |      |        |   | (315   | )
|                                                                    |                                  |                                                                          |                                                  | Increase (Decrease) in liabilities
Accounts payable and Accrued Liabilities |        |                           | (3     | )    |        |   | 218    |  
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  |                                                                          |                                                  | Net Cash provided by (used in ) operating
Activities                        |        |                           | 838    |      |        |   | 446    |  
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|Cash flows from investing activities Securities available for sale: |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  |                                                                          |                                                  | Purchase of investment securities                                           |        |                           | (8,076 | )    |        |   | (8,207 | )
|                                                                    |                                  |                                                                          |                                                  | Proceeds from maturities of investment securities                           |        |                           | 6,975  |      |        |   | 2,154  |  
|                                                                    |                                  | Securities to be Held to Maturity:                                       |                                                  |                                                                             |        |                           |        |      |        |  
|                                                                    |                                  |                                                                          |                                                  | Proceeds from maturities of investment securities                           |        |                           | 159    |      |        |   | 68     |  
|                                                                    |                                  | (Increase) Decrease in Federal Funds Sold                                |                                                  |                                                                             | (4,985 | )                         |        |      | (3,056 | )
|                                                                    |                                  | Net (Increase) Decrease in Loans                                         |                                                  |                                                                             | 227    |                           |        |      | 694    |  
|                                                                    |                                  | Purchase of facilities                                                   |                                                  |                                                                             | (13    | )                         |        |      | (84    | )
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  |                                                                          |                                                  | Net Cash provided by (used in) Investing Activities                         |        |                           | (5,713 | )    |        |   | (8,431 | )
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|Cash flows form financing activities:                               |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  | Increase (Decrease) in deposits                                          |                                                  |                                                                             | 6,909  |                           |        |      | 8,977  |  
|                                                                    |                                  | Net increase (Decrease) in securities sold under agreement
to repurchase |                                                  |                                                                             | 83     |                           |        |      | (59    | )
|                                                                    |                                  | Net increase (Decrease)in notes payable                                  |                                                  |                                                                             | (36    | )                         |        |      | (94    | )
|                                                                    |                                  | Sale (redemption) of Common Stock                                        |                                                  |                                                                             | 62     |                           |        |      | 2      |  
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    |                                  |                                                                          |                                                  | Net Cash Provided by (used by) financing activities                         |        |                           | 7,018  |      |        |   | 8,826  |  
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|Net increase (decrease) in cash                                     |                                  |                                                                          | 2,143                                            |                                                                             |        |                           | 841    |     
|Cash, beginning of period                                           |                                  |                                                                          | 6,417                                            |                                                                             |        |                           | 5,764  |     
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|Cash, ending of period                                              |                                  | $                                                                        | 8,560                                            |                                                                             |        | $                         | 6,605  |     
|                                                                    |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                   |                                  |                                                                          |                                                  |                                                                             |        |                           |        |     
|                                                                    | Cash paid during the period for: |                                                                          |                                                  |                                                                             |        |                           |        |      |       
|                                                                    |                                  |                                                                          |                                                  | Interest                                                                    |        | $                         | 1,463  |      |        | $ | 1,499  |  
|                                                                    |                                  |                                                                          |                                                  | Income taxes                                                                |        | $                         | 59     |      |        | $ | 141    |  

See Notes to Consolidated Financial Statements

6



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##### 



VALRICO BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2002

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America. In the opinion of management, all necessary adjustments (consisting
of normal recurring entries) have been made for a fair presentation of the
accompanying unaudited consolidated financial statements. These financial
statements rely, in part, on estimates. The results for the period are not
necessarily indicative of the results to be expected for the entire year.

Valrico Bancorp, Inc., a one-bank holding company, acquired 100% of the common
stock of Valrico State Bank as of May 31, 1995 in a transaction accounted for
similar to a pooling of interests. Therefore, the unaudited consolidated
financial statements include the accounts of Valrico Bancorp, Inc. (the Company)
and its wholly owned subsidiary, Valrico State Bank (the Bank). Significant
intercompany balances and transactions have been eliminated in consolidation.

Net income per share has been computed by dividing net income by the average
number of common shares outstanding of 306,018 as of June 30, 2002, and 304,257
as of June 30, 2001.

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VALRICO BANCORP, INC.

MANAGEMENTS DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The Companys primary asset is its subsidiary bank, which is in its twelfth year
of operation. During the six months ended June 30, 2002, the Bank experienced a
growth in deposits with an increase of $6,909,000 or 7.4%. Demand Deposit
Accounts had the highest percentage of growth at 31.8%, or an increase of
$4,450,000 in the six months ended June 30, 2002.

Loan growth decreased $253,000 or 1.4% for the six months ended June 30, 2002.
The allowance for credit losses at June 30, 2002 was at $984,000 compared to
978,000 at December 31, 2001. The Bank had $60,000 in charge-offs and had
recoveries in the amount of $6,000 during the six months ended June 30, 2002,
and has loan classified as troubled in the amount of $68,000 as of June 30,
2002. A total of $60,000 was expensed for provision for loan losses during the
period. Management considers the allowance to be adequate at this time.

Nonaccrual loans amounted to $455,000 and $483,000 at June 30, 2002 and 2001,
respectively. Loans 90 days or more past due amounted to $0 and $504,000 at June
30, 2002 and 2001, respectively. There were restructured loans in the amount of
$168,000 and $356,000 at June 30, 2002 and 2001, respectively. The following
table sets forth a summary of loan loss experience:

Analysis of the Allowance for Loan Losses

|                                                                                          |                                        |   |                |    |          |   |       |    | 
|----------------------------------------------------------------------------------------- | -------------------------------------- | - | -------------- | -- | -------- | - | ----- | -- | 
|                                                                                          |                                        |   | June 30,       |    | June 30,
|                                                                                          |                                        |   | 2002           |    | 2001    
|                                                                                          |                                        |   |                |    |         
|                                                                                          |                                        |   | (in thousands)
|Balance at Beginning of Period                                                            |                                        | $ | 978            |    |          | $ | 943   |   
|                                                                                          |                                        |   |                |    |          |   |       |   
|Charge-offs:                                                                              |                                        |   |                |    |          |   |       |   
|                                                                                          | Commercial, Financial and Agricultural |   |                | 4  |          |   |       |   | 
|                                                                                          | Real Estate-Construction               |   |                | 40 |          |   |       |   | 
|                                                                                          | Real Estate-Mortgage                   |   |                |   |          |   |       |   | 
|                                                                                          | Installment Loans to Individuals       |   |                | 16 |          |   |       | 36 | 
|                                                                                          | Lease Financing                        |   |                |   |          |   |       |   | 
|                                                                                          |                                        |   |                |    |          |   |       |   
|Total Charge-offs                                                                         |                                        |   | 60             |    |          |   | 36    |   
|                                                                                          |                                        |   |                |    |          |   |       |   
|Recoveries:                                                                               |                                        |   |                |    |          |   |       |   
|                                                                                          | Commercial, Financial and Agricultural |   |                |   |          |   |       | 19 | 
|                                                                                          | Real Estate-Construction               |   |                |   |          |   |       |   | 
|                                                                                          | Real Estate-Mortgage                   |   |                |   |          |   |       |   | 
|                                                                                          | Installment Loans to Individuals       |   |                | 6  |          |   |       | 11 | 
|                                                                                          | Lease Financing                        |   |                |   |          |   |       |   | 
|                                                                                          |                                        |   |                |    |          |   |       |   
|Total Recoveries                                                                          |                                        |   | 6              |    |          |   | 30    |   
|                                                                                          |                                        |   |                |    |          |   |       |   
|Net Charge-offs                                                                           |                                        |   | (54            | )  |          |   | (6    | ) 
|Additions Charged to Operation                                                            |                                        |   | 60             |    |          |   | 60    |   
|                                                                                          |                                        |   |                |    |          |   |       |   
|Balance at end of Period                                                                  |                                        | $ | 984            |    |          | $ | 997   |   
|                                                                                          |                                        |   |                |    |          |   |       |   
|Ratio of Net Charge-offs during the period to average loans
outstanding during the period |                                        |   | (0.08          | )% |          |   | (0.01 | )%
|                                                                                          |                                        |   |                |    |          |   |       |   

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VALRICO BANCORP, INC.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)

Consolidated net income for the three months ending June 30, 2002 was $145,000
or $0.47 per share which compares to $211,000 or $0.67 per share for the same
period in 2001. This represents a decrease over the comparable quarter of
$66,000, which is attributable mostly to the costs associated with an OREO
property. The bank expects to recover most, if not all, of these costs in time.

Salaries and benefits represent 50.1% of non-interest expenses for the six
months ended June 30, 2002, compared to 56.4% for the six months ended June 30,
2001. Salary expense for the six months ended June 30, 2002 increased 3.7% over
the same period for 2001

The Tier I capital ratio was 7.01% and Total Capital ratio was 7.91% at June 30,
2002. The tier I capital to total risk-weighted assets ratio was 9.68% at June
30, 2002.

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PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed for the quarter ended June 30, 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on August 14th, 2002 on its
behalf by the undersigned thereunto duly authorized.

| |  |                                                 
| |  | ------------------------------------------------
| |  | VALRICO BANCORP, INC.                           
|
| |  | By: /s/ Bob Mclean                              
| |  |                                                 
| |  | Bob Mclean
President and Chief Executive Officer
|
| |  | By: /s/ Jerry L. Ball                           
| |  |                                                 
| |  | Jerry L. Ball
Executive Vice President          

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