<PAGE>


                     U.S. Securities and Exchange Commission
                                Washington, D.C.

                                   Form 10-Q


              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended September 30,1998

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

                   For the transition period to


                 Commission file number 0-27474
  

                            American Bancshares, Inc.
                (Exact Name of Registrants Specified in its Charter)


                 Florida                             65-0624640
        (State or other Jurisdiction            (IRS Emloyer Id. No.)
        Incorporation or Organization)

                 4502 Cortez Road West, Bradenton, Florida 34210
                      (Address of Principal Executive Offices)

                                 (941) 795-3050
                (Registrants telephone number including area code)

                 4702 Cortez Road West, Bradenton, Florida 34210
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)



Check  whether  the issuer  has(1)  filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for shorter  period  that the  registrant  was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.
         Yes X  No    .
            ---   ---

Number of shares outstanding of the issuer's Common Stock, par value $1.175 as
of September 30,1998: 4,994,984 shares.
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                         Page
<S>       <C>                                                          <C>
Part I    FINANCIAL INFORMATION

          Item 1
               -Financial Statements                                     1-4

               -Notes to Consolidated Condensed Financial Statements     5-8

          Item 2
               -Management's Discussion and Analysis
                of Financial Condition and Results of
                Operations                                               9-11

          Item 3
               -Management's Discussion and Analysis
                of Year 2000 issues.                                      11

          Item 4   
               -Quantitative and Qualitative Disclosure                   11
                About Market Risk   


Part II   OTHER INFORMATION

          Item 1     Legal Proceedings                                    12


          Item 2     Changes in Securities                                12


          Item 3     Defaults Upon Senior Securities
                     (Not applicable)                                    n/a


          Item 4     Submission of Matters to a Vote
                     of Security Holders
                     (Not applicable)                                    n/a


          Item 5     Other Information                                    12


          Item 6     Exhibits and Reports on Form 8-K                     13
</TABLE>
<PAGE>


PART 1 - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(unaudited, $ in thousands)
<TABLE>
<CAPTION>

                                                  September 30,  December 31,     %           $
Assets                                                 1998         1997        Change      Change
                                                  -------------  ------------  --------   ----------
<S>                                                 <C>          <C>          <C>       <C>
  Cash and due from banks                              17,670        9,549         85.05       8,121
  Federal funds sold                                        0        5,120       (100.00)     (5,120)
  Interest bearing deposits in banks                      519        3,727        (86.07)     (3,208)
  Mortgage loans held for sale                         82,596       39,588        108.64      43,008
  Investment securities, available for sale            75,990       62,898         20.81      13,092
  Mortgage-backed securities, available for sale        5,381        5,766         (6.68)       (385)
  Loans (net of allowance for credit losses and
   deferred loan fees of $1,494,812 as of
   September 30, 1998 and $1,704,529 as of
   December 31, 1997)                                 234,432      213,404          9.85      21,028
  Premises and equipment, net                          12,455        9,161         35.96       3,294
  Other real estate owned, net                            190          363        (47.66)       (173)
  Goodwill                                                 76           80         (5.00)         (4)
  Other assets                                          7,423        4,245         74.86       3,178
                                                    ---------    ---------     ---------    --------
  Total assets                                        436,732      353,901         23.41      82,831
                                                    =========   ==========     =========    ========

Liabilities and shareholders' equity

Liabilities
  Deposits                                            326,857      302,746          7.96      24,111
  Securities sold under agreements to repurchase       30,378       17,528         73.31      12,850
  Federal funds purchased and FHLB borrowings          32,500        5,000        550.00      27,500
  Other Borrowed Money                                      0          500       (100.00)       (500)
  Guaranteed Preferred Beneficial Interests in 
   the Company's Junior Subordinated Debentures
   (trust preferred securities)                        16,249          n/a        100.00      16,249
  Other liabilities                                     3,097        2,048         51.22       1,049
                                                    ---------    ---------     ---------    --------
    Total liabilities                                 409,081      327,822         24.79      81,259

Shareholders' equity
  Preferred shares, 5,000,000 shares authorized,
  0 shares issued and outstanding as of 
  September 30,1998                                         0          n/a          0.00           0

  Common shares, $1.175 par value, 20,000,000
   shares authorized, 4,994,984 shares issued
   and outstanding as of  September 30, 1998
   and 4,994,484 as of December 31, 1997                5,870        5,869          0.02           1
  Additional paid in capital                           15,551       15,548          0.02           3
  Accumulated other comprehensive income, net             476          140        240.00         336
  Retained earnings                                     5,754        4,522         27.24       1,232
                                                    ---------    ---------     ---------    --------
    Total shareholders' equity                         27,651       26,079          6.03       1,572
                                                    ---------    ---------     ---------    --------
Total liabilities and shareholders' equity            436,732      353,901         23.41      82,831
                                                    =========    =========     =========    ========

</TABLE>

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

                                     Page 1
<PAGE>
 American Bancshares, Inc. and Subsidiaries
 Consolidated Condensed Statements of Income
 (unaudited, $ in thousands)
<TABLE>
<CAPTION>
                                                  Three Month's Ended September 30,     %             $
                                                         1998           1997          Change        Change
                                                      -----------    -----------    ----------   -----------
<S>                                                   <C>            <C>            <C>          <C>
Interest income
  Interest and fees on loans                               6,851           5,206         31.60          1,645
  Interest on mortgage backed securities, taxable             86             194        (55.67)          (108)
  Interest on investment securities, taxable               1,260             765         64.71            495
  Interest on investment securities, nontaxable               30              17         76.47             13
  Other interest income                                       14             114        (87.72)          (100)
                                                        --------        --------     ---------      ---------
    Total interest income                                  8,241           6,296         30.89          1,945

Interest expense
  Deposits                                                 3,335           3,094          7.79            241
  Securities sold under agreements to repurchase             332             177         87.57            155
  Federal funds purchased and FHLB advances                  531              81        555.56            450
  Trust preferred securities                                 331               0        100.00            331
  Other borrowed money                                        (2)              0       (100.00)            (2)
                                                        --------        --------     ---------      ---------
    Total interest expense                                 4,527           3,352         35.05          1,175

Net interest income                                        3,714           2,944         26.15            770
Provision for loan losses                                    154             160         (3.75)            (6)
                                                        --------        --------     ---------      ---------
Net interest income after loan loss                        3,560           2,784         27.87            776

Noninterest income
  Service charges & fees                                     476             562        (15.30)           (86)
  Gain on sale of mortgage loans                             341              60        468.33            281
  Gain on sale of securities                                  58              66        (12.12)            (8)
  Gain on sale of servicing                                   15              75        (80.00)           (60)
  Broker loan fees                                            27             108        (75.00)           (81)
  Originated mortgage servicing rights                       169              55        207.27            114
  Merchant fees                                              172             105         63.81             67
  Other income                                               219             120         82.50             99
                                                        --------        --------     ---------      --------- 
    Total noninterest income                               1,477           1,151         28.32            326

Noninterest expense
  Salaries & employee benefits                             1,863           1,331         39.97            532
  Net occupancy expense                                      232             172         34.88             60
  Furniture and equipment expenses                           274             261          4.98             13
  Data processing fees                                       220             158         39.24             62
  Legal fees                                                 114              70         62.86             44
  Other expense                                            1,357           1,000         35.70            357
                                                        --------        --------     ---------      ---------
    Total noninterest expense                              4,060           2,992         35.70          1,068

Income before income taxes                                   977             943          3.61             34
Provision for income taxes                                   342             401        (14.71)           (59)
                                                        --------        --------     ---------      ---------
Net income                                                   635             542         17.16             93
                                                        ========        ========     =========      =========
Earnings per share (actual $'s)
   Basic                                                    0.13            0.11
   Diluted                                                  0.13            0.11

Average number of shares outstanding
   Basic                                               4,994,984       4,994,484
   Diluted                                             5,015,921       5,017,965

</TABLE>

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

                                     Page 2
<PAGE>
 American Bancshares, Inc. and Subsidiaries
 Consolidated Condensed Statements of Income
 (unaudited, $ in thousands)
<TABLE>
<CAPTION>
                                                   Nine Months ended September 30,      %             $
                                                         1998           1997          Change        Change
                                                      -----------    -----------    ----------   -----------
<S>                                                   <C>            <C>            <C>          <C>
Interest income
  Interest and fees on loans                              19,136          14,567         31.37         4,569
  Interest on mortgage backed securities, taxable            208             604        (65.56)         (396)
  Interest on investment securities, taxable               3,202           2,301         39.16           901
  Interest on investment securities, nontaxable               78              50         56.00            28
  Other interest income                                      200             327        (38.84)         (127)
                                                       ---------       ---------      --------       -------
    Total interest income                                 22,824          17,849         27.87         4,975

Interest expense
  Deposits                                                 9,823           8,613         14.05         1,210
  Securities sold under agreements to repurchase             880             438        100.91           442
  Federal funds purchased and FHLB advances                  726             278        161.15           448
  Trust preferred securities                                 331               0        100.00           331
  Other borrowed money                                        25               0        100.00            25
                                                       ---------       ---------      --------       -------
    Total interest expense                                11,785           9,329         26.33         2,456

Net interest income                                       11,039           8,520         29.57         2,519
Provision for loan losses                                    429             686        (37.46)         (257)
                                                       ---------       ---------      --------       -------
Net interest income after loan loss                       10,610           7,834         35.44         2,776

Noninterest income
  Service charges & fees                                   1,352           1,300          4.00            52
  Gain on sale of loans                                      448              90        397.78           358
  Gain on sale of securities                                 186              70        165.71           116
  Gain on sale of servicing                                   87             346        (74.86)         (259)
  Broker loan fees                                           115             242        (52.48)         (127)
  Originated mortgage servicing rights                       501              92        444.57           409
  Merchant fees                                              564             362         55.80           202
  Other income                                               500             388         28.87           112
                                                       ---------       ---------      --------       -------
    Total noninterest income                               3,753           2,890         29.86           863

Noninterest expense
  Salaries & employee benefits                             5,131           3,785         35.56         1,346
  Net occupancy expense                                      650             480         35.42           170
  Furniture and equipment expenses                           726             706          2.83            20
  Data processing fees                                       707             438         61.42           269
  Legal fees                                                 604             168        259.52           436
  Litigation settlement                                      525               0        100.00           525
  Other expense                                            4,124           2,805         47.02         1,319
                                                       ---------       ---------      --------       -------
    Total noninterest expense                             12,467           8,382         48.74         4,085

Income before income taxes                                 1,896           2,342        (19.04)         (446)
Provision for income taxes                                   664             902        (26.39)         (238)
                                                       ---------       ---------      ---------      -------
Net income                                                 1,232           1,440        (14.44)         (208)
                                                      ==========       =========      =========      =======
Earnings per share (actual $'s)
Basic                                                       0.25            0.29
Diluted                                                     0.25            0.29

Average number of shares outstanding
Basic                                                  4,994,691       4,986,422
Diluted                                                5,022,425       5,005,987

</TABLE>

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

                                     Page 3
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statement of Cashflows
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
                                                    Nine Months ended September 30,
                                                          1998           1997
                                                       ----------     ---------
<S>                                                   <C>            <C>        
Cash flows from operating activities:
 Net income                                                 1,232         1,440
                                                         --------      --------
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Provision for loan losses                                   429           686
  Net gain on sale of investment securities                  (170)          (73)
  Net gain on sale of loans                                  (448)          (87)
  Net gain on sale of mortgage servicing rights               (87)         (396)
  Net gain on originated mortgage servicing rights           (501)          (92)
  Net (gain)/loss on sale of foreclosed real estate             0             7
  Deferred income taxes                                         0            73
  Depreciation                                                689           550
  Proceeds from sales of loans held for sale               52,191        28,823
  Net amortization of premiums and accretion of
   discounts on investment securities                           3            13
  Increase in other liabilities                             1,049           416
  (Increase) decrease in other assets                      (2,413)          147
                                                         --------      --------
 Total adjustments                                         50,742        30,067
                                                         --------      --------
Net cash provided by operating activities                  51,974        31,507
                                                         --------      --------
Cash flows from investing activities:
 Loan originations, net of repayments                    (116,287)      (70,169)
 Purchases of bank premises and equipment                  (3,983)       (1,881)
 Proceeds from sales and maturities of available for
  sale investment securities                               54,201        16,916
 Purchases of available for sale investment
  securities, net of repayments                           (66,405)      (32,545)
 Recoveries on loans charged off                               83            58
                                                        ---------      --------
Net cash used in investing activities                    (132,391)      (87,621)
                                                        ---------      --------
Cash flows from financing activities:
 Net increase in demand deposits, NOW 
  and savings accounts                                     25,644        29,020
 Net increase (decrease) in time deposits                  (1,533)       21,623
 Net increase in securities sold under agreements to
  repurchase                                               12,850         7,571
 Proceeds from issuance of trust preferred securities      16,249             0
 Net proceeds from advances (repayments)from the
  FHLB and Federal Funds purchased                         27,000        (1,300)
 Proceeds from sale of stock                                    0           425
                                                        ---------     ---------
Net cash provided by financing activities                  80,210        57,339
                                                        ---------     ---------
Net increase (decrease) in cash and cash equivalents         (207)        1,225
Cash and cash equivalents at beginning of period           18,396        22,976

Cash and cash equivalents at end of period                 18,189        24,201
                                                       ==========     =========
Supplemental disclosures:
 Interest paid                                             11,422         9,304
                                                       ==========     =========
 Income taxes paid                                            915           944
                                                       ==========     =========
</TABLE>

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

                                     Page 4
<PAGE>
                       AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS




Note 1.    Holding Company and Subsidiaries Background Information

American  Bancshares,  Inc. (Company),  is a one bank holding company,  operated
under the laws of the state of Florida.  Its wholly owned banking  subsidiary is
American Bank (Bank),  a state  chartered bank. The Holding  Company,  a Florida
corporation  organized June 30, 1995, is a registered  holding company under the
Bank Holding Company Act of 1956, as amended, and on December 1, 1995 became the
bank holding company for the Bank. The Bank was incorporated on December 6, 1988
and opened for business on May 8, 1989.  The Bank is a general  commercial  bank
with all the rights,  powers,  privileges  granted and  conferred by the Florida
Banking Code. Although the Holding Company was not formed until June 30,1995 and
did not acquire the Bank until December 1, 1995, the financial  statements  have
been presented as if the Company had been in existence since the Bank was formed
in 1988 and as if the Bank was it's wholly owned subsidiary since that time.

The Company has organized a wholly-owned Florida subsidiary corporation, Freedom
Finance Corporation,  ("Finance Company"),  pursuant to which it engages in full
service consumer financing.  The Finance Company offers consumer-driven products
and services ranging from mortgages to automobile  loans,  home equity loans and
education financing.  The Finance Company has the ability to extend financing to
individuals   and  entities  which  may  not  be  able  to  satisfy  the  Bank's
underwriting requirements or loan standards. During April 1998 the Bank extended
a $2.4 million line of credit to the Finance Company to support operations.  The
Finance Company commenced preliminary operations in late March 1998.

ABI Capital Trust  ("ABICT"),  a Delaware  statutory  trust,  was created on May
21,1998. The ABICT exists for the  exclusive  purpose of (i) issuing and selling
Common  Securities  and  Preferred  Securities  of ABICT  (together  the  "Trust
Securities"), (ii) using the proceeds of the sale of Trust Securities to acquire
Deferrable Interest Debentures ("Junior Subordinated  Debentures") issued by the
Company,   and  (iii)  engaging  only  in  those  other  activities   necessary,
convenient,  or incidental  thereto (such as  registering  the transfer of Trust
Securities).  Accordingly  the Junior  Subordinated  Debentures will be the sole
assets of the ABICT.  On July 7,1998 the ABICT  issued $15 million of 8.5% Trust
Securities,  the  Company  invested  $463,920,  in the  form of a  common  stock
purchase,  and the  ABICT  purchased  $15,463,920  of 8.5%  Junior  Subordinated
Debentures  from the  Company.  In  connection  with the  over-allotment  option
granted to the underwriter on August 6,1998 the ABICT issued  $1,249,420 of 8.5%
Trust  Securities,  the Company invested an additional  $38,650 in the form of a
common  stock  purchase,  and the  ABICT  purchased  $1,288,070  of 8.5%  Junior
Subordinated  Debentures  from the  Company.  The Company owns all of the Common
Securities  of  ABICT,  the  only  voting  security,  and  as a  result  it is a
subsidiary of the Company.

Note 2.           Basis of Presentation

The accompanying unaudited condensed  consolidated financial statements,  in the
opinion  of  management,  include  all  adjustments,  consisting  only of normal
recurring  adjustments  necessary for a fair presentation of the results for the
interim periods.  Certain information and footnote disclosures normally included
in  financial   statements   prepared  in  accordance  with  generally  accepted
accounting  principles have been condensed or omitted  pursuant to SEC rules and
regulations,  although the Company believes that the disclosures included herein
are adequate to make the information  presented not  misleading.  The results of
operations for the three and nine month periods ended September 30, 1998 are not
necessarily indicative of the results expected for the full year.

The organization and business of the Company,  accounting  policies  followed by
the Company and other  information  are contained in the Company's  December 31,
1997 Form 10-KSB.  This quarterly report should be read in conjunction with such
annual report.

Merger - On March 23,1998, the Company completed its merger with Murdock Florida
Bank (Murdock).  In connection with the merger the Company issued 924,026 shares
of its common stock in  exchange for all of the outstanding  Murdock shares. The
transaction  was  accounted  for as a  pooling  of  interests.  Accordingly  the
Consolidated Balance Sheet,  Income Statement and Statement of Cash Flow include
the results of Murdock on a historical basis.

                                     Page 5
<PAGE>
                       AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


Note 3.           Investments

The  Company's  investments and  mortgage-backed  securities  are  classified as
available  for sale and recorded at fair value as required by the  provisions of
Statement of Financial Accounting Standards No. 115. Unrealized gains and losses
are  reflected  as  a  separate   component  of  shareholders'   equity  on  the
consolidated statement of condition. At September 30, 1998, an unrealized gain, 
net of tax, of $476,000 was reflected as an increase of shareholders' equity.

Note 4.           Earnings Per Share

  Basic  earnings per common share is  calculated  by dividing net income by the
sum of the weighted average number of shares of common stock outstanding.

  Diluted  earnings per common share is calculated by dividing net income by the
weighted  average  number of shares of common  stock  outstanding,  assuming the
exercise of stock options and warrants  using the treasury  stock  method.  Such
adjustments to the weighted average number of shares of common stock outstanding
are made only when such  adjustments  dilute  earnings  per  common  share.  The
diluted earnings per share is summarized as follows:
<TABLE>
<CAPTION>
                                                             Nine Months            Three Months   
                                                          ended September 30,    ended September 30,
                                                           1998        1997        1998        1997
                                                        ---------   ---------   ---------   ---------
<S>                                                     <C>         <C>         <C>         <C>
Weighted average common shares outstanding............  4,994,691   4,986,422   4,994,984   4,994,484
Weighted average common shares equivalents............     27,734      19,565      20,937      23,481
                                                        ---------   ---------   ---------   ---------
Shares used in diluted earnings per share
  calculation.........................................  5,022,245   5,005,987   5,015,921   5,017,965
                                                        =========   =========   =========   =========
</TABLE>

Note 5.           Capital

On July 7,1998,  ABI Capital Trust ("ABICT"),  a Delaware Business trust created
by the Company on May 21, 1998, issued $15,000,000 in the aggregate  liquidation
amount of its 8.50% preferred  securities,  liquidation amount $10 per preferred
security  ("Capital  Securities") in a registered public offering.  On August 6,
1998,  the  underwriter  exercised its  over-allotment  option,  in part, and an
additional $1,249,420 in aggregate liquidation amount of Capital Securities were
issued. On these respective dates, the Company purchased $463,920 and $38,650 in
aggregate  liquidation  amount  of  the  common  securities  of  ABICT  ("Common
Securities").

 The Common Securities are wholly owned by the Company,  and such securities are
the only class of ABICT's  securities  possessing  general  voting  powers.  The
Capital Securities  represent  preferred undivided  beneficial  interests in the
assets  of  ABICT,  and  are  classified  on  the  Company's  balance  sheet  as
"Guaranteed  Preferred Beneficial Interests in the Company's Junior Subordinated
Debentures", with distributions on such securities included in interest expense.
Under the Federal Reserve Board's current  risk-based  capital  guidelines,  the
Capital Securities are includable in the Company's capital.

 The proceeds from the issuance of the Capital  Securities and Common Securities
were used by ABICT to purchase $16,249,000 aggregate liquidation amount of 8.50%
junior  subordinated   deferrable  interest  debentures  ("Junior   Subordinated
Debentures") issued by the Company. The Junior Subordinated Debentures represent
the sole assets of ABICT and payments under the Junior  Subordinated  Debentures
are the sole source of cash flow for ABICT. The Junior  Subordinated  Debentures
accrue and pay cash distributions  quarterly in arrears at the rate of 8.50% per
annum of the stated liquidated amount of $10 per Junior Subordinated  Debenture,
and are scheduled to mature on July 7, 2028.

 Holders  of  the  Capital  Securities  receive  preferential   cumulative  cash
distributions  quarterly on each  distribution  date at the stated  distribution
rate unless the Company exercises its right to extend the payment of interest on
the Junior  Subordinated  Debentures for up to 20 quarterly interest periods, in
which case payment of distributions  on the Capital  Securities will be deferred
for a comparable period. During an extended interest period, the Company may not
pay dividends or distributions  on, or repurchase,  redeem or acquire any shares
if its capital  stock.  In connection  with issuance of Capital  Securities  the


                                     Page 6
<PAGE>
                       AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


Note 5.           Capital (continued)

Company issued a guarantee with respect to certain  payments to be made by ABICT
under the  terms  thereof.  The  agreements  governing  the  Capital  Securities
(including such guarantee),  in the aggregate,  provide a full.  Irrevocable and
unconditional  guarantee by the Company of the payment of distributions  on, the
redemption  of, and any  liquidation  distribution  with  respect to the Capital
Securities.  The obligations of the Company under such guarantee and the Capital
Securities  are  subordinate  and  junior  in right  of  payment  to all  senior
indebtedness of the Company.

 The Capital  Securities are mandatorily  redeemable in whole,  but not in part,
upon  repayment  at  the  stated  maturity  dates  of  the  Junior  Subordinated
Debentures or the earlier  redemption of the Junior  Subordinated  Debentures in
whole upon the  occurrence  of one or more  events  ("Events")  set forth in the
indenture relating to the Capital Securities and in whole or in part at any time
after the stated  optional  redemption  dates (June 30, 2003)  contemporaneously
with the  Company's  optional  redemption  of the  related  Junior  Subordinated
Debentures  in  whole  or  in  part.  The  Junior  Subordinated  Debentures  are
redeemable prior to their maturity dates at the Company's option (i) on or after
the stated optional  redemption dates, in whole at any time or in part from time
to time, or (ii) in whole, but not in part, at any time within 90 days following
the occurrence and during the continuation of one or more of the Events, in each
case  subject to  possible  regulatory  approval.  The  redemption  price of the
Capital  Securities  upon their early  redemption will be 100% of the liquidated
amount plus accumulated but unpaid distributions.

In July 1998 and August 1998, the Company issued Junior Subordinated  Debentures
totaling approximately $16.8 million. Of the net proceeds of approximately $15.8
million the Company has  invested  $8.0  million in the Bank,  as an  additional
capital  contribution,   and  repaid  other  outstanding  indebtedness  totaling
approximately  $3.0  million.  The balance of the funds will be used for general
corporate  purposes,  including but not limited to (i) making additional capital
contributions to the Bank, (ii) making additional  capital  contributions to the
Finance Company,  (iii) investing in other business opportunities as may present
themselves from time to time, and (iv) working capital.

Note 6.           Comprehensive Income

Effective January 1, 1998 the Company has adopted Financial Accounting Standards
("FAS") No. 130 "Reporting  Comprehensive Income," which requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in the financial statements. Prior periods will
be reclassified as required.  The Company's total comprehensive  earnings are as
follows:
<TABLE>
<CAPTION>
Comprehensive Earnings (unaudited, actual $)

                                             Nine months ended September 30,
                                                1998                1997
                                                ----                ---- 
<S>                                     <C>                 <C>
Net income (loss)                             1,232,031          1,440,376   
Other comprehensive earnings (losses):                0                  0
Unrealized gains (losses) on securities         336,109            217,527
                                              ---------          ---------
Comprehensive income                          1,568,140          1,657,903
</TABLE>

Note 7.           Impact of Recently Issued Accounting Standards

FAS  No.  131,   Disclosures   about  Segments  of  an  Enterprise  and  Related
information,  is effective for fiscal years  beginning  after December 15, 1997.
This statement  establishes  standards for reporting information about operating
segments in annual financial  statements and interim  information is required to
be reported on the basis that it is used  internally for evaluating  performance
of and  allocation of resources to operating  segments.  The Company has not yet
determined  to what  extent the  standard  will  impact the  disclosures  in the
financial statements.

FAS No. 132,  "Employers'  Disclosures  about Pensions and Other  Postretirement
Benefits" which is effective for periods beginning after December 15, 1997. This
statement revises employers'  disclosures about pension and other postretirement
benefit plans.  Because this statement addresses  disclosures only, the adoption
will have no material impact on the financial statements.


                                     Page 7
<PAGE>
                       AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 7.           Impact of Recently Issued Accounting Standards (continued)

On June  15,  1998  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments  and Hedging  Activities  (FAS 133).  FAS 133 is  effective  for all
fiscal  quarters of all fiscal years  beginning  after June 15, 1999 (January 1,
2000 for the  Company).  FAS 133 requires  that all  derivative  instruments  be
recorded on the balance sheet at their fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other  comprehensive
income,  depending  on whether a  derivative  is  designated  as part of a hedge
transaction, if it is, the type of hedge transaction.  Management of the Company
anticipates that, due to its limited use of derivative instruments, the adoption
of FAS 133  will not have a  significant  effect  on the  Company's  results  of
operations or its financial position.

On October 12, 1998,  the  Financial  Accounting  Standards  Board (FASB) issued
Statement  of   Financial   Accounting   Standards   No.  134   Accounting   for
Mortgage-Backed  Securities  Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage  Banking  Enterprise  (FAS 134) an amendment of FASB
Statement No. 65. This Statement shall be effective for the first fiscal quarter
beginning after December 15, 1998. This Statement further amends Statement 65 to
require that after the securitization of mortgage loans held for sale, an entity
engaged in mortgage banking  activities  classify the resulting  mortgage-backed
securities or other retained  interests  based on its ability and intent to sell
or hold those investments. This Statement conforms the subsequent accounting for
securities  retained  after the  securitization  of mortgage loans by a mortgage
banking enterprise with the subsequent  accounting for securities retained after
the securitization of other types of assets by a nonmortgage banking enterprise.
Management  is currently  assessing  the future  period impact of FAS 134 on the
Company's  consolidated  balance  sheet,  statements  of  income,  shareholders'
equity, and cash flows.

Note 8.           Litigation

 On March 27,1997, James J. Bazata, a former employee of the Bank, filed a claim
in the United States District Court, Tampa Division, alleging that such employee
was discriminated  against.  It is alleged that this conduct violated his rights
under the Americans with Disabilities Act of 1990. The company believes that the
Bank acted  appropriately  and that this action was without  merit.  Pursuant to
negotiations with Mr. Bazata, the Company agreed to settle this lawsuit on July
1,1998,  exhibit  10.3 of the  Company's  form  10-Q  dated  August  10,1998  is
incorporated  herein by  reference,  by entering  into a  consulting  agreement,
exhibit 10.2 of the  Company's  form 10-Q dated August  10,1998 is  incorporated
herein by reference, with Mr. Bazata's corporation for services through December
31,  2000,  and has  further  agreed to pay Mr.  Bazata's  legal  fees and costs
incurred in connection with the lawsuit.  The total payments due through the end
of 2000 under the consulting  agreement,  and Mr. Bazata's legal fees and costs,
aggregate  $525,000.  The Company  expensed the entire  settlement in the period
ending  June  30,1998,  accruing  all amounts  due  pursuant  to the  consulting
agreement, legal fees and costs.



                                     Page 8
<PAGE>

PART 1

ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

American Bancshares, Inc. and Subsidiaries

General

 This  discussion  contains  certain  "forward-looking  statements"  within  the
meaning  of the  Private  Securities  Litigation  Reform  Act of  1995,  such as
statements  relating  to the  financial  condition  and  prospects,  results  of
operations,  plans for future business development activities,  capital spending
and  financing  sources,  capital  structure,  the  effects  of  regulation  and
competition,  and the  business of the Company.  Where used in this filing,  the
words "anticipate", "believe", "estimate", "expect", "intend", and similar words
and  expressions,  as they  relate  to the  Company,  or the  management  of the
Company, identify forward-looking  statements.  Such forward-looking  statements
reflect the current views of the Company and are based on information  currently
available  to the  management  of the  Company  and upon  current  expectations,
estimates,  and  projections  about the Company and its  industry,  management's
beliefs with respect thereto, and certain assumptions made by management.  These
forward-looking  statements  are not  guarantees of future  performance  and are
subject to risks,  uncertainties,  and other  factors  which could cause  actual
results  to  differ   materially   from  those  expressed  or  implied  by  such
forward-looking  statements as a result of various factors.  Potential risks and
uncertainties  include,  but are not limited to: (i) competitive pressure in the
banking and financial services industries increasing significantly; (ii) changes
in the  interest  rate  environment  which  reduce  margins;  (iii)  changes  in
political  conditions  or changes  occurring in the  legislative  or  regulatory
environment;  (iv) general economic conditions, either nationally or regionally,
becoming  less  favorable  than expected  resulting  in, among other  things,  a
deterioration in credit quality;  (v) changes  occurring in business  conditions
and inflation;  (vi)  acquisitions  and  integration  of acquired  businesses or
assets; (vii) changes in technology; (viii) changes in monetary and tax
policies;  (ix)  changes  occurring  in the  securities  markets;  (x) year 2000
related issues and (xi) other risks and uncertainties detailed from time to time
in the filings of the Company with the Commission.

Liquidity and Capital Resources

Total assets of the Company  increased by 23.41% to $436,732,000 as of September
30, 1998, from  $353,901,000 as of December 31, 1997 and 31.1% from $333,076,000
as of September  30, 1997.  The increase in assets from  December 31, 1997,  was
primarily  the result of increases in Cash and Due From Banks of  $8,121,000  to
$17,670,000,  increases in Net Loans of $64,036,000 to $317,028,000 and premises
and equipment of $3,294,000 to $12,455,000.  The increases in assets were funded
through  increases  in deposits of  $24,111,000  to  $326,857,000,  increases in
Securities Sold Under Agreements to Repurchase of $12,850,000 to $30,378,000 and
increases in borrowings of $27,000,000 to $32,500,000.

As of September 30, 1998, the Bank's Tier 1 leverage ratio was 8.50%,  Tier 1 to
risk  weighted  assets  was 12.12% and total  risk  based  capital  was  12.88%,
resulting in a classification of "Well Capitalized"  under FDIC guidelines.  The
Bank, through its Asset/Liability  Committee,  monitors, among other things, the
Bank's capital and liquidity position,  making adjustments to deposit, loan, and
investment  strategies as  necessary.  The Bank  continues to maintain  adequate
liquidity  levels with a liquidity  ratio at September  30, 1998 of 48.10%.  The
Bank is a member  of the  Federal  Home Loan Bank of  Atlanta  (FHLB).  FHLB has
approved a line of credit  totaling  $50,000,000  collateralized  by  qualifying
mortgages and all of the Bank's FHLB stock.  As of September 30, 1998,  advances
totaling  $32,500,000 were  outstanding.  The Bank also maintains  Federal Funds
Purchased  agreements  with several  correspondent  banks to provide  sources of
overnight  funds.  As of  September  30,  1998,  the Bank had no  federal  funds
purchased.  During  April  1998,  the new  administrative  office  building  was
completed and is now occupied.  The cost of construction was approximately  $2.5
million.  In June,  1998 the  administrative  offices were sold to the Bank,  at
cost, to allow the Company to better leverage its capital position.

In July 1998 and August 1998, the Company issued Junior Subordinated  Debentures
("Debenture") totaling approximately $16.8 million, at an interest rate of 8.5%.
Of the net proceeds of approximately $15.8 million the Company has invested $8.0
million  in the Bank,  as an  additional  capital  contribution,  and repaid and
cancelled the  Commercial  Revolving  Line of Credit from Barnett  Banks,  N.A.,
South Florida (now Nationsbank, N.A.). totaling approximately $3.0 million.



                                     Page 9
<PAGE>

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Liquidity and Capital Resources (continued)

In July and August,  1998 the Bank also drew down $26 million of it FHLB line of
credit at an interest rate ranging from 5.04% - 5.09%. The average interest rate
on the  subordinate  debentures  and the FHLB  advances was 6.64%.  The Bank has
invested  these funds  primarily in FNMA and FHLMC  securities,  with an average
yield of 6.65.

On July 15,1998 the Bank acquired a former  SouthTrust Bank, N.A. branch located
at 1201 Beneva Rd.  South,  Sarasota,  Florida  34236.  The  purchase  price was
$725,000.  No deposits  or loans were  acquired  in the  transaction.  State and
Federal  regulatory  approval has been  received to operate  this  location as a
branch of the Bank.  The Bank expects to commence  operation of this facility in
the fourth quarter of 1998.

The Bank has  negotiated  a lease for a branch  location at 6311  Atrium  Drive,
Suite 101 Bradenton,  Florida 34202 (in the Lakewood Ranch  Subdivision).  State
and Federal regulatory approval has been received to operate this location as a
branch of the Bank. The Bank expects to  commence operation of this facility in 
the first quarter of 1999.

Management  believes that there are adequate  funding sources to meet its future
liquidity needs for the foreseeable future.  Primary among these funding sources
are the  repayment  of  principal  and  interest  on loans,  the renewal of time
deposits,  and the growth in the deposit base.  Management does not believe that
the terms and  conditions  that will be present at the renewal of these  funding
sources  will  significantly  impact  the  Company's  operations,   due  to  its
management of the maturities of its assets and liabilities.

Results of Operations

The Company's net income for the quarter ended September 30,1998 was $635,000 or
$.13 per share,  compared  to net income of  $542,000  or $.11 per share for the
same period for 1997. Net interest income  increased  $770,000 to $3,714,000 for
the quarter ended September 30,1998,  over the same quarter in 1997, as a result
of the increase in interest earning assets.  Non-interest  income increased from
$1,151,000  for the quarter ended  September 30, 1997 to $1,477,000 for the same
period in 1998. The increase in non-interest income is primarily attributable to
increases  in gain on the sale of mortgage loans of  $281,000;  an  increase  in
originated  mortgage  servicing  rights  ("OMSR's") of $114,000,  an increase of
$99,000 in other  income and an increase in credit card  merchant  services  fee
income of $67,000  and  partially  offset by  decreases  in  service  charges on
deposits  and fees of $86,000;  a decrease  in broker  loan fees of  $81,000;  a
decrease  in gain on sale of  servicing  of $60,000  and a decrease of $8,000 in
gain on sale of securities.

Total general and  administrative  expense for the quarter  ended  September 30,
1998,  increased $1,068,000 over the same period of 1997. This increase resulted
primarily from increases in other  operating  expenses  related to the growth in
the  Company's  assets,  the  number of Bank  branches,  and the start up of the
Finance  Company.  Specifically,  salary  expense  increased by  $532,000,  data
processing  increased by $62,000.  Other  expenses  increased by $357,000 due to
increased telephone expenses of $51,000;  increased interchange fees of $48,000;
increased item  processing  fees of $30,000;  and various other items  partially
attributable continued asset growth and the start up costs of the Finance
Company.  In an effort to curtail  certain costs related to item  processing the
Bank will begin its own item processing  operation in the first quarter of 1999.
Management believes cost savings will begin to be realized in the second quarter
of 1999.  Management  anticipates,  beginning in April 1999, cost savings,  both
direct and indirect,  attributable to this change will  approximate  $10,000 per
month, however there can be no assurance that these results will be achieved.

For the three months ended  September  30,1998,  net interest  income  increased
$770,000 to $3,714,000, compared to $2,944,000 for the same period in 1997, as a
result of the 23% asset growth.  Loan loss expense  decreased  from $160,000 for
the three month period ended  September 30, 1997 to $154,000 for the same period
in 1998.  Management  uses a procedure  on a monthly  basis for  evaluating  the
adequacy  of the  allowance  for  loan  loss.  Based on that  review  management
considers the allowance  sufficient  to cover  expected loan losses.  During the
third quarter of 1998, the bank identified a commercial loan  relationship  that
was experiencing  problems meeting its debt service  requirements.  The customer
has since  filed for  bankrupcy  protection.  Total  loans  outstanding  to this
customer were  approximately  $1,000,000.  Management  believes that its current
exposure is approximately  $550,000.  This exposure was considered in evaluating
the  sufficiency  of the Bank's  allowance  for loan losses.  However,  the bank
intends to pursue all legal remedies to minimize any potential loss.


                                     Page 10
<PAGE>

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations (continued)

For the nine months ended  September 30, 1998, net income was $1,232,000 or $.25
per share,  compared to net income of  $1,440,000 or $.29 per share for the same
period for 1997.  Earnings  per share  were  affected  by the Bazata  litigation
settlement of $525,000 and associated  legal fees of $235,000,  costs associated
with the  acquisition of Murdock  Florida Bank of $541,000 and costs  associated
with the opening of the Ruskin  branch of $67,000 net of the  associated  income
tax benefit of $479,000. Net interest income increased $2,519,000 to $11,039,000
compared to $8,520,000  for the same period in 1997 as a result of the 23% asset
growth. The provision for loan loss expense decreased from $686,000 for the nine
month period ended September 30, 1997 to $429,000 for the same period in 1998.

Noninterest income increased to $3.8 million for the nine months ended September
30,1998  from $2.9  million  for the same  period  for 1997.  Significant  items
include gain on originated  mortgage servicing rights of $409,000;  gain on sale
of mortgage loans of $358,000 and merchant fees of $202,000.

Noninterest expenses increased $4.1 million to $12.5 million for the nine months
ended September 30,1998 from $8.4 million for the same period for 1997. Salaries
and employee  benefits  increased $1.3 million to $5.1 million from $3.8 million
due to increased staff size.  Additionally,  the Bazata litigation settlement of
$525,000  and  associated  legal fees of  $235,000,  costs  associated  with the
acquisition of Murdock  Florida Bank of $541,000 and costs  associated  with the
opening  of  the  Ruskin  branch  of  $67,000   contributed   to  the  increased
non-interest  expenses.  Other significant  expense increases were incidental to
the growth of the Bank.


PART 1.

ITEM 3.  Management's Discussion and Analysis of Year 2000 Issues

The  Company,  via  its  subsidiaries,  utilizes  and  is  dependent  upon  data
processing  systems and software to conduct its  business.  The data  processing
systems and  software  include  those  developed  and  maintained  by the Bank's
third-party  data  processing  vendor  and  purchased  software  that  is run on
in-house  computer  networks.  In 1997,  the Bank  formed  a year  2000  ("Y2K")
Steering  Committee,  consisting  of the  Bank's  senior  management  as well as
employees  from all affected  areas to address the Year 2000  Project.  The Bank
then began the task of identifying the many software  applications  and hardware
devices expected to be impacted by this issue. To date, those vendor's contacted
have indicated that their hardware or software is or will be Year 2000 compliant
in time frames that meet regulatory  requirements.  If this is not the case, our
contingency plans call for new hardware or software to be implemented by certain
crucial dates.

Non-compliant  vendors  have  been and  continue  to be  contacted  for  project
progress reports. Communications with compliant vendors to develop testing plans
is also ongoing. The Bank's Year 2000 Test Plan has been completed and submitted
to the FDIC as of  September  15, 1998.  We expect to be Year 2000  compliant by
December 31, 1998 with a final  drop-dead  date for  compliance set  at June 30,
1999.

The Bank's  Board of  Director's  is updated on Year 2000  progress on a monthly
basis. The Bank has budgeted a total of $181,000 to the Y2K Compliance  Project,
however,  the costs  associated with the compliance  efforts are not expected to
have a  significant  impact  on the Bank or the  Company's  ongoing  results  of
operations.


PART 1.

ITEM 4.  Quantitative and Qualitative Disclosure About Market Risk

         Not applicable.


                                     Page 11
<PAGE>


PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

 On March 27,1997, James J. Bazata, a former employee of the Bank, filed a claim
in the United States District Court, Tampa Division, alleging that such employee
was discriminated  against.  It is alleged that this conduct violated his rights
under the Americans with Disabilities Act of 1990. The company believes that the
Bank acted  appropriately  and that this action was without  merit.  Pursuant to
negotiations with Mr. Bazata, the Company agreed to settle this lawsuit on July
1,1998,  exhibit  10.3 of the  Company's  form  10-Q  dated  August  10,1998  is
incorporated  herein by  reference,  by entering  into a  consulting  agreement,
exhibit 10.2 of the  Company's  form 10-Q dated August  10,1998 is  incorporated
herein by reference, with Mr. Bazata's corporation for services through December
31,  2000,  and has  further  agreed to pay Mr.  Bazata's  legal  fees and costs
incurred in connection with the lawsuit.  The total payments due through the end
of 2000 under the consulting  agreement,  and Mr. Bazata's legal fees and costs,
aggregate  $525,000.  The Company  expensed the entire  settlement in the period
ending  June  30,1998,  accruing  all amounts  due  pursuant  to the  consulting
agreement, legal fees and costs.

Item 2.   Changes in Securities

ABI Capital Trust  ("ABICT"),  a Delaware  statutory  trust,  was created on May
21,1998.  On June 4,1998 the Company filed a registration  statement on Form S-1
(file nos.  333-56095 and 333-56095-01) to register  Preferred  Securities to be
offered  and sold by  ABICT as well as the  Junior  Subordinated  Debenture  and
guarantee of the Company underlying such Preferred Securities.  The registration
statement was amended on June 19,1998 by filing Amendment No. 1 to the Form S-1.
The  S-1  and  Amendment  No.  1  are  incorporated  herein  by  reference.  The
registration  statement was declared  effective on June  30,1998.  The Preferred
Securities were sold pursuant to a firm commitment underwritten offer managed by
Advest,  Inc.  Approximately  $15 million in aggregate  principal  amount of the
Preferred  Securities were sold to Advest, Inc. on July 7,1998, and upon partial
exercise of the  over-allotment  option,  an additional  $1,249,620 in principal
amount were sold to Advest,  Inc.  on August 6, 1998.  As of the filing date the
ABICT has issued  approximately  $16.25  million of 8.5% Trust  Securities.  The
Company  has  incurred  approximately  $971,000  in  costs  associated  with the
formation  of the  ABICT  and  issue of the  securities.  These  costs are being
amortized over the  contractual  life of the securities.  The proceeds  received
from the sale of the Preferred  Securities  were invested in the purchase of the
Company's  Junior  Subordinated  Debentures.  The net  proceeds  received by the
Company was  approximately  $15.8  million,  $8.0 million of such  proceeds were
invested  in the Bank,  $3.0  million  was used to repay  existing  debt and the
remainder is being held for future use for general corporate purposes.

On July  21,1998 the Board of  Directors  of the Company  voted to issue  47,400
stock options  pursuant to the "American  Bancshares,  Inc. and American Bank of
Bradenton  Incentive  Stock  Option Plan of 1996." Of these stock  options 5,000
were issued to Gerald L. Anthony, President  and CEO,  20,000 stock options were
issued to senior  officers.  The  remaining  22,400 stock options were issued to
other Bank staff members.

On July 21,1998 the Board of Directors of the Company voted to issue 74,998
stock options pursuant to the "American Bancshares, Inc. Directors'
Non-qualified Stock Option Plan of 1997."

Item 3.   Defaults Upon Senior Securities

          Not applicable this filing.

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

          Not applicable this filing.
 
Item 5.           Other Information

 The  Company   recently  has  organized  a  wholly-owned   Florida   subsidiary
corporation,  Freedom  Finance  Corporation,  (referred to herein as the Finance
Company),  pursuant  to which it has begun to engage  in full  service  consumer
financing.  The Finance Company commenced  preliminary  operations at the end of
March 1998. In order to provide the Finance  Company with the funds necessary to
commence operations,  the Company made a small capital contribution and the Bank
extended a $2.4 million loan to the Finance Company in April 1998. This loan was
made on substantially  the same terms and conditions,  including  interest rates
and collateral on loans, as those  prevailing for comparable  transactions  with
unrelated third parties.  It is anticipated  that the Finance Company will offer
consumer-driven  products and  services  ranging  from  mortgages to  automobile
loans, home equity loans and education financing.  The Finance Company will have
the ability to extend  financing to  individuals  and entities  which may not be
able to satisfy the Bank's underwriting requirements or loan standards. However,
the Finance  Company is expected to provide  such loans on a selective  basis to
customers that the Finance Company believes are quality credits.  Such customers
will likely consist of  individuals  or entities  which have another  banking or
credit relationship with the Company or the Bank.


                                     Page 12
<PAGE>

PART II - OTHER INFORMATION


Item 6.        Exhibits and Report on Form 8-K

(a)   Exhibits:

    none this period

(b)   Reports on Form 8-K

    none this period


                                     Page 13
<PAGE>


SIGNATURES


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




                                            /s/      Gerald L. Anthony
                                            -----------------------------------
                                            Gerald L. Anthony, President and
                                            Chief Executive Officer


                                            Date: November 13, 1998
                                                 -------------------


                                            /s/      Brian M. Watterson
                                            -----------------------------------
                                            Brian M. Watterson
                                            Senior Vice President and
                                            Chief Financial Officer


                                            Date: November 13, 1998
                                                 -------------------