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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended

June 30, 2002

Commission file number 0-27652

REPUBLIC BANCSHARES, INC.(Exact Name of Registrant As Specified In Its Charter)

|FLORIDA                                              | 59-3347653                       
|---------------------------------------------------- | ---------------------------------
|(State of incorporation)                             | (IRS Employer Identification No.)
|                                                     |                                  
|111 2nd Avenue N.E., St. Petersburg, FL              | 33701                            
|(Address of Principal Office)                        | (Zip Code)                       
|(727) 823-7300                                      
|(Registrants Telephone Number, Including Area Code)

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

At June 30, 2002, 11,378,719 shares of the registrants $2.00 par value common stock were outstanding.

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TABLE OF CONTENTS



|                           |                                                                                               |                                                 |  |  |  |  |  | 
|-------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|                           |                                                                                               | Consolidated Balance Sheets                    
|                           |                                                                                               | Consolidated Statements of Operations          
|                           |                                                                                               | Consolidated Statements of Stockholders Equity
|                           |                                                                                               | Consolidated Statements of Comprehensive Income
|                           |                                                                                               | Consolidated Statements of Cash Flows          
|                           |                                                                                               | Notes to Consolidated Financial Statements     
|                           |                                                                                               | Selected Quarterly Financial Information       
|                           | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                           |                                                                                               | Analysis of Financial Condition                
|                           |                                                                                               | Analysis of Results of Operations              
|                           | Item 3. Interest Rate Risk Management                                                        
|Part II. OTHER INFORMATION
|                           |                                                                                               | Item 1. Legal Proceedings                      
|                           |                                                                                               | Item 6. Exhibits and Report on Form 8-K        
|SIGNATURES                

REPUBLIC BANCSHARES, INC.

INDEX

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|-------------------------------
|Part I.   FINANCIAL INFORMATION
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|Part II.   OTHER INFORMATION   
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this Quarterly Report on Form 10-Q (other than the financial statements and statements of historical fact), including, without limitation, statements as to our expectations and beliefs presented under the caption, Managements Discussion and Analysis of Financial Condition and Results of Operations, may constitute forward-looking statements. Forward-looking statements are made based upon our expectations and beliefs concerning events, many of which, by their nature, are inherently uncertain and outside of our control. It is possible that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.

We caution readers that the assumptions which form the basis for forward-looking statements, with respect to or that may impact earnings for the year ending December 31, 2002, and thereafter, include many factors that are beyond our ability to control or estimate precisely. Some factors include: the adequacy of our loan loss allowance; our ability to recover any or all of the claim under our Financial Institution Bond; the market demand and acceptance of our loan and deposit products; the impact of competitive products; and changes in economic conditions, such as inflation or fluctuations in interest rates.

While we periodically reassess material trends and uncertainties affecting our results of operations and financial condition in connection with our preparation of managements discussion and analysis contained in our quarterly report, we do not intend to review or revise any particular forward-looking statement referenced herein.



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REPUBLIC BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  June 30, 2002 and December 31, 2001($ in thousands, except share data)

|                                                                                                                                                                                |   | June 30,    |   |  | December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - |  | ------------
|                                                                                                                                                                                |   | 2002        |   |  | 2001        
|                                                                                                                                                                                |   |             |   |  |             
|                                                                                                                                                                                |   | (unaudited) |   |  |             
|ASSETS                                                                                                                                                                          |   |             |   |  |             
|Cash and due from banks                                                                                                                                                         | $ | 62,118      |   |  | $           
|Interest bearing deposits with banks                                                                                                                                            |   | 14,138      |   |  |             
|Federal funds sold                                                                                                                                                              |   | 8,887       |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Cash and cash equivalents                                                                                                                                                       |   | 85,143      |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Securities: (Note 3)                                                                                                                                                            |   |             |   |  |             
|Available for sale securities at fair value                                                                                                                                     |   | 798,328     |   |  |             
|Held to maturity securities at amortized cost                                                                                                                                   |   | 15,891      |   |  |             
|Trading securities at fair value                                                                                                                                                |   | 7,800       |   |  |             
|FHLB stock                                                                                                                                                                      |   | 15,261      |   |  |             
|Loans held for sale                                                                                                                                                             |   | 3,760       |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Loans (Note 4)                                                                                                                                                                  |   | 1,450,401   |   |  |             
|Allowance for loan losses (Note 5)                                                                                                                                              |   | (30,617     | ) |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Net loans                                                                                                                                                                       |   | 1,419,784   |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Premises and equipment, net                                                                                                                                                     |   | 42,230      |   |  |             
|Other real estate owned, net                                                                                                                                                    |   | 20,970      |   |  |             
|Accrued interest receivable                                                                                                                                                     |   | 11,791      |   |  |             
|Goodwill                                                                                                                                                                        |   | 2,726       |   |  |             
|Premium on deposits                                                                                                                                                             |   | 17,014      |   |  |             
|Other assets                                                                                                                                                                    |   | 36,734      |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Total assets                                                                                                                                                                    | $ | 2,477,432   |   |  | $           
|                                                                                                                                                                                |   |             |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|LIABILITIES
AND STOCKHOLDERS EQUITY                                                                                                                                            |   |             |   |  |             
|Liabilities:                                                                                                                                                                    |   |             |   |  |             
|Deposits-                                                                                                                                                                       |   |             |   |  |             
|Noninterest bearing checking                                                                                                                                                    | $ | 154,008     |   |  | $           
|Interest checking                                                                                                                                                               |   | 194,900     |   |  |             
|Money market                                                                                                                                                                    |   | 387,693     |   |  |             
|Savings                                                                                                                                                                         |   | 179,830     |   |  |             
|Time deposits                                                                                                                                                                   |   | 1,142,469   |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Total deposits                                                                                                                                                                  |   | 2,058,900   |   |  |             
|Securities sold under agreements to repurchase                                                                                                                                  |   | 36,486      |   |  |             
|FHLB advances                                                                                                                                                                   |   | 132,246     |   |  |             
|Convertible subordinated debt                                                                                                                                                   |   | 29,309      |   |  |             
|Other liabilities                                                                                                                                                               |   | 12,712      |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Total liabilities                                                                                                                                                               |   | 2,269,653   |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Company-obligated mandatorily redeemable preferred                                                                                                                              |   |             |   |  |             
|securities of subsidiary trust solely holding junior                                                                                                                            |   |             |   |  |             
|subordinated debentures of the Company                                                                                                                                          |   | 28,750      |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Stockholders equity:                                                                                                                                                           |   |             |   |  |             
|Common stock ($2.00 par, 20,000,000 shares authorized, 11,378,719      and 11,335,339 shares issued and outstanding at June 30, 2002      and December 31, 2001, respectively.) |   | 22,757      |   |  |             
|Capital surplus                                                                                                                                                                 |   | 129,556     |   |  |             
|Retained earnings                                                                                                                                                               |   | 20,288      |   |  |             
|Net unrealized gain on available for sale securities, net of tax effect                                                                                                         |   | 6,428       |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Total stockholders equity                                                                                                                                                      |   | 179,029     |   |  |             
|                                                                                                                                                                                |   |             |   |  |             
|Total liabilities and stockholders equity                                                                                                                                      | $ | 2,477,432   |   |  | $           
|                                                                                                                                                                                |   |             |   |  |             

The accompanying notes are an integral part of these consolidated balance sheets

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REPUBLIC BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS($ in thousands, except share data; unaudited)

|                                                                              | For the Three Months Ended June 30, |            | For the Six Months Ended June 30,
|----------------------------------------------------------------------------- | ----------------------------------- | ---------- | ---------------------------------
|                                                                              |                                     |            |                                  
|                                                                              |                                     | 2002       |                                  
|                                                                              |                                     |            |                                  
|Interest income:                                                              |                                     |            |                                  
|Loans                                                                         | $                                   | 25,446     |                                  
|Securities                                                                    |                                     | 10,718     |                                  
|Federal funds sold & other investments                                        |                                     | 274        |                                  
|                                                                              |                                     |            |                                  
|Total interest income                                                         |                                     | 36,438     |                                  
|                                                                              |                                     |            |                                  
|Interest expense:                                                             |                                     |            |                                  
|Deposits                                                                      |                                     | 15,163     |                                  
|Securities sold under agreement to repurchase                                 |                                     | 123        |                                  
|FHLB advances                                                                 |                                     | 777        |                                  
|Holding company debt                                                          |                                     | 536        |                                  
|                                                                              |                                     |            |                                  
|Total interest expense                                                        |                                     | 16,599     |                                  
|                                                                              |                                     |            |                                  
|Net interest income                                                           |                                     | 19,839     |                                  
|Provision for loan losses                                                     |                                     | 2,000      |                                  
|                                                                              |                                     |            |                                  
|Net interest income after provision for loan losses                           |                                     | 17,839     |                                  
|                                                                              |                                     |            |                                  
|Noninterest income:                                                           |                                     |            |                                  
|Service charges on deposit accounts                                           |                                     | 1,569      |                                  
|Loan service fees, net                                                        |                                     | 24         |                                  
|Other loan fee income                                                         |                                     | 754        |                                  
|Gains on loans & securities, net                                              |                                     | 440        |                                  
|Gain on sale of branches                                                      |                                     |           |                                  
|Other operating income                                                        |                                     | 508        |                                  
|                                                                              |                                     |            |                                  
|Total noninterest income                                                      |                                     | 3,295      |                                  
|                                                                              |                                     |            |                                  
|Noninterest expense:                                                          |                                     |            |                                  
|Salaries and employee benefits                                                |                                     | 9,618      |                                  
|Net occupancy expense                                                         |                                     | 3,231      |                                  
|Advertising and marketing                                                     |                                     | 280        |                                  
|Data & item processing fees and services                                      |                                     | 1,491      |                                  
|Loan collection costs                                                         |                                     | 644        |                                  
|Other operating expenses                                                      |                                     | 2,685      |                                  
|ORE expense, net                                                              |                                     | (429       | )                                
|Amortization of goodwill                                                      |                                     |           |                                  
|Amortization of premium on deposits                                           |                                     | 692        |                                  
|                                                                              |                                     |            |                                  
|Total noninterest expense                                                     |                                     | 18,212     |                                  
|Income before income taxes & minority interest                                |                                     | 2,922      |                                  
|Income tax expense                                                            |                                     | (1,098     | )                                
|                                                                              |                                     |            |                                  
|Income before minority interest                                               |                                     | 1,824      |                                  
|Minority interest in income from subsidiary trust, net of tax                 |                                     | (421       | )                                
|                                                                              |                                     |            |                                  
|Net income                                                                    | $                                   | 1,403      |                                  
|                                                                              |                                     |            |                                  
|Per share data:                                                               |                                     |            |                                  
|Basic net income per common share                                             | $                                   | 0.13       |                                  
|                                                                              |                                     |            |                                  
|Diluted net income per common & common equivalent share                       | $                                   | 0.13       |                                  
|                                                                              |                                     |            |                                  
|                                                                              |                                     |            |                                  
|Weighted average common shares outstanding-basic                              |                                     | 11,368,532 |                                  
|                                                                              |                                     |            |                                  
|Weighted average common & common equivalent shares      outstanding - diluted |                                     | 13,278,763 |                                  
|                                                                              |                                     |            |                                  
|                                                                              |                                     |            |                                  

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

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REPUBLIC BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITYFOR THE YEAR ENDED DECEMBER 31, 2001 ANDTHE SIX MONTHS ENDED JUNE 30, 2002 (unaudited)($ in thousands, except share data)

|                                                                           |                     |        |              |  |         |        |          |  | Net
Unrealized     |         |      
|-------------------------------------------------------------------------- | ------------------- | ------ | ------------ |  | ------- | ------ | -------- |  | ------------------ | ------- | -----
|                                                                           |                     |        |              |  |         |        |          |  | Gain (Loss) on     |         |      
|                                                                           | Perpetual Preferred |        |              |  | Capital |        | Retained |  | Available for sale |         |      
|                                                                           | Convertible Stock   |        | Common Stock |  | Surplus |        | Earnings |  | Securities         |         | Total
|                                                                           |                     |        |              |  |         |        |          |  |                    |         |      
|                                                                           |                     |        |              |  |         |        |          |  |                    |         |      
|Balance, December 31, 2000                                                 | $                   | 1,500  |              |  | $       | 21,112 |          |  | $                  | 128,735 |      
|Net loss                                                                   |                     |       |              |  |         |       |          |  |                    |        |      
|Change in fair value of available for sale   securities, net of tax effect |                     |       |              |  |         |       |          |  |                    |        |      
|Conversion of preferred stock into750,000 common shares                    |                     | (1,500 | )            |  |         | 1,500  |          |  |                    |        |      
|Exercise of stock options into 29,350 shares                               |                     |       |              |  |         | 59     |          |  |                    | 299     |      
|Dividends on preferred stock                                               |                     |       |              |  |         |       |          |  |                    |        |      
|Other                                                                      |                     |       |              |  |         |       |          |  |                    | 22      |      
|                                                                           |                     |        |              |  |         |        |          |  |                    |         |      
|Balance, December 31, 2001                                                 |                     |       |              |  |         | 22,671 |          |  |                    | 129,056 |      
|Net income                                                                 |                     |       |              |  |         |       |          |  |                    |        |      
|Change in fair value of available for sale   securities, net of tax effect |                     |       |              |  |         |       |          |  |                    |        |      
|Exercise of stock options into 43,380 shares                               |                     |       |              |  |         | 86     |          |  |                    | 500     |      
|                                                                           |                     |        |              |  |         |        |          |  |                    |         |      
|Balance, June 30, 2002                                                     | $                   |       |              |  | $       | 22,757 |          |  | $                  | 129,556 |      
|                                                                           |                     |        |              |  |         |        |          |  |                    |         |      




REPUBLIC BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME($ in thousands; unaudited)

|                                                                                     | For the Three Months Ended June 30, |   | For the Six Months Ended June 30,
|------------------------------------------------------------------------------------ | ----------------------------------- | - | ---------------------------------
|                                                                                     |                                     |   |                                  
|                                                                                     |                                     |   | 2002                             
|                                                                                     |                                     |   |                                  
|Net income                                                                           |                                     | $ | 1,403                            
|Unrealized gain on available for sale securities:                                    |                                     |   |                                  
|Unrealized holding gain, net of tax effect during period (1)                         |                                     |   | 7,528                            
|Less reclassification adjustment for gains realized in net income, net of   taxes(1) |                                     |   | (114                             
|                                                                                     |                                     |   |                                  
|Net unrealized gains                                                                 |                                     |   | 7,414                            
|                                                                                     |                                     |   |                                  
|Comprehensive income                                                                 |                                     | $ | 8,817                            
|                                                                                     |                                     |   |                                  

|(1) | Income taxes on unrealized holding gains year-to-date were $1,562 in 2002 and $1,523 in 2001. Income taxes on gains realized year-to-date in net income were $150 in 2002 and $239 in 2001.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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REPUBLIC BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS($ in thousands; unaudited)

|                                                                                         | For the Three Months Ended June 30, |         |   | For the Six Months Ended June 30,
|---------------------------------------------------------------------------------------- | ----------------------------------- | ------- | - | ---------------------------------
|                                                                                         |                                     |         |   |                                  
|                                                                                         |                                     | 2002    |   |                                  
|                                                                                         |                                     |         |   |                                  
|OPERATING ACTIVITIES:                                                                    |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net income                                                                               | $                                   | 1,403   |   |                                  
|Reconciliation of net income to net cash     (used in)/provided by operating activities: |                                     |         |   |                                  
|Provision for loan and ORE losses                                                        |                                     | 2,000   |   |                                  
|Depreciation of fixed assets                                                             |                                     | 1,301   |   |                                  
|Amortization of goodwill and premium on deposits                                         |                                     | 737     |   |                                  
|Amortization of loan premiums, discounts & MSRs                                          |                                     | (1,084  | ) |                                  
|(Gain) on sale of loans, net                                                             |                                     | (326    | ) |                                  
|(Gain)/loss on sale of securities                                                        |                                     | 113     |   |                                  
|(Gain) on sale of other real estate owned                                                |                                     | (714    | ) |                                  
|Capitalization of mortgage servicing                                                     |                                     |        |   |                                  
|(Gain)/loss on disposal of premises and equipment                                        |                                     | (9      | ) |                                  
|(Gain) on sale of branches                                                               |                                     |        |   |                                  
|Net (increase) in deferred tax asset                                                     |                                     | (5,555  | ) |                                  
|Net (increase)/decrease in other assets                                                  |                                     | 4,670   |   |                                  
|Net (decrease)/increase in other liabilities                                             |                                     | 3,387   |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net cash provided by/(used in) operating activities                                      |                                     | 5,923   |   |                                  
|                                                                                         |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|INVESTING ACTIVITIES:                                                                    |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net (increase)/decrease in loans and loans held for sale                                 |                                     | (8,974  | ) |                                  
|Proceeds from sales and maturities of securities                                         |                                     | 25,826  |   |                                  
|(Purchase)/redemption of FHLB stock                                                      |                                     |        |   |                                  
|(Purchase) of securities available for sale                                              |                                     | (74,722 | ) |                                  
|Principal repayment on securities                                                        |                                     | 92,105  |   |                                  
|Purchase of premises & equipment                                                         |                                     | (1,366  | ) |                                  
|Proceeds
from disposal of premises & equipment                                           |                                     | (568    | ) |                                  
|Proceeds from sale of other real estate                                                  |                                     | 14,936  |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net cash provided by/(used in) investing activities                                      |                                     | 47,237  |   |                                  
|                                                                                         |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|FINANCING ACTIVITIES:                                                                    |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net increase/(decrease) in deposits                                                      |                                     | (70,277 | ) |                                  
|Net cash paid for branch sales                                                           |                                     |        |   |                                  
|Net increase/(decrease) in repurchase agreements                                         |                                     | (3,115  | ) |                                  
|Proceeds/(repayments) from FHLB advances, net                                            |                                     | 24,998  |   |                                  
|Proceeds from exercise of stock options                                                  |                                     | 465     |   |                                  
|Proceeds from issuance of subordinated debt                                              |                                     |        |   |                                  
|Repayment of holding company debt                                                        |                                     |        |   |                                  
|Dividends on perpetual preferred convertible stock                                       |                                     |        |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net cash (used in)/provided by financing activities                                      |                                     | (47,929 | ) |                                  
|                                                                                         |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|Net increase/(decrease) in cash and cash equivalents                                     |                                     | 5,231   |   |                                  
|Cash and cash equivalents, beginning of period                                           |                                     | 79,912  |   |                                  
|                                                                                         |                                     |         |   |                                  
|Cash and cash equivalents, end of period                                                 | $                                   | 85,143  |   |                                  
|                                                                                         |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                       |                                     |         |   |                                  
|                                                                                         |                                     |         |   |                                  
|Cash paid during the period for-                                                         |                                     |         |   |                                  
|Interest                                                                                 | $                                   | 17,102  |   |                                  
|Income taxes                                                                             |                                     | 20      |   |                                  
|                                                                                         |                                     |         |   |                                  

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

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REPUBLIC BANCSHARES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING MATTERS

Basis of Presentation and Organization

In the opinion of management, the accompanying consolidated financial statements of Republic Bancshares, Inc. and its subsidiaries (referred to herein as the Company or Republic or We), marked unaudited where applicable, contain all normal recurring adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of June 30, 2002 and December 31, 2001, and the results of operations and cash flows for the three and six months ended June 30, 2002 and 2001. The accounting and reporting policies of the Company and its wholly-owned subsidiaries, Republic Bank (the Bank, including its wholly-owned subsidiaries, Republic Insurance Agency and Republic SPE, Inc.) and RBI Capital Trust I (RBI), are in conformity with accounting principles generally accepted in the United States of America (generally accepted accounting principles) and prevailing practices within the financial services industry.

The preparation of financial statements in conformity with generally accepted accounting principles requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified.

Our consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Our primary source of income is from the Bank and its wholly owned subsidiaries. The Banks primary source of revenue is derived from net interest income on earning assets and from fees and charges on loans and deposits.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Form 10-K for the year ended December 31, 2001. The operating results for the three and six months ended June 30, 2002, are not necessarily indicative of the operating results to be expected for the fiscal year ending December 31, 2002.

Critical Accounting Policies

Our accounting and reporting policies and those of our subsidiaries are in accordance with generally accepted accounting principles and conform to general practices within the banking industry. Our financial position and results of operations are affected by the application of accounting policies, including judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses and related disclosures. Different assumptions in the application of these policies could result in material changes in our consolidated financial position and/or consolidated results of operations. The critical accounting and reporting policies include the areas of securities, allowance for loan losses, valuations of residual interests and mortgage servicing rights from loan sales or securitizations, and income taxes.

Our accounting policies are fundamental to understanding Managements Discussion and Analysis of Financial Condition and Results of Operations. Accordingly, our critical accounting policies are discussed in detail in Republic Bancshares 2001 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The following is a summary of those accounting policies.

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Securities

Securities that we have both the positive intent and ability to hold to maturity are classified as Held to Maturity and are carried at historical cost, adjusted for amortization of premiums and accretion of discounts. Securities classified as Available for Sale are those securities that may be sold prior to maturity as part of our asset/liability management strategies or in response to other factors. These securities are carried at fair value with any unrealized gains or losses, net of applicable tax effect, reported as a separate component of stockholders equity. Securities identified as Trading include the residual interests in cash flows from the securitization of High LTV Loans in 1997 and 1998 and the excess spread interest-only strips related to securitization or sale of first lien residential loans. Trading securities are carried at fair value with any unrealized gains or losses included in the consolidated statements of operations under the caption Gain (loss) on loans and securities, net.

Interest and dividends on securities include the amortization of premiums and accretion of discounts using the effective interest rate method and are together reported as part of interest income on securities. Gains and losses realized on sales of securities are generally determined on the specific identification method and are reported under Gain (loss) on loans and securities, net.

Allowance for loan losses

The allowance for loan losses is established and maintained at levels deemed adequate to cover losses inherent in the portfolio as of the balance sheet date. This estimate is based on managements evaluation of the risks in the loan portfolio and changes in the nature and volume of loan activity. Estimates for loan losses are derived by analyzing historical loan losses, current trends in delinquencies and charge-offs, plans for problem loan administration, changes in the size and composition of the loan portfolio and peer group information. Periodically, we are examined by the state and federal banking regulators and the results of those examinations are also incorporated into our estimation process. Also included in managements estimates for loan losses are considerations with respect to the impact of economic events, the outcome of which are uncertain. These events may include, but are not limited to, a general slowdown in the economy, fluctuations in overall lending rates, political conditions, legislation that may directly or indirectly affect the banking industry and economic conditions affecting specific geographical areas in which we conduct business. This information is compiled and the results are used to assign risk factors to segments of our loan portfolio. In certain cases, we may assign risk factors on an individual loan basis. Otherwise, risk factors are assigned to pools of loans with homogenous characteristics. We may also carry a portion of our allowance for loan losses without allocation to individual loans or pools of loans based on information collected regarding the quality of the loan portfolio, past and future expected trends and overall economic conditions, among other things.

Valuation of residual interests from securitization of High LTV Loans and valuation of mortgage servicing rights

Residual interests from securitization of High LTV Loans are accounted for as trading assets and are evaluated at least quarterly with the valuation adjustment, if any, reflected as a trading gain or loss in the consolidated statement of operations under the caption Gain (loss) on loans and securities, net. Under generally accepted accounting principles, use of quoted market values is the preferred method for valuing trading assets.
However, the market for the residual interests on our balance sheet is illiquid and price quotations are not readily available. In that situation, the accounting rules permit use of other methods to estimate fair value, including techniques utilizing the present value of expected cash flows. We have used that present value methodology to value our trading assets which requires and is highly dependent on the selection of a discount rate, prepayment speed and an expected loss ratio.
A majority of the mortgage loans comprising the collateral pool underlying the residual interests are secured by junior liens on residential real estate where, at origination, there was little or no equity in the property. Also, most of the loans were made for the purpose of debt consolidation and many of the
borrowers had previous credit weaknesses, including bankruptcy, default or an above-average rate of delinquency.

6



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The overall delinquency rate for pools of this type of loan is generally higher than for pools of first mortgage loans and recovery of defaulted amounts is difficult to predict. Further, the terms of the securitizations place the Company in a first loss position among all security holders in the transactions and the realization of cashflows to the Company is expected over an extended period. As a result, the valuations derived in this process are extremely sensitive to changes in the assumptions used to calculate the expected cash flows. We are currently receiving cashflow from one of the residual interests and have applied those amounts to reduce the carrying value of that asset. A second residual interest is not expected to contribute cashflow to us until well into future years.

Our mortgage servicing rights and excess servicing interest-only strips from securitization or sale of first lien mortgage loans are also valued using a present value of cashflows methodology. Mortgage servicing rights and excess servicing interest-only strips represent an estimate of the present value of the future servicing fees arising from the right to service loans for others. This requires the development of a number of estimates, including anticipated principal amortization and prepayments of principal. The valuation of these assets is significantly affected by interest rates, mortgage loan prepayment speeds and the payment performance of the underlying loans. In general, during periods of declining interest rates, the value of mortgage servicing assets declines due to increasing prepayments attributable to increased mortgage refinance activity. Conversely, during periods of rising interest rates, the value of servicing assets generally increases due to reduced refinance activity. We amortize the mortgage servicing rights over the period of estimated net servicing income based on projections of the amount and timing of future cash flows. The amount and timing of servicing asset amortization is adjusted quarterly based on actual results and updated projections. The mortgage servicing rights are accounted for in the Other Assets category on our balance sheet while the excess servicing interest-only strips are a trading asset.

Income taxes and the related deferred tax assets and liabilities

The determination of our overall income tax provision is complex and requires careful analysis. There are significant differences in the timing of recognition of income tax expense for financial accounting and income tax purposes in the following areas; (1) loan loss provisions, (2) mortgage servicing rights amortization and income from residual interests from loan securitizations, (3) premium amortization on deposits, (4) depreciation of fixed assets and, (5) net operating loss carryforwards. As a result, our balance sheet includes a net deferred tax asset with valuation highly dependent on our ability to generate future taxable income.

Reclassifications

Certain reclassifications may have been made to the prior period consolidated financial statements to conform to the June 2002 financial statement presentation. These reclassifications only changed the reporting categories and did not affect our results of operations or financial position.

Recent Accounting Pronouncements

Statement of Financial Accounting Standard (SFAS) No. 141  Business Combinations and SFAS No. 142  Goodwill and Other Intangible Assets

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 addresses financial accounting and reporting for goodwill and other intangible assets acquired in a business combination. SFAS No. 141 requires the purchase method of accounting to be used for all business combinations initiated after June 30, 2001, establishes specific criteria for the recognition of intangible assets separately from goodwill and requires unallocated negative goodwill to be written off immediately as an extraordinary gain (instead of being deferred and amortized). SFAS No. 142 addresses financial accounting and reporting for intangible assets acquired individually or with a group

7



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of other assets but not those acquired in a business combination. SFAS No. 142 also addresses financial accounting and reporting for goodwill and other intangible assets subsequent to their acquisition. SFAS No. 142 provides that goodwill will not be amortized but rather will be evaluated, at least annually, for impairment. It also provides for the continued amortization of intangible assets that have finite useful lives. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001 and for all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. The provisions of SFAS No. 142 are effective for fiscal years beginning after December 15, 2001. The adoption of SFAS No. 141 and SFAS No. 142 did not have a material effect upon our financial position or results of operations. Following are the pro forma net income and earnings per share, had all periods presented been accounted for under SFAS No. 142:

|                                       | For the Three Months Ended June 30, | For the Six Months Ended June 30,
|-------------------------------------- | ----------------------------------- | ---------------------------------
|                                       |                                     |                                  
|                                       |                                     | 2002                             
|                                       |                                     |                                  
|Net income                             | $                                   | 1,403                            
|Amortization of goodwill, net of taxes |                                     |                                 
|                                       |                                     |                                  
|Pro forma net income                   | $                                   | 1,403                            
|                                       |                                     |                                  
|Pro forma earnings per share:          |                                     |                                  
|Basic                                  | $                                   | 0.13                             
|                                       |                                     |                                  
|Diluted                                | $                                   | 0.13                             
|                                       |                                     |                                  
|Weighted average common                |                                     |                                  
|shares outstanding -basic              | 11,368,532                          |                                  
|                                       |                                     |                                  
|Weighted average common & common       |                                     |                                  
|equivalent shares outstanding -diluted | 13,278,763                          |                                  
|                                       |                                     |                                  

SFAS No. 144 - Accounting for the Impairment or Disposal of Long-Lived Assets

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 replaces SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of and amends Accounting Principles Board Opinion No. 30, Reporting the Results of Operations  Reporting the Effects of Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequent Occurring Events and Transactions. SFAS No. 144 addresses the financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years, with early application encouraged. The adoption of SFAS No. 144 did not have a material effect upon our results of operations or financial position.

SOP 01-6 - Accounting by Certain Entities (Including Entities with Trade Receivables) that Lend to or Finance the Activities of Others

In December 2001, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) 01-6, Accounting by Certain Entities (including Entities with Trade Receivables) that Lend to or Finance the Activities of Others. SOP 01-6 clarifies that accounting and financial reporting practices for lending and financing activities should be the same regardless of the type of entity engaging in those activities and conforms, where appropriate, differences among the accounting and financial reporting provisions previously established by certain AICPA Audit and Accounting guides. SOP 01-6 is effective for fiscal years beginning after December 15, 2001. The adoption of SOP 01-6 did not have a material effect upon our results of operations or financial position.

2. EARNINGS PER SHARE

Diluted earnings per common and common equivalent shares have been computed by dividing net income by the weighted average common and common equivalent shares outstanding during the periods.

8



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The weighted average common and common equivalent shares outstanding has been adjusted to include the number of shares that would have been outstanding if stock options, with an exercise price greater than the average market price for the period, had been exercised at that average market price with the proceeds being used to buy shares from the market (i.e., the treasury stock method). Also, the calculation includes the shares that would have been issued from conversion of our perpetual preferred convertible stock (in 2001) and the convertible subordinated debentures, if they had been converted to common stock (i.e., the if converted method.) Basic earnings per common share was computed by dividing net income less dividends paid on the perpetual preferred convertible stock (in 2001) by the weighted average number of shares of common stock outstanding during the year.

The table below reconciles the calculation of the diluted and basic earnings per share for 2002 and 2001 ($ in thousands, except share data, unaudited):

|                           | For the Three Months Ended June 30,
|-------------------------- | -----------------------------------
|                           |                                    
|                           | 2002                               
|                           |                                    
|                           |                                    
|                           | Net                                
|                           | Income                             
|                           |                                    
|                           |                                    
|Net income attributable    |                                    
|to common stockholders     | $                                  
|Basic earnings per share   |                                    
|Options exercised during   |                                    
|the period-incremental     |                                    
|effect prior to exercise   |                                    
|Weighted average options   |                                    
|outstanding (1)            |                                    
|Convertible subordinated   |                                    
|debentures                 |                                    
|Convertible perpetual      |                                    
|preferred stock            |                                    
|                           |                                    
|Diluted earnings per share | $                                  
|                           |                                    
|                          
|                           | For the Six Months Ended June 30,  
|                           |                                    
|                           | 2002                               
|                           |                                    
|                           |                                    
|                           | Net                                
|                           | Income                             
|                           |                                    
|                           |                                    
|Net income attributable    |                                    
|to common stockholders     | $                                  
|Basic earnings per share   |                                    
|Options exercised during   |                                    
|the period-incremental     |                                    
|effect prior to exercise   |                                    
|Weighted average options   |                                    
|outstanding (1)            |                                    
|Convertible subordinated   |                                    
|debentures                 |                                    
|Convertible perpetual      |                                    
|preferred stock            |                                    
|                           |                                    
|Diluted earnings per share | $                                  
|                           |                                    

(1)
For the three month period ended June 30, 2002 and 2001,
respectively, there were 86,440 and 322,887 of stock options and
1,794,861 and 72,527 shares from conversion of convertible
subordinated debentures, which were antidilutive. For the six month period ended June 30, 2002 and 2001, respectively, there were 166,440 and 352,287 of stock options and 833,332 and 1,794,861 shares from conversion of convertible subordinated debentures, which were antidilutive.

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3. SECURITIES

Our securities totaled $822.0 million at June 30, 2002 and were comprised primarily of mortgage-backed securities (MBS) with a lesser amount of U.S. Treasury and federal agency securities and revenue bonds. Included were $798.3 million of securities classified as available for sale, $15.9 million of securities classified as held to maturity and $7.8 million of securities were trading assets. The market values assigned to the securities classified as available for sale were determined using market quotations at June 30, 2002.

Included in the trading asset category were $5.1 million in overcollateralization and residual interests in cash flows from securitizing High LTV Loans in 1997 and 1998 (the Residuals) and $2.7 million of excess servicing interest-only strips on mortgage servicing rights. These trading assets were valued using a present value of cashflows technique. The Residuals are valued in much the same way as are the excess servicing interest-only strips on pools of first lien mortgage loans but also carry an additional element of credit risk. High LTV loans are mortgage loans underwritten to borrowers primarily for debt consolidation purposes where the combined loan-to-value ratio generally exceeds 100% and can go as high as 125%. These loans have performed with an annual loss rate significantly in excess of loss rates for first lien mortgage loans. The market for High LTV-related assets is illiquid and there are no readily observable market prices that can be relied on to value these trading assets. The three key assumptions used in the valuation are the discount rate, the expected loss ratio and the expected prepayment speed. These assets are evaluated at least quarterly with any valuation adjustment reflected as a trading gain or loss in the statement of operations. There were no unrealized trading gains or losses recorded in the results of operations for the quarters ended June 30, 2002 and 2001.

The key assumptions used and the resultant valuation of the Residuals and excess servicing interest-only strips on mortgage servicing rights at June 30, 2002 were as follows ($ in thousands, unaudited):

|                                     | December 1997  |        | June 1998      |  | Excess Servicing
|------------------------------------ | -------------- | ------ | -------------- |  | ----------------
|                                     | Securitization |        | Securitization |  | Interest-only   
|                                     | (1997-1)     |        | (1998-1)     |  | Strips          
|                                     |                |        |                |  |                 
|                                     |                |        |                |  |                 
|Collateral amount                    | $              | 19,006 |                |  | $               
|Discount rate                        |                | 15.00  | %              |  |                 
|Wtd. avg. remaining life (years)     |                | 1.97   |                |  |                 
|Cumulative lifetime default rate (1) |                | 15.52  | %              |  |                 
|Prepayment speed                     |                | 44.01  | %              |  |                 
|Fair value                           | $              | 2,557  |                |  | $               

(1) Expressed as the percent of total defaults over the expected life of the collateral to the initial collateral amount. N/A  not applicable

4. LOANS

Total loans at June 30, 2002 were $1.45 billion compared to $1.42 billion at December 31, 2001. Mortgage loans serviced for others as of June 30, 2002 and December 31, 2001, were $562.0 million and $638.0 million, respectively. Mortgage loan servicing rights (both purchased and originated) amounted to $8.5 million and $10.2 million at June 30, 2002 and December 31, 2001, respectively. Loans on which interest was not being accrued at June 30, 2002 and December 31, 2001, totaled approximately $21.4 million and $46.2 million, respectively. Loans past due 90 days or more and still accruing interest at June 30, 2002 and December 31, 2001, totaled $0 and $12,000, respectively.

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Loans at June 30, 2002 and December 31, 2001, are summarized as follows, based on the underlying collateral, not the primary purpose of the loan ($ in thousands; June 30, 2002, unaudited):

|                                                        | June 30,    |           | December 31,
|------------------------------------------------------- | ----------- | --------- | ------------
|                                                        | 2002        |           | 2001        
|                                                        |             |           |             
|                                                        | (unaudited) |           |             
|Real estate mortgage loans:                             |             |           |             
|One-to-four family residential                          | $           | 415,744   |             
|Subprime mortgages                                      |             | 39,696    |             
|Multifamily residential                                 |             | 57,929    |             
|Warehouse lines of credit                               |             | 154       |             
|Commercial real estate                                  |             | 507,858   |             
|                                                        |             |           |             
|Mortgage loans secured by first liens held in portfolio |             | 1,021,381 |             
|Commercial (business) loans                             |             | 109,466   |             
|Home equity loans                                       |             | 274,560   |             
|High LTV Loans                                          |             | 24,946    |             
|Consumer loans                                          |             | 20,048    |             
|                                                        |             |           |             
|Total loans held for portfolio                          |             | 1,450,401 |             
|Allowance for loan losses                               |             | (30,617   | )           
|                                                        |             |           |             
|Net loans held for portfolio                            |             | 1,419,784 |             
|Loans held for sale                                     |             | 3,760     |             
|                                                        |             |           |             
|Net loans held-for portfolio & loans held for sale      | $           | 1,423,544 |             
|                                                        |             |           |             

At June 30, 2002, the composition of our loan portfolio, according to the location of the borrower or the real estate taken as underlying collateral, was as follows ($ in thousands, unaudited):

|                                      |  | Disbursed |           | Percent of
|------------------------------------- |  | --------- | --------- | ----------
|State                                 |  | Amount    |           | Total     
|                                      |  |           |           |           
|Florida                               |  | $         | 1,226,144 |           
|Outside Florida                       |  |           | 228,017   |           
|                                      |  |           |           |           
|Total (including loans held for sale) |  | $         | 1,454,161 |           
|                                      |  |           |           |           
|Detail of loans outside Florida:      |  |           |           |           
|New England (1)                       |  | $         | 48,082    |           
|Georgia                               |  |           | 24,900    |           
|California                            |  |           | 22,972    |           
|Texas                                 |  |           | 16,001    |           
|Virginia                              |  |           | 14,591    |           
|New Jersey                            |  |           | 13,879    |           
|Illinois                              |  |           | 11,192    |           
|Ohio                                  |  |           | 11,071    |           
|North Carolina                        |  |           | 10,116    |           
|Missouri                              |  |           | 10,064    |           
|New York                              |  |           | 9,987     |           
|All other (none greater than $10,000) |  |           | 35,162    |           
|                                      |  |           |           |           
|Total outside Florida                 |  | $         | 228,017   |           
|                                      |  |           |           |           

|(1) | New England has been defined by us to include the states of Connecticut, Delaware, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

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5. ALLOWANCE FOR LOAN LOSSES

In the evaluation of the allowance for loan losses, management segments the loan portfolio into common risk categories and, within those risk categories, between loans of a homogenous nature and loans whose characteristics are non-homogenous. Homogenous types of loans include performing and nonperforming loans secured by first liens on residential properties, home equity loans and other types of consumer loans. Also, included in this category are performing commercial (business) and commercial real estate loans with a total relationship balance of less than $500,000. Each grouping is evaluated for impairment through the assignment of a risk factor to assess the exposure to future loan losses. The loss factors used for these homogenous groupings of loans are based on historical loss statistics and trends in delinquencies, previous and current underwriting standards, loan concentrations in geographic areas or specific industries and loan policies and procedures that may affect future loan collections.

Non-homogenous loans include commercial (business) and commercial real estate loans with a relationship balance of $500,000 or more that are either nonperforming or, are performing and classified as substandard or doubtful as to repayment. These loans are evaluated individually for impairment based on our expectation of future cashflows from either sale of collateral or recovery of amounts from the borrower.

The loss estimates for the homogenous and non-homogenous loans are consolidated to prepare a comprehensive loss estimate of the entire portfolio.

The allowance for loan losses amounted to $30.6 million and $32.0 million at June 30, 2002 and December 31, 2001, respectively. Changes in the allowance for loan losses for the first six months of the current year compared to the same period of the previous year were as follows ($ in thousands; unaudited):

|                                |  |   | For the Six Months Ended June 30,
|------------------------------- |  | - | ---------------------------------
|                                |  |   |                                  
|                                |  |   | 2002                             
|                                |  |   |                                  
|                                |  |   |                                  
|Balance, beginning of period    |  | $ | 31,997                           
|Provision for loan losses       |  |   | 3,100                            
|                                |  |   |                                  
|Loans charged-off (1)           |  |   | (5,379                           
|Recoveries of loans charged-off |  |   | 899                              
|                                |  |   |                                  
|Net charge-offs                 |  |   | (4,480                           
|                                |  |   |                                  
|Balance, end of period          |  | $ | 30,617                           
|                                |  |   |                                  

|(1) | In 2002, there was a $2.3 million charge to the allowance to writedown the carrying value of a $4.3 million loan secured by a hotel in central Florida.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

6. RELATED PARTY TRANSACTIONS

Related Party Transactions with Mr. William R. Hough

Mr. William R. Hough is the Chairman of the Board of the Company, a director of the Company and the Bank, and our largest shareholder. Mr. Hough is also Chairman Emeritus and the controlling shareholder of William R. Hough & Co. (WRHC), a NASD-member investment-banking firm. A summary of the transactions with Mr. Hough, his immediate family members and his affiliates is as follows:

Securities Purchases and Sales; Investment Services

WRHC is compensated on a commission basis for acting as our agent in open-market purchases and sales of securities. For the six months ended June 30, 2002, we purchased $196.3 million and sold $96.7 million of mortgage-backed securities through WRHC. We also sold a $10.8 million subordinate tranche from a High LTV Loan Securitization through WRHC and paid them a commission of $67,500.

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We also periodically may purchase securities under agreement to repurchase from WRHC at a rate based on the prevailing federal funds rate plus one-eighth of one percent but there were no purchases of this type during 2002. WRHC also offers sales of insurance and mutual fund products and provides investment advisory services to customers on our premises. Fee income earned from this relationship was $162,000 and $3,000 for the six months ended June 30, 2002 and 2001, respectively.

Loans to Mr. Hough and His Related Interests

In November 1999, the Bank made a $4.2 million loan to WRH Mortgage, Inc., an affiliate of Mr. Hough. The Bank has retained $2.0 million of the loan with the remainder participated to another financial institution on a non-recourse basis. The loan is secured by improved real estate and office buildings and is personally guaranteed by Mr. Hough. All principal and interest payments have been made as agreed and the terms of the loan are comparable to those offered to non-affiliated borrowers.

Related Party Transactions with Other Directors and Executive Officers

Certain other directors and executive officers, members of their immediate families, and entities with which such persons are associated are customers of ours. As such, they had transactions in the ordinary course of business with us. Loans and commitments to lend to those persons were comprised solely of two loans, each with a balance of less than $100,000. One loan was made to finance a personal residence and the second was a commercial business line of credit. Both loans were current as to payment of principal and interest and were made in the ordinary course of business, upon substantially the same terms as offered to non-affiliated borrowers.

7. HOLDING COMPANY CASHFLOW AND DEBT SERVICE

Florida statutes limit the amount of dividends that can be paid by the Bank to the Company in any given year to an amount no greater than the Banks net income for the current year plus retained net income of the Bank from the preceding two years. As of June 30, 2002, the Bank had a net deficit for dividend payment purposes of $5.3 million, which restricts the Bank from further dividend payments to Republic Bancshares, Inc. (the Bank Holding Company) during 2002 until there is a surplus for dividend payment purposes. On June 30, 2002, the Bank Holding Company had unrestricted cash to be used for debt service totaling $7.0 million. The Bank Holding Companys annual debt service requirement is approximately $4.7 million.

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REPUBLIC BANCSHARES, INC.SELECTED QUARTERLY FINANCIAL INFORMATION($ in thousands, except share data; unaudited)

|                                                    | Quarters Ended
|--------------------------------------------------- | --------------
|                                                    |               
|                                                    | June 2002     
|                                                    |               
|RESULTS
OF OPERATIONS:                              |               
|Interest income                                     | $             
|Interest expense                                    |               
|                                                    |               
|Net interest income                                 |               
|Loan loss provision                                 |               
|                                                    |               
|Net interest income after loan loss provision       |               
|Noninterest income                                  |               
|Noninterest expense                                 |               
|                                                    |               
|Income (loss) before income taxes                   |               
|and minority interest                               |               
|Income tax expense (benefit)                        |               
|Minority interest from subsidiary trust, net of tax |               
|                                                    |               
|Net income (loss)                                   | $             
|                                                    |               
|                                                    |               
|Earnings (loss) per share  diluted                 | $             
|Weighted average shares outstanding  diluted       | 13,278,763    
|                                                    |               
|BALANCE
SHEET DATA (at period-end):                 |               
|Total assets                                        | $             
|Securities                                          |               
|Loans                                               |               
|Nonperforming assets                                |               
|Allowance for loan losses                           |               
|Deposits                                            |               
|Stockholders equity                                |               
|Book value per share (dollars)                      |               
|Tangible book value per share (dollars)             |               
|                                                    |               
|SELECTED
OPERATING RATIOS:                          |               
|Return on average assets                            |               
|Return on average equity                            |               
|Net interest margin                                 |               
|Operating efficiency ratio                          |               
|Loan loss allowance to portfolio loans              |               
|Loan loss allowance to nonperforming loans          |               
|                                                    |               
|CAPITAL
RATIOS:                                     |               
|Equity to assets                                    |               
|Equity & minority interest to assets                |               
|Regulatory ratios  Bank:                           |               
|Tier 1 (leverage)                                   |               
|Tier 1 to risk assets                               |               
|Total capital                                       |               
|Regulatory ratios  Company:                        |               
|Tier 1 (leverage)                                   |               
|Tier 1 to risk-assets                               |               
|Total capital                                       |               
|                                                    |               
|OTHER
DATA (at period-end)                          |               
|Number of branch banking offices                    |               
|Number of full-time equivalent employees            |               

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REPUBLIC BANCSHARES, INC.SELECTED QUARTERLY FINANCIAL INFORMATION($ in thousands; unaudited)

|                                         |                                                                                                       | Quarters Ended
|---------------------------------------- | ----------------------------------------------------------------------------------------------------- | --------------
|                                         |                                                                                                       |               
|                                         |                                                                                                       | June          
|                                         |                                                                                                       | 2002          
|                                         |                                                                                                       |               
|                                         |                                                                                                       |               
|SELECTED AVERAGE BALANCES & YIELDS/COSTS
|                                         |                                                                                                       |               
|Average
balances:                       
|                                         | Total assets                                                                                          | $             
|                                         | Earning assets                                                                                        |               
|                                         | Loans                                                                                                 |               
|                                         | Securities                                                                                            |               
|                                         | Deposits                                                                                              |               
|                                         | Other interest-bearing liabilities                                                                    |               
|                                         | Stockholders equity                                                                                  |               
|                                         |                                                                                                       |               
|Average
yields/costs:                   
|                                         | Earning assets                                                                                        |               
|                                         | Loans                                                                                                 |               
|                                         | Securities                                                                                            |               
|                                         | Deposits                                                                                              |               
|                                         | Other interest-bearing liabilities                                                                    |               
|                                         | Total interest-bearing liabilities                                                                    |               
|                                         |                                                                                                       |               
|NONPERFORMING
ASSETS:                   
|                                         |                                                                                                       |               
|Nonperforming
loans:                     |                                                                                                       |               
|Residential first lien                   | $                                                                                                     | 7,965         
|Warehouse lines of credit                |                                                                                                       | 152           
|Commercial real estate and multifamily   |                                                                                                       | 10,827        
|Commercial (business)                    |                                                                                                       | 1,098         
|Home equity and consumer                 |                                                                                                       | 732           
|High LTV                                 |                                                                                                       | 612           
|                                         |                                                                                                       |               
|                                         | Total nonperforming loans (1)                                                                         |               
|                                         |                                                                                                       |               
|Other nonperforming receivables          |                                                                                                       |              
|                                         |                                                                                                       |               
|Other real estate:                       |                                                                                                       |               
|Residential                              |                                                                                                       | 2,033         
|Commercial                               |                                                                                                       | 18,937        
|                                         |                                                                                                       |               
|                                         | Total ORE                                                                                             |               
|                                         |                                                                                                       |               
|                                         |                                                                                                       |               
|                                         | Total nonperforming assets                                                                            | $             
|                                         |                                                                                                       |               
|                                         |                                                                                                       |               
|(1)                                      | Includes all loans on nonaccrual and all loans 90 days and over past due and still accruing interest.

15



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##### 



REPUBLIC BANCSHARES, INC.SELECTED QUARTERLY FINANCIAL INFORMATION($ in thousands; unaudited)

|                                                          | Quarters Ended
|--------------------------------------------------------- | --------------
|                                                          |               
|                                                          | June 2002     
|                                                          |               
|Loan
loss allowance activity                              |               
|                                                          |               
|Allowance for loan losses at                              |               
|beginning of period                                       | $             
|Loan discount (net) allocated to/                         |               
|(from) purchased portfolios                               |               
|Provision for loan losses                                 |               
|                                                          |               
|Net
(charge-offs) recoveries:                             |               
|                                                          |               
|Residential first lien                                    |               
|Warehouse lines of credit                                 |               
|Nonconforming first lien mortgages                        |               
|Commercial real estate/multifamily                        |               
|Commercial (business)                                     |               
|Home equity                                               |               
|Consumer                                                  |               
|Other                                                     |               
|High LTV                                                  |               
|                                                          |               
|Net charge-offs                                           |               
|                                                          |               
|                                                          |               
|Allowance for loan losses at end of period                | $             
|                                                          |               
|                                                          |               
|Net
charge-offs (recoveries) to average
loans-annualized: |               
|                                                          |               
|Residential first lien                                    |               
|Warehouse lines of credit                                 |               
|Nonconforming first lien mortgages                        |               
|Commercial real estate/multifamily                        |               
|Commercial (business)                                     |               
|Home equity                                               |               
|Consumer and other                                        |               
|High LTV                                                  |               
|                                                          |               
|Net charge-offs to average loans                          |               
|                                                          |               

16



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##### 









Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Comparison of Balance
Sheets at June 30, 2002 and December 31, 2001

Overview

At June 30, 2002, we had total assets of $2.48 billion, stockholders equity of $179.0 million and a stated book value per share of $15.73. At year-end 2001 total assets were $2.46 billion, stockholders equity was $172.0 million and stated book value was $15.18. Loans, net of allowances for loan losses, were $1.42 billion at June 30, 2002, an increase of $30.8 million from December 31, 2001, while total deposits were $2.06 billion, a decrease of $71.4 million from year-end 2001.

Securities

Securities, primarily mortgage-backed investments issued by one of the federal guarantee agencies, were $822.0 million at June 30, 2002 as compared to $834.1 million at the end of last year. At June 30, 2002, $798.3 million of securities were classified as available for sale, $15.9 million of securities were classified as held to maturity and $7.8 million of securities were trading assets. These trading assets consisted of: (1) $5.1 million in overcollateralization and residual interests in cash flows from securitizations in December 1997 and June 1998; and (2) $2.7 million in the excess interest-only spread on mortgage servicing rights.

Average total securities for the first six months of 2002 were $832.0 million, up $392.0 million, or 89.1%, from the average during the first six months of 2001. Purchases of new securities have been substantial; both from proceeds from repayments to the loan portfolio and from prepayments of mortgage backed securities during 2001 and 2002. The annualized yield on average total securities for the first six months of 2002 was 5.25%, a decrease of 116 basis points from the yield earned in the first half of 2001. This decline was primarily because purchases of new securities were at yields below the portfolio average and from downward repricing of adjustable rate securities.

Loans

Our loan portfolio grew at an average rate of 4.7% in the first half of 2002 following several periods of decline resulting both from managements program to reduce credit risk in the portfolio and from the high levels of prepayments experienced throughout 2001 and the early part of 2002. Total loans (including loans held for sale) increased by $33.2 million from year-end 2001 to $1.45 billion at June 30, 2002. Commercial business loans increased $1.0 million, commercial real estate loans increased $5.2 million and home equity loans increased $56.8 million, while residential loans decreased $28.7 million, primarily from repayments of subprime loans and from seasoned loans that were purchased from others. The net change in total loans was also reduced by the transfer of two nonperforming loans totaling $18.3 million to the other real estate (ORE) category in the first quarter of 2002.

The annualized yields on residential loans, commercial and commercial real estate loans, and consumer loans for the first half of 2002 were 7.14%, 7.03%, and 8.36%, respectively, resulting in an annualized yield on the total loan portfolio of 7.07%. The yields on those same categories in the first half of 2001 were 7.96%, 8.19%, and 8.90%, respectively, resulting in an annualized yield on the total loan portfolio for 2001 of 8.28%. This reflects a decrease of 121 basis points on the annualized yield on the total loan portfolio during the first six months of 2002 compared to the same period in 2001.

17



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##### 



The decrease in yield resulted from a lower overall interest rate environment. During 2001, the Federal Reserve reduced the federal funds rate which had a corresponding effect on other market interest rates, primarily shorter-term interest rates. The majority of our loan portfolio is indexed to the prime, Libor and Treasury interest rates. The average prime interest rate was 4.75% during the first half of 2002 compared to 7.98% for the same period of 2001. Short term Libor and Treasury rates declined by approximately 275 basis points in the same periods.

Allowance for Loan
Losses

The allowance for loan losses amounted to $30.6 million (2.11% of portfolio loans) at June 30, 2002, compared with $32.0 million (2.25% of portfolio loans) at December 31, 2001. Activity to the allowance in 2002 included provisions for loan losses of $3.1 million and net loan charge-offs of $4.5 million. At June 30, 2002, the ratio of the allowance for loan losses to nonperforming loans was 143.16% compared to 69.24% at the end of 2001.

Nonperforming Assets

Nonperforming assets amounted to $42.4 million (1.71% of total assets) at June 30, 2002, compared with $63.3 million (2.57% of total assets) at December 31, 2001, a decrease of $20.9 million. Commercial real estate nonperformers declined by $19.2 million, primarily as a result of taking title of our largest nonperforming real estate property, a hotel in Wilmington, Delaware, which was transferred into the ORE category during the first quarter of 2002. The increase in the ORE balance was limited to $4.1 million because the transfer of the Wilmington property was largely offset by the sale of the Cypress Woods Golf and Country Club in Naples, Florida, this quarter.

Deposits

Total deposits were $2.06 billion at June 30, 2002, a $71.4 million decrease from the prior year-end primarily from a reduction in higher costing certificates of deposit. Significant progress was made in shifting the mix of deposits from higher-costing time deposits to less expensive checking, savings and money market accounts. By category, checking accounts increased by $9.1 million, while money market and savings accounts decreased by $16.3 million, and time deposits declined by $64.3 million. As of June 30, 2002, we had 44.51% of our deposits in the lower-costing core deposit categories.

Federal Home Loan Bank
(FHLB) Advances

Advance borrowings from the FHLB, secured by a blanket lien on the Banks mortgage loan portfolio, increased by $80.0 million from $52.3 million at the end of 2001 to $132.2 million at June 30, 2002. The proceeds from this increase in borrowings were used to fund loan and investment growth and the outflow of higher-costing certificates of deposit.

These borrowings had the following rate and maturity characteristics as of June 30, 2002 ($ in thousands):

|                           |   |         |  | Weighted Average
|-------------------------- | - | ------- |  | ----------------
|Maturing in:               |   | Amount  |  | Rate            
|                           |   |         |  |                 
|30 days or less - variable | $ | 115,000 |  | 2.15            
|2-12 months - fixed        |   | 5,000   |  | 3.16            
|Over 1 year - fixed        |   | 12,246  |  | 4.63            
|                           |   |         |  |                 
|Total                      | $ | 132,246 |  | 2.42            
|                           |   |         |  |                 

18



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##### 



At June 30, 2002, the Bank had total credit line availability with the FHLB equal to 20% of its total assets or $495.2 million of which $132.2 million had been used.

Stockholders
Equity

Stockholders equity was $179.0 million at June 30, 2002, or 7.23% of total assets, compared to $172.0 million or 7.00% of total assets at December 31, 2001. Mortgage security prices increased during the first half of 2002 relative to levels at the end of 2001, which resulted in a $3.8 million valuation increase, net of tax, on securities classified as available-for-sale. The number of common shares outstanding at June 30, 2002 was 11,378,719.

At June 30, 2002, the Banks tier 1 (leverage) capital ratio was 8.04%, its tier 1 (risk-based) capital ratio was 13.09%, and its total risk-based capital ratio was 14.37%, all in excess of minimum FDIC guidelines for an institution to be considered a well-capitalized bank. The same ratios for the Company at June 30, 2002, were 7.27%, 11.79%, and 15.00%, respectively.




Comparison of Results
of Operations for the Three Months Ended June 30, 2002 and 2001

Overview

Net income for the quarter ended June 30, 2002 was $1.4 million, or $0.13 per share, (on a diluted basis) compared with income of $1.7 million, or $0.15 per share on the same basis, for the same period in 2001. Included in the prior year were $2.8 million in gains on the sale of branches, net of applicable tax effect.

Analysis of Net Interest
Income (see table on page 20)

Net interest income for the three months ended June 30, 2002, was $19.8 million compared with $16.3 million for the same period last year, a $3.5 million or 21.47% increase. Net interest margin in the second quarter of 2002 was 3.40% compared to 2.93% a year ago, a 47 basis point improvement. During 2001, the rapid decline in market interest rates reduced asset yield faster than we were able to reduce our funding costs. Net interest margin stabilized in the fourth quarter of 2001 and continued improving through the second quarter of 2002 as funds cost reductions took effect. Average asset yield decreased by 119 basis points from 7.46% for the same period in 2001 to 6.27% for 2002. However, the average cost of interest-bearing liabilities decreased by 186 basis points compared to the same period a year ago, from 4.97% to 3.11%.

19



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##### 



The following table summarizes the average yields earned on interest earning assets and the average rates paid on interest bearing liabilities for the three months ended June 30, 2002 and 2001 ($ in thousands; unaudited):

|                                        | Three Months Ended June 30,
|--------------------------------------- | ---------------------------
|                                        |                            
|                                        | 2002                       
|                                        |                            
|                                        | Average                    
|Summary of Average Rates                | Balance                    
|                                        |                            
|Interest earning assets:                |                            
|Loans                                   | $                          
|Securities                              |                            
|Interest bearing deposits in banks      |                            
|FHLB stock                              |                            
|Federal funds sold                      |                            
|                                        |                            
|Total interest earning assets           |                            
|Noninterest earning assets              |                            
|                                        |                            
|Total assets                            | $                          
|                                        |                            
|Interest bearing liabilities:           |                            
|Interest checking                       | $                          
|Money market                            |                            
|Savings                                 |                            
|Time deposits                           |                            
|FHLB advances                           |                            
|Subordinated debt                       |                            
|Other borrowings                        |                            
|                                        |                            
|Total interest bearing liabilities      |                            
|                                        |                            
|Noninterest bearing liabilities         |                            
|Stockholders equity                    |                            
|                                        |                            
|Total liabilities and equity            | $                          
|                                        |                            
|                                        |                            
|Net interest income/net interest spread |                            
|                                        |                            
|Net interest margin                     |                            
|                                        |                            

|                                    |  | Increase (Decrease) Due to |       
|----------------------------------- |  | -------------------------- | ------
|                                    |  |                            |       
|Changes in Net Interest Income      |  | Volume                     |       
|                                    |  |                            |       
|Interest earning assets:            |  |                            |       
|Loans                               |  | $                          | (1,895
|Securities                          |  |                            | 4,238 
|Interest bearing deposits in banks  |  |                            | 42    
|FHLB stock                          |  |                            | 30    
|Federal funds sold                  |  |                            | (881  
|                                    |  |                            |       
|Total change in interest income     |  |                            | 1,534 
|Interest bearing liabilities:       |  |                            |       
|Interest checking                   |  |                            | 31    
|Money market                        |  |                            | 501   
|Savings                             |  |                            | 29    
|Time deposits                       |  |                            | (2,149
|FHLB advances                       |  |                            | 771   
|Subordinated debt                   |  |                            | 110   
|Other borrowings                    |  |                            | (144  
|                                    |  |                            |       
|Total change in interest expense    |  |                            | (851  
|                                    |  |                            |       
|Total change in net interest income |  | $                          | 2,385 
|                                    |  |                            |       

20



---



##### 



Noninterest Income

Noninterest income for the three months ended June 30, 2002, was $3.3 million compared with $10.1 million for the same period in 2001, a decrease of $6.8 million. Gains on sale of branches in 2001 were $4.5 million (none in 2002) and gains on sale of loans and securities decreased $1.1 million. Early payoffs to the servicing portfolio increased significantly which reduced loan service fees and required an accelerated amortization of capitalized loan-servicing rights.

The following table reflects the components of noninterest income for the three months ended June 30, 2002 and 2001 ($ in thousands; unaudited):

|                                    | For the Three Months Ended June 30,
|----------------------------------- | -----------------------------------
|                                    |                                    
|                                    |                                    
|                                    |                                    
|                                    |                                    
|Service charges on deposit accounts | $                                  
|Loan service fees                   |                                    
|Other loan fee income               |                                    
|Gains on sale of loans, net         |                                    
|Gain on sale of securities, net     |                                    
|Gain on trading assets, net         |                                    
|Gain on sale of branches            |                                    
|Other income                        |                                    
|                                    |                                    
|Total noninterest income            | $                                  
|                                    |                                    

Noninterest Expense

Total expenses for the second quarter of 2002 were $18.2 million compared with $20.2 million for the same period last year, a decrease of $2.0 million or 9.90%, and the lowest quarterly expense result in the last 11 quarters. Savings from the ongoing Profit Improvement Program as well as from branch sales and closure of underperforming branches, largely offset the additional costs from increasing staff in the loan and deposit production areas of the Company.

The following table reflects the components of noninterest expense for the three months ended June 30, 2002 and 2001 ($ in thousands; unaudited):

|                                               | For the Three Months Ended June 30,
|---------------------------------------------- | -----------------------------------
|                                               |                                    
|                                               |                                    
|                                               |                                    
|                                               |                                    
|Salaries and benefits                          | $                                  
|Net occupancy expense                          |                                    
|Advertising and marketing                      |                                    
|Data processing fees and services              |                                    
|Loan collection costs                          |                                    
|Other operating expense                        |                                    
|ORE expense, net of ORE income                 |                                    
|Amortization of goodwill & premium on deposits |                                    
|                                               |                                    
|Total noninterest expense                      | $                                  
|                                               |                                    

21



---



##### 



Comparison of Results
of Operations for the Six Months Ended June 30, 2002 and 2001

Overview

Net income for each of the
six months ended June 30, was $2.6 million, or $0.24 per share, (on a
diluted basis) for 2002, compared with income of $3.3 million, or
$0.29 per share on the same basis, for the same period in
2001.

Analysis of Net Interest
Income (see table on page 23)

Net interest income for the
six months ended June 30, 2002, was $38.7 million compared with $34.5
million for the same period last year, a $4.2 million or 12.21%
increase. Net interest margin in the first six months of 2002 was
3.31% compared to 3.00% a year ago, a 31 basis point improvement.
Average asset yield decreased by 131 basis points from 7.65% for the
same period in 2001 to 6.34% for 2002. The average cost of
interest-bearing liabilities decreased by 180 basis points compared
to the same period a year ago from 5.09% to 3.29%.

Noninterest Income

Noninterest income for the
six months ended June 30, 2002, was $6.6 million compared with $16.0
million for the same period in 2001, a decrease of $9.4 million. Loan
service fees declined $2.0 million primarily from sale of servicing
on High LTV Loans in the third quarter of 2001 and from increases in
early payoffs on conventional and government mortgage servicing. This
factor reduced service fee revenue and required an accelerated
amortization of capitalized mortgage servicing
rights.

The following table reflects
the components of noninterest income for the six months ended June
30, 2002 and 2001 ($ in thousands; unaudited):

|                                    | For the Six Months Ended June 30,
|----------------------------------- | ---------------------------------
|                                    |                                  
|                                    |                                  
|                                    | 2002                             
|                                    |                                  
|Service charges on deposit accounts | $                                
|Loan service fees                   |                                  
|Other loan fee income               |                                  
|Gains on sale of loans, net         |                                  
|Gain on sale of securities, net     |                                  
|Gain (loss) on trading assets, net  |                                  
|Gain on sale of branches            |                                  
|Other income                        |                                  
|                                    |                                  
|Total noninterest income            | $                                
|                                    |                                  

22



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##### 



The following table summarizes the average yields earned on interest earning assets and the average rates paid on interest bearing liabilities for the six months ended June 30, 2002 and 2001 ($ in thousands; unaudited):

|                                        | Six Months Ended June 30,
|--------------------------------------- | -------------------------
|                                        |                          
|                                        | 2002                     
|                                        |                          
|                                        |                          
|Summary of Average Rates                |                          
|                                        |                          
|Interest earning assets:                |                          
|Loans                                   | $                        
|Securities                              |                          
|Interest bearing deposits in banks      |                          
|FHLB stock                              |                          
|Federal funds sold                      |                          
|                                        |                          
|Total interest earning assets           |                          
|Noninterest earning assets              |                          
|                                        |                          
|Total assets                            | $                        
|                                        |                          
|Interest bearing liabilities:           |                          
|Interest checking                       | $                        
|Money market                            |                          
|Savings                                 |                          
|Time deposits                           |                          
|FHLB advances                           |                          
|Subordinated debt                       |                          
|Other borrowings                        |                          
|                                        |                          
|Total interest bearing liabilities      |                          
|                                        |                          
|Noninterest bearing liabilities         |                          
|Stockholders equity                    |                          
|                                        |                          
|Total liabilities and equity            | $                        
|                                        |                          
|Net interest income/net interest spread |                          
|                                        |                          
|Net interest margin                     |                          
|                                        |                          
|                                        |                          

|                                    |   | Increase (Decrease) Due to |  
|----------------------------------- | - | -------------------------- | -
|                                    |   |                            |  
|Changes in Net Interest Income      |   | Volume                     |  
|                                    |   |                            |  
|Interest earning assets:            |   |                            |  
|Loans                               | $ | (6,818                     | )
|Securities                          |   | 9,969                      |  
|Interest bearing deposits in banks  |   | 100                        |  
|FHLB stock                          |   | 26                         |  
|Federal funds sold                  |   | (2,528                     | )
|                                    |   |                            |  
|Total change in interest income     |   | 749                        |  
|Interest bearing liabilities:       |   |                            |  
|Interest checking                   |   | 47                         |  
|Money market                        |   | 1,378                      |  
|Savings                             |   | 18                         |  
|Time deposits                       |   | (5,190                     | )
|FHLB advances                       |   | 1,184                      |  
|Subordinated debt                   |   | 377                        |  
|Other borrowings                    |   | (318                       | )
|                                    |   |                            |  
|Total change in interest expense    |   | (2,504                     | )
|                                    |   |                            |  
|Total change in net interest income | $ | 3,253                      |  
|                                    |   |                            |  

23



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##### 



Noninterest Expense

Total expenses for the first six months of 2002 were $36.6 million compared with $39.5 million for the same period last year, a decrease of $2.9 million or 7.37%. Salaries and benefits increased a modest $137,000 or 0.70%, as savings from reduced staffing in administrative and support areas offset costs from growing the loan and deposit production capabilities.

The following table reflects the components of noninterest expense for the six months ended June 30, 2002 and 2001 ($ in thousands; unaudited):

|                                               | For the Six Months Ended June 30,
|---------------------------------------------- | ---------------------------------
|                                               |                                  
|                                               |                                  
|                                               |                                  
|                                               |                                  
|Salaries and benefits                          | $                                
|Net occupancy expense                          |                                  
|Advertising and marketing                      |                                  
|Data processing fees and services              |                                  
|Loan collection costs                          |                                  
|Other operating expense                        |                                  
|ORE expense, net of ORE income                 |                                  
|Amortization of goodwill & premium on deposits |                                  
|                                               |                                  
|Total noninterest expense                      | $                                
|                                               |                                  




Item 3.  INTEREST RATE RISK MANAGEMENT

The primary objective of interest rate risk management is to minimize the effect that changes in interest rates have on net interest income. The Asset / Liability Management Committee (ALCO) meets at least quarterly to monitor interest rate risk in the loan, investment and liability portfolios.

Management uses simulation software to measure the sensitivity of projected net interest income to changes in interest rates. The simulation process takes into account the current contractual agreements with customers on deposits, borrowings, loans, investments and any commitments to enter into those transactions in the future. Also considered are the current volumes, average rates and scheduled maturities and payments of asset and liability portfolios, together with projected prepayments and new business volumes. This data, combined with various interest rate scenarios, provide a measurement of interest sensitivity.

The following table shows
the effect that the indicated changes in interest rates would have on
net interest income, projected for the next 12 months under a static interest rate scenario. Each change in interest rates is ramped pro rata over a 12-month time horizon. The resulting change in net interest income from the static interest rate projection provides one measure of sensitivity in relation to changing interest rates, given the assumptions used in this process.

The percentage change projected for net interest income from a static rate projection, assuming a rate shock ramped over a 12 month period, was as follows:

|If interest rates:        | Change-%
|------------------------- | --------
|                          |         
|                          |         
|Increase 100 basis points | -1.9    
|Increase 200 basis points | -4.0    
|                          |         
|Decrease 100 basis points | +1.0    
|Decrease 200 basis points | +0.3    

24



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##### 






|Part II.                                                                                                                                                                                                                                                                                              | OTHER INFORMATION              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                                                                                                                                                                                                                      |                                
|Item 1.                                                                                                                                                                                                                                                                                               | Legal Proceedings              
|                                                                                                                                                                                                                                                                                                      |                                
|We are subject to various legal proceedings in the ordinary course of business. Based on information presently available, we do not believe that the ultimate outcome in such proceedings, in the aggregate, would have a material adverse effect on our financial position or results of operations.
|                                                                                                                                                                                                                                                                                                      |                                
|Item 6.                                                                                                                                                                                                                                                                                               | Exhibits and Report on Form 8-K
|                                                                                                                                                                                                                                                                                                      |                                
|(a)     Exhibits:                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      | 3.1                            
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      | 3.2                            
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      |                                
|(b)     The following reports on Form 8-K were filed during the quarter for which this report is filed:                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      | (1)                            
|                                                                                                                                                                                                                                                                                                      |                                
|                                                                                                                                                                                                                                                                                                      | (2)                            

25



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##### 






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.

|     
|-----
|     
|     
|Date:
|     
|     
|     
|     
|Date:
|     
|     

26