<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-K

   Annual Report pursuant to Section 13 of The Securities Exchange Act of 1934

                  For the fiscal year ended December 31, 1996
                                 File No. 1-6963

                               ORIOLE HOMES CORP.
       ------------------------------------------------------------------
       1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445
                                 (561) 274-2000




           Florida                                         59-1228702
  ------------------------                           ---------------------
  (State of Incorporation)                           (I.R.S. Employer I.D.)


Securities registered pursuant of Section 12(b) of
  the act:



                                                        Name of Each Exchange on
Title of Each Class                                         Which Registered
------------------------------------                    ------------------------
Class A Common Stock, $.10 par Value                     American Stock Exchange

Class B Common Stock, $.10 par Value                     American Stock Exchange

12 1/2% Senior Notes due 2003


                                   ----------

         The Registrant (1) HAS filed all reports required to be filed by
Section 13 of the Securities Exchange Act of 1934 during the preceding twelve
months; and (2) HAS been subject to the filing requirements for at least the
past 90 days.

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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 [ X ].

         As of March 17, 1997, the Company had outstanding 1,874,949 shares of
its Class A Common Stock and 2,750,575 shares of its Class B Common Stock.

         The aggregate market value of voting stock held by non-affiliates of
the Registrant is $24,173,243 as of March 17, 1997.

         Part II is partially incorporated by reference from the Registrant's
Annual Report to Shareholders for the year ended December 31, 1996, and Part III
is incorporated by reference from the Registrant's Proxy statement for the 1997
Annual Meeting.




<PAGE>   2


                                     PART I


ITEMS 1 AND 2   BUSINESS AND PROPERTIES
-------------   -----------------------

         Oriole Homes Corp. ("Oriole" or the "Company") has built and sold
single-family homes, patio homes, townhouses, villas, duplexes and low- and
mid-rise condominiums in planned communities in southeast Florida since 1963.
During each of the last five years, Oriole was the largest builder of
condominiums for active adults in Palm Beach County, both in dollar volume and
number of units sold. The Company's attributes have been, (i) construction of
quality homes within communities that offer a wide range of amenities, (ii)
satisfied customers who provide a continual source of referrals, (iii) offering
a wide selection of moderately priced housing, (iv) extensive knowledge of the
southeast Florida market, (v) effective cost control policies, and (vi) a land
acquisition and development strategy that permits development and construction
in phases, and ensures availability of strategically located land for future
development.

         The Company will continue to adhere to most of its prior attributes but
will also refine and adopt new strategies as it determines appropriate to meet
evolving market conditions. In this regard, the Company is now extending its
geographic market into Bonita Springs (southwest Florida) and the Ocala (central
Florida) area to take advantage of the accelerated growth in those communities.
It is also reducing its reliance on purchasing large tracts of land and building
a large variety of homes in a community. The combination of land carrying costs
and a reduction in the rate of price appreciation is making it prudent to
purchase property that is ready for immediate development. Going forward, the
Company wil place greater emphasis on analyzing current trends and then taking
advantage of opportunities in the market.

         Approximately 64 percent of Oriole's revenues are derived from sales in
communities designed exclusively for active adults (age 55 and over), the
fastest growing demographic segment in the United States. The Company alters its
product mix to meet changes in the housing preferences of this market, which
enjoys a high percentage of discretionary income. Home prices range from
$117,000 to $280,000 in the Company's active adult communities. In 1996,
approximately 64 percent of Oriole's sales of homes and condominiums in
communities designed for active adults were cash sales. The sales prices of
Oriole's residences averaged approximately $165,283 for condominiums and
$177,254 for single-family homes during the year ended December 31, 1996.

         The Company was incorporated in the State of Florida in 1968 as the
successor to six corporations engaged in the construction and sale of
single-family homes since 1963. Unless the context otherwise requires, the terms
"Company" and "Oriole" refer to Oriole Homes Corp. and its consolidated
subsidiaries. The Company's principal executive offices are located at


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<PAGE>   3



1690 South Congress Avenue, Suite 200, Delray Beach, Florida 33445, and its
telephone number is (561) 274-2000.

HOME BUILDING DATA (IN 000'S)

         The following table sets forth information concerning sales, new
contracts and backlog for each of the past five years for the Company's
single-family homes, patio homes, townhomes, villas, duplexes and low- and
mid-rise condominiums.

<TABLE>
<CAPTION>
                               Years Ended December 31, (Dollars in Thousands)
                               -----------------------------------------------
                              1992       1993      1994        1995      1996
                              ----       ----      ----        ----      ----
<S>                        <C>        <C>        <C>        <C>        <C>
Total Sales
         Sales value       $ 89,423   $ 98,302   $110,116   $ 73,409   $100,661
         Number of homes        708        771        775        433        597

Total New Contracts
         Sales value       $ 91,216   $108,180   $100,109   $ 79,410   $110,122
         Number of homes        743        788        661        483        670

Total Backlog (1)
         Sales value       $ 29,477   $ 39,355   $ 29,348   $ 35,349   $ 44,810
         Number of homes        240        257        143        193        266


</TABLE>
----------

(1) Backlog as of the end of the period.


         The Company expects to fill substantially all backlog, both in number
of homes and dollar amount, within a twelve month period. It typically takes the
Company four to eight months after receipt of a sales contract to build and
deliver the completed home to the purchaser. The Company's backlog historically
tends to increase between January and May. These contracts are generally with
active adults who are planning their retirement and desire occupancy of their
homes in the months of October through December.



OPERATING POLICIES

         QUALITY CONSTRUCTION AND DIVERSE AMENITIES. The Company is a developer
of moderately-priced residential housing and related amenities, which create a
total lifestyle unique to Oriole communities. The Company's communities include
extensive recreational facilities, which range from social clubhouses and
swimming pools in its single-family communities to multi-million dollar
clubhouses, with tennis courts, indoor and outdoor swimming pools, theaters for
the performing arts and health clubs/spas, in its active adult communities.



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<PAGE>   4


         The development of planned communities and the construction of such
amenities require financial resources unavailable to many home builders, thereby
limiting the number of builders that might otherwise compete directly with the
Company. The Company believes that its planned communities appeal to purchasers
and permit the Company to offer its customers various housing products in one
location. The Company has built over 21,500 homes in southeast Florida, and
satisfied purchasers provide the Company with a continual source of referrals.

         PRODUCT DIVERSIFICATION. The Company's homes appeal to a wide variety
of buyers and lifestyles. Accordingly, the Company offers a diversity of home
styles and price ranges at various locations. The Company sells single-family
homes, patio homes, townhomes, villas, duplexes and low- and mid-rise
condominiums. Home designs are continually reviewed and refined to reflect
changing tastes. Sales prices presently range from approximately $90,000 to
$400,000, and the average sales price of homes delivered during 1996 was
approximately $168,600. See "Communities Currently Under Development or
Construction."

         FLORIDA MARKET. The Company's residential developments are all located
in the State of Florida and primarily in Southeast Florida (Broward, Palm Beach
and Martin Counties). The Company also has developments in Bonita Springs and
the Ocala area, Florida.

         COST CONTROLS AND COMPANY POLICIES. The Company has attempted to
control costs by (i) acquiring large tracts of undeveloped land and developing
the land in phases, (ii) developing planned communities, which permit the
Company to take advantage of certain economies of scale, (iii) generally
beginning construction only when homes are under contract, and (iv) acting as
general contractor and hiring subcontractors on a fixed-price or other
cost-effective basis.

         The Company's general policy is not to begin construction of
single-family homes prior to the execution of a sales contract, which minimizes
the costs and risk of completed but unsold inventory. The Company maintains a
limited inventory of completed homes for sale. There were 21 single family homes
completed and unsold in inventory (not including model homes) at December 31,
1996. In many instances, the Company will begin multi-family construction
(duplex, townhouse, villa and multi-story complexes) when sales contracts are in
effect for a predetermined percentage of the units. As of December 31, 1996, the
Company's inventory included 78 unsold completed units in multi-family projects.

         LAND ACQUISITION AND DEVELOPMENT. The Company selects locations for its
developments on the basis of accessibility to major highways and thoroughfares,
proximity to shopping areas, medical facilities and community cultural and
recreation centers. The Company generally acquires large tracts of land that
require site improvements prior to


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construction. The tracts of land are separated into phases for both development
and construction. The Company typically acquires land on which construction can
begin within three years.

         The Company spends considerable effort in developing design and
marketing concepts for each of its communities. The design concepts determine
the size, style and price range of homes, the layout of streets and individual
lots and the overall community design. The product line offered in a particular
community depends upon many factors, including the housing generally available
in the area, the needs of the particular market and the cost of building lots.
After finalizing the design concepts, the Company undertakes development
activities that include site planning and engineering, construction of roads,
sewer, water and drainage facilities, recreational facilities and other
amenities.



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<PAGE>   6



RESIDENTIAL PROJECTS AND PRODUCT LINES

The following table summarizes information as of December 31, 1996 with respect
to the Company's principal projects under development or construction during
1996.

<TABLE>
<CAPTION>
                                                             Units Sold    Units Sold
      Name and           Year                      Total         and          and
     Location of      Development                  Units      Delivered    Delivered      Units Under     Units Under  Remaining
     Development        Started       Type        Planned     Thru 1996     in 1996     Construction(1)    Contract    Units(2)
     -----------        -------       ----        -------     ---------    ---------    ---------------    --------    --------
                                                                                                  At December 31, 1996
                                                                                        ---------------------------------------
<S>                  <C>            <C>           <C>          <C>           <C>            <C>            <C>         <C>
Lakeshore at              1981         Mixed        1,160         426(3)         --            --            --         200
University Park
Miramar

Country Glen              1993         Single         300          70             43           22            30         200
Cooper City                            Family

Cypress Bend              1980         Mixed        1,583       1,551(4)           2           --            --         --
Pompano Beach

Sandpiper Landing         1995         Single         145          18             18           23            28          99
Coconut Creek                          Family

Boca Springs              1990         Single         214         214              1           --            --         --
Boca Raton                             Family

Fairway Point             1993         Active          60          59             17           --            --           1
Boca Raton                             Adult

Coral Lakes               1992         Active       1,253(6)      332            145           61            71         850
Delray Beach                           Adult

Palm Isles                1991         Active         992         888             94           12             8          96
Boynton Beach                          Adult

Majestic Isles            1994         Active         450          80             76           65            48         322
Boynton Beach                          Adult

Palm Isles West           1995         Active         235          36             36           19            17         182
Boynton Beach                          Adult


</TABLE>


                                       5
<PAGE>   7


RESIDENTIAL PROJECTS AND PRODUCT LINES - Continued


<TABLE>
<CAPTION>
                                                             Units Sold   Units Sold
      Name and           Year                      Total        and          and
     Location of      Development                  Units     Delivered    Delivered      Units Under     Units Under  Remaining
     Development        Started       Type        Planned    Thru 1996     in 1996     Construction(1)    Contract    Units(2)
     -----------        -------       ----        -------    ---------    ----------   ---------------    --------    --------
                                                                                                 At December 31, 1996
                                                                                       ---------------------------------------
<S>                  <C>            <C>          <C>          <C>           <C>            <C>            <C>         <C>

Cypress Woods            1989         Single        152           62(5)         22         --         --         --
Lake Worth                            Family

Summer Chase             1989         Active        221          129            19          7          9          83
Lake Worth                            Adult

Whispering Sound         1991         Active        230          133            40         12         12          85
Palm City/Stuart                      Adult

Sandpiper Isles          1995         Mixed         116(6)        18            17          4          4          94
Bonita Springs

Sandpiper Greens         1995         Mixed          60            4             4         --          1          55
Bonita Springs

Stonecrest               1995         Active        239(7)        63            63         23         38         138
Ocala                                 Adult


</TABLE>


(1) Includes model units.
(2) Includes model units and potential units to be constructed.
(3) Does not include 535 rental units.
(4) Does not include 32 rental units.
(5) Does not include 90 lots sold.
(6) Reduction in original number of units planned.
(7) Includes purchase of additional land.


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<PAGE>   8




COMMUNITIES UNDER DEVELOPMENT OR CONSTRUCTION

         COUNTRY GLEN is a community of single-family homes located in Cooper
City, Florida. The community consists of 300 units with recreational facilities
and is presently under development and construction. Prices range from $230,000
to $390,000.

         SANDPIPER LANDING is a 240 acre master planned private gated community
consisting of 145 3 and 4 bedroom, two-car garage residences, priced from
$125,000 to $160,000, located in Coconut Creek, Florida.

         CORAL LAKES is an active adult community at Delray Beach. The community
of 1,253 units features condominiums in two- and four-story buildings, villas,
duplexes and a section of single-family residences with two-car garages. Prices
range from $98,000 to $183,000. This community has a multi-million dollar
on-site clubhouse and spa, similar to but larger than the completed facility at
Palm Isles, and also feature satellite swimming pools.

         PALM ISLES is an active adult community of 992 residences at Boynton
Beach. Prices in this community range from $125,000 to $135,000, and home styles
include villas, duplexes, lakefront two-story condominiums and single-family
residences. The community has a multi-million dollar on-site clubhouse and spa
with eight tennis courts. The community also features satellite swimming pools.

         PALM ISLES WEST, an active adult community in Boynton Beach, features
235 duplexes and single-family residences priced from $123,000 to $184,000.
Residents of this community will share Palm Isles' multi-million dollar
clubhouse, spa, and tennis courts, plus enjoy the convenience of a satellite
swimming pool and sun deck within Palm Isles West.

         MAJESTIC ISLES is an active adult community of 450 duplexes and
single-family residences located in Boynton Beach. Prices range from $121,000 to
$183,000. The community will feature an intimate, luxury clubhouse with swimming
pool and tennis courts.

         CYPRESS WOODS is a single-family home community located in Lake Worth
and consists of 152 luxury single-family homes. Prices are from $150,000 to
$185,000. Recreational facilities include a private family park area with
basketball, tennis courts and a play area for children. This community was sold
out in 1996.

         SUMMER CHASE is a community for active adults located in Lake Worth.
The community features 221 single-family residences with two-car garages. The
price range is from $138,000 to $162,000. A social clubhouse is available to all
residents along with tennis courts and pool.


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<PAGE>   9


         WHISPERING SOUND is an active adult community of 230 duplex residences
located in Martin County at Palm City/Stuart. The residences range in price from
$110,000 to $118,000. The community includes natural preserved areas offering
backyard privacy for nearly every residence. The social clubhouse is available
to all residents along with tennis courts and pool.

         SANDPIPER ISLES is a 116 home neighborhood of luxury 3 bedroom, 2 bath
coach homes surrounded by lakes and preserves, priced from $185,000 and luxury 3
bedroom, 3 1/2 bath mid-rise condominiums, priced from $225,000, all with
private social clubhouse, lakeside pool and gated entry, located in Bonita
Springs, Florida.

         SANDPIPER GREENS is a neighborhood of sixty 3 bedroom, 2 bath garden
mid-rise residences adjoining a country club with a championship 18-hole golf
course, priced from $170,000 to mid $200's, located in Bonita Springs, Florida.
Residents have the option of becoming members of such country club.

         ORIOLE AT STONECREST is a 239 home active adult community consisting of
2 and 3 bedroom single-family homes and villas, priced from $90,000 to $125,000,
offering championship golf, social recreational clubhouse with pool, located in
Marion County close to Ocala, Florida.

CONSTRUCTION

         The Company acts as the general contractor for the construction of its
developments except in the Bonita Springs and Ocala projects. Company employees
monitor the construction of each project, participate in design and building
decisions, coordinate the activities of subcontractors and suppliers, maintain
quality and cost controls and monitor compliance with zoning and building codes.
Subcontractors typically are retained for a specified phase of development
pursuant to a contract that obligates the subcontractor to complete construction
at a fixed price. Agreements with the Company's subcontractors are generally
entered into after competitive bidding. The Company does not have any long-term
contractual commitments with any of its subcontractors.

         The Company generally constructs single-family homes only after the
execution of a sales contract. The Company attempts to minimize cancellations by
requiring a down payment and qualifying its customers for mortgage approval
prior to commencement of construction.

         The Company offers a variety of options for each of its homes. These
options permit buyers to customize their homes and permit the Company to offer
variations on standard models while maintaining the efficiencies of a production
builder. The


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<PAGE>   10

Company believes the availability of these options increases the appeal of the
Company's homes and makes them suitable to the needs of a wide variety of
buyers.

         At December 31, 1996, the Company employed approximately 61 people in
the construction operation. Most construction materials are obtained by
subcontractors and are readily available from numerous sources. The Company has
not experienced any material delays in construction due to shortages of
materials or labor, however, the fact that there has been a significant increase
in construction activities in southeast Florida could result in the Company or
its subcontractors experiencing shortages in the labor market.

MARKETING AND SALES

         The Company sells its homes through sales managers and independent
commissioned salespersons, who typically work in model sales centers or from
sales offices located in model homes and condominiums in the Company's
communities. The Company also cooperates with independent real estate brokers.
The Company trains sales personnel on the availability of financing,
construction schedules, marketing and advertising plans. The Company's sales and
marketing organization consists of approximately 69 Company employees and sales
personnel, all of whom are licensed real estate agents in the State of Florida.
The concentration of the Company's projects in southeast Florida permits the
Company to engage independent commission salespersons on a long-term, rather
than a project-by-project basis, which management believes results in reduced
training costs and a more motivated sales force with extensive knowledge of the
Company's operating policies and housing products.

         The Company advertises in newspapers and magazines, by direct mail and
on billboards. In fiscal 1996, the Company's aggregate advertising costs were
approximately $2.1 million. The Company maintains model homes and condominiums
in all its communities, and management believes that these model units play a
particularly important role in the Company's marketing efforts. The Company
expends a significant effort in creating an attractive atmosphere at its models,
where interior decorations are based upon the lifestyles of the target buyers.

COMPETITION AND MARKET FACTORS

         The business of developing and selling residential properties is highly
competitive and fragmented. The Company competes with numerous large and small
builders on the basis of a number of interrelated factors, including location,
reputation, amenities, design, quality and price. Some of these competing
builders have nationwide operations and greater financial resources. The
Company's products must also compete with resales of existing homes and
condominiums and available rental housing. Management




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<PAGE>   11

believes that the Company's primary competitive strengths have been (i)
satisfied customers who provide a continual source of referrals, (ii) its
ability to offer quality residences with certain customized features at a wide
range of prices, (iii) the location of its communities, and (iv) its reputation
for service, innovative design and value pricing.

         The Company maintains a strong position in the active adult community
market in southeast Florida and has been the leading builder of condominiums in
Palm Beach County in each of the last five years. The Company focuses on
providing a high-quality, active lifestyle for adults.

         The housing industry is cyclical and is affected by consumer confidence
levels, prevailing economic conditions and interest rates. A variety of other
factors affect the housing industry and the demand for new homes, including the
availability and increase in the cost of labor and materials, changes in costs
associated with home ownership, such as increases in property taxes and energy
cost, changes in consumer preferences, demographic trends and the availability
of mortgage financing programs.

CUSTOMER FINANCING

         The Company works with a number of mortgage lenders to provide home
buyers with a variety of conventional mortgage financing programs. By making
available a variety of attractive mortgage programs, the Company is able to
better coordinate and expedite the entire sales transaction by assuring that
mortgage commitments are obtained and that closings take place on a timely and
efficient basis. In 1996, approximately 64 percent of Oriole's sales of homes
and condominiums were cash sales.

RENTAL APARTMENTS

         The Company owns 480 rental units known as The Pier Club, in Miramar,
Florida. The Company also rents an additional 55 units in other developments.
The Company rents these apartments, typically under one-year leases. The
Company's future plans do not presently include the construction of any
additional rental communities.

JOINT VENTURES

         As of December 31, 1996, Oriole had funded $5.1 million in a joint
venture with Regency Homes, Inc., a prominent builder of residential housing in
South Florida. The joint venture project, funded in 1993, approved for 1,100
units known as Regency Lakes was entered into in 1994. Oriole Homes Corp. has
purchased from the joint venture 145 sites for $3.3 million.

         Also as of December 31, 1996, Oriole has funded $1.4 million in a joint
venture with Gordon Family Homes, Inc., a builder of luxury homes in Delray
Beach, Florida. The


                                       10

<PAGE>   12

project will contain 89 single family home and is located on Jog Road south of
Linton Boulevard in Palm Beach County, Florida.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

         In developing a community, the Company must obtain the approval of
numerous government authorities that regulate such matters as permitted land
uses, density levels, the installation of utilities such as water, drainage and
waste disposal, and the dedication of acreage for open space, parks, schools and
other community purposes. Several authorities in Florida, including Broward and
Palm Beach counties, have imposed impact fees as a means of defraying the costs
of providing certain governmental services to developing areas. The amount of
these impact fees has increased significantly during recent years. Building
codes in these counties require the use of specific construction material which
increases the energy efficiency of homes. In addition, each county in which the
Company is building has imposed restrictive zoning and density requirements in
order to limit the number of persons who live and work within their boundaries.
Counties and cities within the State of Florida have also, at times, declared
moratoriums on the issuance of building permits and imposed other restrictions
in the areas where sewage treatment facilities and other public facilities do
not reach minimum standards. To date, restrictive zoning laws and imposition of
moratoriums have not had a material adverse effect on the Company's development
activities. However, there is no assurance that such restrictions will not
adversely affect the Company in the future.

         The Company is also subject to a variety of federal, state and local
statutes, ordinances, rules and regulations concerning protection of the
environment. Environmental laws vary greatly depending on the community's
location, the site's environmental conditions and the present and former uses of
the site. These environmental laws may result in delays, causing the Company to
incur substantial compliance and other costs, and prohibit or severely restrict
development. Prior to consummating the purchase of land, the Company engages
independent environmental engineers to evaluate such land for the presence of
hazardous or toxic materials, wastes, or substances. The Company has not been
adversely affected to date by the presence or potential presence of such
materials, but there is no assurance that environmental problems will not
adversely affect the Company in the future.

         Certain permits and approvals will be required to complete the
communities under development and currently being planned by the Company. The
ability to obtain necessary permits and approvals is often beyond the Company's
control and could restrict or prevent the development of otherwise desirable
property. The length of time necessary to obtain permits and approvals increases
the carrying costs of unimproved property. In addition, the continued
effectiveness of permits already granted is subject to


                                       11
<PAGE>   13

factors such as changes in policies, and the interpretation and application of
rules and regulations.

         The Florida Local Government Comprehensive Planning and Land
Development Regulation Act (the "Act") provides that public facilities,
including, but not limited to, sewer, solid waste, drainage, potable water,
parks, roads and recreation facilities, shall be available concurrently with the
impact of land development projects that would use such facilities. This
requirement is known as the "concurrency" requirement. Counties and cities are
required to implement concurrency by adopting local comprehensive plans and land
development regulations. These plans and regulations establish the guidelines
for concurrency review and the exemptions from the concurrency requirement. All
of the Company's development projects in Palm Beach and Broward Counties have
been found to satisfy concurrency requirements.

         The Company must also comply with regulations by federal and state
authorities relating to the sale and advertising of residential real estate. In
order to advertise and sell condominiums, the Company has been required to
prepare registration statements or other disclosure documents and, in some
cases, to file such materials with designated regulatory agencies. The Company
advertises its condominium units in New York and has prepared registration
statements in connection with sales in New York and in the State of Florida.

         The State of Florida requires that customer deposits be held in
segregated bank accounts. As of December 31, 1996, the Company has posted bonds
of $2.5 million and had entered into an escrow agreement with a bank and the
State of Florida that allows the Company to use customer deposits. See Note I of
Notes to Consolidated Financial Statements.





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<PAGE>   14


EMPLOYEES

         The Company employs approximately 218 persons, of whom approximately 46
are executive and supervisory personnel. The Company has had no major work
stoppages as a result of labor disputes and believes that relations with its
employees and its subcontractors are good.

CORPORATE HEADQUARTERS

         The Company rents 22,500 square feet of space in a two-story office
building. The lease expires January 1, 1998. The Company has the option to renew
such lease for an additional five year period. See Note N of Notes to
Consolidated Financial Statements.

ITEM 3   LEGAL PROCEEDINGS

         The Company is a party to various lawsuits, all of which are of a
routine nature and are incidental to the Company's present business activities.
These proceedings are not material, nor would the adverse resolution thereof
materially affect the business or properties of the Company.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE BY SECURITY HOLDER

         No matters were submitted to security holders during the 4th quarter.
The annual Meeting of Shareholders of the Registrant has been scheduled for May
22, 1997. The Company will file its definitive proxy material pursuant to
Regulation 14, prior to April 30, 1997.

                                     PART II

ITEM 5   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         SHAREHOLDER MATTERS

         Information required by this item is incorporated by reference to the
Registrant's 1996 Annual Report to Shareholders.

ITEM 6   SELECTED FINANCIAL DATA

         Information required by this item is incorporated by reference to the
Registrant's 1996 Annual Report to Shareholders.





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<PAGE>   15







ITEM 7   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS


OVERVIEW

         General. The following table sets forth for the periods indicated
certain items of the Company's Consolidated Financial Statements expressed as a
percentage of the Company's total revenues:

<TABLE>
<CAPTION>
                                           Percentage of Total Revenues
                                             Years Ended December 31,
                                                                     1994              1995             1996
                                                                     ----              ----             ----
<S>                                                                  <C>               <C>              <C>
Sale of houses and condominiums                                      91.8%             89.3%            90.2%
Sale of land                                                          1.6               2.0              1.5
Other operating revenues                                              2.8               3.7              2.8
Interest, rentals and other income                                    3.6               4.8              3.4
Gain on sale of property and land held for investment, net            0.2               0.2              2.1
Selling, general and administrative expenses                         13.6              18.9             15.5
Net income (loss)                                                     3.4             (14.3)             0.1

</TABLE>


         Backlog. The following table sets forth the Company's backlog at
December 31, 1994, 1995 and 1996.

<TABLE>
<CAPTION>


December 31,                   Number of Units            Aggregate Dollar Value
------------                   ---------------            ----------------------
<S>                                  <C>                        <C>
1994                                 143                        $29,348,000
1995                                 193                        $35,349,000
1996                                 266                        $44,810,000

</TABLE>

         The Company's backlog generally represents units under contract for
which a full deposit has been received, any statutory rescission right has
expired, and in the case of a mortgage contingency, the buyer has been qualified
for a mortgage loan. The Company generally fills all backlog within twelve
months. The Company estimates that the period between receipt of a sales
contract and delivery of the completed home to the purchaser is four to eight
months. The Company's backlog historically tends to increase between January and
May. Trends in the Company's backlog are subject to change from period to period
for a number of economic conditions including consumer confidence levels,
interest rates and the availability of mortgages.



                                       14

<PAGE>   16

RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED
DECEMBER 31, 1995

         The Company's revenues from home sales increased $27.3 million (or
37.1%) during the calendar year 1996 as compared to the same period in 1995. The
Company delivered 597 homes in 1996 compared to 433 in 1995, with a decrease of
0.5% in the average selling price of homes delivered (from $169,500 to
$168,600). The number of new contracts signed (670) and the aggregate dollar
value of those new contracts ($110.1 million) increased in 1996 from 483 and
$79.4 million, repectively, in 1995. The average selling price of new contracts
entered into in 1996 was $164,361, which was subtantially the same as 1995.

         Other operating revenues increased to $3.2 million during 1996 from
$3.1 million in 1995 due to a lower vacancy rate on our rental apartments.
Interest, rentals and other income decreased to $3.8 million in 1996 from $4.0
million in 1995 due to a lower return on joint venture investments.

         Cost of home sales increased to $87.6 million in 1996 from $62.2
million in 1995 primarily as a result of an increase in the number of homes
delivered. As a percentage of home sales, cost of home sales increased to 87.1%
in 1996 from 85.7% in 1995 due to the absorption of higher construction costs
and the impact of higher previously capitalized interest.

         It should be noted that the Company's gross margins during 1996 were
adversely impacted by the decision made last year to reduce prices on certain
models in order to spur sales at some of our communities. This action was
undertaken following an evaluation of the marketplace in 1995 resulting in a
determination that there was growing buyer resistance to the higher home prices
the Company was seeking to obtain. The Company's higher prices resulted from
increases in costs of building homes due to increases in material and labor
costs, new building code provisions and accumulated capitalized interest on
units in older subdivisions. Throughout 1996, the Company focused its efforts on
promoting its reduced pricing in the marketplace and generating sales and cash
flow. At the same time, the Company has sought to introduce new models that can
be priced competitively and sold at a faster pace. The Company believes that
through these efforts it will be able to increase cash flow, reduce interest
expense and increase net income. There can be no assurance that the Company will
be successful in these efforts.

         Selling, general and administrative expenses ("SG&A") increased to
$17.3 million in 1996 from $15.5 million in 1995, but as a percentage of total
revenues, these expenses decreased to 15.5% in 1996 from 18.9% in 1995. The
Company's interest cost incurred in 1996 was $11.0 million as compared to $10.7
million the same period in 1995.



                                       15
<PAGE>   17


         Net income increased to $0.08 million in 1996 from a net loss of
$11,761,564 in 1995. Included in these net results are non cash pre-tax
writedowns of $1.7 million in 1996 and $13.9 million in 1995, pertaining to the
carrying cost of certain land inventory.

         Included in net results for 1996 is a pre-tax gain of $2,355,119 on the
sale of non-residential parcels of land, the sale of a Recreation Lease and the
sale of a group of residential lots.

RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED
DECEMBER 31, 1994

         The Company's revenues from home sales decreased $36.7 million (or
33.3%) during the calendar year 1995 as compared to the same period in 1994. The
Company delivered 433 homes in 1995 compared to 775 in 1994, with an increase of
19.3% in the average selling price of homes delivered (from $142,100 to
$169,500). The increase in the average selling price per home is primarily the
result of the Company's entry into an upscale condominium community where the
average selling price is $565,000 and a single family home community where the
average selling price is $272,000. The decrease in home sales is believed to be
the result of resistance to higher home prices that were precipitated by
increases in material costs and by new building codes requiring greater
hurricane protection. Also, resales were weak thoughout the country which
negatively affected the ability of the Company's prime customers, active adults,
to sell their present homes and use those funds to purchase retirement homes in
Florida.

         The number of new contracts signed (483) and the aggregate dollar value
of these new contracts ($79.4 million) decreased in 1995 from 661 and $100.1
million in 1994.

         The Company's backlog has increased from $29.3 million at December 31,
1994 to $35.3 million as of December 31, 1995. A decrease in interest rates in
the second half of 1995 contributed to a larger number of new sales contracts
received by the Company and this trend continued in early 1996 and is expected
to remain through 1996.

         Other operating revenues decreased to $3.1 million during 1995 from
$3.4 million in 1994 primarily as a result of higher vacancies in the rental
units project. Interest, rentals and other income decreased to $4.0 million from
$4.3 million in 1994.

         Cost of home sales decreased to $62.2 million in 1995 from $91.8
million in 1994 as a result of a decrease in the dollar volume of homes
delivered. As a percentage of home sales, cost of home sales increased to 84.8%
from 83.4% due to increased competition, the absorption of higher construction
costs and the impact of higher previously capitalized interest.



                                       16

<PAGE>   18

         Selling, General and Administrative expenses ("SG&A") decreased to
$15.5 million in 1995 from $16.3 million in 1994, but as a percentage of total
revenues, these expenses increased to 18.9% from 13.6% in the same period of
1994. Interest costs incurred in 1995 increased to $10.7 million from $10.4
million in 1994.

         The Company incurred a net loss for the year ended December 31, 1995 of
$11.8 million or $2.54 per share, after a non-cash pre-tax write down of $13.9
million as of December 31, 1995, pertaining to the carrying cost of certain land
inventory. In 1994 the Company had a net income of $4.1 million or $.89 per
share. The write-down affects the carrying cost of land inventory for
approximately 360 unsold housing units located in three developments originally
purchased in 1989 and 1991. Land inventories are carried at cost, plus
accumulated development and construction costs, including capitalized interest
and real estate taxes. As these developments are among the Company's oldest and
slower selling projects, they have been materially affected by the accumulated
cost allocations. As a result, the accumulated cost of this inventory was in
excess of its net realizable value. Results for 1995 also include a reduction of
$686,744 in the Company's reserve for construction defects, which reflects
unused warranty reserve related to finished projects.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition, inventory balances and disposition of
non-residential parcels of land. The Company has financed its working capital
needs through funds generated by operations, sale of land, borrowings and the
periodic issuance of common stock.

         On January 13, 1993, the Company issued $70.0 million of its 12 1/2%
Senior Notes ("Notes") due January 15, 2003. The Notes are senior unsecured
obligations of the Company subject to redemption, at the Company's option, on or
after January 15, 1998 at 105% of the principal amount and thereafter at prices
declining annually to 100% on or after January 15, 2001. The indenture under
which the Notes were issued requires sinking fund payments of $17.5 million on
January 15, 2001 and January 15, 2002. The indenture contains provisions
restricting the amount and type of indebtedness the Company may incur, the
purchase by the Company of its stock and the payment of dividends. At December
31, 1996, dividend payments were restricted and will continue to be restricted
until the Company posts cumulative net income in excess of $20.5 million.

         The Company had, as of December 31, 1996, a $20.0 million revolving
line of credit of which $17.3 million was available at a rate of prime plus
1.5%, which line expires on July 1, 1997. This line is secured by assets
aggregating not less than 2 times




                                       17
<PAGE>   19

the amount of the line and in addition to typical restrictions and covenants the
Company must:

         a)  maintain a consolidated tangible net worth of not less than
             $60.0 million.

         b)  The issuance of additional debt is restricted by covenants in
             the agreement.

         The Company anticipates that it would be able to either renew its
existing line of credit or obtain a new line of credit on terms satisfactory to
the Company prior to the expiration of the existing line. This line can be used
to finance ongoing development, construction of residential real estate and
other short-term capital needs.

         The Company had outstanding an aggregate balance of approximately $12.6
million of a purchase money mortgage at an interest rate of 7.15% which is
collateralized by land and buildings. Of this mortgage, $.2 million is due in
1997 and $12.4 million is payable by 2003.

INFLATION

         The Company, as well as the home building industry in general, may be
adversely affected during periods of high inflation, primarily because of higher
land and construction costs. In addition, higher mortgage interest rates may
significantly affect the affordability and availability of permanent mortgage
financing to prospective purchasers.

         Inflation also increases the Company's cost of labor and materials. The
Company attempts to pass through to its customers any increases in its costs
through increased selling prices. During the last three years, the Company has
experienced a reduction in gross margins on the sale of homes. In some part,
these reduced margins are the result of the Company being unable to raise
selling prices and pass on increased construction and capitalized interest
costs. There is no assurance that inflation will not have a material adverse
impact on the Company's future results of operations.

ACCOUNTING METHODS

         The Company is required to apply the provisions of Statement of
Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
SFAS 121 establishes guidance for when to recognize and how to measure
impairment losses of long-lived assets and certain identifiable intangible
assets. The Company was required to implement this standard in its fiscal year
1996. The implementation of SFAS 121 did not have a material effect on the
Company's financial position or results of operations.

         The Company is required to apply the provisions of Statement of
Financial Accounting Standards No. 123 ("SFAS No.123"), "Accounting for
Stock-Based Compensation." The Company is required to present additional
disclosures regarding the fair value of stock options. The Company was required
to implement this standard in fiscal year 1996. The implementation of SFAS
No. 123 did not have a material effect on the Company's financial position or
results of operations.




                                       18
<PAGE>   20




                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                  DECEMBER 31,


                                     ASSETS

<TABLE>
<CAPTION>

                                                                   1996           1995
                                                                   ----           ----
<S>                                                           <C>             <C>
Cash and cash equivalents                                     $  2,409,376    $  3,275,615

Receivables
     Mortgage notes (Note B)                                       277,205         280,562
     Due at closing                                                   --           114,700
     Income taxes (Note H)                                       2,398,914       1,660,846
                                                              ------------    ------------

                                                                 2,676,119       2,056,108
                                                              ------------    ------------
Inventories (Notes A and C)
     Land                                                       90,105,428     103,435,218
     Houses and condominiums completed or under
       construction                                             51,080,872      48,306,006
     Model houses and condominiums                               4,776,274       3,386,194
                                                              ------------    ------------

                                                               145,962,574     155,127,418
     Less estimated costs of completion included
       in inventories                                           14,184,967      23,699,916
                                                              ------------    ------------

                                                               131,777,607     131,427,502
                                                              ------------    ------------

Property and equipment (at cost) (Notes A and N)
     Land                                                        7,046,758       7,168,046
     Buildings                                                  20,728,053      22,283,655
     Furniture, fixtures and equipment                           4,724,882       5,445,387
                                                              ------------    ------------

                                                                32,499,693      34,897,088

     Less accumulated depreciation                               9,648,463      10,892,078
                                                              ------------    ------------

                                                                22,851,230      24,005,010
                                                              ------------    ------------

Other
     Prepaid expenses                                            2,709,076       2,378,932
     Unamortized debt issuance costs                             1,810,237       2,098,760
     Investment in and advances to joint ventures (Note E)       6,531,000       5,625,000
     Land held for investment (at cost)                          2,346,772       3,001,783
     Deferred income taxes (Note H)                                   --           458,375
     Other assets                                                2,434,473       5,151,232
                                                              ------------    ------------

                                                                15,831,558      18,714,082
                                                              ------------    ------------

                  Total assets                                $175,545,890    $179,478,317
                                                              ============    ============

</TABLE>


                                                                     (continued)




                                       19
<PAGE>   21


                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS - CONTINUED

                                  DECEMBER 31,


                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                           1996             1995
                                                           ----             ----
<S>                                                    <C>             <C>
Liabilities
     Line of credit (Note F)                            $  2,700,000    $  8,500,000
     Mortgage notes payable (Note G)                      12,641,501      15,041,573
     Accounts payable                                     10,742,182       7,328,804
     Customer deposits (Note I)                            7,583,571       6,072,046
     Accrued expenses and other liabilities (Note J)       6,588,489       8,393,132
     Deferred income taxes (Note H)                        1,387,473            --
     Senior notes (Note K)                                66,155,936      66,481,313
                                                        ------------    ------------

                  Total liabilities                      107,799,152     111,816,868
                                                        ------------    ------------

Shareholders' equity (Notes L and M)
     Class A common stock, $.10 par value
         Authorized - 10,000,000 shares
           issued and outstanding - 1,874,949
           in 1996 and 1,891,249 in 1995                     187,495         189,125
     Class B common stock, $.10 par value
         Authorized - 10,000,000 shares
           issued and outstanding - 2,750,575
           in 1996 and 2,734,275 in 1995                     275,058         273,428

     Additional paid-in capital                           19,267,327      19,267,327

     Retained earnings                                    48,016,858      47,931,569
                                                        ------------    ------------

                  Total shareholders' equity              67,746,738      67,661,449
                                                        ------------    ------------

                  Total liabilities and shareholders
                    equity                              $175,545,890    $179,478,317
                                                        ============    ============


</TABLE>

The accompanying notes are an integral part of these statements.





                                       20
<PAGE>   22



                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                            YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
                                                          1996              1995             1994
                                                          ----              ----             ----
<S>                                                 <C>               <C>               <C>
Revenues
    Sales of houses and condominiums                $ 100,661,096     $  73,409,093     $ 110,116,572
    Sales of land                                       1,649,356         1,610,441         1,959,779
    Other operating revenues                            3,171,936         3,070,455         3,365,024
    Gain on sales of property and land held for
      investment, net                                   2,355,119           173,619           202,374
    Interest, rentals and other income (Note N)         3,781,788         3,972,662         4,333,548
                                                    -------------     -------------     -------------
                                                      111,619,295        82,236,270       119,977,297
                                                    -------------     -------------     -------------

Costs and expenses
    Cost of houses and condominiums sold               87,645,345        62,232,488        91,778,577
    Non-recurring charge to inventory (Note C)          1,723,130        13,917,025              --
    Cost of land sold                                   1,714,696         1,384,516         1,726,119
    Costs relating to other operating revenues          3,017,109         3,180,214         2,804,767
    Selling, general and administrative expenses       17,312,095        15,532,512        16,313,685
    Interest costs incurred                            11,010,976        10,653,413        10,430,616
    Interest capitalized (deduct)                     (10,336,279)       (9,898,999)       (9,736,452)
                                                    -------------     -------------     -------------
                                                      112,087,072        97,001,169       113,317,312
                                                    -------------     -------------     -------------

(Loss) income before (benefit from) provision
  for income taxes                                       (467,777)      (14,764,899)        6,659,985

(Benefit from) provision for income taxes
  (Note H)                                               (553,066)       (3,003,335)        2,523,065
                                                    -------------     -------------     -------------

                Net income (loss)                   $      85,289     $ (11,761,564)    $   4,136,920
                                                    =============     =============     =============

Net income (loss) per Class A and Class B
  common share                                      $         .02     $       (2.54)    $         .89
                                                    =============     =============     =============

</TABLE>


The accompanying notes are an integral part of these statements.



                                       21

<PAGE>   23


                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


<TABLE>
<CAPTION>

                                                               Common Stock
                                           ----------------------------------------------------
                                                 Class A                        Class B
                                           ---------------------          ---------------------     Additional
                                                                                                      Paid-in        Retained
                                           Shares         Amount          Shares         Amount       Capital        Earnings
                                           ------         ------          ------         ------     -----------      --------

<S>                                        <C>          <C>              <C>           <C>          <C>             <C>
Balance at January 1, 1994                 1,895,549    $   189,555      2,729,975     $ 272,998    $ 19,267,327    $ 57,311,700

Net income for 1994                             --             --               --            --            --         4,136,920

Stock conversion                              (2,200)          (220)         2,200           220            --              --

Cash dividends
     Class A common stock $.35
       per share                                --             --               --            --              --        (663,002)
     Class B common stock $.40
       per share                                --             --               --            --              --      (1,092,485)
                                           ---------    -----------      ---------     ---------    ------------    ------------

Balance at December 31, 1994               1,893,349        189,335      2,732,175       273,218      19,267,327      59,693,133

Net loss for 1995                               --             --             --            --              --       (11,761,564)

Stock conversion                              (2,100)          (210)         2,100           210            --              --
                                           ---------    -----------      ---------     ---------    ------------    ------------

Balance at December 31, 1995               1,891,249        189,125      2,734,275       273,428      19,267,327      47,931,569

Net income for 1996                             --             --             --            --              --            85,289

Stock conversion                             (16,300)        (1,630)        16,300         1,630            --              --
                                           ---------    -----------      ---------     ---------    ------------    ------------

Balance at December 31,
 1996                                      1,874,949     $  187,495      2,750,575    $  275,058    $ 19,267,327    $ 48,016,858
                                           =========    ===========      =========     =========    ============    ============




</TABLE>



The accompanying notes are an integral part of these statements.



                                       22

<PAGE>   24


                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            YEARS ENDED DECEMBER 31,


<TABLE>
<CAPTION>

                                                                                    1996            1995              1994
                                                                                    ----            ----              ----
<S>                                                                           <C>              <C>              <C>
Cash flows from operating activities
     Net income (loss)                                                        $     85,289     $(11,761,564)    $  4,136,920
     Adjustments to reconcile net income (loss) to net cash
       provided by (used in) operating activities
         Depreciation                                                            1,356,947        1,258,516        1,234,118
         Amortization                                                              559,382          437,006          474,897
         Deferred income taxes                                                   1,845,848       (1,563,081)         382,344
         Gain on sales of  property and land held
           for investment, net                                                  (2,355,119)        (173,619)        (202,374)
     (Increase) decrease in operating assets
         Receivables                                                              (620,011)        (789,811)         356,362
         Inventories                                                            (2,685,734)      (4,596,546)       1,575,418
         Other assets                                                            2,369,615       (2,477,874)      (2,512,938)
     Increase (decrease) in operating liabilities
         Accounts payable                                                        3,413,378          864,387          (43,474)
         Customer deposits                                                       1,511,525        1,096,847       (1,116,371)
         Accrued expenses and other liabilities                                 (1,804,643)         572,802         (113,292)
                                                                              ------------     ------------     ------------
                  Total adjustments                                              3,591,188       (5,371,373)          34,690
                                                                              ------------     ------------     ------------

                  Net cash provided by (used in)
                    operating activities                                         3,676,477      (17,132,937)       4,171,610
                                                                              ------------     ------------     ------------

Cash flows from investing activities
     (Investment in) return of joint ventures                                     (906,000)       1,375,000       (3,500,000)
     Land held for investment                                                      (13,530)          (4,882)        (205,451)
     Capital expenditures                                                       (1,667,524)      (1,212,533)        (702,466)
     Proceeds from sales of property and equipment                               6,840,646          747,170          780,966
                                                                              ------------     ------------     ------------
                  Net cash provided by (used in) investing
                    activities                                                   4,253,592          904,755       (3,626,951)
                                                                              ------------     ------------     ------------

Cash flows from financing activities
     Proceeds from mortgage notes                                                     --            345,508        3,444,962
     Payment of mortgage notes                                                  (2,400,072)      (2,723,185)        (425,191)
     Borrowings under line of credit agreement                                  33,500,000       20,500,000        9,500,000
     Repayments under line of credit agreement                                 (39,300,000)     (12,000,000)      (9,596,317)
     Repurchase of senior notes                                                   (500,000)        (126,000)      (1,910,000)
     Issuance costs                                                                (96,236)        (108,606)         (75,000)
     Dividends paid                                                                   --           (993,409)      (1,524,156)
                                                                              ------------     ------------     ------------
                  Net cash (used in) provided by financing
                    activities                                                  (8,796,308)       4,894,308         (585,702)
                                                                              ------------     ------------     ------------

Net decrease in cash and cash equivalents                                         (866,239)     (11,333,874)         (41,043)

Cash and cash equivalents at beginning of year                                   3,275,615       14,609,489       14,650,532
                                                                              ------------     ------------     ------------

Cash and cash equivalents at end of year                                      $  2,409,376     $  3,275,615     $ 14,609,489
                                                                              ============     ============     ============

Supplemental disclosures of cash flow information
Cash paid during the year for:
     Interest (net of amount capitalized)                                     $    528,720     $    610,777     $    624,828
     Income taxes                                                             $        619     $    643,049     $  3,268,315

Supplemental disclosure of non-cash financing activities:
     Refinancing of mortgage notes payable                                    $ 12,800,000     $       --       $       --

</TABLE>


The accompanying notes are an integral part of these statements.




                                       23

<PAGE>   25






                       ORIOLE HOMES CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
         INFORMATION

     PRINCIPLES OF CONSOLIDATION

     The accompanying Consolidated Financial Statements include the accounts of
     Oriole Homes Corp. and all wholly-owned subsidiaries (the "Company").
     Significant intercompany accounts and transactions have been eliminated in
     consolidation.

     OPERATIONS

     The Company, a Florida corporation, is engaged principally in the design,
     construction, marketing and sale of single and multi-family residential
     homes (including condominiums) primarily in southeast (Palm Beach, Broward
     and Martin Counties) Florida. The Company also has developments in Naples
     and Ocala, Florida.

     REVENUE RECOGNITION

     The Company records revenues and profits from sales of real estate in
     accordance with generally accepted accounting principles governing profit
     recognition for real estate transactions.

     INVENTORIES

     Inventories are carried at cost, plus accumulated development and
     construction costs (including capitalized interest and real estate taxes).
     House and condominium inventories which are completed and being held for
     sale aggregate approximately $13,516,000 in 1996 and $13,275,000 in 1995.
     The accumulated costs of land, houses and condominiums are not in excess of
     estimated net realizable value. Estimated net realizable value is based
     upon sales achieved and backlog in the normal course of business less
     estimated cost to complete and dispose of the property. The Company's
     management, on an on-going basis, reviews individual projects in inventory
     for impairment.

     INTEREST CAPITALIZATION

     The Company capitalizes certain interest costs incurred on land under
     development and houses and condominiums under construction. Such
     capitalized interest is included in cost of house and condominium sales
     when the units are delivered. During the years 1996, 1995, and 1994
     respectively, the Company capitalized interest in the amount of
     $10,336,279, $9,898,999 and $9,736,452 and expensed as a component of cost
     of goods sold $6,727,484, $6,270,173 and $9,313,121.



                                                                     (continued)


                                       24
<PAGE>   26


                       ORIOLE HOMES CORP. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
         INFORMATION - Continued

     DEPRECIATION

     The Company provides for depreciation of property and equipment by the
     straight-line and accelerated methods over the following estimated useful
     lives of the various classes of depreciable assets:

        Buildings                                          25 to 27 years
        Furniture, fixtures and equipment                    5 to 7 years

     DEBT ISSUANCE COSTS AND UNAMORTIZED DISCOUNT

     Costs incurred in connection with obtaining debt have been deferred and are
     being amortized by the interest method over the term of the debt.

     CASH EQUIVALENTS

     Cash equivalents consist of highly liquid investments with maturities of
     three months or less when purchased.

     NET INCOME PER SHARE

     Net income (loss) per common share is computed by dividing net income
     (loss) by the weighted average number of shares outstanding during each
     year: 4,625,524 shares in 1996, 1995 and 1994.

     ADVERTISING

     The Company expenses advertising costs as incurred, except for sales
     brochures and site plans which are accounted for in "Other Assets." Sales
     brochures and site plans are expensed as the materials are used or
     distributed to customers. Advertising expense for the years ended December
     31, 1996, 1995 and 1994 was $2,112,364, $1,411,412 and $1,713,158,
     respectively.




                                                                     (continued)

                                       25

<PAGE>   27
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
         INFORMATION - Continued

     ESTIMATES

     In preparing financial statements in conformity with generally accepted
     accounting principles, management makes estimates and assumptions that
     affect the reported amounts and disclosures of assets and liabilities at
     the date of the financial statements, as well as the reported amounts of
     revenues and expenses during the reporting period.
     Actual results could differ from those estimates.

     INCOME TAXES

     The Company accounts for income taxes under the asset and liability method.
     Deferred tax assets and liabilities are recognized for future tax
     consequences attributable to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases. Deferred tax assets and liabilities are measured using enacted
     tax rates expected to apply to taxable income in the years in which those
     temporary differences are expected to be recovered or settled.

     FINANCIAL STATEMENT RECLASSIFICATION

     Certain amounts reflected in the consolidated financial statements for the
     year ended December 31, 1995 have been reclassified to conform to the
     presentation for the year ended December 31, 1996.

NOTE B - MORTGAGE NOTES

     First and second mortgage notes receivable bear interest at rates ranging
     from 8% to 10%. The Company's receivables are primarily mortgages which are
     collateralized by real estate. Minimum payments required on the first and
     second mortgage notes subsequent to December 31, 1996 are: 1997 - $3,844;
     1998 - $4,167; 1999 - $266,421 and 2000 - $2,773.

NOTE C - SPECIAL CHARGES

     The Company recorded, in the fourth quarter 1996, a non-recurring charge of
     $1,723,130 ($1,137,266, net of tax benefit, or $.25 per common share)
     related to the write-down in the book value of a parcel of land located in
     southern Broward County that is under contract for sale and scheduled to
     close in 1997.


                                                                     (continued)



                                       26
<PAGE>   28

                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - SPECIAL CHARGES - Continued

     During the fourth quarter 1995, the Company recorded a non-recurring charge
     of $13,917,025 ($11,079,381, net of tax benefit, or $2.40 per common share)
     related to the write-down of certain land inventory to its estimated net
     realizable value. The write-down pertains to land inventory for
     approximately 360 unsold housing units located in three developments. These
     three developments were originally purchased in 1989 and 1991.

NOTE D - LIFE INSURANCE

     The Company purchased life insurance on the lives of two of its officers
     and their spouses who own significant shares of common stock of the
     Company. An irrevocably designated trustee of the officers is the
     beneficiary. Upon the death of the officers or termination of the policies,
     the Company shall receive an amount equal to the aggregated premiums paid
     less any policy loans and unpaid interest or cash withdrawals received by
     the Company. The accumulated premiums paid by the Company on the above
     policies during the years ended December 31, 1996 and 1995 were $668,085
     and $641,352, respectively, and are classified as other assets.

     In connection with the policies, the Company has an option with the
     officers to acquire all or any part of the Class A or Class B common stock
     of the Company owned by such individuals at the market price of such
     securities at the time of their death.

NOTE E - INVESTMENT IN JOINT VENTURES

     The Company has three and two joint venture agreements in 1996 and 1995,
     respectively. The joint ventures construct and sell homes. The Company is
     guaranteed a preferred return ranging from 10% to 15% on these investments.
     All risks of loss are borne by the joint venturee. The joint ventures are
     accounted for using the cost method. At December 31, 1996 and 1995, there
     were no advances from the Company to the joint ventures.

NOTE F - LINE OF CREDIT

     A revolving loan agreement (line of credit) with a bank, collateralized by
     land, provides up to $20,000,000 of borrowings, at an interest rate of
     prime plus 1.5%, of which $17,300,000 is available at December 31, 1996.
     The agreement expires July 1, 1997.



                                                                     (continued)

                                       27
<PAGE>   29
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - LINE OF CREDIT - Continued

     The line of credit can be used to finance ongoing development and
     construction of residential real estate and short-term capital needs and
     only requires monthly interest payments. The credit agreement has no
     compensating balance arrangements and contains typical restrictions and
     covenants, the most restrictive of which include the following:

          a.   The Company shall maintain, at all times through the life of the
               loan, its consolidated tangible net worth at not less than
               $60,000,000.

          b.   The Company's ability to incur additional debt is restricted by
               covenants in the agreement.

     Average interest rates and balances outstanding, for revolving lines of
     credit payable to banks, based on a weighted average are as follows:



<TABLE>
<CAPTION>

                                                               1996                1995                1994
                                                               ----                ----                ----
<S>                                                    <C>                 <C>                 <C>
         Daily average outstanding
           borrowings                                  $     13,703,000    $     7,045,000     $     1,805,944

         Average interest rate during the
           period                                                 10.1%               8.2%                8.6%

         Interest rate at the end
           of the period                                          9.75%              10.0%                10.0%

         Maximum outstanding during the
           year                                        $     20,000,000    $    12,500,000     $     7,010,000

</TABLE>



NOTE G - MORTGAGE NOTES PAYABLE

     Mortgage notes payable at December 31, 1996 and 1995, are summarized as
     follows:


<TABLE>
<CAPTION>
                                                                                1996                 1995
                                                                                ----                 ----
<S>                                                                         <C>                 <C>
         Mortgage note,  interest at 7.15%,  requires  monthly payments
         of $91,696  including  interest,  final balloon payment due at
         maturity  on  March  1,  2003;   collateralized  by  land  and
         buildings
                                                                            $  12,641,501       $           --

         Mortgage notes payable refinanced and paid
         in 1996                                                                      --            15,041,573
                                                                            -------------       --------------
                                                                            $  12,641,501        $  15,041,573
                                                                            =============        =============

</TABLE>


                                       28

<PAGE>   30
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE G - MORTGAGE NOTES PAYABLE - Continued

     Aggregate maturities of the mortgage note payable as of December 31, 1996,
     is as follows:

               1997                       $    185,577
               1998                            216,768
               1999                            232,785
               2000                            249,986
               2001                            268,458
               Thereafter                   11,487,927
                                           -----------
                                           $12,641,501
                                           ===========

NOTE H - INCOME TAXES

     Deferred income taxes and benefits are provided for significant income and
     expense items recognized in different years for tax and financial reporting
     purposes. Temporary differences which give rise to significant deferred tax
     assets (liabilities) follow:

<TABLE>
<CAPTION>
                                                              1996            1995
                                                          -----------     -----------

<S>                                                       <C>             <C>
     State net operating loss carryforward                $   636,970     $   310,986
     Inventory write-down adjustment                        3,269,606       5,232,802
     Reserve for warranties on houses and condominiums        741,339         770,245
     Percentage of completion                                  32,655         174,878
     Inventory capitalization                                 144,997         184,757
                                                          -----------     -----------

                  Total deferred tax assets, before
                    valuation allowance                     4,825,567       6,673,668

     Less:  Valuation allowance                             2,307,012       2,706,144
                                                          -----------     -----------

                  Total deferred tax assets, net of
                    valuation allowance                     2,518,555       3,967,524
                                                          -----------     -----------

     Deferred expenses                                     (3,752,133)     (3,333,765)
     Accelerated depreciation                                (153,895)       (175,384)
                                                          -----------     -----------

                  Total deferred tax liabilities           (3,906,028)     (3,509,149)
                                                          -----------     -----------

                  Net deferred tax (liability) asset      $(1,387,473)    $   458,375
                                                          ===========     ===========
</TABLE>



                                                                     (continued)

                                       29
<PAGE>   31
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - INCOME TAXES - Continued

     At December 31, 1995, the Company recorded a valuation allowance for the
     deferred tax assets relating to the inventory adjustment as the Company's
     ability to realize these benefits is not "more likely than not". During
     1996, the Company decreased the valuation based on management's
     reevaluation of the likelihood of realization.

     The Company files consolidated income tax returns. The components of the
     provision for (benefit from) income taxes are as follows:

<TABLE>
<CAPTION>

                                1996           1995             1994
                            -----------     -----------    ------------
<S>                         <C>             <C>             <C>
     Current provision:
          Federal           $(2,398,914)    $(1,440,254)    $ 1,848,612
          State                    --              --           292,109
                            -----------     -----------     -----------

                             (2,398,914)     (1,440,254)      2,140,721
     Deferred provision:
          Federal             1,845,848      (1,582,344)        305,537
          State                    --            19,263          76,807
                            -----------     -----------     -----------

                              1,845,848      (1,563,081)        382,344
                            -----------     -----------     -----------

                            $  (553,066)    $(3,003,335)    $ 2,523,065
                            ===========     ===========     ===========

</TABLE>


     The reasons for the difference between the total tax expense and the amount
     computed by applying the statutory federal income tax rate to income before
     income taxes are as follows:



<TABLE>
<CAPTION>
                                                1996           1995            1994
                                            -----------     -----------     -----------
<S>                                         <C>             <C>             <C>
     (Benefit from) provision for taxes
       at statutory rates (34%)             $  (159,045)    $(5,020,066)    $ 2,264,395

     Change in valuation allowance             (399,132)      2,706,144            --

     (Benefit from ) provision for state
       income taxes                             (25,730)       (811,999)        241,644

     Other                                       30,841         122,586          17,026
                                            -----------     -----------     -----------

              Net tax (benefit) expense     $  (553,066)    $(3,003,335)    $ 2,523,065
                                            ===========     ===========     ===========

</TABLE>

                                                                     (continued)

                                       30
<PAGE>   32
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - INCOME TAXES - Continued

     The Company has a Federal net operating loss carryback and a State net
     operating loss carryforward of $7,055,630 and $11,581,273, respectively.
     The Federal net operating loss will be carried back and fully absorbed in
     1993 and 1994. The State net operating loss carryforward expires in the
     years 2010 and 2011.

NOTE I - CUSTOMER DEPOSITS

     Certain customer deposits, pursuant to statutory regulations of the State
     of Florida or by agreement between the buyer and seller, are held in
     segregated bank accounts. At December 31, 1996 and 1995, cash in the
     amounts of approximately $216,000 and $289,000, respectively, was so
     restricted.

     The Company entered into an escrow agreement with a bank and the Division
     of Florida Land Sales and Condominiums which allowed the Company to use
     customer deposits which were previously maintained in an escrow account.
     Deposits of up to $900,000 in 1996 and $1,100,000 in 1995, which could be
     released to the Company, are guaranteed by performance bonds aggregating
     $2,500,000 for 1996 and $5,000,000 for 1995.

NOTE J - ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued expenses and other liabilities include the following:

<TABLE>
<CAPTION>
                                                                           1996                    1995
                                                                        ----------              ----------
<S>                                                                    <C>                     <C>
         Accrued interest                                               $3,865,125              $3,893,771
         Accrued warranties on houses and
           condominiums                                                  1,929,574               1,983,202
         Accrued real estate and property taxes                             67,427               1,648,948
         Other accrued liabilities                                         726,363                 867,211
                                                                        ----------              ----------

                                                                        $6,588,489              $8,393,132
                                                                        ==========              ==========
</TABLE>


                                       31

<PAGE>   33
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE K - SENIOR NOTES

     Senior Notes are comprised as follows:

<TABLE>
<CAPTION>

                                                                        1996                    1995
                                                                    ------------             -----------
<S>                                                                  <C>                     <C>
         12 1/2% senior notes due January 15, 2003
           with an effective interest rate of 13.02%                 $70,000,000             $70,000,000
         Repurchase of senior notes to be used as
           part of sinking fund                                       (2,536,000)             (2,036,000)
         Unamortized discount                                         (1,308,064)             (1,482,687)
                                                                     -----------             -----------

                                                                     $66,155,936             $66,481,313
                                                                     ===========             ===========

</TABLE>


     On January 13, 1993, the Company issued 12 1/2% senior notes ("Notes"), due
     January 15, 2003. The Notes have a face value of $70,000,000 and were
     issued at a discount of $1,930,000. The notes are senior unsecured
     obligations of the Company subject to redemption at the Company's option on
     or after January 15, 1998 at 105% of the principal amount and thereafter at
     prices declining annually to 100% of the principal amount on or after
     January 15, 2001.

     The indenture under which senior notes were issued requires sinking fund
     payments of $17,500,000 on January 15, 2001 and January 15, 2002. The
     indenture, contains provisions restricting the amount and type of
     indebtedness the Company may incur, the purchase by the Company of its
     stock and the payment of cash dividends. At December 31, 1996, dividend
     payments are restricted and will be restricted until the Company posts
     cumulative net income in excess of $20,500,000.

NOTE L - STOCK OPTIONS

     The Company has two stock option plans accounted for under APB Opinion 25
     and Related Interpretations. The plans allow the Company to grant options
     to employees for up to 400,000 shares of Class B common stock and
     nonemployee directors for up to 20,000 shares of Class B common stock. The
     options have terms of five years for employees and ten years for
     nonemployee directors when issued. The stock options for employees vest at
     the end of the second year, and stock options for nonemployee directors
     vest 50% each after the first and second year. The exercise price of each
     option equals the market price of the Company's stock on the date of grant.



                                                                     (continued)


                                       32

<PAGE>   34
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - STOCK OPTIONS - Continued

     Accordingly, no compensation cost has been recognized for the plan. Had
     compensation cost for the plan been determined based on the fair value of
     the options at the grant dates consistent with the method of Statement of
     Financial Accounting Standards 123, Accounting for Stock-Based Compensation
     (SFAS 123), the Company's net income and earnings per share would have been
     reduced to the proforma amounts indicated below. Disclosure of such amounts
     is not required for the fiscal year ended December 31, 1994 and accordingly
     is not presented below:

<TABLE>
<CAPTION>
                                                                               1996             1995
                                                                           ------------     -------------
<S>                                                <C>                      <C>              <C>
         Net income (loss)                         As reported             $     85,289     $ (11,761,564)
                                                   Pro forma                    (22,738)    $ (11,814,556)

         Primary earnings (loss) per share         As reported             $        .02     $       (2.54)
                                                   Pro forma               $       (.01)    $       (2.54)

</TABLE>


     The fair value of each option grant is estimated on the date of grant using
     the binomial options-pricing model with the following weighted-average
     assumptions used for grants in 1996 and 1995, respectively: expected
     volatility of 37.18 and 36.33 percent; risk-free interest rate of 6.43 and
     7.45 percent; and expected life of 5.3 and 5.4 years.

     A summary of the status of the Company's fixed stock option plan as of
     December 31, 1996 and 1995, and changes during the years ending on those
     dates is presented below:

<TABLE>
<CAPTION>
                                                         1996                      1995
                                               ------------------------     ------------------
                                                               Weighted               Weighted
                                                               Average                 Average
                                                Shares         Exercise     Shares    Exercise
                                                 (000)          Price       (000)      Price
                                               -------        ---------     -----     --------
<S>                                              <C>              <C>        <C>         <C>
     Outstanding at beginning of
       year                                      45.2          $  7.06        3.6     $  8.62

          Granted                                43.5             7.63       41.6        6.93
          Exercised                                --               --         --          --
          Forfeited                                --               --         --          --
                                               ------          -------     ------     -------

     Outstanding at end of year                  88.7          $  7.34       45.2     $  7.06

     Options exercisable at year
       end                                        3.6          $  8.62        1.8     $  8.62

     Weighted-average fair value of
       options granted during the year             --          $  3.37         --     $  3.19

</TABLE>


                                       33
<PAGE>   35
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - STOCK OPTIONS - Continued

     The following information applies to options outstanding at December 31,
     1996:

          Number outstanding                                        88,700
          Range of exercise prices                                $6 to $9
          Weighted-average exercise price                            $7.34
          Weighted-average remaining contractual life            4.5 years

NOTE M - COMMON STOCK

     Class A common stock and Class B common stock have identical dividend
     rights with the exception that the Class B common stock is entitled to a
     $.025 per share additional dividend. Class A common stock is entitled to
     one vote per share, while Class B common stock is entitled to one-tenth
     vote per share. Holders of Class B common stock are entitled to elect 25%
     of the Board of Directors as long as the number of outstanding shares of
     Class B common stock is at least 10% of the number of outstanding shares of
     both classes of common stock. At the option of the holder of record, each
     share of Class A common stock may be converted at any time into one share
     of Class B common stock.

NOTE N - LEASING ARRANGEMENTS

    RENTAL PROPERTIES

     In connection with certain housing developments, the Company leases
     recreation facilities. The Company also leases rental units. These leases
     are accounted for as operating leases.

     The following schedule provides an analysis of the Company's property under
     operating leases (included in property and equipment) by major classes as
     of December 31, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                    1996                    1995
                                                                    ----                    ----

<S>                                                         <C>                     <C>
                Land                                        $       7,046,758       $       7,168,046
                Buildings                                          20,728,053              22,283,655
                Furniture, fixtures and equipment                     967,842                 965,277
                                                            -----------------       -----------------

                                                                   28,742,653              30,416,978

                Less accumulated depreciation                       7,665,119               7,216,168
                                                            -----------------       -----------------

                                                            $      21,077,534       $      23,200,810
                                                            =================       =================

</TABLE>


                                       34
<PAGE>   36
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - LEASING ARRANGEMENTS - Continued

     The following is a schedule of approximate future minimum rental income
     required under these leases as of December 31, 1996:

                1997                    $       2,204,000
                1998                              562,000
                1999                              562,000
                2000                              562,000
                2001                              562,000
                Thereafter                     46,404,000
                                        -----------------

                                        $      50,856,000
                                        =================

     OFFICES AND WAREHOUSE

     The Company leases its offices and warehouse under lease agreements
     extending through 1997, with options to renew for up to five years,
     accounted for as operating leases. The approximate future minimum rental
     payments as of December 31, 1996 are as follows: 1997 - $135,000.

     Total rent expense, including common area maintenance expenses, for each of
     the years ended December 31, 1996, 1995 and 1994 amounted to approximately
     $300,000, $320,000 and $320,000, respectively.

NOTE O - DEFERRED COMPENSATION PLAN

     The Company has a defined contribution plan established pursuant to Section
     401(K) of the Internal Revenue Code. Employees contribute to the plan a
     percentage of their salaries, subject to certain dollar limitations, and
     the Company matches a portion of the employees' contributions. The
     Company's contribution to the plan amounted to $68,238 in 1996, $72,981 in
     1995 and $63,685 in 1994.


                                       35

<PAGE>   37
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE P - FINANCIAL INSTRUMENTS

     The estimated fair value of the Company's financial instruments does not
     purport to represent the aggregate net fair value of the Company.

     The following methods and assumptions were used to estimate the fair value
     of each class of financial instruments for which it is practicable to
     estimate that value:

     CASH AND CASH EQUIVALENTS

     The carrying amount approximates fair value because of the short maturity
     of those instruments.

     MORTGAGE NOTES RECEIVABLES

     The carrying amount approximates fair value due to interest rates currently
     offered for loans with similar terms to borrowers of similar credit quality
     not being significantly different.

     LINE OF CREDIT

     The carrying amount of the line of credit approximates fair value due to
     the length of the maturities and interest rates being tied to market
     indices.

     MORTGAGE NOTES PAYABLE

     The carrying amounts of mortgage notes payable approximate fair value due
     to the interest rates not being significantly different from the current
     market rates available to the Company.

     SENIOR NOTES

     Quoted market prices offered to the Company are used to estimate fair value
     of the Company's senior notes.

     All of the Company's financial instruments are held for purposes other than
     trading. The carrying amounts in the table below are the amounts at which
     the financial instruments are reported in the financial statements.



                                                                     (continued)

                                       36


<PAGE>   38
                      Oriole Homes Corp. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE P - FINANCIAL INSTRUMENTS - Continued

     The estimated fair values of the Corporation's financial instruments, at
December 31, are as follows:

<TABLE>
<CAPTION>
                                                 1996                                 1995
                               -----------------------------------     -----------------------------------
                                    Carrying            Estimated           Carrying           Estimated
                                     Amount            Fair Value            Amount           Fair Value
                                    of Assets           of Assets           of Assets          of Assets
                                  (Liabilities)       (Liabilities)       (Liabilities)      (Liabilities)
                                  -------------       -------------       -------------      -------------
<S>                            <C>                 <C>                 <C>                <C>
         Cash and cash
           equivalents         $      2,409,376    $     2,409,376     $     3,275,615    $      3,275,615
         Mortgage notes
           receivable                   277,205            277,205             280,562             280,562
         Line of credit              (2,700,000)        (2,700,000)         (8,500,000)         (8,500,000)
         Mortgage notes
           payable                  (12,641,501)       (12,641,501)        (15,041,573)        (15,041,573)
         Senior notes               (66,155,936)       (65,777,400)        (66,481,313)        (55,730,000)

</TABLE>



NOTE Q - CONTINGENCIES

     The Company is involved, from time to time, in litigation arising in the
     ordinary course of business, none of which is expected to have a material
     adverse effect on the Company's consolidated financial position or results
     of operations.


                                       37

<PAGE>   39


                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS


Board of Directors
Oriole Homes Corp.

We have audited the accompanying consolidated balance sheets of Oriole Homes
Corp. and Subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Oriole
Homes Corp. and Subsidiaries at December 31, 1996 and 1995, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.


/s/ Grant Thornton LLP

Miami, Florida
March 7, 1997




                                       38

<PAGE>   40
ITEM 9   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         This item is not applicable.

                                    PART III

ITEM 10  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by this item of this part is incorporated by
reference to Registrant's definitive proxy statement for the Annual Meeting of
Shareholders.

ITEM 11  EXECUTIVE COMPENSATION

         The information required by this item of this part is incorporated by
reference to Registrant's definitive proxy statement for the Annual Meeting of
Shareholders.

ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this item of this part is incorporated by
reference to Registrant's definitive proxy statement for the Annual Meeting of
Shareholders.

ITEM 13  CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

         The information required by this item of this part is incorporated by
reference to Registrant's definitive proxy statement for the Annual Meeting of
Shareholders.

                                     PART IV

ITEM 14  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.  Financial Statements

         The following consolidated financial statements of Oriole Homes Corp.
         and subsidiaries are included in Part II of this annual report and in
         the Company's 1996 Annual Report to Shareholders.

         Consolidated balance sheets as of December 31, 1996 and 1995.

         Consolidated statements of operations for the three years ended
         December 31, 1996.

         Consolidated statements of cash flows for the three years ended
         December 31, 1996.

         Consolidated statements of shareholders' equity for the three years
         ended December 31, 1996.

         Notes to consolidated financial statements.

         Report of independent certified public accountants.


                                       39

<PAGE>   41

         Selected Quarterly Financial Data for the years ended December 31, 1996
         and 1995 included in the Company's 1996 Annual Report to Shareholders
         which is incorporated by reference as Part II of this annual report.

     2.  Financial Statement Schedules

         The following financial statement schedules of Oriole Homes Corp. and
         subsidiaries are included in Part IV of this report:

                 Report of independent certified public accountants.

         All other schedules are omitted because they are not applicable or not
         required or because the required information is included in the
         consolidated financial statements or notes thereto.

     3.  Exhibits
<TABLE>
<CAPTION>

                                                                                     Page No.

<S>                     <C>                                                          <C>
         (b)

            3.1         Articles of Incorporation of Registrant                           *

            3.2         By-Laws of Registrant                                             *

            4.2         Form of indenture between the Registrant and Sun Bank
                        National Association, Trustee.                                    *

            10.1        Lease Agreement, dated May 7, 1991 between Oriole Homes
                        Corp. and Arbors Associates, Ltd.                                 *

            10.6        Registrant's 401(k) Defined Contribution Benefit Plan             *

            10.7        Joint Venture Agreement between the Company and Regency
                        Homes, Inc. dated December 31, 1993 as amended December
                        31, 1995.                                                        **

            10.8        Joint Venture Agreement between the Company and Gordon
                        Family Homes at Morikami Park dated October 2, 1996.

            10.9        The Company's 1994 Stock Option Plan for Employees and
                        the 1994 Stock Option Plan for Non Employee Directors,
                        filed in the Proxy Statement dated April 5, 1994 are
                        incorporated herein by reference.

            22.1        List of Registrant's Subsidiaries (Filed as Exhibit 22
                        to the Company's Form 10-K for the fiscal year ended
                        December 31, 1990 and incorporated herein by reference).

            (*)         Filed as exhibits to the Registration Statement of the
                        Registrant on Form S-2 declared effective on January 13,
                        1993. (File No. 33-51680).

            (**)        Filed as an exhibit to the Registrant's Annual Report on
                        Form 10-K filed in March 1994.

            (b)         Reports on Form 8-K
                        There were no reports on Form 8-K for the three months
                        ended December 31, 1996.


</TABLE>
<PAGE>   42



                                   SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities Exchange Act
     of 1934, the Registrant has duly caused this Annual Report to be Signed on
     its behalf by the undersigned, thereunto duly authorized.

                                             ORIOLE HOMES CORP.

DATE              3-24-97                    s/ R.D. Levy
     -----------------------                 --------------------------------
                                             R.D. Levy, Chairman of the Board
                                             Chief Executive Officer, Director

DATE              3-24-97                    s/ A. Nunez
     -----------------------                 --------------------------------
                                             A. Nunez, Senior Vice President,
                                             Treasurer, Chief Financial Officer,
                                             Chief Accounting Officer, Director


     Pursuant to the requirements of the Securities Exchange Act of 1934 this
     Annual Report has also been signed by the following persons on behalf of
     the Registrant in the capacities indicated.

                        MEMBER OF THE BOARD OF DIRECTORS


<TABLE>
<S>                                           <C>
DATE              3-25-97                     s/ Harry A. Levy
     -----------------------                  ----------------------------------
                                              Harry A. Levy, Director


DATE              3-24-97                     s/ E. E. Hubshman
     -----------------------                  ----------------------------------
                                              E.E. Hubshman, Director


DATE              3-24-97                     s/ Mark A. Levy
     -----------------------                  ----------------------------------
                                              Mark A. Levy, Director


DATE              3-24-97                     s/ Eugene H. Berns
     -----------------------                  ----------------------------------
                                              Eugene H. Berns, Director


DATE              3-28-97                     s/ Donald C. McClosky
     -----------------------                  ----------------------------------
                                              Donald C. McClosky, Director


DATE              3-28-97                     s/ Paul R. Lehrer
    -----------------------                   ----------------------------------
                                              Paul R. Lehrer, Director



DATE              3-26-97                     s/ George R. Richards
    -----------------------                   ----------------------------------
                                              George R. Richards, Director

</TABLE>